[Federal Register Volume 60, Number 15 (Tuesday, January 24, 1995)]
[Rules and Regulations]
[Pages 4712-4739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1387]
[[Page 4711]]
_______________________________________________________________________
Part III
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 51, et al.
Low Emission Vehicle Program for the Northeast Ozone Transport Region;
Final Rule
Federal Register / Vol. 60, No. 15 / Tuesday, January 24, 1995 /
Rules and Regulations
[[Page 4712]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51, 52 and 85
[FRL-5141-8]
RIN-2060-AF15
Final Rule on Ozone Transport Commission; Low Emission Vehicle
Program for the Northeast Ozone Transport Region
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: At the request of the Northeast Ozone Transport Commission
(OTC), EPA is announcing today its final determination that reduction
of new motor vehicle emissions throughout the Northeast Ozone Transport
Region (OTR) is necessary to mitigate the effects of air pollution
transport and to bring nonattainment areas in the OTR into attainment
(including maintenance) of the national ambient air quality standard
for tropospheric ozone (smog). This will assist OTR states in their
efforts to reduce ozone pollution to the level necessary to protect
public health. EPA today approves the recommendation of the OTC and
promulgates a rule under sections 184 and 110 of the Clean Air Act (the
Act) that requires emission reductions from new motor vehicles in the
OTR equivalent to the reductions that would be achieved by the OTC Low
Emission Vehicle (OTC LEV) program.
States would be relieved of their obligations under this
requirement if EPA were to find that all automakers had opted into an
acceptable LEV-equivalent new motor vehicle program. EPA believes that
such a program, which would be far better than OTC LEV, could be agreed
upon and adopted in the near future. States' obligations under this
requirement could also be met by a state's revision of its state
implementation plan to include the OTC LEV program. Today's action
gives states additional flexibility by also allowing a state the option
of adopting a set of measures that would achieve certain emission
reductions needed to prevent the state's adverse pollutant transport
impacts.
EPA is also promulgating a final rule today determining ``model
year'' for purposes of section 177 and part A of title II of the Act,
as that term is applied to on-highway motor vehicles.
DATES: The regulations to be codified in 40 CFR parts 51 and 52 are
effective February 15, 1995. The regulations to be codified in 40 CFR
part 85 are effective February 23, 1995.
ADDRESSES: Materials relevant to this final rule are contained in EPA
Air Docket No. A-94-11, located at the Air Docket (LE-131) of the EPA,
room M-1500, 401 M Street SW., Washington, DC 20460, tel. (202) 260-
7548. Interested parties may inspect the docket between the hours of 8
a.m. to 5:30 p.m., Monday through Friday except on federal holidays.
FOR FURTHER INFORMATION CONTACT: Mike Shields, Office of Mobile
Sources, US EPA, 401 M Street, SW., Washington, DC 20460, tel. (202)
260-7757.
SUPPLEMENTARY INFORMATION:
I. Outline and Introduction
This final rule preamble is organized into the following sections:
I. Outline and Introduction
A. Introduction
B. LEV-Equivalent Program
1. Cleaner Conventional Cars and Light-Duty Trucks
2. Advanced Technology Vehicles
3. Enforcement of a LEV-Equivalent Program
4. Criteria for an Acceptable LEV-Equivalent Program
5. State Obligations if an Acceptable LEV-Equivalent Program is
in Effect
C. Procedural Background
II. Description of Action
III. Statutory Framework for the SIP Call
A. Section 184
B. Section 110
C. Consistency of EPA Action with Sections 177, 202 and 209 of
the Act
IV. Basis for Requiring OTC LEV or a LEV-Equivalent Program
A. Necessity
1. Legal Interpretation of Necessity
2. Emission Reductions from OTC LEV or a LEV-Equivalent Program
are Needed
a. Magnitude of Reductions Needed for Attainment in 2005
b. Contribution Analysis
c. Analysis of Inventory and Options for Control Measures
i. Inventory Analysis
ii. Analysis of Options for Control Measures Without More
Stringent New Motor Vehicle Standards
iii. Determination Whether Reductions from OTC LEV or LEV-
Equivalent Program Are Necessary
iv. ZEV Equivalency
d. The Effect of a Possible LEV-Equivalent Program on the Need
for OTC LEV.
e. Particular Circumstances of OTC LEV Program
f. Conclusions Regarding Need for OTC LEV or a LEV-Equivalent
Program for Purposes of Bringing Downwind States into Attainment by
the Dates Provided in Subpart 2 of Part D of Title I
3. OTC LEV or LEV-Equivalent Program is Also Needed for
Maintenance
a. Legal Analysis
b. Technical Analysis
4. Relevance of EPA Transport Policy
B. Consistency of OTC LEV with Section 177 of the Clean Air Act
1. Introduction
2. California Fuel Regulations
3. ZEV Production Mandate
4. Incorporation of Minor Provisions of the California LEV
Program
5. NMOG Fleet Average
6. Averaging, Trading, and Banking
7. Applicability of Section 177 in States Without Plan
Provisions Approved Under Part D of Title I
V. Action on OTC Petition, Issuance of Findings of SIP Inadequacy,
and Requirements for SIP Revisions
A. Action on OTC Petition and Explanation of SIP Call
B. State Requirements Under EPA SIP Call
C. Sanctions
VI. Determination of Model Year
VII. Effective Date
VIII. Statutory Authority
IX. Administrative Designation and Regulatory Analysis
X. Impact on Small Entities
XI. Paperwork Reduction Act
A. Introduction
In today's action, EPA takes a significant step towards the goal of
reducing smog in the heavily populated northeast region of the country.
The northeast has some of the most severe smog pollution in the
country--pollution reaches levels much higher than are healthy. Ground-
level ozone, the main harmful ingredient in smog, is produced by the
combination of volatile organic compounds (VOCs) and nitrogen oxides
(NOX).1 The chemical reactions that create smog take place
while the pollutants are being blown through the air by the wind, which
means that smog can be more severe miles away from the source of
pollution than it is at the source.
\1\In the upper atmosphere, or stratosphere, ozone occurs
naturally and forms a protective layer, which shields us from the
sun's harmful ultraviolet rays. However, in the lower atmosphere, or
at ``ground level,'' man-made ozone can cause a variety of problems
to human health, crops and trees.
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Ground-level ozone causes health problems because it damages lung
tissue, reduces lung function, and sensitizes the lungs to other
irritants. Scientific evidence indicates that ambient levels of ozone
not only affect people with impaired respiratory systems, such as
asthmatics, but healthy adults and children as well. Exposure to ozone
for six to seven hours at relatively low concentrations has been found
to reduce lung function significantly in normal, healthy people during
periods of moderate exercise. This decrease in lung function is often
accompanied by such symptoms as chest pain, coughing, nausea, and
pulmonary congestion.
Though these effects are not as well established in humans, animal
studies [[Page 4713]] have demonstrated that repeated exposure to ozone
for many months can produce permanent structural damage in the lungs
and accelerate the rate of lung function loss, as well as the lung
aging period. Each year ground-level ozone is also responsible for
several billion dollars worth of agricultural crop yield loss. It also
causes noticeable foliar damage in many crops and species of trees.
Studies also indicate that current ambient levels of ozone are
responsible for damage to forests and ecosystems.
As part of efforts to reduce harmful levels of smog, today's action
approves the recommendation of an organization of northeastern states
that EPA require all the northeastern states to adopt the California
car program to reduce significantly the pollution emitted by new cars
and light-duty trucks. This requirement could be met either by state
adoption of the California car program or by having a nationwide
alternative car program in effect that would achieve emissions
reductions at least equivalent to what the California car program would
achieve. Motor vehicles are a significant cause of smog because of
their emission of VOCs and NOX. EPA has projected that, without
the California car (or an equivalent) program in the northeastern
states, highway vehicles will account for approximately 38% of NOX
and 22% of VOC anthropogenic (man-made) emissions in 2005. EPA
currently estimates that VOC emissions should be reduced by
approximately 95 tons per day and NOX emissions by approximately
195 tons per day as a result of today's action.2
\2\These emissions estimates are based on the most accurate data
currently available. The Agency continues to analyze emissions data
and modeling assumptions.
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Since smog travels across county and state lines, it is essential
for state governments and air pollution control agencies to cooperate
to solve the problem. This is particularly true in the densely-
populated northeast--for example, the smog that causes health problems
in New York City is the result, in part, of cars driven in
Pennsylvania, Maryland and elsewhere in the northeast. Through the
Ozone Transport Commission (OTC), the northeastern states have made
major strides in developing region-wide strategies for achieving
healthy air quality. Today's action, a further step in implementing the
OTC's region-wide approach, is necessary for the region to attain and
maintain healthy air quality.
Although EPA believes that the northeastern states cannot achieve
healthy air quality unless their neighbors within the northeast adopt
the California car program or a nationwide program is in effect,
today's action gives the states much flexibility in filling this need.
Today's action sets broad requirements that states must meet, but
otherwise gives states as much flexibility as the Clean Air Act allows
in structuring and implementing their motor vehicle programs. EPA will
continue to work with the states to help develop and establish
California car programs that work well regionally. Furthermore, EPA
continues to support the efforts of parties who are working on a
possible new nationwide approach to decreasing emissions from motor
vehicles and believes such a nationwide program could be superior to
region-wide adoption of the California car program. Such a nationwide
program could relieve states of having to respond to today's SIP call.
Finally, if an individual state achieves sufficient emission reductions
from programs other than a new motor vehicle program (and other than
the broadly practicable measures discussed later in this notice), that
state will be allowed to do so instead of adopting the California car
program.
B. LEV-Equivalent Program
Concurrently with processing the OTC recommendation, EPA has
explored the possibility of a LEV-equivalent program.3 As
explained below, EPA believes the OTC LEV program will provide
significant benefits and is necessary to help the northeast achieve air
quality goals. Nonetheless, as EPA stated in the SNPRM and at numerous
public meetings, EPA believes that a LEV-equivalent program could
provide far greater environmental and public health benefits to the OTR
and the nation, and do so more efficiently than would the OTC LEV
program. Under the Clean Air Act, however, such a program can only be
achieved by agreement of the relevant parties--it cannot be imposed
unilaterally by EPA or the states. In an effort to develop a LEV-
equivalent program, EPA and the parties have been involved in intensive
and open discussions, particularly under the Clean Air Act Advisory
Committee's Subcommittee on Mobile Source Emissions and Air Quality in
the Northeast States that EPA established in August 1994.
\3\In this notice, a ``LEV-equivalent program'' is an
alternative voluntary nationwide program that would achieve emission
reductions from new motor vehicles in the OTR equivalent to or
greater than would be achieved by the OTC LEV program and that would
advance motor vehicle emission control technology. This definition
is based on comments EPA received and discussions at meetings of the
Clean Air Act Advisory Committee's Subcommittee on Mobile Source
Emissions and Air Quality in the Northeast States that indicated
that the alternative voluntary federal program that the interested
parties are discussing would have an advanced technology component.
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EPA believes that a LEV-equivalent program would have significant
advantages when compared to OTC LEV. First, a LEV-equivalent program
would achieve the same or greater emission reductions for the OTR. Two
factors are primarily responsible for the emissions equivalence. The
LEV-equivalent program would provide for earlier introduction of
Transitional Low Emission Vehicles (``TLEVs'') in the OTR than would be
required under the OTC LEV petition. Also, 2001 and later model year
vehicles that are originally purchased outside the OTR and then move
into the OTR will be approximately 70% cleaner for in-use VOC and
NOX emissions than the incoming vehicles (i.e., Tier I vehicles)
under the OTC LEV program. Second, the LEV-equivalent program would
provide significant environmental and public health benefits for the
rest of the country. Third, by requiring vehicles to meet the same
tailpipe standard in both California and the rest of the country, and
by harmonizing the other California and federal emission standards, the
program could streamline the process for certifying a vehicle for sale,
reduce auto manufacturers' testing and design costs, and provide other
efficiencies in the marketing of automobiles. Fourth, the parties could
use their resources to make the program succeed rather than continuing
the resource-intensive battle that has been waged over the past few
years between the states and the auto industry over the OTC LEV
program.
EPA urges the parties to continue their efforts to reach an agreed-
upon program. The effective date of today's SIP call is February 15,
1995. By giving states a full year to submit their SIP revisions after
the effective date, this action allows the parties, particularly the
states, to focus on the voluntary agreement for the next 45 days
without simultaneously starting whatever legislative and regulatory
action is necessary to adopt OTC LEV in case a LEV-equivalent program
does not materialize. When states do begin legislative efforts, EPA
urges them to structure their authority so that an approved alternative
program can be adopted and implemented nationwide.
The alternative program under discussion contemplates using federal
rulemaking to establish the program. In light of the significant
progress that has already been made in developing an
[[Page 4714]] alternative program, EPA believes it is appropriate to
initiate an expedited rulemaking process on the conventional car
portion of a LEV-equivalent program, as described below. Although EPA
cannot act unilaterally to impose a LEV-equivalent program, EPA
believes that, in light of the parties' continuing efforts to reach
agreement, it is time to start to develop the regulatory structure that
the parties have discussed to implement an agreement. EPA intends to
propose and take comment on the voluntary new motor vehicle emission
program described below. EPA also intends to propose that the entire
alternative program is environmentally superior to OTC LEV because the
alternative is at least environmentally equivalent to OTC LEV in the
OTR and it has additional environmental benefits for the rest of the
nation.
Before issuing such a proposal, EPA will seek the advice and
recommendations of the Clean Air Act Advisory Committee and
Subcommittee that have been addressing these issues. Although many of
these issues, particularly those that would be raised by the
conventional car portion of the program, have already been discussed in
numerous Federal Register notices and public meetings, EPA believes it
is important to allow people and states who have not participated in
this process to date an opportunity to be heard on the specific
provisions of a potential new, nationwide motor vehicle emission
program.
The LEV-equivalent program under discussion has two major
components--a cleaner car to be sold nationwide and advanced motor
vehicle pollution control technology. In the following subsections, EPA
describes the nationwide cleaner car, the advanced technology program
currently under discussion, the possible methods for enforcing a LEV-
equivalent program, the criteria for finding that such a program would
be an acceptable alternative for OTC LEV, and how an acceptable LEV-
equivalent program would affect a state's obligations under today's
action.
1. Cleaner Conventional Cars and Light-Duty Trucks
The first component of a LEV-equivalent program would be
requirements for cleaner conventional cars and light-duty trucks that
ultimately would result in nationwide sales of cleaner new motor
vehicles. Starting with the 2001 model year, all new cars and light-
duty trucks sold outside California would meet the California Low
Emission Vehicle (LEV) standard. These vehicles would have up to 66%
lower in-use VOC and 73% lower in-use NOX tailpipe emissions than
vehicles meeting the federal Tier I Standards. Prior to the nationwide
introduction of this vehicle, auto manufacturers would phase in cleaner
cars and light-duty trucks in the OTR according to a schedule that
would accomplish emission reductions in the OTR equivalent to the
following schedule:
40% TLEVS4 for model years 1997-2000
\4\ TLEV stands for transitional low emissions vehicle, which is
cleaner than cars required by federal law.
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30% LEVs for model year 1999
60% LEVs for model year 2000
100% LEVs for model years 2001 and later
EPA cannot promulgate regulations requiring manufacturers to meet these
standards prior to model year 2004 (see section 202(b)(1)(C) of the
Act). Nonetheless, EPA can establish a voluntary program that would not
apply to manufacturers until they opted into the program; then, once an
auto manufacturer opted in, the voluntary standards would be
implemented in a way that would be indistinguishable from mandatory
standards.
In establishing such a program, several issues need to be addressed
other than the tailpipe standards and phase-in schedule. EPA will seek
comment on how to establish a banking and trading program, what
exemptions should apply to small volume manufacturers, the extent to
which federal standards (other than tailpipe standards) can be
harmonized with California standards to reduce testing and design
costs, how to incorporate California's on-board diagnostics system
requirements, what process and timing are appropriate for allowing auto
manufacturers to opt in, and other issues that would arise under the
voluntary program.
2. Advanced Technology Vehicles
In the second component, auto manufacturers, utilities, and state
and federal governments would commit to work together to further the
development of advanced technology to control motor vehicle emissions.
Representatives of the states and auto companies have been meeting
independently and as a working group of a Subcommittee of the Clean Air
Act Advisory Committee to develop an advanced technology component of a
LEV-equivalent program. At this point in the discussions, they do not
anticipate that EPA would take regulatory action to adopt the advanced
technology component. Attachment A to this preamble is a current draft
discussion paper of their ideas on the Advanced Technology Vehicle
(ATV) component of a LEV-equivalent program. The parties have not yet
reached agreement on this component.
3. Enforcement of a LEV-Equivalent Program
Given constraints imposed by Congress in the Clean Air Act, a LEV-
equivalent program cannot be instituted without the consent of the auto
manufacturers and the OTC states. The auto manufacturers must agree to
any tailpipe regulations other than the current federal program or the
California program. EPA is precluded by section 202(b)(1)(C) from
modifying the mandatory tailpipe standards prior to model year 2004.
States are precluded by sections 177 and 209 from adopting any program
other than the California program. Thus, the only route left to a LEV-
equivalent program is one in which the auto manufacturers voluntarily
agree to additional regulation. The auto manufacturers have said that,
in principle, they could agree to a voluntary program if it avoided the
need to comply with OTC LEV in the OTC states. The OTC states,
therefore, would have to agree not to require compliance with OTC LEV
if the auto manufacturers were complying with a voluntary federal
program.
EPA has suggested that a combination of EPA regulations, consent
decree(s), and a memorandum of understanding could be used in
combination to create an enforceable LEV-equivalent program. EPA
anticipates that a memorandum of understanding may be necessary or
appropriate to outline the general structure and some specifics of the
LEV-equivalent program. EPA intends to propose that the cleaner
conventional car component would be embodied in EPA regulations that
would be issued after an expedited notice-and-comment rulemaking was
completed. EPA suggests that the regulations be supplemented by a
consent decree addressing obligations not in the regulations and
providing additional assurance that the regulatory obligations will
remain in effect. The states and automakers have discussed embodying
the advanced technology vehicle component in a memorandum of
understanding and a consent decree.
EPA intends to propose that it has statutory authority to
promulgate the voluntary standards under sections 202(a) and 301(a) of
the Clean Air Act. Section 202(a)(1) directs the Administrator to
prescribe standards for control of air pollutant emissions from motor
vehicles. EPA's prescription of [[Page 4715]] voluntary, as well as
mandatory standards, is consistent with this authority under section
202(a)(1). Section 202(b)(1)(C) prohibits the Administrator from
changing the emission standards (Tier I standards) established in
section 202(g), (h) and (i) prior to model year 2004. However, this
prohibition against EPA setting new mandatory standards does not negate
EPA's authority to establish emission standards with which
manufacturers may voluntarily comply. In addition, section 301(a)
authorizes the Administrator to promulgate regulations necessary to
carry out her functions under the Act. The voluntary standards
discussed above would fall within the Administrator's duty to implement
the broad air pollution reduction purposes of the Act, and specifically
to control air pollution from motor vehicles.
4. Criteria for an Acceptable LEV-Equivalent Program
EPA is not determining in today's action what criteria an
alternative program would need to meet for EPA to find that the program
is an acceptable alternative to the OTC LEV program. EPA would
determine the necessary criteria for equivalence as a part of any
rulemaking that established or reviewed such an alternative program.
However, EPA believes that one criterion that a LEV-equivalent program
must meet is that it must have VOC and NOX emissions reductions in
the OTR equivalent to those that would be achieved by the OTC LEV
program.5 Based on EPA's current analysis, a version of which was
in a notice of data availability published on October 24, 1994 (59 FR
53395), EPA intends to propose that the alternative program described
above meets this equivalence requirement.
\5\The vehicle types subject to a LEV-equivalent program would
need to be the same vehicle types (or a subset thereof) that would
be subject to OTC LEV. Thus, emission reductions from heavy-duty
trucks could not be used to assess the equivalence of a LEV-
equivalent program.
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In addition, an acceptable alternative program must be enforceable.
A finding of enforceability would have to include a showing that the
program, once in effect, would remain in effect. Therefore, today's
action regarding the LEV-equivalent program is based on the assumption
that automobile manufacturers would not be allowed to use ``off-
ramps''6 to exit from the program. The OTC has also stated that
the advancement of motor vehicle emission control technology is one of
the criteria an alternative program must meet.
\6\ An ``off-ramp'' is a provision allowing manufacturers to opt
out of an alternative program if a certain trigger-event occurs, for
example, if a state implemented a LEV program.
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5. State Obligations if an Acceptable LEV-Equivalent Program is in
Effect
Today's action recognizes that, if an acceptable LEV-equivalent
program were in effect, then states would not be required to adopt OTC
LEV regulations and submit them as a SIP revision. Under today's rule,
if EPA were to determine later through rulemaking that a LEV-equivalent
program was acceptable and were to find that it was in effect, states
would not be obligated to adopt the OTC LEV program as long as the LEV-
equivalent program stayed in effect. For example, if all the automakers
opted into a LEV-equivalent program that did not allow them to opt out,
states would not have to undertake the legislative and regulatory
process necessary for adoption of the OTC LEV program. If something
happened to disrupt or void the LEV-equivalent program, states would
then be required to adopt OTC LEV because today's action would still
make states responsible for ensuring that there were provisions for
emission reductions from new motor vehicles.
In the SNPRM, EPA had raised the issue of whether states would need
to adopt OTC LEV regulations if a LEV-equivalent program were in
effect. Under one approach, states would adopt an OTC LEV program that
allowed auto manufacturers the option of complying with a LEV-
equivalent program instead of the OTC LEV standards; thus, OTC LEV
would be in place as a ``back stop'' in case something happened to the
LEV-equivalent program. For example, if a LEV-equivalent program
allowed manufacturers to opt out if a state adopted the California LEV
program, then the other states could not be assured that they would
achieve the necessary reductions from a LEV-equivalent program.
Therefore, states would need to have OTC LEV in place so that it would
replace the LEV-equivalent program if that program were no longer in
effect. EPA believes that, under certain circumstances, the ``back
stop'' approach wastes state resources by requiring a rulemaking
process for a program that should never be used. Thus, under today's
rule, states could be relieved of the obligation to adopt OTC LEV if
EPA determined in a later rulemaking that a LEV-equivalent program was
an acceptable alternative to OTC LEV and found that the program was in
effect.
C. Procedural Background
The OTC submitted a recommendation to EPA on February 10, 1994,
that EPA require all states in the OTR to adopt an OTC LEV program. EPA
extensively reviewed the background for this rulemaking in its
September 22, 1994, supplemental notice of proposed rulemaking (SNPRM).
See 59 FR at 48664-48667. This review included a description of the
statutory scheme in which the rulemaking arises, a description of the
ozone transport region provisions of the Clean Air Act, background
regarding the OTC's development of the OTC LEV program, and a summary
of EPA's actions in response to the OTC's recommendation. This
background is not repeated in its entirety here, and the reader is
referred to the SNPRM for further detail.
EPA has moved quickly to resolve the very complicated issues that
the OTC's recommendation raises and has provided maximum opportunity
for public participation. After receiving the OTC's recommendation on
February 10, 1994, the Agency quickly published a notice announcing
receipt of the OTC's recommendation, identifying its major elements,
and briefly presenting EPA's framework for a process to respond and an
approach for analyzing the issues. See 59 FR at 12914 (March 18, 1994).
As announced on April 8, 1994, EPA held two days of public hearings on
May 2-3, 1994, in Hartford, Connecticut. See 59 FR at 16811.
Before the public hearing and pursuant to section 307(d) of the
Clean Air Act, EPA published a notice of proposed rulemaking (NPRM)
that contained extensive information about EPA's approach to addressing
the recommendation. See 59 FR 21720 (April 26, 1994). This notice
detailed EPA's analytic framework for a decision and identified the
central issues EPA was considering. EPA explained in the NPRM that the
rulemaking procedures of section 307(d) would apply to any approval or
partial approval of the recommendation, since those procedures are an
excellent vehicle for ensuring an open, public process. See 59 FR at
21724. In the NPRM, EPA proposed in the alternative to approve,
disapprove, or partially approve and partially disapprove the OTC
recommendation.
After publication of EPA's proposal and the two days of initial
public hearings, EPA held an additional series of three public
``roundtable'' meetings in Pennsylvania, New Hampshire, and New York.
EPA held these meetings to provide specific analysis of the issues
through interactive discussion among the various interested parties and
members of the public. See 59 FR 28520 (June 2, 1994). At the end of
these [[Page 4716]] meetings, EPA extended the public comme organized
public discussion of issues raised and resolved in this rulemaking. In
addition to sharing their views in many public hearings and meetings,
interested parties provided voluminous written comments on EPA's April
26 and September 22 proposals. These comments and other documents
relevant to the development of this final rule are contained in the
public docket for this rulemaking. The Agency has fully considered all
of this information in developing today's final rule. EPA's responses
to significant comments are contained in detailed response-to- comments
documents that are contained in the public docket. Interested parties
should consult those documents for EPA's response to the comments it
received.
EPA has structured this final rule to follow the analytic framework
that the Agency used in the NPRM and SNPRM. As explained above, rather
than repeating the entire discussion in the SNPRM, EPA is adopting much
of the rationale provided in the SNPRM as the statement of basis and
purpose supporting today's final action. For this reason, this final
rule notice summarizes and references much of the discussion in the
SNPRM, and elaborates where needed to clarify or modify EPA's proposed
rationale in light of the comments EPA received or to address issues
left unresolved in the SNPRM. Although this notice and the SNPRM
contain EPA's responses to some comments, the response-to-comments
documents provide detailed responses to all other relevant, significant
comments received. In addition to relying on this notice and the
response-to-comments documents as the statement of basis and purpose
for today's action, EPA is also relying for its statement of basis and
purpose on the detailed explanations in the SNPRM, except where
indicated otherwise in this final rule notice or the response-to-
comments documents, or where statements in the SNPRM are inconsistent
with statements in the final rule notice or response-to-comments
documents.
II. Description of Action
EPA today is making the factual finding that emissions reductions
from new motor vehicles equivalent to the reductions that would be
achieved by the OTC LEV program are needed throughout the OTR to bring
certain OTR nonattainment areas into attainment (including maintenance)
by their applicable attainment dates. Based on that finding, EPA today
is issuing to each of the states in the OTR a finding that its SIP is
substantially inadequate to meet certain requirements insofar as the
SIP would not currently achieve those emission reductions. There are
two possible ways to achieve these emission reductions and thereby cure
this SIP inadequacy--state adoption of the OTC LEV program or
establishment of an acceptable LEV-equivalent federal motor vehicle
program. By virtue of today's findings of SIP inadequacy, unless an
acceptable LEV-equivalent program is in effect, EPA is today finding
the OTC LEV program necessary to achieve timely attainment (including
maintenance) in certain nonattainment areas and therefore is requiring
each OTC state to cure the inadequacy within one year by adoption of
the OTC LEV program and submission of it as a SIP revision. However, if
EPA issues a rule determining that a LEV-equivalent new motor vehicle
program is acceptable and issues a finding that all the automakers have
opted into that program nationwide, then the states would be relieved
of their obligation to adopt OTC LEV.
As an alternative to achieving emission reductions from new motor
vehicles, states could submit adopted measures sufficient to fill the
gap in emission reductions that EPA identifies in today's rule as
required to prevent adverse transport impacts on downwind attainment.
By filling the gap in emission reductions between the measures EPA has
identified in this notice as potentially broadly practicable measures
and the amount necessary to prevent adverse transport impacts downwind,
the state would demonstrate that it was unnecessary to adopt new motor
vehicle controls for transport reasons.
EPA is approving the OTC's LEV recommendation based on the
determination under sections 184(c) and 110(a)(2)(D) of the Act that
the recommended LEV program is necessary throughout the OTR to bring
certain OTR nonattainment areas into attainment by the applicable
attainment dates, unless an acceptable LEV-equivalent program is in
effect, and that the recommended LEV program is otherwise consistent
with the Act. Approval of the OTC recommendation requires EPA to issue
the finding of SIP inadequacy described above and to require states to
respond within one year with SIP revisions requiring the OTC LEV
program, unless an acceptable LEV-equivalent program is in effect.
Independent of section 184, but based on the same factual finding of
necessity, EPA also is requiring the actions described above under its
SIP call authority in section 110(k)(5)\7\ on the basis that the SIP
for each state in the OTR is substantially inadequate to meet the
requirements relating to pollution transport in section 110(a)(2)(D)
and to mitigate adequately the interstate pollutant transport described
in section 184.\8\
\7\Section 110(k)(5) authorizes the Administrator to require the
state to revise the SIP as necessary to correct the deficiency
whenever she finds that a SIP for an area is substantially
inadequate to mitigate adequately the interstate pollutant transport
described in sections 176A or 184 or to otherwise comply with any
requirement of the Act.
\8\Section 110(a)(2)(D) requires that SIPs contain adequate
provisions to prevent emissions within the state that contribute
significantly to nonattainment in, or interfere with maintenance by,
any other state.
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EPA's SIP call does not require states in the OTR to adopt
California's Zero Emission Vehicle (ZEV) production mandate, but leaves
this choice to each state's discretion. EPA has determined that section
177 of the Act allows states to adopt the California LEV program
without adopting the ZEV mandate.
Finally, EPA is issuing regulations defining the term ``model
year'' for purposes of section 177 and part A of title II of the Act,
as that term applies to on-highway motor vehicles. The regulations
provide that model year will apply on an engine family-by-engine family
basis. This regulatory action codifies long-standing EPA guidance on
this definition and should clarify the applicability of the two-year
lead-time requirement in section 177.
III. Statutory Framework for the SIP Call
As mentioned above, authority for today's SIP call is premised both
on EPA's approval of the OTC recommendation under section 184(c) and on
EPA's independent authority under sections 110(a)(2)(D) and 110(k)(5),
which would support such an action even in the absence of an OTC
recommendation.9 For reasons described in the response-to-comments
[[Page 4717]] documents, EPA disagrees with comments claiming that EPA
lacks such authority because the section 184 process is invalid under
the United States Constitution, because section 110 does not authorize
EPA to require states to adopt specific measures, or because an EPA SIP
call requiring state regulation of emissions from new motor vehicles
violates sections 177, 202, and 209 of the Act.
\9\ In addition, EPA believes it has authority to approve the
OTC's recommendations under section 176A, the general transport
commission provision of the CAA. For the reasons described in the
response-to-comments documents accompanying this final action, which
include the fact that the OTC refers to section 176A in its own by-
laws, EPA believes that the Northeast OTC is a section 176A
transport commission as well as a section 184 transport commission.
As a consequence, EPA believes that, notwithstanding the fact that
the OTC's recommendations themselves do not explicitly refer to
section 176A, it may treat the OTC's recommendations as section 176A
requests with recommendations, as well as section 184
recommendations, and act on them accordingly. References in this
notice to EPA's analysis of and conclusions on the OTC petition
under section 184 are intended to reflect also EPA's analysis of and
conclusions on the petition treated as a request with
recommendations under section 176A.
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A. Section 184
EPA described the provisions of section 184 in detail in both the
NPRM and SNPRM. See 59 FR at 21722-21724 and 59 FR at 48668. Section
184(c) explicitly provides that the Administrator is to review the
OTC's recommendations to determine whether the control measures in the
recommendations are necessary and otherwise consistent with the Act,
and is to approve, disapprove, or partially disapprove and partially
approve such recommendations. Upon approval, the Administrator is to
issue to affected states a finding under section 110(k)(5) that the SIP
for such state is inadequate to meet the requirements of section
110(a)(2)(D), and that each such state is required to revise its SIP to
include the approved measures within one year after the finding is
issued.
In the SNPRM, EPA addressed comments from both the auto
manufacturers and the Natural Resources Defense Council (NRDC)
regarding the validity of the section 184 scheme under the United
States Constitution. Various other commenters also submitted comments
on the constitutional questions. EPA has fully considered the comments
and believes that section 184 is consistent with the Constitution, as
discussed in the response-to-comments documents.
B. Section 110
EPA is interpreting section 110 of the Act to provide that it
grants the Agency independent authority to issue today's SIP call,
apart from any authority provided by section 184, for the reasons given
below and in the SNPRM, 59 FR at 48667-48670 (col. 1), and further
explained in detail in the response-to-comments document accompanying
this final action. Section 110(a)(2)(D) requires that SIPs include
adequate provisions prohibiting sources in the state from contributing
significantly to nonattainment or interfering with maintenance in any
other state. If EPA finds that a SIP is ``substantially inadequate to *
* * mitigate adequately interstate pollutant transport * * * or to
otherwise comply with any requirement of this Act,'' including section
110(a)(2)(D), section 110(k)(5) requires EPA to issue a SIP call
requiring the state to adopt the SIP revisions necessary to correct the
inadequacy.
As proposed in the SNPRM, EPA concludes that sections 110(a)(2)(D)
and (k)(5) authorize it to find at any time that a SIP is inadequate
due to pollution transport. EPA believes that emissions reductions from
new motor vehicles equivalent to those achieved by the OTC LEV program
are necessary throughout the OTR to bring all of the OTR states into
attainment (including maintenance) of the ozone NAAQS by their
respective attainment dates; that, unless an acceptable LEV-equivalent
program is in effect, OTC LEV is necessary because it is the only
currently available method of achieving these reductions; that the
states' SIPs are inadequate to the extent they do not provide for the
emissions reductions from new motor vehicles equivalent to those
achieved by the OTC LEV program; and that, unless EPA issues a finding
that all automakers have opted into a LEV-equivalent program that EPA
has determined by rule to be acceptable, the states must adopt the OTC
LEV program to correct the deficiency within one year of the effective
date of the finding of inadequacy, and that waiting to make this
finding may compromise the states' ability to achieve the reductions by
the time they are needed for timely attainment and maintenance
thereafter. As discussed in the SNPRM, EPA concludes that, as it has
done in the past, it may require submission of specific SIP measures
pursuant to section 110(k)(5). Finally, as discussed in the SNPRM, EPA
believes that it should find the states' SIPs inadequate only insofar
as they do not contain the emissions reductions from new motor vehicles
equivalent to those achieved by OTC LEV program because those
reductions depend on vehicle fleet turnover, which will take an
unusually long time to generate the needed emissions reductions.
EPA is basing today's final action in part on this independent
authority under section 110, and it believes certain aspects of its
explanation in the SNPRM merit elaboration. First, where EPA has found
a measure to be necessary to prevent states from contributing
significantly to other states' nonattainment, EPA concludes that
section 110(k)(5) authorizes the Agency to find SIPs inadequate to the
extent that they do not contain that measure. In this case, however,
both EPA's SIP call under section 110(k)(5) and its necessity finding
under section 184 are qualified by the assumptions EPA made in
conducting the necessity analysis. Because EPA assumed for purposes of
its analysis that certain measures were not potentially practicable for
all areas in the transport region and thus excluded such measures from
consideration, the states' obligation under the SIP call could be met
(1) by obtaining the necessary reductions from new motor vehicles
through adoption of OTC LEV or through an alternative new motor vehicle
program that achieved equivalent emissions reductions, or (2) by
adopting alternative measures that will provide sufficient emission
reductions to fill the gap in emission reductions needed to prevent
significant transport impacts on downwind attainment, which would
demonstrate that OTC LEV is not in fact necessary in that state.
Second, EPA continues to support the conclusions described in the
SNPRM regarding the scope of this SIP call, 59 FR at 48669. The OTC LEV
program is distinctive and warrants a finding under section 110(k)(5)
that these SIPs are deficient insofar as they do not provide for
emissions reductions from new motor vehicles equivalent to those
achieved by that program. Model year 1999 and later vehicles will
remain on the road until well after the attainment deadlines throughout
the northeast. Failure to require that they meet LEV emissions
standards will constitute an irrevocable loss in emissions reductions
until those vehicles are replaced many years later. Therefore, it is
important that the tighter LEV standards apply to these new vehicles if
the reduced emissions will be necessary to achieve and maintain the
NAAQS later.
A general finding of SIP inadequacy is not yet warranted. EPA
recognizes the close connection between states' planning to address
transport and their planning for reductions to ensure timely
attainment. The November 15, 1994, deadline for states to submit
modeled attainment demonstrations has now passed. However, of the
states in the OTR that have submitted SIPs, none purports to provide
for the emissions reductions needed to bring downwind states into
attainment and continue maintenance of the ozone standard.\10\
Especially in such circumstances, EPA continues to believe that it has
authority under section 110(k)(5) to find that the states' current SIPs
are substantially inadequate for lack of a pollution
[[Page 4718]] control measure that must be adopted and implemented in
the near term for the state to achieve fully the emissions reductions
necessary to mitigate transport adequately. However, while the states'
failure merits even closer EPA oversight of these states' progress in
SIP development, EPA believes that a general finding of SIP inadequacy
is not yet warranted. While, for the reasons described above, EPA is
drawing an exception with respect to a finding of SIP inadequacy based
on the absence of a LEV program from these SIP, EPA still believes it
should generally allow states the first opportunity to address
transport and their attainment demonstrations together in their
forthcoming SIP revisions before the Agency exercises its SIP-call
authority more broadly to address non-LEV deficiencies.
\10\In the SNPRM, EPA incorrectly stated that the Act creates no
deadline for submission of SIPs demonstrating compliance with
section 110(a)(2)(D), and inadvertently omitted language it had
drafted to explain that section 172(b), read in conjunction with
section 172(c)(7), does establish a deadline for such SIPs for
nonattainment areas. That date too has now passed.
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Even though the attainment demonstrations are now overdue, states
are in the process of incorporating many additional control measures
into their SIPs for purposes of meeting their obligations and are
actively working to adopt regional strategies to address transport. In
fact, as discussed in greater detail below, after publication of the
SNPRM the OTC states signed a Memorandum of Understanding to adopt
stringent controls on NOx emissions from stationary sources that
will apply region-wide throughout the OTR. EPA will continue to track
the states' progress in adopting control measures to achieve the
necessary reductions in time for downwind states to meet their
attainment deadlines and to maintain the NAAQS thereafter, and if those
efforts prove insufficient, EPA may consider making a more
comprehensive finding of SIP inadequacy if other measures are lacking.
C. Consistency of EPA Action With Sections 177, 202 and 209 of the Act
EPA reaffirms its initial determination and rationale that its
decision is consistent with sections 177, 202 and 209. See 59 FR 48670-
48671. As discussed in the SNPRM, section 202(b)(1)(C) only precludes
the Agency from promulgating national standards under section 202 that
modify certain specified standards prior to model year 2004. This is
not a general prohibition against all EPA action relating to the
control of emissions from motor vehicles. In acting under section 184
and section 110, however, EPA is not imposing mandatory federal
standards. Rather, EPA is requiring the states to exercise their own
independent authority under section 177 to promulgate state regulations
relating to the control of emissions from motor vehicles. That state
authority is not limited by section 202(b)(1)(C). Thus, this action
relies not on EPA's authority under section 202 (which would be limited
by section 202(b)(1)(C)), but on EPA's authority under sections 110 and
184, to mandate state action that would otherwise be discretionary.
Some commenters note that EPA is requiring states to act under
section 177 in a manner that would otherwise be up to the discretion of
the state.\11\ However, as discussed above, sections 110 and 184 give
the Administrator authority to impose ``additional control measures''
(i.e., measures over and above those required under other provisions of
the Act) on states. Moreover, section 110(a)(2)(D) requires SIPs to
contain provisions prohibiting ``any source or other type of emissions
activity'' from emitting air pollution that interferes with attainment
or maintenance in other states. This language is sufficiently broad to
include motor vehicles. There is no indication that section 184 is
limited in effect to stationary sources or that state standards for
automobiles were excluded from the ``additional control measures'' that
EPA could require under section 184.
\11\This is likely to be true for any actions ordered under
section 184 or 110. EPA would not need the authority of section 110
and 184 to require states to promulgate standards already required
by law.
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IV. Basis for Requiring OTC LEV or a LEV-Equivalent Program
EPA's explanation of the proposed basis for approval of the OTC LEV
recommendation comprises the primary subject of the SNPRM. See 59 FR at
48671-48694. This detailed explanation is not repeated here. Rather,
the following discussion references many of the portions of the SNPRM
on which EPA is relying for today's action. In addition to these
references and a summary, this discussion only addresses changes to and
elaborations upon EPA's explanation of its basis for action. In
addition to the rationale set forth in this notice and the response-to-
comments documents, EPA is also relying on the SNPRM as the basis for
today's SIP call, except as otherwise explained in the response-to-
comments documents or in this preamble, or where the SNPRM is
inconsistent with those documents. EPA bases its requirement for states
to adopt the OTC LEV program on its determinations that the emissions
reductions that the program achieves are necessary to bring certain
nonattainment areas into attainment (including maintenance) of the
ozone standard by the dates applicable under Subpart 2 of Part D of
Title I of the Clean Air Act; that, unless an acceptable LEV-equivalent
program is in effect, OTC LEV is necessary because there is no other
currently available method of achieving these reductions from the same
sources; and that requiring the OTC LEV program is consistent with
other requirements of the Act. The basis for each of these
determinations is described in detail in subsections A and B of this
section of the notice.
A. Necessity
EPA's conclusion that the emission reductions achieved by the OTC
LEV program are necessary to bring certain nonattainment areas in the
OTR into attainment (including maintenance) of the ozone standard by
their applicable dates is based on a series of statutory
interpretations and factual determinations. As set forth in detail
below, EPA is interpreting the ``necessary'' standard in section
184(c)--as well as the ``significant contribution'' and
``interference'' tests of section 110(a)(2)(D) read in conjunction with
section 184(c)(5)--as authorizing the Agency to find ``necessary'' any
potentially broadly practicable measure that, in light of the
availability of other potentially broadly practicable measures, is
needed to bring the downwind areas into timely attainment. EPA next
analyzes the full magnitude of emission reductions needed for serious
and severe nonattainment areas in the OTR to attain the standard, and
the degree to which various sections of the OTR upwind of those
respective nonattainment areas contribute to their nonattainment. From
that analysis EPA concludes that 50-75% NOX reductions from every
portion of the OTR lying to the south, southwest, west and northwest of
each of the serious and severe OTR nonattainment areas, as well as 50-
75% VOC reductions from the portion of the OTR lying in or near (and
upwind of) each of those nonattainment areas, are needed to bring each
of those respective nonattainment areas into attainment by their
respective attainment dates.
EPA then analyzes the potentially broadly practicable pollution
control measures (other than emission standards for new motor vehicles)
to determine whether they would achieve the necessary emission
reductions; EPA concludes that they would not and that a significant
shortfall would remain. Based on that conclusion, EPA finds that new
motor vehicle tailpipe emission reductions are necessary to help fill
that shortfall, and that, unless an acceptable LEV-equivalent program
is in effect, the OTC LEV program is the [[Page 4719]] only program
currently available to achieve those reductions, and hence that the OTC
LEV program is necessary. EPA then concludes that the trading and
migration of vehicles within the OTR provide a basis for requiring that
the OTC LEV program be adopted even in the few portions of the OTR not
upwind of a serious or severe nonattainment area in order to ensure
that the necessary emission reductions from the various upwind portions
of the OTR contributing significantly to those downwind nonattainment
problems are actually achieved. Based on those findings, EPA then
concludes that, unless an acceptable LEV-equivalent program is in
effect, the OTC LEV program is necessary in every portion of the OTR to
bring the serious and severe ozone nonattainment areas of the OTR into
attainment by their respective attainment dates.
Finally, EPA concludes that it may interpret section l84's
reference to attainment to incorporate maintenance of the ozone
standard. EPA relies on that interpretation, on EPA's treatment of the
OTR petition as resting also on the provisions in section 176A, and on
EPA's independent authority under sections 110(a)(2)(D) and (k)(5) to
address the interference of upwind states with maintenance of the
standard by downwind states. Based on these, EPA concludes that it may
and should make the same necessity and SIP inadequacy findings
described above and approve the OTC recommendation, not only to assure
timely attainment in the OTR's serious and severe nonattainment areas,
but also because such reductions are necessary for those and certain
other areas to maintain the ozone standard.
1. Legal Interpretation of Necessity
EPA discussed its interpretation of the ``necessary'' standard
under sections 184(c) and 110(k)(5) in the SNPRM. See 59 FR at 48671-
48675. EPA then proposed, under section 110(a)(2)(D), that contributing
emissions are ``significant,'' at least where EPA finds that
controlling the emissions is necessary to bring any downwind area into
attainment. EPA also proposed that contributing emissions ``interfere''
with downwind maintenance, at least where controlling the emissions is
necessary for downwind areas to maintain the NAAQS. In particular, the
Agency believes that the ``necessary'' standard requires the Agency to
evaluate the emissions reductions needed and then determine whether
potentially reasonable and practicable alternative measures could be
adopted instead of the OTC LEV program to achieve the needed
reductions. Id. There are two different types of alternative measures
that could affect a finding that OTC LEV is necessary. First, an
alternative that achieves the same or greater emissions reductions from
the same emissions sources (here, new motor vehicles) may render the
OTC LEV program unnecessary. There are limited opportunities to develop
an alternative to the OTC LEV program that would achieve the same or
greater reductions from new motor vehicles. This is because section 202
bars EPA modification of the Tier I standards prior to model year 2004,
and the states cannot, under sections 177 and 209, adopt standards
other than the California standards. As discussed in the introduction
to this notice and below, EPA has worked to explore the possibility of
an alternative program to achieve equivalent reductions from new motor
vehicles that would be consistent with these provisions. Such a program
is not currently available to the OTC states. However, if EPA were to
determine through rulemaking that a LEV-equivalent program is
acceptable and to find that all the automakers had opted into the
program, then states would not be required to adopt OTC LEV as long as
the LEV-equivalent program remained in effect.
Second, certain alternative measures that are sufficient in the
aggregate to achieve the necessary reductions without further
reductions from new motor vehicles could likewise render the OTC LEV
program unnecessary.
EPA's interpretation is consistent with its approach to
interpreting the ``necessary'' standard under section 211(c)(4)(C) of
the Act. See 59 FR at 48672. The interpretation certified by Congress
under that section provides that measures are necessary if no other
measures that would bring about timely attainment exist, or ``if other
measures exist and are technically possible to implement, but are
unreasonable or impracticable.'' Similarly, EPA is concluding here that
alternatives are available if they are at least potentially reasonable
and practicable for application across the OTR, as well as sufficient
to achieve the necessary reductions. Also, EPA's necessity
determination and its SIP call are both subject to any state's ability
to demonstrate, through adoption of alternative measures that EPA
cannot currently find potentially practicable for all OTR areas, that
the OTC LEV program is not in fact necessary to bring the downwind
states into attainment (including maintenance), and thereby to prevent
a significant contribution from that state to nonattainment in another
and to prevent interference with maintenance in a downwind state.
EPA must make any determination of the need for additional control
measures in the context of factual uncertainty regarding issues such as
whether measures are potentially broadly practicable, the amount of
reductions needed, and the amount of reductions that particular
measures will achieve in fact. EPA is making its determination based on
the best information currently available. As explained in the SNPRM and
elaborated upon in the response-to-comments documents, EPA believes
that it should apply a general policy of resolving these uncertainties
in favor of the public and the environment.
EPA noted in the SNPRM that the states' attainment plans were due
two months later, and that the work the states had accomplished in
assembling their attainment plans did not indicate that the OTC LEV
program would be unnecessary to address the transport problem. See 59
FR at 48673. EPA has now received SIP submissions under section 182
(b)-(d), concerning attainment and rate-of-progress, that were due by
November 15, 1994 from only a few of the states in the OTC. Of those
received, none purports to achieve NOX or VOC reductions
sufficient to account for contributions to nonattainment problems
further downwind. This further confirms that EPA should act now based
on the best available information.
EPA discussed in its NPRM and SNPRM whether section 184, together
with the legislative history, support giving ``deference'' to the OTC's
recommendation regarding the necessity of the OTC LEV program, and EPA
explicitly requested comment on that issue. See 59 FR at 21726-21727
and 59 FR at 48672. EPA has now considered the issue of deference to
the OTC in light of the comments received and does not believe that the
OTC, per se, deserves any special deference. EPA believes, however,
that when states submit a request to EPA that EPA take specific action
to implement section 110(a)(2)(D), whether under section 110(k)(5)
alone or under sections 176A or 184, EPA should pay close attention to
that request and consider it and any recommendations it makes
carefully. EPA believes that this is appropriate in light of the
fundamental role that states have historically played in implementing
title I of the CAA and the expertise that states bring to bear on air
pollution problems. In reviewing any such request from states, EPA
remains obligated to consider independently all of the factual
information available in determining whether any program
[[Page 4720]] recommended by the states is necessary. In any event, in
this instance, EPA's independent review of all the relevant factual
information fully supports the conclusion that the OTC LEV program is
necessary, and EPA has not accorded the OTC's recommendation deference
in approving it.
2. Emission Reductions from OTC LEV or a LEV-Equivalent Program are
Needed
(a) Magnitude of Reductions Needed for Attainment in 2005. The
SNPRM contains EPA's detailed analysis of available modeling
information regarding the magnitude of reductions needed for attainment
in the serious and severe nonattainment areas in the OTR. See 59 FR at
48673-48675. EPA's conclusion is that NOX emission reductions of
50% to 75% from a 1990 baseline emissions inventory are needed
throughout the OTR to reach attainment of the ozone NAAQS in those
serious and severe areas. EPA further concludes that VOC emissions
reductions of 50% to 75% from a 1990 baseline emissions inventory are
needed in and near (and upwind of) the Northeast urban corridor for
attainment in the serious and severe areas. Some parts of the OTR may
need reductions closer to the upper end of the range and other parts
closer to the lower end, based on the emissions level in the particular
area and the geographic location of the area.
As explained in the SNPRM, 59 FR at 48674, the 50% to 75%
reductions are needed from a 1990 baseline emissions inventory,
assuming that all growth in emissions since 1990 must be neutralized in
addition to achieving these percentage reductions. The estimated target
level of emissions implied by this percentage reduction will not vary
over time, though the growth that must be neutralized will steadily
increase. EPA derived this conclusion from extensive modeling studies
that are described in the SNPRM but are not repeated here. See 59 FR at
48675.
EPA reviewed in detail the atmospheric modeling tools used to
analyze the need for and effectiveness of various strategies, and the
studies that had been completed at the time of the SNPRM. See 59 FR at
48674. These tools include the Regional Oxidant Model (ROM) and the
Urban Airshed Model (UAM), which differ principally in the size of the
modeling domain and the resolution of information about subunits in the
photochemical grid. EPA also explained that the relationship between
ROM and UAM modeling involves an iterative process. ROM applications
provide boundary conditions (i.e., the conditions of the ambient air at
the upwind boundary of each of the UAM domains) for UAM analysis, and
UAM analyses provide information about strategies that can be input for
further ROM modeling to yield more refined boundary conditions for
further UAM analysis.
The states' obligation to submit attainment demonstrations (due
November 15, 1994) involves the use of UAM modeling to demonstrate that
the adopted control measures will achieve attainment for their own
nonattainment areas. As indicated above, only a few of the OTR states
have submitted any of this information, including UAM modeling, and
none has submitted the complete UAM modeling. As indicated in the
SNPRM, EPA does not expect the UAM modeling to be completed in the near
future. EPA does not believe it is appropriate to wait for the UAM
attainment demonstrations (which have since become overdue) to reach a
conclusion here. This is because ROM is the more important modeling
tool for assessing transport and is sufficient to support certain key
conclusions with respect to transport. Also, the OTC LEV and the LEV-
equivalent programs depend on time for vehicle turnover to achieve
reductions and delay could cause necessary reductions to be irrevocably
lost. Current information justifies action now to avoid the very high
risk of losing necessary reductions while awaiting further technical
information from the states that is already overdue.
(b) Contribution Analysis
As described in more detail in the response-to-comments documents,
EPA continues to rely on the ROM studies described in the SNPRM--the
ROMNET and Matrix studies--to support its conclusions concerning
transport and the amount of emissions reductions needed across the
region for the serious and severe nonattainment areas in the Northeast
corridor to attain. In the SNPRM, EPA examined the degree to which
transport contributes to the ozone problem in each of those areas. See
59 FR at 48675-77. EPA acknowledged that it is enormously complicated
to determine which reductions are needed for any specific area to avoid
causing ozone exceedances downwind. The analysis depends on regional,
urban, and wind trajectory modeling information and monitoring data, as
well as information on controls assumed in the web of downwind areas
and other upwind areas. In the SNPRM, EPA noted that the OTC relied on
ROM studies and trajectory analyses to determine the extent to which
upwind areas contribute to exceedances downwind throughout the OTR. EPA
continues to believe that these studies support its conclusions.
In the SNPRM, EPA also reviewed studies in which EPA examined
surface winds and aloft winds data during the relevant times. As stated
in the SNPRM, this information indicates that transport results in a
large cumulative impact of emissions and ozone transported by surface
winds from the south and southwest of each of the nonattainment areas
along the Northeast urban corridor, and that transport also results
from ozone and emissions transported by winds aloft from far to the
west and northwest of each of the nonattainment areas along the
corridor. EPA continues to believe that these studies support its
conclusions.
More specifically, wind trajectory data support the conclusion that
the following areas contribute to nonattainment and maintenance
problems in the OTR, in the following manner (other areas may
contribute as well): The Washington, D.C. nonattainment area--
encompassing part of Virginia, the District of Columbia, and part of
Maryland--is to the south-southwest of the Baltimore, Maryland,
nonattainment area, and thus, according to wind trajectory data, ozone
and emissions from those areas travel with the surface winds to
contribute to the nonattainment problem in Baltimore. The Baltimore
area itself, as well as the rest of Maryland, is to the south,
southwest, or west of the Philadelphia, Pennsylvania nonattainment
area, which includes parts of Pennsylvania, Delaware and New Jersey;
thus ozone and emissions from Maryland contribute to that nonattainment
problem. Ozone and emissions from western Pennsylvania, and western and
northern Maryland, contribute to the Philadelphia problem as well.
Ozone and emissions from the Philadelphia area contribute to the New
York City area which lies to the northeast. Ozone and emissions from
western and northern Pennsylvania and northern New Jersey, and the
southern and western portions of upstate New York--which are to the
west and northwest of the New York City area--also contribute to the
nonattainment problem in that area, which comprises parts of New York,
northern New Jersey, and southern Connecticut. The New York City area
is to the southwest of Providence, Hartford, and Boston, and thus ozone
and emissions from the New York City area contribute to those areas'
problems. Ozone and emissions from upstate New York and northern
Pennsylvania, which lie to the west and [[Page 4721]] northwest, also
contribute to the problems in Hartford, Providence and Boston.
Connecticut, Rhode Island, western Massachusetts, Vermont, and central
and southern New Hampshire also contribute to the Boston problem, by
virtue of lying to the southwest, west or northwest of Boston. By
virtue of lying to the southwest of Portsmouth, New Hampshire, the
states of Connecticut, Rhode Island, and Massachusetts contribute to
Portsmouth's nonattainment problem. Western and northern New York
State, Vermont, and central and southern New Hampshire lie to the west
and northwest of the Portsmouth nonattainment area, and thus also
contribute to the Portsmouth problem. The Boston area, as well as New
Hampshire, Vermont, and New York State, lie to the southwest or west of
Maine, and thus contribute to nonattainment and maintenance problems in
Maine.
Recently, and too late for inclusion in the rationale of the SNPRM,
three additional studies have become available, described below. These
new studies confirm the conclusions indicated by the previous studies.
EPA has completed a modeling analysis for the OTC to examine the
potential impacts of region-wide NOX-oriented control strategies
in portions of the eastern United States.\12\ The pertinent purposes of
this analysis were (1) to identify whether a set of alternative
regional controls would reduce ozone transport into and along the
Northeast ``Urban Corridor'' to below 120 ppb, and (2) to examine the
incremental benefits, in term of ozone reductions in the Corridor, from
the application of control strategies within the Corridor only and
within the entire OTR. For this analysis, the ``Urban Corridor'' is
defined as the contiguous serious and severe ozone nonattainment areas
extending from Washington, DC, through Baltimore, Philadelphia, New
York City, and New England to southern New Hampshire.
\12\See ``Summary of EPA Regional Oxidant Model Analyses of
Various Regional Ozone Control Strategies'', November 28, 1994.
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For the analysis EPA used ROM (see 59 FR at 48674), a photochemical
grid model covering the eastern half of the United States and
southeastern Canada. Model simulations were performed for two
meteorological episodes: July 1-15, 1988 and July 13-21, 1991. The July
1988 period was a severe and widespread ozone episode in most sections
of the modeling domain. During the July 1991 period, high ozone
concentrations were limited to the Midwest and Northeast.
Meteorological weather patterns were quite favorable for large-scale
ozone and precursor transport into and along the Urban Corridor during
both episodes.
EPA modelled several scenarios simulating very significant emission
reductions (on the order of 35-40% for NOX and VOC) in the OTR.
These scenarios included, among others, reductions from combinations of
measures, including the Clean Air Act-mandated control programs, a 0.15
lb/MMBtu NOX limit, an additional ``corridor control package,''
and LEV. None of these emission reduction combinations was sufficient
to reduce ozone levels to below 0.12 ppm throughout the region.
Specifically, even with the most effective combination of measures,
several areas, including the New York City area and parts of New
England, were not in attainment by the year 2005. Specifically in New
England, even the most effective combination of these measures did not
result in attainment in the Boston area and parts of Connecticut and
Rhode Island by the year 2005. Because emissions are lower in 2005 than
in 1999 (the attainment year for serious areas in the OTR), it is a
reasonable extrapolation from this data that an even greater
nonattainment problem remained in 1999, and that a maintenance problem
in these areas is to be expected. This provides additional support to
EPA's conclusions from the SNPRM that very large emission reductions
will be required throughout the OTR to bring all areas into attainment.
EPA also used ROM to examine the impact on air quality of a region-
wide OTC LEV program applied in addition to a Clean Air Act 2005 base
case scenario and a 0.15 lb/MMBtu NOX program in the OTR. Given
that, due to fleet turnover, reductions from the OTC LEV program would
be only partially achieved by 2005, EPA's ROM analysis found the
incremental improvements in ozone levels due to application of the OTC
LEV program (reductions of 3-6 ppb in daily maximum ozone levels) to be
relatively large. EPA found this incremental improvement from OTC LEV
most evident when the LEV results are compared with the results of
simulating the impact of a ``corridor control strategy'' that would
result in similar emission reductions.
A further discussion of this recent model analysis is included in
the response-to-comments documents.
New York State reached conclusions that support the studies
described above, after applying the Urban Airshed Model (UAMIV) to the
modeling domain being used in the New York and Connecticut ozone
attainment demonstrations.\13\ These studies utilized the CALMET
procedure for generating meteorological inputs to UAM. Consequently,
resulting wind fields and mixing heights differed from those used in
the ROM analyses and in earlier UAM studies conducted by the same
investigators. New York State's most recent UAM study shows that it
would be impossible to demonstrate attainment unless large reductions
in regional ozone transported into the domain were realized. In this
UAM study, it is shown that a local strategy reflecting 75% reduction
in VOC and 25% reduction in NOX combined with an upwind regional
strategy reflecting 75% reduction in NOX and 25% reduction in VOC
would be necessary to attain the NAAQS throughout the New York UAM
domain. These results add credence to the ROM matrix findings and
results from ROM simulations performed for the OTC, which came to
similar conclusions.
\13\See Kuruvilla, John et. al., ``Modeling Analyses of the
Ozone Problem in the Northeast'', prepared for U.S. EPA, CA No.
X819328-01-0, EPA document no. EPA-230-R-94-108, 1994.
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In the New York UAM analysis, both large VOC and large NOX
reductions were effective in reducing peak ozone concentrations, with
the VOC controls being somewhat more so. However, predicted reductions
in ozone were more extensive over a larger area when NOX was
reduced by large amounts. This latter finding with the UAM is
consistent with ROM analyses that suggest that large NOX
reductions will be needed to reduce regional transport to at or below
120 ppb of ozone. As noted above, the New York UAM analyses to date are
consistent in predicting that large reductions to incoming regional
ozone (through control of ozone precursors) will be needed to
demonstrate attainment further downwind with the UAM.
The New York UAM analysis uses more refined, localized
meteorological estimates (CALMET), instead of coarser ROM meteorology,
as well as the updated interim regional inventory, rather than 1985
National Acid Precipitation Assessment Program emissions. This study is
close to what New York is expected to use for its attainment
demonstration and rate-of-progress SIPs; thus, the study is
particularly helpful.
Finally, EPA performed studies designed to determine the extent to
which improved air quality in recent years is due to meteorological
fluctuations compared to reduced VOC [[Page 4722]] emissions.14
These studies, discussed in more detail in the response-to-comments
documents, included the development and application of a statistical
procedure for normalizing apparent ozone air quality trends to account
for confounding meteorological factors. The studies concluded that
after meteorology is normalized, there has been a downward trend in
ozone concentrations of 1-2% per year, from 1981 through 1993 (the end
date of the studies). EPA then conducted a ROM test that examined the
impact on ozone levels of the reduction in VOC and NOX emissions
between 1988 and 1991. ROM predicted a decrease in ozone levels that
matched the decrease observed in the meteorological studies. EPA views
these studies as confirmation of the validity of the ROM model's
estimates.
\14\See Briefing, ``Urban Ozone Trends Adjusted for
Meteorology''; See also Cox, William M. and Chu, Shao-Hung,
``Meteorologically Adjusted Ozone Trends in Urban Areas: A
Probabilistic Approach'', Atmospheric Environment, Vol. 27B, No. 4,
pp. 425-434, 1993.
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For its conclusions, EPA relies on (1) the initial ROM studies
showing that 50-75% NOX reductions (from 1990 levels) from the OTR
as a whole are needed to bring the serious and severe nonattainment
areas into attainment by 2005; (2) the wind trajectory analysis
supporting the conclusion that locations lying anywhere from the south
through northwest of each of those nonattainment areas must contribute
that level of NOX reductions in order for each of those
nonattainment areas, respectively, to attain; and (3) the subsequent
ROM, NY UAM and meteorological studies confirming the results of the
initial ROM and wind-trajectory analysis. Based on these, EPA concludes
that 50-75% NOX reductions from the 1990 levels in each state (or,
in the case of Virginia, the portion of the state) in the OTR will be
needed in order for each of the serious and severe areas from Baltimore
northeast through Portsmouth, New Hampshire to attain the standard. In
addition, based on the same analyses, EPA concludes that 50-75% VOC
reductions from the 1990 levels are needed in and near and (upwind of)
those nonattainment areas in order for each of those areas--including
the portions of the Washington, Philadelphia, New York, Providence and
Portsmouth areas just downwind and across state lines from those nearby
upwind VOC sources--to attain the standard by their respective
attainment dates.15 The need for this large level of reductions,
coupled with the wind trajectory data, form the basis for EPA's
conclusions that virtually every area within the OTR contributes
directly to a nonattainment or maintenance problem in a downwind state
in the OTR.
\15\For example, VOC sources in the northern Virginia portion of
the Washington nonattainment area contribute to nonattainment in the
Maryland portion of that area, and VOC sources in the New Hampshire
portions of the Boston nonattainment area contribute to
nonattainment in the Massachusetts portion of that area.
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(c) Analysis of Inventory and Options for Control Measures
The next step in EPA's analysis is to assess the options available
for achieving the necessary reductions in NOX across the OTR and
in VOCs in and near the Northeast Corridor of the OTR, which is
discussed in more detail in the SNPRM. See 59 FR at 48677-48684. For
this step, EPA first assessed the best available information about the
inventory of emissions across the OTR and then considered various
potential control measures to reduce emissions by the necessary amount.
In its analysis, EPA considered options that are at least potentially
reasonable and practicable across the entire OTR (referred to herein as
``potentially broadly practicable'' measures). In other words, EPA has
not considered options that, while perhaps potentially practicable to
some extent in some locations, would be impracticable if applied to
their full extent throughout the OTR.16
\16\EPA believes that whether such measures--particularly those
involving local land-use, highway, or mass transit infrastructure
changes--are practicable to some extent in individual areas depends
on a consideration of local factors that can be conducted only by
state and local citizens and governments. For that reason, EPA
cannot itself either determine or assume that those measures are
practicable to some extent in any particular area. As described
elsewhere in this notice, however, EPA has left states the
flexibility to demonstrate that such measures are indeed practicable
and hence might close any emissions reductions shortfall so as to
render emission reductions from new motor vehicles unnecessary.
---------------------------------------------------------------------------
i. Inventory Analysis
EPA relied on the 1990 interim regional inventory used for ROM and
UAM analyses and projected emissions growth to estimate NOX and
VOC emissions in 2005 (the attainment deadline for severe areas, except
for the New York-New Jersey-Connecticut area with the slightly later
deadline of 2007). EPA projected that highway vehicles will account for
approximately 38% of the total NOX inventory and 22% of the total
VOC inventory in 2005, indicating that substantial motor vehicle
controls would have to be an important part of a workable compliance
plan for the OTR. EPA projected the gasoline-powered light-duty vehicle
component of the inventory (the vehicle types that would be subject to
the OTC LEV program) to constitute 28% of total NOX emissions and
19% of total VOC emissions in the 2005 inventory.
ii. Analysis of Options for Control Measures Without More Stringent New
Motor Vehicle Standards
To identify and evaluate the full range of potentially broadly
practicable control options, EPA first analyzed the impact of measures
explicitly required by the Act, using the same ROM modeling tools used
to assess the overall magnitude of reductions needed in the OTR. The
Agency then analyzed other options to fill the shortfall in emissions
reductions, including a stringent limit on NOX emissions, measures
EPA included in proposed Federal Implementation Plans (FIPs) for three
areas in California, and measures listed in compilations of NOX
and VOC control measures prepared by EPA and the State and Territorial
Air Pollution Program Administrators/Association of Local Air Pollution
Control Officials (STAPPA/ALAPCO). Recognizing uncertainties in various
aspects of its analysis and EPA's authority to resolve those
uncertainties in favor of health and environmental protection, EPA
concludes that no combination of such measures would be sufficient to
achieve the necessary amount of reductions without more stringent
standards applicable to new motor vehicles.
EPA identified in the SNPRM the array of measures applicable to
stationary and mobile sources under the Act, and described its modeling
of the impacts of these measures on ambient ozone levels in the OTR.
EPA calculated that application of these controls would achieve
reductions by 2005 in the OTR of 20% for NOX and 37% for VOCs from
the 1990 baseline inventory, and concluded from ROM studies modeling
the impacts of these measures that this level of reductions would be
insufficient.
As explained in the SNPRM, EPA must account for problems in
calculating the impact of control measures, including imperfect
enforcement, control equipment malfunctions, and operating and
maintenance problems. Accounting for such problems through a ``Rule
Effectiveness'' factor diminishes the emissions reductions that one
could expect if all sources could fully comply with rules at all times.
See 59 FR at 48682. EPA noted that it had applied Rule Effectiveness
considerations in calculating the overall impact of the Act-mandated
controls for the ROM studies and for mobile sources within the MOBILE
emissions model. See 59 [[Page 4723]] FR at 48679 n.36 and 48682.
However, EPA did not apply Rule Effectiveness values in calculating the
impacts of other control measures, thereby making these measures overly
optimistic.
In addition to the Act-mandated controls, EPA also examined the
impact of a region-wide limit on NOX emissions of 0.15 lbs/MMBtu
(the ``0.15 NOX standard'') for boilers, gas turbines, and
internal combustion engines with a capacity of at least 250 MMBtu/hr.
EPA calculated that this level of control would achieve a 15% reduction
in inventory-wide NOX emissions from a 2005 projected baseline,
after application of other controls mandated in the Act. Together with
the mandatory measures, this would achieve a total NOX emissions
reduction in the OTR of 32% from 1990 baseline levels.
EPA explained in the SNPRM that it evaluated the 0.15 NOX
standard as representing the maximum emissions reduction from large
stationary sources that is not clearly unreasonable or impracticable.
See 59 FR at 48679. By this EPA explained that it did not mean that EPA
believes that such measures are in fact reasonable and practicable. See
59 FR at 48678.
In fact, on September 27, 1994--five days after publication of the
SNPRM--eleven of the thirteen OTC member States signed a Memorandum of
Understanding regarding regional NOX controls (NOX MOU)
somewhat less stringent than the 0.15 NOX standard. Only
Massachusetts and Virginia have not signed the NOX MOU.
Designed to build on the existing NOX Reasonably Available
Control Technology (RACT) program, the agreement represents a phased
approach to controlling NOX emissions from power plants and other
large fuel combustion sources. The first component (called ``phase II''
because the existing NOX RACT program is ``phase I''), to be
implemented by May 1999, would include three control zones in the
region: An inner zone ranging from the Washington, DC, metropolitan
area northeast to southeastern New Hampshire; an outer zone ranging
from the inner zone out to western Pennsylvania; and a northern zone
which includes much of northern New York and northern New England,
including most of New Hampshire.
Control requirements under the MOU vary with the zone in which the
various sources are located, with the most stringent requirements
occurring in the inner zone. Affected sources (boilers and indirect
heat exchangers with a maximum gross heat input rate of at least 250
MMBtu per hour and electric generating units producing at least 15MW of
electricity) in the Inner Zone will be required to reduce NOX
emissions by 65 percent from base year levels or emit NOX at a
rate of no more than 0.2 lbs/MMBtu. In the Outer Zone, NOX
emissions must be reduced by 55 percent from base year levels by May 1,
1999, or emissions must be limited to no more than 0.2 lbs/MMBtu.
Northern Zone controls remain at RACT levels during phase II.
The next phase (known as ``phase III'') would be implemented by May
2003. By that date, affected sources in both the Inner and Outer Zones
must reduce NOX emissions by 75 percent from base year levels or
limit NOX emissions to no more than 0.15 lb/MMBtu. Affected
sources in the Northern Zone would be subject to regulations that would
reduce their rate of NOX emissions by 55 percent from base year
levels, or would have to emit NOX at a rate of no greater than 0.2
lbs/MMBtu.
The NOX MOU provides for modified regulations for the May 1,
2003, targets if additional modelling and analysis show that these
modified regulations, in combination with regulations for controlling
VOCs, will result in attainment of the ozone standard throughout the
OTR. In such a case, the NOX MOU would have to be revised by
December 31, 1998.
Based on EPA's 1990 interim emissions inventory, EPA estimates that
the NOX MOU will result in about a 70 percent reduction in
NOX from these sources, or slightly less than the reduction that
would have occurred with the application of a region-wide 0.15 lbs/
MMBtu standard. EPA estimates that more than three-fourths of the total
NOX reductions to be obtained under the NOX MOU will be
achieved by 1999.
In addition to the Act-mandated measures and region-wide NOX
controls, EPA also considered a variety of NOX and VOC control
measures from STAPPA/ALAPCO compilations, transportation control
measures, California reformulated gasoline, and measures EPA proposed
for FIPs for California areas. As summarized in the SNPRM, most of the
NOX source categories in the STAPPA/ALAPCO compilation were
already encompassed within the 0.15 NOX standard. The remaining
STAPPA/ALAPCO categories of small stationary and area sources comprise
an extremely small portion of the stationary source segment of the
emissions inventory, and a still smaller portion of the overall
inventory. EPA also calculated that the transportation control measures
that EPA would consider potentially broadly practicable would yield
only a combined reduction of 2.5% from 1990 baseline inventory-wide
NOX reductions. In the SNPRM, EPA identified the option of
extending the employee trip reduction (or employee commute options
(``ECO'')) program region-wide as potentially practicable. Upon further
consideration, EPA believes it is more appropriate to characterize
region-wide ECO as a measure that, while potentially practicable in
some urban and suburban settings, cannot be considered broadly
practicable if applied across the OTR. Deleting the emission-reduction
benefits of extending ECO region-wide, however, merely buttresses the
conclusions described above. For California reformulated gasoline, EPA
calculated a 1.4% reduction in NOX emission from 1990 baseline
inventory-wide levels. For the proposed California FIP measures, EPA
also did not find additional options that were not either inappropriate
or unavailable in the OTR, or already encompassed within the Act-
mandated controls or 0.15 NOX standard. In sum, EPA concludes that
all other potentially broadly practicable options will be needed in
addition to more stringent controls for new motor vehicles throughout
the OTR, in order for the serious and severe ozone nonattainment areas
in the OTR to attain the ozone standard; those other options will not
produce emissions reductions sufficient to remove the need for such
motor vehicle controls. As described in the SNPRM, similar conclusions
apply with respect to VOC emission controls in and near the urban
Northeast Corridor nonattainment areas of the OTR.
iii. Determination Whether Reductions from OTC LEV or LEV-Equivalent
Program Are Necessary
As discussed in the SNPRM and above, EPA has concluded that there
are not sufficient broadly practicable options for making up the
shortfall in emissions reductions necessary for attainment and that all
of the emissions reductions associated with applying the OTC LEV or
LEV-equivalent program are necessary. See 59 FR at 48683-48684. EPA
calculated the impact of the OTC LEV program in 2005 from the 2005
projected inventory, over the reductions that will take place in New
York and Massachusetts as a result of their existing LEV programs
beginning in 1996. EPA did not account in those calculations for the
emissions associated with migrating and visiting vehicles. EPA
subsequently analyzed these migration effects and published a notice
describing them on October 24, 1994, 59 FR 53396. Since that notice,
EPA has done a more thorough analysis of these effects, which can be
found in the RIA [[Page 4724]] located in section V of the docket. EPA
now estimates that those migration effects result in a 16 ton per day
increase in VOC emissions and a 28 ton per day increase in NOX
emissions in 2005 over EPA's previous estimates of highway vehicle
emissions under the OTC LEV program. However, the benefits of the OTC
LEV are still substantial and EPA continues to believe that the
information above and in the SNPRM (see conclusion 59 FR at 48682)
supports the conclusion that all of the emission reductions associated
with the OTC LEV program are necessary and that no options other than
that program are currently available to achieve reductions from new
motor vehicles. The OTC LEV program is necessary unless an acceptable
LEV-equivalent program is in effect.
The OTC LEV program would be reasonable and practicable in the OTR,
as explained in the SNPRM, 59 FR at 48683-48684. EPA granted California
a waiver for the LEV program based on a finding of technical
feasibility and adequate lead-time; the California Air Resources Board
(CARB) has continued to find the program feasible with certification of
several categories of LEVs; New York and Massachusetts have also found
that the program is reasonable; and the legislative history of section
177 reflects the notion that extension of California standards to other
states would not place an undue burden on auto manufacturers.
iv. ZEV Equivalency
EPA requested comment in the SNPRM on whether it should use its
authority under section 184 to include a ``ZEV equivalency''
requirement--i.e., to require the OTR states to achieve the additional
emissions reductions associated with the ZEV production mandate if the
Agency were not to require the OTR states to adopt the ZEV mandate. See
59 FR at 48684. EPA noted that in an August 4, 1994, letter, the Chair
of the OTC stated that, for purposes of discussing different options
with the auto manufacturers, any alternative should be compared to the
full LEV program, including the ZEV mandate. In addition, commenters
suggested that EPA require that states' programs compel the automobile
manufacturers either to sell ZEVs or to achieve equivalent reductions
from the new vehicle sector.
EPA has decided that today's action should not require states to
achieve those benefits of the ZEV production mandate that are not
otherwise provided by the OTC LEV program.17 First, EPA does not
interpret the OTC's recommendation as recommending that EPA issue such
a requirement. Regarding the ZEV production mandate, the OTC's February
10, 1994, recommendation states:
\17\For purposes of today's action, the additional benefits of
ZEVs are NMOG evaporative and NOx tailpipe emissions. Because the
LEV program's fleet NMOG average is unaffected by the ZEV mandate,
the ZEV mandate does not affect fleet NMOG tailpipe emissions, but
the mandate does result in increased reductions of NMOG evaporative
and NOx tailpipe emissions. Commenters also suggested that auto
manufacturers be responsible for CO, toxics and CO2 benefits of
ZEVs, but consideration of these benefits is beyond the scope of the
Agency's authority under section 184, which pertains solely to ozone
pollution and its precursors.
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To the extent that a Zero Emission Vehicle sales requirement
must be a component of a LEV program under Section 177, such a
requirement shall apply. Further, if such a Zero Emission Vehicle
sales requirement is not a required component of programs adopted
under Section 177, individual States within the OTC may at their
option include such a requirement and/or economic incentives
designed to increase the sales of ZEVs in the programs they adopt.
Thus the OTC states clearly recommended that they be obligated to adopt
the ZEV mandate only if it were legally required for adoption of the
LEV program under section 177. Since EPA has concluded that states
adopting the LEV program are not obligated to adopt the ZEV mandate
under section 177 (see discussion in section IV.B.3. below), the OTC
states have not recommended that EPA require state adoption of the ZEV
mandate. The states also clearly expressed their wish to retain
authority as individual states to adopt ZEV mandates. This in no way
suggests that the states wanted EPA to require those who choose not to
adopt a ZEV production mandate to achieve its benefits through other
requirements applicable to manufacturers of new motor vehicles.
The February 10 recommendation does not elsewhere reflect any
desire that EPA require the states to achieve the additional benefits
associated with a ZEV mandate. The recitation clauses in the OTC's
recommendation state the OTC's expectation that EPA should evaluate
alternatives to the OTC LEV program according to specified criteria.
This does not, however, amount to a request that EPA require that
states achieve the benefits associated with the ZEV mandate. Rather,
EPA believes this is best understood as indicating the OTC's desire
that EPA should consider other options to achieve the same reductions
from new motor vehicles through a LEV-equivalent program. In so doing,
EPA believes the OTC's recommendation is best understood to underscore
that such an option should also advance technology.
Second, the August 4, 1994 letter from the OTC does not support the
view that EPA should require that states achieve the additional
emissions benefits of the ZEV mandate. That letter does not purport to
interpret the OTC's February 10 recommendation.18 Rather, that
letter sets forth the OTC's principles in approaching negotiations with
the automakers regarding a LEV-equivalent program. The August 4 letter
reflects the OTC's desire that the OTC's agreement to accept a LEV-
alternative would not deprive the OTC states of the ZEV benefits that
they would otherwise have the option to require. This is entirely
different from a recommendation that EPA require that the states
achieve the ZEV benefits.19
\18\EPA need not resolve whether it is appropriate to rely on
such a letter to determine the OTC's intent.
\19\Even if the OTC had intended that EPA require state programs
requiring from the new motor vehicle sector the additional benefits
provided by a ZEV production mandate, it is unlikely that EPA could
issue such a requirement. EPA received no comments explaining how,
without adopting a ZEV mandate, states could require the additional
ZEV mandate emission benefits from the new motor vehicle sector and
not violate sections 209 and 177.
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d. The Effect of a Possible LEV-Equivalent Program on the Need for OTC
LEV
As mentioned above, EPA is continuing to work with the interested
parties to determine whether a LEV-equivalent program could be
developed. Several commenters have argued that the possibility of a
LEV-equivalent program precludes EPA from finding that OTC LEV is
necessary. EPA disagrees with these commenters for the reasons given in
the SNPRM, 59 FR 48683 (cols. 2-3). There is no currently available
method (other than adoption of a LEV program under section 177) for a
state unilaterally to require emission reductions from new motor
vehicles. The alternative program being developed by interested parties
is not an option that individual states can adopt now. The alternative
requires the automakers' consent to tighter standards and the
automakers have made it clear that their consent will not be given
without certain conditions being met--including the condition that all
OTC states agree to the alternative. Not all OTC states have agreed to
an alternative, and EPA does not have authority to require them to do
so. In addition, the automakers have indicated that their agreement to
a LEV-equivalent program is contingent on New York and
[[Page 4725]] Massachusetts dropping their ZEV programs. EPA cannot
require those states to take such an action. Furthermore, the
alternative would likely require either EPA regulations or a consent
decree or both before it would be valid. EPA cannot now find that the
OTC LEV program is unnecessary even though a LEV-equivalent program
might become available in the near future. As discussed elsewhere in
this notice, however, EPA has qualified its finding that OTC LEV is
necessary by providing that that program will not be considered
necessary, and hence will not be required, if and when EPA finds that
an acceptable LEV-equivalent program is in effect.20
\20\ On another point raised in the SNPRM, EPA noted that it was
considering an extension of its cross-border sales policy to Maine
dealers. EPA has made this extension. See letters from Mary T. Smith
to Honorable Olympia J. Snowe and Honorable William S. Cohen, dated
October 12, 1994.
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e. Particular Circumstances of OTC LEV Program.
Several particular aspects of the OTC LEV program further support
EPA's conclusion that it is necessary to adopt the program region-wide
to attain the greatest amount of emissions reductions and to facilitate
operation of the program, as explained in more detail in the SNPRM. See
59 FR at 48684-48685. These circumstances include: The interstate
nature of the business of selling new cars, particularly among the
smaller Northeast states and especially along their border areas; the
need for states to adopt the program as soon as possible because the
fleet turnover on which the emissions reductions depend takes
substantial time; and the mobility of cars throughout the dense
transportation infrastructure in the Northeast, so that the sale of
cars meeting less stringent standards in part of the region could
compromise environmental benefits across the region. The mobility of
motor vehicles in the OTR supports the conclusion that the LEV program
is needed throughout the OTR, to ensure that both the motor-vehicle-
related portion of the overall NOX reduction needed throughout the
OTR, and the motor-vehicle-related portion of the overall VOC
reductions needed in and near the urbanized Northeast Corridor, are
actually achieved.
f. Conclusions Regarding Need for OTC LEV or a LEV-Equivalent Program
for Purposes of Bringing Downwind States Into Attainment by the Dates
Provided in Subpart 2 of Part D of Title I
The next step in EPA's analysis in the SNPRM was to address
specifically the need for the OTC LEV program by the 1999, 2005, and
2007 attainment deadlines for the serious and severe areas in the OTR.
As noted above, EPA's conclusion that 50% to 75% reduction from a 1990
baseline inventory in NOX emissions throughout the OTR and in VOC
emissions in and near the urban areas is constant over time. EPA's
modeling focused primarily on the 2005 inventory, at which time growth
since 1990 must be offset in addition to achieving the 50% to 75%
reductions. As EPA explained in the SNPRM, there is no reason to
believe that the conclusion that emission reductions equivalent to
those achieved by the OTC LEV program are necessary would be different
for the New York-New Jersey-Connecticut severe area, which has a 2007
attainment deadline. This is because the control options EPA considered
will not achieve such greater reductions in the extra two years so as
to make up the shortfall needed for attainment. Also, each of these
three states needs the program in order that the other two may attain
by 2007, as they share a common airshed and commuters from each of
these states contribute emissions to the others. For these same
reasons, these three states may also need the program in order that the
southern New Jersey-Philadelphia nonattainment area may attain by 2005.
Based on the ROM and trajectory analyses described in the SNPRM and
the analysis of alternative control measures, EPA also believes that,
unless an acceptable LEV-equivalent program is in effect, all of the
OTR states need the OTC LEV program in order that serious areas with a
1999 attainment deadline may attain on time. As noted above, because
emissions will be lower in the OTC nonattainment areas in 2005 than in
1999, it is a reasonable extrapolation from the modeling data that an
even greater nonattainment problem will remain in 1999 than in 2005.
Even the limited reductions from the OTC LEV program in model year 1999
are actually necessary, given the reductions that need to be achieved
in upwind states in order for each of these areas to attain on time.
Further, the attainment date for those serious areas may well extend
beyond 1999. This provides another reason to resolve in favor of acting
quickly, any uncertainties with regard to the need for an OTC LEV or
LEV-equivalent program to bring serious areas into timely attainment.
Three years of data are needed to actually achieve attainment, and the
states may legally extend their attainment deadlines for two one-year
periods if one exceedance of the NAAQS occurs in the deadline year. It
is quite possible that at least some of the serious areas with 1999
deadlines will need to rely on these extensions through 2001. Certainly
current modeling indicates that the best chance for these areas to
attain by their attainment dates would be through use of these one-year
extensions. Emission reductions from the OTC LEV program would be
necessary to offset growth and sustain attainment-level air quality in
2000 and 2001, when the program will generate increasing reductions due
to fleet turnover.
In summary, based on the analysis in the SNPRM and consideration of
the comments, EPA concludes that (1) emission reductions from the OTC
LEV or a LEV-equivalent program are a necessary part of the 50-75%
NOX and VOC reductions needed from upwind states to bring serious
and severe areas stretching from the Washington, DC nonattainment area
to the Portsmouth, New Hampshire nonattainment area into attainment by
the 1999, 2005, and 2007 deadlines applicable to those areas; (2) the
reductions from OTC LEV or a LEV-equivalent program will be needed in
areas located in a broad arc extending from the south through the
northwest of each of those areas; (3) such a program is also needed in
the remaining parts of the OTR to maintain the program's effectiveness
in light of dealership trading and migration of vehicles throughout the
OTR; and (4) the OTC LEV program is the only currently available
program for reducing emissions from new motor vehicles. Therefore, EPA
concludes that the OTC LEV program is necessary in each state (or in
the case of Virginia, portion of the state) in order to bring all of
those serious and severe nonattainment areas into attainment by those
dates, unless an acceptable LEV-equivalent program is in effect.
3. OTC LEV or LEV-Equivalent Program is Also Needed for Maintenance
In the SNPRM, EPA also addressed how maintenance of the ozone NAAQS
after it is achieved is relevant to EPA's analysis. See 59 FR at 48687-
48690. First, EPA explained its legal authority to consider maintenance
under both sections 110(k)(5) and 184, and then described why OTC LEV
or a LEV-equivalent program is necessary for maintenance.
a. Legal Analysis
EPA concludes that it has authority to act, even under section
110(k)(5), even prior to submission of attainment demonstrations under
section 182, to require submission of measures [[Page 4726]] necessary
for compliance with the maintenance aspects of section 110(a)(2)(D), as
discussed in more detail in the SNPRM. In the SNPRM and NPRM
discussions, EPA emphasized the relocation of maintenance in general to
section 175A in the 1990 Amendments to the Act, together with the
retention of maintenance as an explicit consideration under section
110(a)(2)(D) for purposes of addressing pollution transport.
Particularly in light of the staggered attainment deadlines under
section 181 for ozone, upwind areas with later deadlines may continue
to generate emissions interfering with downwind maintenance in downwind
areas with shorter attainment deadlines. As with the attainment
analysis, EPA concludes that it is important to act now, because
reductions from the OTC LEV and LEV-equivalent programs are dependent
on fleet turnover, and delay would cause the irrevocable loss of
emissions reductions necessary for downwind maintenance. Also,
uncertainty in the factual analysis for maintenance should be resolved
in favor of health and the environment for the same reasons EPA
described in the attainment discussion.
EPA also concludes maintenance is a proper consideration under
section 184(c), as described in more detail in the SNPRM and NPRM.
While the language of section 184(c) references timely attainment and
does not explicitly refer to maintenance, EPA concluded that
``attainment'' should be understood to include ``maintenance'' where
the issue is whether measures are ``necessary'' to comply with
pollution transport requirements. This is because it does not make
sense to believe Congress intended that section 184 would not reach a
measure in fact necessary for maintenance, when the result of a failure
to implement the measure would therefore be downwind areas' relapse
into nonattainment. Also, EPA believes that the OTC is an entity also
established under section 176A, which encompasses both the attainment
and maintenance aspects of section 110(a)(2)(D). Section 184 simply
adds stringency to section 176A in light of the serious problem in the
northeast. It therefore makes sense to believe Congress did not intend
in section 184(c) to displace the more general authority of a
commission under section 176A to make recommendations, and for EPA to
approve recommendations, concerning both the attainment and maintenance
aspects of section 110(a)(2)(D). EPA has reviewed the comments
submitted on this issue and continues to believe that it has the
authority to consider maintenance when acting pursuant either to
section 110 or section 184 for the reasons given in the SNPRM and in
the response-to-comments documents.
Beyond that, as described earlier, EPA believes that it may treat
the OTC submittal also as a request with recommendations under section
176A, which plainly authorizes EPA to approve such a request if its
recommended measures are necessary to prevent interference with
maintenance in downwind states under section 110(a)(2)(D).
b. Technical Analysis
EPA is concluding that, unless an acceptable LEV-equivalent program
is in effect, the OTC LEV program is necessary for states in the OTR to
maintain the ozone NAAQS after they achieve the standard, as discussed
in the SNPRM. See 59 FR at 48688. EPA bases this conclusion on its
analysis of emissions growth in the OTR which the additional measures
must neutralize, even after sufficient controls for attainment by the
attainment deadlines are in place. This growth results especially from
increasing vehicle miles traveled (VMT), which tends to overcome
reductions resulting from turnover to the Tier 1 standards and
implementation of advanced inspection/maintenance programs. Therefore,
the high level of reductions needed to attain the NAAQS are also needed
from the same areas to maintain the NAAQS, and OTC LEV or a LEV-
equivalent program is needed from those areas for the same reason.
The Agency's analysis of available control options shows that they
are insufficient to produce the emissions reductions needed to bring
downwind areas into attainment without more stringent standards for new
motor vehicles. The Agency therefore concludes that such options would
a fortiori be insufficient to achieve the emissions reductions needed
to maintain the standard over two consecutive ten-year periods
following redesignation (as required under section 175A). The
additional ROM and meteorological studies described above tend to
confirm that the serious areas in the Northeast Corridor--including the
New England areas--will not be able to attain and maintain the ozone
standard without a combination of measures including OTC LEV or a LEV-
equivalent program. (The response-to-comments documents include
additional support for this conclusion.)
EPA explained that the OTC LEV or LEV-equivalent program will
continue to accrue additional benefits through the year 2028. EPA
calculated that in 2015 (the latest year for which it has projected
emissions reductions), the program would yield a 39% reduction in
NOX emissions and a 38% reduction in VOC emissions from highway
vehicles compared to emissions in that year without the program.
EPA acknowledges that for the most part, sources in Maine do not
directly contribute emissions or ozone to an interstate ozone
nonattainment problem. Maine is included because vehicles purchased in
Maine may release emissions in parts of the OTR that do contribute to a
nonattainment or maintenance problem. A vehicle purchased in Maine may
travel to another state in the OTR because a Maine resident who
purchased the vehicle in Maine moved to the other state or traveled
there for purposes of work or recreation. This pattern is more common
in southeastern Maine, which is close to the New Hampshire city of
Portsmouth.
EPA's rationale for finding LEV necessary in New Hampshire is
several-fold. Parts of southern and central New Hampshire are northwest
of Boston, and trajectory studies support the hypothesis that emissions
and ozone from these areas contribute to the Boston nonattainment
problem. In addition, part of New Hampshire is in the Boston
nonattainment area; thus, vehicles in this area generate local NOX
and VOC emissions that are part of the problem on the Massachusetts
side of the state border. Vehicles in other parts of New Hampshire
should be subject to the OTC LEV program for the same reason as
vehicles in Maine, discussed above.
In addition, New Hampshire lies to the south and southwest of
Maine, and thus contributes to Portland and other Maine nonattainment
problems. Although the Maine areas are moderate with an attainment date
of 1996, it is possible that the LEV reductions, which will not begin
until 1999, will be necessary for attainment and maintenance in Maine.
At the least, this possibility provides EPA with another reason to
resolve any uncertainty over the necessity of OTC LEV in this state in
favor of requiring OTC LEV.
Specifically, the OTC ROM and the New York UAM/ROM Study clarify
the extent to which LEV may be needed for attainment and maintenance in
the northeastern portions of the OTR. Both studies (i) apply ROM 2.2 to
analyze what would happen with a recurrence of the July 1988
meteorological episodes in the year 2005, and (ii) incorporate the
interim regional emissions inventory as well as emissions reductions
from [[Page 4727]] controls required under the Clean Air Act
Amendments. These studies find that, for the episode days modelled,
ozone levels for the southeast coastal region in Maine hover at the 120
ppb standard. OTC ROM, figures A-2 and B-2; New York UAM/ROM Study,
figures 15a-c and 18a-c. It should be noted that the ROM model tends to
underestimate ozone levels in this seacoast region by failing to fully
account for the impact of the seabreeze. The ROM model tends to show
higher levels of ozone just off the coast, but it appears that
seabreezes keep more of the ozone plume over the shore. Accordingly, it
is quite possible that by the year 2005, this portion of Maine would
remain in nonattainment notwithstanding the imposition of all mandated
Clean Air Act controls.
The attainment date for this area is 1996. Emissions inventories
are expected to decrease over time, so that the 2005 inventory is
expected to be lower than inventories in the last part of the 1990s.
Accordingly, ozone levels in the last part of the 1990s in Maine may be
expected to be even higher than in the year 2005. For this reason, it
is possible that Maine's attainment dates will be extended to or past
1999 through application of EPA's overwhelming transport policy. Even
if Maine's attainment date remains 1996, Maine appears likely to have a
problem maintaining the NAAQS standard in the late 1990s and early 21st
century. Accordingly, EPA believes it relevant to inquire into how to
assure attainment and maintenance of the ozone NAAQS in Maine.
The OTC ROM study shows that the beneficial impact of OTC LEV and
.15 lb/MMBtu NOX limits throughout the OTR is an ozone reduction
of some 6-9 ppb, and that the beneficial impact of OTC LEV alone is
approximately 3 ppb. The spatial impact of these reductions is
difficult to discern from the ROM model due to, among other things, the
large grids it employs; thus, it is not possible to isolate the
benefits from stationary sources compared to mobile sources. Therefore,
it is possible that reductions from motor vehicles will prove to be a
necessary component of any control strategy designed to assure
attainment and maintenance for the Maine coastal areas. It is further
possible that emissions reductions from other mobile source measures
will not prove to be sufficient, and therefore that the reductions from
OTC LEV would be necessary.
Although the preceding conclusions are based on information that at
present is uncertain, EPA believes that it is appropriate to resolve
those uncertainties in favor of concluding that the emission reductions
that would be achieved by OTC LEV or an acceptable LEV-equivalent
program throughout Maine and New Hampshire (as well as states to the
south and west of Maine) are indeed needed to ensure maintenance (if
not also timely attainment) in Maine.
4. Relevance of EPA Transport Policy
As described in the SNPRM, the Agency's September 1, 1994 transport
policy addresses areas where overwhelming transport from upwind areas
with later attainment dates is a dominant factor accounting for
nonattainment in downwind areas with an earlier attainment date. Such
downwind areas may not be able to attain by the deadline due to the
impact of transport. EPA's policy is that states may seek to have EPA
interpret the Act so that, if it is impracticable to accelerate
controls upwind and other facts can be shown, then the downwind areas
might have additional time to attain beyond the section 181(a)(1)
dates. EPA anticipates that emissions reductions during any ``extension
period'' for downwind areas would apply to reaching attainment rather
than to maintenance. In addition, if EPA concludes that certain serious
areas in the OTR will not be able to reach attainment by 1999, and do
not qualify for any extensions, then they would be reclassified to a
higher classification (i.e., ``bump up'') under section 181(b)(2) of
the Act and would have additional time to attain. The OTC LEV or a LEV-
equivalent program would ultimately also be necessary to achieve the
reductions needed by any such area in the period after 1999 to attain
by such later attainment dates.
B. Consistency of OTC LEV With Section 177 of the Clean Air Act
1. Introduction
EPA concludes that the OTC's recommendation is consistent with
section 177 of the Act, and that implementation of the ZEV production
mandate is unnecessary for the recommendation to be consistent with
section 177, for the reasons given in greater detail in the response-
to-comments document and in the SNPRM, 59 FR at 48690-48694. The
aspects of the OTC recommendation identified as potentially implicating
section 177 include: the statement in the OTC recommendation that
adoption of California reformulated gasoline is not a part of the
recommendation; the recommendation that EPA not require the ZEV
production mandate except to the extent required under section 177; and
the recommendation's failure to explicitly incorporate California's
regulations. Commenters raised other concerns about consistency of the
OTC's recommendation with section 177, including: whether incorporation
of the NMOG fleet average requirement would violate section 177;
whether a state's incorporation of the California LEV program after the
program is initiated in California would create a ``third vehicle'' due
to California's credit banking provisions; and whether a state without
a current nonattainment area or approved SIP can adopt the California
LEV requirements.
EPA has reviewed the comments provided since the publication of the
SNPRM and has concluded that the determination of consistency proposed
in the SNPRM should be made final. Therefore, EPA finds that the OTC
LEV recommendation is consistent with section 177 of the Act.
2. California Fuel Regulations
EPA finds that the OTC's choice not to include California's clean
fuel requirements in its recommendation does not violate section 177
because it neither contravenes the ``identical standards'' requirement
nor the ``third car'' prohibition of section 177. EPA addressed this
issue in detail in the SNPRM and continues to rely on that discussion.
See 59 FR at 48690-91. California's fuel provisions were not part of
California's waiver application under section 209 and are not governed
by section 209(a). Rather, they are addressed separately in section 211
of the Act. Section 211 allows states to regulate fuels differently
than EPA if they can demonstrate that such regulation is necessary to
meet air quality standards, except that California may regulate fuel
without such a showing. California's fuel standards are thus not
``standards * * * for which a waiver has been granted'' under section
177. If states were obligated to adopt California's fuel standards to
comply with section 177, then such states would also have to meet the
necessary showing under section 211 with respect to the fuel
requirements. This would contradict the structural separation in the
Act between vehicle and fuel requirements. It would also erect a
``necessary'' hurdle to adopting vehicle standards identical to
California's vehicle standards in a way not contemplated in section
177.
Moreover, given the specific language of section 177 (its
references to section 209, its reference to waivers, and its use of the
term ``standards relating to control of emissions from new motor
vehicles,'' which mirrors section 209's [[Page 4728]] language), it is
clear that the ``standards'' that must be identical under section 177
are vehicle-based standards, not fuel standards. Finally, the
legislative history indicates that Congress specifically decided not to
include fuel requirements under section 177 when it reviewed section
177 in 1990.
Both federal courts that have reviewed the issue have found that
failure of a state to promulgate California's fuel regulations does not
violate section 177's requirement that an adopting state's standards be
identical to California's standards. Motor Vehicle Manufacturers
Association v. NYDEC, 17 F.3d 521 (2nd Cir. 1994) and American
Automobile Manufacturers Association v. Greenbaum, No. 93-10799-MA (D.
Mass. October 27, 1993) (the ``New York case'' and the ``Massachusetts
case'', respectively). These decisions are in accord with EPA's
position on this matter. For a more detailed discussion of this issue,
review the response-to-comments documents and the SNPRM at 59 FR at
48690 (col. 3).
Likewise, EPA finds that the OTC's choice not to include the
California fuel requirements does not violate section 177's ``third
vehicle'' prohibition. The auto manufacturers claim higher sulfur
levels in fuel found in the OTR would cause problems with California
LEV emissions control systems, necessitating changes in design that
would create a ``third vehicle.'' EPA rejects this argument.
The voluminous data provided by manufacturers do not contradict the
basic premises outlined by EPA in the SNPRM. This data refers to three
issues related to increased sulfur in fuel in the northeast that
manufacturers claim will cause the manufacture of ``third vehicles.''
These are: The effects sulfur will have on California's on-board
emissions diagnostics system (OBD II); the effects of sulfur on in-use
recall testing; and the effects of sulfur on ``maximum I/M cutpoints''
(i.e., cutpoints of 1.5 times the applicable standard).
As the Agency made clear in the SNPRM, nothing in the OTC LEV
recommendation requires manufacturers to build a third car. In fact,
the OTC LEV petition requires that cars sold in the OTC be California-
certified vehicles. Manufacturers can build the same car to meet both
California's and the OTC's requirements. Any design change that a
manufacturer makes is based on the manufacturer's choice to do so. As
the Second Circuit made clear in its decision denying manufacturers'
``third vehicle'' claim in the context of the ZEV production mandate,
whatever design change ``manufacturers choose to install on cars sold
in New York is a marketing choice of theirs and not a requirement
imposed by the (state).'' MVMA, 17 F.3d 521, 538 (2nd Cir. 1994).
Manufacturers' claims regarding sulfur's effects on California OBD
II systems center around the contention that manufacturers will use
flange-mounted catalyst assemblies instead of welded ones in their
vehicles sold in the northeast. This is not a significant change in the
design of the vehicles, and it would be done to save consumer time and
cost if the catalysts need to be replaced. This would be a marketing
choice by manufacturers and does not provide the basis for a third
vehicle claim.
This issue was addressed by the District Court in the New York case
recently. In dismissing a virtually identical claim by manufacturers in
the New York case, the District Court (Judge McAvoy) found that ``the
changes of which (manufacturers) complain are simply not required by
New York's adoption of California's LEV program. Certainly New York has
not expressly required that manufacturers change their emissions
systems mounting. Likewise, (manufacturers) have failed to show that
New York's adoption will de facto inevitably cause the switch from
flanged to bolted assemblies.'' MVMA, Docket No. 92-CV-869, slip op. at
16 (N.D.N.Y. Oct. 24, 1994). In the Massachusetts case, the trial judge
in AAMA has also denied manufacturers' request for a preliminary
injunction on this issue, determining that manufacturers were unlikely
to succeed on the merits of their claim. AAMA, Docket No. 93-10799-MA
(D. Mass. Oct. 27, 1993.)
In addition, manufacturers' claims regarding ``maximum I/M
cutpoints'' (i.e., cutpoints 1.5 times above the applicable standards)
and state in-use recall testing are inapposite. The OTC recommendation
did not include requests for either maximum I/M or in-use recall
testing. It is uncertain whether state programs will include these
provisions. Therefore, as such provisions are not required or otherwise
implicated by this action, manufacturers' arguments that such programs
will cause ``third vehicles'' are not ripe.
Another important issue noted by several commenters and Judge
McAvoy is that a significant number of vehicles sold in California
(those that permanently or, to a lesser extent, temporarily relocate)
are likely to be subjected to fuels with the same sulfur levels as
those in the northeast. In fact, AAMA admits that permanently relocated
California vehicles will likely need to have their converters replaced.
However, according to AAMA, auto manufacturers apparently will choose
not to equip California vehicles with the flange mounted converter
assemblies, though manufacturers do not claim that such assemblies are
forbidden by California regulations or that the way in which vehicle
catalysts are mounted is relevant in California certification testing.
Once again, any difference in vehicles is a manufacturer choice and is
certainly not mandated by the provisions of the OTC LEV recommendation;
nor is it an undue burden.
Moreover, as discussed more thoroughly in the response-to- comments
documents, the legislative history shows that Congress intended to
provide separate requirements for state regulation of vehicles and
state regulation of fuels. As Judge McAvoy determined, Congress did not
intend that differences in fuel requirements be used as criteria to
invalidate state vehicle regulations under section 177. See MVMA,
Docket No. 92-CV-869, slip op. at 19 (N.D.N.Y. Oct. 24, 1994).
Finally, as discussed in detail in the response-to-comments
documents, EPA is not convinced that the factual data provided by
manufacturers show that manufacturers will need to build a different
car for the OTR than for California in model year 1999 and thereafter.
First, manufacturers admit that the data they provide are generally
applicable to vehicles built prior to the current model year or to
model years 1996-1998. EPA notes that significant progress in
developing catalyst formulations that are more tolerant of sulfur than
current formulations may eliminate much of the concerns of
manufacturers by the 1999 model year. Also, EPA believes that
manufacturers have not shown that sulfur in fuel will, in and of
itself, cause OBD II catalyst monitors to illuminate malfunction
indicator lights by mistaking otherwise good catalysts as
malfunctioning.
3. ZEV Production Mandate
EPA finds that the ZEV production mandate is not required to ensure
consistency with section 177 for the reasons given in the SNPRM. See 59
FR at 48691-48692. EPA is leaving to each individual OTC state the
decision as to whether to adopt the ZEV mandate.21 EPA is not
resolving whether the ZEV mandate is an ``emission standard.''
[[Page 4729]] Rather, the Agency concludes that the ZEV production
mandate is not required to meet the identical standards provision under
section 177, whether or not the mandate is a standard relating to
control of emissions. Section 177 does not require adoption of all
California standards for a particular model year, but only requires
that if a state adopts motor vehicle standards, those standards that
are adopted must be identical to California's standards.22 The ZEV
production mandate and the remainder of the LEV program can be
segregated from each other, and the ZEV mandate is not essential for
implementation and enforcement of the remainder of the LEV program,
which is a fully functional and enforceable motor vehicle emissions
program. States adopting the LEV program therefore need not adopt the
ZEV mandate to comply with the requirement for identical standards
under section 177.
\21\EPA believes that the incorporation of the ZEV production
mandate into a state's LEV program is consistent with the
requirements of section 177.
\22\In the SNPRM, 59 FR 48692, n. 72, EPA stated its belief that
all standards applicable to a segregable program must be implemented
to assure that specific vehicles are subject to the same emissions
requirements. Upon further review, EPA believes that individual
emission standards may be implemented as long as the ``third car''
and ``sales limitation'' requirements of section 177 are not
violated by the omission of any standard.
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4. Incorporation of Minor Provisions of the California LEV Program
The OTC's recommendation does not spell out every detail of the
California LEV program that it intended to incorporate into the
recommended program. As discussed in more detail in the SNPRM and the
response-to-comments documents, EPA interprets the OTC's recommendation
to incorporate the requirement that standards be identical to the
California LEV program, and to include any secondary requirements of
the California program necessary to ensure consistency with section 177
for 1999 and later model year passenger cars and light-duty trucks. See
59 FR at 48693. Determinations regarding which portions of the
California LEV program are required for consistency with section 177
will be made in the review of each state plan.
5. NMOG Fleet Average
State adoption of the NMOG fleet average does not violate section
177, as explained in the SNPRM. See 59 FR at 48693. The fleet average
requirement is a primary component of the California program that is
necessary to ensure specified emission reductions. Adoption of it by
other states is consistent with the identical standards requirement of
section 177. The NMOG average requires that a certain number of lower-
emitting vehicles must be sold in order to assure compliance, but does
not prohibit the sale of any California-certified car. State
incorporation of the NMOG average is therefore consistent with section
177's provision that states cannot restrict the sales of California-
certified vehicles.
6. Averaging, Trading, and Banking
Manufacturers claim that states must allow manufacturers to carry
over to OTR states any banked credits manufacturers have received in
California in model years leading up to 1999. Since California's LEV
program begins before model year 1999, each manufacturer is allowed to
generate and bank credits under California's program prior to 1999. The
manufacturer may use these credits to reduce the stringency of the NMOG
standards it must meet in California in model year 1999 and, to some
extent, later years. For OTC states that begin the program in model
year 1999, manufacturers would not be able to generate and bank credits
in that state before that year. Forcing manufacturers to meet the NMOG
fleet average in 1999 without the ability to use banked credits would,
according to manufacturers, violate section 177 by requiring a
different vehicle mix and, in effect, more stringent standards, in
1999. Therefore, auto manufacturers arguably could have to meet a more
stringent NMOG fleet average requirement in model year 1999 than they
would have to meet in California in that year.
EPA concludes that the availability of credit banking in California
prior to model year 1999 does not cause the OTC's recommended program
to violate the identical standards requirement of section 177. In
addition, states do not have to accept credits manufacturers have
banked in California in model years prior to 1999.
The specific language of section 177 indicates that the existence
of banked credits from a previous model year should not prevent states
from enacting the same NMOG fleet average requirements as California
has for 1999 and later years. Section 177 states that ``any State * * *
may adopt and enforce for any model year standards * * * and take other
actions * * * if * * * such standards are identical to the California
standards for which a waiver has been granted for such model year.''
(Emphasis added.) Section 177 explicitly refers to standards (and other
actions) taken with regard to a specific model year. Thus, as the OTC
LEV program's NMOG fleet average for the 1999 and later model years is
identical to the California NMOG fleet average that California has in
effect for those model years, there is no conflict with section 177.
Moreover, the ``limitation on California vehicles'' language is
concerned with ensuring that ``types'' of California vehicles are not
prohibited in section 177 states. It is not designed to ensure that
manufacturers' vehicle mixes in all states are identical.
However, as discussed in part V below, EPA believes that a state,
if it so chose, could implement the NMOG fleet average to account for
manufacturers' inability to bank credits in that state prior to the
start of the OTC LEV program in that state. EPA believes that there may
be advantages to states and manufacturers if states did account for the
manufacturers' inability to bank credits in OTC LEV programs prior to
model year 1999. For further explanation, see EPA's discussion in the
SNPRM (59 FR at 48694) and the response-to-comments documents.
7. Applicability of Section 177 in States Without Plan Provisions
Approved Under Part D of Title I
All states in the OTR have plan provisions approved under part D of
title I of the Act, and therefore satisfy this prerequisite for
eligibility under section 177. All states other than Vermont have ozone
nonattainment areas with associated SIPs approved under part D. Vermont
has plan provisions approved under part D related to earlier
nonattainment problems. See 40 CFR 52.2370(c)(10). In addition, EPA has
very recently approved Vermont's plan provisions related to emissions
statements in order to fulfill obligations under part D as revised by
the 1990 Amendments to the Act.
V. Action on OTC Petition, Issuance of Findings of SIP Inadequacy, and
Requirements for SIP Revisions
A. Action on OTC Petition and Explanation of SIP Call23
\23\EPA is not relying on the discussion in section V. A. of the
SNPRM (59 FR at 48694-48695) for the statement of basis and purpose
for today's action, but is relying on the discussion in section V.
B. (59 FR at 48695).
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Based on the factual conclusions and legal interpretations
presented in section IV.A. above, EPA determines through today's action
that, until such time as EPA finds that an acceptable LEV-equivalent
program is in effect, adopting OTC LEV throughout the OTR is necessary
to bring certain areas into attainment (including maintenance) by the
dates provided in subpart 2 of part D of title I of the Clean Air Act.
Based on the conclusions presented in section [[Page 4730]] IV.B.
above, EPA determines through today's action that OTC LEV is otherwise
consistent with the Act. Based on those conclusions, EPA today approves
the OTC's recommendation that OTC LEV be adopted throughout the OTR. As
described elsewhere, however, EPA's approval of the OTC recommendation
and the requirements that flow from it leave open the option for an
acceptable LEV-equivalent program that would remove the need for the
OTC LEV program.
In section IV.A., EPA discussed its factual finding that emission
reductions from new motor vehicles equivalent to the reductions that
would be achieved by the OTC LEV program are needed throughout the OTR
to bring certain OTR nonattainment areas into attainment (including
maintenance) by their applicable attainment dates. Based on this
finding, EPA today finds under section 110(a)(2)(D) that each of those
states (and in the case of Virginia, the portion of the state lying
within the OTR) contributes significantly to nonattainment in, and
interferes with maintenance by, another state with respect to the ozone
standard. Because the SIPs for those states currently lack provisions
requiring those emission reductions, EPA today finds under its
independent section 110(k)(5) authority that each of those SIPs is
substantially inadequate (1) to comply with section 110(a)(2)(D)'s
requirement that each SIP contain adequate provisions prohibiting any
emissions activity that will contribute significantly to nonattainment
in, or interfere with maintenance by, another state with respect to the
ozone standard; and (2) to mitigate adequately the interstate pollutant
transport described in section 184. EPA is making the first of these
findings also pursuant to the requirement of section 184(c)(5) that,
upon approval of an OTC recommendation, EPA make ``a finding under
section 110(k)(5) that the implementation plan for such state is
inadequate to meet the requirements of section 110(a)(2)(D).''
Section 184(c)(5) states that EPA's finding under section 110(k)(5)
shall require the affected state to revise its SIP to include the
approved control measure within one year after the finding is issued.
Section 110(k)(5) itself provides that EPA must require the state
receiving a finding of SIP inadequacy to revise its SIP ``as
necessary'' to correct the inadequacies that are the subject of the
finding. As described above, EPA is qualifying its finding that OTC LEV
is necessary under sections 184 and 110(a)(2)(D), and hence is
qualifying its approval of the OTC LEV recommendation, by making each
finding subject to the contingency that EPA will find that an
acceptable LEV-equivalent program has come into effect. Thus, the SIP
inadequacy would be cured for each such SIP if an acceptable LEV-
equivalent program were in effect, and states would not have to submit
a SIP revision to comply with today's action. Therefore, EPA has
structured today's rule to require that each state in the OTR submit a
SIP revision within one year from the effective date of the SIP call
unless EPA finds that an acceptable, LEV-equivalent program is in
effect.
As described earlier, EPA has based its necessity findings on the
conclusions that there are insufficient potentially broadly practicable
measures to achieve the necessary emission reductions without also
applying OTC LEV or a LEV-equivalent program. A state would always have
the option under section 110 to adopt whatever measures it may believe
practicable for application within its borders. Thus, EPA is qualifying
its finding of necessity, and hence is qualifying its approval of the
OTC recommendation, by making each subject to the contingency that a
state will actually adopt sufficient (non-LEV) measures beyond those
EPA has identified as potentially broadly practicable so as to
demonstrate that the OTC LEV program is not necessary for that state to
cure the SIP inadequacy. EPA has structured its rule to provide that,
unless an acceptable LEV-equivalent program is in effect, the SIP
revisions required in response to the findings of SIP inadequacy must
contain either the OTC LEV program or sufficient adopted alternative
measures. These measures would be sufficient if, when combined with the
emission reductions that would result in that state from the measures
mandated by the Clean Air Act and all measures EPA has currently
concluded are potentially broadly practicable, they would achieve 50 to
75% NOX reductions from a 1990 baseline throughout that state and
50 to 75% VOC reductions from a 1990 baseline in the portions of the
state in or near the line of serious and severe nonattainment areas
along the Northeast Corridor.
As described above, today's SIP call keeps open the option of an
acceptable24 LEV-equivalent program, while ensuring that necessary
emission reductions are not delayed. The finding of inadequacy would be
cured and states would not have to adopt OTC LEV if an acceptable LEV-
equivalent program were in effect (which EPA assumes for today's action
would include a requirement that auto manufacturers could not opt out
once they had opted in). If states take action to adopt or enact OTC
LEV before discussions on the alternative program are concluded, EPA
encourages states to structure their OTC LEV programs to provide for a
future LEV-equivalent program that EPA finds is acceptable in a future
rulemaking. Such a provision could give auto manufacturers the choice
of complying with either the state's OTC LEV standards or the
acceptable LEV-equivalent program.
\24\The criteria for determining whether a LEV-equivalent
program is acceptable will be established as part of the rulemaking
on the acceptability of that program. However, to relieve states of
their obligation to submit an OTC LEV program, EPA has assumed that
a LEV-equivalent program would not allow manufacturers to opt out of
the program after they had opted in. EPA is not addressing today
whether states would need to adopt OTC LEV as a ``back stop'' if
manufacturers could opt out of the program.
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To meet the requirements of this SIP call using an OTC LEV program,
a state must exercise its authority under section 177 to adopt the NMOG
fleet averages that are part of California's LEV program. The
requirements for these are set forth in the following section. States
are not required to adopt the ZEV mandate, but retain their authority
to do so under section 177.
As described above, rather than submit an OTC LEV SIP revision,
states may submit a ``shortfall'' program to meet today's SIP call. A
``shortfall'' SIP revision must contain adopted measures that make up
the shortfall between (1) the emission reductions necessary to prevent
adverse consequences on downwind nonattainment (i.e., 50-75% NOX
reductions throughout the state and 50-75% VOC reductions in the
portions of the state in, or near and upwind of the Northeast urban
corridor), and (2) the emission reductions that would be achieved by
the measures mandated by the Act and the potentially broadly applicable
measures EPA identifies in this notice and the SNPRM. Such SIPs will
include measures that EPA cannot now conclude are potentially
practicable for the region as a whole. Therefore, states submitting a
shortfall SIP in lieu of the OTC LEV program must submit fully adopted
measures sufficient to fill completely the emission reduction
shortfall, not just the emission reduction equivalent to the OTC LEV
program, in order to make a convincing demonstration that OTC LEV is
not necessary to prevent adverse impacts in downwind states. The
submittal of (non-LEV) measures that would achieve only emissions
reductions equivalent to what [[Page 4731]] the OTC LEV or LEV-
equivalent program would achieve might still leave a substantial
shortfall. Thus, there would be no showing that a LEV program would be
unnecessary to fill that remaining shortfall. The ``shortfall'' SIP
measures cannot be measures that are mandated by the Clean Air Act or
are among the potentially broadly applicable measures identified by EPA
in this notice or the SNPRM. For purposes of determining whether such a
shortfall SIP revision is complete within the meaning of section
110(k)(1) (and hence is eligible at least for consideration to be
approved as satisfying today's SIP call), such a SIP revision must
contain other adopted emission-reduction measures that, together with
the identified potentially broadly applicable measures, achieve at
least the minimum 50% reduction in NOX emissions throughout those
portions of the state within the transport region, and at least the
minimum 50% reduction in VOC emissions within those portions of the
state in or near (and upwind of) the urbanized portions of the
Northeast Corridor.
B. State Requirements Under EPA SIP Call
To satisfy the requirement for an OTC LEV SIP revision under
today's SIP call, unless EPA finds that an acceptable LEV-equivalent
program is in effect, every state in the OTR is required to promulgate
regulations that will mandate the OTC LEV program for new light-duty
vehicles and trucks beginning in model year 1999. The regulations must
be adopted no later than one year following the effective date of the
SIP call and apply to 1999 and later model years. This will provide
manufacturers with the two-year lead-time required under section
177.25 The OTC LEV program applies to all passenger cars and
light-duty trucks (0-5750 pounds loaded vehicle weight (LVW)) in the
OTR.26
\25\ Given today's model year regulations, the effective date of
this rule, and the information in the docket on auto manufacturers'
production schedules, EPA realizes that a few 1999 model year engine
families might not be subject to OTC LEV. EPA does not anticipate
that this will reduce emission benefits significantly.
\26\ These requirements therefore apply to all 1999 and later
model year vehicles in each state, except that these requirements
only apply in the northern portion of Virginia that is a part of the
OTR.
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The OTC LEV program generally requires that no 1999 or later model
year vehicle may be sold, imported, delivered, purchased, leased,
rented, acquired, received, or registered in the OTR unless such
vehicle has received a certification from the California Air Resources
Board.27 Each state must allow for the sale of California's Tier
I, TLEV, LEV, ULEV and ZEV vehicles in that state. The emission
standards for such vehicle classes must be identical to those in
California. In addition, all states must promulgate California's NMOG
fleet average requirements. The fleet averages for passenger cars and
light-duty trucks 0-3750 lbs. LVW shall be identical to California's
NMOG fleet averages for such classes of vehicles, as stated in the OTC
recommendation. The NMOG fleet averages for larger light-duty trucks
(3751-5750 lbs. LVW) shall be identical to California's NMOG fleet
averages for such class of vehicles for the applicable model
years.28 As discussed below, states have considerable flexibility
in implementing these NMOG fleet averages during the appropriate model
years.
\27\ The OTC recommendation contained several exceptions to this
requirement. For example, vehicles sold directly from one dealer to
another dealer are not subject to this requirement. EPA expects that
these exemptions will be included in state programs. EPA is not
today ruling whether these exemptions are required, permitted or
prohibited under the Act, although EPA notes that it received no
comments providing any substantive arguments that these exceptions
violate section 177.
\28\ The NMOG fleet averages for passenger cars and light-duty
trucks (0-3750 lbs. LVW) for the applicable model years, in grams
per mile, are: 1999-0.113; 2000-0.073, 2001-0.070, 2002-0.068; 2003
and later years-0.062. The NMOG averages for light-duty trucks
(3751-5750 lbs. LVW) are: 1999-0.150; 2000-0.099; 2001-0.098; 2002-
0.095; 2003 and later-0.093.
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States must adopt California's provisions pertaining to averaging,
banking and trading, hybrid electric vehicles, extensions and
exemptions for intermediate and small volume manufacturers (as defined
by California), and Reactivity Adjustment Factors (RAFs) as necessary
for certification in California. States also must adopt any other
provisions of California's new motor vehicle regulations that are
necessary to ensure compliance with section 177 of the Clean Air Act.
EPA has not examined which other provisions are necessary to ensure
compliance with section 177. The need for other provisions shall be
addressed when individual states adopt or seek approval of the OTC LEV
program.
States are not required to adopt California's ZEV production
mandate. As discussed earlier in section IV.B.3., EPA does not believe
that adoption of the production mandate is necessary to ensure
compliance with section 177. The OTC did not recommend that EPA require
states to incorporate the ZEV production mandate unless it was required
by section 177, and EPA declines to use its discretion to require
states to incorporate the mandate. However, states are free, at their
own discretion, to incorporate the mandate into their motor vehicle
emission programs.
States also have significant discretion in the manner in which they
implement the OTC LEV program. Though states must adhere to the
requirements of section 177, EPA is not mandating specific methods that
states must use to implement the program. In particular, EPA believes
that states have significant discretion in the manner in which they
implement the NMOG fleet average.
Given the regional nature of the OTC LEV program and the possible
hardships to state governments and manufacturers in having to
administer and comply with separate programs in thirteen different
jurisdictions, states should attempt to coordinate their programs as
much as possible. In particular, EPA believes that states could choose
to give manufacturers the option of meeting the NMOG average on a
region-wide basis, rather than having to meet the requirement on a
state-by-state basis.29 This will allow for more flexibility in
enforcement and compliance, but will require more coordination among
jurisdictions.
\29\ For example, a state program could deem a manufacturer to
be in compliance with a state's NMOG average if the manufacturer's
sales in OTR states with identical requirements meet the NMOG
average. There might be only small variations in vehicle mix from
one state to another if the states have identical standards and are
in the same region. If such variations have insignificant effects on
a state's air quality, state-by-state compliance with NMOG averages
might not be worth the administrative burden.
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EPA also believes that states have the discretion to account for
automakers' inability to bank credits in those states prior to 1999.
This might be accomplished by accounting for banked credits that
manufacturers have amassed in California (or perhaps in New York or
Massachusetts) in model years prior to 1999 under the averaging,
banking and trading provisions of the LEV program. As discussed above
in part IV.B.3, EPA does not believe that states have an obligation to
account for credits that manufacturers have received in California for
early banking. A state program that includes California's NMOG average
and California's averaging, banking and trading provisions is
consistent with section 177, whether or not the state accounts for
credits that are banked in California prior to the state's
implementation of the LEV program. However, EPA believes that, in
implementing the program, states can, consistent with section 177,
account for banked credits. Given that the averaging, banking and
[[Page 4732]] trading program was included by California to provide
flexibility in meeting the program, EPA does not believe it is a breach
of the identicality requirement to allow states to account for banked
credits in implementing the OTC LEV program. Also, if any states fail
to implement the program in model year 1999, desire for regional
consistency would also dictate that such states allow for any banked
credits from other state programs in the implementation of their
programs. In any case, states should coordinate with each other to
ensure that the goals of regional consistency are not frustrated by
differences in implementation of the NMOG fleet average.
Finally, as discussed in section VI.B.5, states may decide not to
include the NMOG average in their implementation of the OTC LEV program
in the initial model year if the state can only begin implementation of
the program in the middle-to-end of the year. Manufacturers have
objected that beginning implementation of the OTC LEV program in the
middle of a calendar year would create significant problems for
manufacturers in meeting the NMOG fleet average requirements for the
first model year. This is because manufacturers meet the NMOG fleet
average by coordinating their entire fleets to achieve the desired
average. This process is susceptible to disruption when manufacturers
must meet the NMOG average in the initial model year if the initial
model year begins in the middle-to-end of a calendar year. This is
because, under the model year regulations finalized today, only a
portion of a manufacturer's fleet may be subject to the NMOG
requirements for the initial model year if it is a ``split'' model
year. EPA believes that manufacturers are well equipped to deal with
this disruption by moving production start dates, especially given the
two years of lead-time that manufacturers will have to coordinate their
production schedules. However, given the fleet-wide nature of the NMOG
fleet average and the desire for coordinated regional strategy, it may
be appropriate for states that begin the OTC LEV program in the middle-
to-end of a calendar year to refrain from implementing the NMOG fleet
average for the initial model year. However, once the second model year
begins, the NMOG fleet average must be a part of the state program.
Also, states that initiate the OTC LEV program close to the beginning
of the year (when disruption of the NMOG program should be minimal)
should include the NMOG fleet average as part of the OTC LEV program in
the initial model year.
C. Sanctions
In the SNPRM, EPA addressed the imposition of sanctions in the case
of state non-compliance with EPA's SIP call under section 110(k)(5) of
the Act. EPA's rule to implement section 179 of the Act regarding
sanctions specifies the order in which the statutory highway funding
and offset ratio sanctions will apply, but does not address the
imposition of sanctions in the case of state failure to comply with a
SIP call under section 110(k)(5) of the Act. See 59 FR 38932 (Aug. 4,
1994)(sanctions rule). EPA therefore proposed in the SNPRM to extend
the general scheme promulgated for sanctions under section 179 to the
SIP call at issue here, with the 2:1 offset sanction applied first and
the highway funding sanction applied second. EPA takes final action
today to apply that general scheme to this SIP call.
EPA also requested comment on whether it should provide in the
final rule that discretionary sanctions under section 110(m) of the Act
would apply beginning immediately upon a finding of failure to submit
the OTC LEV program (or a complete shortfall SIP revision) by the one-
year deadline for that submission. EPA questioned whether the
particular circumstances presented here by the two-year lead-time
requirement may warrant such action. EPA is deferring final action on
whether to exercise its discretion under section 110(m) to accelerate
the imposition of sanctions if states fail to submit the OTC LEV
program by the applicable deadline. The Agency will consider this issue
further.
VI. Determination of Model Year
In the SNPRM, EPA proposed to promulgate regulations determining
for purposes of Section 177 and Title II, Part A of the Act the
definition of the term ``model year'' and certain related terms. See 59
FR at 48696-48698. EPA believed that this was a necessary step to
remove any confusion regarding the commencement of a model year which
may have resulted from conflicting views on this point in the New York
and Massachusetts litigations regarding the adoption of the California
LEV standards.
After review of the comments received on the proposed model year
regulations published in the SNPRM, EPA has determined, for the reasons
given below, in the SNPRM (59 FR 48697-48698), and in the response-to-
comments documents, that it is appropriate at this time to promulgate
these proposed regulations as final rules. At the request of AAMA, EPA
is adding language clarifying the term ``date on which a vehicle or
engine is first produced.''
EPA's proposed model year regulations, which apply to section 177
and Title II, retained the definition of ``model year'' found in both
the Act and in existing EPA regulations (promulgated under section 202)
as essentially ``the manufacturer's annual production period.''30
EPA's proposed model year regulations also codified the definition of
``annual production period,'' which has appeared in various versions of
EPA Advisory Circulars on this issue since 1972.
\30\See 42 U.S.C. sec. 7521 (b)(3)(A)(i) (1993) and 40 CFR
86.082-2 (1994).
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Under the proposed regulations, model year would be determined on
an engine family basis for specific models within engine families,
depending upon the date the first model in the engine family commences
production. Therefore, the date upon which the model year begins may be
different for each engine family that a manufacturer produces. EPA
believes this approach is more appropriate than beginning model years
industry-wide on a certain date (an alternative favored by the industry
and discussed below) because it is more suited to the central purpose
of section 177, which is to allow states to receive emission benefits
from the California motor vehicle program while giving manufacturers
two years of lead-time to prepare to meet the state standards. In
addition, as discussed in the SNPRM (59 FR 48697), this approach
provides manufacturers with substantial flexibility to continue to
produce automobiles for one model year while initiating production of
other models for a later model year.
EPA received critical comments on the proposed rule only from AAMA,
which raised several objections. The main thrust of the AAMA argument
is that the EPA model year regulations will cause more harm than good
because they will compel manufacturers to provide both California and
Federal vehicles to a single state in a single model year depending on
that state's date of adoption of the California standards. For this
reason, AAMA supported an industry-wide approach in which model years
would begin on January 2 of the calendar year preceding the model year
for which the model year is designated. However, as emphasized in the
SNPRM, EPA believes that the model year regulations provide vehicle
manufacturers the maximum flexibility in terms of adjusting the model
year [[Page 4733]] designations of their product line to meet marketing
needs and product changes.
EPA's approach allows manufacturers to control the beginning of the
model year for each of its engine families, since manufacturers control
the date upon which its models begin production. Manufacturers are in
the best position to determine the date that any model in an engine
family commences production and manufacturers decide production start
dates on a model-by-model basis. Therefore, the engine family approach
allows manufacturers to avail themselves of the two year lead-time
without allowing the state program to lag unnecessarily. By contrast,
AAMA's approach (allowing the model year to begin on January 2 of the
year previous to the calendar year for all models) would in fact turn
the two year lead-time into, in the worst case, a three year lead-time
(minus one day).
AAMA also commented that the EPA model year regulations could
``obviate'' the NMOG fleet average in a situation where manufacturers
needed to provide California vehicles to a state for only part of a
model year, and thus may have difficulties meeting the fleet average
for that model year. EPA recognizes this possibility but notes that one
way to solve the problem is to revise production and supply schedules
to make sure the state fleet average is met. Given that manufacturers
have two years to prepare to meet these requirements, this solution is
within the capability of manufacturers. In any event, EPA notes that it
is not today ordering that states must include the NMOG fleet average
provisions in their state programs in a split model year. Though EPA
believes that the NMOG average is important to ensure emission
reductions in states with OTC LEV programs, EPA recognizes that states
may wish to avoid some of the confusion manufacturers allege is
possible in the introductory year of the program. If the application of
NMOG fleet average creates a substantial hardship for manufacturers in
the first year due to the adoption of OTC LEV by a state late in the
year, the state may wish not to require manufacturers to comply with
the NMOG fleet average for the first applicable model year.
In addition, AAMA asks for clarification regarding two points.
First, AAMA asks EPA to declare whether the model year rules apply on a
model-by-model basis or an engine family-by-engine family basis.
Second, AAMA seeks clarification on how to determine the point of first
production of a particular model. The model year rules are applied on
an engine family basis. Where an engine family contains more than one
model, the model year for that engine family begins upon the first
production of any model in that engine family. The date of first
production of any model is the ``Job 1 date,'' which is the date on
which a manufacturer produces the first saleable unit of a specific
model.
EPA received a request from AAMA to extend the comment period for
the proposed model year regulations to allow more time to consider the
issues. EPA rejects this request for the following reasons. EPA
recognizes that because of its approval of the OTC recommendation, the
OTC member states must now proceed to adopt the OTC LEV program one
year from the effective date of the SIP call to ensure the minimum
adequate lead-time for the standards to be effective in model year
1999. EPA believes that it is important to promulgate these final
regulations now to eliminate any confusion regarding when a model year
commences before these states begin the adoption process. EPA has
provided the public with a full thirty-day comment period with an
opportunity for hearing. In addition, as the model year issue has been
the subject of litigation for the last two years, manufacturers have
been aware of the central questions surrounding this issue.
For a more detailed discussion of the issues raised by EPA's model
year regulations, including AAMA's comments and EPA's responses, please
review the SNPRM, 59 FR 48697-48698, and the response-to-comments
documents. The text of the final regulations, with minor changes from
the proposal, appears below.
VII. Effective Date
The regulations to be codified in 40 CFR parts 51 and 52 (the ``SIP
call'' regulations) are effective February 15, 1995. This is consistent
with the requirement of the Administrative Procedure Act, codified at 5
U.S.C. 553(d), that publication or service of a substantive rule be
made not less than 30 days before it becomes effective.31 EPA will
assure that, by January 16, 1995, either notice of today's action will
be published in the Federal Register or EPA will have provided actual
notice of this action to the states that have regulatory obligations as
a result of this action. EPA will also make this notice available to
other interested persons upon request prior to publication.
\31\EPA generally acts consistently with this provision and
provides that a rule does not become effective until 30 days after
the date of publication, but technically today's action is not
subject to this provision. The EPA Administrator has determined
that, pursuant to section 307(d)(1)(V) of the Act, the rulemaking
procedures of section 307(d) apply. See 59 FR at 21724. Section
307(d)(1) specifically provides that ``[t]he provisions of section
553 through 557 and section 706 of title 5 shall not, except as
expressly provided in this subsection, apply to actions to which
this subsection applies.'' Nowhere does subsection 307(d) expressly
provide that section 553(d) of title 5 applies.
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As EPA explained in its proposal, it is very important that states
begin implementation of the OTC LEV program in model year 1999 to
achieve the necessary emissions reductions. EPA had expressed concern
in the SNPRM that, to ensure implementation for all models in model
year 1999, states must adopt the program before January 2, 1996. See 59
FR at 48669-48670. Based on information in the docket on the production
schedules for new models, EPA now believes that adoption of the OTC LEV
program by mid-February, 1995, will not significantly reduce the
emission benefits of the program for model year 1999.
The regulations to be codified in 40 CFR part 85 are effective
February 23, 1995.
EPA believes that today's actions, including the finding of
inadequacy, the SIP call and the promulgation of the model year
regulations, are nationally applicable regulations under section
307(b)(1) of the Act. Alternatively, the Administrator determines that
today's actions are nationwide in scope and effect and bases today's
action on that determination. Today's action interprets sections 110,
184 and 177 in ways that are applicable nationwide. In addition, the
SIP call affects 13 different jurisdictions in five different federal
appellate circuits. Thus, under section 307(b), any petitions for
review must be filed in the Court of Appeals for the D.C. Circuit
within 60 days from the date that notice of this action appears in the
Federal Register.
VIII. Statutory Authority
The statutory authority for this final rule may be found at
sections 110, 176A, 177, 184, 202, 206, 209, 301 and 307 of the Clean
Air Act, 42 U.S.C. 7410, 7506a, 7507, 7511c, 7521, 7525, 7543, 7601,
and 7607.
IX. Administrative Designation and Regulatory Analysis
Under Executive Order 12866, 58 FR 51735 (Oct. 4, 1993) the Agency
must determine whether the regulatory action is ``significant'' and
therefore subject to OMB review and the requirements of the Executive
Order. The Order defines ``significant regulatory action'' as one that
is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
[[Page 4734]] adversely affect in a material way the economy, a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or state, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order.
Pursuant to the terms of Executive Order 12866, since this action
could result in a rule that would have substantial impact, this notice
is a ``significant regulatory action'' because the estimated range of
annual costs of the OTC LEV program is between $xx and $xx. As such,
this action submitted to the Office of Management and Budget (OMB) for
review. Changes made in response to OMB suggestions or recommendations
will be documented in the public docket for this rulemaking.
EPA has prepared an economic analysis for this rule under E.O.
12866. A copy of this analysis has been placed in the docket. A draft
version of the Regulatory Impact Analysis was submitted to OMB for
review as required by E.O. 12866. Any written comments from OMB and EPA
responses to those comments will be placed in the public docket for
this rulemaking. A final version of the analysis is available in the
docket.
X. Impact on Small Entities
The Regulatory Flexibility Act, 5 U.S.C. 601(a), provides that,
whenever an agency is required to publish a general notice of
rulemaking, it must prepare and make available a regulatory flexibility
analysis (RFA). While EPA has followed rulemaking procedures under
307(d) of the Clean Air Act, EPA believes it is not legally required to
publish a general notice of rulemaking here, and hence that it need not
prepare an RFA. But even if EPA is required to publish a general notice
of rulemaking here, an RFA is required only for small entities that are
directly regulated by the rule. See Mid-Tex Electric Cooperative, Inc.
v. FERC, 773 F.2d 327 (D.C. Cir. 1985) (agency's certification need
only consider the rule's impact on regulated entities and not indirect
impact on small entities not regulated). The OTC LEV program will
directly regulate auto manufacturers. Since these auto manufacturers
generally do not qualify as small businesses within the meaning of the
Regulatory Flexibility Act, EPA does not believe an RFA is needed for
either the proposed or final rules, even if a rulemaking is required.
Accordingly, pursuant to 5 U.S.C. 605(b), the Administrator certifies
that this rule will not have a significant economic impact on a
substantial number of small entities.
Nevertheless, the Agency has considered the effect of an OTC LEV
program on new and used car dealerships as part of its regulatory
impact analysis, even though such analysis is not required because
these businesses would not be directly regulated under the rule. The
results of this analysis, set forth in the RIA, indicate that the OTC
LEV would not have a significant economic impact on automobile
dealerships.
XI. Paperwork Reduction Act
The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and
implementing regulations, 5 CFR part 1320, do not apply to this action
as it does not involve the collection of information as defined
therein.
Attachment A to the Preamble
Revised Draft Discussion Paper on ATV Component of 49-State Alternative
December 7, 1994.
I. Principles and Definition
The Advanced Technology Vehicle (ATV) component of a 49-State
alternative to the OTC petition will be based on the following
principles:
Parties publicly commit to work in cooperation with
each other to establish and maintain a sustainable, viable market for
ATV's at the retail level.
ATV program will be designed to achieve shared
responsibility among states, EPA, DOE, fuel providers, fleet operators
and auto manufacturers for achieving increases in ATV's.
Phased program from infrastructure and vehicle
development to fleet sales to retail sales will be pursued. Timeframes
will be assigned to components of any alternative that will involve
incremental steps toward accomplishing increases in ATV's.
Vehicle yield from federal and State programs,
municipal and private fleets, as well as approaches to provide vehicles
to private consumers will be included.
Parties will, at the initiation of the MOU and
throughout the program, jointly develop sales estimates of fleet and
consumer vehicles that all parties anticipate should be on the road at
specific milestones.
All parties commit that specific actions will be
identified and undertaken as necessary if estimates are not realized.
Parties will develop a fuel neutral strategy based on
achieving market longevity and environmental benefits. Infrastructure
must be constructed under a joint strategy, but it is understood that
states will make infrastructure choices according to regional needs.
The definition of ATV for the purposes of this
agreement will be (PARTIES WILL INSERT DEFINITION LATER).
II. Memorandum of Understanding
The Memorandum of Understanding is based on the agreement that all
parties will contribute to a joint effort to create a sustainable,
viable ATV market. All parties agree that the best strategy for
achieving this market is to first utilize the federal fleet markets in
order to establish a full range of viable vehicle technology, maximize
the number of vehicles purchased through municipal and state fleet
programs, create incentives to encourage private fleet purchases,
establish infrastructure requirements, assess customer preference, and
to systematically evaluate progress for the purposes of introducing
vehicles to the private consumer as soon as possible.
Components of a joint strategy will include the following areas:
(1) Fleet Estimates--The foundation for introduction of ATV's will
be the federal requirements under EPAct. Parties will develop
projections or estimates for anticipated number of vehicles resulting
from the programs that will be used as objectives for gaining a number
and types of vehicles on the road on a specific timeline. Parties will
develop agreements for joining in the programs, including harmonizing
EPAct and the CAA of 1990, and maximizing federal fleet purchases.
Parties will work jointly to develop programs and maximize municipal
and private fleet purchases in the Northeast states. Parties will
assume expanded municipal and private fleet vehicle sales for the
purposes of estimation.
(2) Development of Objectives Based on Fleet and Consumer Sales
Estimates--At the initiation of the MOU, parties will agree on
assumptions for and will establish initial overall fleet and consumer
vehicle sales estimates that can be reasonably expected in the OTR by
2004. Parties will jointly state that this estimated number of vehicles
should be sold if initial assumptions prove to be correct and if all
aspects of the strategy are successfully implemented. Annual sales
estimates [[Page 4735]] will be revised as part of the annual meeting
process.
(3) Problem Identification and Action Commitment--Parties will
identify possible problems that might occur in the development of a
viable market and examples of specific actions that might be
contemplated in a joint evaluation process (specific actions are
detailed in Section III below).
(4) Benchmark Criteria and Components of a Viable Market--Benchmark
criteria will be developed for a long-term, sustainable market. Some
criteria might include, but will not be limited to:
Infrastructure development (fuel quality and price,
station density, user friendly refueling, service support, incentives,
quasi-public service and fuel sales).
Vehicle development (range, life-cycle costs, safety
and user convenience).
Removal of regulatory impediments to ATV vehicle sales.
Reliability and durability profile of fleets.
Consumer needs surveyed from Federal, state and
municipal fleets and then further defined.
Fuel savings documented and demonstrated.
Vehicle resale value documented and retained.
Consumer-directed incentives in place.
(5) Joint ATV Program Implementation Process--Parties agree to
oversee the implementation of this ATV agreement. This joint
implementation process will include annual meetings to be held between
principal representatives of the Northeast States and Auto
manufacturers. Staff level meetings will occur during the course of a
year to chart progress in the areas listed below and provide a basis
for evaluation of progress. Possible areas for evaluation include, but
are not limited to:
Assumptions for Annual Sales Estimates.
Funding for Federal Fleet Purchases.
Technology and Vehicle Type Availability.
State Procurement Requirements and Practices.
Joint Marketing Efforts.
Infrastructure Construction and Capabilities.
Research and Data Needs.
Other Information and Expertise Needs.
Consumer Satisfaction Assessed and Consumer Confidence
Built.
Plans to Remove Roadblocks and Other Program
Adjustments.
(6) Group Structure and Disagreement Settlement Process--A
structure for the evaluation will be established by a working group at
the initiation of the ATV program. This working group will design the
structure of the annual meetings; designate the purpose, number, type
and level of meetings to evaluate program progress; and, outline the
issues of concern to be addressed. Specifically, responsibilities for
discussion of the evaluation areas listed above will be delineated,
possible scenarios for action should problems occur or milestones not
be met by any party will be developed, and a process for resolving
disagreements that arise will be defined.
It is agreed by all parties that primarily the auto manufacturers
and states will be involved in the group structure discussions and the
overall evaluation process, but that all key parties will be consulted
for their advice throughout the process.
(7) Suggested Timeline for Introduction of ATV's--The ATV program
will consist of three phases. If significant progress could be made
early for any of these phases, parties could agree through annual
meeting decisions to advance the timeline of for delivery of vehicles.
The parties recognize the legitimacy of existing incentive programs and
that new incentive programs may be instituted earlier than this
timeframe. The conceptual and planning work for all phases of this
process will proceed simultaneously, and lessons from existing programs
will be applied in initiating these steps.
1996-98--EPAct for Federal, State and Fuel Provider Fleets
Manufacturers market ATV's to fleets. Infrastructure development
begins. Incentive programs are established. Surveys are conducted to
estimate potential demand for 1999-2001, including municipal and
private fleets.
1999-2001--Add Municipal and Private Fleets
Manufacturers expand product offerings. Infrastructure expands.
Incentive programs expand to municipal and private fleets. Surveys
conducted to estimate 2002-2004 retail consumer demand. Criteria
decided for maintaining sustainable retail sales.
2002-2004--Add Retail Consumer Offerings
According to establishment of adequate infrastructure, offer ATV's
for retail consumer sales in all Northeast States. Incentive programs
expand to retail consumers.
III. Summary of Commitments by All Parties
In this strategy, each party commits to provide certain results
within an agreed upon timeframe. A summary of each parties' commitments
follows.
Auto Manufacturers
Auto manufacturers will supply private consumer ATVs in
a timely manner in 2002, if commitments and criteria put forth in the
MOU are met by all parties. Auto manufacturers will introduce ATV's
sooner than 2002 if both parties agree that the criteria defining a
viable market described in this agreement are met earlier.
The responsibility for supply ATVs includes modifying vehicles to
the extent necessary for use in the Northeast, establishing adequate
sales and support structure, technician training and service parts
inventories in addition to vehicle design, development and manufacture.
The Auto manufacturers agree to participate in the
annual review process to assess the progress of the program and to
determine how to develop a viable market for ATVs in the OTR. This
includes participating in the projection of annual sales estimates and
evaluating progress toward meeting those estimates.
Auto Manufacturers agree to work with the states to
determine what actions may be needed to adjust the program if sales
estimates are not being met. This will include consideration of
voluntary actions such as increasing public education and marketing,
addressing weaknesses in infrastructure development, and discussing and
addressing technological barriers or hardware problems. Auto
manufacturers agree to implement the actions identified and agreed
upon.
Auto manufacturers agree to discuss pricing issues with
states individually as requested to address vehicle pricing concerns.
State Representatives
States will establish incentive programs to encourage
the purchase of ATVs and direct state procurement policies in a manner
consistent with Federal Practices. States will maximize purchases of
ATVs in state fleets to the greatest extent possible.
States agree to work to assist municipalities to
conform with EPAct requirements as soon as feasible. States will also
work to assist in the development of incentive programs for private
fleet purchases of ATVs.
States will participate in the annual review process to
assess the [[Page 4736]] progress of the program and to determine how
to develop a viable market for ATVs in the OTR. This includes
participating in the projection of annual sales estimates and
evaluating progress toward meetings estimates.
States agree to work with auto manufacturers to
determine what actions may be needed to adjust the program if sales
estimates are not met. This will include consideration of actions such
as participating in public education efforts and joint marketing;
addressing problems in fleet purchases, vehicle procurement processes
or program funding in specific states; and providing information on
fleet vehicle customer satisfaction and issues. States agree to
implement the actions identified and agreed upon.
States agree to seek support of public service
commissions in becoming involved in the ATV program, and emphasizing
the importance of fueling infrastructure construction. States agree to
initiate and support legislation to the greatest extent possible.
Others
Administration will direct Federal procurement
practices favoring purchase of ATV's.
EPA will work with DOE to assure harmonization and
consistency between CAA of 1990 and EPAct.
Fuel and energy providers will purchase vehicles
according to EPAct requirements, establish refueling infrastructure,
and contribute to the development of state incentive programs.
List of Subjects
40 CFR Part 51
Environmental protection, Air pollution control.
40 CFR Part 52
Environmental protection, Air pollution control, Intergovernmental
relations, Ozone, Volatile organic compounds.
40 CFR Part 82
Environmental protection, Air pollution control, Motor vehicle
pollution, Penalties.
Dated: December 19, 1994.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter 1, is
amended as follows:
PART 51--[AMENDED]
1. The authority citation for part 51 shall continue to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
2. Subpart G is amended by adding a new Sec. 51.120, to read as
follows:
Sec. 51.120 Requirements for state implementation plan revisions
relating to new motor vehicles.
(a) The EPA Administrator finds that the State Implementation Plans
(SIPs) for the States of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
Island, and Vermont, the portion of Virginia included (as of November
15, 1990) within the Consolidated Metropolitan Statistical Area that
includes the District of Columbia, are substantially inadequate to
comply with the requirements of section 110(a)(2)(D) of the Clean Air
Act, 42 U.S.C. 7410(a)(2)(D), and to mitigate adequately the interstate
pollutant transport described in section 184 of the Clean Air Act, 42
U.S.C. 7511C, to the extent that they do not provide for emission
reductions from new motor vehicles in the amount that would be achieved
by the Ozone Transport Commission low emission vehicle (OTC LEV)
program described in paragraph (c) of this section. This inadequacy
will be deemed cured for each of the aforementioned states (including
the District of Columbia) in the event that EPA determines through
rulemaking that a national LEV-equivalent new motor vehicle emission
control program is an acceptable alternative for OTC LEV and finds that
such program is in effect. In the event no such finding is made, each
of those states must adopt and submit to EPA by February 15, 1996 a SIP
revision meeting the requirements of paragraph (b) of this section in
order to cure the SIP inadequacy.
(b) If a SIP revision is required under paragraph (a) of this
section, it must contain the OTC LEV program described in paragraph (c)
of this section unless the State adopts and submits to EPA, as a SIP
revision, other emission-reduction measures sufficient to meet the
requirements of paragraph (d) of this section. If a State adopts and
submits to EPA, as a SIP revision, other emission-reduction measures
pursuant to paragraph (d) of this section, then for purposes of
determining whether such a SIP revision is complete within the meaning
of section 110(k)(1) (and hence is eligible at least for consideration
to be approved as satisfying paragraph (d) of this section), such a SIP
revision must contain other adopted emission-reduction measures that,
together with the identified potentially broadly practicable measures,
achieve at least the minimum level of emission reductions that could
potentially satisfy the requirements of paragraph (d) of this section.
All such measures must be fully adopted and enforceable.
(c) The OTC LEV program is a program adopted pursuant to section
177 of the Clean Air Act.
(1) The OTC LEV program shall contain the following elements:
(i) It shall apply to all new 1999 and later model year passenger
cars and light-duty trucks (0-5750 pounds loaded vehicle weight), as
defined in Title 13, California Code of Regulations, section
1900(b)(11) and (b)(8), respectively, that are sold, imported,
delivered, purchased, leased, rented, acquired, received, or registered
in any area of the state that is in the Northeast Ozone Transport
Region as of December 19, 1994.
(ii) All vehicles to which the OTC LEV program is applicable shall
be required to have a certificate from the California Air Resources
Board (CARB) affirming compliance with California standards.
(iii) All vehicles to which this LEV program is applicable shall be
required to meet the mass emission standards for Non-Methane Organic
Gases (NMOG), Carbon Monoxide (CO), Oxides of Nitrogen (NOX),
Formaldehyde (HCHO), and particulate matter (PM) as specified in Title
13, California Code of Regulations, section 1960.1(f)(2) (and
formaldehyde standards under section 1960.1(e)(2), as applicable) or as
specified by California for certification as a TLEV (Transitional Low-
Emission Vehicle), LEV (Low-Emission Vehicle), ULEV (Ultra-Low-Emission
Vehicle), or ZEV (Zero-Emission Vehicle) under section 1960.1(g)(1)
(and section 1960.1(e)(3), for formaldehyde standards, as applicable).
(iv) All manufacturers of vehicles subject to the OTC LEV program
shall be required to meet the fleet average NMOG exhaust emission
values for production and delivery for sale of their passenger cars,
light-duty trucks 0-3750 pounds loaded vehicle weight, and light-duty
trucks 3751-5750 pounds loaded vehicle weight specified in Title 13,
California Code of Regulations, section 1960.1(g)(2) for each model
year beginning in 1999. A state may determine not to implement the NMOG
fleet average in the first model year of the program if the state
begins implementation of the program late in a calendar year. However,
all states must implement the NMOG fleet average in any full model
years of the LEV program.
(v) All manufacturers shall be allowed to average, bank and trade
credits in the same manner as allowed under the [[Page 4737]] program
specified in Title 13, California Code of Regulations, section
1960.1(g)(2) footnote 7 for each model year beginning in 1999. States
may account for credits banked by manufacturers in California or New
York in years immediately preceding model year 1999, in a manner
consistent with California banking and discounting procedures.
(vi) The provisions for small volume manufacturers and intermediate
volume manufacturers, as applied by Title 13, California Code of
Regulations to California's LEV program, shall apply. Those
manufacturers defined as small volume manufacturers and intermediate
volume manufacturers in California under California's regulations shall
be considered small volume manufacturers and intermediate volume
manufacturers under this program.
(vii) The provisions for hybrid electric vehicles (HEVs), as
defined in Title 13 California Code of Regulations, section 1960.1,
shall apply for purposes of calculating fleet average NMOG values.
(viii) The provisions for fuel-flexible vehicles and dual-fuel
vehicles specified in Title 13, California Code of Regulations, section
1960.1(g)(1) footnote 4 shall apply.
(ix) The provisions for reactivity adjustment factors, as defined
by Title 13, California Code of Regulations, shall apply.
(x) The aforementioned state OTC LEV standards shall be identical
to the aforementioned California standards as such standards exist on
December 19, 1994.
(xi) All states' OTC LEV programs must contain any other provisions
of California's LEV program specified in Title 13, California Code of
Regulations necessary to comply with section 177 of the Clean Air Act.
(2) States are not required to include the mandate for production
of ZEVs specified in Title 13, California Code of Regulations, section
1960.1(g)(2) footnote 9.
(3) Except as specified elsewhere in this section, states may
implement the OTC LEV program in any manner consistent with the Act
that does not decrease the emissions reductions or jeopardize the
effectiveness of the program.
(d) The SIP revision that paragraph (b) of this section describes
as an alternative to the OTC LEV program described in paragraph (c) of
this section must contain a set of state-adopted measures that provides
at least the following amount of emission reductions in time to bring
serious ozone nonattainment areas into attainment by their 1999
attainment date:
(1) Reductions at least equal to the difference between:
(i) The nitrogen oxides (NOX) emission reductions from the
1990 statewide emissions inventory achievable through implementation of
all of the Clean Air Act-mandated and potentially broadly practicable
control measures throughout all portions of the state that are within
the Northeast Ozone Transport Region created under section 184(a) of
the Clean Air Act as of December 19, 1994; and
(ii) A reduction in NOX emissions from the 1990 statewide
inventory in such portions of the state of 50% or whatever greater
reduction is necessary to prevent significant contribution to
nonattainment in, or interference with maintenance by, any downwind
state.
(2) Reductions at least equal to the difference between:
(i) The VOC emission reductions from the 1990 statewide emissions
inventory achievable through implementation of all of the Clean Air
Act-mandated and potentially broadly practicable control measures in
all portions of the State in, or near and upwind of, any of the serious
or severe ozone nonattainment areas lying in the series of such areas
running northeast from the Washington, DC, ozone nonattainment area to
and including the Portsmouth, New Hampshire ozone nonattainment area;
and
(ii) A reduction in VOC emissions from the 1990 emissions inventory
in all such areas of 50% or whatever greater reduction is necessary to
prevent significant contribution to nonattainment in, or interference
with maintenance by, any downwind state.
PART 52--[AMENDED]
1. The authority citation for part 52 continue to read as follows:
Authority: 42 U.S.C. 7401-7671q.
2. Subpart A is amended by adding a new Sec. 52.32, to read as
follows:
Sec. 52.32 Sanctions following findings of SIP inadequacy.
For purposes of the SIP revisions required by Sec. 51.120, EPA may
make a finding under section 179(a) (1)-(4) of the Clean Air Act, 42
U.S.C. 7509(a) (1)-(4), starting the sanctions process set forth in
section 179(a) of the Clean Air Act. Any such finding will be deemed a
finding under Sec. 52.31(c) and sanctions will be imposed in accordance
with the order of sanctions and the terms for such sanctions
established in Sec. 52.31.
3. Subpart H is amended by adding a new Sec. 52.381, to read as
follows:
Sec. 52.381 Requirements for state implementation plan revisions
relating to new motor vehicles.
Connecticut must comply with the requirements of Sec. 51.120.
4. Subpart I is amended by adding a new Sec. 52.433, to read as
follows:
Sec. 52.433 Requirements for state implementation plan revisions
relating to new motor vehicles.
Delaware must comply with the requirements of Sec. 51.120.
5. Subpart J is amended by adding a new Sec. 52.498, to read as
follows:
Sec. 52.498 Requirements for state implementation plan revisions
relating to new motor vehicles.
The District of Columbia must comply with the requirements of
Sec. 51.120.
6. Subpart U is amended by adding a new Sec. 52.1035, to read as
follows:
Sec. 52.1035 Requirements for state implementation plan revisions
relating to new motor vehicles.
Maine must comply with the requirements of Sec. 51.120.
7. Subpart V is amended by adding a new Sec. 52.1079, to read as
follows:
Sec. 52.1079 Requirements for state implementation plan revisions
relating to new motor vehicles.
Maryland must comply with the requirements of Sec. 51.120.
8. Subpart W is amended by adding a new Sec. 52.1160, to read as
follows:
Sec. 52.1160 Requirements for state implementation plan revisions
relating to new motor vehicles.
Massachusetts' adopted LEV program must be revised to the extent
necessary for the state to comply with all aspects of the requirements
of Sec. 51.120.
9. Subpart EE is amended by adding a new Sec. 52.1530, to read as
follows:
Sec. 52.1530 Requirements for state implementation plan revisions
relating to new motor vehicles.
New Hampshire must comply with the requirements of Sec. 51.120.
10. Subpart FF is amended by adding a new Sec. 52.1583, to read as
follows:
Sec. 52.1583 Requirements for state implementation plan revisions
relating to new motor vehicles.
New Jersey must comply with the requirements of Sec. 51.120.
11. Subpart HH is amended by adding a new Sec. 52.1674, to read as
follows:
Sec. 52.1674 Requirements for state implementation plan revisions
relating to new motor vehicles.
New York's adopted LEV program must be revised to the extent
necessary for the state to comply with all aspects of the requirements
of Sec. 51.120. [[Page 4738]]
12. Subpart NN is amended by adding a new Sec. 52.2057, to read as
follows:
Sec. 52.2057 Requirements for state implementation plan revisions
relating to new motor vehicles.
Pennsylvania must comply with the requirements of Sec. 51.120.
13. Subpart OO is amended by adding a new Sec. 52.2079, to read as
follows:
Sec. 52.2079 Requirements for state implementation plan revisions
relating to new motor vehicles.
Rhode Island must comply with the requirements of Sec. 51.120.
14. Subpart UU is amended by adding a new Sec. 52.2385, to read as
follows:
Sec. 52.2385 Requirements for state implementation plan revisions
relating to new motor vehicles.
Vermont must comply with the requirements of Sec. 51.120.
15. Subpart VV is amended by adding a new Sec. 52.2453, to read as
follows:
Sec. 52.2453 Requirements for state implementation plan revisions
relating to new motor vehicles.
Virginia must comply with the requirements of Sec. 51.120 with
respect to the portion of Virginia that in 1990 was located in the
Consolidated Metropolitan Statistical Area containing the District of
Columbia.
PART 85--CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES AND MOTOR
VEHICLE ENGINES
1. The authority citation for part 85 is revised to read as
follows:
Authority: 42 U.S.C. 7507, 7521, 7522, 7524, 7525, 7541, 7542,
7543, 7547, 7601(a), unless otherwise noted.
2. Part 85 is amended by adding subpart X to read as follows:
Subpart X--Determination of Model Year for Motor Vehicles and Engines
Used in Motor Vehicles Under Section 177 and Part A of Title II of the
Clean Air Act
Sec.
85.2301 Applicability.
85.2302 Definition of model year.
85.2303 Duration of model year.
85.2304 Definition of production period.
85.2305 Duration and applicability of certificates of conformity.
Subpart X--Determination of Model Year for Motor Vehicles and
Engines Used in Motor Vehicles Under Section 177 and Part A of
Title II of the Clean Air Act
Sec. 85.2301 Applicability.
The definitions provided by this subpart are effective February 23,
1995 and apply to all light-duty motor vehicles and trucks, heavy-duty
motor vehicles and heavy-duty engines used in motor vehicles, and on-
highway motorcycles as such vehicles and engines are regulated under
section 177 and Title II part A of the Clean Air Act.
Sec. 85.2302 Definition of model year.
Model year means the manufacturer's annual production period (as
determined under Sec. 85.2304) which includes January 1 of such
calendar year, provided, that if the manufacturer has no annual
production period, the term ``model year'' shall mean the calendar
year.
Sec. 85.2303 Duration of model year.
A specific model year must always include January 1 of the calendar
year for which it is designated and may not include a January 1 of any
other calendar year. Thus, the maximum duration of a model year is one
calendar year plus 364 days.
Sec. 85.2304 Definition of production period.
(a) The ``annual production period'' for all models within an
engine family of light-duty motor vehicles, heavy-duty motor vehicles
and engines, and on-highway motorcycles begins either: when any vehicle
or engine within the engine family is first produced; or on January 2
of the calendar year preceding the year for which the model year is
designated, whichever date is later. The annual production period ends
either: When the last such vehicle or engine is produced; or on
December 31 of the calendar year for which the model year is named,
whichever date is sooner.
(b) The date when a vehicle or engine is first produced is the
``Job 1 date,'' which is defined as that calendar date on which a
manufacturer completes all manufacturing and assembling processes
necessary to produce the first saleable unit of the designated model
which is in all material respects the same as the vehicle or engine
described in the manufacturer's application for certification. The
``Job 1 date'' may be a date earlier in time than the date on which the
certificate of conformity is issued.
Sec. 85.2305 Duration and applicability of certificates of conformity.
(a) Except as provided in paragraph (b) of this section, a
certificate of conformity is deemed to be effective and cover the
vehicles or engines named in such certificate and produced during the
annual production period, as defined in Sec. 85.2304.
(b) Section 203 of the Clean Air Act prohibits the sale, offering
for sale, delivery for introduction into commerce, and introduction
into commerce, of any new vehicle or engine not covered by a
certificate of conformity unless it is an imported vehicle exempted by
the Administrator or otherwise authorized jointly by EPA and U.S.
Customs Service regulations. However, the Act does not prohibit the
production of vehicles or engines without a certificate of conformity.
Vehicles or engines produced prior to the effective date of a
certificate of conformity, as defined in paragraph (a) of this section,
may also be covered by the certificate if the following conditions are
met:
(1) The vehicles or engines conform in all material respects to the
vehicles or engines described in the application for the certificate of
conformity:
(2) The vehicles or engines are not sold, offered for sale,
introduced into commerce, or delivered for introduction into commerce
prior to the effective date of the certificate of conformity;
(3) The Agency is notified prior to the beginning of production
when such production will start, and the Agency is provided full
opportunity to inspect and/or test the vehicles during and after their
production; for example, the Agency must have the opportunity to
conduct selective enforcement auditing production line testing as if
the vehicles had been produced after the effective date of the
certificate.
(c) New vehicles or engines imported by an original equipment
manufacturer after December 31 of the calendar year for which the model
year was named are still covered by the certificate of conformity as
long as the production of the vehicle or engine was completed before
December 31 of that year. This paragraph does not apply to vehicles
that may be covered by certificates held by independent commercial
importers unless specifically approved by EPA.
(d) Vehicles or engines produced after December 31 of the calendar
year for which the model year is named are not covered by the
certificate of conformity for that model year. A new certificate of
conformity demonstrating compliance with currently applicable standards
must be obtained for these vehicles or engines even if they are
identical to vehicles or engines built before December
31. [[Page 4739]]
(e) The extended coverage period described here for a certificate
of conformity (i.e., up to one year plus 364 days) is primarily
intended to allow flexibility in the introduction of new models. Under
no circumstances should it be interpreted that existing models may
``skip'' yearly certification by pulling ahead the production of every
other model year.
[FR Doc. 95-1387 Filed 1-23-95; 8:45 am]
BILLING CODE 6560-50-P