To prevent the spread of plant pests into the United States, the Animal and Plant Health Inspection Service (APHIS) restricts the importation of many articles, including fruits. As a condition of importation, all fruits are subject to inspection at the port of arrival and, if necessary, treated for plant pests, in accordance with our regulations in 7 CFR chapter III. The Plant Protection and Quarantine (PPQ) Treatment Manual contains approved treatment schedules and is incorporated by reference into the regulations at 7 CFR 300.1.

The PPQ Treatment Manual currently provides that limes that are found to be infested with mealybugs (Pseudococcidae) or other surface pests upon arrival in the United States must be treated with methyl bromide to destroy the mealybugs and other surface pests. In keeping with our commitment to working toward the development of commodity treatment alternatives to methyl bromide, we have determined that the following hot water treatment can be used as an effective treatment method for limes infested with mealybugs and other surface pests:

• The limes must be treated under the supervision of an APHIS inspector;

• The limes must be treated in a certified hot water immersion treatment tank and must be submerged at least 4 inches below the water's surface;

• The water must circulate continually and be kept at 120.2 °F or above for 20 minutes;

• The treatment time begins when the water temperature reaches at least 120.2 °F in all locations of the tank; and

• Cooling and waxing the limes are optional and are the sole responsibility of the processor.

Research conducted by the Department's Agricultural Research Service has shown that hot water treatment will destroy all mealybugs and other surface pests. Therefore, we are adding the hot water treatment described above to the PPQ Treatment Manual and are updating the PPQ Treatment Manual's incorporation by reference at 7 CFR 300.1 to reflect the date of this treatment's inclusion in the manual.

We are publishing this rule without a prior proposal because we view this action as noncontroversial and anticipate no adverse public comment. This rule will be effective, as published in this document, 60 days after the date of publication in the Federal Register unless we receive written adverse comments or written notice of intent to submit adverse comments within 30 days of publication of this rule in the Federal Register .

Adverse comments are comments that suggest the rule should not be adopted or that suggest the rule should be changed.

If we receive written adverse comments or written notice of intent to submit adverse comments, we will publish a notice in the Federal Register withdrawing this rule before the effective date. We will then publish a proposed rule for public comment.

As discussed above, if we receive no written adverse comments or written notice of intent to submit adverse comments within 30 days of publication of this direct final rule, this direct final rule will become effective 60 days following its publication. We will publish a notice in the Federal Register , before the effective date of this direct final rule, confirming that it is effective on the date indicated in this document.

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 PPQ Treatment Manual, which is incorporated by reference at 7 CFR 300.1, to allow imported limes that are found to be infested with mealybugs (Pseudococcidae) and other surface pests to be treated with a hot water treatment. This action will provide an alternative to treating infested limes with methyl bromide.

Methyl bromide may still be used as a treatment method. It costs about $18.40 to fumigate a ton of limes with methyl bromide. Hot water treatment will cost about $9.10 per ton, taking into account labor and fuel costs. Hot water treatment will also take less time than methyl bromide fumigation. A hot water treatment tank fitted with 4 bins has a capacity to treat about 8 tons per hour. Depending on the amount of limes to be treated and the capacity of the treatment facility, it typically takes approximately 2 hours to fumigate limes with methyl bromide.

This rule does not require the use of hot water treatment for infested limes; rather, it establishes hot water treatment as an alternative to methyl bromide fumigation. The hot water treatment provided for by this rule may lower treatment costs for lime importers who choose it over methyl bromide fumigation, but we do not expect that its availability will have any substantial economic effects on any entities, large or small.

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 program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

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 no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

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

The Asian longhorned beetle (ALB) ( Anoplophora glabripennis ), an insect native to China, Japan, Korea, and the Isle of Hainan, is a destructive pest of hardwood trees. It attacks many healthy hardwood trees, including maple, horse chestnut, birch, poplar, willow, and elm. In addition, nursery stock, logs, green lumber, firewood, stumps, roots, branches, and wood debris of a half an inch or more in diameter are subject to infestation. The beetle bores into the heartwood of a host tree, eventually killing the tree. Immature beetles bore into tree trunks and branches, causing heavy sap flow from wounds and sawdust accumulation at tree bases. They feed on, and over-winter in, the interiors of trees. Adult beetles emerge in the spring and summer months from round holes approximately three-eighths of an inch in diameter (about the size of a dime) that they bore through branches and trunks of trees. After emerging, adult beetles feed for 2 to 3 days and then mate. Adult females then lay eggs in oviposition sites that they make on the branches of trees. A new generation of ALB is produced each year. If this pest moves into the hardwood forests of the United States, the nursery, maple syrup, and forest product industries could experience severe economic losses. In addition, urban and forest ALB infestations will result in environmental damage, aesthetic deterioration, and a reduction in public enjoyment of recreational spaces.

The Asian longhorned beetle regulation (7 CFR 301.51-1 through 301.51-9, referred to below as the regulations) restrict the interstate movement of regulated articles from quarantined areas to prevent the artificial spread of ALB to noninfested areas of the United States. Portions of the State of Illinois and portions of New York City and Nassau and Suffolk Counties in the State of New York are already designated as quarantined areas.

Recent surveys conducted by inspectors of State, county, and city agencies and by inspectors of the Animal and Plant Health Inspection Service (APHIS) have revealed that infestations of ALB have occurred outside the quarantined areas in Cook and DuPage Counties, IL, and in New York City, NY. Officials of the U.S. Department of Agriculture and officials of State, county, and city agencies in Illinois and New York are conducting an intensive survey and eradication program in the infested areas. Both Illinois and New York have quarantined the infested areas and are restricting the intrastate movement of regulated articles from the quarantined areas to prevent the spread of ALB within those States. However, Federal regulations are necessary to restrict the interstate movement of regulated articles from the quarantined areas to prevent the spread of ALB to other States and other countries.

The regulations in § 301.51-3(a) provide that the Administrator of APHIS will list as a quarantined area each State, or each portion of a State, where ALB has been found by an inspector, where the Administrator has reason to believe that ALB is present, or where the Administrator considers regulation necessary because of its inseparability for quarantine enforcement purposes from localities where ALB has been found.

Less than an entire State will be quarantined only if (1) the Administrator determines that the State has adopted and is enforcing restrictions on the interstate movement of regulated articles; and (2) the designation of less than an entire State as a quarantined area will be adequate to prevent the artificial spread of ALB.

In accordance with these criteria and the recent ALB findings described above, we are amending § 301.51-3(c) to include additional quarantined areas in Cook and DuPage Counties, IL, and in New York City, NY. The additional quarantined areas are described in the rule portion of this document.

This rulemaking is necessary on an emergency basis to prevent the spread of ALB into noninfested areas of the United States. 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 we receive that are postmarked 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 under Executive Order 12866.

This emergency situation makes timely compliance with section 604 of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) impracticable. We are currently assessing the potential economic effects of this action on small entities. Based on that assessment, we will either certify that the rule will not have a significant economic impact on a substantial number of small entities or publish a final regulatory flexibility analysis.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

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 no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

An environmental assessment and finding of no significant impact have been prepared for this ongoing program. The environmental assessment provides a basis for our conclusion that the Federal quarantine for ALB will not have a significant impact on the quality of the human environment. Based on the finding of no significant impact, the Administrator of the Animal and Plant Health Inspection Service has determined that an environmental impact statement need not be prepared.

The environmental assessment and finding of no significant impact were prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq. ), (2) regulations of the Council on Environmental Quality for implementing the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing Procedures (7 CFR part 372).

Copies of the environmental assessment and finding of no significant impact are available for public inspection at USDA, room 1141, South Building, 14th Street and Independence Avenue SW., Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, except holidays. Persons wishing to inspect copies are requested to call ahead on (202) 690-2817 to facilitate entry into the reading room. In addition, copies may be obtained by writing to the individual listed under FOR FURTHER INFORMATION CONTACT or by calling the Plant Protection and Quarantine fax service at (301) 734-3560 and requesting document number 0023. The documents may also be viewed on the Internet at http://www.aphis.usda.gov/ppd/es/ppqdocs.html .

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

Customs preclearance operations have been in existence since 1952. There are presently 11 preclearance facilities operating in both Canada and the Caribbean. Each facility is responsible for preclearing U.S. bound passengers and their personal effects and baggage. In most cases, U.S. bound passengers who are precleared in either Canada or the Caribbean are permitted to arrive at a U.S. domestic facility and either directly connect to a U.S. domestic flight or leave the airport. Preclearance facilities primarily serve to facilitate low risk passengers and to relieve passenger congestion at federal inspection facilities in the United States. In fiscal year 2000, 12.5 million passengers were precleared. This figure represents 15% of all commercial air passengers cleared by Customs.

Section 101.5, Customs Regulations (19 CFR 101.5), sets forth a list of Customs preclearance offices in foreign countries and of the Customs officers under whose supervision the preclearance offices function.

The Customs Regulations reflect that there are 9 preclearance offices. This document amends § 101.5, Customs Regulations, to add to the list of preclearance offices one at Orangestad, Aruba and one at Ottawa, Canada. Section 101.5 is also amended to reflect that all preclearance operations are being consolidated under a single Director, Preclearance, located in the Office of Field Operations at Customs Headquarters.

Because this amendment merely reflects the addition of two new Customs preclearance offices and the consolidation of the Customs preclearance operations under a Director, Preclearance, located in the Office of Field Operations at Customs Headquarters, pursuant to 5 U.S.C. 553(b)(B), notice and public procedure are unnecessary, and for the same reason, pursuant to 5 U.S.C. 553(d)(3), a delayed effective date is not required.

Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) do not apply. This amendment does not meet the criteria for a “significant regulatory action” as specified in Executive Order 12866.

The principal author of this document was Janet L. Johnson, Regulations Branch, Office of Regulations and Rulings, U.S. Customs Service. However, personnel from other offices participated in its development.

The Department of the Treasury is the fiscal agent for the Department of Housing and Urban Development for transactions in debentures that have been issued under the National Housing Act, 12 U.S.C. 1701 et seq. , as amended. Federal Reserve Banks, as fiscal agents of the United States, are authorized to perform any necessary acts under this part. In final rule, 59 FR 42161, Aug. 17, 1994, this part was revised to consolidate the processing of debentures in certificated and book-entry forms at the Federal Reserve Bank of Philadelphia. This final rule amends 31 CFR part 337 to provide that the Bureau of the Public Debt, Office of Public Debt Accounting, will perform transactions relating to the debentures effective October 29, 2001.

This final rule is not a “significant regulatory action” as defined in Executive Order 12866 and is not a major rule under 5 U.S.C. 804. Therefore, an assessment of anticipated benefits, costs, and regulatory alternatives is not required.

A prior notice of proposed rulemaking is unnecessary and impracticable because the final rule makes a minor change to the procedures for processing debentures. Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ) does not apply.

We ask for no new collections of information in this final rule. Therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does not apply.

The proposed rule to revise the current DMM P014, Refunds and Exchanges, was published in the Federal Register August 15, 2001, (66 FR 42817). The Postal Service requested that comments on the proposed rule be submitted by September 14, 2001. The date for receipt of comments was extended to September 25, 2001. The Postal Service received two written comments from postage evidencing system providers and one comment from a governmental organization. The Postal Service gave thorough consideration to the comments it received, modified the proposed rule as appropriate, and now announces the adoption of the final rule. The Postal Service's evaluation of the significant comments follows. The final rule, as amended, follows the discussion of the comments.

1. Time limit on refunds. Two commenters expressed concern that only allowing 30 days from the date printed in indicia for users to obtain a refund for unused indicia printed on unmailed envelopes, wrappers, or labels would increase administrative burdens on both the Postal Service and users. Both commenters requested an extension of this time period to 90 days.

The Postal Service carefully considered this requirement and agrees to extend the time period to 60 days for unused indicia printed by all types of postage evidencing systems, except for PC Postage (TM) systems. The time limit for PC Postage systems will remain 30 days.

2. Damaged postage evidencing systems. One commenter noted that although the procedures for reconstructing the register values for a refund or transfer of unused postage appear to be limited to systems damaged by fire, there are many other ways in which a system could become damaged.

The Postal Service agrees with the commenter and changed the regulation in response to this comment. The Postal Service also clarified that the unused postage value remaining in a postage evidencing system checked out and withdrawn from service may be refunded only in certain circumstances and only with the proper supporting documentation, as described in the revised regulation.

3. Refund of unused postage value remaining in a postage evidencing system. Two commenters asked that an option be added to allow the transfer of the unused postage to the appropriate postage payment account for withdrawn postage evidencing systems.

The Postal Service agrees with the commenters and changed the regulation by adding this option to reflect current practice.

4. Examinations.

(a) One commenter asked that the required examination of a postage evidencing system to verify the refund amount for unused postage value remaining in a postage evidencing system be waived if there is no question of system accuracy.

The Postal Service requires examination of all postage evidencing systems to verify the amount before any remaining funds are cleared from the meter. Either a refund or credit is initiated for unused postage value remaining in a postage evidencing system or additional money is collected to pay for postage value used, based on what is found. The Postal Service made no change to the regulation in response to this comment.

(b) One commenter asked that the Postal Service specify alternatives on how to perform the required examinations to verify the refund amount for unused postage value remaining in a postage evidencing system.

The Domestic Mail Manual (DMM) regulates customer use of postal services. Regulations affecting providers of postage evidencing systems are found in Title 39, Code of Federal Regulations (CFR) part 501, Authorization to Manufacture and Distribute Postage Meters. The Postal Service will publish proposed revisions to this part to include policies and regulations pertaining to more secure postage evidencing systems, such as those that use a PSD, those that generate IBI, and PC Postage systems, in a future issue of the Federal Register .

5. Refund indicia. One commenter asked that instead of requiring the user to print a refund indicia, the provider should be allowed to calculate the refund due for a PC Postage system if the provider has a Postal Service-approved method for doing so.

The Postal Service carefully considered the request and makes no change to the regulation at this time.

An appropriate amendment to 39 CFR part 111 to reflect these changes will be published to include this final rule.

The proposed rule to replace the current DMM P030, Postage Meters and Meter Stamps, was published in the Federal Register August 15, 2001, (66 FR 42820). The Postal Service requested that comments on the proposed rule be submitted by September 14, 2001. The date for receipt of comments was extended to September 25, 2001. The Postal Service received three written comments from postage evidencing system providers. The Postal Service gave thorough consideration to the comments it received, modified the proposed rule as appropriate, and now announces the adoption of the final rule. The Postal Service's evaluation of the significant comments follows. The final rule, as revised, follows the discussion of the comments and of the other significant changes made since publication of the proposed rule.

(a) One commenter requested that the regulations name specific technologies that would meet certain postage evidencing system requirements.

There are many different solutions to meeting postage evidencing system requirements. We made no changes to the generalized terminology used.

(b) One commenter requested that the definition of a PC Postage system be changed to require the system to print the destination address at the same time it prints the indicium.

A PC Postage system need not print the destination address when it prints the indicium. We made no changes to the definition of a PC Postage system.

(c) One commenter noted that although the regulations state that remote reset meters are reset electronically at the location of the meter, there might be nonelectronic means for resetting such meters.

The Postal Service agrees with the commenter and revised the regulation.

(d) One commenter suggested that the fluorescent ink used in a postage evidencing system must be Postal Service-approved ink.

The Postal Service agrees with the commenter and changed the regulation in response to this comment.

(e) One commenter suggested that users must be required to use only those labels approved by the Postal Service for a given postage evidencing system when using that system.

The Postal Service agrees with the commenter and changed the regulation in response to this comment.

(a) One commenter noted that noncompliance with the terms and conditions of the authorized provider's lease or rental agreement should be a reason for revoking a license that authorizes lease or rental of a postage evidencing system. The commenter also requested requiring the immediate surrender of a postage evidencing system or Postal Security Device (PSD) upon termination of a lease or rental agreement.

We revised the regulations to include licensee failure to abide by the terms and conditions of the authorized provider's lease or rental agreement, as a reason for possible revocation of a license. We added termination of a lease or rental agreement, as a reason for requiring the immediate surrender of a postage evidencing system or PSD.

(b) One commenter requested that the agreement between the provider and their customer be referred to as a “rental” instead of a “lease.”

To allow for a variety of contractual relationships, the text was changed to use the phrase “lease or rental agreement” for all references to the agreement between the provider and their customer.

(c) One commenter requested that the Postal Service clarify that the base or host of the mailing system may be leased, sold, or rented at the discretion of the provider, although the postage evidencing system or PSD remains the property of the provider.

We revised the regulation to clarify that the base or host component of the mailing equipment that supports the postage evidencing system or PSD may be sold, leased, or rented at the discretion of the provider and the customer, in accordance with the product approval as granted by the Postal Service.

(a) Two commenters requested an increase to the proposed 30-day time period after which a license authorization to lease or rent a postage evidencing system can be cancelled when an active system is not associated with the license. The commenters noted that seasonal business or delays in fulfillment of new meter orders could cause a 30-day period of inactivity.

The Postal Service carefully considered this request and agrees that there may be some inconveniences for licensed users in some circumstances if license authorization to lease or rent a postage evidencing system can be cancelled when an active system is not associated with the license for 30 days or more. The regulation was changed to extend the period, to 60 days, in which a system can be inactive before the Postal Service can cancel a user's license authorization, and to allow exceptions for seasonal users.

(b) One commenter requested that since products can be distributed via the Internet or telemarketing, the regulation should allow for the licensee to enter into an agreement by other means than a “signed agreement.”

The Postal Service agrees with this request and eliminated this requirement.

(c) One commenter requested that licensee information be included in the national change-of-address database to alert the Postal Service and providers of potential customer relocations.

The provider may access available databases to determine potential customer relocations at its discretion. We made no changes to the requirement.

(a) One commenter noted that users do not receive any special documentation from the Postal Service giving approval to use a postage evidencing system outside the country.

The Postal Service reviewed the regulation and clarified that the provider receives the approval from the Postal Service to place a postage evidencing system outside the country.

(b) One commenter questioned the requirement that all postage evidencing systems authorized for use outside the United States have enhanced security features that include digital indicia.

The Postal Service reviewed the requirement and revised it so that the requirement for postage evidencing systems to generate digital indicia is now the same for meters placed outside the country as it is for domestic meters.

(c) One commenter questioned the need for more frequent inspections of postage evidencing systems located outside the country and asked that inspection and examination schedules for all postage evidencing systems be the same regardless of their location.

The security of postage evidencing systems located outside the country must be ensured. The Postal Service reviewed the inspection and examination schedule for such systems located, and deleted the requirement for more frequent inspections and examinations. The Postage Evidencing System Inspection and Examination Schedule now applies to all systems, however, special circumstances may be invoked to inspect systems placed outside the country on a more frequent basis.

(a) One commenter noted that the requirements for deposit of mail are confusing and suggested that the Postal Service remove all barriers for customers to deposit mail. The commenter noted that drop shipment of metered mail and zone-rated Priority and Express Mail are the areas of greatest concern.

The Postal Service revised the regulation on deposit of mail to clarify the requirements. All single-piece-rate metered mail may be deposited in any collection box, unless specially marked collection boxes are provided. All metered Express Mail and metered Priority Mail can now be deposited in any collection box, unless specially marked collection boxes are provided to increase customer convenience in using those services.

(b) Two commenters questioned the requirement for certain users of PC Postage systems to submit a mailpiece to the provider for quality assurance evaluation every 12 months. One commenter suggested that this requirement should be a Postal Service responsibility as part of the mail acceptance process, rather than a provider responsibility. The other commenter suggested that the requirement be waived if the customer uses a printer that is sold or specified by the provider.

The Postal Service carefully considered this requirement, which is limited to PC Postage systems that print indicia with a printer that may also be used for nonpostal applications. The provider approval or specification of the printer used does not give the system user immunity from this requirement. The Postal Service does not agree that this should be a postal responsibility and makes no change to this requirement.

(c) One commenter questioned the restriction on using different forms of postage evidencing on the same mailpiece since it could inconvenience customers who have more than one postage evidencing system.

Different forms of postage evidencing are handled differently for facing and cancellation during mail processing. The Postal Service changed this requirement to limit it to letter-size, single-piece-rate mailpieces.

(a) One commenter requested that the details of the Postage Payment Agreement be included in the regulations. We changed the regulation to require use of an approved postage payment process, rather than the signing of a specific agreement. The detailed requirements for the postage payment process will be included in Title 39, Code of Federal Regulations (CFR) part 501, Authorization to Manufacture and Distribute Postage Meters, with other regulations affecting providers of postage evidencing systems. The Postal Service will publish proposed revisions to this part to include policies and regulations pertaining to more secure postage evidencing systems, such as those that use a PSD, those that generate IBI, and PC Postage, in a future issue of the Federal Register .

(b) One commenter requested that the on-site meter service program be available at any provider's office rather than just branch offices to ensure coverage under the program for direct distribution centers.

The Postal Service agrees with the commenter and changed the regulation in response to this comment.

(c) Commenters requested changes to the payment options for postage evidencing systems, for example extending the use of credit cards to systems other than PC Postage and allowing the use of checks as payment for postage on PC Postage systems.

The Postal Service carefully considered the use of different payment options for postage evidencing systems and does not agree that these should be changed at this time. We made no change to the regulation.

(d) In response to the requirement that the provider document each reset transaction for the user unless the provider gives the user a monthly statement documenting all transactions and the balance after each transaction, one commenter suggested that the provider could give the customer the option of whether or not to receive this monthly statement. The commenter noted that there are multiple options for providing statements, including offering the customer the option not to receive one.

The regulation does not specify the method used to provide the documentation. The Postal Service makes no change to this requirement.

(a) One provider asked that instead of requiring that a defective postage evidencing system or PSD be retrieved by the provider within 3 days, that the regulation state that the retrieval process begin within that time.

The Postal Service changed the regulation to require that the provider begin the retrieval process for a defective postage evidencing systems or PSD within 2 days of notification by the licensee.

(b) One commenter noted that with prior Postal Service approval, the provider procedures for check out and withdrawal of a manually reset meter may vary from those in the proposed regulation.

The Postal Service reviewed the current procedures and changed the regulation since the provider may also check out a specifically designated meter model from service by using a Postal Service-approved process to transfer the postage remaining on the manually reset meter directly to a remotely reset meter.

(c) One commenter asked that an option be added to allow the transfer of unused postage in a remote reset Generation 1 postage meter checked out of service to the appropriate meter resetting account after Postal Service verification.

The Postal Service changed the regulation by adding this option to reflect current practice.

(d) One commenter questioned the requirement that postage evidencing systems or PSDs that are returned must be shipped by Priority Mail unless the Postal Service gives written permission to ship at another rate or special service. The commenter noted that the Postal Service should not require use of a Postal Service product when there are equivalent or better products offered by the private sector that provide for equivalent or better tracking and tracing capabilities.

The Postal Service revised the regulation by requiring the use of Priority Mail with Delivery Confirmation to return postage evidencing systems or PSDs to the provider when the unit is withdrawn from service, unless the Postal Service gives written permission to ship by another means or service.

There were several requests for clarification of the regulations affecting providers and their relationship with the Postal Service.

The Domestic Mail Manual (DMM) regulates customer use of postal services. Regulations affecting providers of postage evidencing systems are found in Title 39, Code of Federal Regulations (CFR) part 501, Authorization to Manufacture and Distribute Postage Meters. The Postal Service will publish proposed revisions to this part to include policies and regulations pertaining to more secure postage evidencing systems, such as those that use a PSD, those that generate IBI, and PC Postage, in a future issue of the Federal Register .

1. We added a statement that indicia are also called “meter stamps” or “metered postage.”

2. We limited check in and check out of remote reset meters to the licensing post office, unless the on-site meter program is used.

3. We added a requirement that matter other than postage or postal markings printed by postage evidencing systems must not emulate valid indicia. This requirement applies to both letterpress and digital indicia.

4. We made minor editorial changes.

Throughout this document wherever “we”, “us”, or “our” is used we mean EPA.

We are approving revisions to the minor source/minor modification pre-construction permitting requirements for Wisconsin Electric Power Company's (WE's) Pleasant Prairie Power Plant located at 8000 95th Street, Pleasant Prairie, Wisconsin. WDNR submitted the revised requirements on February 9, 2001, as amendments to its SIP. The WDNR held a public hearing on the proposed revisions on January 22, 2001.

The revisions include the expansion of the State's general construction permit exemption to include certain activities at the Pleasant Prairie facility. This SIP revision will not have an adverse effect on air quality.

The WDNR has submitted a portion of the Environmental Cooperative Agreement signed by WDNR and WE on February 5, 2001, for approval into the SIP. The Environmental Cooperative Agreement was developed pursuant to the Environmental Cooperative Pilot Program authorized under Section 299.80, Wis. Stats. The Environmental Cooperative Agreement replaces the general construction permit exemption at NR 406.04(2) with the requirements of Section XII.C, Item “Construction Permit Exemption for Minor Physical or Operational Changes,” of the Environmental Cooperative Agreement. This change applies only to the Pleasant Prairie Power Plant. The provisions of NR 406.04(2) remain in effect for all other facilities within the State of Wisconsin.

The revisions differ from the current requirements in several significant ways:

1. The current exemption cannot by used by any facility subject to a New Source Performance Standard (NSPS). The Pleasant Prairie Power Plant has two units subject to an NSPS.

2. The current exemption threshold for nitrogen oxide ( NO X ) emissions is 5.7 pounds per hour. The revision increases the threshold to 9.0 pounds per hour (approximately 39.42 tons per year) of NO X .

3. The current regulations at NR 406.04(2) do not require a source to notify WDNR and EPA of changes that qualify for the exemption prior to making the changes or to perform an ambient air quality analysis for those changes. The revisions do require pre-construction notification and an air quality analysis.

This action will exempt physical changes or changes in the method of operation at the Pleasant Prairie Power Plant with potential emissions less than 9.0 pounds per hour (39.42 tons per year) for sulfur dioxide, carbon monoxide, or NO X ; 5.7 pounds per hour (24.97 tons per year) of particulate matter or volatile organic compounds; 3.4 pounds per hour (14.89 tons per year) of particulate matter less than 10 microns in diameter; and 0.13 pounds per hour (0.57 tons per year) of lead from the requirement to obtain a permit prior to commencing construction on the physical changes or on changes in the method of operation. The current rules contain a similar exemption for certain sources; however, this exemption cannot be used by the Pleasant Prairie Power Plant because it is subject to an NSPS.

The general exemption in the current rule does include a threshold of 5.7 pounds per hour for NO X because it can be applied in areas with a lower significance threshold such as severe ozone non-attainment areas. For the area in which the Pleasant Prairie Power Plant is located, the significance threshold is 40 tons per year (approximately 9.13 pounds per hour). Although the current rules do require receipt of a construction permit prior to making changes for the Pleasant Prairie Power Plant, issuance of the permit will not result in any additional pollution control requirements or lower emission limitations. The revision is procedural and has no direct impact on emissions.

Under the current rule, an air quality analysis is required for physical changes or changes in the method of operation as part of the pre-construction permitting process to ensure that no applicable standards are violated. The revisions have maintained this requirement. The Pleasant Prairie Power Plant must notify WDNR and EPA of all modifications made under the exemption, and they must include a summary of air quality impacts including any ambient air quality modeling performed as part of that notification.

The applicability provisions and requirements of the current operating permit regulations are unchanged. Any physical change or change in the method of operation at the Pleasant Prairie Power Plant triggering these requirements must obtain the required permit prior to commencing operation.

We are approving, through direct final rulemaking, revisions to the minor source pre-construction permitting requirements for the WE Pleasant Prairie Power Plant, located in Kenosha County at 8000 95th Street, Pleasant Prairie, Wisconsin. We are publishing this action without prior proposal because we view this as a noncontroversial revision and anticipate no adverse comments. However, in a separate document in this Federal Register publication, we are proposing to approve the SIP revision should adverse written comments be filed. This action will be effective without further notice unless we receive relevant adverse written comment by December 10, 2001. Should we receive such comments, we will publish a final rule informing the public that this action will not take effect. Any parties interested in commenting on this action should do so at this time. If no such comments are received, this action will be effective on January 7, 2002.

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. 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 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. 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 January 7, 2002 unless EPA receives adverse written comments by December 10, 2001.

Under section 307(b)(1) of the Clean Air Act, 42 U.S.C. 7607, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 7, 2002. 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).)

This supplementary information section is organized as follows:

Illinois' submittals relating to control of nitrogen oxides (NO X ) emissions include four principal sets of rules, all of which are in Title 35 of the Illinois Administrative Code, Part 217: 1) Subpart W, regulating electric generating units, submitted February 23, 2001, 2) Subpart T, regulating cement kilns, submitted April 9, 2001, 3) Subpart U, regulating other large boilers and turbines, submitted May 1, 2001, and 4) Subpart X, providing credit for voluntary NO X emission reductions, also submitted May 1, 2001. These submittals also include a variety of definitional rules, codified in Part 211. Separately, on June 18, 2001, Illinois submitted a budget demonstration, demonstrating that the regulations in Subparts T, U, and W of Part 217 are sufficient to achieve the levels of NO X emissions that USEPA budgeted for Illinois. On June 27, 2001, Illinois further submitted evidence of signed legislation amending the compliance date of these rules to set a fixed compliance date of May 31, 2004.

USEPA published proposed rulemaking on Subpart W on August 31, 2000, at 65 FR 52467. Final rulemaking on Subpart W is published elsewhere in today's Federal Register .

On June 28, 2001, at 66 FR 34382, USEPA published action proposing to approve most of the rest of Illinois' NO X emission control program. Specifically, in that action, USEPA proposed to approve Illinois' rules for cement kilns and for industrial boilers and turbines, proposed to approve Illinois' budget demonstration, and proposed to conclude that Illinois has satisfied the requirements established by USEPA in its rulemaking known as the NO X SIP Call. USEPA conducted expedited rulemaking on these rules due to their similarity to USEPA's rule recommendations. USEPA proposed to exclude Subpart X from this expedited rulemaking but stated its intention to propose action on Subpart X in the near future.

Illinois' budget demonstration submittal also included clarifications of selected elements of Illinois' rules. Most notably, Illinois clarified two terms used in both its electricity generating unit rules and its industrial boiler and turbine rules for limiting emissions from sources seeking low emitter status. As described in the notice of proposed rulemaking, Illinois clarified that “potential NO X mass emissions” may be defined as the emissions determined either by emissions monitoring according to Part 75 or by multiplying hours of operation times maximum potential hourly emissions. Illinois further clarified that a source that emits more than the allowable number of tons (25 tons or less per ozone season) shall be considered to have exceeded its permissible number of hours of operation and shall lose its low emitter status. USEPA concurred with these interpretations.

USEPA received three sets of comments, sent by the Illinois Environmental Protection Agency (Illinois EPA) on July 24, 2001, sent by the Illinois Environmental Regulatory Group (IERG) dated July 26, 2001, and sent by LTV Steel Company (“LTV Steel”) also dated July 26, 2001. The following describes these comments and provides USEPA's response.

Comment: Illinois EPA supports USEPA's proposed rulemaking. Illinois EPA urges action on Subpart X of its NO X regulations, which provide credit under specified criteria for sources that voluntarily reduce NO X emissions. Illinois EPA acknowledges USEPA's rationale for using “streamlined rulemaking on the Illinois rules needed to satisfy USEPA's NO X SIP Call” (i.e. rules restricting NO X emissions from electricity generating units, large industrial boilers and turbines, and cement kilns). At the same time, Illinois EPA comments favorably on USEPA statements that “Subpart X ‘provides for an innovative approach to obtaining voluntary reductions of NO X emissions’” and that USEPA will work with Illinois EPA on Subpart X “to arrive at a program that is ‘approvable and beneficial to the environment.’ ”

Response: USEPA acknowledges Illinois EPA's support for the proposed rulemaking. USEPA concurs that Subpart X is an important set of rules and restates its intention to propose rulemaking on Subpart X in the near future.

Comment: IERG in general “concurs with the analysis and decisions” in USEPA's proposed rulemaking. However, IERG comments at length that USEPA “cannot grant overall approval to the State's submittal unless and until it takes final action approving Subpart X.”

IERG first notes that the state law authorizing NO X emission regulations dictates that the state's rules shall include provisions for “voluntary reductions of NO X emissions * * * to provide additional allowances” for use by trading program participants. IERG states that if this “legislative mandate * * * is left unfulfilled, the [Illinois EPA] will be precluded, by Illinois law, from administering the NO X trading program rules.” In IERG's view, USEPA recognized this interconnection between state regulations and authorizing state legislation when it insisted that an unacceptable compliance deadline included in the rules pursuant to legislative mandate could not be remedied without amending the legislation. Thus, IERG believes that state legislation makes Subpart X an “integral part of Illinois' NO X SIP Call submittal.”

IERG then comments that “absent Subpart X, or a variant thereof, the State does not have the necessary legal authority to implement the plan.” Legal authority to adopt and implement a plan is one of the criteria under 40 CFR 51 Appendix V for a state submittal to be complete. Therefore, IERG concludes that “USEPA's overall approval of Illinois' ozone transport SIP Call submittal, and * * * the legal authority for Illinois to proceed with the implementation of the NO X trading program regulations, can come to fruition only after Subpart X is approved.” IERG also notes that while Subpart X is an integral element of Illinois' NO X SIP Call submittal, “Subpart X is not an element of Illinois' Chicago area attainment demonstration.”

Response: USEPA agrees in part and disagrees in part with IERG's comments. USEPA agrees that it has not completed rulemaking on the NO X rules that Illinois has submitted, and USEPA agrees that such rulemaking will not be complete until USEPA conducts rulemakings on Subpart X. USEPA disagrees, however, as to whether rulemaking on Subpart X is a prerequisite for determining whether Illinois has satisfied the NO X SIP Call.

The Illinois legislation quoted by IERG instructs the applicable state governmental bodies to propose and adopt regulations on NO X emissions pursuant to USEPA's NO X SIP Call. The legislation gives more detailed instructions on some points, including instructions to adopt provisions for voluntary reductions of NO X emissions for allowance generation purposes. The state included such provisions in Subpart X.

USEPA believes that Illinois has fulfilled its obligations under the state legislation that provided for the NO X regulations. However, USEPA does not share IERG's view that the state legislation dictates USEPA's approach to this rulemaking. Illinois' Environmental Protection Act provides for a variety of regulations, including provisions for water pollution and solid waste regulations and including a range of air pollution regulations such as new source permitting and the Illinois volatile organic compound trading program. Clearly USEPA's action on Illinois' NO X regulations is not contingent on action on the range of other regulations pursuant to this legislation. All of the new regulations for statewide NO X emission control are authorized in a single section of the Environmental Protection Act (section 9.9), but this fact does not itself mandate that USEPA conduct rulemaking jointly on all elements provided for in this section.

In judging whether it can conduct rulemaking separately on the different subparts of Illinois' NO X rules, USEPA instead must focus more on the interrelationship of the actual provisions of these subparts. Subpart T specifies control requirements for cement kilns, which for most sources does not involve tradable allowances. Subpart U, addressing industrial boilers and turbines, identifies the regulated sources, specifies how many allowances will be issued to these sources, and requires these sources to hold allowances at least equivalent to their emissions. Subpart W, addressing electricity generating units, again defines the regulated sources, specifies how many allowances will be issued to these sources, and requires adequate allowance holdings. None of these obligations under any of these subparts are altered by any of the provisions of Subpart X.

Subpart X in essence specifies criteria and procedures by which emission units not subject to Subparts T, U, or W that reduce NO X emissions may be issued allowances. Issuance of such allowances does not alter the compliance obligations of sources under Subparts T, U, or W. Even if a source regulated under Subparts U or W or possibly T may ultimately take possession of allowances potentially issued under Subpart X, such possession only alters the source's method of compliance and does not alter the basic compliance obligation, in particular the obligation to hold adequate allowances. This rationale is similar to the rationale by which USEPA judges Subparts U and W to be independent: although Subpart U can affect the number of allowances available for purchase by Subpart W sources, the provisions of Subpart U have no effect on the compliance obligations of Subpart W sources. Therefore, USEPA could choose to conduct separate rulemakings on Subpart U and Subpart W. Thus, all four subparts of Part 217 are independent from each other, and for example USEPA may choose to conduct rulemaking on Subpart X separately from its rulemaking on other subparts of Part 217.

From USEPA's perspective, Subpart X is essentially no more or less independent from Subparts U and W than it is from the NO X control regulations in other Eastern states. While Illinois' focus presumably was on providing an alternative set of allowances for Illinois sources, these allowances would also be available for use by sources in other states subject to the NO X SIP Call. Thus, rulemaking on Subpart X is no more a prerequisite to approving and implementing Subparts U and W than it is to approving and implementing any other state's NO X control regulations.

The remaining element of IERG's comment questions whether USEPA may reach a conclusion on Illinois satisfying the requirements of the NO X SIP Call before completing rulemaking on the entire submittal, in particular before completing rulemaking on Subpart X. USEPA continues to believe that it can judge now whether Illinois has satisfied the existing NO X SIP Call requirements. Through the rules of Subparts T, U, and W, Illinois has limited emissions from cement kilns, industrial boilers and turbines, and electricity generating units, respectively. Illinois submitted a budget demonstration showing that these three subparts of the Part 217 rules are adequate to assure that NO X emissions in Illinois remain within levels currently budgeted for the State under the NO X SIP Call. USEPA proposed to approve this demonstration.

The central requirement of the NO X SIP Call is for each affected state to assure that NO X emissions do not exceed the budgeted levels. Illinois' budget demonstration shows that the requirements of Subparts T, U, and W assure achievement of these budgeted NO X emission levels in Illinois. That is, even before completing rulemaking on Subpart X, USEPA's rulemaking on Subparts T, U, and W suffice to satisfy fully the existing requirements of the NO X SIP Call.

As a point of clarification, the existing requirements of the NO X SIP Call are less stringent than USEPA expects these requirements to become. The difference principally reflects a court remand on the portion of the NO X SIP Call pertaining to control of stationary internal combustion engines. USEPA labels the existing requirements as Phase I of the NO X SIP Call, which USEPA expects to amend with Phase II budgets reflecting presumed control of internal combustion engines. USEPA is only evaluating the Illinois regulations against the existing, Phase I requirements; USEPA will obviously evaluate Illinois' regulations with respect to Phase II requirements only after USEPA establishes those requirements.

USEPA's approach for judging satisfaction of existing NO X SIP Call requirements is the same approach it is using to judge the contribution of these rules toward attaining the ozone standard. Subparts T, U, and W each achieve a quantifiable reduction in NO X emissions. For purposes of the NO X SIP Call, USEPA must judge whether the collective reductions suffice to assure that Illinois' NO X emissions budget is achieved. For purposes of the attainment demonstration, USEPA must judge whether the collective reductions suffice to assure attainment. The intention of Subpart X is neither to increase nor to decrease NO X emissions in Illinois. Therefore, for both the NO X SIP Call and the attainment demonstration, USEPA may judge whether the applicable requirements are satisfied without needing first to evaluate Subpart X.

Comment: LTV Steel agrees in general with amending Illinois' NO X emissions budget to add LTV Steel's Boiler 4B to the list of sources subject to allowance holding requirements. However, LTV Steel believes that a larger quantity of emissions should be budgeted for this boiler. Since Illinois is issuing allowances to each source according to its budgeted emissions, LTV Steel's recommendation is expressed in terms of the number of allowances to be issued to LTV Steel for this boiler.

LTV Steel provides data showing that the proposed budgeted emissions for Boiler 4B “is equivalent to an emission rate of less than 0.146 lb/mmBTU”. LTV Steel objects that the budgeted emission rate for Boiler 4B “should not be more stringent than the [0.15 lb/mmBTU emission rate budgeted for electricity generating units]”.

LTV Steel quotes from USEPA's NO X SIP Call rulemaking of October 27, 1998, as follows: “EPA determined the aggregate emission levels for large non-electric generating units in each State budget based upon a 60 percent reduction * * *. The 60 percent reduction results in an average emission rate across the region of 0.17 lbs/mmBTU for large non-electric generating units. Therefore, initial unadjusted allocations to existing large non-electric generating units would be based on actual heat input data (in mmBTU) for the units multiplied by an emission rate of 0.17 lb/mmBTU.” LTV Steel also provides a similar quote from USEPA's rulemaking of January 18, 2000. LTV Steel concludes, based on the 1995 heat input for its Boiler 4B, that the unit should receive allowances for 70 tons per ozone season rather than 60.

Response: USEPA and LTV Steel agree on most points: we agree that Boiler 4B should be subject to requirements as a large boiler, we agree that controlled emissions for this boiler should be calculated consistently with other units, and we agree that 1995 conditions (projected to 2007) should be the basis for the calculations. However, we do not agree on whether the emissions budget for LTV Steel's boiler should be calculated at 0.17 lb/mmBTU or at 60 percent control.

LTV Steel's Boiler 4B burns a combination of natural gas and coke oven gas. Using emissions data collected at the facility, Illinois EPA and USEPA estimate that 60 percent control of this boiler would yield an emission factor slightly below 0.15 lb/mmBTU.

USEPA is addressing emissions budgeted for this unit and not the allocation for the unit; Illinois then has latitude in how it distributes allowance allocations. This distinction appears moot in Illinois because the state's rules provide allowances according to each source's portion of the budget (minus a new source set-aside), but the distinction is key to understanding the statement in USEPA's rulemaking. The quoted statement clearly says that emission budgets for large non-electricity generating units reflect 60 percent control. As quoted by LTV Steel, the rulemaking notice explains that this control level for industrial boilers and turbines on average reflects an emission factor of 0.17 lbs/mmBTU, so a state could at least approximately achieve the budgeted NO X emission level by issuing allocations at 0.17 lbs/mmBTU. However, states also have the option to allocate allowances according to the 60 percent control level, which is the option Illinois has chosen. Regardless of how the state chooses to distribute allowances, USEPA must calculate the budget adjustment for LTV Steel's Boiler 4B according to 60 percent control.

Illinois' rules provide an allowance allocation to LTV Steel according to this budget adjustment. Therefore, LTV Steel must have an allocation for Boiler 4B that reflects 60 percent control.

The second rulemaking quoted by LTV Steel is USEPA's rulemaking on petitions under Clean Air Act section 126. Besides the fact that this rulemaking does not apply directly to Illinois, the section 126 context differs from the NO X SIP Call context in a way that makes the quoted statement irrelevant. In its section 126 action, USEPA was responsible for determining allowance allocations. USEPA chose here to issue allowances according to an average emission level, but this choice in no way requires states to use the same approach in allocating allowances under the NO X SIP Call. In addition, the quoted statements suggest that had USEPA found 60 percent control to reflect a lower average emission rate, USEPA would have allocated allowances according to that lower rate.

As noted in the proposed rulemaking on Illinois' rules, USEPA has provided detailed budget calculations on its web site, at ftp://ftp.epa.gov/EmisInventory/ NOxSIPCall_Mar2_2000/. The spreadsheet for Illinois available at this site clearly calculates the emissions budget for industrial boilers and turbines on the basis of 60 percent control. Thus, USEPA is adjusting Illinois' budget to include LTV Steel's Boiler 4B at a 60 percent control level, which under Illinois' rules will result in LTV Steel receiving an allocation for 60 tons of allowances for each ozone season.

Comment: LTV Steel requested confirmation that the deadline for installing and operating continuous emissions monitoring has been delayed to May 31, 2003.

Response: Illinois' rule at section 217.456(c) subjects sources such as LTV Steel to the monitoring requirements of 40 CFR 96 Subpart H. (Electricity generating units are similarly subject to the 40 CFR 96 Subpart H requirements pursuant to section 217.756(c).) As promulgated, 40 CFR 96.70 requires that monitoring begin at least by May 1, 2002, and earlier if the source seeks early reduction credits. However, a decision by the Court of Appeals for the District of Columbia Circuit has delayed the emissions compliance deadline of the NO X SIP Call by one year plus one month.

While 40 CFR 96 Subpart H has not been expressly modified, USEPA recognizes that the change in the compliance deadline warrants a delay in the deadline for emissions monitoring for sources not seeking early reduction credits. The purposes of this monitoring are best achieved by starting at the beginning of the defined ozone season rather than one month later. Therefore, USEPA believes that the Court of Appeals decision warrants a one year delay but not a thirteen month delay in the commencement of emissions monitoring for sources not seeking early reduction credits.

In summary, USEPA affirms that installation and operation of continuous emissions monitoring may be delayed until May 1, 2003, for sources that are not seeking early reduction credits.

USEPA is taking final action approving Subparts T and U of Part 217 of Title 35 of the Illinois Administrative Code, regulating NO X emissions from cement kilns and industrial boilers and turbines, respectively. This approval reflects selected rule interpretations described in the notice of proposed rulemaking. USEPA is making two minor amendments to the budget as requested by Illinois, adding a boiler owned by LTV Steel and deleting a boiler owned by University of Illinois from the inventory of large boilers and turbines. By separate action today, USEPA is approving Subpart W, regulating NO X emissions from electricity generating units.

Illinois' budget demonstration shows that these three sets of regulations provide sufficient limitations on NO X emissions in the state to satisfy the existing requirements of USEPA's NO X SIP Call. USEPA is approving this budget demonstration. With this approval and the approval of the three relevant sets of regulations, USEPA concludes that Illinois has fully satisfied current (“Phase I”) requirements under the NO X SIP Call.

USEPA wishes to clarify its views on one aspect of compliance accounting under Illinois' rule. USEPA's administration of a multi-state trading program requires that the states have consistent compliance accounting procedures. USEPA will be using procedures in which compliance is assessed on a unit-by-unit basis. Illinois' rules for industrial boilers and turbines are somewhat unclear on this point: multiple rule paragraphs indicate that compliance is assessed on a unit-by-unit basis, and yet Section 217.456 (d)(1) suggests that the source may be in compliance if the source has adequate allowances on a source-wide basis.

Illinois provided clarification on this point in a letter to USEPA dated September 20, 2001. Illinois specified that its rules must be interpreted to require compliance on a unit-by-unit basis. Consequently, if a source holds a sufficient total number of allowances but misdistributes these allowances such that one or more unit accounts (supplemented by available allowances from the source's overdraft account) hold insufficient allowances, those units will be in violation. Each violating unit will be subject to the 3 to 1 deduction of allowances pursuant to Illinois' section 217.456 (f)(5) and USEPA's 40 CFR 96.54 (d)(1). USEPA concurs with and approves this interpretation of Illinois' rules.

The regulations approved here, along with the regulations governing electricity generating units, are an important part of Illinois' attainment demonstration for the Chicago area. USEPA finds these regulations creditable for this purpose.

USEPA is also approving all the definitions of Part 211 submitted in conjunction with the Subpart T and Subpart U submittals. These part 211 rules provide a variety of definitions of terms used in part 217 that are generally quite similar to USEPA's recommended definitions. These rules also include a definition of the term “source” that brings that definition into conformance with state law and USEPA recommendations.

Because USEPA has not approved Subpart X, allowances may not be issued for sources that voluntarily reduce NO X emissions pursuant to these rules. In addition, provisions in Subpart U implying creditability of emission reductions pursuant to Subpart X are inoperative prior to approval of Subpart X.

In order to fulfill its obligation for rulemaking on the entire Illinois submittal, USEPA must conduct rulemaking on Subpart X. While USEPA is taking no action today on Subpart X, USEPA intends to conduct rulemaking on Subpart X in the near future.

USEPA has reviewed the completeness of Illinois' submittals of February 23, 2001, April 9, 2001, May 1, 2001, and June 18, 2001. USEPA concludes that these submittals are complete and represent a complete response to Phase I of USEPA's NO X SIP Call. Consequently, USEPA concludes that Illinois has remedied the prior deficiency identified on December 26, 2000 (65 FR 81366), namely Illinois' prior failure to submit a SIP in response to the NO X SIP Call. USEPA's December 2000 finding started an 18-month clock for the mandatory imposition of sanctions and the obligation for USEPA to promulgate a FIP within 24 months. Today's action terminates both the sanctions clock and USEPA's FIP obligation.

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 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, USEPA'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), USEPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for USEPA, 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, USEPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. USEPA 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. USEPA 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 10, 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 January 7, 2002. 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).)

Throughout this document, the terms “you” and “me” refer to the reader of this final rule and to sources subject to the State rule, and the terms “we”, “us”, or “our” refers to EPA.

The Clean Air Act (Act or CAA) as amended in 1990 requires the EPA to establish National Ambient Air Quality Standards (NAAQS) for certain air pollutants that cause or contribute to air pollution that is reasonably anticipated to endanger public health or welfare. Clean Air Act sections 108 and 109. In 1979, EPA promulgated the 1-hour ground-level ozone standard of 0.12 parts per million (ppm) or 120 parts per billion (ppb). 44 FR 8202 (February 8, 1979).

Ground-level ozone is generally not directly emitted by sources. Rather, volatile organic compounds (VOC) and NO X , both emitted by a wide variety of sources, react in the presence of sunlight to form additional pollutants, including ozone. NO X and VOC are referred to as precursors of ozone.

The Act, as amended in 1990, requires EPA to designate as nonattainment any area that was violating the 1-hour ozone standard, generally based on air quality monitoring data from the 1987 through 1989 period. Clean Air Act section 107(d)(4); 56 FR 56694 (November 6, 1991). The Act further classified these areas, based on the areas' ozone design values, as marginal, moderate, serious, severe, or extreme. Marginal areas were suffering the least significant ozone nonattainment problems, while the areas classified as severe and extreme had the most significant ozone nonattainment problems.

The control requirements and date by which attainment with the ozone NAAQS is to be achieved vary with an area's classification. Marginal areas were subject to the fewest mandated control requirements and had the earliest attainment date, November 15, 1993. Moderate areas were subject to more stringent planning and control requirements but were provided more time to attain the ozone standard, until November 15, 1996. Severe and extreme areas are subject to even more stringent planning and control requirements but are also provided more time to attain the standard. Severe areas are required to attain the ozone NAAQS by November 15, 2005 or November 15, 2007, depending on the areas' ozone design values for the 1987 through 1989 period.

The Chicago-Gary-Lake County ozone nonattainment area was classified as severe-17 and its attainment date is November 15, 2007. The Chicago-Gary-Lake County ozone nonattainment area is defined (40 CFR 81.314 and 81.315) to contain Cook, DuPage, Grundy (Aux Sable and Goose Lake Townships only), Kane, Kendall (Oswego Township only), Lake, McHenry, and Will Counties in Illinois, and Lake and Porter Counties in Indiana.

The Act requires moderate and above ozone nonattainment areas (including severe ozone nonattainment areas) to be addressed in ozone attainment demonstrations, including adopted emission control regulations sufficient to achieve attainment of the ozone NAAQS by the applicable ozone attainment dates. The requirements of the Act for ozone attainment demonstrations for moderate and above ozone attainment areas are determined by considering several sections of the Act. Section 172(c)(6) of the Act requires SIPs to include enforceable emission limitations, and such other control measures, means or techniques as well as schedules and timetables for compliance, as may be necessary to provide for attainment by the applicable attainment dates. Section 172(c)(1) of the Act requires the implementation of all reasonably available control measures (including reasonably available control technology [RACT]) and requires the SIP to provide for sufficient annual reductions in emissions of VOC and NO X as necessary to attain the ozone NAAQS by the applicable attainment dates. Sections 182(c)(2) and (d) required SIP revision submissions by November 15, 1994 for serious and severe ozone nonattainment areas to demonstrate how the areas would attain the 1-hour standard and how they would achieve rate-of-progress (ROP) reductions in VOC emissions of 9 percent for each 3-year period until the date of attainment. (In some cases, NO X emission reductions can be substituted for the required VOC emission reductions to achieve ROP.) Section 182(c)(2)(A) requires the ozone attainment demonstrations for serious and above ozone nonattainment areas to be based on the use of photochemical grid modeling or on other analytical methods determined to be at least as effective. The attainment demonstrations based on photochemical grid modeling can address the emission impacts of both VOC and NO X . The NO X emission control regulations addressed in this rulemaking are, in part, intended to meet the requirements for the attainment demonstrations for the Chicago-Gary-Lake County ozone nonattainment area.

On October 27, 1998, the EPA promulgated a NO X SIP Call for a number of States, including the State of Illinois. The NO X SIP Call requires the subject States to develop NO X emission control regulations sufficient to provide for a prescribed NO X emission budget in 2007, and is further discussed below. These NO X emission reductions will address ozone transport in the area of the country primarily east of the Mississippi River. The rule also provides NO X emission reductions to support attainment of the 1-hour ozone standard in the Chicago-Gary-Lake County ozone nonattainment area. EPA promulgated the NO X SIP Call pursuant to the requirements of CAA section 110(a)(2)(D) and our authority under CAA section 110(k). Section 110(a)(2)(D) applies to all SIPs for each pollutant covered by a NAAQS and for all areas regardless of their attainment designation. It requires a SIP to contain adequate provisions that prohibit any source or type of source or other types of emissions within a State from emitting any air pollutants in amounts which will contribute significantly to nonattainment in, or interfere with maintenance or attainment of a standard by any other State with respect to any NAAQS. Section 110(k)(5) authorizes the EPA to find that a SIP is substantially inadequate to meet any CAA requirement when appropriate, and, based on such finding, to then require the State to submit a SIP revision within a specified time to correct such inadequacies.

The State of Illinois has the primary responsibility under the CAA for ensuring that Illinois meets the ozone NAAQS and is required to submit a SIP that specifies emission limitations, control measures, and other measures necessary for attainment, maintenance, and enforcement of the NAAQS within the State. The SIP for ozone must meet the CAA requirements discussed above, must be adopted pursuant to notice and comment rulemaking, and must be submitted to the EPA for approval. A number of analyses and EPA rulemaking actions have affected the SIP revisions needed for the Chicago-Gary-Lake County ozone nonattainment area as discussed below.

The States of Illinois, Indiana, Wisconsin, and Michigan have worked cooperatively to provide the EPA with an ozone attainment demonstration for the Lake Michigan area, which includes the Chicago-Gary-Lake County ozone nonattainment area. Analyses conducted to support this ozone attainment demonstration, as submitted in 1994 and supplemented in April 1998, indicate that reductions in upwind NO X emissions are needed to reduce the transport of ozone into these nonattainment areas.

On March 2, 1995, Mary D. Nichols, Assistant Administrator for EPA's Air and Radiation Division, published a memorandum titled “Ozone Attainment Demonstrations.” In this memorandum, the EPA recognized that the development of the necessary technical information, as well as the emission control measures necessary to achieve the attainment of the ozone NAAQS had been difficult for the States affected by significant ozone transport. EPA established a two-phase process for States with serious and severe ozone nonattainment areas to develop ozone attainment SIPs. Under Phase I, States were required to complete 1994 SIP requirements (with the exception of final ozone attainment demonstrations), submit regulations sufficient to meet ROP requirements through 1999, and submit initial ozone modeling analyses, including preliminary ozone attainment demonstrations based on assumed reductions in upwind ozone precursor emissions. Phase II called for a two-year consultative process to assess regional strategies to address ozone transport in the eastern United States and required submittal of all remaining ROP submittals to cover ROP through the attainment dates, final attainment demonstrations to address the emission reduction requirements resulting from the two-year consultative process and any additional rules and emission controls needed to attain the ozone standard, and any regional controls needed for attainment by all areas in the eastern half of the United States.

In response to the problem of ozone transport, the Environmental Council of States (ECOS) recommended the formation of a national workgroup to assess the problem and to develop a consensus approach to addressing the transport problem. As a result of ECOS' recommendation and in response to the March 2, 1995 EPA memorandum, the Ozone Transport Assessment Group (OTAG), a partnership among EPA, the 36 eastern States and the District of Columbia, and industrial, academic, and environmental groups, was formed to conduct regional ozone transport analyses and to develop a recommended ozone transport control strategy. OTAG was given the responsibility for conducting the two-years of analyses envisioned in the March 2, 1995, EPA memorandum.

OTAG conducted a number of regional ozone data analyses and regional ozone modeling analyses using photochemical grid modeling. In July 1997, OTAG completed its work and made recommendations to the EPA concerning the regional emissions reductions needed to reduce transported ozone as an obstacle to attainment in downwind areas. OTAG recommended a possible range of regional NO X emission reductions to support the control of transported ozone. Based on OTAG's recommendations and other information, EPA issued the NO X SIP Call rule on October 27, 1998. 63 FR 57356.

In the NO X SIP Call, EPA determined that sources and emitting activities in 23 jurisdictions 1 emit NO X in amounts that “significantly contribute” to ozone nonattainment or interfere with maintenance of the 1-hour ozone NAAQS in one or more downwind areas in violation of CAA section 110(a)(2)(D)(i)(I). EPA identified NO X emission reductions by source sector that could be achieved using cost-effective measures and set state-wide NO X emission budgets for each affected jurisdiction for 2007 based on the possible cost-effective NO X emission reductions. The source sectors include nonroad mobile, highway mobile, area, electrical generating units (EGUs) (including stationary boilers and turbines, which may generate steam for industrial processes but whose primary purpose is to generate electricity for sale to the electrical grid), and major non- EGU stationary point sources (process stationary boilers or turbines, whose primary purpose is to generate steam for industrial processes). EPA established recommended NO X emissions caps for large EGUs (serving a generator greater than 25 megawatts) and for large non-EGUs (maximum design heat input of greater than 250 million British thermal units [Btu] per hour [mmBtu/hr]). EPA determined that significant NO X reductions using cost-effective measures could be obtained as follows: application of a 0.15 pounds NO X /mmBtu heat input emission rate limit for large EGUs; a 60 percent reduction of NO X emissions from large non-EGUs; a 30 percent reduction of NO X emissions from large cement kilns; and a 90 percent reduction of NO X emissions from large stationary internal combustion engines not serving electricity generators. The 2007 state-wide NO X emission budgets were established by jurisdiction, in part, by assuming these levels of NO X emission controls coupled with NO X emissions projected by source sector to 2007.

Although the state-wide NO X emission budgets were based on the levels of reduction achievable through cost-effective emission control measures, the NO X SIP Call allows each State to determine what measures it will choose to meet the state-wide NO X emission budgets. It does not require the States to adopt the specific NO X emission rates assumed by the EPA in establishing the NO X emission budgets. The NO X SIP Call merely requires States to submit SIPs, which, when implemented, will require controls that meet the NO X state-wide emission budget. The NO X SIP Call encourages the States to adopt a NO X cap and trade program for large EGUs and large non-EGUs as a cost-effective strategy and provides an interstate NO X trading program that the EPA will administer for the States. If States choose to participate in the national trading program, the States must submit SIPs that conform to the trading program requirements in the NO X SIP Call.

On April 30, 1998, and December 26, 2000, the State of Illinois submitted a major revision of the ozone attainment demonstration for the Chicago-Gary-Lake County ozone nonattainment area. In that attainment demonstration revision, the State demonstrated that significant reductions in transported ozone and NO X would be necessary to achieve attainment of the 1-hour ozone standard in the nonattainment area. Illinois committed to complete the ozone attainment demonstration and to adopt sufficient local and regional controls as needed to demonstrate attainment of the ozone standard and to submit the final attainment demonstration and adopted regulations to the EPA by December 2000. The EPA proposed to conditionally approve the 1-hour attainment demonstration based, in part, on the State's commitment to adopt and submit a final attainment demonstration and a post-1999 ROP plan, including the necessary State emission control regulations, by December 31, 2000. 64 FR 70496. The NO X regulations reviewed in this rule are, in part, intended to meet part of the State's commitment to complete the ozone attainment demonstration for the Chicago-Gary-Lake County nonattainment area.

When the EPA published the NO X SIP Call on October 27, 1998, a number of States and various industry groups filed petitions challenging the SIP Call before the United States Court of Appeals for the District of Columbia Circuit. See Michigan v. EPA , 213 F.3d 663(D.C. Cir. 2000). The Court, on May 25, 1999, stayed the obligation of States to submit SIPs in response to the NO X SIP Call rule. Subsequently, on March 3, 2000, the Court upheld most of the NO X SIP Call. The Court, however, vacated the SIP Call as it applied to Missouri and Georgia and remanded for further consideration the inclusion of portions of Missouri and Georgia in the rule. The Court also vacated the rule as it applied to Wisconsin because EPA had not made a showing that sources in Wisconsin significantly contribute to nonattainment or interfere with maintenance of the ozone NAAQS in any other State. Finally, the Court also remanded two issues concerning a limited portion of the NO X emission budgets. On June 22, 2000, the Court removed the stay of States' obligation to submit SIPs in response to the NO X SIP Call and denied petitioners' motions for rehearing and rehearing en banc. In removing the stay, the Court provided that EPA should allow 128 days for States to submit SIPs. Thus, SIPs were to be submitted to us by October 30, 2000.

On June 29, 2000, the Illinois Environmental Protection Agency (IEPA) submitted a draft NO X emission control rule to the EPA for pre-adoption review.

On July 18, 2000, EPA received a letter from David J. Kolaz, Chief, Bureau of Air, Illinois Environmental Protection Agency, which contained a number of documents, including the draft rule submitted on June 29, 2000, along with additional documentation for the draft rule. The letter included a request from the Bureau Chief to process the submittal in parallel (i.e., parallel processing) to the development of the rule at the State level and included a schedule for development and adoption of the rule by the State.

Parallel processing allows a State to submit a plan for approval prior to actual adoption by the State. 47 FR 27073 (June 23, 1982) A submittal for parallel processing must include the following three items: a letter from the State requesting parallel processing; a schedule for final adoption or issuance of the plan; and a copy of the proposed regulation or document. Illinois submitted these three items of information in the letter dated July 18, 2000, from the Bureau Chief. The Bureau Chief is the authorized representative for the State to submit SIP revisions. The letter asks that EPA parallel process the submittal, and it includes milestones leading to final adoption of the plan. The milestones were acceptable to EPA as a schedule, however the end date of final approval (final rule adoption) by the Illinois Pollution Control Board (IPCB) could not be precisely established. Enclosed with the letter was a copy of the draft NO X rule along with a “Statement of Reasons” provided to the IPCB by the Legal Counsel of the Illinois Environmental Protection Agency to support the adoption of the rule.

On December 27, 2000, EPA received a final rule, Illinois Administrative Code 217, Subpart W, NO X Trading Program for Electrical Generating Units. This rule was made effective as of December 21, 2000, following approval by the IPCB. The rule included changes recommended by EPA with the exception of the portion of the rule (section 217.756(d)(3)) which contained unapprovable compliance delay language. The Administrative Register version of this package, containing a technical support document, supplemental information, hearing comments and other information such as the ozone attainment demonstration was submitted in a letter dated February 23, 2001. This package contained compliance delay language as the only nonapprovable element of the submittal. The compliance delay language provided for the State to delay compliance with the rule to the year following such time that all other States in EPA Region 5, and States contiguous with the State of Illinois, have adopted NO X regulations and EPA has approved these State's NO X plans.

However, in a June 27, 2001, letter from the Chief, Bureau of Air, Illinois Environmental Protection Agency, EPA was informed that on June 22, 2001, the Governor signed into law House Bill 1599. This new Illinois law specifies a final compliance date of May 31, 2004, and satisfies EPA concerns expressed in our August 31, 2000, proposal.

The State based the rule primarily on EPA's part 96 Trading Rule. Many sections of part 96 are incorporated by reference (IBR) into the rule. In addition to IBR of portions of 40 CFR part 96, Illinois' NO X rule also includes IBR of portions of 40 CFR parts 60, 72, 75, and 76. Section 217.104 of the Illinois rule identifies the CFR parts and sections included in the IBR. Table 1 identifies the Volume 40 CFR parts and sections included by IBR in Illinois' NO X rule.

In addition to the IBR portion, the rule contains a number of other subparts and sections. Table 2 lists these subparts and sections. Some of these were derived from federal regulations. (Illinois attempted to either revise the federal regulations to more abbreviated versions or to revise the federal regulations to make them more compatible with existing State regulations.) Where appropriate, the final column of Table 2 notes the federal regulation(s) from which the State regulation was derived or notes the effect of the State regulation relative to related federal regulations.

Using information provided by the IEPA to the IPCB in support of the adoption of this rule, the following summarizes several of the various rule sections listed in Table 2 above.

A number of new definitions are added to an existing part 211 of Illinois' air pollution rules. Definitions of the following terms are added: Allowance; Combined Cycle System; Combustion Turbine; Common Commercial Operation; Commence Operation; Common Stack; Control Period; Excess Emissions; Fossil Fuel; Fossil Fuel-Fired; Generator; Heat Input; Heat Input Rate; Nameplate Capacity; Potential Electrical Output Capacity; and Repowering. The specifics of these definitions do affect the completeness and enforceability of the rule(s) that uses them. Therefore, they have been compared to definitions contained in 40 CFR parts 96 and 97 as part of the review conducted for this final rulemaking. EPA concurs with these definitions.

This section specifies the purpose of the State's NO X rule.

This section states that the measurement of NO X emissions at sources and facilities covered by the rule shall be conducted according to: (a) the phenol disulfonic acid method (40 CFR part 60, appendix A, Method 7 (1999)); and continuous emissions monitoring pursuant to 40 CFR part 75 (1999).

Like definitions of terms, abbreviation definitions can affect the completeness and enforceability of a rule, and the abbreviations added to this rule have been reviewed from this standpoint. It should be noted that part 211 of Illinois' air pollution rules also contains a number of defined abbreviations. The abbreviations added in section 217.102 are specific to the NO X rule and do not necessarily apply to other Illinois air pollution control rules.

As noted above, the State amended section 217.104 (to add this section to existing Illinois rules) to add portions of 40 CFR part 96 and 40 CFR parts 72, 75, and 76 (see Table 1 above) to the documents that have been incorporated into Illinois' rules by reference. IBR documents are an integral part of Illinois' rules and are enforceable in the same manner as one would enforce any State rule.

This section addresses the applicability of the State's NO X trading program. Subsection (a) provides that the NO X trading rule and emissions cap applies to all fossil fuel-fired stationary boilers, combustion turbines or combined cycle systems, serving a generator which has a nameplate capacity exceeding 25 megawatts (MWe) if the generated electricity is sold. This section also applies to fossil fuel-fired units with a maximum design heat input rate of greater than 250 mmBtu/hour and serving smaller generators under certain specified circumstances, including the condition that a served generator is larger than 50 percent of a unit's potential electrical output capacity (such a unit would also be classified as an electrical generating unit subject to the rule and the trading program requirements). Subsection (b) of this section provides that units meeting the above criteria are subject to the emission limits of the NO X Trading Program.

Subsection (c) provides an exemption for low-emitters, such as units that burn natural gas and/or fuel oil exclusively and have potential NO X emission rates of 25 tons or less during the control period. The owner or operator of such a unit may choose to get an operating permit that limits emissions to this lower level through federally enforceable conditions as specified in this subsection. Owners and operators seeking low emitter status affect the emission allowances covered in the NO X Trading Program.

Further interpretation of this section is contained in a June 18, 2001, letter from IEPA addressing low-emitter status. The intent of Illinois' low emitter status provisions in Subpart U (§ 217.472) and Subpart W (§ 217.754 (c)) is to provide a unit two alternatives to qualify for low emitter status. The first alternative requires a unit to take permit limits on its operating hours and potential NO X mass emissions in order to ensure that the unit's potential NO X mass emissions do not exceed 25 tons of NO X in an ozone season. The operating hours restriction follows the procedures in EPA's model rule, 40 CFR 96.4(b), and is calculated using a default NO X emissions rate and the unit's maximum potential hourly heat input.

The second alternative allows a unit with monitored ozone season NO X emissions of 25 tons or less, as monitored according to part 75, to qualify for low emitter status. Under this alternative, a unit must again take permit limits restricting ozone season operating hours and potential NO X mass emissions during the ozone season to 25 tons or less.

Also, the State made clearer, in its letter, the meaning of the term “potential” in these provisions. In Subpart W, section 217.754(c), this term is first used in paragraph (c)(1)(B), stating that the source's permit must “Limit the EGU's potential NO X mass emissions * * * to 25 tons or less.” Under paragraph (c)(1)(D), the permit must in addition “Require that the EGU's potential NO X mass emissions be calculated [either by monitoring according to 40 CFR Part 75 or by multiplying maximum potential hourly emissions times hours of operation].” Consequently, “potential emissions” must be interpreted to mean the emissions determined according to whichever method is used under section 217.754(c)(1)(D). Since the measurements under 40 CFR Part 75 measure actual emissions, a low emitting source using such monitoring would rely largely on actual emissions data to evaluate compliance with the permit limit on potential NO X mass emissions.

The contents of this letter and an analysis was published in the proposed rule dated June 28, 2001 (66 FR 34382), because similar provisions are found in Subpart U, Section 217.472(a). The public comment period closed for the June 28, 2001 proposed rule on July 30, 2001. No adverse comments were received on Illinois' low-emitter status provisions. EPA believes the explanation provided by the State regarding low-emitter status adequately addresses EPA's concerns.

This section specifies the compliance requirements for EGUs subject to the NO X Trading Program (budget EGUs). Owners or operators of each source that has one or more budget EGUs must submit an application meeting the requirements of section 217.758 for an emissions budget permit from the IEPA. The budget permit must specify federally enforceable conditions covering the NO X Trading Program and must satisfy all other permitting requirements in Illinois' air quality rules. The application for a budget permit is subject to specified timing requirements.

Subject budget EGUs must meet specified monitoring requirements, including continuous emissions monitoring. An account representative for a subject budget EGU must comply with specified monitoring compliance certification and reporting requirements of 40 CFR part 96, subpart H. The monitoring results will be used to certify compliance with the budget emissions limitations.

Subsection (d) requires the account representative for a budget EGU to hold sufficient emission allowances available for compliance deduction in the budget EGU's compliance account or the source's overdraft account by November 30 of each year, starting in the compliance year, to account for NO X emissions. Only a certain number of allowances will be given to a budget EGU each control period (May 1 through September 30) based on an established State-wide NO X emissions cap and an allowance distribution system devised cooperatively by the State and the affected sources. Budget EGUs can not use an allowance prior to the control period in which it is allocated by the State.

Subsection (e) provides the recordkeeping requirements for the budget EGUs. All emission monitoring information must be recorded and maintained in accordance with 40 CFR part 96, subpart H. Documents and records must be kept and must be made available for inspection upon request for 5 years unless a different period is specified elsewhere (under other parts of these SIP rules).

Subsection (f) contains the provisions governing liability of budget EGUs, their owner and operators, and account representatives. The owner and account representative of one budget EGU are not liable for any violation of any other budget EGU with which they are not affiliated, except with respect to requirements for EGUs with a common stack.

The budget permit of a budget EGU must contain federally enforceable conditions that apply to the unit and provide that the budget permit is a complete and separable portion of the source's entire permit.

Subsection (a) prohibits the issuance of a budget permit and the establishment of a NO X emissions allowance until the IEPA and the EPA have received a complete “account certificate of representation” from the budget EGU's account representative, and sets forth the timing for submitting a budget permit application where one or more of the budget EGUs are subject to the requirements of section 39.5 of the Illinois Clean Air Act Permit Program. Budget EGUs not subject to these requirements are also required to obtain a permit with federally enforceable conditions.

Subsection (a) provides that the total base NO X trading budget available statewide for allowance allocations for each control period (May 1 through September 30) is 30,701 tons (30,701 allowances). This budget may be increased or decreased under various circumstances, such as the opt-in of non-subject sources or the opt-out of exempted low-emitter sources. This subsection also provides that for the years of 2004 through 2006, 5 percent of the 30,701 allowances will be allocated to a new source set-aside. For the years 2007 and thereafter, the new source set-aside will be reduced to 2 percent of the 30,701 allowances.

Subsection (b) authorizes the IEPA to adjust the total EGU trading budget available for allocation. This is done to remove allowances for low-emitters opting to become exempt from some provisions of the NO X Trading Program.

Subsection (c) authorizes the IEPA to adjust the total base EGU trading budget pro-rata if the EPA subsequently makes adjustments in the EGU budget.

The methodology used to calculate allocations (not the total state-wide emission cap) is based on the emission rate limit and a unit's control period heat input. Appendix F of the rule lists the budget EGUs and their associated allowances. For budget EGUs, including opt-ins, not listed in Appendix F, the limiting emission rate used in the calculation of allowances is the more stringent of 0.15 pounds NO X /million Btu heat input or the permitted NO X emission rate, but never less than 0.055 pounds NO X per million Btu heat input.

Subsection (b) sets forth how the heat input is to be determined for the control period. This heat input for each budget EGU is used along with the emission limit to determine the NO X allowance for the EGU.

This section sets forth, for each control period, the allowance allocations for budget EGUs. The allocations involve a “fixed/flex” approach from 2007 through 2010 and a “100 percent flex” approach in 2011 and thereafter (consult this section of the rule for the details of these approaches). The allocations for 2004 through 2006 are specified in subsection (a). Other subsections provide for allocations of allowances to budget EGUs for follow-on years out to 2011.

This section sets aside allowances for new sources as noted above. During the period of 2004 through 2006, any allowances that are not allocated to new sources will be allocated to certain EGUs. After January 1, 2004, new budget EGUs that commence commercial operation may purchase allowances from the new source set-aside based on a pricing structure defined in this section.

This section allows budget EGUs to request early reduction credits (ERCs) if they reduce NO X emissions in the 2001, 2002 or 2003 control periods for use in 2004 and 2005 control periods. This section sets forth the various requirements associated with the generation and recording of these ERCs along with the requirement for monitoring system availability. It is understood that early reduction credits for the year 2001 would require emissions monitoring according to part 75 during the 2000 ozone period in order to establish a baseline and for each control period for which early reduction credits are requested. This and other issues were addressed to the State in a letter dated May 16, 2001.

The final rules affect all fossil fuel-fired boilers, combustion turbines or combined cycle systems in the State of Illinois serving a generator with a nameplate capacity greater than 25 MWe and selling electricity (and boilers, turbines, and all combined cycle systems in the State of Illinois serving smaller generators provided that these units have heat input rates exceeding 250 mmBtu/hour and have a potential to provide more than 50 percent of their power output to the generators), and any opt-in sources in the State of Illinois as described in the rule.

The NO X reductions called for in the State rule are based on an NO X emissions cap required for EGUs in the State. The target budget established in the State rule is 30,701 tons for the control period. The cap is based on an emission rate of 0.15 pounds/mmBtu heat input for EGUs operating in 1995/1996 applied to operating levels expected in 2007. With regard to the attainment demonstration for the Chicago-Gary-Lake County nonattainment area, the State submitted an attainment demonstration on December 26, 2000. This rule is intended to provide the level of control from EGUs that, in conjunction with rules establishing similar requirements for other source types, will meet Illinois' NO X emission budget under the NO X SIP Call.

The IEPA incorporated by reference the EPA Part 96 monitoring, recordkeeping, and reporting requirements for affected sources. However, in section 217.770(a) of the rule, which addresses early reduction credits for budget EGUs, the rule provided that “* * * monitoring system availability shall be not less than 80 percent during the control period prior to the control period in which the NO X emissions reduction is made * * *”. Also, in the opt-in process, the State, in section 217.776(b) addressed monitoring system availability of “* * * not less than 80 percent * * *”. This differed with the EPA requirement for monitoring in section 96.84(b) of 40 CFR part 96, which requires 90 percent availability. In the course of finalizing the rule, the State revised the availability requirement to 90 percent and, therefore, this portion of the rule is approvable.

The Illinois rule had a compliance date that was contingent upon implementation of NO X rules in other States. Section 217.756 stated that sources “* * * shall be subject to the monitoring and [emission control] requirements * * * starting on the later of May 1, 2003, * * * or [May 1 of the year after] all of the other States subject to the provisions of the NO X SIP Call [in Region 5 or contiguous to Illinois] have adopted regulations to implement NO X trading programs and other required reductions of NO X emissions pursuant to the NO X SIP Call, and such regulations have received final approval by USEPA * * *, or a final FIP for ozone promulgated by USEPA is effective.” The relevant other States are Indiana, Michigan, Ohio, Missouri, and Kentucky. This language provided for compliance with relevant requirements by May 1, 2003, except that a later compliance date would apply if any of these five other States did not have adequate NO X regulations either as approved State regulations or as effective promulgated Federal regulations by the end of 2002.

This language raised significant concerns which we communicated to the State. For EPA to approve this rule and the expected other related rules as satisfying the NO X SIP Call, EPA must conclude that the controls needed to achieve the budget will be required by May 31, 2004. As noted above, in a June 27, 2001, letter, IEPA informed EPA that on June 22, 2001, the Governor signed into law House Bill 1599 which specifies a May 31, 2004, compliance date applicable to this rule and other rules which are part of the NO X SIP.

EPA believes the Illinois NO X EGU rule submittal addresses all of the elements of the NO X model rule for EGUs and therefore, when fully implemented, will meet the existing requirements of the Federal NO X budget. The State's SIP included rules controlling emissions from electric generating units, non-electric generating units, cement kilns, and associated budget trading rules. The SIP also includes a rule which incorporates by reference portions of the Federal part 96 rule, and includes a budget demonstration which was submitted by the Chief, Bureau of Air, in a letter dated June 18, 2001.

The most significant portion of the plan was a revision of the State's rules, requested by EPA, which responded to our concerns regarding the delayed compliance date affecting the three source categories and the budget trading program. This revision to the rules was brought about by a change in legislation, signed by the Governor and submitted by the State to EPA in a letter dated June 27, 2001.

All of these items have been reviewed by EPA and found to meet the requirements set forth in the EPA model rule and in part 51.121. The State has not yet submitted a rule to control internal combustion engines because EPA has not promulgated its final rule for this source category.

The budget data are derived from EPA's inventory, obtained from the EPA Internet site at ftp.epa.gov/EmisInventory/NOxSIPCall_Mar2_2000/. The following table summarizes the 2007 budget for the five categories of sources identified in EPA's rulemaking, namely electrical generating point sources (EGUs), non-electrical generating point sources (non-EGUs), stationary area sources, non-road mobile sources, and on-road mobile sources.

The reductions of 11,246 tons from non-EGUs are based on reductions at large cement kilns, large industrial boilers and turbines, and assuming a 90% reduction from large internal combustion (I.C.) engines. Illinois has not yet submitted a rule to control I.C. engines because EPA has not promulgated its final rule covering I.C. engines. Also, in the Subpart U (non-EGU) SIP submittal, Illinois EPA has requested that EPA incorporate a slightly revised budget for non-EGUs that reflects inventory corrections. When these revisions are incorporated, the non-EGU point source's 2007 base and 2007 budget emissions will be 71,011 and 59,765 tons of NO X per ozone season, respectively, as compared to the 70,948 and 59,577 tons per season reported in EPA's inventory.

As with the approach EPA assumed in formulating its budget, Illinois' approach reflects controls on EGUs and on non-EGUs. Illinois' rules provide for large EGUs and large point non-EGUs to participate in the Federal NO X Trading Program, and their NO X emissions are capped at the same level as contained in EPA's inventory of March 2, 2000, with the exception of revisions requested in Illinois' non-EGU (Subpart U) SIP revision. The revised trading budget for non-EGUs as proposed by Illinois is 4,856 tons, as compared to 4,882 reported in the EPA's inventory. The Subpart T cement kiln rule does not cap NO X emissions from large kilns. Illinois followed EPA's model rule in developing the Subpart T regulation. It is a technology/rate-based rule. Though Illinois has used the emissions reductions specified in the March 2, 2000, inventory, the NO X emissions can decrease or increase slightly depending on the options the sources choose to comply with the Subpart T rule. EPA is satisfied with the State's submittal.

The State reports that early in 1999, the IEPA commenced regular meetings with the NO X Technical Committee and with representatives of the existing EGUs. The State met with these existing sources on numerous occasions. Most of the time was spent developing concepts in the flexible portions of the Federal NO X Trading Program, i.e., initial allocations, allocation methodology, and the use of the Compliance Supplement Pool. The State also met with new EGUs and again with existing EGUs for a second time to discuss how allowances would be allocated.

Following the May 25, 1999 stay by the Court of Appeals, the IEPA shifted its effort to meet the requirements of the 1-hour ozone standard attainment demonstration. When this stay was lifted on June 22, 2000, IEPA again began to formulate a program to comply with the NO X SIP Call rule. IEPA again met with the affected sources and also with the American Lung Association of Chicago, the Illinois Environmental Council, the Environmental Law and Policy Center, and the Illinois Environmental Regulatory Group.

As noted in the December 16, 1999 proposed rulemaking on the State's attainment demonstration for the Chicago-Gary-Lake County ozone nonattainment area (64 FR 70496), the attainment demonstration noted that significant reductions in regional NO X emissions would be needed to attain the standard in the nonattainment area. The State did assume significant future reductions in background (transported) ozone levels and upwind NO X emissions to reflect possible impacts from EPA's NO X SIP Call based on information available prior to April 1998.

The State of Illinois asked that the Part 217 NO X emissions control rule be parallel processed by EPA in order to expedite eventual approval of the State's NO X SIP. Guidance for parallel processing is found at 47 FR 27073 (June 23, 1982). In addition, we used 40 CFR part 96 for review of portions of the submittal which apply. The State incorporated by reference a significant portion of 40 CFR part 96. The portions incorporated by reference are listed elsewhere in this action.

Illinois and other Lake Michigan States completed the attainment demonstration for the Lake Michigan area. EPA proposed on July 11, 2001 (66 FR 36370) to approve IEPA's Chicago area attainment demonstration because we believe it adequately demonstrates attainment for the Chicago-Gary-Lake County ozone nonattainment area. A complete discussion of the budget demonstration can be found at 66 FR 34382.

No. The Part 217 rule only addresses the NO X controls for EGUs. Although these reductions are significant, they are not sufficient to guarantee that the State will achieve the NO X emission budget established in the NO X SIP Call. To achieve the acceptable NO X emission level of the NO X SIP Call, the State adopted additional emission control regulations for non-EGUs and Cement Kilns. The adequacy of the full set of reductions to satisfy the NO X SIP Call requirements is addressed in separate rulemaking on these sources and on the budget demonstration (See 66 FR 34382). Other previously identified deficiencies and how Illinois addressed them are discussed below.

We reviewed the State's draft Part 217 NO X trading program rule for EGUs and gave the State comments on deficiencies. EPA again reviewed the rule when it was submitted in February 23, 2001, and found the State made many of the corrections suggested by us. These deficiencies were corrected by Illinois and the State included these changes in an errata sheet filed with the Illinois Pollution Control Board during its hearing process. We again reviewed the rule and the legislation following the action by the Legislature which addressed the compliance delay language and found this portion addressing compliance delay to be acceptable.

The reference to Method 7 is questionable. Method 7 is a one time stack test. The rule should require Continuous Emissions Monitoring Systems (CEMS). Additionally, there is a more recent method than method 7. It is method 7e. The State made this correction in its final rule. The State's rule incorporates by reference EPA's measurement methods, it also refers to 40 CFR part 75. Table 1 lists the elements of EPA's model rule which the State incorporated by reference. Included in that list is part 75 Continuous Emissions Monitoring which the State requires for all sources subject to this rule. It is clear that the State's intent in this section is to see that all sources use CEMs as the exclusive requirement for measuring emissions.

If a unit receives low emitter status, it will not be required to monitor emissions. The unit will need only to report operating hours. In Subpart W at 217.754(c) of the State's rule, which requires potential NO X emissions to be calculated by either part 75 or by the default emissions rate, the rule should require only the use of default emissions rates. However, in the State's final rule this recommendation was not followed. The intent of this portion of the rule is to provide a unit two alternatives to qualify for low emitter status. The first alternative requires a unit to take permit limits on its operating hours and potential NO X mass emission in order to ensure that the units potential NO X mass emission do not exceed 25 tons during the ozone season.

The second alternative allows a unit with monitored ozone season NO X emissions of 25 tons or less, as monitored according to part 75, to qualify for low emitter status. Under this alternative, a unit must again take a permit limit restricting ozone season operating hours and potential NO X mass emissions during the season to 25 tons or less.

The State goes on to define the use of the term “potential NO X mass emissions” as it is used in this section. In Subpart W, section 217.754(c), this term is first used in paragraph (c)(1)(B), stating that the source's permit must “Limit the EGU's potential NO X mass emissions * * * to 25 tons or less.” Under paragraph (c)(1)(D), the permit must in addition “Require that the EGU's potential NO X mass emissions be calculated [either by monitoring according to 40 CFR 75 or by multiplying maximum potential hourly emissions times hours of operation].” Consequently, “potential emissions” must be interpreted to mean the emissions determined according to whichever method is used under section 217.754(c)(1)(D). Since the measurements under 40 CFR 75 measure actual emissions, a low emitting source using such monitoring would rely largely on actual emissions data to evaluate compliance with the permit limit on potential NO X mass emissions.

This section repeats section 96.6 of 40 CFR part 96, which is already incorporated by reference in the State rule. EPA recommended section 217.756 be deleted. The State chose to leave this section in its rule as a means of providing fuller notice to sources in Illinois subject to the rule applicable to them.

(d)(3). This subsection is discussed in detail in previous pages of this action and was the main reason for EPA's August 31, 2000, proposed disapproval in the alternative (See 65 FR 52967). In a June 27, 2001, letter to EPA, IEPA informed EPA that on June 22, 2001, the Governor signed into law House Bill 1599 which specifies a May 31, 2004, compliance date.

(g). Effect on other authorities—We recommended that rather than referencing 40 CFR 96.4(b), the rule should reference 217.754(c). The State agreed and made the change.

Throughout this section, when the State addressed allocation of allowances from the new source set-aside, it uses the phrase “to budget EGUs that have not fully operated for the full 2000 control period (italics supplied).” Read literally, it could authorize an existing source that was shut down for part of a control period to receive allowances from the new source set-aside. We recommended the State clarify this, perhaps by replacing the italicized phrase with the phrase “commenced commercial operation.” This latter term is used in section 217.768. In order to use consistent terminology, the State made the recommended change.

(i) In this section the State should clarify the phrase “* * * less than one-half of the control period in 2002 * * *”. EPA recommended this language be more specific. The State changed this to “* * * but have operated for 76 or fewer days of the control period in 2003 * * *” This changed not only the language to clarify the meaning but also changed the year to reflect the court change in the date of compliance.

(a) The unit's monitoring data availability was listed at 80 percent. In the State's final rule data availability was changed to 90 percent, as in the model Federal rule. The phrase, the “* * * control period prior to the control period * * *” is ambiguous due to the double reference to “control period.” This was made clear in the final rule. The State also revised the years in which early reduction credits can be earned as reflected in the change in the date by which sources must be in compliance.

(a)(2) By its terms, the provisions authorize units to opt-in only if all of their emissions are vented to a stack and monitor in accordance with part 75.

(b) Monitoring data availability was 80 percent in the State's proposed rule. The State changed this to 90 percent in it's final rule.

(b)(3) In the State's final rule this section was changed to (b)(2). The rule referred to “any allowances allocated to that unit under section 217.782 of this subpart for the control period * * * (emphasis added).” We recommended the emphasized term be revised to read “* * * the same or earlier control period * * *” The State's final rule includes this recommended change.

Throughout this section, the State refers to a unit which changes its regulatory status and becomes a budget opt-in unit. In fact, this provision is meant to address units which change their regulatory status and become budget units. EPA recommended in this section the phrase “* * * budget opt-in unit * * *” be replaced with the phrase “* * * budget EGU * * *”. The State did not make this recommended change as it believed the change was not necessary. The State retained the terminology in order to keep it straight for purposes of Illinois sources that are opt-in units, not ones that are required to be in the trading program. As they are opt-in units, they can opt out again. The State believes the meaning of the phrase from any point of view is not ambiguous. We agree, and this is not an approvability issue.

(b)(2)(B) This section was unclear and referred to the year of the control period not to the year prior to the year of the control period. The State agreed and made the change in the final rule.

EPA proposed to approve the Illinois EGU rule on August 31, 2000 (65 FR 52967). We received 2 comments on the proposal. One comment was from the State of Missouri Department of Natural Resources, Division of Air Quality (DAQ). This comment dated October 2, 2000, was a letter requesting that EPA extend the comment period by 30 days so that DAQ would have sufficient time to review the Federal proposal and its potential impacts on Missouri and submit substantive comments to EPA. No follow-up comments on the proposal were received from the DAQ, and its request to extend the comment period was subsequently withdrawn.

The second comment is from the State of Illinois and was received in a letter dated September 29, 2000. These comments responded to specific issues EPA noted in the August 31, 2000, proposal including a comment on proposed State rule concerning the compliance delay language.

EPA is taking final action today to approve Illinois' Administrative Code 217, Subpart W, NO X Trading Program for Electrical Generating Units. These rules require reductions in emissions of nitrogen oxides from large EGUs and require a statewide cap on NO X emissions, consistent with the requirements of the NO X SIP Call. 63 FR 57355 (October 27, 1998)

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 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 10, 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 January 7, 2002. 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 EPA is approving the Indiana Department of Environmental Management's (IDEM's) NO X SIP Call SIP revision. The following table of contents describes the format for this SUPPLEMENTARY INFORMATION section:

In the following questions and answers, whenever the term “you” is used it refers to the reader of this final rule and “we,” “us,” or “our” refers to the EPA.

On March 30, 2001, IDEM submitted its proposed plan and requested parallel processing, which allows a state to submit a draft plan for approval prior to actual adoption by the state. On July 2, 2001, through parallel processing, EPA proposed approval of the plan. On August 20, 2001 and September 19, 2001, IDEM submitted its final NO X emission control plan to the EPA.

IDEM had originated its rulemaking process on regional NO X reductions in 1999. EPA reviewed and provided extensive comments on several previous drafts of the rules. The State addressed all issues raised before adopting its final rules. The State did not, however, address some of the issues before it proposed rules. Since our proposal was based on the State's proposed rules, EPA discussed these issues at length in our proposed approval. Indiana's final resolution of each of these issues is consistent with our comments in our proposed rule, as discussed in this Federal Register action.

Indiana's final plan includes a budget demonstration, supporting materials and two NO X rules: 326 IAC 10-3, pertaining to cement kilns and blast furnace gas boilers, and 326 IAC 10-4, a trading program focusing on reductions from electric generating units (EGUs) and large boilers and turbines. The budget demonstration is discussed in more detail in Section C, “How does Indiana address its statewide NO X budget?” The supporting materials include information such as the number of allowances that Indiana intends EPA to allocate to each EGU unit for 2004—2006 and each large affected non-EGU unit for 2004—2009 and detailed inventories. The rules included in the plan require compliance statewide by May 31, 2004. This plan constitutes Indiana's response to “Phase I” of the NO X SIP Call. “Phase I” NO X budgets reflect controls on EGUs subject to the acid rain program, large boilers and turbines, and cement kilns. The tables below summarize the requirements of Indiana's two final rules and highlight some key differences between 326 IAC 10-4 and the model rule in the NO X SIP Call (40 CFR Part 96). These tables are not meant to be exhaustive of every requirement in Indiana's rules. Rather, they are intended to provide a general idea of how Indiana's rules are structured and some of the significant requirements. For a complete understanding of the rules, please see the applicable rulemaking package which is available at the locations listed in the ADDRESSES section of this final approval.

In addition to the specific rule for cement kilns and blast furnace gas boilers, 326 IAC 10-3, Indiana adopted a rule to implement the Nitrogen Oxides Budget Trading Program at 40 CFR part 96.

Two sections of the 40 CFR part 96 model rule, namely 40 CFR 96.1 and 40 CFR 96.3, were not addressed by a specific section in Indiana's rule. 40 CFR 96.1 describes the purpose of the model rule and establishes the general framework. It provides that a unit needs to comply only after a state with proper jurisdiction adopts and submits a rule and the EPA approves that rule as part of the SIP. 40 CFR 96.1 also requires that, to the extent a state adopts specified parts of the rule, that state needs to authorize the EPA to assist in the implementation. Indiana addressed this requirement in its rule's definition of EPA in 326 IAC 10-4-2(73), where it authorizes EPA to assist in operating the trading program. 40 CFR 96.3 is simply a list of acronyms that were used in the model rule. Unlike the model rule, instead of defining the acronyms in one section, Indiana's rule usually defines those acronyms the first time they are used in the document.

EPA finalized a NO X budget for each affected state on October 27, 1998, in its NO X SIP Call (63 FR 57355). Since that time, EPA has also published two technical amendments. In addition, the D.C. Circuit Court of Appeals rendered an opinion on March 3, 2000, that, while generally upholding the NO X SIP Call, slightly changed states' NO X SIP Call budgets. EPA sent letters to the affected states' governors on April 11, 2000, to specify what portion of the budget needed to be met to achieve the reduction consistent with the amendments as upheld by the Court. Consistent with the Court's opinion, these budgets, referred to as the “Phase I NO X budgets,” reflect controls on EGUs subject to the acid rain program, large boilers and turbines, and cement kilns. For Indiana, the Phase I budget was 234,625 tons for each NO X SIP Call ozone control period. The corresponding compliance supplement pool was 19,915 tons. The “compliance supplement pool” is a voluntary provision that provides flexibility to states in addressing concerns of full compliance by May 31, 2004. Each state will be able to use its pool to provide additional allowances that sources may use to cover emissions during the 2004 and 2005 ozone control periods.

In the budget demonstration, the State took a slightly different approach than that laid out by EPA in the phased approach, and also requested several changes to the statewide budget. The resulting overall budget for the State that EPA is approving in this action is 233,633 tons. These changes also affect the portion of the budget being used to ensure that the appropriate reductions are achieved from EGUs and large industrial boilers and turbines in the State, namely the trading budget. The State trading portion of the budget, in its final rule and submittal, is 53,960 tons.

In the budget demonstration, IDEM used the same inventories as the EPA for area, on-road mobile and non-road mobile categories. IDEM also used the inventories from the NO X SIP Call as a starting point for its budget demonstration for EGUs and the non-EGU point sources.

For the EGU inventory, IDEM started with the inventory from the March 2, 2000 technical amendment(65 FR 11222). In doing so, IDEM has considered all the reductions assumed for EGUs, including assumed reductions from the EGUs not currently covered under the acid rain program. IDEM then requested moving several units at the Indianapolis Power & Light Perry K facility, identified by EPA in the EGU inventory, to the non-EGU inventory based on those units meeting the definition in 326 IAC 10-4-2 for “large affected units.” The 2007 projected uncontrolled emissions from these units were then multiplied by 40 percent (to account for 60 percent control as non-EGU large affected units) and added to the non-EGU portion of the budget.

In addition to the changes to the Perry K facility, IDEM determined that 19 units that EPA had characterized as large non-EGUs, in fact, have capacities of less than 250 mmBtu/hr. As a result, they do not meet either EPA's or IDEM's definition for units that need to be controlled. Therefore, IDEM requested and EPA is approving the shifting of these units from the large non-EGU portion of the inventory to the small non-EGU portion. More information on the inventory and these changes is available in the Docket.

IDEM also presented inventory information that units at Bethlehem Steel and Purdue University are larger than 250 mmBtu/hr. Since these units meet the definition for “large affected units,” IDEM has requested that they be moved to that category and with controls assumed to be 60 percent. IDEM also noted two numerical errors in the SIP call inventory; one affecting a New Energy unit and the other affecting two units at SIGECO's Warrick Station. The State has submitted inventory information to support correcting these errors. We are approving these inventory corrections. More information on these changes is available in the Docket.

The following table shows how IDEM's final inventories differed from those used by EPA in the April 11, 2000, notification to states of EPA's approach to implementing the NO X SIP Call in light of the March 3, 2000 court decision.

On June 19, 2000, EPA proposed to find that the SJV serious ozone nonattainment area did not attain the 1-hour ozone NAAQS by November 15, 1999, the attainment deadline for serious ozone nonattainment areas under CAA section 181(a). 65 FR 37926. The current SJV nonattainment area includes the counties of San Joaquin, Kern, Fresno, Kings, Madera, Merced, Stanislaus and Tulare. 40 CFR 81.301. EPA also proposed to find that the SJV SIP had not been fully implemented, because the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) had failed to adopt and implement six measures by the deadlines in the SIP.

During the public comment period for the proposal, EPA received comments requesting that EPA remove the eastern portion of Kern County from the SJV ozone nonattainment area and designate it a separate ozone nonattainment area. On August 28, 2000, the California Air Resources Board (CARB) formally requested that EPA create a separate ozone nonattainment area for East Kern County and grant this area two 1-year attainment date extensions.

EPA found the State's request compelling and, on May 18, 2001, issued a reproposal to revise the SJV ozone nonattainment area by changing its boundaries to remove eastern Kern County. 1 66 FR 27616. In order to reflect this proposed boundary change, EPA reproposed the Agency's finding that the remaining portion of SJV did not attain the ozone NAAQS by the statutory deadline and, accordingly, would be reclassified by operation of law as a severe ozone nonattainment area if EPA finalized the finding. EPA proposed that the East Kern County ozone nonattainment area would keep its serious classification because the area had not recorded more than one exceedance of the ozone NAAQS over the past two years and the East Kern County area otherwise qualified for two 1-year extensions of the November 15, 1999 attainment deadline pursuant to CAA section 181(a)(5). EPA therefore proposed that the attainment deadline for East Kern County ozone nonattainment area be extended to November 15, 2001.

In this document, EPA is responding to comments submitted in response to the initial proposal (65 FR 37926) and the reproposal (66 FR 27616).

As discussed in the reproposal, the public comments submitted in response to the initial proposal supported removal of East Kern County from the SJV ozone nonattainment area and establishment of this new area as a serious ozone nonattainment area with an extended attainment deadline. No commenters on either the initial proposal or the reproposal opposed these actions. Therefore, for the reasons set forth in the reproposal (66 FR 27617-27620), EPA is today taking final action to grant the State's requests: (1) To split the SJV ozone nonattainment area into two separate ozone nonattainment areas pursuant to CAA section 107(d)(3)(D); (2) to retain for the new East Kern County ozone nonattainment area the serious nonattainment area ozone classification; and (3) to grant two 1-year attainment date extensions pursuant to CAA section 181(a)(5), thus establishing an attainment deadline of November 15, 2001.

EPA received no comments opposing the Agency's finding that the SJV ozone nonattainment area failed to attain the 1-hour ozone standard by the November 15, 1999 deadline. Accordingly, and for the reasons set forth in the proposals (65 FR 37927-37928 and 66 FR 27617), EPA is today issuing the final finding under CAA section 181(b)(2)(A).

As a consequence of EPA's finding of failure to attain, the SJV ozone nonattainment area is reclassified by operation of law to severe. The CAA provides that severe ozone nonattainment areas must attain the ozone NAAQS as expeditiously as practicable, but no later than 15 years after enactment of the 1990 CAA Amendments, or November 15, 2005. CAA section 181(a)(2) also establishes a “severe 17” classification for areas with a 1988 ozone design value between 0.190 parts per million (ppm) and 0.280 ppm. 2 Areas meeting this criterion are required to attain the ozone NAAQS as expeditiously as practicable but no later than 17 years after enactment of the 1990 CAA Amendments (i.e., by November 15, 2007).

In the reproposal, EPA noted that the design value for the SJV ozone nonattainment area is 0.161 ppm. 66 FR 27617. Although this value is below the CAA criterion for the severe-17 classification, EPA referenced a State suggestion that attainment by 2005 may not be possible for the SJV ozone nonattainment area, given the area's air quality problem. Accordingly, EPA solicited comment on the viability of the 2005 deadline, and on any legal, policy, and technical rationale for allowing a 2007 attainment deadline.

State legislators, local governments, CARB, and SJVUAPCD provided the following arguments in support of a severe-17 classification.

(a) It is not feasible to attain by 2005 based on preliminary photochemical modeling which identifies the need for an additional 150 tons per day (tpd) of the two principal ozone precursors—volatile organic compounds (VOCs) and oxides of nitrogen (NO X ). This is a 30 percent reduction in ozone precursors beyond projected 2005 levels with all adopted controls. CARB observed that the only extreme ozone nonattainment area in the country, the South Coast (metropolitan Los Angeles) area, requires the same 150 tpd reduction of VOC emissions to attain but is allowed, by its CAA classification, until 2010 to achieve these reductions.

(b) SJV's design value is higher than the design value for all other areas in the country with a 2005 attainment deadline. In addition, the magnitude of the attainment task is reflected in the number of days over the standard. SJV has not only a higher design value but also a greater number of days over the standard compared to other areas with a 2007 deadline. Although the 1990 CAA Amendments based classifications solely on design value, it is relevant to consider the fact that SJV had at that time the third highest number of exceedance days in the country. SJV has already achieved larger emissions reductions than have any areas that are assigned a 2007 date, both in the percentage of emissions reduced and the actual tons of emissions reduced. SJV has achieved these reductions but has not been able to reduce its design value. This makes clear that SJV has one of the most severe ozone problems in the country, requiring additional time to achieve the NAAQS.

(c) Any new controls would have to be implemented by 2003, which is the first year that counts towards a 2005 attainment date. The SJV area already has in place stringent controls. More time is needed for technology advancements in order to implement the measures required to bring SJV into attainment. More time will also decrease the impact of new controls on businesses.

(d) Additional time is also critically needed to achieve mobile source fleet turnover to meet more stringent standards, and to secure and distribute incentive funding to support replacement of older vehicles. The problem is greater because State incentive money to retrofit engines is being diverted to buy emissions offsets for new electricity generators required to meet the energy crisis.

(e) New State and federal controls on heavy-duty trucks, low emission vehicles, and reformulation of diesel fuel will be much more effective in 2007 than in 2005 due to phase-in schedules, since many of these controls go into effect in 2004 and the penetration rate in the first two years is extremely low.

(f) A 2007 deadline meets the CAA requirement for attainment as expeditiously as practicable based on SJV's air quality, emission reduction, and control strategy issues.

(g) The SJV ozone nonattainment area is greatly impacted by pollution from the San Francisco Bay Area. Assuming that the Bay Area is granted a 2006 attainment date, the SJV's attainment date should be later.

(h) Emissions reductions from post-2003 federal Congestion Mitigation and Air Quality (CMAQ) transportation funding will be needed for attainment, and these funds cannot be secured until the Transportation Equity Act is reauthorized, which is expected in 2004.

(i) Smart Growth policies have the potential to reduce emissions but require more time for implementation than would be available assuming a 2005 attainment deadline.

(j) Sources under federal control are a significant fraction of the SJV emission inventory, especially interstate trucks, farm and construction equipment, and locomotives, and the problem is exacerbated by the fact that the sources are particularly active in the harvest (and smog) season. Given the scale of reductions needed for attainment, the federal government must reduce its share of the inventory. Like California, EPA will need to consider not just new standards but also retrofits and accelerated turnover of the existing fleet. As a regulatory partner, EPA would agree that a 2005 date does not allow sufficient time to accomplish these necessary reductions. The SJV attainment problem is compounded by the presence of two major transportation corridors (Interstate 5 and Freeway 99) and by EPA's failure to enforce adequately the existing national standard for heavy-duty engines and failure to act in a timely manner on the manufacturers' consent degree, resulting in a significant increase in NO X emissions.

(k) EPA has sufficient authority and discretion under CAA sections 172 and 181 to set a 2007 deadline, based on the severity of nonattainment, and the availability and feasibility of control measures.

The Center on Race, Poverty & the Environment (CRPE) and Earthjustice Legal Defense Fund submitted comments opposing the 2007 attainment deadline. These groups stated that EPA lacks the authority to grant an extension of the attainment deadline from 2005 to 2007. The 2005 deadline is explicit in the CAA and so EPA has no administrative discretion to grant an extension beyond that date. In addition to being patently illegal, granting the 2007 deadline would force the millions of Valley residents to breathe dangerous levels of smog at least two years longer than necessary. This 2007 extension would result in human suffering and medical costs far in excess of the temporarily-avoided compliance costs. Granting the SJVUAPCD additional time when it is not implementing its own inadequate plan would reward and perpetuate further inaction. In contrast to the SJVUAPCD, other agencies (such as the South Coast Air Quality Management District) have adopted stringent controls and are on a trajectory to attain the ozone NAAQS, so technical arguments for delaying full implementation of public health protections in the SJV should not be taken seriously.

EPA agrees with many of the comments supporting the difficulty of developing a plan to demonstrate attainment of the NAAQS by the 2005 date. This deadline presents a remarkable challenge for an area with SJV's characteristics: meteorology and topography providing diverse conditions favorable to the formation of ozone; large numbers of small emissions sources already subject, in many cases, to stringent controls and, in other cases, capable of further control only through costly retrofit, rebuild, or replacement programs; substantial mobile source and process emissions sources associated with the area's dominant agricultural economy and therefore operating at peak levels during the ozone season; and large interstate transportation emissions from truck and rail operations that are not generally susceptible to control at local and state levels. Equitable considerations suggest that a 2007 attainment deadline might be at least as appropriate for the SJV ozone nonattainment area as for other areas that were assigned severe-17 classifications in accordance with the provisions of 1990 CAA Amendments.

EPA has concluded, however, that the CAA does not provide the Agency authority to set a 2007 attainment deadline for the SJV ozone nonattainment area based on these considerations. When EPA finds that an ozone nonattainment area failed to attain the ozone standard by its attainment date pursuant to section 181(b)(2), that section provides that the area “shall be reclassified by operation of law in accordance with table 1 of subsection (a) to the higher of—(i) the next higher classification for the area, or (ii) the classification applicable to the area's design value as determined at the time of the notice required under subparagraph (B).” The phrase “in accordance with table 1” prevents EPA from providing a 2007 attainment date for the SJV in this action because, for the severe area class, table 1 establishes an attainment date of “15 years after enactment [ i.e. , 2005].” CAA 181(a). The 2007 attainment deadline is set forth not in table 1 but in CAA section 181(a)(2), which states: “Notwithstanding table 1, in the case of a severe area with a 1988 ozone design value between 0.190 and 0.280 ppm, the attainment date shall be 17 years (in lieu of 15 years) after the date of enactment of the Clean Air Act Amendments of 1990.” Thus, the 2007 attainment date is not provided for in Table 1, which is what Congress required EPA to act in accordance with when an area is reclassified pursuant to section 181(b). Consequently, EPA does not believe that it has the authority to provide the SJV with a 2007 attainment date in this action. However, under section 181(b)(3) of the Act, the State may request a reclassification and receive a 2010 attainment deadline in order to have the additional time the State believes is necessary to attain ozone NAAQS.

Although EPA cannot agree with the State and other commenters that the Agency has the discretion to grant the State's request for a 2007 attainment deadline, EPA does agree that attainment by 2005 requires emission reductions from all quarters, and EPA intends to work closely with the State and local agencies to explore opportunities for the federal government to contribute additional controls or other assistance to advance attainment in the SJV ozone nonattainment area.

EPA's initial proposed finding of failure to attain, proposed that the State be required to submit a severe area SIP revision no later than 18 months from the effective date of the area's reclassification. 65 FR 37928. However, EPA also proposed that the SJVUAPCD be required to submit a revised new source review (NSR) rule within 180 days of the final date of the reclassification, in order to ensure that the District's definitions of “Major Source” and “Distance Offset Ratio” reflect the severe area requirements. 65 FR 37928-37929.

EPA's reproposal noted that CAA section 182(i) authorizes EPA to adjust applicable deadlines as appropriate. EPA proposed a SIP submittal deadline of May 31, 2002, in order to ensure that control measures are put in place as quickly as possible and there is ample time for the measures to take effect before the attainment deadline. The reproposal stated that this deadline is reasonable given the advance notice provided by our initial proposal, issued on June 19, 2000, and the planning efforts already underway at State and local levels. 66 FR 27617.

No commenters on the initial proposal addressed the SIP submittal deadline issue. In response to the reproposal, EPA received four comments. The San Joaquin Valley Transportation Planning Agencies Director's Association (TPA) and Tulare County Association of Governments (TCAG) requested that the deadline be changed to August 31, 2002, in order to allow the revised SIP to incorporate updated transportation planning assumptions. TPA also noted that the reproposal's May 31, 2002 deadline is inconsistent with EPA's policy of allowing 18 months for SIP development. The Western States Petroleum Association (WSPA) requested a six-month extension of the SIP sumittal deadline for the following reasons: The May 31, 2002 deadline would not allow enough time for the regulatory review process necessary for new District rules; WSPA has serious concerns about basing a control strategy on a single design-day ozone episode; the Central California Ozone Study (CCOS) is now available but has yet to be fully considered; the SIP needs to focus more on mobile source reduction strategies because previous significant stationary source reductions have not resulted in a corresponding improvement in air quality. Earthjustice supported EPA's May 31, 2002 deadline, noting that this date affords ample time to prepare the revision since it is 30 months after the area's November 15, 1999 attainment deadline.

EPA agrees with TPA and TCAG that the revised SIP should include updated transportation emissions and the latest planning assumptions. However, the commenters submitted no evidence demonstrating that these updates cannot be completed in time to be incorporated in a SIP submitted by May 31, 2002. EPA believes that the transportation plan and emissions updates can, in fact, be prepared on this schedule. EPA is also concerned that the SIP needs to be prepared no later than this date in order to provide a reasonable opportunity for the State, local agencies, and affected public to meet the SIP emission reduction milestone requirements for 2002 under CAA section 182(c)(2)(B).

Regarding the WSPA comments, neither the District nor the State commented that the May 31, 2002 deadline would present any of the problems suggested by WSPA. EPA announcements concerning the pending reclassification began in late 1999 and became official in June 2000. This has given the responsible agencies adequate time to plan their rulemaking calendars. EPA acknowledged in its June 2000 proposal that the results from CCOS may not be fully available to meet the SIP deadlines. The planning process is dynamic and new information will continue to be developed even after the CCOS information is available; the State always has the option of revising its SIP based on new information. Regarding mobile sources versus stationary sources, EPA relies on the state to develop a control strategy the takes into account the mix of sources affecting the area. EPA is therefore not extending the SIP deadline, both because neither the State nor the local air pollution control agencies requested the additional time, and because the six-month delay would further postpone reductions and planning efforts necessary for air quality improvements in the SJV.

Therefore, EPA is using the authority provided in the CAA to finalize May 31, 2002, as the SIP submittal deadline. By this date, the State must submit a plan addressing all of the severe area requirements.

As noted in the initial proposal, CAA section 182(d)(3) sets a deadline of December 31, 2000, to submit the plan revision requiring fees for major sources should the area fail to attain. Pursuant to CAA section 182(i), EPA proposed to adjust this date to coincide with the submittal deadline for the rest of the severe area requirements. EPA is here finalizing that proposal and establishing May 31, 2002, as the deadline for submitting the emissions fee rule responsive to CAA sections 182(d)(3) and 185.

In the initial proposal, EPA proposed to require that the more stringent severe-area NSR rule, which includes a higher offset ratio and lower applicability level, must be submitted no later than 180 days from the effective date of the SJV area's reclassification to severe. Since this 180-day deadline would now approximate the May 31, 2002 deadline set for the comprehensive severe area plan, EPA is not finalizing the proposed 180-day deadline for the NSR rule revision. Instead, the State will be required to submit by May 31, 2002, a revised NSR rule meeting the severe area provisions of CAA section 182(d).

EPA's initial proposal indicated that the revised severe ozone SIP for SJV needed to meet the RACT requirement for sources subject to the new lower major source applicability cutoff of 25 tons per year (tpy), pursuant to CAA section 182(d). As discussed above, the initial proposal set the deadline for submitting the severe ozone SIP as 18 months from the effective date of the reclassification of the SJV to severe, and the reproposal set the deadline as May 31, 2002. In response to the initial proposal, SJVUAPCD indicated that “the District should be able to adopt RACT rules shortly before the 18-month sanction deadline.”  3 EPA presumes that this comment indicates that the District expected to be able to meet the rule adoption deadline in the reproposal, which is more than 23 months after the initial proposal was published. EPA is finalizing the May 31, 2002 SIP deadline as applicable to the RACT rule revisions provided in CAA section 182(d) for major stationary sources at the severe area applicability level of 25 tpy.

SJVUAPCD's comment on the initial proposal indicated that the District would set the final RACT compliance dates to coincide with the 2005 attainment date, “in order to allow as much time as possible for source operators to install controls.” Under CAA section 172(c)(1), nonattainment plans must “provide for the implementation of all reasonably available control measures as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control technology) * * *.” The SJVUAPCD's RACT compliance schedule should be as expeditious as practicable, both to address this fundamental CAA provision and to speed progress in public health protection. EPA cannot approve RACT compliance schedules that are not as expeditious as practicable but are rather designed to allow as much time as possible for source operators to install controls. Given that the District has known about this RACT requirement since EPA's June 19, 2000 proposal, EPA does not believe that 2005 represents expeditious implementation of the RACT requirement. Neither the State nor District has provided a compelling reason why the new RACT rules could not be implemented prior to 2005. Accordingly, EPA is finalizing the May 31, 2002 deadline for submittal of new RACT rules, and EPA strongly encourages the District to implement the rules within 18 months of the effective date of the reclassification.

EPA's initial proposal indicated that the revised SJV attainment demonstration may establish motor vehicle emissions budgets for subareas within the region if the modeling in the SIP shows that attainment will result when all subarea budgets are met. The initial proposal further stated that there would be no allowance for shifting of growth from one subarea to another. 65 FR 37929.

In response to the initial proposal, CARB supported a single budget as providing better alignment with the new region wide attainment demonstration, while providing greater flexibility by allowing higher than expected emissions in one portion of the valley to be offset by lower emissions in the rest of the region. On the other hand, several of the SJV transportation planning agencies, TPA, and SJVUAPCD endorsed the establishment of separate budgets for each subarea, with trading allowed between subareas so long as the total of all subarea budgets does not exceed the region wide total emission budget. SJVUAPCD further indicated that the new SJV SIP will address the maximum amount of emissions that can be traded and the distance over which these emissions are traded, and a requirement that all subareas not included in a trade should have currently valid conformity findings for their Regional Transportation Plan and Transportation Improvement Programs.

EPA appreciates the complexity of transportation planning in a vast nonattainment area where the responsibility for preparing, adopting, and amending transportation plans and programs is assigned to 8 separate councils of government. The State and local agencies may elect to address the CAA section 176(c) transportation conformity provisions by means of either a region wide budget or separate budgets for subareas. EPA intends to work with all involved parties to ensure that the SIP's budget (or budgets) and conformity provisions provide needed flexibility without jeopardizing the attainment demonstration or the integrity of the regional and local transportation planning processes. In this final action, EPA cautions that subarea budgets must be fully documented and that the budgets and future conformity determinations must be consistent with the region wide attainment demonstration. A significant shift in growth from one subarea to another may therefore require a new modeled attainment demonstration with revised subarea budgets.

The initial proposal included a proposed nonimplementation finding, based on the failure of the SJVUAPCD to meet its SIP commitments to adopt and implement 6 rules to achieve specified emissions reductions totaling 8.09 tpd of VOC emissions. Because the proposed nonimplementation finding is based on a failure of the SJVUAPCD to adopt and implement regulations, the finding would apply to western Kern County (which is under the jurisdiction of the SJVUAPCD) but not to East Kern County, which is under the jurisdiction of the Kern County Air Pollution Control District. 65 FR 37930, footnote 12. 65 FR 37929-31. The rules and associated emission reductions are listed in Table 1 below. EPA proposed that the rules should be adopted and implemented as expeditiously as practicable but implementation should be no later than November 15, 2002, the first rate of progress milestone under the severe area provisions of the CAA. EPA proposed that the 2 to 1 offset sanction in CAA section 179(b)(2) would apply if SJVUAPCD failed to adopt the 6 measures within 18 months of the effective date of the final finding. EPA further proposed that the highway approval and funding sanction would apply under CAA section 179(b)(1) if SJVUAPCD did not correct the deficiencies within 6 months after the offset sanction is imposed.

CRPE commented that an implementation deadline of November 15, 2002, is too late and this delay will unnecessarily threaten the health of San Joaquin Valley residents. EPA should require actual implementation of the rules before the end of the 18 month period. EPA should impose the highway sanctions first, in order to motivate the political forces that will have to be harnessed in order to adopt the rules. EPA should also determine that SJVUAPCD has failed to implement the SIP because the District has excluded agricultural operations from its NSR rule.

SJVUAPCD and CARB commented that the District should be allowed the flexibility to correct the nonimplementation by achieving the 8.09 tpd of VOC emissions through any combination of the six control measures in the SIP or newly identified substitute measures. ARB stated that there has been a substantial change in the inventory for several of the rule categories, and SJVUAPCD indicated that the 8.09 tpd of VOC reductions might be achieved by implementing fewer than the six delinquent rules. 4 SJVUAPCD requested the EPA extend the implementation deadline to May 15, 2003, in order to allow source operators time to get controls in place but still achieve the reductions before the beginning of the 2003 ozone season.

EPA agrees with CRPE that prompt remedy to the nonimplementation is important, but EPA believes that it may be unreasonable to require the SJVUAPCD and affected sources to implement the delinquent measures more quickly than EPA proposed. EPA disagrees with CRPE that the agricultural operations exemption in the SJVUAPCD NSR rule constitutes SIP nonimplementation, since the exemption, although inconsistent with CAA provisions, does not evince a failure to carry out provisions in the approved SIP. Finally, EPA sees no compelling need to reverse the presumptive order of sanction implementation, and therefore the Agency intends to follow the sequence set in 40 CFR 52.31: the offset sanction at the 18th month and the highway sanction at the 24th month following the finding.

EPA believes that the SJVUAPCD is obliged by its existing SIP to meet the specific requirements of its commitments. However, CARB and the District have the opportunity to amend the SIP by showing that reasonable further progress and other requirements of the CAA can be met with a revised schedule of controls and associated emission reductions. This is especially the case where emissions inventory changes after the original control measure commitment show that far less actual emission reductions can be achieved by controls on individual source categories. However, in view of the magnitude of the emission reductions needed for attainment, SJVUAPCD is not free to abandon or postpone any control measure that continues to be available, even though the original SIP's cumulative emission reduction commitment could be met without implementing the measure. EPA therefore finalizes the proposed nonimplementation finding and sets November 15, 2002, as the outside date for adoption and implementation of the delinquent control measures.

EPA is taking final action to split the SJV ozone nonattainment area into two separate ozone nonattainment areas pursuant to CAA section 107(d)(3)(D). EPA is retaining for the new East Kern County ozone nonattainment area the serious nonattainment area ozone classification but granting two 1-year attainment date extensions pursuant to CAA section 181(a)(5), thus establishing an attainment deadline of November 15, 2001. If East Kern County does not record a violation in 2001, the area will be eligible for redesignation to attainment for the 1-hour ozone NAAQS, following submittal by the State and approval by EPA of a redesignation request and maintenance plan addressing the provisions of CAA section 175A.

Pursuant to CAA section 181(b)(2), EPA is finalizing its finding that the SJV area failed to attain the 1-hour ozone NAAQS by the statutory deadline. By operation of law, the area is reclassified to severe and is therefore required, under CAA section 181(a)(1), to attain the NAAQS as expeditiously as practicable but no later than November 15, 2005. Under CAA section 182(i), the State must submit a SIP addressing the severe area requirements. EPA is establishing May 31, 2002, as the deadline for the submission of the severe area requirements. Under CAA section 182(d), severe area plans must meet all requirements for serious area plans plus the requirements for severe areas, including, but not limited to: (1) A 25 tpy major stationary source threshold; (2) additional reasonably available control technology (RACT) rules for sources subject to the new lower major source applicability cutoff; (3) an NSR rule requiring offsets of at least 1.3 to 1; (4) a rate of progress in creditable emission reductions of ozone precursors of at least 3 percent per year from 2000 until the attainment year; (5) a fee requirement for major sources should the area fail to attain by 2005; and (6) a demonstration of attainment as expeditiously as practicable but no later than November 15, 2005. The more stringent RACT provisions must be scheduled for implementation as expeditiously as practicable, and EPA strongly encourages an implementation deadline of no later than 18 months after the effective date of the reclassification to severe.

Upon the effective date of EPA's finding of failure to implement the SIP, SJVUAPCD has until November 15, 2002 to adopt and implement the six delinquent measures shown in Table 1.

If SJVUAPCD has not adopted the measures listed in Table 1 with implementation deadlines of on or before November 15, 2002, the 2 to 1 offset sanction in CAA section 179(b)(2) would apply after 18 months of the effective date of the finding. If the deficiencies have still not been corrected six months after the offset sanction is imposed, then the highway approval and funding sanction would apply under CAA section 179(b)(1).

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.

EPA has determined that neither the finding of failure to attain, nor the finding of nonimplementation, would result in any of the effects identified in Executive Order 12866 sec. 3(f). As discussed above, findings of failure to attain under section 188(b)(2) of the CAA are based solely upon air quality considerations and the subsequent nonattainment area reclassification must occur by operation of law in light of those air quality conditions. These actions do not, in and of themselves, impose any new requirements on any sectors of the economy.

In addition, because the statutory requirements are clearly defined with respect to the differently classified areas, and because those requirements are automatically triggered by classifications that, in turn, are triggered by air quality values, findings of failure to attain and reclassification cannot be said to impose a materially adverse impact on State, local, or tribal governments or communities. Similarly, the finding of failure to implement the SIP merely ensures the implementation of already existing requirements by creating the potential for the imposition of sanctions if the State does not adopt the rules to which it has committed under its own State plan, and therefore the finding does not adversely affect entities.

The designation of East Kern County as a new, separate nonattainment area with a serious classification and the attainment date extensions will not impose any new requirements on any sectors of the economy because the area is already classified as serious.

For the aforementioned reasons, this action is also not subject to Executive Order 32111, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). 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. ).

These actions do 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) for the following reasons: (1) The finding of failure to attain is a factual determination based on air quality considerations; (2) the resulting reclassification must occur by operation of law and will not impose any federal intergovernmental mandate; (3) the designation of East Kern County as a separate nonattainment area with a serious classification will not impose any new requirements on any sectors of the economy; and (4) the finding of nonimplementation does not impose any new federal mandates but rather obliges the State to adopt rules to which it has committed under its State plan.

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). For these same reasons, this rule 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). These actions are also not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because they are not economically significant.

As discussed above, findings of failure to attain under section 188(b)(2) of the CAA are based solely upon air quality considerations and the subsequent nonattainment area reclassification must occur by operation of law in light of those air quality conditions. In addition, the finding of failure to implement the SIP merely ensures the implementation of already existing requirements to which the State has committed under its own plan, and therefore the finding does not adversely affect entities. In this context, it would thus be inconsistent with applicable law for EPA, when it makes a finding of failure to attain and finding of failure to implement the SIP, to use voluntary consensus standards. 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 . 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).

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 January 7, 2002. 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 U.S. Environmental Protection Agency Region 4 announces the deletion of the ICG Iselin Railroad Yard Site, Jackson, Tennessee, from the National Priorities List (NPL), appendix B of the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), 40 CFR part 300. EPA identifies sites that appear to present a significant risk to public health, welfare, or the environment and maintains the NPL as the list of these sites. EPA has determined that the ICG Iselin Railroad Yard site does not pose an imminent and substantial endangerment to the public health and welfare, and the environment. EPA will accept public comments for thirty days after publication of this document in the Federal Register .

Section II of this document describes the criteria for deleting sites from the NPL. Section III discusses deletion procedures. Section IV explains the basis for the intended deletion, and discusses the history of the site. Section V states EPA's action to delete the site from the NPL unless dissenting comments are received during the comment period.

Section 300.425(e) of the NCP provides that sites may be deleted from, or recategorized on the NPL where no further response is appropriate. In making a determination to delete a release from the NPL. EPA shall consider, in consultation with the state, whether the following criteria has been met:

(i) Responsible parties or other persons have implemented all appropriate response action required;

(ii) All appropriate fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

(iii)The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, taking of remedial measures is not appropriate.

In the case of the ICG Iselin Railroad Yard Site, Tennessee Department of Environment and Conservation's (TDEC) remedial investigation and subsequent follow up groundwater studies conducted under EPA's supervision, indicted that the site does not pose a significant threat to public health or the environment, and, therefore, active remedial measures are not appropriate. If new information becomes available which indicates a need for future action, EPA may initiate any remedial action necessary. In accordance with the NCP (40 CFR 300.425 (e)(3)), whenever there is a significant release from a site deleted from the NPL, the site shall be restored to the NPL without application of the Hazard Ranking System (HRS).

The following procedures were used for the intended deletion of the site:

(1) All appropriate response under CERCLA has been implemented and no further action by EPA is appropriate; (2) The Tennessee Department of Environment and Conservation has concurred with the proposed deletion decision; (3) A notice has been published in the local newspaper and has been distributed to appropriate federal, state and local officials and other interested parties announcing the commencement of a 30-day public comment period on EPA's Direct Final Deletion; and, (4) All relevant documents have been made available for public review in the local site information repository. EPA is requesting only dissenting comments on the proposed action to delete.

For deletion of the release from the site, EPA's Regional Office will accept and evaluate public comments on EPA's Final Notice before making a final decision to delete. If no dissenting comments are received, no further activities will be implemented and this “direct final” action will become effective. Deletion of the site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. The NPL is designed primarily for informational purposes and to assist EPA management. As mentioned in Section II of this document, § 300.425 (e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions.

The following site summary provides EPA's rationale for the proposal to delete the ICG Iselin Railroad Yard Site from the NPL.

The ICG Iselin Railroad Yard Site is located in Jackson, Madison County, Tennessee. The Site is an 80-acre property located at the intersection of Eastern Street and Magnolia Street in Jackson. The facility has had several owners over the years, each of whom used it for various purposes related to railroad operation. The Mobile and Ohio Railroad Co. operated the facility as a railroad station and maintenance depot from 1906 until 1940 when Gulf Mobile and Ohio Railroad Company purchased Mobile and Ohio Railroad Co. Gulf Mobile continued to use the facility as a railyard. In 1972, Gulf Mobile reorganized as the Illinois Central Gulf Railroad Company (ICG). ICG used the site as a locomotive maintenance facility from 1972 until 1986, when the Williams Steel Co. purchased much of the property. Norfolk Southern Railway Co. owns the remainder of the property. The site had several contaminated units: a main warehouse; numerous railroad tracks; storage tanks; a battery waste disposal pile; a rail car fueling platform under an open-air shed; and the railyard's pollution control system, which includes a neutralization tank, a concrete tank, several drainage ditches, and a surface impoundment.

The Site was placed on the National Priorities list on December 16, 1994. Upon execution of the Non-Fund Finance Agreement (NFFA) between EPA and TDEC, TDEC oversaw the remediation of the Site. EPA reviewed and commented or concurred on most documents pertaining to the remediation process. Under a State Commissioner's Order, the PRPs conducted a RI/FS which included a Baseline Human Health Risk Assessment. The RI detected arsenic and TCE in groundwater above recommended levels. However, further investigation revealed both contaminants were originating from off-site source(s) upgradient of the Site. TDEC is currently investigating the areas upgradient of the Site. TDEC approved the RI/FS in August 1997.

In September 1998, a Non-Time Critical Removal Action Work Plan was submitted to TDEC. The report characterized contaminated on-site soils. A Public Meeting was held on October 8, 1998 to inform the community of the removal action. TDEC issued an Action Memorandum on October 21, 1998 to document State approval of the removal action. The excavated soil was staged, treated and analyzed using the toxicity characteristic leaching procedure (TCLP). The removal action required excavation of approximately 716 tons of lead contaminated soil. The contaminated soil was disposed of in the Jackson-Madison County Landfill. Finally, all disturbed areas were seeded, fertilized and mulched.

On November 4, 1999, consistent with the NFFA, TDEC's Director of Superfund approved a Record of Decision. Pursant to the NFFA, EPA had issued a concurrence letter in October 1999. The ROD was executed on November 4, 1999. The selected alternative is institutional controls which include deed restrictions and prohibits drilling of water wells on Site. All institutional controls are currently in place. TDEC sent EPA a Certification Letter on November 4, 1999 stating the Site had been remediated to the extent practicable. Furthermore, the letter concludes that the Site appears protective of human health and the environment, complies with federal and state requirements that are applicable or relevant and appropriate to remedial action and is cost-effective. This remedy utilizes permanent solutions and alternative treatment technologies to the maximum extent practicable, and satisfies the statutory preference for remedies that employ treatment that reduces toxicity, mobility and volume. Finally, it concludes that all construction actives relative to CERCLA are complete.

In March 2000, EPA issued and TDEC concurred on the Final Close Out Report and Final Remedial Action Report. Finally, TDEC will conduct Statutory Five-Year reviews at the Site to ensure the selected remedy remains protective of human health and the environment.

TDEC in a letter dated June 30, 2001 concurs with EPA that the criteria for deletion of the NPL listing have been met. Therefore, EPA is deleting the ICG Iselin Railroad Yard site from the NPL, effective on January 7, 2002. However, if EPA receives dissenting comments by December 10, 2001. EPA will publish a document that withdraws this action.

This is a synopsis of the Commission's Report and Order in MM Docket No. 00-174, adopted October 24, 2001, and released October 26, 2001. The full text of this decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail qualexint@aol.com

This is a synopsis of the Commission's Report and Order, MM Docket No. 00-87, adopted October 17, 2001, and released October 26, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, Qualtex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone (202) 863-2893.