[Federal Register Volume 69, Number 238 (Monday, December 13, 2004)]
[Rules and Regulations]
[Pages 72118-72128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27261]



[[Page 72118]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Region 2 Docket No. NY70-279, FRL-7845-8]


Approval and Promulgation of Implementation Plans; New York State 
Implementation Plan Revision; 1-Hour Ozone Control Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a 
revision to the New York State Implementation Plan (SIP) for ozone 
concerning the control of volatile organic compounds. The SIP revision 
consists of amendments to title 6 of the New York Codes, Rules and 
Regulations, part 205, ``Architectural and Industrial Maintenance 
Coatings.'' This SIP revision consists of a control measure needed to 
meet the shortfall emissions reduction identified by EPA in New York's 
1-hour ozone attainment demonstration SIP. The intended effect of this 
action is to approve a control strategy required by New York's SIP 
which will result in emission reductions that will help achieve 
attainment of the national ambient air quality standard for ozone.

EFFECTIVE DATE: This rule will be effective January 12, 2005.

ADDRESSES: A copy of the New York's submittal is available at the 
following addresses for inspection during normal business hours:

Environmental Protection Agency, Region 2 Office, Air Programs Branch, 
290 Broadway, 25th Floor, New York, New York 10007-1866.
New York State Department of Environmental Conservation, Division of 
Air Resources, 625 Broadway, Albany, New York 12233.

FOR FURTHER INFORMATION CONTACT: Kirk J. Wieber, Air Programs Branch, 
Environmental Protection Agency, 290 Broadway, 25th Floor, New York, 
New York 10007-1866, (212) 637-3381 or [email protected].

SUPPLEMENTARY INFORMATION:

I. What Is Required by the Clean Air Act and How Does It Apply to New 
York?

    Section 182 of the Clean Air Act (the Act) specifies the mandatory 
State Implementation Plan (SIP) submittal requirements for areas 
classified as nonattainment for the 1-hour ozone national ambient air 
quality standards (NAAQS) and when SIP submissions must be made to EPA 
by the states. The specific requirements vary depending upon the 
severity of the ozone problem. The New York-Northern New Jersey-Long 
Island area is classified as a severe 1-hour ozone nonattainment area. 
Under section 182, severe ozone nonattainment areas were required to 
submit demonstrations of how they would attain the 1-hour standard. On 
December 16, 1999 (64 FR 70364), EPA proposed approval of New York's 1-
hour ozone attainment demonstration SIP for the New York-Northern New 
Jersey-Long Island nonattainment area. In that rulemaking, EPA 
identified an emission reduction shortfall associated with New York's 
1-hour ozone attainment demonstration SIP, and required New York to 
address the shortfall. In a related matter, the Ozone Transport 
Commission (OTC) developed six model rules which identified control 
measures for a number of source categories and estimated emission 
reduction benefits from implementing these model rules. These model 
rules were designed for use by states in developing their own 
regulations to achieve additional emission reductions to close emission 
shortfalls.
    On February 4, 2002 (67 FR 5170), EPA approved New York's 1-hour 
ozone attainment demonstration SIP. This approval included an 
enforceable commitment submitted by New York to adopt additional 
control measures to close the shortfall identified by EPA for 
attainment of the 1-hour ozone standard.
    EPA is aware that concerns have been raised about the achievability 
of VOC content limits of some of the product categories. Although we 
are approving this rule today, the Agency is concerned that if the rule 
limits make it impossible for manufacturers to produce coatings that 
are desirable to consumers, there is a possibility that users may 
misuse the products by adding additional solvent, thereby circumventing 
the rule's intended VOC emission reductions. We intend to work with the 
states and manufacturers to explore ways to ensure that the rules 
achieve the intended VOC emission reductions, and we intend to address 
this issue in evaluating the amount of VOC emission reduction credit 
attributable to the rules.

II. What Was Included in New York's Submittal?

    On November 4, 2003 Carl Johnson, Deputy Commissioner, New York 
State Department of Environmental Conservation (NYSDEC), submitted to 
EPA a revision to the SIP which included revisions to title 6 of the 
New York Codes, Rules and Regulations (NYCRR), part 205, 
``Architectural and Industrial Maintenance (AIM) Coatings.'' It was 
supplemented on November 21, 2003. The revisions to part 205 (also 
referred to as the New York AIM coatings rule) will provide volatile 
organic compound (VOC) emission reductions to address, in part, the 
shortfall identified by EPA. New York used the OTC model rule as a 
guideline to develop part 205.
    On January 13, 2004, EPA determined that the SIP revision submitted 
by New York containing revisions to part 205 was administratively 
complete pursuant to the criteria found in title 40, part 51, appendix 
V of the Code of Federal Regulations. On January 16, 2004 (69 FR 2557), 
EPA proposed approval of part 205. For a detailed discussion on the 
content and requirements of the revisions to New York's part 205, the 
reader is referred to EPA's proposed rulemaking action.

III. What Comments Did EPA Receive in Response to Its Proposal?

    In response to EPA's January 16, 2004 proposed rulemaking action, 
EPA received comments from two interested parties; (1) Richard M. 
Cogen, Nixon Peabody LLP, on behalf of the Sherwin-Williams Company, 
and (2) James Sell, on behalf of the National Paint and Coating 
Association. A summary of the comments received and EPA's responses are 
as follows:

A. Comment: The New York AIM Coatings Rule Is Based on Flawed Data

    A commenter asserts that the New York AIM coatings rule is based on 
flawed data and that the use of this data violates the Data Quality 
Objectives Act (``DQOA'') (section 515(a) of the Treasury and General 
Government Appropriations Act for Fiscal Year 2001 (Public Law 106-554; 
H.R. 5658)). The data at issue is contained in what the commenter has 
characterized as ``a study prepared by E.H. Pechan and Associates'' 
(``Pechan Study'') in 2001. The alleged flaws relate to emissions 
reductions calculated in the Pechan Study; certain of the underlying 
data and data analyses are allegedly ``unreproduceable.'' Further, the 
commenter asserts that if better data were used, the OTC model AIM 
coatings rule would achieve greater VOC emissions reductions, relative 
to the Federal AIM coatings rule, than was calculated in the Pechan 
Study (51 percent reduction versus 31 percent reduction), even if 
certain source categories were omitted from regulation under the OTC 
rule. For these reasons, the commenter states that EPA must not

[[Page 72119]]

approve the New York AIM coatings rule as a revision to the SIP.\1\
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    \1\ This commenter has submitted a ``Request for Correction of 
Information'' (RFC), dated June 2, 2004, to EPA's Information 
Quality Guidelines Office in Washington, DC. EPA is evaluating and 
will respond separately to the RFC, which raises substantively 
similar issues to those raised by this comment.
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    Response: EPA disagrees with this comment. The Pechan Study is not 
at issue in this rulemaking. The Pechan Study was not submitted to EPA 
by the State in support of its AIM coatings rule. Further, even if the 
Pechan Study had been submitted by the State, the validity of that data 
would not be at issue because, at this time, New York is not asking for 
approval of any quantified amount of VOC emission reduction from the 
enactment of its regulation. Rather, this regulation has been submitted 
by the State, and is being considered by EPA, on the basis that it 
strengthens the existing New York SIP. The commenter does not dispute 
that the New York AIM coatings rule will, in fact, reduce VOC 
emissions.
    Section 110 of the Act provides the statutory framework for 
approval/disapproval of SIP revisions. Under the Act, EPA establishes 
NAAQS for certain pollutants. The Act establishes a joint Federal and 
state program to control air pollution and to protect public health. 
States are required to prepare SIPs, for each designated ``air quality 
control region'' within their borders. The SIP must specify emission 
limitations and other measures necessary for that area to meet and 
maintain the required NAAQS. Each SIP must be submitted to EPA for its 
review and approval. EPA will review and must approve the SIP revision 
if it is found to meet the minimum requirements of section 110 of the 
Act. See also Union Electric Co. v. EPA, 427 U.S. 246, 265, 96 S.Ct. 
2518, 49 L.Ed.2d 474 (1976). The Act expressly provides that the states 
may adopt more stringent air pollution control measures than the Act 
requires with or without EPA approval. See section 116 of the Act. EPA 
only has the authority to disapprove specific SIP revisions that are 
less stringent than a standard or limitation provided by Federal law 
(Section 110(k) of the Act). See also Duquesne Light v. EPA, 166 F.3d 
609 (3d Cir. 1999).
    The Pechan Study is not part of New York's submission in support of 
its AIM coatings rule. Because New York at this time is not claiming a 
specific amount of emissions reductions, the level of emissions 
reductions rightly or wrongly calculated by the Pechan Study, is 
irrelevant to whether EPA can approve this SIP revision.\2\ The only 
relevant inquiry at this time is whether this SIP revision meets the 
minimum criteria for approval under the Act, including the requirement 
that the State AIM coatings rule be at least as stringent as the 
Federal AIM coatings rule set forth at 40 CFR 59.400.
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    \2\ After submission of a request for approval of a quantified 
amount of emissions reductions credit due to the AIM coatings rule, 
EPA will evaluate the credit attributable to the rule. Whatever 
methodology and data the State uses in such a request, the issue of 
proper credit will become ripe for public comment and any comments 
received will be responded to at that time.
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    As set forth above, EPA has concluded that the New York AIM 
coatings rule meets the criteria for approvability. It is worth noting 
that EPA agrees with the commenter's conclusion that the New York AIM 
coatings rule is more stringent than the Federal AIM coatings rule, 
though not for the reasons given by the commenter (i.e., that its 
``better'' data demonstrates that OTC model AIM coatings rule achieves 
a 51 percent, as opposed to the Pechan Study's 31 percent reduction in 
VOC emissions beyond that required by the Federal AIM coatings rule). 
Rather, the New York AIM coatings rule is, on its face, more stringent. 
The preamble of the New York AIM coatings rule states: ``The revisions 
set specific VOC limits (in grams per liter) for 52 coating categories 
and require compliance with those limits by January 1, 2005. These new 
limits are more stringent than the Federal AIM coatings rule for 40 
categories and more stringent than the current State rule for 31 
categories (page 4, New York State Register, Rule Making Activities, 
November 12, 2003).'' Examples of where New York's AIM coatings rule is 
facially more stringent than the Federal AIM coatings rule include, but 
are not limited to, the VOC content limit for non-flat high gloss 
coatings and antifouling coatings. The Federal AIM coatings rule VOC 
content limit for non-flat high gloss coatings is 380 grams/liter while 
the New York AIM coatings rule's limit is 250 grams/liter, and the 
Federal AIM coatings rule's VOC content limit for anti-fouling coatings 
is 450 grams/liter while the New York AIM coatings rule is 400 grams/
liter. An example of where the New York AIM coatings rule is as 
stringent, but not more stringent, than the Federal AIM coatings rule 
is the VOC content limit for antenna coatings and low-solids coatings. 
In both the State and Federal rules, the VOC content limits for these 
categories is 530 grams/liter and 120 grams/liter, respectively. Thus, 
on a category by category basis, the New York AIM coatings rule is as 
stringent or more stringent than the Federal AIM coatings rule. 
Further, EPA has received no comments that the New York AIM coatings 
rule is less stringent than the Federal rule.

B. Comment: Approval of the New York AIM Coatings Rule as a SIP 
Revision Violates Sections 110(a)(2)(A) and 110(a)(2)(E) of the Clean 
Air Act

    With respect to sections 110(a)(2)(A) and 110(a)(2)(E) of the Act, 
the commenter asserts that New York cannot give the assurances required 
by these provisions of the Act since each provision requires that a 
state be able to assure that a SIP revision meets applicable 
requirements of the Act, and that no ``Federal or State law'' prohibits 
the state from ``carrying out such implementation plan or portion 
thereof.'' Such assurance cannot be given, the commenter alleges, the 
New York AIM coatings rule violates the DQOA, sections 183(e)(9), and 
184(c) of the Act, the New York State Environmental Quality Review Act, 
the New York State Administrative Procedures Act and the New York 
Environmental Conservation Law.
    Response: For the reasons set forth in responses to comments A, C, 
D, E and F, EPA disagrees that the New York AIM coatings rule violates 
the DQOA, the Act, the New York State Environmental Quality Review Act, 
the New York State Administrative Procedures Act, and the New York 
Environmental Conservation Law. Therefore, nothing prevents New York 
from giving the assurances under sections 110(a)(2)(A) and (a)(2)(E) of 
the Act.

C. Comment: The New York AIM Coatings Rule Was Adopted in Violation of 
Section 183(e)(9) of the Clean Air Act

    A commenter states that in 1998, after a seven-year rule 
development process, EPA promulgated its nationwide regulations for AIM 
coatings pursuant to section 183(e) of the Act. The commenter notes 
that New York's AIM coatings rule imposes numerous VOC emission limits 
that will be more stringent than the corresponding limits in EPA's 
regulation. The commenter asserts that section 183(e)(9) requires that 
any state which proposes regulations to establish emission standards 
other than the Federal standards for products regulated under Federal 
rules shall first consult with the EPA Administrator. The commenter 
believes that New York failed to engage in that required consultation, 
and therefore, (1) New York violated section 183(e)(9) in its adoption 
of the New York AIM coatings rule, and (2) EPA

[[Page 72120]]

approval of this rule would violate, and be prohibited by sections 
110(a)(2)(A) and (a)(2)(E) of the Act.
    Response: EPA disagrees with this comment. Contrary to the 
implication of the commenter, section 183(e)(9) does not require states 
to seek EPA's permission to regulate consumer products. By its explicit 
terms, the statute contemplates consultation with EPA only with respect 
to ``whether any other state or local subdivision has promulgated or is 
promulgating regulations on any products covered under [section 
183(e)].'' The commenter erroneously construes this as a requirement 
for permission rather than informational consultation. Further, the 
final Federal architectural coatings regulations at 40 CFR 59.410, 
explicitly provides that states and their political subdivisions retain 
authority to adopt and enforce their own additional regulations 
affecting these products. See also 63 FR 48848, 48884. In addition, as 
stated in the preamble to the final rule for architectural coatings, 
Congress did not intend section 183(e) of the Act to preempt any 
existing or future state rules governing VOC emissions from consumer 
and commercial products. See 63 FR 48848, 48857. Accordingly, NYSDEC 
retains authority to impose more stringent limits for architectural 
coatings as part of its SIP, and its election to do so is not a basis 
for EPA to disapprove the SIP. See, Union Electric Co. v. EPA, 427 U.S. 
246, 265-66 (1976). EPA favors national uniformity in consumer and 
commercial product regulation, but recognizes that some localities may 
need more stringent regulations to combat more serious and more 
intransigent ozone nonattainment problems.
    Further, there was ample consultation with EPA prior to the State's 
adoption of its AIM coatings rule. On March 28, 2001, the OTC adopted a 
Memorandum of Understanding (MOU) on regional control measures, signed 
by all the member states of the OTC, including New York, which 
officially made available the OTC model rules, including the AIM model 
rule. See the discussion of this MOU in the Report of the Executive 
Director, OTC, dated July 24, 2001, a copy of which has been included 
in administrative record of this final rulemaking. It should also be 
noted that the March 28, 2001 MOU, was transmitted to Robert Brenner, 
Assistant Administrator for the Office of Air and Radiation of EPA, and 
to various EPA Regional offices, as was the July 24, 2001 Report of the 
Executive Director. That MOU includes the following text: ``WHEREAS 
after reviewing regulations already in place in OTC and other States, 
reviewing technical information, consulting with other states and 
Federal agencies, consulting with stakeholders, and presenting draft 
model rules in a special OTC meeting, OTC developed model rules for the 
following source categories * * * architectural and industrial 
maintenance coatings * * *'' (a copy of the signed March 28, 2001 MOU 
has been placed in the administrative record of this final rulemaking).
    Moreover, NYSDEC provided EPA Region 2 the opportunity to review 
and comment on the New York AIM coatings rule in its draft and proposed 
versions. Given all of the above, there is no validity to the 
commenter's assertion that New York failed to consult with EPA in the 
adoption of its AIM coatings rule. EPA was fully cognizant of the 
requirements of the New York AIM coatings rule before its formal 
adoption by the State.\3\ For all of the above mentioned reasons, EPA 
disagrees that New York violated section 183(e)(9) in its adoption of 
its AIM coatings rule, and disagrees that approval of the New York AIM 
coatings rule by EPA is in violation of or prohibited by sections 
110(a)(2)(A) and (a)(2)(E) of the Act.
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    \3\ While EPA reviewed the AIM model rule and the draft New York 
version of that rule, EPA had no authority conferred under the Clean 
Air Act to dictate the exact language or requirements of the rule 
beyond the general requirement that the New York rule, in order to 
be approvable as a SIP revision, must be at least as stringent as 
its Federal counterpart.
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D. Comment: The New York AIM Coatings Rule Was Adopted in Violation of 
Section 184(c) of the Clean Air Act, and Approval of the SIP Revision 
Would, Itself, Violate That Section

    The commenter believes the OTC violated section 184(c)(l) of the 
Act by failing to ``transmit'' its recommendations to the 
Administrator, and that the OTC's violation was compounded by the 
Administrator's failure to review the model rule through the notice, 
comment and approval process required by section 184(c)(2)-(4) of the 
Act. These alleged violations of the Act should have prevented New York 
from adopting its AIM coatings rule, and now prevent EPA from validly 
approving them as a revision to the New York SIP.
    Response: EPA disagrees with this comment. Section 184(c)(1) of the 
Act states that ``the Commission (OTC) may, after notice and 
opportunity for public comment, develop recommendations for additional 
control measures to be applied within all or a part of such transport 
region if the commission determines such measures are necessary to 
bring any area in such region into attainment by the dates provided by 
this subpart.'' It is important to note that the OTC model AIM coatings 
rule was not developed pursuant to section 184(c)(1), which provision 
is only triggered ``Upon petition of any State within a transport 
region established for ozone * * *'' No such petition preceded the 
development of the model AIM coatings rule. Nor, for that matter, was 
development of a rule upon State petition under section 184(c)(1) meant 
to be the exclusive mechanism for development of model rules within the 
OTC. Nothing in section 184 prevents the voluntary development of model 
rules without the prerequisite of a state petition. This provision of 
the Act was not intended to prevent OTC's development of model rules 
which states may individually choose to adapt and adopt on their own, 
as New York did, basing its AIM coatings rule on the model developed 
within the context of the OTC. In developing its State rule from the 
OTC model, New York was free to adapt that rule as it saw fit (or to 
leave the OTC model rule essentially unchanged), so long as its rule 
remained at least as stringent as the Federal AIM coatings rule.
    As stated above, on March 28, 2001, the OTC and member states, 
signed a MOU on regional control measures which officially made 
available to the public the model rules, including the AIM model rule. 
The OTC did not develop recommendations to the Administrator for 
additional control measures. The MOU stated that implementing these 
rules will help attain and maintain the 1-hour standard for ozone and 
were therefore made available to the states for use in developing its 
own regulations.
    Even though the OTC did not develop the model AIM coatings rule 
pursuant to section 184(c)(1) of the Act, nevertheless it provided 
ample opportunity for OTC member and stakeholder comment by holding 
several public meetings concerning the model rules including the AIM 
coatings model rule. The sign-in sheets or agenda for four meetings 
held in 2000 and 2001 at which the OTC AIM coatings model was discussed 
(some of which reflect the attendance of a representative of the EPA 
and/or the commenter), have been placed in the administrative record 
for this final rulemaking.

E. Comment: The New York AIM Coatings Rule Was Adopted in Violation of 
Section 19-0303 of the New York Environmental Conservation Law (ECL)

    The Commenter asserts that NYSDEC violated section 19-0303(3) of 
the ECL

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because the New York AIM coatings rule applies statewide even though 
additional control measures are needed only for the New York City 
metropolitan area. The commenter contends that by failing to adequately 
consider comments which suggested that the rules could be tailored more 
closely to that metropolitan area, the State failed to observe the 
law's requirement to ``give due recognition to the fact that'' relevant 
differences in air quality or emission characteristics among 
geographical areas in the State may call for differential applicability 
of emission reduction requirements among differing geographical areas.
    The commenter also asserts that NYSDEC violated section 19-0303(4) 
of the ECL because it failed to prepare a sufficient regulatory impact 
assessment. Specifically, the commenter contends that among other 
failings, New York relied upon grossly inadequate data as discussed 
above, failed to perform any State-specific cost or impact studies, and 
failed to analyze the cost-effectiveness of any reasonably available 
alternatives to the New York AIM coatings rule.
    In addition, the commenter asserts that NYSDEC violated section 19-
0303(5) of the ECL because it failed to provide notice in the State 
Environmental Notice Bulletin of the OTC's March 2001 recommendation 
with respect to the OTC model rule on which the New York AIM coatings 
rule is closely based, or to solicit public review of the model rule.
    Response: EPA disagrees with this comment. The New York final AIM 
coatings rule was adopted by the State pursuant to the provisions of 
sections 1-0101, 3-0301, 19-0103, 19-0105, 19-0301, and 19-0305 of the 
ECL, which grants the NYSDEC the authority to adopt regulations for the 
prevention, control, reduction and abatement of air pollution. NYSDEC 
has found that this regulation is necessary for the State to attain 
ambient air quality standards (New York State Register, Rule Making 
Activities, March 19, 2003, page 8 and New York State Register, Rule 
Making Activities, November 12, 2003, page 7, both of which are part of 
NYSDEC's AIM coatings rule SIP revision submittal). With respect to the 
commenter's assertion that the AIM coatings rule was only needed for 
the New York City metropolitan area, it is the State's prerogative as 
to whether it adopts a rule applicable statewide or nonattainment area 
specific. New York adopted its AIM coatings rule to achieve VOC 
emission reductions necessary to attain the 1-hour ozone standard in 
the New York--Northern New Jersey--Long Island nonattainment area, but 
also, New York adopted its AIM coatings rule applicable statewide in 
order to make progress towards reducing 8-hour ozone levels in recently 
designated nonattainment areas located in New York State that are 
outside of the New York City metropolitan area. See New York State 
Register, Rule Making Activities, March 19, 2003, page 8.
    In addition, though the State could have decided to limit the 
application of the rule to selected areas of the State, it elected to 
apply its AIM coatings rule statewide. Rather than opting for a county 
by county variation in regulatory limits affecting the sales and use of 
products, New York opted for a unitary system. Doing so may reduce the 
burden on manufacturers to have to track the point of sale and use of 
products and enhances the effectiveness and enforceability of the rule 
by helping to minimize the opportunity for use of noncomplying products 
within nonattainment areas. We do not consider the State's decision to 
opt for statewide applicability of the limits unreasonable. In any 
event, New York's decision to implement its AIM coatings rule with 
wider geographic scope than that of a specific nonattainment area is 
simply not a grounds for EPA to disapprove the regulation under section 
110 of the Act. As explained elsewhere, states retain the ability under 
the Act to regulate such products so long as they at least meet the 
requirements of the Federal AIM rule.
    With respect to the commenter's assertion concerning the need for a 
regulatory impact statement, EPA disagrees. NYSDEC did prepare a 
regulatory impact statement which included a cost impact study. Since 
in most respects the New York AIM coatings rule is very similar to the 
California Air Research Board (CARB) ``Suggested Control Measure for 
Architectural Coatings,'' NYSDEC utilized the cost information that 
supported the CARB action. Though NYSDEC undertook no independent cost 
analysis, it reviewed and analyzed the information used by CARB and 
included this information in its regulatory impact statement. The CARB 
cost information reflects information supplied by manufacturers who 
market AIM coatings nationally. These manufacturers are representative 
of those affected by the New York AIM coatings rule. Therefore, EPA has 
determined that the analysis and conclusions provided for the CARB 
action are sufficient for the New York AIM coatings rule.
    With respect to the comment concerning the OTC model rule, EPA does 
not agree that New York should have solicited public review of the OTC 
model rule. In development of the model rule, the OTC Stationary and 
Area Sources Committee met with numerous stakeholders on several 
occasions (See EPA's response to Comment D) to discuss and to solicit 
comments on specific aspects of the control measures being considered, 
including the AIM model rule. It is also important to note that the 
NYSDEC held public hearings on April 28, 2003, April 30, 2003, and May 
2, 2003, for the proposed New York AIM coatings rule.
    In addition, in its review of the SIP revision submission of the 
New York AIM coatings rule, EPA has found no reason to indicate that 
the review performed by NYSDEC's Counsel's Office, as to the legality 
of its AIM coatings rule under State law, is insufficient. Therefore, 
EPA has determined, pursuant to section 110(a)(2)(E) of the Act and 40 
CFR part 51, appendix V, that New York has provided the necessary 
assurances that it has adequate authority to implement the SIP revision 
and that it has followed all the procedural requirements of the New 
York constitution and laws in adopting the SIP revision submitted to 
EPA.

F. Comment: The State Violated the State Administrative Procedure Act 
(SAPA) and State Environmental Quality Review Act (SEQRA) in Its 
Adoption of the New York AIM Coatings Rule

    The commenter states that NYSDEC's adoption of the New York AIM 
coatings rule was subject to SAPA. Section 202(5)(b) of the SAPA 
requires that NYSDEC publish and make available to the public an 
assessment of public comment on the proposed rule, including a summary 
and analysis of the issues raised by the comments and significant 
alternatives suggested in the comments. Section 202(5)(b) of the SAPA 
also required that the assessment include a statement of the reasons 
why any significant alternatives were not incorporated into the rule. 
The commenter stated that NYSDEC violated section 202(5)(b) of the SAPA 
because its assessment of public comments (the ``Response to Comments'' 
document) failed completely to identify or respond to a number of 
comments and failed to provide a statement as to why several 
alternatives suggested by the commenter and others were not 
incorporated into the rule.
    Section 202-a(1) of the SAPA requires that, in promulgating the New 
York AIM coatings rule, NYSDEC consider utilizing approaches designed 
to avoid

[[Page 72122]]

undue deleterious economic effects or overly burdensome impacts on 
affected persons. The commenter stated that NYSDEC violated section 
202-a(1) of the SAPA by failing to give adequate consideration to 
approaches suggested by the commenters that would have avoided undue 
deleterious economic effect and other undue impacts on the regulated 
community.
    SEQRA requires that agencies in New York review the environmental 
impact of actions that they propose to take ``as early as possible in 
the formulation of a proposal for actions.'' Section 8-0109(4) of the 
ECL. Such review must evaluate whether the proposed action ``may have a 
significant effect'' on the environment. To fulfill its obligations 
under SEQRA, State agencies in New York must take a ``hard look'' at 
the potential environmental impact of their proposals and make a 
reasoned elaboration of the basis for their impact determination.
    The commenter stated that in promulgating the New York AIM coatings 
rule, NYSDEC violated these basic requirements of SEQRA. The commenter 
contends that NYSDEC failed to review the impact of the rule early 
enough in its rulemaking process. The commenter further asserted that 
NYSDEC should have performed, but failed to perform, an environmental 
impact analysis, and should have rendered a determination of 
significance at the point at which it endorsed a proposal for action in 
March 2001 (when it approved the OTC's MOU, committing to pursue 
adoption of the OTC model rule). The commenter went on to state that 
NYSDEC compounded this ``violation'' by failing to perform an adequate 
evaluation of the environmental impacts of the New York AIM coatings 
rule either at the time that it formally proposed them or at the time 
of adoption. It contends that NYSDEC's failings in that regard 
included, but were not limited to, its failure to obtain or consider 
any State-specific information, its failure to assess the impacts of 
requiring use of products that will not be suitable for their intended 
purpose, the reliance on data of insufficient quality, and its failure 
to reasonably consider available alternatives. It is the commenter's 
position that these violations of SAPA and SEQRA are grounds to 
invalidate the New York AIM coatings rule under State law and cause the 
State to be without sufficient authority to implement them.
    Response: EPA disagrees with the commenter's assertion concerning 
SAPA. New York did in fact include an assessment of public comments in 
its November 4, 2003, SIP revision submittal which was also included in 
the November 12, 2003, New York State Register for the State's final 
approval of the New York AIM coatings rule. This assessment included 
responses to specific comments and to comments in general. Failure to 
quote comments provided to NYSDEC verbatim does not constitute failure 
to respond to such comments. After review of the comments and NYSDEC's 
responses, EPA has determined that the NYSDEC responses are sufficient. 
In addition, NYSDEC does not have to consider every conceivable 
alternative to the rulemaking proposal (McKinney's section 8-0109, 
subdivisions 2(d), 4 of the ECL; 6 NYCRR section 617.14(f)(5)), but can 
focus on those alternatives which can be implemented and which are 
consistent with the objectives of the rulemaking.
    EPA also disagrees with the commenter's assertion concerning SEQRA. 
SEQRA requires that ``all agencies determine whether the actions they 
directly undertake, fund or approve may have a significant impact on 
the environment, and, if it is determined that the action may have a 
significant adverse impact, prepare or request an environmental impact 
statement.'' Adoption of the New York AIM coatings rule will result in 
a positive impact to the environment by achieving VOC emission 
reductions necessary to attain the 1-hour standard in the New York-
Northern New Jersey-Long Island nonattainment area and will also make 
progress towards reducing 8-hour ozone levels statewide. Therefore, 
since the impact will not be adverse, an environmental impact statement 
was not necessary.
    As stated earlier, in its review of the SIP revision submission of 
the New York AIM coatings rule, EPA has found no reason to indicate 
that the review performed by NYSDEC's Counsel's Office, as to the 
legality of its AIM coatings rule under State law, is insufficient. 
Therefore, EPA has determined, pursuant to section 110(a)(2)(E) of the 
Act and 40 CFR part 51, appendix V, that New York has provided the 
necessary assurances that it has adequate authority to implement the 
SIP revision and that it has followed all the procedural requirements 
of the New York constitution and laws in adopting the SIP revision 
submitted to EPA.

G. Comment: The New York AIM Coatings Rule Violates the Equal 
Protection Clause of the U.S. Constitution

    A commenter claimed that the New York AIM coatings rule violates 
The Equal Protection Clause of the United States Constitution because 
the Equal Protection Clause entitles persons, including corporate 
entities, to equal protection under the law. The New York AIM coatings 
rule allows only ``small manufacturers'' (defined as those who 
manufacture less than 3,000,000 gallons per year) to seek a limited 
short-term exemption from the rules based on an inability to meet the 
VOC content limits due to economic and/or technical infeasibility. This 
exemption would provide small manufacturers with additional time to 
acquire the technology for producing compliant coatings. The commenter 
contends that this exemption, which is not available to large 
manufacturers (even if they could satisfy the economic and/or technical 
infeasibility requirement) is not rationally related to any legitimate 
legislative purpose. The commenter further states that it also is 
unconstitutionally protectionist and discriminates against both large 
manufacturers and out-of-state manufacturers. It is the commenter's 
position that large manufacturers, like small manufacturers, should not 
be required to comply with infeasible limits, and should be provided 
with equal protection under the law. The commenter suggested that EPA 
should disapprove the New York AIM coatings rule SIP revision because 
of this alleged abridgment of its Constitutional rights.
    Response: EPA disagrees with the commenter's allegations that the 
New York AIM coatings rule violates the Equal Protection Clause of the 
Fourteenth Amendment to the U.S. Constitution. The mere fact that the 
State has elected to treat ``small'' and ``large'' manufacturers of 
coatings differently does not, in and of itself, constitute a violation 
of the Constitution.
    The Equal Protection Clause provides, inter alia, that ``[n]o State 
shall * * * deny to any person within its jurisdiction the equal 
protection of the laws.'' U.S. Const. amend XIV section 1. This clause 
is generally understood to mean that similar persons will be dealt with 
in a similar fashion under a state law. This does not mean, however, 
that a government may never classify persons and treat them 
differently. The ability of a state to differentiate between persons 
depends upon the nature of the classification scheme and the nature of

[[Page 72123]]

the rights at issue. The New York AIM coatings rule does not affect 
fundamental rights and it does not adversely affect suspect classes. In 
the case of state statute that relates solely to matters of economics 
or general social welfare, the statute need only rationally relate to a 
legitimate governmental purpose.
    It is primarily the role of the courts to decide when a state 
action is rationally related to a legitimate governmental purpose. 
Nevertheless, based upon the administrative record for the New York AIM 
coatings rule, EPA believes that the State would pass that test. First, 
the State had a legitimate interest in drawing a distinction between 
large and small manufacturers. Its stated purpose for treating small 
manufacturers differently was to provide them with assistance to comply 
with the rule. See, ``Assessment of Public Comments on Proposed 
Revisions to 6 NYCRR part 205, Architectural and Industrial Maintenance 
(AIM) Coatings,'' Response 48.
    The State explained that it is obligated, by State law, to: 
``consider implementation approaches that will minimize adverse impacts 
* * * on small businesses * * * including establishing different 
compliance or reporting requirements or timetables that take into 
account the resources available to small businesses * * * and exempt 
such entities from compliance with the rule so long as the public 
health, safety, or general welfare is not endangered.'' Id., 
(explaining requirements of section 202-b of the New York 
Administrative Procedures Act). Following this statutory requirement, 
the State indicated that it had identified the small manufacturers in 
the State, evaluated their product lines, and targeted the regulatory 
exemption in such a way that it would provide necessary relief to small 
businesses, yet not undermine the overall VOC emission reduction 
objectives of the New York AIM coatings rule.
    The State noted that it elected to create the exemption in order: 
``To ensure that those businesses which have limited product lines and 
little if any research and development resources do not face crippling 
financial impacts from the adoption of the rule and have an opportunity 
and sufficient time to come into compliance.'' In addition, the State 
also explained why it decided not to extend the exemption to all 
manufacturers, regardless of size and economic resources: ``[t]he 
effect of adopting such a broad based exemption would be to swallow the 
whole rule. The [state] could not rely on any VOC reductions from the 
adoption of the proposed rule if every manufacturer could apply for an 
exemption that would never expire.'' Id. The State thus has a number of 
legitimate interests in creation of the small business exemption, 
including: (i) Compliance with State law; (ii) assuring that small 
manufacturers are not unnecessarily put out of business with the 
attendant economic and social costs; and (iii) assuring the overall 
effectiveness of the rule to achieve the intended VOC emission 
reduction goals for protection of public health.
    To achieve these legitimate goals, EPA believes that the State has 
chosen an approach that is rationally related to the intended effect. 
The State targeted the exemption to what it decided were companies that 
would have more limited research and development resources. It made the 
exemption temporary so that these small companies would eventually 
manufacture coatings that would meet the VOC limits. One might disagree 
with the approach that the State has taken, but EPA concludes that the 
approach is rationally related to the intended goals. Courts have 
required that a such law need only have such a rational basis to pass 
muster under the Equal Protection Clause, not that it be perfect. See, 
NPCA v. City of Chicago, 45 F.3d 1124, 1127-28 (7th Cir. 1994), cert. 
denied, 515 U.S. 1143 (1995) (local restriction on sales of paints used 
by graffiti artists may not be the most effective means, but also not 
irrational to meet the objective).
    In addition, EPA believes the commenter has not shown that there is 
no rational basis for this distinction. The commenter simply asserts 
that larger manufacturers should be treated in the same way as smaller 
manufacturers and that the provision is not related to any legitimate 
legislative purpose. EPA notes, however, that Congress and EPA have 
drawn distinctions in control requirements applicable under the Act 
based on the size of the entities subject to the requirements and 
either exempted smaller entities or subjected them to less stringent 
requirements. See, e.g., section 182(b)(3) of the Act which provides 
exempting smaller service stations from certain requirements; 40 CFR 
86.708-94(a)(1)(i)(B)(1)(iv) which provides for exemptions for small 
volume motor vehicle manufacturers from certain requirements. EPA also 
notes that the Regulatory Flexibility Act requires Federal agencies to 
examine the impacts of regulations on small entities, including small 
businesses, and determine whether small businesses should be subject to 
different and less burdensome regulatory requirements than larger 
entities. Consequently, there is a rational basis for a distinction 
between larger and smaller entities.
    Finally, EPA notes that the commenter asserts without any 
justification that this provision of the New York AIM coatings rule 
discriminates against out-of-state manufacturers. EPA does not believe 
that this provision does so. The New York AIM coatings rule's limited 
short-term exemption provision applies to small manufacturers, as 
defined by the rule, regardless of whether they are located within or 
outside of New York State.
    Given the legitimate interest of the State, and the rational 
relationship between the goals and the State's approach, EPA concludes 
that it should not disapprove the New York AIM coatings rule based upon 
the Equal Protection Clause.

H. Comment: The New York AIM Coatings Rule Violates the Commerce Clause 
of the U.S. Constitution

    The commenter claimed that the New York AIM coatings rule violates 
the Commerce Clause of Article I, section 8, of the U.S. Constitution, 
because it imposes an unreasonable burden on interstate commerce. The 
commenter asserted that because the New York AIM coatings rule contains 
VOC limits and other provisions that differ from the Federal AIM 
coatings rule in 40 CFR 59.400, the rule causes an unreasonable 
restriction on coatings in interstate commerce. The commenter further 
asserted that the burdens of the New York AIM coatings rule are 
excessive and outweigh the benefits of the rule. The commenter 
suggested that EPA should disapprove the SIP revision on this basis.
    Response: EPA agrees that AIM coatings are products in interstate 
commerce and that state regulations on coatings therefore have the 
potential to violate the Commerce Clause. EPA understands the 
commenter's practical concerns caused by differing state regulations, 
but disagrees with the commenter's view that the New York AIM coatings 
rule impermissibly impinges on interstate commerce.
    A state law may violate the Commerce Clause in two ways: (i) by 
explicitly discriminating between interstate and intrastate commerce; 
or (ii) even in the absence of overt discrimination, by imposing an 
incidental burden on interstate commerce that is markedly greater than 
that on intrastate commerce. The New York AIM coatings rule does not 
explicitly discriminate against interstate commerce, because it

[[Page 72124]]

applies evenhandedly to all coatings manufactured or sold for use 
within the state. The New York AIM coatings rule's limited short-term 
exemption provision applies to small manufacturers, as defined by the 
rule, regardless of whether they are located within or outside of New 
York State. In the case of incidental impacts, the Supreme Court has 
applied a balancing test to evaluate the relative impacts of a state 
law on interstate and intrastate commerce. See, Pike v. Bruce Church, 
Inc., 397 U.S. 137 (1970). Courts have struck down even 
nondiscriminatory state statutes, when the burden on interstate 
commerce is ``clearly excessive in relation to the putative local 
benefits.'' Id. at 142.
    At the outset, EPA notes that it is unquestionable that the State 
has a substantial and legitimate interest in obtaining VOC emissions 
reductions for the purpose of attaining the Ozone NAAQS. The adverse 
health consequences of exposure to ozone are well known and well 
established and need not be repeated here. See, e.g., National Ambient 
Air Quality Standards for Ozone: Final Response to Remand, 68 FR 
614620-61425 (January 6, 2003). Thus, the New York AIM coatings rule is 
protective of the public health of the citizens of New York State. The 
courts have recognized a presumption of validity where the state 
statute affects matters of public health and safety. See, e.g., Kassel 
v. Consolidated Freightways Corp. of Delaware, 450 U.S. 662, 671 
(1980). Moreover, even where the state statute in question is intended 
to achieve more general environmental goals, courts have upheld such 
statutes notwithstanding incidental impacts on out of state 
manufacturers of a product. See, e.g, Minnesota v. Clover Leaf 
Creamery, et al., 449 U.S. 456 (1981) (upholding state law that banned 
sales of milk in plastic containers to conserve energy and ease solid 
waste problems).
    The commenter asserts, without reference to any facts, that the New 
York AIM coatings rule imposes burdens and has impacts on consumers 
that are ``clearly excessive in relation to the purported benefits * * 
*'' By contrast, EPA believes that the burdens of the New York AIM 
coatings rule are not so overwhelming as to trump the State's interest 
in the protection of public health. First, the New York AIM coatings 
rule does not restrict the transportation of coatings in commerce 
itself, only the sale of nonconforming coatings within the State's own 
boundaries. The State's rule excludes coatings sold or manufactured for 
use outside the State or for shipment to others. New York AIM Coatings, 
subpart 205.1(b). The New York AIM coatings rule cannot be construed to 
interfere with the transportation of coatings through the State en 
route to other states. As such, EPA believes that the cases concerning 
impacts on the interstate modes of transportation themselves are 
inapposite. See, e.g., Bibb v. Navajo Freight Lines, 359 U.S. 520 
(1938).
    Second, the New York AIM coatings rule is not constructed in such a 
way that it has the practical effect of requiring extraterritorial 
compliance with the state's VOC limits. The New York AIM coatings rule 
only governs coatings manufactured or sold for use within the State's 
boundaries. The manufacturers of coatings in interstate commerce are 
not compelled to take any particular action, and they retain a wide 
range of options to comply with the rule, including but not limited to: 
(i) Ceasing sales of nonconforming products in New York; (ii) 
reformulating nonconforming products for sale in New York and passing 
the extra costs on to consumers in that state; (iii) reformulating 
nonconforming products for sale more broadly; (iv) developing new lines 
of conforming products; or (v) entering into production, sales or 
marketing agreements with companies that do manufacture conforming 
products. Because manufacturers or retailers of coatings in other 
states are not forced to meet New York's regulatory requirements 
elsewhere, the rule does not impose the type of obligatory 
extraterritorial compliance that the courts have considered 
unreasonable. See, e.g., NEMA v. Sorrell, 272 F.3d 104 (2nd Cir. 2000) 
(state label requirement for light bulbs containing mercury sold in 
that state is not an impermissible restriction). The New York AIM 
coatings rule may have the effect of reducing the availability of 
coatings or increasing the cost of coatings within the State, but 
courts typically view it as the prerogative of the state to make 
regulatory decisions with regard to such impacts upon its own citizens. 
See NPCA v. City of Chicago, 45 F.3d 1124 (7th Cir. 1994), cert. 
denied, 515 U.S. 1143 (1995) (while local restriction on sales of 
paints used by graffiti artists may not be the most effective means to 
meet objective, it is up to the local government to decide).
    Third, the burdens of the New York AIM coatings rule do not appear 
to fall more heavily on interstate commerce than upon intrastate 
commerce. The effect on manufacturers and retailers will fall on 
manufacturers and retailers, regardless of location, if they intend 
their products for sale within New York, and does not appear to have 
the effect of unfairly benefitting instate manufacturers or retailers. 
The mere fact that there is a burden on some companies in other states 
does not alone establish impermissible interference with interstate 
commerce. See Exxon Corp. v. Maryland, 437 U.S. 117, 126 (1978).
    In addition, EPA notes that courts have not found violations of the 
Commerce Clause in situations where states have enacted state laws with 
the authorization of Congress. See, e.g., Oxygenated Fuels Assoc., Inc. 
v. Davis, 63 F. Supp. 1182 (E.D. Cal. 2001) (state ban on MTBE 
authorized by Congress); NEMA v. Sorell, 272 F.3d 104 (2nd Cir. 2000) 
(RCRA's authorization of more stringent state regulations confers a 
``sturdy buffer'' against Commerce Clause challenges). Section 183(e) 
of the Act governs the Federal regulation of VOCs from consumer and 
commercial products, such as coatings covered by the New York AIM 
coatings rule. EPA has issued a Federal regulation that provides 
national standards, including VOC content limits, for such coatings. 
See 40 CFR 59.400 et seq. Congress did not, however, intend section 
183(e) to pre-empt additional state regulation of coatings, as is 
evident in section 183(e)(9) which indicates explicitly that states may 
regulate such products. EPA's regulations promulgated pursuant to the 
Act recognized that states might issue their own regulations, so long 
as they meet or exceed the requirements of the Federal regulations. 
See, e.g., the National Volatile Organic Compound Emission Standards 
for Architectural Coatings, 40 CFR 59.410, and Federal Register which 
published the standards, 63 FR 48848, 48857 (September 11, 1998). Thus, 
EPA believes that Congress has clearly provided that a state may 
regulate coatings more stringently than other states.
    In section 116 of the Act, Congress has also explicitly reserved to 
states and their political subdivisions the right to adopt local rules 
and regulations to impose emissions limits or otherwise abate air 
pollution, unless there is a specific Federal preemption of that 
authority. When Congress intends to create such Federal preemption, it 
does so through explicit provisions. See, e.g., section 209(a) of the 
Act which pertains to state or local emissions standards for motor 
vehicles; section 211 of the Act which pertains to fuel standards. 
Moreover, the very structure of the Act is based upon ``cooperative 
federalism,'' which contemplates that each state will develop its own 
state implementation plan, and that states retain a large degree of 
flexibility in choosing which

[[Page 72125]]

sources to control and to what degree in order to attain the NAAQS by 
the applicable attainment date. See Union Electric Co. v. EPA, 427 U.S. 
246 (1976). Given the structure of the Act, the mere fact that one 
state might choose to regulate sources differently than another state 
is not, in and of itself, contrary to the Commerce Clause.
    Finally, EPA understands that there may be a practical concern that 
a plethora of state regulations could create a checkerboard of 
differing requirements that might not be the simplest approach to 
regulating VOCs from AIM coatings or other consumer products. Greater 
uniformity of standards does have beneficial effects in terms of more 
cost effective and efficient regulations. As EPA noted in its own AIM 
coatings rule, national uniformity in regulations is also an important 
goal because it will facilitate more effective regulation and 
enforcement, and minimize the opportunities for undermining the 
intended VOC emission reductions. 63 FR 48856-48857. However, EPA also 
recognizes that New York and other states with longstanding ozone 
nonattainment problems have local needs for VOC reductions that may 
necessitate more stringent coatings regulations. Under section 116 of 
the Act, states clearly have the authority to do so. New York may have 
additional burdens to insure compliance with its rule, but for purposes 
of this action EPA presumes that the State will take appropriate 
actions to enforce it as necessary. Because the New York AIM coatings 
rule meets the requirements of section 110(a)(2) of the Act, EPA has an 
obligation to approve the rule. EPA has no grounds for disapproval of 
the New York AIM coatings rule based upon the commenters commerce 
clause comment.

I. Comment: The Emission Limits and Compliance Schedule in the New York 
AIM Coatings Rule Are Neither Necessary Nor Appropriate to Meet 
Applicable Requirements of the Clean Air Act

    The commenter claims that the New York AIM coatings rule is not 
``necessary or appropriate'' for inclusion in the New York SIP, because 
EPA did not direct New York to achieve VOC reductions through the AIM 
coatings rule, but left it to the State to decide how such reduction 
can be achieved. The commenter further asserts that the New York AIM 
coatings rule is also not necessary or appropriate for inclusion in the 
New York SIP because of the numerous procedural and substantive 
failings on the part of NYSDEC in promulgating the rule.
    Response: EPA disagrees with this comment. If fulfillment of the 
``necessary or appropriate'' condition of section 110(a)(2)(A) required 
EPA to determine that a measure was necessary or appropriate and 
require a state to adopt that measure, this condition would present a 
``catch 22'' situation. EPA does not generally have the authority to 
require the state to enact and include in its SIP any particular 
control measure, even a ``necessary'' one.\4\ However, under section 
110(a)(2)(A) a control measure must be either ``necessary or 
appropriate,'' (emphasis added); the use of the disjunctive ``or'' does 
not provide that a state must find that only a certain control measure 
and no other measure will achieve the required reduction. Rather, a 
state may adopt and propose for inclusion in its SIP any measure that 
meets the other requirements for approvability so long as that measure 
is at least an appropriate (and not necessarily exclusive), means of 
achieving emissions reduction. See also, Union Electric Co. v. EPA, 427 
U.S. 246, 264-266 (1976) in which the Court held that ``necessary'' 
measures are those that meet the ``minimum conditions'' of the Act, and 
that a state ``may select whatever mix of control devices it desires,'' 
even ones more stringent than Federal standard, to achieve compliance 
with a NAAQS, and that ``the Administrator must approve such plans if 
they meet the minimum requirements of section 110(a)(2).'' Clearly, in 
light of the Act and the caselaw, EPA's failure to specify state 
adoption of a specific control measure cannot dictate whether a control 
measure is necessary or appropriate.
---------------------------------------------------------------------------

    \4\ As noted in Virginia v. EPA, EPA does have the authority 
within the mechanism created by section 184 of the Act to order 
states to adopt control measures recommended by the OTC, if EPA 
agrees with and approves that recommendation. 108 F.3d, n.3 at 1402. 
As previously stated, the OTC AIM model rule was not developed 
pursuant to the section 184 mechanism; EPA therefore has no 
authority to order that New York or any other state adopt this 
measure in order to reduce VOC emissions.
---------------------------------------------------------------------------

    In this particular instance, EPA identified an emission reduction 
shortfall associated with New York's 1-hour ozone attainment 
demonstration SIP, and required New York to address the shortfall. See, 
64 FR 70364 and 67 FR 5170. It is the State's prerogative to develop 
whatever rule or set of rules it deems necessary or appropriate such 
that the rule or rules will collectively achieve the additional 
emission reductions for attainment of the 1-hour ozone standard as 
identified by EPA.
    As stated previously, the State's November 4, 2003, SIP revision 
submittal provides evidence that it has the legal authority to adopt 
the New York AIM coatings rule and that it has followed all of the 
requirements in the State's law and constitution that are related to 
adoption of the New York AIM coatings rule.

J. Comment: Comments Submitted to the NYSDEC on New York's Proposal of 
Its AIM Coatings Rule Are Incorporated by Reference in Sherwin-
Williams' Letter to EPA Submitted as Comment to EPA's January 16, 2004 
Proposed Approval of the New York AIM Coatings Rule

    In its February 17, 2004, letter submitted to EPA as comment to 
EPA's proposed approval of the New York AIM Coatings Rule, the 
commenter incorporated by reference a ``Statement on behalf of the 
Sherwin-Williams Company on proposed 6 NYCRR Part 205'' presented to 
the NYSDEC at the Legislative Public Hearing, dated May 2, 2003 and 
``Comments of the Sherwin-Williams Company'' to the NYSDEC, dated May 
12, 2003. The following summarizes the comments that were presented to 
the NYSDEC and thereby incorporated by reference by the commenter:
    (1) The commenter has significant concerns with the proposed 
standards for interior wood clear and semi-transparent stains, interior 
wood varnishes, interior wood sanding sealers, exterior wood primers, 
and floor coatings. The commenter asserts that New York's proposed AIM 
coatings rule is based upon the inaccurate assumption that compliant 
coatings are available or can be developed which will satisfy customer 
requirements and meet all of the performance requirements of these 
categories. The commenter contends that such coatings are not 
effectively within the limits of current technology and that this 
``inaccurate assumption'' will result in increased and earlier 
repainting which can damage floors in New York due to seasonal 
variations in temperature and humidity.
    (2) The commenter contends that NYSDEC has not considered the 
increase in emissions resulting from the performance issues and 
repainting.
    (3) The commenter has suggested changes to the VOC standards for 
only a few of the 52 product categories proposed by New York in its AIM 
coatings rule, and claims that the version of the AIM coatings rule it 
counter-proposes will achieve significant reductions beyond the 
National AIM coatings rule.
    (4) The commenter states that New York's proposed AIM coatings rule 
will

[[Page 72126]]

have a significant adverse impact on the commenter and the NYSDEC can 
issue another regulation that achieves substantial VOC reductions 
beyond the Federal AIM coatings rule without causing serious adverse 
impact on potential sales of certain products.
    (5) The commenter contends that the reporting requirements and 
related compliance provisions of New York's proposed AIM coatings rule 
are unreasonable.
    (6) The commenter states that New York's proposed AIM coatings rule 
is arbitrary and capricious because it does not include reasonable 
alternatives and because the small business limited short-term 
exemption provision should be available to all manufacturers.
    (7) The commenter asserts that the economic analysis of New York's 
proposed AIM coatings rule is inaccurate because it uses a cost figure 
of $6400 per ton of emissions reduced based upon an economic analysis 
done for California. It contends that the cost figure is inappropriate 
given the differences in the stringency of the current requirements for 
AIM coatings in New York versus California, and therefore, New York 
needs to make an independent determination of the cost of VOC 
reductions from its proposed AIM coatings regulation.
    (8) The commenter has indicated that both the Consumer Products 
regulation and AIM coatings rule proposed by New York are based on 
rulemakings in California. However, New York's proposal includes the 
California averaging provision for consumer products but does not do so 
for AIM. The commenter asserts that failure to include the California 
averaging provisions in the New York AIM coatings rule is arbitrary and 
capricious, and places an unequal burden on the architectural coating 
industry.
    (9) The commenter also submitted comments to NYSDEC regarding it 
proposed AIM coatings rule challenging that the NYSDEC does not have 
authority under the State ECL to adopt the proposed AIM coatings rule.
    Response: As previously stated in this document, EPA disagrees with 
the commenter's assertion that the adoption of the AIM coatings 
regulation by the NYSDEC is in violation of the ECL. Please see EPA's 
response to Comment E. With regard to the other comments submitted by 
the commenter to the NYSDEC on its proposed AIM coatings rule that it 
has incorporated by reference in its comments to EPA on EPA's February 
16, 2004, proposed approval, EPA's response is that , it is important 
to understand EPA's role and responsibilities with regard to the review 
and approval, or disapproval, of rules submitted as SIP revisions. 
Prior to approving a state submitted SIP revision, pursuant to section 
110(a) of the Act, EPA reviews the submission to ensure that the state 
provided the opportunity for comment and held a hearing(s) on the state 
regulation that is at issue in the proposed SIP revision. In this case, 
New York's November 4, 2003, SIP submittal and its November 21, 2003, 
supplemental SIP submittal to EPA, of its AIM coatings rule include the 
necessary documentation to demonstrate that it met these requirements. 
New York's SIP revision submissions are included in the docket of this 
rulemaking.
    A complete SIP revision submission from a state includes copies of 
timely comments properly submitted to the state on the proposed SIP 
revision and the state's responses to those comments. New York's 
November 4, 2003, submission of its AIM coatings rule as a SIP revision 
to EPA properly includes both the comments submitted on its proposed 
AIM coatings rule and the States responses to those comments. See both 
the documents entitled, Assessment of Public Comments on Proposed 
Revisions to 6 NYCRR part 205, Architectural and Industrial Maintenance 
(AIM) Coatings and New York State Register, Rule Making Activities, 
Notice of Adoption, pg. 2, November 12, 2003.
    The New York SIP revision submission of its AIM coatings rule does 
not request that EPA approve a specific amount of VOC emission 
reduction credit. As such, the comments regarding the State's emission 
reduction calculations are not germane to EPA's current rulemaking to 
approve New York's November 4, 2003, and the supplemental November 21, 
2003, SIP revision. The State's responses to the comments made by the 
commenter in its May 12, 2003, letter submitted to the NYSDEC as part 
of its timely comments on the proposed New York AIM coatings rule are 
included in the States' submission to EPA for approval of the SIP 
revision. (Comments were to be submitted to the NYSDEC on its proposed 
SIP revision by May 12, 2003).
    The cost per ton figure determined by New York in its regulatory 
impact statement, its decision to rely upon information from 
California, its decision on whether to include reasonable alternatives, 
its choice not to include averaging provisions in its AIM coatings 
rule, its choice of reporting requirements and its choice to include a 
small business limited short-term exemption are all decisions which 
fall within the State's purview, and issues regarding those decisions 
are rightfully raised by interested parties to the State during its 
regulatory adoption process. Therefore, it was appropriate that the 
commenter comment to the State on these matters during the adoption of 
its AIM coatings rule. EPA has reviewed the SIP revision submitted and 
has determined that the commenter's comments on those issues it has 
incorporated by reference in this rulemaking, along with the NYSDEC's 
responses to those issues, are included therein. In the context of a 
SIP approval, EPA's review of state decisions is limited to whether the 
rule meets the minimum criteria of the Act. Provided that the rule 
adopted by the state satisfies this criteria, EPA must approve such 
plans. See, Union Electric Co. v. EPA.
    With regard to the commenter's comments concerning the availability 
of complying coatings and the ability to develop complying coatings 
that can meet customer requirements and performance requirements, EPA 
notes that NYSDEC addressed these comments in its Assessment of Public 
Comments document. NYSDEC researched various AIM coatings surveys and 
performance studies which ``demonstrate the technical feasibility of 
the proposed limits and that coatings reformulated to meet these limits 
perform as expected.'' NYSDEC determined that quality AIM coatings are 
available in all categories which comply with the VOC content limits 
specified in the proposed New York AIM coatings rule, and therefore, 
New York adopted the proposed limits into its final AIM coatings rule. 
It is the State's prerogative to impose more stringent limits for 
architectural coatings as part of its SIP, and its election to do so is 
not a basis for EPA to disapprove the SIP. EPA has determined that New 
York's SIP revision was complete in that it included the commenter's 
comments and NYSDEC sufficiently responded to them. EPA has also 
determined that this SIP revision meets the minimum criteria for 
approval under the Act, including the requirement that the revision be 
at least as stringent as the Federal AIM coatings rule set forth at 40 
CFR 59.400.

IV. What Is EPA's Conclusion?

    EPA has determined that the comments, received in response to the 
January 16, 2004 proposed rulemaking action, do not alter its proposed 
determination that the SIP revision submitted by New York is fully 
approvable. EPA has evaluated New York's submittal for consistency with 
the Act, EPA regulations, and EPA

[[Page 72127]]

policy. EPA has determined that the revisions made to title 6 of the 
New York Codes, Rules and Regulations, part 205, entitled, 
``Architectural and Industrial Maintenance Coatings'', effective 
November 22, 2003, meet the SIP revision requirements of the Act and, 
therefore, EPA has made the final determination that New York's AIM 
coatings rule is approvable.

V. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason, this action is also not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action 
merely approves state law as meeting Federal requirements and imposes 
no additional requirements beyond those imposed by state law. 
Accordingly, the Administrator certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because 
this rule approves pre-existing requirements under state law and does 
not impose any additional enforceable duty beyond that required by 
state law, it does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Public Law 104-4).
    This rule also does not have tribal implications because it will 
not have a substantial direct effect on one or more Indian tribes, 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 by Executive Order 13175 (65 
FR 67249, November 9, 2000). This action also does not have federalism 
implications because it does 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 (64 
FR 43255, August 10, 1999). This action merely approves a state rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the Act. 
This rule also is not subject to Executive Order 13045 ``Protection of 
Children from Environmental Health Risks and Safety Risks'' (62 FR 
19885, April 23, 1997), because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Act. In this 
context, in the absence of a prior existing requirement for the State 
to use voluntary consensus standards (VCS), EPA has no authority to 
disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Act. Thus, the requirements of section 
12(d) of the National Technology Transfer and Advancement Act of 1995 
(15 U.S.C. 272 note) do not apply. This rule does not impose an 
information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    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. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by February 11, 2005. 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, Incorporation by 
reference, Intergovernmental relations, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

    Dated: November 23, 2004.
Kathleen Callahan,
Acting Regional Administrator, Region 2.

0
Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

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

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

Subpart HH--New York

0
2. Section 52.1670 is amended by adding new paragraph (c)(105) to read 
as follows:


Sec.  52.1670  Identification of plans.

* * * * *
    (c) * * *
    (105) Revisions to the State Implementation Plan submitted on 
November 4, 2003 and supplemented on November 21, 2003, by the New York 
State Department of Environmental Conservation, which consists of a 
control strategy that will achieve volatile organic compound emission 
reductions that will help achieve attainment of the national ambient 
air quality standard for ozone.
    (i) Incorporation by reference:
    (A) Regulation Part 205, ``Architectural and Industrial Maintenance 
Coatings.'' of title 6 of the New York Code of Rules and Regulations, 
filed on October 23, 2003, and effective on November 22, 2003.

0
3. In Sec.  52.1679, the table is amended by revising the entry under 
title 6 for part 205 to read as follows.


Sec.  52.1679  EPA-approved New York State regulations.

[[Page 72128]]



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                                                                             Latest EPA
    New York State regulation              State effective date             approval date          Comments
----------------------------------------------------------------------------------------------------------------
Title 6:
 
                                                  * * * * * * *
    Part 205, Architectural and   11/22/2004...........................  12/13/2004 and FR
     Industrial Maintenance                                               page citation.
     Coatings.
                                                  * * * * * * *
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[FR Doc. 04-27261 Filed 12-10-04; 8:45 am]
BILLING CODE 6560-50-P