[Federal Register Volume 70, Number 91 (Thursday, May 12, 2005)]
[Proposed Rules]
[Pages 25008-25010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9480]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[R06-OAR-2005-TX-0021; FRL-7910-9]


Approval and Promulgation of Implementation Plans; State of 
Texas; Control of Air Pollution From Motor Vehicles, Mobile Source 
Incentive Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to approve revisions to the Texas State 
Implementation Plan (SIP) to incorporate the Texas Emission Reduction 
Plan (TERP) into the Texas SIP. The TERP is utilized in each of the 
nonattainment areas and near nonattainment areas in the state to 
achieve reductions in the emissions of oxides of nitrogen from on-road 
and non-road mobile sources. This action will allow the State to 
capture credit from those reductions and use them in attainment 
demonstrations for these areas.

DATES: Comments must be received on or before June 13, 2005.

ADDRESSES: Submit your comments, identified by Regional Material in 
EDocket (RME) ID No. R06-OAR-2005-TX-0021, by one of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the on-line instructions for submitting comments.
     Agency Web site: http://docket.epa.gov/rmepub/. Regional 
Material in EDocket (RME), EPA's electronic public docket and comment 
system, is EPA's preferred method for receiving comments. Once in the 
system, select ``quick search,'' then key in the appropriate RME Docket 
identification number. Follow the on-line instructions for submitting 
comments.
     U.S. EPA Region 6 ``Contact Us'' Web site: http://epa.gov/region6/r6coment.htm. Please click on ``6PD'' (Multimedia) and select 
``Air'' before submitting comments.
     E-mail: Mr. Thomas Diggs at [email protected]. Please 
also cc the person listed in the FOR FURTHER INFORMATION CONTACT 
section below.
     Fax: Mr. Thomas Diggs, Chief, Air Planning Section (6PD-
L), at fax number 214-665-7263.
     Mail: Mr. Thomas Diggs, Chief, Air Planning Section (6PD-
L), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, 
Dallas, Texas 75202-2733.
     Hand or Courier Delivery: Mr. Thomas Diggs, Chief, Air 
Planning Section (6PD-L), Environmental Protection Agency, 1445 Ross 
Avenue, Suite 1200, Dallas, Texas 75202-2733. Such deliveries are 
accepted only between the hours of 8 a.m. and 4 p.m. weekdays except 
for legal holidays. Special arrangements should be made for deliveries 
of boxed information.
    Instructions: Direct your comments to Regional Material in EDocket 
(RME) ID No. R06-OAR-2005-TX-0021. EPA's policy is that all comments 
received will be included in the public file without change, and may be 
made available online at http://docket.epa.gov/rmepub/, including any 
personal information provided, unless the comment includes information 
claimed to be Confidential Business Information (CBI) or other 
information the disclosure of which is restricted by statute. Do not 
submit information through Regional Material in EDocket (RME), 
regulations.gov, or e-mail if you believe that it is CBI or otherwise 
protected from disclosure.
    The EPA RME website and the federal regulations.gov are ``anonymous 
access'' systems, which means EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send an e-mail comment directly to EPA without going through RME 
or regulations.gov, your e-mail address will be automatically captured 
and included as part of the comment that is placed in the public file 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment and with any disk or CD-ROM you 
submit. If EPA cannot read your comment due to technical difficulties 
and cannot contact you for clarification, EPA may not be able to 
consider your comment. Electronic files should avoid the use of special 
characters, any form of encryption, and be free of any defects or 
viruses.
    Docket: All documents in the electronic docket are listed in the 
Regional Material in EDocket (RME) index at http://docket.epa.gov/rmepub/. Although listed in the index, some information is not publicly 
available, i.e., CBI or other information whose disclosure is 
restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the Internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically in RME or in the official file which is 
available at the Air Planning Section (6PD-L),

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Environmental Protection Agency, 1445 Ross Avenue, Suite 700, Dallas, 
Texas 75202-2733. The file will be made available by appointment for 
public inspection in the Region 6 FOIA Review Room between the hours of 
8:30 a.m. and 4:30 p.m. weekdays except for legal holidays. Contact the 
person listed in the FOR FURTHER INFORMATION CONTACT paragraph below or 
Mr. Bill Deese at (214) 665-7253 to make an appointment. If possible, 
please make the appointment at least two working days in advance of 
your visit. There will be a 15 cent per page fee for making photocopies 
of documents. On the day of the visit, please check in at the EPA 
Region 6 reception area at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State submittal is also available for public inspection at the 
State Air Agency listed below during official business hours by 
appointment: Texas Commission on Environmental Quality, Office of Air 
Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Sandra Rennie, Air Planning Section 
(6PD-L), Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7367; fax 
number 214-665-7263; e-mail address [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.

Outline

What Action Are We Taking?
What Is the Background for This Action?
What Did the State Submit?
What Do These Rules Require?
What Are Oxides of Nitrogen?
What Areas in Texas Will This Action Affect?
Why Are We Proposing To Approve This Submittal?
Proposed Action
Statutory and Executive Order Reviews

What Action Are We Taking?

    We are proposing to approve a revision to the SIP as an economic 
incentive program consistent with EPA's guidance. For a more complete 
description of our review, please see the technical support document 
for this action.
    We are proposing to approve rules that implement a portion of the 
TERP legislation. The legislation created an economic incentive program 
to accelerate the introduction of lower emitting mobile source 
technologies in nonattainment and near nonattainment areas of Texas. 
The State adopted these rules on August 22, 2001.
    We are also proposing to approve revisions to these rules that the 
State adopted on January 28, 2004, and submitted to EPA on March 3, 
2004.

What Is the Background for This Action?

    In 2001, the Texas Legislature enacted Senate Bill 5, which 
established the TERP. The TERP includes a grant program designed to 
accelerate the early introduction and use of lower emitting diesel 
technologies in the nonattainment and near nonattainment areas of 
Texas; a grant program to fund improved energy efficiency in buildings; 
purchase and lease incentives to encourage the introduction of cleaner 
light duty vehicles into the Texas fleet; and funding for research and 
development programs focused on new air pollution reduction 
technologies. This legislation also establishes a statewide incentive 
program for the purchase or lease of new on-road diesel vehicles and 
light-duty motor vehicles that meet more stringent emission standards 
than those required by any federal requirements. The incentives 
eligible for on-road diesel vehicles are for the incremental cost to 
purchase the cleaner vehicle. The incentive for eligible light duty 
vehicles is a specified dollar amount. Each of the incentives is based 
on the specific emission standard to which the vehicle is certified.
    In 2003 Texas House Bill 1365 amended surcharges and fees which 
fund TERP, along with the eligibility criteria. The 2003 amendments 
broaden the list eligible to apply for a grant. This adoption also adds 
three counties to the list where eligible projects may be funded and 
also includes all counties in nonattainment areas. The amendment also 
provides for the new methods for streamlining the grant process for 
small business. The 2003 legislation was projected to provide 
approximately $120 million per year for funding those programs through 
September 2008.

What Did the State Submit?

    On March 9, 2005, the Texas Commission on Environmental Quality 
submitted Texas Emission Reduction Plan rules at 30 TAC, Chapter 114, 
Subchapter K, Mobile Source Incentive Programs, Division 3, Diesel 
Emission Reduction Incentive Program for On-Road and Non-Road Vehicles, 
to EPA as a revision to the SIP. These new rules are found in 30 TAC 
Sections 114.620-623, 114.626, and 114.629. The State adopted revisions 
to these rules on January 28, 2004, and submitted them to EPA on March 
3, 2004.

What Do These Rules Require?

    The TERP includes a number of voluntary incentive and assistance 
programs designed to help improve the air quality in Texas. The 
programs included in TERP are as follows: Heavy-Duty Motor Vehicle 
Purchase or Lease Incentive Program, Light-Duty Motor Vehicle Purchase 
or Lease Incentive Program and Diesel Emission Reduction Incentive 
Grant Program for On-Road and Non-Road Vehicles (``Incentive Grant 
Program''). It is the Incentive Grant Program that is contained in 
Division 3 and that is before us as a SIP revision.
    The Incentive Grant Program rules delineate the individuals and 
businesses that may apply for grants under TERP and provide that all 
applicants are subject to the criteria listed in Texas Emission 
Reduction Plan: Guidance for Emissions Reduction Incentive Grants 
Program (RG-388). Eligible projects include multiple variations of 
leasing or purchasing, retrofitting, repowering, or other 
NOX reducing technologies for on-road and off-road diesel 
powered engines. The rule requires that any project funded by a grant 
must operate no less than 75 percent of the vehicle miles traveled or 
hours of operations of that project over the following five years in a 
nonattainment or near nonattainment county.
    The plan also requires that a project, excluding infrastructure 
projects, must meet a cost-effectiveness not to exceed $13,000 per ton 
of NOX emissions. Except in extreme circumstances, the 
emissions reductions gained by any project funded through a TERP grant 
may not be used for credit under any state or federal emission 
reduction credit averaging, banking or trading program. The program 
allows TERP reductions to be credited toward the NOX cap and 
trade program in Houston but only in the unlikely event that the 
industrial source's compliance cost exceeds $75,000/ton. In that case, 
the source would be able to deposit $75,000/ton into the TERP account 
where the money would be utilized to achieve more cost effective mobile 
source reductions.
    Use of TERP reductions in the NOX cap and trade program 
is covered in 30 TAC 101.357, which is not the subject of this proposed 
action. We will address this issue when we act on the Mass Emissions 
Cap and Trade revisions at a later date.

What Are Oxides of Nitrogen?

    Nitrogen oxides (NOX) belong to the group of criteria 
air pollutants. NOX results from burning fuels, including

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gasoline and coal. Nitrogen oxides react with volatile organic 
compounds to form ozone or smog and are also major components of acid 
rain.

What Areas in Texas Will This Action Affect?

    The TERP will provide potential emission reductions in the 
following counties: Bastrop, Bexar, Brazoria, Caldwell, Chambers, 
Collin, Comal, Dallas, Denton, El Paso, Ellis, Fort Bend, Galveston, 
Gregg, Guadalupe, Harris, Hardin, Harrison, Hayes, Henderson, Hood, 
Hunt, Jefferson, Johnson, Kaufman, Liberty, Montgomery, Nueces, Orange, 
Parker, Rockwall, Rusk, San Patricio, Smith, Tarrant, Travis, Upshur, 
Victoria, Waller, Williamson, Wilson, and any other county located 
within an area of Texas designated as nonattaiment for ground-level 
ozone.

Why Are We Proposing To Approve This Submittal?

    TERP Division 3 is a measure relied upon in State Implementation 
Plans for the Early Action Compact areas of Austin, San Antonio, and 
Northeast Texas, as well as the Houston/Galveston Attainment 
Demonstration, and the Dallas/Fort Worth 5 percent Increment of 
Progress Plan. The amount of emission reductions projected for the TERP 
program is delineated in each of these plan revisions. These reductions 
are assisting areas to come into attainment with the National Ambient 
Air Quality Standard for ozone.
    Diesel engines are targeted due to their relatively high 
NOX emissions and their long operational life, which makes 
the introduction of newer cleaner engines into a fleet a long term 
process with normal turnover. The TERP will offset the incremental cost 
of projects that will reduce oxides of nitrogen emissions from heavy 
duty diesel trucks and construction equipment in nonattainment areas. 
This is an incentive to owners and operators to upgrade their fleets at 
an expedited rate. The upgrade of these fleets will reduce the amount 
of NOX emissions to the atmosphere. We are proposing to 
approve these revisions to the Texas SIP because they will contribute 
to the attainment of the ozone standard, and therefore strengthen the 
SIP.

Proposed Action

    TERP Division 3 is consistent with EPA guidance for an economic 
incentive program. See ``Improving Air Quality With Economic Incentive 
Programs,'' EPA Office of Air and Radiation, EPA-452-/R-01-001 (Jan. 
2001). Therefore, we propose to approve the TERP Division 3 rules.

Statutory and Executive Order Reviews

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866, entitled ``Regulatory 
Planning and Review.'' This rule is not a ``significant energy action'' 
as defined in Executive Order 13211, ``Actions Concerning Regulations 
That Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355 (May 22, 2001)), because it is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. This 
proposed action merely proposes to approve state law as meeting Federal 
requirements and imposes no additional requirements beyond those 
imposed by state law. Accordingly, the Administrator certifies that 
this proposed 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 proposes to approve 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 (Pub. L. 104-4).
    This proposed 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 proposes to approve a state rule implementing a Federal 
standard, and does not alter the relationship or the distribution of 
power and responsibilities established in the Clean Air Act. This 
proposed 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). 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 proposed 
rule is not subject to Executive Order 13045 because it approves a 
state program.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air 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 Clean Air 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 proposed 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.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen 
dioxide, Ozone, Particulate matter, Reporting and recordkeeping 
requirements, Sulfur oxides, Volatile organic compounds.

    Dated: May 4, 2005.
Richard E. Greene,
Regional Administrator, Region 6.
[FR Doc. 05-9480 Filed 5-11-05; 8:45 am]
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