[Federal Register Volume 64, Number 105 (Wednesday, June 2, 1999)]
[Rules and Regulations]
[Pages 29573-29580]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13805]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[NV-034-0016; FRL-6350-5]


Approval and Promulgation of Implementation Plans; Nevada State 
Implementation Plan Revision, Clark County

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing the approval of revisions to the Nevada 
State Implementation Plan (SIP) proposed in the Federal Register on 
December 11, 1998. This action specifically includes approval of 
revisions to Clark County Health District's wintertime oxygenated fuels 
program. This approval action will incorporate these revisions into the 
federally approved SIP. The intended effect of approving these 
revisions is to regulate emissions of carbon monoxides (CO) in 
accordance with the requirements of the Clean Air Act, as amended in 
1990 (CAA or the Act). Thus, EPA is finalizing the approval of these 
revisions into the Nevada SIP under provisions of the CAA regarding EPA 
action on SIP submittals, SIPs for national primary and secondary 
ambient air quality standards and plan requirements for nonattainment 
areas.

EFFECTIVE DATE: This action is effective on July 2, 1999.

ADDRESSES: Copies of the SIP revision and EPA's evaluation report are 
available for public inspection at EPA's Region 9 office during normal 
business hours. Copies of these documents are

[[Page 29574]]

also available for inspection at the following locations:

Nevada Division of Environmental Protection, Bureau of Air Quality, 123 
W. Nye Lane, Carson City, NV
Clark County Health District, P.O. Box 3902, 625 Shadow Lane, Las 
Vegas, NV

FOR FURTHER INFORMATION CONTACT: Roxanne Johnson, Air Planning Office 
(AIR-2), Air Division, U.S. Environmental Protection Agency, Region IX, 
75 Hawthorne Street, San Francisco, CA 94105-3901, (415) 744-1225.

SUPPLEMENTARY INFORMATION:

I. Applicability

    The revisions being approved into the Nevada SIP include: Clark 
County District Board of Health, (Clark County), Air Pollution Control 
(APC) Section 53, Oxygenated Gasoline Program (as amended and approved 
on September 25, 1997). This SIP revision was submitted by the Nevada 
Division of Environmental Protection to EPA on August 7, 1998.

II. Background

    On December 11, 1998, EPA proposed to approve Clark County's 
Oxygenated Gasoline Program as a revision to the Nevada SIP. 63 FR 
68415. EPA has evaluated the revisions for consistency with the 
requirements of the CAA and EPA regulations. EPA has found that Clark 
County's revisions to its wintertime gasoline oxygenated fuels program 
meet applicable EPA requirements. A detailed discussion of the SIP 
revisions and evaluation has been provided in the December 11, 1998 
Federal Register (63 FR 68415), and in the technical support document 
(TSD) available at EPA's Region IX office.

III. Response to Public Comments

    A 30-day public comment period was provided in the notice of 
proposed rulemaking, 63 FR 68415, December 11, 1998. EPA received only 
one comment letter, from the Western States Petroleum Association 
(WSPA). WSPA's comments and EPA's responses are set forth below.

A. Preemption

    WSPA commented that Nevada's 3.5% oxygen content requirement is 
preempted by section 211(c)(4) of the Act because EPA has previously 
promulgated regulations to prescribe controls or prohibitions on the 
oxygen content of gasoline and by section 211(m)(2) because this 
section of the Act requires certain nonattainment areas to implement an 
oxygenated gasoline program with not less than 2.7% oxygen. WSPA also 
commented that Clark County's 3.5% gasoline oxygen content requirement 
is preempted under the doctrines of conflict and field preemption.
    EPA does not believe that Clark County's 3.5% gasoline oxygen 
content requirement is barred by section 211(m) or preempted by the 
Act, either explicitly under section 211(c)(4)(A) or implicitly based 
on the judicial doctrines of conflict preemption or field preemption. 
EPA's response to WSPA's preemption comments begins with a discussion 
of consistency with section 211(m), followed by a response to the other 
preemption arguments.
1. Consistency with Section 211(m)
    On March 18, 1997, the Clark County Commission adopted a resolution 
requesting that the Board of Health adopt the proposed regulations 
specifying that the minimum oxygen content of wintertime gasoline shall 
be 3.5% oxygen by weight, starting October 1, 1997. Because the Las 
Vegas Valley was being designated by EPA as a serious nonattainment 
area for carbon monoxide (CO), the Board of Health moved to propose the 
minimum 3.5% oxygenate regulation to help reach attainment of the 
National Ambient Air Quality Standards for CO.
    Section 211(m)(1) requires that certain states with areas 
designated nonattainment for CO implement an oxygenated gasoline 
program. This applies to states containing CO nonattainment areas with 
a CO design value 1 of at least 9.5 parts per million based 
on 1988 and 1989 data.
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    \1\ The carbon dioxide design value is a surrogate measure of 
attainment status, a measure of progress, and an indicator of how 
much concentrations must be reduced to meet the standard.
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    Section 211(m) requires that various states submit revisions to 
their SIP, and implement oxygenated gasoline programs. This section 
also identifies certain elements that the state program must contain. 
Section 211(m)(2)(A) identifies the geographic area of the state 
program (it must apply throughout the Consolidated Metropolitan 
Statistical Area (CMSA) or the Metropolitan Statistical Area (MSA)) and 
the time period of the program (it must apply during that portion of 
the year in which the area is prone to high ambient concentrations of 
CO, as determined by the Administrator, but no less than four months). 
Section 211(m)(2)(A)(B) requires that gasoline be blended to contain 
not less than 2.7% oxygen. Under certain circumstances (section 
211(m)(7)), gasoline must be blended to contain not less than 3.1% 
oxygen. Section 211(m)(5) requires that EPA promulgate guidelines for 
states to implement provisions for marketable oxygen credits. This 
section also authorizes EPA to waive the above requirements under 
limited circumstances.
    WSPA argues that, under section 211(m), a state must adopt a 2.7% 
standard and may not adopt any other standard, except as expressly 
provided in section 211(m)(7). The requirement that gasoline be blended 
to contain ``not less than 2.7 percent oxygen by weight'' would 
therefore set both a floor and a ceiling for a minimum oxygen content 
that a state must establish.2 Clark County's requirement of 
a 3.5% minimum oxygen content would violate the requirements of section 
211(m) under this interpretation. EPA believes that the better reading 
of section 211(m)(2) is that, at a minimum, states must require that 
gasoline contain 2.7% oxygen by weight, and that states could satisfy 
this by requiring gasoline to contain 2.7% oxygen or by setting any 
higher requirement such as 3.1% oxygen content, or 3.5% oxygen content.
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    \2\ In support of its claim, WSPA points to the 1996 extension 
of the CO attainment date for the Las Vegas area. WSPA argues that 
in the preamble to that action EPA identified the 2.7% oxygen 
content requirement without expressing that the requirement for the 
area was a minimum content requirement. EPA believes WSPA has read 
too much into the preamble's abbreviated listing of requirements for 
the area. Nothing in that preamble indicated an intent to interpret 
the confines of section 211(m)(2). In fact, EPA noted that Clark 
County had revised its regulations ``to meet the minimum 2.7% 
oxygenate by weight requirement of the CAA.'' 61 FR 41759, 41763 
(Aug. 12, 1996).
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    Neither the text of section 211(m) nor the legislative history 
indicate a clear Congressional intent to prohibit states from adopting 
any oxygen content requirement greater than 2.7%. This interpretation 
would be inconsistent with the general structure of the Act because it 
would restrict the ability of states to develop programs to meet the 
federal ambient air quality standards. See Title I generally, sections 
107, 110, and 116. Oxygenated gasoline is one of the simplest and most 
cost-effective measures for control of carbon monoxide. This 
interpretation would limit a state's ability to use this strategy for 
air quality purposes, as any increase above the 2.7% minimum would only 
be allowed where a severe nonattainment area had already failed to meet 
its statutory deadline for attaining the NAAQS. Thus, states would be 
barred from adopting any oxygen content requirement above 2.7%, even 
where an area needed a more stringent

[[Page 29575]]

standard to attain the NAAQS. Instead, such a state with a moderate 
nonattainment area could not take action needed to meet the air quality 
standard. The area would likely have to continue to violate the 
standard until it had been upgraded to a severe nonattainment area and 
had missed the deadline for severe nonattainment areas to come into 
compliance with the NAAQS, before it could adopt a more effective 
control measure designed to help attain the NAAQS. There is no 
indication that Congress intended a limitation so potentially injurious 
to public health and so contrary to rational planning. This 
interpretation is also inconsistent with the principle that a statute 
should not be read to preempt state authority unless it is clear that 
Congress intended such a result. See Medtronic, Inc. v. Lohr, 518 U.S. 
470, 485 (1996); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 518 
(1992).
    WSPA asserts that the legislative history of sections 211 (m) and 
(k) shows that the 2.7% oxygen content level was set to ensure fuel 
neutrality and opportunity for all oxygenates in the marketplace. They 
argue that state programs requiring greater than 2.7% oxygen conflict 
with this goal and Congress therefore intended to prohibit 
them.3 However, while much of the legislative history of 
section 211(m) concerns the appropriate level at which to set the 
minimum federally mandated oxygenate requirement in the Clean Air Act, 
there is no indication that Congress intended to bar the states from 
setting more stringent oxygenate requirements.
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    \3\ This concern arises because ethanol is currently the only 
oxygenate additive that may lawfully be blended in gasoline at 
levels greater than 2.7% oxygen by weight.
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    The Chafee-Baucus Statement of the Senate Managers (discussing the 
Conference Committee version of the bill which Congress adopted as the 
1990 Amendments to the CAA) states merely that ``[t]he conference 
agreement requires any gasoline sold in a carbon monoxide nonattainment 
area to contain at least 2.7 percent oxygen. * * *'' Senate Committee 
on Environment and Public Works, 103d Cong., 1st Sess., A Legislative 
History of the Clean Air Act Amendments of 1990 (hereinafter 
``Legislative History'') at 896 (1993) (statement from Senate debate on 
October 27, 1990). Senator Simpson and Congressmen Sharp and Hall all 
reiterated a statement that has been cited in support of the 
proposition that section 211(m) bars states from requiring a higher 
fuel oxygen content. ``The level of 2.7 percent was chosen in part to 
provide more even opportunities for competition between the two major 
oxygenates, methyl tertiary butyl ether, or MTBE, and ethyl alcohol, or 
ethanol. * * * The Administrator may not discriminate among these 
different oxygenates, and should encourage fair competition among 
them.'' Legislative History at 1171 (statement from Senate debate on 
October 26, 1990) (emphasis added). See also id. at 1216, 1328. Senator 
Simpson and others added that in exercising its waiver authority under 
section 211(m)(3), EPA may not approve partial waivers of the oxygenate 
requirements. ``In particular, new 211 (k) and (m) already create 
several new kinds of gasoline, and different oxygen concentrations may 
already exist under the various NOX cap provisions of these 
two subsections. Further balkanizing of the gasoline industry--with 
different oxygenate concentrations in different east coast cities, for 
example--potentially risks further disruptions and precision from 
refiners that may not be possible.'' Id. at 1169 (statement from Senate 
debate October 26, 1990). All of these statements address limitations 
on EPA's, not states', authority to choose between oxygenates or set 
more or less stringent oxygen content requirements. These statements 
simply give no indication of whether or not Congress intended to limit 
states' ability to set more stringent requirements, which might be 
critical to carry out their responsibility to adopt state 
implementation plans to protect the health of their citizens.
    Other statements in the legislative history suggest that Congress 
was primarily concerned about establishing a preference for one 
oxygenate over another as a matter of federal law and intended to give 
states flexibility in their fuels programs. The Senate version of the 
bill provided that the wintertime oxygen content requirements would be 
a direct federal mandate on the fuel producers to sell gasoline with at 
least 3.1% oxygen content, rather than a directive to states for their 
state implementation plans. S.1630, 103d Cong. (1990), reprinted in 
Legislative History at 4119, 4388. Commenting on his proposed amendment 
to substitute 2.7% for 3.1% oxygen content, Senator Lautenberg stated:

    But the question is, should we, as a Federal initiative, provide 
an advantage to one of these fuels over another? I do not think so. 
* * * [A 2.7% requirement] would allow for open and free competition 
among the various fuels and provide State and local officials with 
the flexibility to decide what fuels they need in their areas. * * * 
[The 3.1% requirement] takes away flexibility from State and local 
officials. * * * [Quoting from State and Territorial Air Pollution 
Program Administrators (STAPPA) and Association of Local Air 
Pollution Control Officials (ALAPCO) letter] ``We believe it is 
critically important that any alternative fuels programs be `fuel 
neutral.' This would provide State and local governments with the 
ability to select from a variety of fuels--not just gasohol--to 
address problems (e.g., carbon monoxide and ozone) unique to their 
jurisdictions.'' * * * [A]nd most importantly, as STAPPA noted, [my 
amendment] would allow localities to use the fuels that best meet 
their particular needs. * * * USDA notes that four States have 
oxygenated fuels program in place: Arizona, Colorado, Nevada, and 
New Mexico. * * * [The 3.1% requirement] would force the areas that 
already have oxygenated fuels programs to scrap them and switch to 
gasohol. * * *

    Legislative History at 5429-5430 (statement from Senate debate on 
March 7, 1990) (emphasis added). Senator Wirth added: ``As I understand 
it, the amendment offered by the Senator from New Jersey would not set 
this issue in concrete. It would require that oxygenated fuels sold in 
these nonattainment areas contain 2.7 percent oxygen. If, a few years 
down the road it makes sense for a State, or a city like Denver, to set 
a higher minimum oxygen content, that possibility always exists. All we 
are saying with this amendment is that we don't want to set a national 
minimum oxygen content standard of 3.1 percent.'' Id. at 5457 (emphasis 
added).
    While Senator Lautenberg's 2.7% oxygen content amendment did not 
pass in the Senate, the final CAA set a 2.7% oxygen content 
requirement. Consequently, the arguments advanced by Senators 
Lautenberg and Wirth should be considered indicative of some of the 
reasons underlying Congress' final decision to adopt a 2.7% minimum 
standard rather than a 3.1% minimum standard. As enunciated by Senators 
Lautenberg and Wirth, preserving state flexibility to make choices 
regarding the best fuel requirements for a particular locality was an 
important motivation for preferring 2.7% over 3.1%. This goal hardly 
comports with an intent to limit states' ability to adopt oxygen 
content requirements more stringent than 2.7%. Senator Wirth's 
statement, in particular, makes it clear that these provisions were not 
intended to prevent states from adopting more stringent requirements. 
Nor did Senator Wirth anticipate that states would have to jump any 
particular hurdle before adopting such requirements. Rather, he stated 
``that possibility always exists'' if ``down the road it makes sense.''
    In addition, during the debates over the Senate bill several 
senators referred to the existing oxygenated fuels

[[Page 29576]]

programs that states were already implementing at that time. At least 
one of those programs was more stringent than 2.7%. Nowhere was it 
suggested or noted that the legislation would require the state to 
remove that program. In contrast, Senator Lautenberg explicitly raised 
as an objection to the 3.1% requirement that it would negate existing 
state programs mandating a 2.7% oxygen content.
    The most reasonable inference from this legislative history is that 
Congress did not want to directly mandate that all state programs under 
section 211(m) require greater than 2.7% oxygen, as this would severely 
reduce the flexibility of states to develop their own programs and 
would by act of Congress directly limit open competition in the 
marketplace between oxygenates.4 Congress rejected a 
provision that would require all state oxygenated gasoline programs 
under section 211(m) to require 3.1% oxygen content. Instead, Congress 
set the minimum amount acceptable under section 211(m) at 2.7%, and 
only mandated that states adopt standards setting a higher oxygen 
content under limited circumstances. Section 211(m)(7) 5. 
While Congress rejected a federal requirement for an oxygen content 
greater than 2.7%, there is no similar indication that Congress 
intended to prohibit states from adopting such programs where the state 
considered it appropriate. To the contrary, the statements of 
individual congressmen indicate an intent to preserve state 
flexibility. Section 211(m)'s provision on marketable oxygen credits 
also supports this view. While Congress did not mandate that states 
adopt such credit programs, they are explicitly authorized to do so. 
This gives states the flexibility to structure their programs as 
desired, including the ability to adopt credit programs to promote the 
use of various oxygenates even where the minimum oxygen content is 
greater than 2.7%.6
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    \4\ Similarly, certain members of Congress indicated that they 
did not want EPA, the federal agency implementing section 211(m), to 
use its waiver authority under sections 211(m) and 211(k) in a 
manner that would limit the marketplace.
    \5\ WSPA claims that treating the 2.7% oxygen content 
requirement in section 211(m)(2) as merely a floor would effectively 
read out of the statute section 211(m)(7), which requires serious 
nonattainment areas to require gasoline with a minimum oxygen 
content of 3.1 %. EPA is not persuaded by WSPA's logic. Because both 
section 211(m)(2) and 211(m)(7) are phrased in terms of minimum 
requirements, there is no inconsistency created by allowing states 
to adopt programs that meet or exceed these requirements. Section 
211(m)(7) still serves a purpose--it requires an increase in the 
minimum oxygenate content for certain serious nonattainment areas 
that have not previously exercised their discretion to require 
greater oxygen content levels.
    \6\ For example, if a state sets an oxygen content standard of 
3.1% without any provisions for a credit program, refiners could not 
meet such a requirement by using MTBE. If a state included a credit 
program, however, refiners could meet a 3.1% oxygen content standard 
by supplying a combination of some oxygenated gasoline using ethanol 
(at 3.5% oxygen content) and some oxygenated gasoline using MTBE (at 
2.7% oxygen content).
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    Section 211(m) is most reasonably interpreted as requiring adoption 
of an oxygenated gasoline program with any weight percent oxygen 
content requirement that will result in gasoline being blended to 
contain not less than 2.7% oxygen by weight. A content requirement of 
2.7% or higher satisfies this requirement and is authorized by section 
211(m). This interpretation is consistent with the terms of section 
211(m) and the legislative history discussed above. It is also 
consistent with the Clean Air Act's basic approach of providing 
flexibility to the states in developing state programs to achieve and 
maintain the NAAQS. Under the Act, states have the primary 
responsibility for determining the manner by which to achieve these air 
quality standards. See CAA section 116; Virginia v. EPA, 108 F.3d 1397 
(D.C. Cir. 1997), reh'g granted, 116 F.3d 499 (D.C. Cir. 1997) 
(modifying so as not to vacate Part 85 of EPA's final rule). EPA has 
relied on this interpretation in approving SIP revisions for state 
programs. See 62 FR 10690 (March 10, 1997) (approval of 3.1% oxygen 
content requirement for Denver, CO); 62 FR 49442 (September 22, 1997) 
(approval of 3.5% oxygen content as a contingency measure for Spokane, 
WA).
2. Preemption under the Clean Air Act
    WSPA has raised three separate arguments claiming that state 
programs under section 211(m) requiring gasoline blending at levels 
greater than 2.7% are preempted under the Act, except where required 
under section 211(m)(7). The first argument is that section 
211(c)(4)(A) prohibits such programs absent a showing of necessity 
under section 211(c)(4)(C). The second argument is that the state 
program is in conflict with the Clean Air Act and is therefore 
preempted. Finally, it has been argued that the state program is 
preempted because Congress through the Clean Air Act has occupied the 
field of gasoline oxygen content controls.
    a. Preemption under section 211(c)(4). Section 211(c)(4) of the Act 
is a provision of general applicability that expressly prohibits state 
fuel controls under specified circumstances. Section 211(c)(1) of the 
Act authorizes EPA to prescribe a control or prohibition on a fuel or 
fuel additive upon a finding that emissions products from such fuel or 
fuel additive may endanger public health or welfare, or impair emission 
control devices or systems.
    Section 211(c)(4)(A) prohibits states from prescribing or 
attempting to enforce a control or prohibition respecting any 
characteristic or component of a fuel or fuel additive if EPA has 
prescribed a control or prohibition applicable to the same 
characteristic or component under section 211(c)(1).7 This 
prohibition does not apply if the state control is identical to 
EPA's.8 Section 211(c)(4)(C) provides that a state may 
prescribe and enforce such a nonidentical fuel control or prohibition 
if EPA approves the provision in a state implementation plan (SIP). EPA 
may approve the state control or prohibition in a SIP only if it is 
necessary to achieve the NAAQS that the plan implements.
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    \7\ State regulation is also prohibited if EPA publishes a 
finding in the Federal Register that no control or prohibition of 
the characteristic or component is necessary.
    \8\ The prohibition also does not apply to California. Section 
211(c)(4)(B).
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    For the purpose of determining whether a state gasoline requirement 
is preempted under section 211(c)(4)(A), EPA believes it is appropriate 
to look at the federal gasoline requirements applicable in the area 
where the state requirements would apply. For further discussion see 
the May 26, 1998 letter from Margo T. Oge, Director, US EPA Office of 
Mobile Sources in the docket for this action. (See docket file: NV-OXY-
98-VI.) Clark County is subject to the conventional gasoline 
requirements, not the RFG requirements. 40 CFR 80.70; 40 CFR 
80.101(b)(3). Thus, any preemption under section 211(c)(4)(A) of Clark 
County's oxygen content controls would have to be based on federal 
oxygen content requirements found in the conventional gasoline 
regulations. The only conventional gasoline provision adopted under 
section 211(c)(1) that directly references oxygen content is the use of 
oxygen content as an input into the Complex Model, which is used to 
measure emissions performance for the exhaust toxics and NOX 
performance standards. As discussed below, however, EPA need not 
address the issue of whether the conventional gasoline provisions 
arguably preempt state control of oxygen in conventional gasoline areas 
because EPA believes that section 211(m) authorizes the Clark County 
requirement and overrides any potential preemption under section 
211(c)(4).

[[Page 29577]]

    Even assuming a state control on oxygen content would otherwise be 
preempted under section 211(c)(4)(A), in the absence of section 211(m), 
a threshold issue is whether the CAA requires the state to satisfy both 
the necessity requirement of section 211(c)(4)(C) as well as the 
requirements of section 211(m) for the state oxygenated gasoline 
program to be approved into a SIP.9 WSPA asserts, ``[I]f 
Congress intended to exempt CAA Sec. 211(m) from the preemption 
provisions of Sec. 211(c)(4)(A) it would certainly have done so 
expressly within Sec. 211(m).'' EPA disagrees. EPA believes section 
211(m) itself is an express statement on the ability of states to 
control oxygen content. It seems more logical to conclude that, given 
Congress' intent to provide state flexibility and ensure attainment of 
the CO NAAQS, if Congress has intended states also to satisfy the 
conditions of 211(c)(4), it would have expressly referenced that 
section.
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    \9\ This issue only arises where a state control would be 
preempted under section 211(c)(4)(A) (without reference to the 
requirements of section 211(m)). If the state control would not be 
preempted under section 211(c)(4)(A), then the criteria for approval 
of a SIP in section 211(c)(4)(C) are not applicable. The SIP 
revision would have to be consistent with section 211(m) but not 
section 211(c)(4)(C).
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    EPA believes the most reasonable interpretation is that those 
elements of a state oxygenated gasoline program within the range of 
programs specified by section 211(m) are not subject to the preemption 
provisions of section 211(c)(4). However, those elements of a state 
oxygenated gasoline program beyond the range of programs specified by 
section 211(m) would be subject to section 211(c)(4)(A) and, if 
preempted, would be required to show necessity under section 
211(c)(4)(C).10
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    \10\ EPA discussed the relationship between 211(m) and 211(c)(4) 
in approving a CO SIP revision for New Jersey. See 61 FR 5299 
(February 12, 1996).
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    The interaction of section 211(c)(4) and section 211(m) is not 
addressed in the text of these provisions, and it is not discussed in 
the legislative history. The structure of section 211, however, 
indicates that section 211(m) is the best indication of Congressional 
intent concerning the criteria for SIP approval of state programs in 
the designated CO nonattainment areas. While section 211(c)(4) 
addresses state fuel control programs in general, Congress specifically 
addressed state oxygenated gasoline programs in section 211(m). 
Congress required that certain states adopt these programs, and 
Congress specified several elements that the programs must contain. Yet 
Congress did not indicate that the section 211(m) requirements for a 
state oxygenated gasoline program may be subject to preemption under 
section 211(c)(4) and, if preempted, could not be approved absent a 
showing of necessity under section 211(c)(4)(C). It is reasonable to 
interpret section 211 such that the requirement of a necessity showing 
under section 211(c)(4)(C) does not apply to those elements of a state 
program that are specified in section 211(m) because the more specific 
provisions of section 211(m) take precedence over the more general 
provisions of section 211(c)(4) for those elements. Congress required 
states to adopt those elements of a program and submit them as a SIP 
revision, and Congress expected that EPA would be able to approve such 
a SIP revision without a further showing of necessity under section 
211(c)(4)(C).
    Consider, for example, a state oxygenated gasoline program that 
extends beyond the boundaries of the CMSA or MSA. Section 211(m) 
contains a specific requirement regarding geographic scope--the program 
must include the entire CMSA or MSA. Requiring oxygenated gasoline 
within the CMSA/MSA is clearly within the range of program elements 
specified under section 211(m), and thus such a state requirement would 
not be subject to the preemption and necessity demonstration provisions 
of section 211(c)(4). If section 211(m) and 211(c)(4) were not 
interpreted in this manner, a state program might satisfy this 
requirement of section 211(m), but if oxygen content requirements were 
preempted under section 211(c)(4)(A), the state program might still not 
be approvable into the SIP.11 This would be contrary to the 
clear purpose of section 211(m) that certain states would have approved 
into their SIPs and implement the oxygenated gasoline requirements 
specified in section 211(m).
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    \11\ For example, preempted state fuel controls may not be 
approved for a waiver unless they are necessary for achieving a 
NAAQS. As a result, waivers for fuel measures can only be justified 
for areas where emission reductions are necessary for a NAAQS. The 
211(m) program, however, requires adoption of the oxygen control 
throughout the MSA or CMSA, irrespective of need. It is conceivable 
that the area needing CO reductions to achieve the NAAQS is smaller 
than the MSA or CMSA. Thus a state might find itself required by 
211(m) to adopt a control for the entire MSA or CMSA, and yet unable 
to justify a waiver under 211(c)(4) for an oxygen control applicable 
to the entire area.
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    That portion of the state program requiring oxygenated gasoline 
beyond the CMSA or MSA, however, involves a state gasoline control 
beyond that which Congress required or expected in order to comply with 
section 211(m). Hence, such a provision should be subject to the 
requirements of section 211(c)(4)(C) if the state program would 
otherwise be preempted under section 211(c)(4)(A). The structure of 
section 211 does not indicate that oxygenated gasoline requirements 
beyond the geographic area specified in section 211(m) should be 
approvable without restriction under section 211(c)(4)(C).
    The elements of geographic scope and control period are clearly 
specified in section 211(m) as a single area or time 
period.12 However, the oxygen content requirement is not 
limited to a single specified value. Congress did not specify, for 
example, that the state program must require exactly 2.7% oxygen 
content, nor, as discussed above, did Congress prohibit states from 
establishing a larger weight percent requirement. Instead Congress 
specified that the SIP revisions must contain provisions requiring that 
gasoline be blended to contain not less than 2.7% oxygen by weight.
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    \12\ Section 211(m)(2) provides that the requirements shall 
apply during the portion of the year in which the area is prone to 
high ambient concentrations of CO, which shall be as determined by 
the Administrator. The Administrator may not select a time period of 
less than four months, except under limited specified circumstances. 
For any given area, the Administrator would determine a specific 
time period in which the area is prone to high ambient 
concentrations of CO.
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    Arguably, the oxygen content requirements of section 211(m) could 
be read in the same manner as the geographic scope and control period 
provisions. Under this approach, a state requirement that is set at 
2.7% would not be subject to the preemption provisions of section 
211(c)(4), including the necessity showing under section 211(c)(4)(C). 
However, for any requirement above 2.7%, the state would have to show 
that the requirement is necessary, if the state program would otherwise 
be preempted under section 211(c)(4)(A).13
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    \13\ Section 211(c)(4)(C) would not apply under this 
interpretation where a state program was required to require at 
least 3.1% oxygen content under section 211(m).
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    An alternative interpretation is that the oxygen content 
requirements of section 211(m)(2) call for any one of a range of 
minimum concentrations, and not one specific level. Any content 
requirement that results in gasoline containing not less 2.7% oxygen is 
within the scope of programs authorized and envisioned by Congress 
under section 211(m). Under this interpretation, a state requirement of 
greater than 2.7% oxygen content would not be subject to preemption 
under section 211(c)(4) and the state would

[[Page 29578]]

not need to show necessity under section 211(c)(4)(C).
    EPA believes that the latter interpretation better implements 
Congressional intent. The text of section 211(m)(2) is reasonably read 
to envision a range of oxygen contents, whereas the geographic scope 
and control period are specifically identified as a single area or time 
period. The legislative history indicates that Congress intended to 
provide flexibility to states regarding oxygen content, and did not 
want to restrain that flexibility by setting a federal mandate for a 
specific oxygen level that states must require. While Congress 
deliberately rejected a federal mandate that would reduce the market 
opportunities for various oxygenates, it did this with the goal of 
preserving state flexibility, not limiting it, and the latter 
interpretation is consistent with this goal. Moreover, the overall 
structure established by the Act supports this interpretation, as the 
Act assigns states the primary responsibility to adopt programs to 
achieve clean air goals and preserves flexibility for the states in 
developing the programs needed to satisfy this role. This 
interpretation is also consistent with the general principle of 
avoiding a statutory interpretation that preempts state action unless 
Congressional intent to do so is clear. See Medtronic, Inc. v. Lohr, 
518 U.S. 470, 485 (1996); Cipollone v. Liggett Group, Inc., 505 U.S. 
504, 518 (1992); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 
(1947). Thus, EPA believes that a state is not preempted under the 
provisions of section 211(c)(4) from adopting a weight percent oxygen 
requirement greater than 2.7% under a section 211(m) state program, 
within the geographic scope and control period specified in section 
211(m), and that EPA may approve a SIP revision to implement such a 
section 211(m) program without a showing of necessity under section 
211(c)(4)(C).
    b. Conflict preemption. WSPA commented that Clark County's 3.5% 
oxygen rule is preempted under the doctrine of conflict preemption 
because it hinders the accomplishment of a federal objective--namely 
EPA's ``charge'' under the waiver provisions of section 211(m)(3) to 
``ensur(e) that the areas with the greatest need for oxygenated 
gasoline receive priority in obtaining such gasoline.'' WSPA has not 
documented any problem with the supply or availability of compliant 
gasoline or oxygenates. In fact, refiners have been providing gasoline 
containing a minimum 3.5% oxygen content for at least two winter 
seasons, and there are no indications of a lack of supply of oxygenates 
in other areas subject to section 211(m). Thus, there do not appear to 
be concerns under 211(m)(3). Likewise, WSPA has not supported its 
conflict preemption assertion.
    A federal statute implicitly overrides a state law when the state 
law is in actual conflict with the federal law. This occurs when it is 
impossible for a private party to comply with both the state and 
federal requirements, or where the state law stands as an obstacle to 
the accomplishment and execution of the full purposes and objectives of 
Congress. Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995) 
(quoting English v. General Electric Co., 496 U.S. 72, 78-79 (1990) and 
Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). Contrary to WSPA's 
comments, EPA has not seen any evidence indicating that the Clark 
County provisions for oxygenated gasoline would lead to either of these 
results. First, there is no impossibility here; it is practically and 
legally possible to blend and supply gasoline that meets the federal 
conventional gasoline requirements and that has an oxygen content of 
3.5%. Second, EPA does not believe that the 3.5% oxygen content 
requirement would be an obstacle to the accomplishment and execution of 
Congress' purposes. Here, a primary objective of Congress is that 
gasoline meet all of the applicable requirements specified in section 
211, including the oxygenated gasoline provisions of section 211(m), 
the summertime RVP requirements of section 211(h), and the conventional 
gasoline requirements of section 211(k)(8). A state program requiring 
greater than 2.7% oxygen content is not an obstacle to accomplishing 
this Congressional objective; rather, it is consistent with the 
requirements of section 211(m) and the goals of Congress embodied in 
this provision. By providing that states must set an oxygen content at 
least as stringent as 2.7%, section 211(m) contemplates that states may 
require higher oxygen contents. In addition, such higher oxygen content 
requirements do not conflict with the federal summertime RVP or 
conventional gasoline requirements applicable in Clark 
County.14 There is no evidence that the Clark County 
requirement would conflict with or interfere with the specifications 
for annual oxygen content limits in the conventional gasoline program, 
or interfere with refiners' or importers' ability to produce complying 
conventional gasoline.
---------------------------------------------------------------------------

    \14\ Issues concerning conflict with the requirements or goals 
of the federal reformulated gasoline program need not be addressed 
to evaluate the Clark County program.
---------------------------------------------------------------------------

    c. Field preemption. WSPA further commented that Clark County's 
3.5% oxygen requirement is preempted under the doctrine of field 
preemption. WSPA, however, does not elaborate on this claim.
    A state program is preempted under field preemption where Congress 
has implicitly indicated an intent to occupy a given field to the 
exclusion of state law. ``Such a purpose properly may be inferred where 
the pervasiveness of the federal regulation precludes supplementation 
by the States, where the federal interest in the field is sufficiently 
dominant, or where the object sought to be obtained by federal law and 
the character of obligations imposed by it * * * reveal the same 
purpose.'' Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300 (1987) 
(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947).
    Here, neither section 211(m) nor section 211 as a whole establishes 
a comprehensive federal presence. Instead, the fuels programs under 
section 211 provide a number of federal requirements but also 
explicitly preserve a role for the states in regulating fuels. Section 
211(c)(4) explicitly preempts state action, but only under certain 
circumstances, and provides an exemption from preemption under section 
211(c)(4)(C). Section 211(m) requires states, not the federal 
government, to adopt oxygenated gasoline programs. As discussed above, 
state programs requiring greater than 2.7% oxygen content are within 
the range of programs authorized under section 211(m), and Congress did 
not intend to prohibit them. Thus, federal regulation here is not so 
pervasive as to preclude supplementation by states, nor is the federal 
interest in the field sufficiently dominant to preempt state action.
    State programs under section 211(m) requiring greater than 2.7% 
oxygen content are therefore not preempted based on either conflict or 
field preemption.
    d. Preemption under 211(f). WSPA also appears to argue that EPA's 
authority to grant waivers from the substantially similar prohibition 
of section 211(f)(1), and its authority to control or ban fuel 
additives under section 211(c)(1), mean that only EPA can act to 
allegedly ban the use of a fuel additive such as MTBE, not states. In 
addition, WSPA claims that EPA must satisfy the requirements of section 
211(c)(1) before it could approve Nevada's SIP provision.

[[Page 29579]]

    EPA has explained above that the Clark County provision is neither 
expressly prohibited under section 211(c)(4), nor implicitly prohibited 
under conflict or field preemption. EPA's authority under sections 
211(c)(1) and (f)(4) does not provide an additional basis for 
preemption of state fuel controls. Congress indicated expressly in 
section 211(c)(4) what state fuel controls are prohibited, and there is 
no reason to believe EPA's authority to act under section 211(c)(1) and 
(f)(4) indicates a Congressional intent to preempt state fuel controls 
not otherwise preempted under section 211(c)(4). In addition, EPA's 
authority to act on a state SIP submission is not based on or limited 
by section 211(c)(1). Nothing in section 211(c) or (m) or section 110 
indicates that section 211(c)(1) applies to EPA's action on a state SIP 
submission involving a state oxygenated gasoline program. Such an 
interpretation would run counter to the central structure of the Act, 
by limiting a state's SIP measures to only those provisions that EPA 
could or would be able to adopt under it's own federal authority.

B. Regulatory Negotiation Agreement

    WSPA commented that EPA's approval of Clark County's SIP revision 
``violates the spirit, if not the letter * * * '' of an Agreement in 
Principle entered into in August 1991 between EPA, environmental 
groups, state and local agencies, and industry. WSPA claims the parties 
agreed that during the control periods for CO nonattainment areas the 
required oxygenate level in gasoline would be set at 2.7 percent by 
weight. WSPA also claims that EPA agreed on how to limit components in 
conventional gasoline areas and to invoke 211(c) to preempt state 
regulation of fuel. The 1991 Agreement in Principle was an agreement on 
the underlying principles to be proposed for implementation of the 
then-new provisions of sections 211(k) and 211(m). Nothing in the 
Agreement suggests that states subject to 211(m) are prohibited from 
requiring oxygen content levels greater than the statutory minimum. The 
Agreement outlines the minimum oxygen content levels to be proposed for 
reformulated gasoline (RFG) and describes the ranges of oxygen content 
that will be deemed to comply with NOX standards in RFG 
areas. These provisions both applied to the ``simple model'' for 
certifying RFG. These provisions are not informative for this 
rulemaking because: (1) Las Vegas is not an RFG area; (2) nothing in 
the provisions states that higher oxygen content levels are prohibited; 
and, (3) the simple model described in these provisions has been 
replaced by the ``complex model'' throughout the country.15 
See 40 CFR 80.42(c)(2).
---------------------------------------------------------------------------

    \15\ The complex model includes ranges of fuel components that 
the model can accept for predicting the emissions that will result 
from use of a particular fuel. The range for oxygen content that the 
model can accept is 0.0 to 4.0 percent by weight. See 40 CFR 
80.45(f)(1). Clark County's 3.5% requirement fits within the range 
limits of the model.
---------------------------------------------------------------------------

    The Agreement also described the oxygenated gasoline guidelines 
that EPA would recommend. This section of the Agreement highlighted 
state flexibility by stating, ``While recognizing state discretion, EPA 
guidelines shall recommend a credit program. * * *'' The elements of 
the recommended credit program do not suggest that states be limited to 
the statutory minimum requirements of 211(m). Likewise nothing in the 
Agreement suggests that 211(c) preempts state compliance with 211(m) or 
that 211(c) would be used in any way beyond that provided by the 
statute.

C. Commerce Clause of the U.S. Constitution

    Finally, WSPA commented that Clark County's 3.5% gasoline oxygen 
content requirement is barred by the Commerce Clause. WSPA argues that 
the Clark County Board of Health's purpose for enacting the requirement 
is unclear and that the Board may have enacted the requirement with the 
ulterior motive of ``protect(ing) economic interests of ethanol 
providers within the state. * * * '' The record clearly indicates that 
the Board's purpose in adopting the requirement is to address Clark 
County's carbon monoxide air quality problem and the attendant health 
risks which it poses to the local population. WSPA has not submitted 
any documentation to the contrary and there is no basis for EPA to 
believe that the Board's motives were other than those stated in the 
record. WSPA has also failed to submit documentation to support its 
assertion that the 3.5% oxygen content requirement imposes an 
unreasonable burden on interstate commerce. Fuel suppliers in Clark 
County have been complying with the 3.5% oxygen requirement for a 
number of years--first voluntarily and, since October 1997, pursuant to 
the Clark County rule.

IV. EPA Action

    EPA is finalizing action to approve the above revisions for 
inclusion into the Nevada SIP. EPA is approving the submittal under 
section 110(k)(3) as meeting the requirements of section 110(a) and 
Part D of the CAA. This approval action will incorporate Clark County's 
revisions into the federally approved SIP. The intended effect of 
approving these revisions is to regulate emissions of CO in accordance 
with the requirements of the CAA.

V. Administrative Requirements

A. Executive Order 12866

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

B. Executive Order 12875

    Under Executive Order 12875, Enhancing the Intergovernmental 
Partnership, 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, or 
EPA consults with those governments. If EPA complies by consulting, 
Executive Order 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 any written 
communications from the governments, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 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

    Protection of Children from Environmental Health Risks and Safety 
Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is 
determined to be ``economically significant'' as defined under E.O. 
12866, and (2) concerns an environmental health or safety risk that EPA 
has reason to believe may have a disproportionate effect on children. 
If the regulatory action meets both criteria, the Agency must evaluate 
the environmental health or safety effects of the planned rule on 
children, and explain why the planned regulation is

[[Page 29580]]

preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency. This rule is not subject to E.O. 
13045 because it does not involve decisions intended to mitigate 
environmental health or safety risks.

D. Executive Order 13084

    Under Executive Order 13084, Consultation and Coordination with 
Indian Tribal Governments, EPA may not issue a regulation that is not 
required by statute, that significantly 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, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 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 officials 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. 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 small governmental 
jurisdictions. This final 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 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 approval action promulgated 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.

G. Submission to Congress and the Comptroller General

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

H. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by August 2, 1999. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Reporting and 
recordkeeping requirements.

    Dated: May 19, 1999.
Laura Yoshii,
Acting Regional Administrator, Region IX.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart DD--Nevada

    2. Section 52.1470 is amended by adding paragraph (c)(38)to read as 
follows:


Sec. 52.1470  Identification of plan.

* * * * *
    (c) * * *
    (38) On August 7, 1998, regulations for the following Health 
District were submitted by the Governor's designee.
    (i) Incorporation by reference.
    (A) Clark County Health District.
    (1) Section 53 adopted on September 25, 1997.

[FR Doc. 99-13805 Filed 6-1-99; 8:45 am]
BILLING CODE 6560-50-P