[Federal Register Volume 71, Number 182 (Wednesday, September 20, 2006)]
[Rules and Regulations]
[Pages 54908-54912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7809]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2004-0508; FRL-8221-2]
RIN 2060-AJ71


Control of Air Pollution From New Motor Vehicles; Second 
Amendment to the Tier 2/Gasoline Sulfur Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action amends the credit generation provisions of the 
Geographic Phase-in Area (GPA) gasoline sulfur program to yield the 
correct number of credits for refineries and importers that produce GPA 
gasoline and eliminate the generation of windfall credits by refineries 
or importers that have gasoline sulfur baselines below 150 ppm sulfur.
    In June 2002, we published a Direct Final Rule (DFR) and concurrent 
Notice of Proposed Rulemaking (NPRM) to amend certain provisions of the 
gasoline sulfur program concerning Geographic Phase-in Area (GPA) 
gasoline. Specifically, we replaced the variable standard for GPA 
gasoline with a flat standard of 150 parts per million (ppm) sulfur for 
the duration of the GPA program. To prevent the generation of windfall 
credits by refineries or importers that had gasoline sulfur baselines 
below 150 ppm sulfur, we also amended the program's credit generation 
provisions. As stated in the preamble to the Direct Final Rule, we 
believed that the amendment would result in an equivalent number of 
credits generated during the amended GPA program as compared to the 
original program described under the Tier 2 final rule. Despite our 
intent for the revised calculations to yield the equivalent number of 
credits, the amended credit provisions were incorrect as pointed out by 
an adverse comment received on the DFR. Based on this adverse comment, 
we issued a partial withdrawal notice on August 26, 2002, to withdraw 
the amendments to the credit provisions and reinstate the provisions 
that were previously in effect. However, we also stated that we would 
address the adverse comments in a subsequent final action, this action, 
based on the concurrent NPRM.

DATES: This final rule is effective on January 1, 2007.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-HQ-OAR-2004-0508. All documents in the docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the EPA Docket Center, 
EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, 
DC. This Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The Docket telephone number 
is (202) 566-1742. The Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744.


    Note: The EPA Docket Center suffered damage due to flooding 
during the last week of June 2006. The Docket Center is continuing 
to operate. However, during the cleanup, there will be temporary 
changes to Docket Center telephone numbers, addresses, and hours of 
operation for people who wish to visit the Public Reading Room to 
view documents. Consult EPA's Federal Register notice at 71 FR 38147 
(July 5, 2006) or the EPA Web site at http://www.epa.gov/epahome/dockets.htm for current information on docket status, locations and 
telephone numbers.


FOR FURTHER INFORMATION CONTACT: Mary Manners, Compliance and 
Innovative Strategies Division, U.S. EPA, National Vehicle and Fuels 
Emission Laboratory, 2000 Traverwood, Ann Arbor, MI 48105; telephone 
(734) 214-4873, fax (734) 214-4053, e-mail [email protected].

SUPPLEMENTARY INFORMATION: 

Does This Action Apply to Me?

    This action will affect you if you produce gasoline. The table 
below gives an example of entities that may have to comply with the 
regulations. However, since this is only an example, you should 
carefully examine these and other existing regulations in Title 40 Part 
80 of the Code of Federal Regulations (CFR). If you have any questions, 
please call the person listed in the FOR FURTHER INFORMATION CONTACT 
section above.

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                                                  NAICS codes                        Examples of potentially
                   Category                           \a\        SIC codes \b\         regulated entities
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Industry......................................          324110            2911  Petroleum refiners.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) System.

Outline of This Preamble

I. Electronic Availability
II. Background
    A. Refinery/Importer Annual Average GPA Standard and Credit 
Generation Under the Tier 2 Final Rule
    B. Refinery/Importer Annual Average GPA Standard and Credit 
Generation Under the June 2002 Direct Final Rule
III. What Is EPA Finalizing Under This Action?
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health & Safety Risks

[[Page 54909]]

    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Congressional Review Act

I. Electronic Availability

    Today's action is available electronically on the date of 
publication from EPA's Federal Register Internet Web site listed below. 
Electronic copies of this preamble, regulatory language, and other 
documents associated with today's final rule are available from the EPA 
Office of Transportation and Air Quality Web site, listed below, 
shortly after the rule is signed by the Administrator. These services 
are free of charge, except any cost that you already incur for 
connecting to the Internet.
    EPA Federal Register Web site: http://www.epa.gov/fedrgstr/EPA-AIR/ 
(either select a desired date or use the Search feature).
    EPA Office of Transportation and Air Quality Web site: http://www.epa.gov/otaq/ (look in What's New or under specific rulemaking 
topic).
    Please note that due to differences between the software used to 
develop the documents and the software into which the documents may be 
downloaded, changes in format, page length, etc., may occur.

II. Background

    Under a direct final rule (DFR) published in the Federal Register 
on June 12, 2002 (67 FR 40169), we eliminated the anti-backsliding 
provision for the annual average sulfur standard for Geographic Phase-
in Area (GPA) gasoline. Specifically, we replaced the variable average 
standard for GPA gasoline \1\ with a flat average standard of 150 ppm 
sulfur for 2004 through the duration of the GPA program.\2\ To prevent 
the generation of windfall credits by refineries that had gasoline 
sulfur baselines below 150 ppm sulfur, we also amended the credit 
generation provisions for the duration of the GPA program (Sec.  
80.310). As stated in the preamble to the direct final rule, we 
believed that the amendment to Sec.  80.310 would result in an 
equivalent number of credits generated during the amended GPA program 
as compared to the original program under the Tier 2 final rule (65 FR 
6698, February 10, 2000), even though the average standard for GPA 
gasoline was changed to 150 ppm sulfur.
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    \1\ The anti-backsliding requirement was defined for the average 
standard for GPA gasoline as the least of (1) 150 ppm, (2), the 
refinery's or importer's 1997/1998 average gasoline sulfur level, 
calculated in accordance with section 80.295, plus 30 ppm, or (3) 
the lowest average sulfur level for any year in which the refinery 
generated allotments or credits under sections 80.275(a) or 80.305 
plus 30 ppm, not to exceed 150 ppm.
    \2\ Under the Tier 2 final rule (65 FR 6698, February 10, 2000), 
the GPA program lasted from 2004 through 2006. However, the highway 
diesel final rule (66 FR 5002, January 18, 2001) allowed a two year 
extension of the GPA program in exchange for full compliance with 
the 15 ppm ultra-low sulfur diesel fuel standard by June 1, 2006.
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    However, one commenter on the DFR indicated that the amendment to 
Sec.  80.310 would change the manner in which a refinery or importer of 
GPA gasoline would generate gasoline sulfur credits beginning in 2004. 
Specifically, the commenter stated that the amendments to Sec. Sec.  
80.310(a) and 80.310(b) would cause the credit baselines for its 
refineries to be reduced from 150 ppm to lower sulfur levels. The 
commenter also indicated that the changes to Sec.  80.310(d) would 
require a refinery to reduce sulfur levels by at least 10 percent from 
its baseline before credits could be generated. The commenter stated 
that it would be adversely impacted by these changes since the amended 
rule would require it to invest capital dollars earlier than it had 
currently planned at its refineries in order to generate credits. The 
commenter stated that the combined effect of these changes would be 
detrimental because the number of credits that it could generate would 
be significantly reduced. The commenter indicated that it would be 
negatively impacted by this credit generation limitation since its 
ability to defer capital expenditures would be limited.
    Based on this adverse comment, we issued a partial withdrawal 
notice (67 FR 38338, August 26, 2002) to withdraw the amendments to 
Sec.  80.310(a), (b), and (d). In the DFR, we stated that if we 
received adverse comment on one or more distinct amendments, 
paragraphs, or sections of the direct final rule by July 12, 2002, we 
would publish a timely withdrawal in the Federal Register indicating 
which provisions would become effective on September 10, 2002, and 
which provisions would be withdrawn due to adverse comment. During the 
30-day comment period for the rule, we received the adverse comments 
discussed above on the amendments to Sec.  80.310(a), (b), and (d). In 
the partial withdrawal notice, we withdrew those amendments and 
reinstated the provisions that were previously in effect. However, we 
also stated that we would address the adverse comments in a subsequent 
final action, today's action, based on the Notice of Proposed 
Rulemaking that was published concurrently with the DFR.

A. Refinery/Importer Annual Average GPA Standard and Credit Generation 
Under the Tier 2 Final Rule

    Prior to the June 2002 DFR, a refinery or importer's average sulfur 
standard for GPA gasoline would have been, with the anti-backsliding 
provisions of the Tier 2 final rule, the least of 150 ppm, the 
refinery's 1997-98 sulfur baseline plus 30 ppm, or the level from which 
credits were generated plus 30 ppm. A refinery or importer with a 
sulfur baseline of 100 ppm, for example, would have had a GPA gasoline 
sulfur standard of 130 ppm for the duration of the GPA program (the 
refinery or importer's 1997-98 baseline plus 30 ppm), assuming that no 
credits were generated prior to 2004. In 2004 and beyond, that refinery 
or importer would have generated credits based on the following 
equation under Sec.  80.310:

CRa = Va x (Sstd-Sa)

Where:

CRa = Credits generated for the averaging period.
Va = Total annual volume of gasoline produced at a 
refinery or imported during the averaging period.
Sstd = The standard for GPA gasoline (least of 150 ppm, 
the refinery or importer's 1997-98 sulfur baseline plus 30 ppm, or 
the level from which credits were generated plus 30 ppm).
Sa = Actual annual average sulfur level for gasoline 
produced at a refinery or imported during the averaging period, 
exclusive of any credits.

    Using a volume of 100 gallons for simplified calculation purposes 
and assuming that the refinery or importer's actual annual gasoline 
sulfur level was held at its baseline level of 100 ppm, that refinery 
or importer would have generated 3000 ppm-gallon credits [100 gallons x 
(130 ppm - 100 ppm)].

B. Refinery/Importer Annual Average GPA Standard and Credit Generation 
Under the June 2002 Direct Final Rule

    As a result of the June 2002 DFR, a refinery or importer's average 
sulfur standard for GPA gasoline would have been a flat standard of 150 
ppm. As mentioned above, the DFR also amended the credit generation 
provisions (Sec.  80.310) for the duration of the GPA program to 
prevent the generation of windfall credits. As a result of the DFR, 
that refinery or importer would have generated credits based on the 
following equation:

CRa = Va x (SCredit-Sa)

Where:

CRa = Credits generated for the averaging period.

[[Page 54910]]

Va = Total annual volume of gasoline produced at a 
refinery or imported during the averaging period.
SCredit = For GPA gasoline, the least of 150 ppm, or the 
refinery or importer's 1997-98 sulfur level, or the refinery or 
importer's lowest annual average sulfur level for any year from 2000 
through 2003 during which the refinery or importer generated credits 
or allotments.
Sa = Actual annual average sulfur level for gasoline 
produced at a refinery or imported during the averaging period, 
exclusive of any credits.

    Again using a volume of 100 gallons for simplified calculation 
purposes and assuming that the refinery or importer's actual annual 
gasoline sulfur level was held at its baseline level of 100 ppm, that 
refinery or importer would not generate any credits under the amended 
Sec.  80.310 [100 gallons x (100 ppm - 100 ppm) = 0]. Furthermore, the 
amendment to Sec.  80.310 specified that refiners and importers of GPA 
gasoline may generate credits beginning in 2004 only if the annual 
average sulfur level for the gasoline produced or imported during the 
annual averaging period is less than 0.90 of the refinery or importer's 
1997-98 baseline sulfur level. In this example, the refinery or 
importer would not be able to generate credits until it reduced its 
gasoline sulfur levels to 90 percent of its baseline, or 90 ppm [0.90 x 
100].

III. What Is EPA Finalizing Under This Action?

    Today's final rule does not further amend the refinery/importer 
annual average standard for GPA gasoline. That is, the standard 
continues to be 150 ppm for the duration of the GPA program. However, 
today's final rule does amend the credit generation provisions of Sec.  
80.310 by adding 30 ppm to the Scredit variable, as shown below. 
Today's final rule also amends Sec. Sec.  80.285 and 80.415 to make 
them consistent with Sec.  80.310. These amendments will yield the 
correct number of credits generated in that the number of credits 
generated will be equivalent to the number of credits generated under 
Sec.  80.310 of the Tier 2 final rule. While these amendments apply to 
credits generated beginning in 2004, these amendments will not be 
effective until January 1, 2007 and will not be applied retroactively. 
Specifically, under today's final rule, a refinery or importer will 
generate credits based on the following equation:

CRa = Va x (SCredit-Sa)

Where:

CRa = Credits generated for the averaging period.
Va = Total annual volume of gasoline produced at a 
refinery or imported during the averaging period.
SCredit = For GPA gasoline, the least of 150 ppm, or the 
refinery's or importer's 1997-98 sulfur level plus 30 ppm, or the 
refinery's lowest annual average sulfur level for any year from 2000 
through 2003 during which the refinery generated credits or 
allotments plus 30 ppm.
Sa = Actual annual average sulfur level for gasoline 
produced at a refinery or imported during the averaging period, 
exclusive of any credits.

    Again using a volume of 100 gallons for simplified calculation 
purposes and assuming that the refinery or importer's actual annual 
gasoline sulfur level is held at its baseline level of 100 ppm, that 
refinery or importer will generate 3000 ppm-gallon credits under 
today's final rule [100 gallons x (130 ppm-100 ppm) = 3000].

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and 
is therefore not subject to review under the EO.

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
This action specifically amends the regulations pertaining to the 
calculation of GPA gasoline sulfur credits to yield the correct number 
of credits for refineries and importers that produce GPA gasoline and 
to eliminate the generation of windfall credits by refineries or 
importers that have gasoline sulfur baselines below 150 ppm sulfur. 
This action is of limited impact in that it only applies to GPA 
gasoline and only for 2007 and 2008; it does not impose any new 
information collection requirements on the regulated entities.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's final rule on 
small entities, EPA has concluded that this action will not have a 
significant economic impact on a substantial number of small entities. 
Today's action does not apply to or affect small refiners or any other 
small entity.
    As stated above, today's action amends the credit generation 
provisions of the GPA gasoline sulfur program to yield the correct 
number of credits for GPA gasoline and eliminate the generation of 
windfall credits by refineries or importers that have gasoline sulfur 
baselines below 150 ppm sulfur.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments, and the private sector. Under Sec.  202 of the UMRA, We 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more for 
any single year. Before promulgating a rule for which a written 
statement is needed, Sec.  205 of the UMRA generally requires us to 
identify and

[[Page 54911]]

consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule. The provisions of Sec.  205 do not 
apply when they are inconsistent with applicable law. Moreover, Sec.  
205 allows us to adopt an alternative that is not the least costly, 
most cost-effective, or least burdensome alternative if we provide an 
explanation in the final rule of why such an alternative was adopted.
    Before we establish any regulatory requirement that may 
significantly or uniquely affect small governments, including tribal 
governments, we must develop a small government plan pursuant to Sec.  
203 of the UMRA. Such a plan must provide for notifying potentially 
affected small governments, and enabling officials of affected small 
governments to have meaningful and timely input in the development of 
our regulatory proposals with significant Federal intergovernmental 
mandates. The plan must also provide for informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    This rule contains no Federal mandates for State, local, or tribal 
governments as defined by the provisions of Title II of the UMRA. The 
rule imposes no enforceable duties on any of these governmental 
entities. Nothing in the rule will significantly or uniquely affect 
small governments.
    We have determined that this rule does not contain a Federal 
mandate that may result in estimated expenditures of more than $100 
million to the private sector in any single year. This action has the 
net effect of amending 40 CFR 80.285, 80.310, and 80.415 to correct the 
credit generation provisions for GPA gasoline. Therefore, the 
requirements of the Unfunded Mandates Act do not apply to this action.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires us to develop an accountable process to ensure 
``Meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    Under section 6 of Executive Order 13132, we may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or we consult 
with State and local officials early in the process of developing the 
proposed regulation. We also may not issue a regulation that has 
federalism implications and that preempts State law, unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    Section 4 of the Executive Order contains additional requirements 
for rules that preempt State or local law, even if those rules do not 
have federalism implications (i.e., the rules will not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government). Those 
requirements include providing all affected State and local officials 
notice and an opportunity for appropriate participation in the 
development of the regulation. If the preemption is not based on 
express or implied statutory authority, we also must consult, to the 
extent practicable, with appropriate State and local officials 
regarding the conflict between State law and federally protected 
interests within the agency's area of regulatory responsibility.
    This final rule does not have federalism implications. It will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. The requirements of the rule 
will be enforced by the Federal government at the national level. Thus, 
the requirements of section 6 of the Executive Order do not apply to 
this rule. Although section 6 of Executive Order 13132 does not apply 
to this rule, we did consult with State and local officials in 
developing this rule.

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

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This final rule corrects the 
credit generation provisions for GPA gasoline under the Tier 2 program. 
This final rule does not have tribal implications, as specified in 
Executive Order 13175.

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

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that we have reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, section 5-501 of the Order directs us to evaluate 
the environmental health or safety effects of the planned rule on 
children, and explain why the planned regulation is preferable to other 
potentially effective and reasonably feasible alternatives considered 
by us.
    This rule is not subject to the Executive Order because it is not 
an economically significant regulatory action as defined by Executive 
Order 12866. Furthermore, this rule does not concern an environmental 
health or safety risk that we have reason to believe may have a 
disproportionate effect on children.

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

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

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), 12(d) of Public Law 104-113, directs us to use 
voluntary consensus standards in our regulatory activities unless it 
would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) developed or adopted by voluntary consensus standards 
bodies. The NTTAA directs us to provide Congress, through OMB, 
explanations when we decide not to use available and applicable 
voluntary consensus standards.

[[Page 54912]]

    This action does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Congressional Review Act

    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). This rule will be effective January 1, 2007.

List of Subjects in 40 CFR Part 80

    Environmental protection, Fuel additives, Gasoline, Imports, 
Labeling, Motor vehicle pollution, Penalties, Reporting and 
recordkeeping requirements.

    Dated: September 14, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, title 40, Chapter 1 of the 
Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7545 and 7601(a).


0
2. Section 80.285 is amended by revising paragraph (b)(1)(ii) to read 
as follows:


Sec.  80.285  Who may generate credits under the ABT program?

* * * * *
    (b) * * *
    (1) * * *
    (ii) Refiners and importers of gasoline designated as GPA gasoline 
under Sec.  80.219, using the least of 150.00 ppm, or the refinery's or 
importer's 1997-98 baseline calculated under Sec.  80.295 plus 30.00 
ppm, or the refinery's lowest annual average sulfur level for any year 
from 2000 through 2003 during which the refinery generated credits or 
allotments plus 30.00 ppm (for any party generating credits under both 
paragraphs (b)(1)(i) of this section and this paragraph (b)(1)(ii), 
such credits must be calculated separately); or
* * * * *

0
3. Section 80.310 is amended by revising paragraphs (a) and (b) to read 
as follows:


Sec.  80.310  How are credits generated beginning in 2004?

    (a) A refiner for any refinery, or an importer, may generate 
credits in 2004 and thereafter if the annual average sulfur level for 
gasoline produced or imported for the averaging period is less than 
30.00 ppm; or, for refiners that are subject to the small refiner 
standards in Sec.  80.240, the small refiner annual average sulfur 
standard applicable to that refinery; or, for refiners and importers 
subject to the GPA standards in Sec.  80.216, the least of 150.00 ppm, 
or the refinery's or importer's 1997-1998 sulfur level calculated under 
Sec.  80.295 plus 30.00 ppm, or the refinery's lowest annual average 
sulfur level for any year from 2000 through 2003 during which the 
refinery generated credits or allotments plus 30.00 ppm.
    (b) Credits are calculated as follows:

CRa = Va x (SCredit - Sa)

Where:

CRa = Credits generated for the averaging period.
Va = Total annual volume of gasoline produced at a 
refinery or imported during the averaging period.
SCredit = 30.00 ppm; or the sulfur standard for a small 
refinery established under Sec.  80.240; or, for gasoline designated 
as GPA gasoline under Sec.  80.219, the least of 150.00 ppm, or the 
refinery's or importer's 1997-1998 sulfur level calculated under 
Sec.  80.295 plus 30.00 ppm, or the refinery's lowest annual average 
sulfur level for any year from 2000 through 2003 during which the 
refinery generated credits or allotments plus 30.00 ppm.
Sa = Actual annual average sulfur level, calculated in 
accordance with the provisions of Sec.  80.205, for gasoline 
produced at a refinery or imported during the averaging period, 
exclusive of any credits.
* * * * *

0
4. Section 80.415 is amended by revising paragraph (a)(2)(iii) to read 
as follows:


Sec.  80.415  What are the attest engagement requirements for gasoline 
sulfur compliance applicable to refiners and importers?

* * * * *
    (a) * * *
    (2) * * *
    (iii) If the annual average sulfur level for any year in which 
credits were generated for 2000 through 2003 was less than the baseline 
level under paragraph (a)(1) of this section, for small refiners report 
as a finding the lowest annual sulfur level as the new baseline value 
for purposes of establishing the small refiner standards under Sec.  
80.240, and for GPA gasoline report as a finding the lowest annual 
sulfur level plus 30.00 ppm as the new sulfur level for purposes of 
credit generation under Sec.  80.310, if lower than 150.00 ppm.
* * * * *
[FR Doc. 06-7809 Filed 9-19-06; 8:45 am]
BILLING CODE 6560-50-P