[Federal Register Volume 67, Number 148 (Thursday, August 1, 2002)]
[Proposed Rules]
[Pages 49895-49897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19439]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX-126-1-7477; FRL-7254-4]


Finding of Failure to Implement a State Implementation Plan; 
Texas, Houston/Galveston Nonattainment Area; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes to find that the approved severe area ozone 
State Implementation Plan for the Houston/Galveston area is not being 
implemented according to its terms. If EPA makes final this proposed 
non-implementation finding, 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).

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

ADDRESSES: Written comments on this action 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.
    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 Circle, Austin, Texas 78753.
    Anyone wanting to examine these documents should make an 
appointment with the appropriate office at least two working days in 
advance.

FOR FURTHER INFORMATION CONTACT: Guy R. Donaldson, Air Planning Section 
(6PD-L), 1445 Ross Avenue, Dallas, Texas 75202-2733. Telephone Number 
(214) 665-7242, E-mail Address: [email protected].

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

Table of Contents

I. Summary
    A. What portion of the approved State Implementation Plan are we 
finding Texas is not fully implementing?
    B. Why is it important that Texas fully implement this program?
    C. What are the consequences if we make final this proposed 
finding of failure to implement?
    D. How can Texas correct this deficiency?
II. Administrative Requirements
    A. Executive Order 12866
    B. Executive Order 13045
    C. Executive Order 13132
    D. Executive Order 13175
    E. Executive Order 13211
    F. Regulatory Flexibility
    G. Unfunded Mandates
    H. National Technology Transfer and Advancement Act

I. Summary

A. What Portion of the Approved State Implementation Plan Are we 
Finding Texas Is not Fully Implementing?

    We are proposing to find that Texas is not fully implementing the 
Texas Emission Reduction Program. Section 110(a)(2)(E) of the Act 
requires a SIP to have adequate funding. The TERP program was passed as 
part of Senate Bill 5 during the 77th Texas Legislative Session in 
2001. This measure was submitted to EPA as part of a SIP revision in a 
letter from the Governor of Texas dated October 4, 2001. We approved 
this revision to the SIP on November 14, 2001 (66 FR 57159) through 
parallel processing. This legislation included, (1) 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, (2) a grant program to fund improved energy efficiency in 
public buildings, (3) purchase and lease incentives to encourage the 
introduction of clean light duty cars into the Texas fleet and, (4) 
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. Section 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 TNRCC will not be able to achieve all of the 
emission reductions projected for the TERP in the State Implementation 
Plan.

B. Why Is it Important That Texas Fully Implement This Program?

    The TERP program is a vital portion of the State Implementation 
Plan. At the time the Legislature enacted SB 5, it mandated the removal 
of two control measures the State was relying on in its attainment 
plan: a ban on construction activities during the morning hours and a 
requirement that owners and operators of diesel non-road equipment of 
50 Horsepower or greater accelerate the purchase of engines meeting 
Tier 2 and 3 emission standards. For more information on Tier 2 and 
Tier 3 Standards, see 40 CFR 89.112. The state anticipated that 
approximately 19 tons per day of the TERP reductions would be needed to 
compensate for the loss of emission reductions from the two control 
measures. The EPA estimated that, with the previously anticipated 
funding level, the TERP program could achieve 27-36 tons per day of 
emission reductions in the HG area.
    It was expected that the remaining reductions in excess of 19 tons 
per day would contribute significantly to reducing the emission 
reduction shortfall in the HG SIP. The State has estimated that an 
additional 56 tons per day of emission reductions need to be adopted in 
the HG area to meet the National Ambient Air Quality Standard. The 
State has committed to adopt, by May 2004, rules to address this 
shortfall. Texas committed to submit adopted controls to meet 25% of 
the shortfall by December 2002 and the State anticipated that the 
remaining TERP reductions could be used to meet all or part of that 
commitment.
    The remaining TERP reductions provide, among other things, 
incentives for the owners and operators of heavy duty diesel equipment 
to upgrade their equipment with new engines or with retrofit devices to 
reduce emissions. Diesel engines have been targeted because of their 
relatively high NOX emissions and because their long 
operating life makes the widespread introduction of new cleaner engines 
into the fleet through normal turnover a lengthy process. With the 
current level of funding, Texas will not be able to accelerate the 
introduction of a sufficient number of cleaner diesel engines into the 
fleet to achieve the emission reductions necessary to demonstrate 
attainment by November 15, 2007.

C. What Are the Consequences if We Make Final This Proposed Finding of 
Failure To Implement?

    Under the authority of section 179(a)(4) of the Act, if we make a 
finding that a provision of an approved plan is not being implemented, 
then the deficiency identified in the finding must be corrected within 
18 months or sanctions will begin to apply. There are two types of 
sanctions: Highway

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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 a final 
finding, the 2 to 1 offset sanction in CAA section 179(b) will apply in 
the HG area (40 CFR 52.31(d)(1)). This sanction requires a company that 
is constructing a new or modifying an existing facility over a certain 
size to reduce emissions in the area by two tons for every one ton of 
VOC or NOX the new/modified facility will emit. The current 
offset ratio in the HG area is 1.3 to 1.
    If Texas has not corrected the deficiencies within six months after 
the offset sanction is imposed, then the highway sanction will apply in 
the HG nonattainment area (40 CFR 52.31(d)(1)). 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, offset sanctions first then highway 
sanctions, is set in EPA's regulations at 40 CFR 52.31. If sanctions 
have been imposed, they will be lifted when we determine, after the 
opportunity for public comment, that the implementation 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)).

D. 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 measure included in the currently approved SIP, which again 
accounts for approximately 19 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. 
Because the HG SIP already includes stringent controls on virtually 
every source category, finding additional measures will be very 
difficult. New measures could include implementing fuels measures, 
implementing stricter transportation controls, such as ``no drive'' 
days, and /or reducing the industrial cap in the HG area.

II. Administrative Requirements

A. Executive Order 12866

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

B. 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 involve decisions intended to mitigate environmental health or 
safety risks.

C. 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 
does not establish any new requirement with which the State must comply 
nor does it alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Rather, consistent 
with the Clean Air Act requirements, this action proposes that the 
State is not complying with provisions already approved in the SIP. 
Thus, the requirements of section 6 of the Executive Order do not apply 
to this rule.

D. Executive Order 13175

    This proposed 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.

E. 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.

F. 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 findings of failure to implement 
under section 110 and subchapter I, part D of the Clean Air Act do not 
create any new requirements but simply find failure to implement 
requirements that already apply under the approved SIP. Therefore, 
because

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the Federal SIP finding of failure to implement 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.

G. Unfunded Mandates

    Under sections 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 finding of failure to implement 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 find failure to implement 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.

H. 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, 
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. 02-19439 Filed 7-31-02; 8:45 am]
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