[Federal Register Volume 69, Number 246 (Thursday, December 23, 2004)]
[Rules and Regulations]
[Pages 76848-76854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27983]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[R05-OAR-2004-MI-0002; FRL-7849-1]


Approval and Promulgation of Implementation Plans: Michigan: 
Oxides of Nitrogen

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The EPA is approving a revision to the plan prepared by 
Michigan that will limit the emissions of oxides of nitrogen 
(NO<INF>X</INF>) from large stationary sources (i.e. power plants, 
industrial boilers and cement kilns). This plan meets all of the 
requirements contained in an EPA rule that was published in the Federal 
Register on April 16, 2004. This rule, otherwise known as the 
NO<INF>X</INF> SIP Call Phase I provides for NO<INF>X</INF> reductions 
from sources in 20 States in the eastern half of the country. The 
effect of this approval is to ensure federal enforceability of the 
state air program plan and to maintain consistency between the state-
adopted plan and the approved State Implementation Plan (SIP).

DATES: This ``direct final'' rule is effective February 22, 2005, 
unless EPA receives written adverse comment by January 24, 2005. If 
written adverse comment is received, EPA will publish a timely 
withdrawal of the direct final rule in the Federal Register and inform 
the public that the rule will not take effect.

ADDRESSES: Submit comments, identified by Regional Material in EDocket 
(RME) ID No. R05-OAR-2004-MI-0002, 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 comments 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-

[[Page 76849]]

line instructions for submitting comments.
    E-mail: <a href="/cdn-cgi/l/email-protection#52303d20262837207c38332b123722337c353d24"><span class="__cf_email__" data-cfemail="aac8c5d8ded0cfd884c0cbd3eacfdacb84cdc5dc">[email protected]</span></a>.
    Fax: (312)886-5824.
    Mail: You may send written comments to: J. Elmer Bortzer, Chief, 
Air Programs Branch, (AR-18J), U.S. Environmental Protection Agency, 77 
West Jackson Boulevard, Chicago, Illinois 60604.
    Hand delivery: Deliver your comments to: J. Elmer Bortzer, Chief, 
Air Programs Branch, (AR-18J), U.S. Environmental Protection Agency, 
Region 5, 77 West Jackson Boulevard, 18th floor, Chicago, Illinois 
60604. Such deliveries are only accepted during the Regional Office's 
normal hours of operation. The Regional Office's official hours of 
business are Monday through Friday, 8:30 AM to 4:30 PM excluding 
Federal holidays.
    Instructions: Direct your comments to Regional Material in EDocket 
(RME) ID No. R05-OAR-2004-MI-0002. EPA's policy is that all comments 
received will be included in the public docket without change, 
including any personal information provided, unless the comment 
includes information claimed to be Confidential Business Information 
(CBI) or other information whose disclosure is restricted by statute. 
Do not submit information that you consider to be CBI or otherwise 
protected through Regional Material in EDocket (RME), regulations.gov, 
or e-mail. The EPA RME website and the federal regulations.gov website 
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 docket 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. For additional instructions on submitting 
comments, go to Section I of the SUPPLEMENTARY INFORMATION section of 
the related proposed rule which is published in the Proposed Rules 
section of this Federal Register.
    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., Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Publicly 
available docket materials are available either electronically in RME 
or in hard copy at Environmental Protection Agency, Region 5, Air and 
Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. 
(We recommend that you telephone Douglas Aburano, Environmental 
Engineer, at (312) 353-6960 before visiting the Region 5 office.) This 
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, 
excluding legal holidays.

FOR FURTHER INFORMATION CONTACT: Douglas Aburano, Environmental 
Engineer, Criteria Pollutant Section (AR-18J), Air Programs Branch, Air 
and Radiation Division, United States Environmental Protection Agency, 
Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 
353-6960, <a href="/cdn-cgi/l/email-protection#afcecddaddcec1c081cbc0dac8c3cedcefcadfce81c8c0d9"><span class="__cf_email__" data-cfemail="1170736463707f7e3f757e64767d7062517461703f767e67">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This section provides 
additional information by addressing the following questions:

I. General Information
    A. Does this action apply to me?
    B. What Should I Consider as I Prepare My Comments for EPA?
II. What is a SIP?
III. What is the Federal Approval Process for a SIP?
IV. Background
V. Michigan's Control of NO<INF>X</INF> Emissions
VI. EPA Action
VII. What are the Statutory and Executive Order Review Requirements?

I. General Information.

A. Does This Action Apply to Me?

    This action applies to large stationary sources of NO<INF>X</INF> 
(such as electric generating units that produce electricity for sale, 
other large boilers that produce steam and/or electricity but do not 
sell electricity, and cement kilns) in the southern counties (Allegan, 
Barry, Bay, Berrien, Branch, Calhoun, Cass, Clinton, Eaton, Genesee, 
Gratiot, Hillsdale, Ingham, Ionia, Isabella, Jackson, Kalamazoo, Kent, 
Lapeer, Lenawee, Livingston, Macomb, Mecosta, Midland, Monroe, 
Montcalm, Muskegon, Newaygo, Oakland, Oceana, Ottawa, Saginaw, Saint 
Clair, Saint Joseph, Sanilac, Shiawassee, Tuscola, Van Buren, 
Washtenaw, Wayne) of Michigan. This action also applies to the unit at 
DTE Energy's Harbor Beach facility in Huron County.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
regulations.gov or e-mail. Clearly mark the part or all of the 
information that you claim to be CBI. For CBI information in a disk or 
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
    (a) Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    (b) Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    (c) Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    (d) Describe any assumptions and provide any technical information 
and/or data that you used.
    (e) If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    (f) Provide specific examples to illustrate your concerns, and 
suggest alternatives.

II. What Is a SIP?

    Section 110 of the Clean Air Act (CAA) requires states to develop 
air pollution regulations and control strategies to ensure that state 
air quality meets the national ambient air quality standards 
established by EPA. These ambient standards are established under 
section 109 of the CAA, and they currently address six criteria 
pollutants. These pollutants are: carbon monoxide, nitrogen dioxide, 
ozone, lead, particulate matter, and sulfur dioxide. Each state must 
submit these regulations and control strategies to us for approval

[[Page 76850]]

and incorporation into the federally-enforceable SIP. Each federally-
approved SIP protects air quality primarily by addressing air pollution 
at its point of origin. These SIPs can be extensive and contain state 
regulations or other enforceable documents, as well as supporting 
elements such as emission inventories, monitoring networks, and 
modeling demonstrations.

III. What Is the Federal Approval Process For a SIP?

    For state regulations to be incorporated into the federally-
enforceable SIP, states must formally adopt the regulations and control 
strategies consistent with state and federal requirements. This process 
generally includes a public notice, public hearing, public comment 
period, and a formal adoption by a state-authorized rulemaking body. 
Once a state rule, regulation, or control strategy is adopted, the 
state submits it to us for inclusion into the SIP. We must provide 
public notice and seek additional public comment regarding the federal 
action on the state submission. If adverse comments are received, they 
must be addressed prior to any final federal action. All state 
regulations and supporting information approved by EPA under section 
110 of the CAA are incorporated into the federally-approved SIP. EPA 
has codified its actions on state SIP submittals in the Code of Federal 
Regulations (CFR) at Title 40, part 52, entitled ``Approval and 
Promulgation of Implementation Plans.'' The actual state regulations 
which are approved are not reproduced in their entirety in the CFR, but 
are ``incorporated by reference,'' which means that we have approved a 
given state regulation with a specific effective date.

IV. Background

A. What Are the Phase I NO<INF>X</INF> SIP Call Requirements?

    On October 27, 1998, EPA published a final rule entitled, ``Finding 
of Significant Contribution and Rulemaking for Certain States in the 
Ozone Transport Assessment Group Region for Purposes of Reducing 
Regional Transport of Ozone,'' otherwise known as the ``NO<INF>X</INF> 
SIP Call.'' See 63 FR 57356 (October 27, 1998). The NO<INF>X</INF> SIP 
Call requires 22 states and the District of Columbia to meet 
NO<INF>X</INF> emission budgets during the five month period from May 1 
through September 30 in order to reduce the amount of ground level 
ozone that is transported across the eastern United States. EPA 
discussed the history of the SIP Call extensively as part of the 
conditional approval of Michigan's NO<INF>X</INF> trading program (see 
69 FR 8905).

B. Conditional Approval of Michigan's Phase I NO<INF>X</INF> SIP

    On April 3, 2003, MDEQ submitted to EPA for approval a SIP to 
address the Phase I NO<INF>X</INF> SIP Call requirements. While the 
rules submitted by MDEQ generally met the requirements for approval, we 
identified a number of deficiencies preventing full approval of the 
NO<INF>X</INF> SIP at that time. EPA published a proposed conditional 
approval of Michigan's submittal on February 26, 2004 (69 FR 8905), and 
finalized the conditional approval on April 16, 2004 (69 FR 20548). EPA 
required that MDEQ address these deficiencies and submit revised 
approvable regulations by May 31, 2004, or the conditional approval 
would automatically convert to a disapproval.

C. What Deficiencies Were Identified and How Did MDEQ Address Them?

    In the review of Michigan's April 3, 2003 NO<INF>X</INF> SIP 
submittal, EPA identified six deficiencies that MDEQ had to correct 
before EPA could fully approve Michigan's submittal. EPA communicated 
these deficiencies to MDEQ, and, in most cases, EPA suggested language 
that Michigan could adopt to address each concern. On May 27, 2004, 
MDEQ submitted revised regulations to address the deficiencies.
    Following is a list of the identified deficiencies and a 
description of how MDEQ addressed them:
    1. Deficiency: Rule 802(5) states, ``An oxides of nitrogen budget 
unit that is subject to a rule promulgated under section 126 of the 
Clean Air Act shall not be subject to this rule until the section 126 
requirements no longer apply.'' Under this language, those oxides of 
nitrogen budget units that are subject to the Section 126 Rule and that 
would be subject to controls under the Michigan SIP are not covered by 
the SIP. The Section 126 Rule remains in place and will remain 
effective until EPA approves the Michigan SIP. The EPA cannot approve 
the Michigan SIP, and move forward to remove the Section 126 
requirements, unless the SIP has in place regulations to achieve the 
necessary emissions reductions to meet the Phase I budget. In 
evaluating the SIP, EPA cannot take into consideration the emissions 
reductions required by the Section 126 Rule. Because the Section 126 
Rule would still be in place at the time EPA takes action on the 
Michigan SIP, oxides of nitrogen budget units that would otherwise be 
subject to controls under the Michigan SIP would not be covered at that 
time. Therefore, the SIP would not be providing sufficient emissions 
reductions to meet the Phase I budget and would not be approvable. This 
language must be removed from the State's rules. EPA will then take 
action to ensure that no unit is subject to both trading programs.
    Correction: MDEQ has removed this language.
    2. Deficiency: The applicability of these rules is based on named 
counties in the southern portion of Michigan. While this applicability 
is sufficient to meet the requirements found in the SIP Call, it is not 
enough to remove all of the Section 126 requirements from the State. 
This is because there is one source, DTE's Harbor Beach unit, that is 
affected by Section 126 requirements, but is not in one of the counties 
affected by Michigan's NO<INF>X</INF> SIP call rule. Michigan has 
indicated a desire to include the Harbor Beach unit in the trading 
program in order to satisfy the Section 126 requirements for this 
source. To address this situation and enable EPA to remove all of the 
Section 126 requirements from Michigan after the Michigan 
NO<INF>X</INF> SIP has been approved, MDEQ must extend the 
applicability of the Michigan NO<INF>X</INF> SIP to that one source.
    Correction: The applicability section of this rule now includes the 
unit at DTE's Harbor Beach facility in Huron County.
    3. Deficiency: Twenty-five ton exemption--States may develop 
alternative 25-ton NO<INF>X</INF> exemptions to the one included in the 
model rule provided they are based on permit restrictions that limit a 
unit's potential to emit during an ozone season to 25 tons or less and 
are not inconsistent with 40 CFR part 75 monitoring requirements. 
Michigan's regulation, Part 8. Emissions Limitations and Prohibitions--
Oxides of Nitrogen, includes in Rule 802(2) the 25-ton exemption. The 
rule language is based on the model rule but provides additional 
options for qualifying for the exemption that involve emission 
monitoring or testing that is inconsistent with Part 75.
    In addition, when a unit receives a 25-ton exemption, the unit's 
potential emissions (reflected as an equivalent number of allowances) 
must be removed from the trading budget to avoid double counting. An 
exempt unit's emissions are included in the state's large Electric 
Generating Unit (EGU) or large non-EGU emissions budget and therefore 
as allowances in the state's trading budget. EPA is concerned that 
Michigan's rule does not account for potential emissions from the 
exempt units. Neither the rule

[[Page 76851]]

nor the SIP submittal specifies a procedure for removing from the 
trading budget the allowances reflecting the exempt unit's potential 
emissions. To address the deficiencies related to the 25 ton exemption 
provisions including the related budget adjustments, Michigan must 
modify its regulations to ensure an exempt source's emissions are less 
than 25 tons in each ozone season and provide a process for adjusting 
the trading budget accordingly. EPA provided MDEQ suggested language 
modifying the regulations.
    Correction: Language has been added to require monitoring in 
accordance with 40 CFR part 75, subpart H. Also, MDEQ has adopted the 
language suggested by EPA to address EPA's other concerns.
    4. Deficiency: New source set-aside--The new source set-aside 
provisions of section 811(1)(a) specify the set-aside pool allocation. 
The rule contains a typographical error regarding the number of 
allowances to be set-aside after 2006. A footnote in the Michigan SIP 
submittal highlights this error and indicates the correct number. This 
error should be corrected since the official regulations are the basis 
for all allocations.
    Also, section 811(2) appears to address the issue of adjusting a 
new source's allowances to account for reduced utilization, but is 
incomplete and, for example, lacks the adjustment formula. This section 
also appears to specify how remaining set-aside allowances are 
determined, but that matter is also addressed in section 811(3). 
Michigan must clarify these provisions. EPA provided MDEQ suggested 
language to clarify these provisions.
    Correction: The typographical error has been corrected and MDEQ has 
adopted the language suggested by EPA to address EPA's other concerns.
    5. Deficiency: Language in section 802(1)(a) appears to allow the 
State to exempt an EGU for which applicability has not been determined. 
EPA cannot approve any exemption that is solely at the discretion of 
the State and does not include EPA approval as well. The language 
relating to exemptions based solely on the State's discretion must be 
removed as a condition of final approval.
    Correction: This language has been removed in the version submitted 
by MDEQ for approval.
    6. Deficiency: Language in section 804 relating to retired unit 
exemptions must be modified to include the requirement that a unit that 
qualifies for this exemption, is not required to have a permit, and 
subsequently resumes operation will lose the exemption at the time of 
resumption of operation. EPA provided MDEQ suggested language modifying 
this section of the regulations.
    Correction: The ``loss of exemption'' language suggested by EPA has 
been adopted and submitted by MDEQ.

V. Michigan's Control of NO<INF>X</INF> Emissions

A. When Did Michigan Submit the SIP Revision to EPA in Response to the 
NO<INF>X</INF> SIP Call?

    On April 3, 2003, MDEQ submitted a final revision to its SIP to 
meet the requirements of the Phase I NO<INF>X</INF> SIP Call. EPA found 
that the initial submittal generally complied with section 110 of the 
Act and the Phase I NO<INF>X</INF> SIP Call but that it had several 
minor deficiencies. Therefore, EPA conditionally approved the 
submittal. On May 27, 2004, MDEQ submitted another SIP revision that 
addressed all of the issues raised in EPA's April 16, 2004 conditional 
approval.

B. When Did Michigan Hold Public Hearings and What Were the Results?

    Public hearings were held on December 3, 2001 and January 22, 2003 
for the April 3, 2003 submittal. A public hearing was held on March 11, 
2004 for the May 27, 2004 submittal. MDEQ holds public hearings on 
rules at the end of a 30-day public comment period. MDEQ either 
modified its rules to accommodate the comments received or explained 
why the rules were not changed in light of the comments.

C. What Is Included in Michigan's NO<INF>X</INF> SIP Call Revision?

    Michigan allows, as in the model rule, EGUs and non-EGUs to 
participate in the multi-state cap and trade program. Cement kilns are 
not included in the trading program, but will be required to install 
low NO<INF>X</INF> burners, mid-kiln firing system or technology that 
achieves the same emission decreases (a 30% reduction). Michigan's SIP 
revision to meet the requirements of the NO<INF>X</INF> SIP Call 
consists of the revision of Michigan Rules 802 through 817. The 
regulations 802 through 816 affect EGUs and non-EGUs. Rule 817 applies 
requirements to cement manufacturing facilities.
    Michigan's SIP revision to meet the requirements of the 
NO<INF>X</INF> SIP Call consists of the following Michigan Rules:
    <bullet> 802 Applicability under oxides of nitrogen budget trading 
program
    <bullet> 803 Definitions for oxides of nitrogen budget trading 
program
    <bullet> 804 Retired unit exemption from oxides of nitrogen budget 
trading program
    <bullet> 805 Standard requirements of oxides of nitrogen budget 
trading program
    <bullet> 806 Computation of time under oxides of nitrogen budget 
trading program
    <bullet> 807 Authorized account representative under oxides of 
nitrogen budget trading program
    <bullet> 808 Permit requirements under oxides of nitrogen budget 
trading program
    <bullet> 809 Compliance certification under oxides of nitrogen 
budget trading program
    <bullet> 810 Allowance allocations under oxides of nitrogen budget 
trading program
    <bullet> 811 New source set-aside under oxides of nitrogen budget 
trading program
    <bullet> 812 Allowance tracking system and transfers under oxides 
of nitrogen budget trading program
    <bullet> 813 Monitoring and reporting requirements under oxides of 
nitrogen budget trading program
    <bullet> 814 Individual opt-ins under oxides of nitrogen budget 
trading program
    <bullet> 815 Allowance banking under oxides of nitrogen budget 
trading program
    <bullet> 816 Compliance supplement pool under oxides of nitrogen 
budget trading program
    <bullet> 817 Emission limitations and restrictions for Portland 
cement kilns
    Michigan's Oxides of Nitrogen Budget Trading Program (Rules 802 
through 816) establishes and requires participation in a NO<INF>X</INF> 
allowance trading program for large EGUs and non-EGUs. These rules 
establish a NO<INF>X</INF> cap and allowance trading program for the 
ozone control seasons beginning May 31, 2004. Michigan Rule 817, not 
part of the trading program, applies to cement kilns and also requires 
control during the ozone season starting on May 31, 2004. Beginning in 
2005, the ozone control period is May 1 through September 30.
    The State of Michigan chose to follow EPA's model NO<INF>X</INF> 
budget and allowance trading rule, 40 CFR part 96, that sets forth a 
NO<INF>X</INF> emissions trading program for EGUs and non-EGUs. 
Michigan's Oxides of Nitrogen Budget Trading Program is based upon 
EPA's model rule, therefore, Michigan sources are allowed to 
participate in the interstate NO<INF>X</INF> allowance trading program 
that EPA is administering for the participating states. Under Rule 810, 
Michigan allocates NO<INF>X</INF> allowances to the EGU and non-EGU 
units that are affected by these requirements. The NO<INF>X</INF> 
trading program applies to EGUs (fossil fuel fired boilers and turbines

[[Page 76852]]

serving a generator with a nameplate capacity greater than 25 MW that 
sell any amount of electricity) as well as non-EGUs (fossil fuel fired 
industrial boilers and turbines that have a maximum design heat input 
greater than 250 mmBtu per hour). Each NO<INF>X</INF> allowance permits 
a source to emit one ton of NO<INF>X</INF> during the seasonal control 
period. NO<INF>X</INF> allowances may be bought or sold. Unused 
NO<INF>X</INF> allowances may also be banked for future use, with 
certain limitations.
    Source owners will monitor and report their NO<INF>X</INF> 
emissions by using methodologies that meet the requirements of 40 CFR 
part 75, subpart H, and report resulting data to EPA electronically. 
Each budget source complies with the program by demonstrating at the 
end of each control period that actual emissions do not exceed the 
amount of allowances held for that period. However, regardless of the 
number of allowances a source holds, it cannot emit at levels that 
would violate other federal or State limits, for example, reasonably 
available control technology (RACT), new source performance standards, 
or Title IV (the Federal Acid Rain program).
    Michigan's Oxides of Nitrogen Budget Trading Program establishes 
requirements for cement manufacturing facilities. These sources are 
subject to NO<INF>X</INF> reduction requirements but do not participate 
in the NO<INF>X</INF> trading program. Michigan's submittal does not 
rely on any additional reductions beyond the anticipated federal 
measures in the mobile and area source categories.
    Michigan's submittal demonstrates that the Phase I NO<INF>X</INF> 
emission budgets established by EPA will be met because MDEQ agrees 
with all of the assumptions, projections, etc. used by EPA to determine 
the 2007 budgets. Because Michigan has adopted all of the same controls 
assumed by EPA in developing the State's NO<INF>X</INF> budget, the 
actual emissions in 2007 should be the same as those EPA has projected 
to be the State's 2007 budget.

D. What Is the Compliance Supplement Pool?

    To provide additional flexibility for complying with emission 
control requirements associated with the NO<INF>X</INF> SIP Call, the 
final NO<INF>X</INF> SIP Call rule provided each affected state with a 
``compliance supplement pool.'' The compliance supplement pool is a 
quantity of NO<INF>X</INF> allowances that may be used to cover excess 
emissions from sources that are unable otherwise to meet control 
requirements during the 2004 and 2005 ozone season. Allowances from the 
compliance supplement pool will not be valid for compliance past the 
2005 ozone season. The NO<INF>X</INF> SIP Call included these voluntary 
provisions in order to address commenters' concerns about the possible 
adverse effect that the control requirements might have on the 
reliability of the electricity supply or on other industries required 
to install controls as the result of a state's response to the 
NO<INF>X</INF> SIP Call.
    A state may issue some or all of the compliance supplement pool via 
two mechanisms. First, a state may issue some or all of the pool to 
sources with credits from implementing NO<INF>X</INF> reductions beyond 
all applicable requirements after September 30, 1999, but before May 
31, 2004 (i.e., early reductions). This allows sources that cannot 
install controls prior to May 31, 2004, to purchase other sources' 
allowances reflecting early reduction credits in order to comply. 
Second, a state may issue some or all of the pool to sources that 
demonstrate a need for an extension of the May 31, 2004 compliance 
deadline due to undue risk to the electricity supply or other 
industrial sectors, and where allowances reflecting early reductions 
are not available (See 40 CFR 51.121(e)(3)). Michigan has opted to 
issue the State's compliance supplement pool through the Early 
Reduction Credit program only.

E. How Does Michigan's NO<INF>X</INF> SIP Affect Sources Subject to 
EPA's Section 126 Rule in the SIP Call Area?

    All of the existing sources in the SIP Call area that are subject 
to EPA's Section 126 Rule are also subject to Michigan's NO<INF>X</INF> 
rules.

VI. EPA Action

    EPA is fully approving the NO<INF>X</INF> SIP submitted on April 3, 
2003 as modified on May 27, 2004. EPA finds that Michigan's submittals 
are fully approvable because the initial April 3, 2003 submittal was 
conditionally approved and the conditions for full approvability were 
met in the May 27, 2004 submittal. In combination, these two submittals 
meet the requirements of the Phase I NO<INF>X</INF> SIP Call.
    We are approving: Michigan's revision of the ozone SIP that 
responds to EPA's Phase I NO<INF>X</INF> SIP Call. This revision 
consists of Michigan Air Pollution Control Rules 803, 805-810, and 812-
817 as submitted on April 3, 2003 and Michigan Air Pollution Control 
Rules 802, 804 and 811 as submitted May 27, 2004. A combined package of 
these rules 802-817 as submitted on April 3, 2003 and May 27, 2004 was 
submitted as a supplement to the May 27, 2004 submittal for ease of 
incorporation by reference. This supplemental submittal was sent by 
MDEQ to EPA on August 5, 2004.
    By this action, we are also vacating our April 16, 2004 (69 FR 
20548) conditional approval of Michigan's earlier NO<INF>X</INF> SIP 
submittal.
    The EPA is publishing this action without prior proposal because we 
view this as a noncontroversial amendment and anticipate no adverse 
comments. However, in the proposed rules section of this Federal 
Register publication, we are publishing a separate document that will 
serve as the proposal to approve the state plan if relevant adverse 
comments are filed. This rule will be effective February 22, 2005 
without further notice unless we receive relevant adverse written 
comments by January 24, 2005. If we receive such comments, we will 
withdraw this action before the effective date by publishing a 
subsequent document that will withdraw the final action. All public 
comments received will then be addressed in a subsequent final rule 
based on the proposed action. The EPA will not institute a second 
comment period. Any parties interested in commenting on this action 
should do so at this time. If we do not receive any comments, this 
action will be effective February 22, 2005.

VII. What Are the Statutory and Executive Order Review Requirements?

Executive Order 12866: Regulatory Planning and Review

    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.

Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    Because this action does not significantly affect energy supply, 
distribution or use, it is not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001).

Regulatory Flexibility Act

    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

[[Page 76853]]

Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Unfunded Mandates Reform Act

    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).

Executive Order 13175: Consultation and Coordination With Indian Tribal 
Governments

    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).

Executive Order 13132: Federalism

    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 CAA.

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

    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.

National Technology Transfer Advancement Act

    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 CAA. 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.

Paperwork Reduction Act

    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.).

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).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by February 22, 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, Nitrogen dioxide, Ozone, Reporting and recordkeeping 
requirements.

    Dated: December 3, 2004.
Bharat Mathur,
Acting Regional Administrator, Region 5.

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 X--Michigan

0
2. Section 52.1170 is amended by adding paragraph (c)(121) to read as 
follows:


Sec.  52.1170  Identification of plan.

* * * * *
    (c) * * *
    (121) On April 3, 2003, the Michigan Department of Environmental 
Quality (MDEQ) submitted a revision to the Michigan State 
Implementation Plan (SIP). This SIP revision was made to address EPA 
requirements placed on a number of States in the eastern half of the 
country to reduce emissions of oxides of nitrogen (NO<INF>X</INF>) that 
are contributing to the ozone transport phenomenon. The rulemaking that 
contains the requirements the States must meet is called the Phase I 
NO<INF>X</INF> SIP Call. Michigan's April 3, 2003 SIP revision was 
conditionally approved on April 16, 2004. Subsequent SIP revisions to 
address the requirements found in EPA's conditional approval were made 
on May 27, 2004 and August 5, 2004. These additional submittals, in 
combination with the original SIP revision, fulfill the Phase I 
NO<INF>X</INF> SIP Call requirements. In its August 5, 2004 
supplemental SIP revision, MDEQ requests that the following rules are 
incorporated by reference: R336.1802 Applicability under oxides of 
nitrogen budget trading program, R336.1803 Definitions for oxides of 
nitrogen budget trading program, R336.1804 Retired unit exemption from 
oxides of nitrogen budget trading program, R336.1805 Standard 
requirements of oxides of nitrogen budget trading program, R336.1806 
Computation of time under oxides of nitrogen budget trading program, 
R336.1807 Authorized account representative under oxides of nitrogen 
budget trading program, R336.1808 Permit requirements under oxides of 
nitrogen budget trading program, R336.1809 Compliance certification 
under oxides of nitrogen budget trading program, R336.1810 Allowance 
allocations under oxides of nitrogen budget trading program, R336.1811 
New source set-aside under oxides of nitrogen budget trading program, 
R336.1812 Allowance tracking system and transfers under oxides of 
nitrogen budget trading program, R336.1813 Monitoring and reporting 
requirements under oxides of nitrogen budget trading, R336.1814 
Individual opt-ins under oxides of nitrogen budget trading program, 
R336.1815 Allowance banking under oxides of nitrogen budget trading 
program, R336.1816 Compliance supplement pool under oxides of nitrogen 
budget trading program,

[[Page 76854]]

R336.1817 Emission limitations and restrictions for Portland cement 
kilns.
    (i) Incorporation by reference. The following sections of the 
Michigan Administrative Code are incorporated by reference.
    (A) R336.1802 Applicability under oxides of nitrogen budget trading 
program, effective May 20, 2004.
    (B) R336.1803 Definitions for oxides of nitrogen budget trading 
program, effective December 4, 2002.
    (C) R336.1804 Retired unit exemption from oxides of nitrogen budget 
trading program, effective May 20, 2004.
    (D) R336.1805 Standard requirements of oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (E) R336.1806 Computation of time under oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (F) R336.1807 Authorized account representative under oxides of 
nitrogen budget trading program, effective December 4, 2002.
    (G) R336.1808 Permit requirements under oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (H) R336.1809 Compliance certification under oxides of nitrogen 
budget trading program, effective December 4, 2002.
    (I) R336.1810 Allowance allocations under oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (J) R336.1811 New source set-aside under oxides of nitrogen budget 
trading program, effective May 20, 2004.
    (K) R336.1812 Allowance tracking system and transfers under oxides 
of nitrogen budget trading program, effective December 4, 2002.
    (L) R336.1813 Monitoring and reporting requirements under oxides of 
nitrogen budget trading program, effective December 4, 2002.
    (M) R336.1814 Individual opt-ins under oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (N) R336.1815 Allowance banking under oxides of nitrogen budget 
trading program, effective December 4, 2002.
    (O) R336.1816 Compliance supplement pool under oxides of nitrogen 
budget trading program, effective December 4, 2002.
    (P) R336.1817 Emission limitations and restrictions for Portland 
cement kilns, effective December 4, 2002.


Sec.  52.1218  [Amended]

0
3. Section 52.1218 is amended by removing and reserving paragraph (a).

[FR Doc. 04-27983 Filed 12-22-04; 8:45 am]
BILLING CODE 6560-50-P


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