[Federal Register Volume 64, Number 16 (Tuesday, January 26, 1999)]
[Proposed Rules]
[Pages 3906-3908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1757]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MD080-3037; FRL-6224-2]


Approval and Promulgation of Air Quality Implementation Plans; 
Maryland; Nitrogen Oxides Budget Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a State Implementation Plan (SIP) 
revision submitted by the State of Maryland. This revision implements 
Maryland's portion of the Ozone Transport Commission's (OTC) September 
27, 1994 Memorandum of Understanding (MOU) which describes a regional 
nitrogen oxides (NOX) cap and trade program that will 
significantly reduce NOX emissions generated within the 
Ozone Transport Region (OTR). The intended effect of this action is to 
propose approval of Maryland's regulations entitled Post RACT 
Requirements for NOX Sources and Polices and Procedures 
Relating to Maryland's NOX Budget Program.

DATES: Written comments must be received on or before February 25, 
1999.

ADDRESSES: Written comments may be mailed to David L. Arnold, Chief, 
Ozone & Mobile Sources Branch, Mailcode 3AP21, U.S. Environmental 
Protection Agency, Region III, 1650 Arch Street, Philadelphia, 
Pennsylvania 19103. Copies of the documents relevant to this action are 
available for public inspection during normal business hours at the Air 
Protection Division, EPA, Region III, 1650 Arch Street, Philadelphia, 
Pennsylvania 19103 and Maryland Department of the Environment, 2500 
Broening Highway, Baltimore, Maryland, 21224.

FOR FURTHER INFORMATION CONTACT: Cristina Fernandez, (215) 814-2178, or 
by e-mail at [email protected]. While information may be 
requested via e-mail, comments must be submitted in writing to the 
above Region III address.

SUPPLEMENTARY INFORMATION: On August 28, 1998, Maryland Department of 
the Environment submitted a revision to its State Implementation Plan 
(SIP). The revision consists of Code of Maryland Regulations (COMAR) 
26.11.27.01-.14, Post RACT Requirements for NOX Sources and 
COMAR 26.11.28.01-.13, Polices and Procedures Relating to Maryland's 
NOX Budget Program.

I. Background

    The OTC adopted a MOU on September 27, 1994, committing the 
signatory states to the development and proposal of a two phase region-
wide reduction in nitrogen oxides (NOX) emissions by 1999 
and 2003, respectively. As reasonably available control technology 
(RACT) to reduce NOX emissions was required to be 
implemented by May of 1995, the MOU refers to the NOX 
reductions to be achieved by 1999 as Phase II; and the NOX 
reductions to be achieved by 2003 as Phase III. The OTC states include 
Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode 
Island, New York, New Jersey, Pennsylvania, Maryland, Delaware, the 
northern counties of Virginia and the District of Columbia. All the OTC 
states, with the exception of the Commonwealth of Virginia, signed the 
September 27, 1994 MOU. The OTC MOU requires reductions in ozone season 
NOX emissions from utility and large industrial combustion 
facilities within the OTR in order to further the effort to achieve the 
health-based National Ambient Air Quality Standard (NAAQS) for ozone.
    In the MOU, the OTC states agreed to propose regulations for the 
control of NOX emissions in accordance with the following 
guidelines:
    1. The level of NOX required would be established from a 
1990 baseline emissions level.
    2. The reduction would vary by location, or zone, and would be 
implemented in two phases utilizing a region wide trading program.
    3. The reduction would be determined based on the less stringent of 
each of the following:
    a. By May 1, 1999, the affected facilities in the inner zone shall 
reduce their rate of NOX emissions by 65% from baseline, or 
emit NOX at a rate no greater than 0.20 pound per million 
Btu. (This is referred to as a Phase II requirement ).
    b. By May 1, 1999, the affected facilities in the outer zone shall 
reduce their rate of NOX emissions by 55% from baseline, or 
shall emit NOX at a rate no greater than 0.20 pounds per 
million Btu. (This is referred to as a Phase II requirement).
    c. By May 1, 2003, the affected facilities in the inner and outer 
zone shall reduce their rate of NOX emissions by 75% from 
baseline, or shall emit NOX at a rate of no greater than 
0.15 pounds per million Btu. (This is referred to as a Phase III 
requirement).
    d. By May 1, 2003, the affected facilities in the Northern zone 
shall reduce their rate of NOX emissions by 55% from 
baseline, or shall emit NOX at a rate no greater than 0.20 
pounds per million Btu. (This is referred to as a Phase III requirement 
).

    A Task Force of representatives from the OTC states, organized 
through the Northeast States for Coordinated Air Use Management 
(NESCAUM) and the Mid-Atlantic Regional Air Management Association 
(MARAMA), were charged with the task of developing a model rule that 
would implement the program defined by the OTC MOU. During 1995 and 
1996, the NESCAUM/ MARAMA NOX Budget Task Force worked with 
EPA and developed a model rule as a template for OTC states to adopt 
their own rules to implement the OTC MOU. The model rule was issued May 
1, 1996. The model rule was developed for the OTC states to implement 
the Phase II reduction called for in the MOU to be achieved by May 1, 
1999. The model rule does not include the implementation of Phase III.

[[Page 3907]]

II. Summary of SIP Revision

    The regulations of COMAR 26.11.27.01-.14, Post RACT Requirements 
for NOX Sources are based solely upon the ``NESCAUM/MARAMA 
NOX Budget Rule'' issued in May 1, 1996. The model rule was 
developed by the states in the OTR using the EPA's economic incentive 
rules (67 FR 16690) which were published on April 7, 1994, as the 
general regulatory framework.
    The Maryland NOX Budget Program establishes 
NOX emission allowances for each NOX control 
period beginning May 1, 1999 through the NOX control period 
ending September 30, 2002. This program identifies the budgeted sources 
and identifies the number of allowances each budget source is 
allocated. Maryland's NOX Budget Program, includes the 
adoption of two new chapters: COMAR 26.11.27, Post RACT Requirements 
for NOX Sources and COMAR 26.11.28, Polices and Procedures 
Relating to Maryland's NOX Budget Program.
    COMAR 26.11.27, Post RACT Requirements for NOX Sources 
(NOX Budget Program) is divided in fourteen sections: ( .01) 
Definitions; (.02) Incorporation by Reference; (.03) Applicability; 
(.04) General Requirements; (.05) Allowance Allocations; (.06) 
Identification of Authorized Account Representatives; (.07) Allowance 
Banking; (.08) Emission Monitoring; (.09) Reporting; (.10) Record 
Keeping; (.11) End-of-Season Reconciliation; (.12) Compliance 
Certification; (.13) Penalties; (.14) Audit.
    COMAR 26.11.28, Polices and Procedures Relating to Maryland's 
NOX Budget Program is divided in thirteen sections: (.01) 
Scope; (.02) Definitions; (.03) Procedures Relating to Compliance 
Accounts; (.04) Procedures Relating to General Accounts; (.05) 
Allowance Banking, (.06) Allowance Transfer; (.07) Emissions 
Monitoring; (.08) Early Reduction Allowances; (.09) Opt-in Procedures; 
(.10) Audit Provisions; (.11) Allocations to Units in Operation in 
1990; (.12) Allocations to Budget Sources Beginning Operation or for 
Which a Permit Was Issued After 1990 and Before January 1, 1998; (.13) 
Percent Contribution of Budget by Company.

Proposed Action

    EPA is proposing to approve the Maryland SIP revision consisting of 
COMAR 26.11.27.01-.14, Post RACT Requirements for NOX 
Sources and COMAR 26.11.28.01-.13, Polices and Procedures Relating to 
Maryland's NOX Budget Program, submitted on August 28, 1998. 
EPA is soliciting public comments on the issues discussed in this 
document or on other relevant matters. These comments will be 
considered before taking final action. Interested parties may 
participate in the Federal rulemaking procedure by submitting written 
comments to the EPA Regional office listed in the ADDRESSES section of 
this document. A more detailed description of the state submittal and 
EPA's evaluation are included in a Technical Support Document (TSD) 
prepared in support of this rulemaking action. A copy of the TSD is 
available upon request from the EPA Regional Office listed in the 
ADDRESSES section of this document.

III. Administrative Requirements

A. Executive Orders 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from review under E.O. 12866, entitled ``Regulatory 
Planning and Review.''

B. Executive Order 12875

    Under E.O. 12875, EPA may not issue a regulation that is not 
required by statute and that creates a mandate upon a state, local, or 
tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments. If EPA complies by consulting, E.O. 12875 requires EPA to 
provide to the Office of Management and Budget a description of the 
extent of EPA's prior consultation with representatives of affected 
state, local, and tribal governments, the nature of their concerns, 
copies of written communications from the governments, and a statement 
supporting the need to issue the regulation. In addition, E.O. 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of state, local, and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.'' 
Today's rule does not create a mandate on state, local or tribal 
governments. The rule does not impose any enforceable duties on these 
entities. Accordingly, the requirements of section 1(a) of E.O. 12875 
do not apply to this rule.

C. Executive Order 13045

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to any rule that the EPA determines (1) is 
``economically significant,'' as defined under Executive Order 12866, 
and (2) the environmental health or safety risk addressed by the rule 
has a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This proposed rule is not subject to Executive Order 13045 because 
it is not an economically significant regulatory action as defined by 
Executive Order 12866, and it does not address an environmental health 
or safety risk that would have a disproportionate effect on children.

D. Executive Order 13084

    Under E.O. 13084, EPA may not issue a regulation that is not 
required by statute, that significantly affects or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments. If EPA complies by 
consulting, E.O. 13084 requires EPA to provide to the Office of 
Management and Budget, in a separately identified section of the 
preamble to the rule, a description of the extent of EPA's prior 
consultation with representatives of affected tribal governments, a 
summary of the nature of their concerns, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 13084 
requires EPA to develop an effective process permitting elected and 
other representatives of Indian tribal governments ``to provide 
meaningful and timely input in the development of regulatory policies 
on matters that significantly or uniquely affect their communities.'' 
Today's rule does not significantly or uniquely affect the communities 
of Indian tribal governments. This action does not involve or impose 
any requirements that affect Indian Tribes. Accordingly, the 
requirements of section 3(b) of E.O. 13084 do not apply to this rule.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and

[[Page 3908]]

small governmental jurisdictions. This proposed rule will not have a 
significant impact on a substantial number of small entities because 
SIP approvals under section 110 and subchapter I, part D of the Clean 
Air Act do not create any new requirements but simply approve 
requirements that the State is already imposing. Therefore, because the 
Federal SIP approval does not create any new requirements, I certify 
that this action will not have a significant economic impact on a 
substantial number of small entities. Moreover, due to the nature of 
the Federal-State relationship under the Clean Air Act, preparation of 
a flexibility analysis would constitute Federal inquiry into the 
economic reasonableness of state action. The Clean Air Act forbids EPA 
to base its actions concerning SIPs on such grounds. Union Electric Co. 
v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

F. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
annual costs to State, local, or tribal governments in the aggregate; 
or to private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule. EPA has determined that 
the proposed approval action does not include a Federal mandate that 
may result in estimated annual costs of $100 million or more to either 
State, local, or tribal governments in the aggregate, or to the private 
sector.
    This Federal action approves pre-existing requirements under State 
or local law, and imposes no new requirements. Accordingly, no 
additional costs to State, local, or tribal governments, or to the 
private sector, result from this action to propose approval of 
Maryland's NOx Budget Program to implement Phase II of the OTC MOU.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Nitrogen dioxide, 
Ozone, Reporting and recordkeeping requirements.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: January 19, 1999.
Thomas C. Voltaggio,
Acting Regional Administrator, Region III.
[FR Doc. 99-1757 Filed 1-25-99; 8:45 am]
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