[Federal Register Volume 67, Number 148 (Thursday, August 1, 2002)]
[Proposed Rules]
[Pages 49897-49900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19438]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX-140-1-7540; FRL-7254-5]


Proposed Approval, or in the Alternative, Disapproval of State 
Implementation Plan; Texas; Dallas/Fort Worth Ozone Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA proposes to take one of two alternative actions regarding 
the Dallas/Fort Worth (DFW) State Implementation Plan (SIP). First, the 
EPA proposes to approve the Texas Emission Reduction Program (TERP) 
submission if the State provides a funding mechanism that will ensure 
funding at or above the level contemplated in the State's SIP 
submission. Second, in the alterative, EPA proposes to disapprove the 
SIP submission of the TERP because the state does not have adequate 
funding as required by the Clean Air Act. Because the TERP is necessary 
to achieve emission reductions relied on in the attainment 
demonstration for the DFW area, EPA also proposes to disapprove the DFW 
attainment demonstration SIP if funding at or above the level 
contemplated in the attainment demonstration is not reinstated or other 
equivalent emission reduction measures are enacted. If EPA makes final 
these proposed disapprovals, Texas will have to correct the identified 
deficiencies within 18 months or the first set of sanctions will begin 
pursuant to sections 179(a)and(b)of the Clean Air Act (Act)and 
conformity will lapse.

DATES: Written comments must be received on or before September 3, 
2002.

ADDRESSES: Written comments should be addressed to Mr. Thomas H. Diggs, 
Chief, Air Planning Section (6PD-L), at the EPA Region 6 Office listed 
below. Copies of documents relevant to this action are available for 
public inspection during normal business hours at the following 
locations.
    Anyone wanting to examine these documents should make an 
appointment with the appropriate office at least two working days in 
advance.
    Environmental Protection Agency, Region 6, Air Planning Section 
(6PD-L), 1445 Ross Avenue, Dallas, Texas 75202-2733. Texas Natural 
Resource Conservation Commission, Office of Air Quality, 12124 Park 35 
Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Herbert R. Sherrow, Jr., Air Planning 
Section (6PD-L), EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-
2733, telephone (214)665-7237. e-mail: [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' and 
``our'' refers to EPA.

What Is the Background for This Action?

    The DFW attainment demonstration SIP was submitted on April 25, 
2000.
    On April 30, 2000, the Governor of Texas submitted to us two SIP 
rule revisions. The rules established non-road construction equipment 
operating limitations and accelerated purchase and operation of non-
road compression-ignition fleet equipment in the DFW area.
    The accelerated purchase rule required those in the DFW ozone 
nonattainment area who own or operate non-road equipment powered by 
compression-ignition engines 50 hp and up to meet certain requirements 
regarding Tier 2 and Tier 3 emission standards. For more information on 
the Tier 2 and Tier 3 emission standards, see 40 CFR 89.112, ``Oxides 
of nitrogen, carbon monoxide, hydrocarbon, and particulate matter 
exhaust emission standards.''
    The rule phased-in Tier 2,3 engines on a schedule earlier than the 
federal schedule, depending on horsepower. The rule would have the 
effect of accelerating the turnover rate of compression-ignition 
engine, non-road equipment. Generally, the rule affected diesel 
equipment 50 hp and larger used in construction, general industrial, 
lawn and garden, utility, and material handling applications.
    The purpose of the construction ban rule was to establish a 
restriction on the use of construction equipment (non-road, heavy-duty 
diesel equipment rated at 50 hp and greater) as an air pollution 
control strategy until after 10 o'clock a.m. As a result, production of 
ozone precursors would be stalled until later in the day when optimum 
ozone formation conditions no longer existed, ultimately reducing the 
peak level of ozone. The restrictions were to apply from June 1 through 
October 31.
    The rule allowed operators to submit an alternate emissions 
reduction plan by

[[Page 49898]]

May 31, 2002. The alternate plan would allow operation during the 
restricted hours, provided the plan achieved reductions of 
NOX that would result in ozone benefits equivalent to the 
underlying regulation.
    The DFW attainment demonstration showed that emission reductions of 
16 tons per day from these two rules were necessary for the area to 
reach attainment. Thus, the DFW attainment demonstration relied on 
these two rules. Please refer to our proposed approval of the rules for 
more information (66 FR 16432, March 26, 2001).
    In May, 2001, the 77th Legislature of the State of Texas passed 
Senate Bill 5 (SB 5) entitled ``The Texas Emission Reduction Program'' 
(TERP). Section 18 of SB 5 required the Texas Natural Resource 
Conservation Commission to submit a SIP revision to us deleting the 
requirements of the two rules requiring a ban on construction 
activities during the morning hours and accelerated purchase of Tier 
2,3 diesel engines for the DFW ozone nonattainment area from the SIP no 
later than October 1, 2001. Repeal of the rules was adopted on August 
22, 2001, and submitted to us as a SIP revision on September 7, 2001. 
The rule repeals were submitted concurrently with the SIP revision as 
part of the implementation of SB 5. The rules were contained in Chapter 
114 relating to Control of Air Pollution from Motor Vehicles.
    The TERP legislation included a grant program designed to 
accelerate the early introduction and use of lower emitting diesel 
technologies in the nonattainment and near nonattainment areas of 
Texas; a grant program to fund improved energy efficiency in public 
buildings; purchase and lease incentives to encourage the introduction 
of clean light duty cars into the Texas fleet; and funding for research 
into new air pollution reducing technologies.
    The bill provided funding mechanisms for the program and the State 
anticipated that about $133 million in new fees would be collected to 
fund the emission controls contemplated. Unfortunately, the major 
funding source, a tax on out-of-state vehicle registrations was found 
to be in violation of the commerce clause of the Fourteenth Amendment 
of United States Constitution and Article I. Sec. 3 of the Texas 
Constitution. See H.M. Dodd Motor Co. Inc. and Autoplex Automotive, LP. 
v. Texas Department of Public Safety, et al., Cause No GNID2585(200th 
Judicial District Court, Travis County, February 21, 2002). Without 
sufficient funding the State will not be able to achieve all of the 
emission reductions projected for the TERP in the State Implementation 
Plan.

What Is the Effect of the Withdrawn Rules on the DFW Attainment 
Demonstration SIP?

    These rules supported the DFW Attainment Demonstration SIP. The 
emission reductions from the rules are necessary for the SIP to show 
attainment of the National Ambient Air Quality Standard. We cannot take 
final action to approve the attainment demonstration SIP since one of 
the measures relied upon for purposes of attainment is not adequately 
funded.

How Does SB 5 Replace the Withdrawn Rules?

    SB 5 contains a Diesel Emissions Reduction Incentive Program to 
achieve emission reductions. Under this program, grant funds are 
provided to offset the incremental costs of projects that reduce 
NOX emissions from heavy-duty diesel trucks and construction 
equipment in nonattainment areas. This program is expected to achieve 
16 tons per day of reductions for the DFW area, out of an expected 
range of 40-50 tons per day. These reductions will be an alternative, 
but equivalent, mechanism to replace the emission reductions that would 
have been achieved by the two withdrawn rules.

Why Are We Proposing Approval of the TERP and Disapproval as an 
Alternative?

    If the State secures funding at or above the level specified in the 
submitted SIP, we will approve the TERP submittal. If instead, the 
State submits alternative measures to achieve the emission reductions 
attributed to the TERP, we would take further rulemaking on the 
alternative measures before approving an attainment demonstration that 
relied on those measures.
    Section 110(a)(2)(E) of the Act requires a SIP to have adequate 
funding to be approvable. A State court determined that a significant 
portion of the funding mechanism for the TERP violates the 
Constitution, thus, the State cannot collect a significant portion of 
the money that was intended to fund the incentives. Thus, the full 
amount of reductions needed for the DFW area to attain the standard, in 
accordance with the submitted attainment demonstration SIP, will not be 
achieved unless, (1) The State develops additional sources of funding 
for the TERP or, (2) the State adopts replacement measures that achieve 
equivalent reductions. Thus, in the absence of adequate funding for the 
TERP or an alternate program, we would need to disapprove the TERP and 
the associated DFW attainment demonstration.

Why Are We Proposing Disapproval of the Attainment Demonstration 
SIP?

    If the State is unable to fund the TERP consistent with the level 
in the submitted SIP; or, if alternatively, to adopt and submit 
substitute measures to achieve any emission reductions that cannot be 
achieved due to a lack of funding, we will have to disapprove the 
attainment demonstration SIP. The TERP submission is an underlying 
portion of the attainment demonstration. Without implementation of the 
TERP or of alternative controls to reduce an equivalent amount of 
emissions, attainment cannot be achieved under the current attainment 
demonstration SIP.

What Are the Consequences of Disapproval of the TERP Submission and 
Disapproval of the Attainment Demonstration SIP?

    If the attainment demonstration SIP is disapproved, then sanctions 
under section 179 of the Clean Air Act will apply. Under the authority 
of section 179(a) of the Act and 40 CFR 52.31, if we disapprove a SIP 
element or a SIP, then the deficiency identified must be corrected 
within 18 months or sanctions will begin to apply. There are two types 
of sanctions: Highway Sanctions (section 179(b)(1)) and Offset 
Sanctions (section 179 (b) (2)).
    In accordance with our regulations implementing the sanction 
provisions of the Act, if the State has not corrected the deficiencies 
in the TERP program within 18 months of the effective date of the final 
disapproval, the 2 to 1 offset sanction of section 179(b) will apply in 
the DFW nonattainment area. The current offset ratio in the DFW area is 
1.2 to 1. This sanction requires a company that is constructing a new 
facility or modifying an existing facility over a certain size to 
reduce emissions in the area by two tons for every one ton the new/
modified facility will emit.
    If the State has still not corrected the deficiencies within six 
months after the offset sanction is imposed, then the highway sanction 
will apply in the nonattainment area. This sanction prohibits the U.S. 
Department of Transportation from approving or funding all but a few 
specific types of transportation projects.
    The order of sanctions; offsets sanctions first, then highway 
sanctions, is documented in our regulations at 40 CFR 52.31. If 
sanctions have been imposed, they will be lifted when we determine, 
after the opportunity for

[[Page 49899]]

public comment, that the deficiencies have been corrected. The 
imposition of sanctions may be stayed or deferred based on a proposed 
determination that the State will correct the implementation 
deficiencies (40 CFR 52.31(d)(4)).
    Also, under the authority of section 93.120 of the Conformity Rule 
(62 FR 43813, August 15, 1997), if we finalize the disapproval of the 
attainment demonstration SIP, a conformity freeze will be in place as 
of the effective date of the disapproval without a protective finding 
of the budget. This means that no transportation plan, Transportation 
Improvement Plan (TIP), or project not in the first three years of the 
currently conforming plan and TIP may be found to conform until another 
attainment demonstration SIP is submitted and the motor vehicle 
emissions budget is found adequate. In addition, if the highway funding 
sanction is implemented, the conformity status of the plan and TIP will 
lapse on the date of implementation. No project level approvals or 
conformity determinations can be made and no new transportation plan or 
TIP may be found to conform until another attainment demonstration SIP 
is submitted and the motor vehicle emissions budget is found adequate.

How Can Texas Correct This Deficiency?

    The State has an opportunity in the 2003 78th Legislative Session 
to develop funding mechanisms that would provide sufficient funds for 
the TERP measures included in the currently approved SIP, which again 
account for approximately 16 tons per day of emission reductions. 
Alternatively, the State can revise the State Implementation Plan by 
either adopting new measures to replace the TERP in its entirety, or by 
adopting new measures sufficient to account for any loss in emission 
reductions associated with that portion of the TERP that is unfunded. 
Finding additional measures for the DFW area will be difficult because 
of the stringency of the existing plan. Such measures could include 
implementing fuels measures, or implementing stricter transportation 
controls, such as ``no drive'' days.

Administrative Requirements

Executive Order 12866

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

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 
Executive Order 12866, and (2) concerns an environmental health or 
safety risk that EPA has reason to believe may have a disproportionate 
effect on children. If the regulatory action meets both criteria, the 
Agency must evaluate the environmental health or safety effects of the 
planned rule on children, and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it does 
not mitigate environmental health or safety risks.

Executive Order 13132

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental Partnership). Executive Order 13132 requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by State and local officials in the development of regulatory policies 
that have federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely ensures that a State rule properly implements a Federal 
standard, and does not alter the relationship or the distribution of 
power and responsibilities established in the Clean Air Act. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

Executive Order 13175

    This rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175, 
entitled ``Consultation and Coordination with Indian Tribal 
Governments'' (65 FR 67249, November 6, 2000). Thus, Executive Order 
13175 does not apply to this rule.

Executive Order 13211

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a 
significant regulatory action under Executive Order 12866.

Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions.
    This rule will not have a significant impact on a substantial 
number of small entities because SIP actions under section 110 and 
subchapter I, part D of the Clean Air Act do not create any new 
requirements but simply act on requirements that the State is already 
imposing. Therefore, because Federal SIP actions do 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

[[Page 49900]]

grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 
42 U.S.C. 7410(a)(2).

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 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the action proposed does not include a 
Federal mandate that may result in estimated costs of $100 million or 
more to either State, local, or tribal governments in the aggregate, or 
to the private sector. This Federal action proposes to take action on a 
State rule submitted to comply with a statutory requirement. It does 
not establish any Federal mandate with which the State must comply.
    For the same reasons, EPA has determined that this rule contains no 
regulatory requirements that might significantly affect small 
governments.

National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical. The EPA believes that VCS are inapplicable to this action. 
Today's action does not require the public to perform activities 
conducive to the use of VCS.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental relations, Motor vehicle pollution, Nitrogen oxides, 
Ozone, Reporting and recordkeeping requirements.

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

    Dated: July 25, 2002.
Gregg A. Cooke,
Regional Administrator, Region 6.
[FR Doc. 02-19438 Filed 7-31-02; 8:45 am]
BILLING CODE 6560-50-P