[Federal Register Volume 69, Number 107 (Thursday, June 3, 2004)]
[Rules and Regulations]
[Pages 31498-31505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12553]



[[Page 31497]]

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Part III





Environmental Protection Agency





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40 CFR Parts 52, 70, and 71



Rulemaking on Section 126 Petitions From New York and Connecticut 
Regarding Sources in Michigan; Revision of Definition of Applicable 
Requirement for Title V Operating Permit Programs; Final Rule

  Federal Register / Vol. 69, No. 107 / Thursday, June 3, 2004 / Rules 
and Regulations  

[[Page 31498]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 70, and 71

[FRL-7669-6]
RIN 2060-AJ36


Rulemaking on Section 126 Petitions From New York and Connecticut 
Regarding Sources in Michigan; Revision of Definition of Applicable 
Requirement for Title V Operating Permit Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In today's action, EPA is revising one element of a final rule 
published on January 18, 2000, regarding petitions filed by four 
Northeastern States under section 126 of the Clean Air Act (CAA). The 
petitions seek to mitigate interstate transport of nitrogen oxides 
(NOX), one of the main precursors of ground-level ozone 
pollution. The final rule partially approved the four petitions under 
the 1-hour ozone national ambient air quality standard, thereby 
requiring certain types of sources located in 12 States and the 
District of Columbia to reduce their NOX emissions.
    Subsequently, the U.S. Court of Appeals for the District of 
Columbia Circuit issued a decision on a related EPA regulatory action, 
the NOX State implementation plan call (NOX SIP 
Call), that has relevance to the Section 126 Rule. Although the court 
decision did not directly address the State of Michigan, the reasoning 
of the court regarding the significance of NOX emissions 
from sources in two other States called into question the inclusion of 
a portion of Michigan in the area covered by the NOX SIP 
Call. In response, the EPA is removing that portion of Michigan, known 
as the ``coarse grid'' portion, from the NOX SIP Call. The 
Section 126 Rule is based on many of the same analyses and information 
used for the NOX SIP Call and covers part of Michigan. Thus, 
in light of EPA's response to the court ruling on the NOX 
SIP Call, EPA is also withdrawing its section 126 findings and denying 
the petitions under the 1-hour ozone standard with respect to sources 
located in the coarse grid portion of Michigan. The EPA has not 
identified any existing section 126 sources located in the affected 
portion of the coarse grid.
    The EPA is also revising the definition of the ``applicable 
requirement'' for title V operating permit programs by providing 
expressly that any standard or other requirement under section 126 is 
an applicable requirement and must be included in operating permits 
issued under title V of the CAA.

DATES: This final rule is effective July 6, 2004.

ADDRESSES: Documents relevant to this action are available for public 
inspection at the EPA Docket Center, Attention: Docket OAR-2001-2009, 
located at 1301 Constitution Avenue, NW., Room B102, Washington, DC, 
between 8:30 a.m. and 4:30 p.m., Monday through Friday, excluding legal 
holidays. The telephone number is (202) 566-1742. A reasonable fee may 
be charged for copying.

FOR FURTHER INFORMATION CONTACT: Questions concerning today's action 
should be addressed to Carla Oldham, EPA Office of Air Quality Planning 
and Standards, Air Quality Strategies and Standards Division, C539-02, 
Research Triangle Park, NC, 27711, telephone (919) 541-3347, e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

How Can I Get Copies of This Document and Other Related Information?

    Docket. The EPA has established an official public docket for this 
action under Docket ID No. OAR-2001-2009. The official public docket 
consists of the documents specifically referenced in this action, any 
public comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. The official public docket 
is the collection of materials that is available for public viewing at 
the EPA Air Docket in the EPA Docket Center, (EPA/DC) EPA West, Room 
B102, 1301 Constitution Ave., NW., Washington, DC. The EPA Docket 
Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
EPA Air Docket is (202) 566-1742. A reasonable fee may be charged for 
copying documents.
    The EPA has issued a separate rule on NOX transport 
entitled, ``Finding of Significant Contribution and Rulemaking for 
Certain States in the Ozone Transport Assessment Group Region for 
Purposes of Reducing Regional Transport of Ozone,'' hereafter referred 
to as the NOX SIP Call. The rulemaking docket for that rule 
(Docket ID No. OAR-2001-0008) contains information and analyses that 
EPA has relied upon in the section 126 rulemaking, and hence documents 
in that docket are part of the rulemaking record for this rule.
    Electronic Access. An electronic version of the public docket is 
available through EPA's electronic public docket and comment system, 
EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket/ to 
view public comments, access the index listing of the contents of the 
official public docket, and to access those documents in the public 
docket that are available electronically. Although not all docket 
materials may be available electronically, you may still access any of 
the publicly available docket materials through the docket facility 
identified above. Once in the system, select ``search,'' then key in 
the appropriate docket identification number.
    You may access this Federal Register document electronically 
through the EPA Internet under the ``Federal Register'' listings at 
http://www.epa.gov/fedrgstr/. In addition, the Federal Register 
rulemaking actions and certain associated documents are located at 
http://www.epa.gov/ttn/naaqs/ozone/rto/126/index.html.

Outline

I. Background
    A. What Action Did EPA Take in the January 18, 2000 Section 126 
Rule?
    B. What Was the Geographic Scope of the 1-Hour Findings for 
Michigan Sources?
    C. What Was the March 3, 2000 Court Decision on the 
NOX SIP Call?
    1. What is the Relevance of the NOX SIP Call Court 
Decision to the Section 126 Rule?
    2. What is the NOX SIP Call Court Decision Regarding 
Coarse Grid Sources?
    3. What is EPA's Response to the NOX SIP Call Court 
Decision Regarding Coarse Grid Sources?
II. Final Rule Regarding Michigan Sources
    A. What is Today's Rule Regarding Michigan Coarse Grid Sources 
Under the 1-Hour Standard?
    B. Does Today's Rule Affect the Section 126 Requirements for 
Michigan Fine Grid Sources or Sources Located in Other States?
III. What is Today's Revision to the Definition of ``Applicable 
Requirement'' for Title V Operating Permit Programs?
IV. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with Indian 
Tribal Governments

[[Page 31499]]

G. Executive Order 13045: Protection of Children from Environmental 
Health and Safety Risks
H. Executive Order 13211: Actions that Significantly Affect Energy 
Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Congressional Review Act
K. Judicial Review

I. Background

A. What Action Did EPA Take in the January 18, 2000 Section 126 Rule?

    In a final rule published on January 18, 2000 (65 FR 2674) (January 
2000 Rule), EPA took action on petitions filed by four Northeastern 
States under section 126 of the CAA. Each petition requested that EPA 
make a finding that certain stationary sources located in other 
specified States are emitting NOX in amounts that 
significantly contribute to ozone nonattainment and maintenance 
problems in the petitioning State. The petitions targeted electric 
utilities, industrial boilers and turbines, and certain other 
stationary sources of NOX. The four States that submitted 
petitions are Connecticut, Massachusetts, New York, and Pennsylvania.
    In the January 2000 Rule, EPA found that sources in 12 upwind 
States and the District of Columbia were significantly contributing to 
ozone nonattainment problems in the petitioning States under the 1-hour 
ozone standard. The EPA promulgated the Federal NOX Budget 
Trading Program as the control remedy. Only a portion of Michigan was 
affected by the rule.
    To determine whether emissions from States named in the petitions 
were significantly contributing to 1-hour nonattainment problems in the 
petitioning States, EPA relied on the technical analyses from the final 
NOX SIP Call rulemaking (63 FR 57356; October 27, 1998). The 
technical analyses used to support the Section 126 Rule are discussed 
in detail in previous section 126 rulemaking actions (63 FR 56292; 
October 21, 1998 and 64 FR 28250; May 25, 1999) and in the final 
NOX SIP Call.
    Section 126 of the CAA authorizes a downwind State to petition EPA 
for a finding that any new (or modified) or existing major stationary 
source or group of stationary sources upwind of the State emits or 
would emit in violation of the prohibition of section 110(a)(2)(D)(i) 
because their emissions contribute significantly to nonattainment, or 
interfere with maintenance, of a national ambient air quality standard 
in the State. Sections 110(a)(2)(D)(i), 126(b)-(c). If EPA makes the 
requested finding, the sources must shut down within 3 months from the 
finding unless EPA directly regulates the sources by establishing 
emissions limitations and a compliance schedule, extending no later 
than 3 years from the date of the finding, to eliminate the prohibited 
interstate transport of pollutants as expeditiously as possible. See 
sections 110(a)(2)(D)(i) and 126(c).

B. What Was the Geographic Scope of the 1-Hour Findings for Michigan 
Sources?

    In the January 2000 Section 126 Rule, the 1-hour findings for 
sources in Michigan were linked to the petitions from Connecticut and 
New York. Both States defined the geographic scope of their petitions 
in terms of the Ozone Transport Assessment Group (OTAG) Subregions. The 
OTAG was a group of 37 States in the Eastern half of the United States 
that was active in the 1995-1997 timeframe. The OTAG assessed ozone 
transport affecting member States and submitted recommendations to EPA 
on control strategies to mitigate the ozone transport.\1\ These 
Subregions were delineated by OTAG for use in some of the early air 
quality modeling analyses to determine the spatial scale of transport. 
The Subregional divisions were not used for the purpose of evaluating 
various control strategies. (See 62 FR 60318; November 7, 1997.) Both 
the New York and Connecticut petitions targeted sources located in OTAG 
Subregion 2, among other areas. Part of Michigan is included in 
Subregion 2 (see Figure 1 below).
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    \1\ The OTAG recommendations are provided in appendix B of the 
November 7, 1997 NOX SIP Call propoosal (62 FR 60376).
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BILLING CODE 6560-50-P

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[GRAPHIC] [TIFF OMITTED] TR03JN04.017

BILLING CODE 6560-50-C

    As part of the January 2000 Rule, EPA made findings that large 
electric generating units (EGUs) and large industrial boilers and 
turbines (non-EGUs) located in the OTAG Subregion 2 portion of Michigan 
are significantly contributing to both Connecticut and New York under 
the 1-hour ozone standard. The Subregion 2 portion of Michigan covers 
the area south of 45 degrees latitude and east of 86 degrees longitude. 
The rest of Michigan was not covered by the section 126 findings 
because the New York and Connecticut petitions did not target any other 
areas.

C. What Was the March 3, 2000 Court Decision on the NOX SIP 
Call?

1. What Is the Relevance of the NOX SIP Call Court Decision 
to the Section 126 Rule?
    On March 3, 2000, the United States Court of Appeals for the 
District of Columbia Circuit Court issued its decision on the 
NOX SIP Call, largely upholding the rule. Michigan v. EPA, 
213 F.3d 663 (D.C. Cir., 2000).
    However, the Court ruled against EPA on several points, one of 
which is relevant to today's rulemaking. Specifically, the court 
vacated the inclusion of Georgia and Missouri in the NOX SIP 
Call in light of the OTAG's conclusions that emissions from coarse grid 
portions of States did not merit controls. The court remanded this 
issue concerning Georgia and Missouri to EPA for further consideration. 
The Section 126 Rule is based on NOX SIP Call analyses and 
also affects a coarse grid area, in this case, in Michigan. (See the 
following section for an explanation of coarse grid versus fine grid 
areas of States.) Therefore, EPA's response to the NOX SIP 
Call court decision related to coarse grid sources is being taken into 
consideration in the Section 126 Rule.
2. What Is the NOX SIP Call Court Decision Regarding Coarse 
Grid Sources?
    In the NOX SIP Call, Georgia and Missouri industry 
litigants challenged EPA's decision to calculate NOX budgets 
for these two States based on NOX emissions throughout the 
entirety of each State. The litigants maintained that the record 
supports including only eastern Missouri and northern Georgia as 
contributing to downwind ozone problems.
    The challenge from these litigants generally stems from the 
recommendations of the OTAG. The OTAG recommended NOX 
controls to reduce transport for areas within the ``fine grid'' of the 
air quality modeling domain, but recommended that areas within the 
``coarse grid'' not be subject to additional controls, other than those 
required by the CAA.\2\
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    \2\ The OTAG recommendations on Utility NOX Controls 
approved by the Policy Group, June 3, 1997 (62 FR 60318, appendix B, 
November 7, 1997).
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    In its modeling, OTAG used grids drawn across most of the eastern 
half of the United States. The ``fine grid'' has grid cells of 
approximately 12 kilometers on each side (144 square kilometers). The 
``coarse grid'' extends beyond the perimeter of the fine grid and has 
cells with 36 kilometer resolution. As shown in Figure F-10, appendix F 
of part 52.34, the fine grid includes the area encompassed by a box 
with the following geographic coordinates: Southwest Corner: 92 degrees 
West longitude, 32 degrees North latitude; Northeast Corner: 69.5 
degrees West longitude, 44 degrees North latitude (OTAG Final Report, 
Chapter 2). The OTAG could not include the entire Eastern U.S. within 
the fine grid because of computer hardware constraints.
    It is important to note that there were two key factors directly 
related to air quality that OTAG considered in determining the location 
of the fine grid-coarse grid line.\3\ (See OTAG Technical Supporting 
Document, Chapter 2, page 6; http://www.epa.gov/

[[Page 31501]]

ttn/otag/finalrpt/.) Specifically, the fine grid-coarse grid line was 
drawn to: (1) Include within the fine grid as many of the 1-hour ozone 
nonattainment problem areas as possible and still stay within the 
computer and model run time constraints, (2) avoid dividing any 
individual major urban area between the fine grid and coarse grid, and 
(3) be located along an area of relatively low emissions density. As a 
result, the fine grid-coarse grid line did not track State boundaries, 
and Missouri and Georgia were among several States that were split 
between the fine and coarse grids. Eastern Missouri and northern 
Georgia were in the fine grid while western Missouri and southern 
Georgia were in the coarse grid.
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    \3\ In addition to these two factors, OTAG considered three 
other factors in establishing the geographic resolution, overall 
size, and the extent of the fine grid. These other factors dealt 
with the computer limitations and the resolution of available model 
inputs.
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    The analysis OTAG conducted found that emissions controls examined 
by OTAG, when modeled in the entire coarse grid (i.e., all States and 
portions of States in the OTAG region that are in the coarse grid) had 
little impact on high 1-hour ozone levels in the downwind ozone problem 
areas of the fine grid.\4\
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    \4\ The OTAG recommendation on Major Modeling/Air Quality 
Conclusions approved by the Policy Group, June 3, 1997 (62 FR 60318, 
appendix B, November 7, 1997)
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    The Court vacated EPA's determination of significant contribution 
for all of Georgia and Missouri. Michigan v. EPA, 213 F.3d at 685. The 
Court did not seem to call into question the proposition that the fine 
grid portion of each State should be considered to make a significant 
contribution downwind. However, the Court emphasized that ``EPA must 
first establish that there is a measurable contribution,'' id., at 684, 
from the coarse grid portion of the State before determining that the 
coarse grid portion of the State significantly contributes to ozone 
nonattainment downwind.
3. What Is EPA's Response to the NOX SIP Call Court Decision 
Regarding Coarse Grid Sources?
    In a separate rulemaking on the NOX SIP Call, known as 
the Phase 2 rulemaking, EPA is addressing several issues remanded by 
the court in its March 3, 2000 decision. (The Phase 2 rule was proposed 
on February 22, 2002 (67 FR 8396) and is being finalized in the same 
time frame as today's section 126 action). One of the Phase 2 issues is 
the geographic applicability of the NOX SIP Call for States 
located partially in the coarse grid. With regard to Georgia and 
Missouri, EPA is retaining the existing determination that sources in 
the fine grid parts of these States contribute significantly to 
nonattainment downwind but is not including the coarse grid portions of 
States. The EPA explained that the reasoning of the court regarding 
control requirements for Georgia and Missouri also calls into question 
the inclusion of the coarse grid portions of Michigan and Alabama in 
the NOX SIP Call. Therefore, EPA is extending this rationale 
to the States of Michigan and Alabama and EPA is revising the 
NOX SIP Call to exclude the coarse grid portions of Michigan 
and Alabama.

II. Final Rule Regarding Michigan Sources

A. What Is Today's Rule Regarding Michigan Coarse Grid Sources Under 
the 1-Hour Standard?

    In a February 22, 2002 action, EPA proposed to withdraw the section 
126 findings made in response to the petitions from Connecticut and New 
York under the 1-hour standard for sources that are or will be located 
in the coarse grid portion of Michigan (67 FR 8386). The EPA proposed 
this action to be consistent with EPA's action regarding coarse grid 
sources under the NOX SIP Call. As discussed above, the 
Section 126 Rule is based on many of the same analyses and information 
from the NOX SIP Call. In today's action, EPA is finalizing 
the rulemaking as proposed. Under today's rule, any existing or new 
sources located in that affected segment of the coarse grid (north of 
44 degrees latitude, south of 45.0 degrees latitude, and east of 86.0 
degrees latitude) are no longer subject to the control requirements of 
the Section 126 Rule.\5\ The EPA has not identified any existing 
section 126 sources located in that area. There are no coarse grid 
areas in other States covered by the Section 126 Rule under the 1-hour 
standard. The EPA will address the coarse grid sources under the 8-hour 
standard in a separate rulemaking.
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    \5\ The EPA is taking a different approach to interpreting the 
fine-coarse grid split for purposes of the Phase 2 NOX 
SIP Call rule. The X SIP Call establishes State emissions 
budget rather than regulating individual sources. Because of the 
uncertainties with accurately dividing emissions between the fine 
and coarse grid portions of individual counties, EPA is basing the 
Phase 2 NOX SIP Call emissions budgets on all counties 
that are wholly contained within the fine grid. That is, counties 
that are in the coarse grid or that straddle the fine-coarse grid 
line are excluded. Because the section 126 action regulates specific 
stationary sources, the issue of how to apportion a full 
NOX inventory on a partial-county basis does not arise. 
Therefore, today's section 126 action to remove the coarse grid of 
Michigan follows the fine-coarse grid line exactly. Sources located 
in the fine grid portion of a county that straddles the fine-coarse 
grid line are covered by the Section 126 Rule. the EPA notes that 
the Section 126 Rule has already covered partial counties for 
Michigan in its January 2000 Rule. In that rule, only sources east 
of 86 degrees longitude and south of 45 degrees latitude were 
affected.
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    The EPA received only one short comment via e-mail on the proposal. 
The commenter asserted that many utilities want a ``level playing 
field'' with regard to emissions standards and that as a result of the 
proposed action, utilities could be planned for one area with a 
different set of rules. He stated that the proposal would also be a 
deterrent to developing new emissions technologies if new plants could 
be built without having emissions controls installed. The commenter 
also suggested that many power plants could be built in a 70 by 120 
mile area. He was concerned that an emissions plume from the affected 
area could affect Ontario and States in the northeast.
    The commenter appears not to be aware that the Section 126 Rule 
under the 1-hour standard never covered the whole State of Michigan 
because the relevant section 126 petitions only targeted sources in a 
specific portion of the State. Under section 126, EPA must limit its 
action to addressing the sources within the geographical boundaries 
specified in the petitions. Today's rule shifts the boundary between 
the area that is affected by the Section 126 Rule and the area that is 
not affected. Only a small portion of the State is at issue and, as 
mentioned above, EPA is not aware of any existing section 126 sources 
in that area. The commenter did not provide any evidence that new large 
EGU's are planned for the area or on what effect emissions from such 
sources might have on downwind States.
    The EPA disagrees with the commenter that today's action would be a 
deterrent to the development of new emissions control technologies. 
Only a very small portion of the Section 126 Rule is affected by 
today's action. The control remedy for the Section 126 Rule is a 
NOX budget trading program. Trading programs are one of the 
most cost-effective means to reduce emissions. They provide the 
flexibility and incentive for technology development. The EPA notes 
that although the Section 126 Rule does not cover the whole State, 
Michigan has adopted a statewide trading NOX rule. Any new 
sources locating in the affected area, that as a result of today's rule 
would no longer be subject to the Section 126 Rule, would be subject to 
Michigan's statewide NOX rule. In addition, there are a 
number of other emissions control requirements that sources locating in 
the affected portion of Michigan would have to meet, such as new source 
performance standards, new source review technology standards, and 
title V acid rain

[[Page 31502]]

requirements. Thus, today's action does not result in sources being 
built without emissions control requirements.
    As discussed above, in the Michigan v. EPA decision on the 
NOX SIP Call, the court indicated that ``EPA must first 
establish that there is a measurable contribution'' from the coarse 
grid portion of the State before holding the coarse grid portion of the 
State partly responsible for the significant contribution of downwind 
ozone nonattainment in another State. Michigan v. EPA, 213 F.3d at 684. 
Elsewhere, the Court seemed to identify the standard as ``material 
contribution []''. Id. In response to the court opinion, EPA is 
revising the NOX SIP Call to include only the fine grid 
portion, and not the coarse grid portion, of Michigan at this time. The 
EPA is applying the same reasoning to the Section 126 Rule because the 
Section 126 Rule relies on the technical record for the NOX 
SIP Call. Therefore, EPA is finalizing the February 22, 2002 action as 
proposed: EPA is revising the Section 126 Rule and denying the New York 
and Connecticut petitions under the 1-hour standard with respect to 
sources that are or will be located in the coarse grid portion of 
Michigan.

B. Does Today's Rule Affect the Section 126 Requirements for Michigan 
Fine Grid Sources or Sources Located in Other States?

    Today's rule does not affect the NOX allowance 
allocations for Michigan sources located in the fine grid that were 
established in the January 2000 Rule. In addition, today's rule does 
not affect the section 126 trading budget for Michigan or the 
compliance supplement pool. Because EPA has not identified any existing 
large EGUs and large non-EGUs in the coarse grid portion of Michigan 
affected by today's rule, the NOX allowance calculations in 
the January 2000 Rule were already based only on fine grid emissions. 
This rule does not affect any of the Section 126 Rule requirements for 
sources located in other States. Therefore, today's rule does not 
affect the ability of any sources located in the fine grid to comply 
with the section 126 requirements by the compliance deadline.

III. What Is Today's Revision to the Definition of ``Applicable 
Requirement'' for Title V Operating Permit Programs?

    In the February 22, 2002 action, EPA proposed to revise the 
definitions of the ``applicable requirement'' in 40 CFR 70.2 and 71.2 
by providing expressly that any standard or other requirement under 
section 126 of the CAA is an applicable requirement and must be 
included in operating permits issued under title V of the CAA. The EPA 
did not receive any public comments on that proposal. Therefore, EPA is 
finalizing the definitions as proposed.
    Section 504(a) of the CAA explicitly requires that each permit 
include ``enforceable emission limitations and standards, a schedule of 
compliance, * * * and such other conditions as are necessary to assure 
compliance with applicable requirements of this Act, including the 
requirements of the applicable implementation plan.'' 42 U.S.C. 
7661c(a). Previously, the Sec.  70.2 and Sec.  71.2 definitions of 
``applicable requirement'' did not include requirements that are 
imposed under section 126, even though section 126 authorizes the 
Administrator to adopt standards and requirements under certain 
circumstances as discussed above. Today's action remedies this omission 
and clarifies the treatment, in title V operating permits, of section 
126 requirements promulgated by the Administrator. Therefore, the 
requirements of the Section 126 NOX Budget Trading Program 
promulgated on January 18, 2000 must be included in the title V 
operating permits for units subject to the program.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and, therefore, subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    1. Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal governments or 
communities;
    2. Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    3. Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    4. Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Under Executive Order 12866, today's action is not a ``significant 
regulatory action'' and is therefore not subject to review by OMB. In 
the January 2000 Rule titled ``Findings of Significant Contribution and 
Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate 
Ozone Transport,'' (65 FR 2674), EPA partially approved four section 
126 petitions under the 1-hour ozone standard. Today's action withdraws 
the section 126 findings and denies the petitions under the 1-hour 
ozone standard with respect to sources located in a small portion of 
Michigan.
    This action does not create any additional impacts beyond what was 
promulgated in the January 2000 Rule. This rule also does not raise 
novel legal or policy issues. Therefore, EPA believes that this action 
is not a ``significant regulatory action.''

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Today's rule does not create new requirements. Instead, this action 
withdraws the section 126 requirements for sources that are or would be 
located in a specified portion of Michigan.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial

[[Page 31503]]

number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of the proposed rule on small 
entities, small entity is defined as: (1) A small business according to 
the U.S. Small Business Administration size standards for the NAIAS 
codes listed in the following table;

----------------------------------------------------------------------------------------------------------------
                                                                                 Size standard in number of
               NAIAS code                  Economic activity or industry      employees, millions of dollars of
                                                                                     revenues, or output
----------------------------------------------------------------------------------------------------------------
322121, 322122.........................  Pulp mills.......................  750
325211.................................  Plastics materials, synthetic      750
                                          resins, and nonvulcanized
                                          elastomers.
325188, 325199.........................  Industrial organic chemicals.....  1,000
324110.................................  Petroleum refining...............  1,500
331111.................................  Steel works, blast furnaces, and   1,000
                                          rolling mills.
333611.................................  Steam, gas, and hydraulic          1,000
                                          turbines.
333618.................................  Stationary internal combustion     1,000
                                          engines.
333415.................................  Air-conditioning and warm-air      750
                                          heating equipment and commercial
                                          and industrial refrigeration
                                          equipment.
222111, 222112.........................  Electric utilities...............  4 million megawatt hrs.
486210.................................  Natural gas transmission.........  $6.0
221330.................................  Steam and air conditioning supply  $10.5
----------------------------------------------------------------------------------------------------------------

    (2) A small governmental jurisdiction that is a government of a 
city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    Today's rule does not create new requirements for small entities or 
other sources. Instead, this action withdraws the section 126 
requirements for sources that are or would be located in a specified 
portion of Michigan. Therefore, I certify that this action will not 
have a significant economic impact on a substantial number of small 
entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, 2 
U.S.C. 1532, EPA generally must prepare a written statement, including 
a cost-benefit analysis, for any proposed or final rules with ``Federal 
mandates'' that may result in the expenditure by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any 1 year. A ``Federal mandate'' is defined to 
include a ``Federal intergovernmental mandate'' and a ``Federal private 
sector mandate'' (2 U.S.C. 658(6)). A ``Federal intergovernmental 
mandate,'' in turn, is defined to include a regulation that ``would 
impose an enforceable duty upon State, local, or Tribal governments,'' 
(2 U.S.C. 658(5)(A)(i)), except for, among other things, a duty that is 
``a condition of Federal assistance'' (2 U.S.C. 658(5)(A)(I)). A 
``Federal private sector mandate'' includes a regulation that ``would 
impose an enforceable duty upon the private sector,'' with certain 
exceptions (2 U.S.C. 658(7)(A)).
    The EPA has determined that this action does not include a Federal 
mandate that may result in estimated costs of $100 million or more for 
either State, local, or Tribal governments in the aggregate, or for the 
private sector. This Federal action does not establish any new 
requirements, as discussed above. Accordingly, no additional costs to 
State, local, or Tribal governments, or to the private sector, result 
from this action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), 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 section 6 of 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. The 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.
    Today's action does not have federalism implications. It 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. Today's action imposes no 
additional burdens beyond those imposed by the January 2000 Rule. Thus, 
the requirements of section 6 of the Executive Order do not apply to 
this rulemaking action.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by Tribal officials in the development of regulatory 
policies that have Tribal implications.'' ``Policies that have Tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on

[[Page 31504]]

the distribution of power and responsibilities between the Federal 
government and Indian tribes.''
    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. 
Today's action does not significantly or uniquely affect the 
communities of Indian Tribal governments. As discussed above, today's 
action imposes no new requirements that would impose compliance burdens 
beyond those that would already apply under the January 2000 Rule. 
Accordingly, the requirements of Executive Order 13175 do not apply to 
this rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045: ``Protection of Children From Environmental 
Health 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.
    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that are based on health or safety risks, such that 
the analysis required under section 5-501 of the Order has the 
potential to influence the regulation. This rule is not subject to 
Executive Order 13045, because this action is not ``economically 
significant'' as defined under Executive Order 12866 and the Agency 
does not have reason to believe the environmental health risks or 
safety risks addressed by this action present a disproportionate risk 
to children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions 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. Today's action does not establish any new 
regulatory requirements.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer Advancement Act 
of 1995 (``NTTAA,'' Public Law 104-113, section 12(d), 15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    The NTTAA does not apply because today's action does not establish 
any new technical standards. This action amends the January 2000 Rule 
by reducing the portion of Michigan that is covered by the rule.

J. Congressional Review Act

    The Congressional Review Act (CRA), 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. Section 808 of the CRA provides an 
exception to this requirement. For any rule for which an agency for 
good cause finds that notice and comment are impracticable, 
unnecessary, or contrary to the public interest, the rule may take 
effect on the date set by the Agency. The 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 action is not a ``major rule'' as defined by 5 U.S.C. 804(2). This 
action does not impose any additional costs and compliance burdens 
under the Section 126 Rule. Instead, this action withdraws the section 
126 requirements for sources that are or would be located in a 
specified portion of Michigan. This rule will be effective July 6, 
2004.

K. Judicial Review

    Section 307(b)(1) of the CAA indicates which Federal Courts of 
Appeal have venue for petitions of review of final actions by EPA. This 
section provides, in part, that petitions for review must be filed in 
the Court of Appeals for the District of Columbia Circuit (i) when the 
agency action consists of ``nationally applicable regulations 
promulgated, or final actions taken, by the Administrator,'' or (ii) 
when such action is locally or regionally applicable, if ``such action 
is based on a determination of nationwide scope or effect and if in 
taking such action the Administrator finds and publishes that such 
action is based on such a determination.''
    For the reasons discussed in the May 25, 1999 final rule (64 FR 
28250), the Administrator determined that final action regarding the 
section 126 petitions is of nationwide scope and effect for purposes of 
section 307(b)(1). Thus, any petitions for review of final actions 
regarding the section 126 rulemaking must be filed in the Court of 
Appeals for the District of Columbia Circuit within 60 days from the 
date final action is published in the Federal Register.

List of Subjects

40 CFR Part 52

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

40 CFR Part 70

    Administrative practice and procedure, Air pollution control, 
Intergovernmental relations, Reporting and recordkeeping requirements.

40 CFR Part 71

    Administrative practice and procedure, Air pollution control, 
Reporting and recordkeeping requirements.

    Dated: May 27, 2004.
Michael O. Leavitt,
Administrator.

0
For the reasons set forth in the preamble, chapter I of title 40 of the 
Code of Federal Regulations is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart A--General Provisions

0
2. Section 52.34 is amended by revising paragraphs (c)(2)(vi) and 
(g)(2)(vi) to read as follows:

[[Page 31505]]

Sec.  52.34  Action on petitions submitted under section 126 relating 
to emissions of nitrogen oxides.

* * * * *
    (c) * * *
    (2) * * *
    (vi) Portion of Michigan located south of 44 degrees latitude in 
OTAG Subregion 2, as shown in appendix F, Figure F-2, of this part.
* * * * *
    (g) * * *
    (2) * * *
    (vi) Portion of Michigan located south of 44 degrees latitude in 
OTAG Subregion 2, as shown in appendix F, Figure F-6, of this part.
* * * * *

Appendix F--[Amended]

0
3. Appendix F is amended by adding a new figure F-10 in numerical order 
to read as follows:

APPENDIX F TO PART 52--CLEAN AIR ACT SECTION 126 PETITIONS FROM EIGHT 
NORTHEASTERN STATES: NAMED SOURCE CATEGORIES AND GEOGRAPHIC COVERAGE

* * * * *
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[GRAPHIC] [TIFF OMITTED] TR03JN04.018

PART 70--STATE OPERATING PERMIT PROGRAMS

0
1. The authority citation for part 70 continues to read as follows:

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

0
2. Section 70.2 is amended by renumbering paragraphs (7) through (12) 
of the definition of ``applicable requirement'' as paragraphs (8) 
through (13) and adding a new paragraph (7) to read as follows:


Sec.  70.2  Definitions.

* * * * *

Applicable requirement * * *

    (7) Any standard or other requirement under section 126(a)(1) and 
(c) of the Act;
* * * * *

PART 71--FEDERAL OPERATING PERMIT PROGRAMS

0
1. The authority citation for part 71 continues to read as follows:

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

0
2. Section 71.2 is amended by renumbering paragraphs (7) through (12) 
of the definition of ``applicable requirement'' as paragraphs (8) 
through (13) and adding a new paragraph (7) to read as follows:


Sec.  71.2  Definitions.

* * * * *

Applicable requirement * * *

    (7) Any standard or other requirement under section 126(a)(1) and 
(c) of the Act;
* * * * *
[FR Doc. 04-12553 Filed 6-2-04; 8:45 am]
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