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Citation: 56 Fed. Reg. 38399 1991

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### Federal Register 

## I Vol. 56, No. 156 

## 1 Tuesday, August 13, 1991 / Proposed Rules

DATES: 

### Written comments and requests to speak at apublic hearing (with outlines oforal comments) must be received by Thursday, October 24,1991. Thepublic hearing is scheduled for Thursday, November 7.1991, at 10 a.m. See thenotice ofpublic hearing publishd ,!sswherein this issue ofthe Federal Register.

AODRESSES: 

### Send written comments and requests tospeak at the public hearing (with outlines of oral comments) to: Internal Revenue Service,P.O. Box 7004, Ben Franldin Station,Attn: CC:CORP.TR (FI-19-85), room 5228, Washington, DC20044.

FOR FURThER INFORMATION CONTACT. 

### Mark S.Smith telephone 202-566-3297 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

### Background

The temporary regulations published in the rules and regulations section of this issue of the Federal Register add

new §1.1286-1T to part 1of title 26of the Code ofFederal Regulations. These temporary regulations provide guidance

on the treatment of OD that arises underCode section 1286(a). For the text of thenew temporary regulations, see T.D. 8358,published in the rules and regulations section ofthis issue ofthe Federal Register. The preamble to the temporary regulations explains the regulations. Special Analyses

It has been determined that these proposed rules are not major rules as defined inExecutive Order 12291. Therefore, a Regulatory Impact Analysis isnotrequired. It alsohas been determined that section 553(b) of the Administrative Procedure Act (5U.S.C. chapter 5)and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to theseregulations, and, therefore, an initial Regulatory Flexibility Analysis is not required.Pursuant to section 7805(f) of the Internal Revenue Code, these regulations willbe submitted to the ChiefCounsel for Advocacy of the Small Business Administration for comment on their impact on small business.
Comments and Public Hearing

Before these proposed regulations are adopted,consideration will begiven to any writtencomments that are timely submitted {preferably a signed original and eight copies) to the Internal Revenue Service. All comments will be available for public inspection and copying in their entirety. A public hearing on these proposed regulations will be held onNovember 7.1991, at 10

a.m. Seethe noticeofpublic hearing published elsewhere in this issue ofthe Federal Register. Drafting Information

The principal author ofthese proposed regulations is Mark S. Smith, Office ofthe Assistant Chief Counsel (Financial Institutions and Products), Internal Revenue Service. However, personnel from other offices ofthe IRS andTreasury Department participated in their development. Michael j.Murphy, ActingCommissionerof Internal Revenue. 

### [FR Doc. 91-19230 Filed6-4-1; 3:10 pm]

BILLING CODE 03"-14A



### 26CFR Part I
[FI-15-,8


### RIN 1545-A003

Treatment of Certain Stripped Bonds and Stripped Coupons; Hearing

AGENCY: Internal Revenue Service. Treasury. ACTION: Notice ofpublic hearing on 

### proposed regulations.

SUMMARY: This 

### document provides notice ofa public hearing on proposed IncomeTax Regulations that apply to taxpayers holding stripped bonds and stripped coupons under section 1286of the Internal Revenue Code. DATES: 

### Thepublic hearing willbe held

on Thursday, November 7,1991, beginning at 10 a.m.Requests to speak and outlines oforal comments mustbe received byThursday, October 24, 1991. ADDRESSES: The public hearing will be 

### held in the IRS Commissioner's Conference Room, room 3313, Internal Revenue Building, 1111 Constitution Avenue, NW., Washington, DC. Requests to speak and outlines oforal comments should be submitted to the Internal Revenue Service, P.0, Box 7604, Ben Franklin Station, Attn: CC:CORP:T:R fFI-19-85], room 5228, Washington, DC 20044.

FOR FURTHER INFORMATION CONTACT: 

### Bob Boyer oftheRegulations Unit, Assistant ChiefCounsel (Corporate), 202-377-9231. (not a toll-free number).

SUPPLEMENTARY INFORMATION: The 

### subject ofthe public hearing is proposed regulations that provide guidance on the treatment of original issue discount (OlD) that arises under Code section 1286(a). The guidance is needed to simplify the tax treatment ofcertain 

### stripped bonds and stripped coupons. These regulations appear in the proposed rules section ofthis issue of theFederal Register.. The rules of §601.601(a)(3) ofthe "Statement ofProcedural Rules" (26 CFR part '601)shall apply with respect to the public hearing.Persons who have submitted written comments within the time prescribed in the notice of proposed rulemaking and who also desire to present oral comments at the hearing on theproposed regulations should submit not later than Thursday, October 24. 1091 an outline of the oral comments/testimony to be presented at the hearing and the time they wish to devote to each subject.

Each speaker (orgroup of speakers representing a single entity)will be limited to 10 minutes for anoral presentationexclusive ofthe time consumed by the questions from the panel forthe government and answers to these questions.

Because of controlled access restrictions, attendees cannot be admitted beyond the lobby ofthe Internal Revenue Building until 9:45 a.m.

An agenda showing the scheduling of the speakers will be made after outlines

arereceived from the persons testifying. Copies ofthe agenda will be available free ofcharge atthe hearing.

By direction oftheCommissioner of Intemal Revenue: Dale D. Goode, Federal Register LiaisonOfficer Assistant ChiefCounselfCorporate). [FR Doc. 91-19231 Filed 6-8--91: 3:19pm]

BILUNG CODE 48=4-

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52
[AD-FRL-3983-91
Approval and Promulgation of implementation Plans: Revision of the VisibilityFIPfor Arizona

AGENCY: U.S. Environmental Protection Agency (EPA). ACTION. Supplemental notice requesting

comment.
SUMMARY: OnFebruary 8, 1991, EPA proposed to require the Navajo Generating Station (NGS) in Page, Arizona, tomeet new emission limitations toaddress visibility impairment in the Grand Canyon National Park (GCNP) (55FR 5173). Over 380 comments were received during the initial comment period. Since the close ofthe comment period, many meetings have taken place among representatives ofSalt River Project (SRP) acting on behalfof the NGS
owners, andrepresentatives ofthe 

### 38399

### 384oo

__ 

### ral'R s' ol.56A& 156 / 

### riesdauy, Aiigusit13, 1991'/Pr61osted Ales

Grand Canyon Trust (GCT) and the Environmental Defense Fund (EDF) acting on behalf oftheir organizations. Representatives ofthe State ofArizona and EPA also have participated in most ofthe meetings. Very recently, representatives ofthe NGS owners and the environmental groups have agreed

on a sulfur dioxide (SO2) control strategy for NGS and have recommended that it be adopted by EPA. That strategy includes a 0.10 pounds per million British thermal units SO2 emission limitation for the NGS (approximate to a 90 percent control level) based on a rolling annual average and phased in by unit in 1997, 1998, and 1999. In addition, NGS would shift its maintenance schedule such that six unitweeks ofplanned maintenance would

occur between November 1 and March 15 each year. They have entered into a memorandum ofunderstanding (MOU) memorializing their agreement which they have submitted (together with associated documents) to EPA and which is printed in the appendix to this notice. In today's notice, EPA is announcing that ithas reopened the public comment period on this rulemaking to solicit comments on this

new information. DATES: Comments must be received by

no later than September 9, 1991. The EPA is providing a 30-day public comment period, extending 30 days from the date of signature on this notice. In order to facilitate public participation, EPA is providing actual notice ofthis action to persons commenting on the February 8, 1991, proposal, where addresses are available. ADDRESSES:

Comments

Send comments to EPA's Central Docket Section, Office ofthe General Counsel, ATTN: A-89--02A, room 1500, 401 M Street, Washington, DC 20460.

Docket

Pursuant to section 307(d)(1)(B) ofthe Clean Air Act (Act), 42 U.S.C. 7607(d)(1)(B), this rulemaking is subject
to the procedural requirements of section- 307(d). Therefore, EPA established Docket A-89-O2A for this rulemaking. Further, materials related to the development ofthis notice, including summaries ofthe meetings EPA has participated in with the outside parties and information exchanged, have been placed in this docket. All dockets are available forpublic inspection and copying between 8:30 a.m. to 12 noon and 1:30p.m. to 3:30 p.m., Monday through Friday, at EPA's Central Docket Section, Office of the General Counsel, room 1500, 401 M Street, S.W., Washington, DC. A reasonable fee may be charged for copies.
FOR FURTHER INFORMATION CONTACT. Mr. David H. Stonefield, U.S. Environmental Protection Agency, Office ofAir Quality Planning and Standards (MD-15), Research Triangle Park,North Carolina 27711, (919) 541- 5350 or FTS 629-5350. SUPPLEMENTARY INFORMATION: Background

Section 169A ofthe Act, 42 U.S.C. 7491, sets as a national goal "the prevention ofany future, and the remedying ofany existing, impairment ofvisibility" in certain national parks and wildernesses, including the GCNP. On December 2, 1980, EPA promulgated regulations (45 FR 80084, codified at 40 CFR 51.300 et seq.) to implement section 169A. The regulations required 36 affected States to revise their State implementation plans (SIP's) to implement the various elements ofthe visibility protection program. Among these provisions is the requirement that each affected State include in its SIP such emission limitations, schedules of compliance, and other measures as may be necessary, to make reasonable progress toward the national visibility goal (see40 CFR 51.302(c), section 169A(b)(2)). Measures for achieving reasonable progress include best available retrofit technology (BART) and a long-term strategy (see 40 CFR 51.302(c) (1)and (2), section 169A(b)(2) (A) and (B)). Where a State fails to submit the SIP revisions necessary to meet its obligations under the visibility protection program, EPA may act in place ofthe State pursuant to a Federal implementation plan (FIP) under section 110(c) ofthe Act, 42 U.S.C. 7410(c).

The State ofArizona was among several States which failed to adopt and submit the SIP's required by those regulations. The EDF and other environmental groups filed a citizen's suit alleging that EPAhad failed to perform a nondiscretionary duty under section 110(c) ofthe Act to promulgate visibility FIP's for the States that had failed to submit SIP's to EPA as called forby the 1980 visibility regulations (EDFv. Reilly,No. C826850 RPA (N.C. Cal.)). The EPA and the plaintiffs negotiated a court-approved (and subsequently revised) settlement agreement and EPA initiated a program topromulgate FIP's for the States failing to submit the required visibility SIP's. As part ofthat program, on September 5, 1989, EPA published a notice (54 FR 36948) announcing a preliminary decision to attribute a significant portion ofwintertime visibility impairment of the GCNP to emissions from the NGS. Then on February 8, 1991, EPA proposed
to revise the visibility FIP for Arizona to include an emission limit for NGS to address the visibility Impairment observed in the GCNP (55 FR 5173). The EPA requested comment on several control options including but not limited
to the following rule elements and specific regulatory alternatives: (1) Emission limitations, including limitations ranging between 0.50 and 0.10 lbs/MMBtu; (2) averaging times, including a 3-hour, 30-day, and annual periods; and (3) implementation schedules, including one providing for plantwide compliance by the year 2000. Based on the information available to it
at the time, EPA proposed to adopt an emission limitation of0.30 lbs/MMBtu with compliance determined on a 30-day rolling average basis. The EPA proposed that the limits would bephased in by unit in 1995, 1997, and 1999.

In addition to soliciting written
comments during the comment period, EPA also held a public hearing on March 18 and 19, 1991, in Phoenix, Arizona. A copy of the transcript ofthe hearing is in Docket A-89-02A.

A more extensive discussion ofthe background for this rulemaking was provided in EPA's February 8, 1991 notice ofproposed rulemaking. Generally, readers should refer to that notice since only an abbreviated background has been reiterated here.

New Information After the Close of the Comment Period

After the comment period closed on April 19, 1991, at the recommendation of EPA, representatives ofSRP, GCT, and EDF have and many meetings discussing alternative approaches to EPA's February 8 proposal. Very recently, the outside parties have agreed to recommend that EPA adopt an alternative which calls for promulgation ofa 0.10 lb/MMBtu SO emission limitation for the NGS (approximate to a 90 percent control level) based on a rolling annual average and phased in by unit in 1997, 1998, and 1999. In addition, under the agreement, NGS would shift its maintenance schedule such that a full six unit-weeks ofplanned maintenance would occur between November 1 and March 15 each year. Under specific conditions, less than a full six unitweeks ofmaintenance between November 1 and March 15 may be allowed.

Representatives ofEPA participated .in many ofthe meetings with the parties, assisted in drafting documents to support a potential agreement between

### Federal Register/.

- Vol, 56,. No. 156 

## ./_ ,Tuesday, August, i3, .A991 /. Proposed.Rules

the parties, andprovided technical assistance. Representatives ofthe State ofArizona 

### also attended several of the meetings and provided some technical support. New technical materials and cost information, including adjustment ofthe potentialcontrol costs to 1992 dollars, were exchanged between the parties and EPA. Summaries ofthe meetings and significant conversations in which EPA was involved and copies ofthe new material and information which were submitted to or developed 

### by EPA have been included in Docket A-89-02A.

The outside parties memorialized their agreement in the MOU which they have submitted toEPA along with recommended regulatory requirements forthefinalruemaking action.The SRP has estimated the total levelized annual cost 

### fin 1992 dollars) for this alternative



### as$89.6 million and for the alternative EPA proposed in February 1991 as $106 

### million. The EPA notes that the alternative incorporated in the MOU 

### would provide more visibility protection for the GCNP at a lower cost for NGS and its customers than-the February 8, 1991 proposal. Thus, EPA is giving serious consideration to the control 

### option recommended by the outside parties.

The text of the MOU and its attachment are reprinted as appendix A tothis notice. Thefirst attachment to the MOU sets forth the regulatory requirements to address visibility impairment that the parties to the MOU have recommended that EPA adopt as a final rule. Legal Ratitmale

On July30, 1991, attorneys for the 

### parties wrote toEPA to provide a legal rationale that they believed would justify EPA's adoption ofthe control alternative eventually recommended by the parties. A letterfrom Patrick M. Raher, Hogan and Hartson for Grand Canyon Trust and Environmental Defense Fund. and Henry Nickel, Hunton andWilliams for Salt River Project, dated July30, 199L is an attachment tothe MOU and is setforth in appendix a to thisnotice. Briefly, it asserts that the regulatory alternative that SRP, EDF, and GCThave recommended to EPA meets the requirements in section 169A(b)(2) ofthe Act thatimplementation plan revisions addressing visibility impairment achieve "reasonable progress" toward the national visibilitygoal. TheEPA's Office ofGeneral Counsel reviewed theRaher/ Nickel letter and concurred in a memorandum stating that, subject to any significant points that may be raised in the reopened comment period, the "reasonable progress" argument would provide the core of a defensible rationale in support ofthe rulemaking alternative in question under the specific circumstances ofthis case. A memorandum entitled "Legal Rationale for Rulemaking Alternative in Grad Canyon Visibility Proceeding," from 

### GregoryB.Foote, Assistant General Counsel to William G. Rosenberg, Assistant Administrator, dated August 2, 199L is reprinted as appendix Bto this notice. EPA Discretion

Throughout the meetings with the representatives of the EDF, GCT, SRP, 

### and theState ofArizona, EPA staffhave noticed thatthe parties discussion in no way infringed upon the Agency's unfettered rulemaking discretion. In an August2, 1991 letter to representatives ofSRP. GCT, and EDF,EPA's General Counsel restated this explaining, in part, that while he commended the parties' efforts to reach common ground, "EPA at all times retains complete and unfettered discretion overboth the substantive provisions ofanyfinal regulations and the legal rationale supporting that regulation." 1 

### Solicitation of Comments

TheEPA believes thatthe parties' agreement and associated recommendation to EPA, theunderlying technical materials and cost information which hasbeen exchanged, and the Agencys commitment to public participation constitute good cause for reopening the comment period. Accordingly, EPA requests comments on all aspects ofthe rulemaklng alternative that is the subject oftheMOU, including the regulatoryterms and the legal rationale. That alternative is set forth in appendix A land associated .attachments) to this notice. Where addresses are available, commenters on the February B.1991 proposal will be notified by mail ofthis notice in order to facilitate their ability tocomment on this notice.

List ofSubjects in 40 CFR Part52
Air pollution control. Nitrogen dioxide,Particulate matter,Reporting and recordkeeping requirements, Sulfur oxides.

Dated: August a 1991. 

### William B. Rosenberg,
AssistantAdministrator forAirand Radiation.

'Letter from E. Donald Elliott. General Counsel.
toPatrick Raher and HenryNickel. August 2.1991. Appendix A-.Arizona Visibility Implementation Plan Memorandum of Understanding

The undersigned recommend that EPA take final action on the Navajo Generating Station ("NGS") visibility rulemaking consistent with the August 7,1991, "Recommended Regulatory Requirements for the NGS Visibility Rulemaking," and the RaherfNickel July 30, 199L letter toThomas C.Kiernan, which are attached to thismemorandum and incorporated byreference.

The undersigned agree to recommend to themanagements oftheir respective organizations Ithat their Governing or Policy-Making Bodies or Office commit not to appeal a finalregulation that implements the recommendations set forth in the attachments
to thismemorandum nor support in any way the efforts ofanother interested party in such

an appeal. Thecommitments adopted by the Governing orPolicy-Making Bodies or Office ofthese organizations, after action on these recommendations, to abide by the terms of this memorandum will be expressed in an exchange ofletters ofagreement-as soon as possible and with the expectation that this will occur nolater than 30 days after publication ofthe final rule in theFederal Register-to: John McNamara, Salt River Project, 1521

Project Drive, Phoenix, Arizona 85281 Edward Norton, Grand Canyon Trust, suite

300. 1400 16th Street NW., Washington, DC 20036 Once EPApromulgates the finalrule, EDF and the NGS participants will petition (a) the United States Circuit Court ofAppeals for the Ninth Circuit to vacate thejudgement below and remand the matter pending inEDFv. Reilly,No.90-t5284 tothe court below with instructions todismiss and(b) theUnited States District Courtfor the Northern District ofCalifornia to dismissEDR v.Reilly,C-8850 RPA. John McNamara, AuthorizedRepresentative forandChairman ofthe CoordinatingCommittee forthe Participants inNG& Edward Norton. President, GrandCanyon Trust. Robert Yuhnke, Senior Attorney Environmental Defense Fund.

Therespective organizations forJohn McNamara are theparticipants In NGS, SaltRiver ProjectAgricultural Improvement andPower District.Arizona Public Service Company. Tucson Electric PowerCompany. Department ofWater and Power ofthe

### City ofLosAngeles, Nevada Power Company. andthe United States Department ofthe Interior. for Edward Norton are the Grand Canyon Trust.The Wilderness Society,the National WildlifeFederation. and the Sierra Club; andfor Robert Yunke istheEnvironmental DefenseFund, I 

### -36401

### Fe8eiai 1Rb ter\/ 

## Vd. 6d, 

## No./ V6 Tti 

### day,' Aug'st 13, ii9d1 

## "/ Proobs6 lRwes

First Attachment to the MOU

Recommended Regulatory Requirements for the Navajo Generating Station Visibility Rulemaking
August 7, 1991

1. Applicable to the fossilfuel-firied, steamgenerating equipment designated as Units 1, 2, and 3 at the Navajo Generating Station (NGS).

2. Consistent with the terms ofthis document, the sulfur oxides emission limitation for NGS is0.10 lbs SO2/MMBtu of heat input on an annual rolling average basis. Emission controls will be installed and operated on the following schedule:

-- One unitby November 19, 1997; -Two units by November 19, 1998; -All units by August 19, 1999.
The emissions from all units subject to this emission limitation will be averaged to determine compliance.

3. Schedule of compliance-interim deadlines:

Date of binding contract for A/E firm

to design and procure the control system needed for compliance

........... 6/92 Start of on-site construction of control system for the first unit

.............. 1/95 Initiation ofstart-up testing:

First unit

................................................... 5/97 Second unit

.................. 5/98 Third unit

............................................... 2/99

The interim deadlines will be extended ifit

can be demonstrated to the Administrator that compliance with the deadlines in paragraph 2 would notbe affected.

4. Continuous emission monitors will.be installed to determine compliance with the emission limitations. This equipment will
meet the specifications listed in appendix B of40 CFR part 60 and the quality assurance procedures found in appendix Fof40 CFR part 60.

5. Recordkeeping and reporting requirements: -Report to EPA emissions as required by the

procedures found in40 CFR 60.7; -Maintain records according to the

procedures found in40 CFR 60.7; -FGD unit outages mustbe reported to EPA

by the next business day; and -A follow-up written report must be filed

within 30 days ofthe repair stating how the repair was accomplished and justifying the
amount oftime taken for the repair.
6a. Compliance with the annual rolling
average shall be determined on a daily basis by dividing the total sulfur dioxide emitted by the total energy ofthe fuel consumed during the previous 365boiler-operating days.

b. Foreach unit, in determining compliance with the annual average emission limitation during the first year of operation ofthe control equipment installed to comply with this emission limitation, periods during which

one ofthe following conditions are met shall be excluded: I.Equipment or systems do not meet designer's or manufacturer's performance expectations.

. ii. Field installation including engineering

or construction precludes equipment or systems from performing as designed.

The periods to be excluded shall be determined by the Administrator based on theperiodic reports ofcompliance with this emission limitation which shall identify the timesproposed for exclusion and provide the

reasons for the exclusion, including the

reasons for the FGD outage. The report also shall describe the actions taken to avoid the outage, to minimize its duration, and to reduce SO2 emissions at the plant to the
extent practicable while the FGD unitwas not fully operational. Whenever the time to be excluded exceeds a cumulative total of30 days for any FGD unit, the NGS owner or operator shall file a report within 15 days addressing thehistory of and prognosis for the performance ofthe control equipment.

c. In addition to the foregoing, the Administrator ofEPA shall exclude from the compliance determination any periods for which the Administrator finds that the control equipment is out of service because of catastrophic failure of any FGD unitwhich occurred for reasons beyond the control of the NGS owners and operators and could not have been prevented by good engineering practice, including appropriate maintenance.

d. All equipment needed to comply with this emission limitation will be operated consistent with good engineering practice to reduce emissions and outages and to return the FGD system to full operation as expeditiously as practicable.

7. On 3/16/93 and every year thereafter, the NGS owner or operator will prepare a long-term maintenance plan for the grid that NGS serves covering the period from the date ofthe filing to 3/15 ofthe next year showing
at least six unit-weeks ofmaintenance for NGS in the 11/1 to 3/15 period, except as provided below, to further reduce SO2 emissions during the winter. This plan will be developed consistent with the criteria established by the Western States Coordinating Council ofthe North American Electric Reliability Council to ensure adequate reserve margin. The full six-unit weeks ofwinter maintenance need not occur ifany ofthe following circumstances arise:

a. There is no need for six-unit weeks of scheduled periodic maintenance in the year covered by the plan.

b. The reserve margin on any electrical system served by NGS would fall to an inadequate level, as defined by the criteria referred to in paragraph 7 above. In such

case, the scheduled maintenance may be moved out ofthe 11/1 to 3/15 period.

c.The cost of compliance with this provision would be excessive. Costs of compliance would be excessive when the economic savings to the owners ofmoving NGS' maintenance out ofthe 11/1 to 3/15 period exceeds $50,000 per unit-day of maintenance moved.

d. A major forced outage at a unit occurs outside the winter months, and necessary periodic maintenance occurs during the period offorced outage.

The NGS owner oroperator must demonstrate to the satisfaction ofthe Administrator that such an event precluded the need for a full six-unit weeks of scheduled maintenance during the period specified. Where six unit-weeks of scheduled maintenance is precluded, the NGS owner or operator shall nevertheless make best efforts
to conduct as much scheduled maintenance

as practicable during the winter period.

8.EPA and the Arizona Department of Environmental Quality reviewed the need to reheat the exhaust gases to ensure appropriate plume rise with the lower gas exit temperatures associated with a 0.10 lb/ MBtu emission limitation and found that reheating of the exhaust gas is not necessary toprevent a violation ofnational ambient air quality standard. Moreover, discussions with the State ofArizona indicate that the visible, water vaporplume that would be present with a scrubber without reheat, instead ofthe clear stacks that NGS now has, does not pose
a condition that requires regulatory attention under State or federal law.The elimination of the need to reheat the exhaust gas will result in a significant reduction in capital and operational costs. Second Attachment tothe MOU Hogan & Hartson, Columbia Square, 555 Thirteenth Street, NW. Washington, DC 20004-1109. July 30, 1991 Thomas C. Kiernan, ChiefofStaff tothe Assistant, Administrator for Air and Radiation, Environmental Protection Agency, 401 M Street,SW., Washington, DC 20460
Re: TimhingIssues inArizona VisibilitySIP

Dear Tom: The purpose ofthis letter is to present our views on the legal rationale for a visibility-related emission limitation that would contain different compliance deadlines than the EPA proposal. As you know, our clients are discussing a recommendation to the Agency on an alternative to EPA's proposed rule. Specifically, EPA's proposed 0.30lbs./MMBtu, 30-day average limitation, to be achieved on a phased basis beginning in 1995, has been compared to various 0.10 lbs./MMBtu limitations using different averaging periods and different schedules for phasing in this limitation. Among these alternatives, a 0.10 lbs./MMtu emission limitation on a rolling annual average, phased inby unit in 1997, 1998, and 1999, achieves greaterreductions at less cost than the EPA proposal.

If the Agency were to adopt such a limitation, the parties believe that the legal rationale for the final rule should be that this limitation represents "reasonable progress toward meeting the national goal [of the prevention of any future, and the remedying ofany.existing, impairment ofvisibility in mandatory class IFederal areas]." 40 CFR 51.300(a); 42 U.S.C. 169A(b](2) &169A(a)(1)., Theparties-jointly believe that this legal m

### Federal Register.-/. Vol. 56, No,.156 / Xuesday,: August 13, 1991/,".Proposed .Rules 38403.

rationale is in accord with section 169A(b)(2) of the Clean AirAct. In explaining the basis for this final rule,we would hope that the Agency indicates in the preamble that the 0.10 lbs./MMBtu limitation offers a higher leel ofcontrols at a lower cost thanwould beprovided by EPA's BART guidelines, which focus on NSPS levels of control, although theBART guidelines do provide the methodology employed in deciding the level ofSO, reductions. Finally,we alsohope that the preamble notes that by imposing a 0.10 lbs.(MMBtuemisson limitation,which requires the installation ofa state-of-the-art SO. scrubber, no other sulfur oxide emission controls should be required at NGS under section 109A.

Thank you for considering thismatter in the development ofthe final rule. Please contact us ifyou have any questions. Sincerely, Patrick M. Raher, Hogan& Hartson forGrand Canyon Trust and Environmental DefenseFund. Henry V. Nickel, Hunton8 Williams forSalt RiverProject. Appendix B
United StatesEnvironmental Protection Agency, Washington. DC 20460, Office ofGeneral Counsel

Memorandum Subject: Legal Rationale for Rulemaking Alternative in Grand Canyon Visibility Proceeding From: Gregory B.Foote,Assistant General Counsel To:William G. Rosenberg, Assistant Administrator for Air and Radiation

Introduction

You have requested my opinion regarding a possible legal rationale insupport ofa rulemaking alternative for the February 1991 proposal to establish,under section 169A of the Clean AirAct, sulfur dioxide emission limitations at the Navajo Generating Station (NGS) in order to remedy visibility impairment at Grand Canyon National Park. In particular, you have asked that Ireview a joint letter dated July 30,1991, from Patrick M. Raher, representing the Grand Canyon Trust and theEnvironmental Defense Fund (GCT/EDF), and Henry V.Nickel, representing the Salt River Project (SRP). The Raher/Nickel letter recommends that,in the event EPA adopts a final rule for NGS requiring a 0.10.lbs./nmbtu emission limitation on arolling annual average,'phased inby unit in 1997,1998, and 1999, EPA should also adopt the legal rationale described.in the * July30 letter In support ofsuch a finalxule.. At theoutset. Inote that General Counsel. DonElliott recently responded to Messrs. Raher and Nickel by letter dated August 2, 199 (copy attached). Don Elliott's letter reminded those parties thatEPA must at all times retain full discretion indeciding on both the substantive content ofand legal rationale for its final rulemaking actions. Thus, although the General Counsel assured. Raher and Nickel that EPA would carefully consider their views, he made it clear that EPA could give no assurance that those views would be adopted. The General Counsel's letterdid not address the merits of the Raher/Nickel letter, a subject that Iwill address below. Brief Answer
Inbrief, the Raher/Nickel letter would focus on the "reasonable progress" requirement in section 169A(B)(2) as thebasis for EPA's final action on the NGS rulemaking. Thatgeneral approach isbasically sound and could,in my opinon,provide the core of a defensible rationale in support ofthe prospective final rule in question.My views

on this rulemaking alternative are set forth in greater detail below. Please note that Ihave not yet discussed those views in detail with the General Counsel. Once hehas reviewed them, however, this memorandum could form part ofthe basis fora supplemental notice advising the public that EPA is considering the specific regulatory optionin question, and soliciting comment on that option.

Discussion

Section 169A(b)(2) ofthe Clean AirAct requires that visibility implementation plans contain such emission limits, schedules of compliance and other measures as may be necessary to make reasonable progress toward the national visibility goal. These plan provisions include, as appropriate, BART (section 169Ajb)(2)(A)), and a longterm strategy (section 169A(b)(2)(B)). Thus, "reasonable progress" is the overarching requirement thatimplementation plan revisions under section 169A(b}(2) must address, while subparagraphs (A) and (B) are n6re specific expressions ofrulemaking authority that are incorporated into the parent subsection (b)(2). In crafting the visibility reasonable progress requirements, Congress did notexplicitly address, and apparently didnot even consider, whether there could be greater visibility improvement at a lower costIn furtherance ofthe national goal through an implementation plan provision that relied more generally on subsection (b)(2), rather than on the specific provisions ofsubparagraph (A) and/or subparagraph (B). Where Congress has not directly spoken to the precise question at issue, EPAmay make a reasonable construction of the statute that isappropriate inthe context ofthe particular program at issue. Chevron, U.S.A., Inc. v.Natural ResourcesDefenseCouncil, Inc., 467 U.S. 837, 842-45 (1984).

In the notice ofproposed rulemaking published in theFederal Registeron February8,1991 (50Fed. Reg 5173), EPA proposed a 0.30 IbA/MMBtu emission. limitationfor NGS,,to be determined on a 30- day rolling aVerage and to bephased inby unit in 1995,.1997 and 1999. EPA explicitly

- requested comment onother controloptions permitted under the Act including, inter'alia, the following ruleelements and specific regulatory alternatives:

(1)Emission limitations, including a

- limitation of0.10; (2)Averaging times, including anannual averaging period; and

(3)Implementation schedules, including a schedule th.at extended to2000. EPA also solicited comment generally onregulatory issues raised by interested parties. Inmy opinion, the specific rulemaking alternative

now under consideration is within the scope ofthe February 1991 proposal. However, in. order to insure fullpublic consideration of this alternative, Istrongly recommend that EPA issue a supplemental notice providing a further opportunity for public comment.

As you know, the staff ofthe Office ofAir and Radiation has considered therulemaking alternative consisting ofa 0.10 Ibs/MMBtu emission limitation, to bedetermined on a rolling annual average and phased In by unit in 1997, 1998 and 1999, and has reviewed supporting technical and cost information. I understand that the staffhas concluded that greater visibility Improvement at less cost

can be achieved by this alternative, as compared to the rule proposed in the February 1991 notice, which applied the BARTGuidelines focusing on NSPS levels of 'control to the facts ofthis case. Iunderstand that thestaffalso referred to the BART guidelines to provide the methodology employed indeveloping the level ofsulfur dioxide reductions In the alternative presently under consideration. See sections 169A(g).(1) and (2).

Based on the staffconclusions regarding the factual circumstances ofthis case, EPA could reasonably find that the present alternative, with itshigher expected visibility improvement and lower expected costs (in comparison to the February 1991 proposed rule), best fulfills the overarching statutory requirement In section 169A(b)2) (which

- incorporates the more specific provisions of subparagraphs (A) and (B)) that. ' implementation plan revisions adopted under. section 169A make "reasonable progress", toward thenational visibility goal.
Conclusion

In sum, subject to any significant points that may be raised in the reopenedcomment period, Ibelieve that under the specific circumstances of thiscase EPA couldrely on the provisions ofsection 169A(b)(2) as the

source ofdelegated rulemaking authority for the present alternative. The Agency has weighed the relevant factors and could appropriately conclude that thisalternative reasonably interprets and harmonizes the statutory provisions ina way that best furthers the overarching legislative purpose to achieve reasonable progress toward the

. national visibility goal See,e.g., Public Citizenv.Department of

justice,109'S.Ct.' 2558, 2566 (i980); Church6?theHoly Trinity

v. UnitedStates,143 U.S. 457;459, (1898); see also Citizensto SaveSpencerCountyv. EPA, 6W F.2d-644 (D.C. Cir.1979).

Finally,*1 note that byPomulgating a 0.10 lbs/MMBtu emission limitation which requires installation:of state-ofthe-art;SOi, scrubber technology, thestaffexpects that no other federal implementation plan revisions requiring SO, control should benecessary at NGS under section 169A. Iexpress no view

on this essentially technical and policy matter..

. , I

.. . . Attachment

### ,Federal Register 1 Vo.,,561 No. 456, 

## ',Tuesday August N13,1 1991 /. Proposed Rules

Attachmont to Appendix B
United States Environmental Protection Agency Washington, DC 20460 Office ofGeneral Counsel August 2, 1991 Mr. Patrick M. Raher, Hogan & Hartson for Grand Canyon Trust and Environmental Defense Fund. Columbia Square, 555Thirteenth Street,NW., Washington, DC 20004-1109 Mr. Henry V. Nickel, Hunton & Williams for Salt River Project, 2000 Pennsylvania Ave., NW., Washington, DC 20036 RE: TimingIssuesinArizona VisibilityFIP

Dear Mr. Raherand Mr. Nickel: This is in response toyour letter ofJuly 30, 1991 to Tom Kieman, ChiefofStaffto Assistant Administrator Bill Rosenberg.

Inote with interest your views on a possible legal rationale for a final rule addressing visibility-related emission limitations for Navajo generating Station. EPA applauds your efforts to find common ground thatmay lead to an amicable conclusion to this important rulemaking. The Agency isgiving your views careful consideration as it moves toward final action. Iwant to remind you, however, that ofcourse EPA at all times retains complete and unfettered discretion over both the substantive provisions ofany final-regulation and the legal rationale supporting that final action.

President Bushreiterated this important principle inthe Statement by the president accompanying the signing ofthe Negotiated Rulemaking Act of1990, 104 Stat. 4969, 5 U.S.C. 581 (1990). A copy ofthe Statement is enclosed for your reference.1 The Statement noted thatunder the Appointments Clause of the Constitution, Article II,Sec. 2,C1. 2. governmental authority may be exercised only by officers ofthe United States. In particular, the President emphasized that "Federal officials will retain their full statutory and constitutional responsibility to make all administrative determinations on regulatory matters." Clearly, this responsibility extends to allmaterial aspects ofa final regulation under section 169A ofthe Clean AirAct. Accordingly, while we appreciate the views you have placed before
us, EPA can give no assurances nor negotiate any binding coinutments that it will ultimately adopt the regulatory approach or the legal rationale you have recommended. Sincerely, E.Donald Elliott, Assistant Administrator andGeneral Counsel. [FR Doc. 91-19272 Filed 8-12-91; 8:45 am]
BILLING CODE 8560-604

'.The President's signing statement'was publiihed in the Weekly Compilation ofPresidential Documents (Vol 26;no;48, page 1945) December 3. 1990, and is not republished in thisFederal Register document. FEDERAL MARITIME COMMISSION

,46 CFR Part 586

[Docket No. 91-241

'Actions To Adjust or Meet Conditions Unfavorable to ShippingIn the United States/Korea Trade

AGENCY: Federal Maritime Commission.
ACTION: Notice of proposed.rulemaking; extension oftime to comment.

SUMMARY: The Federal Maritime Commission, in response to apparent unfavorable conditions in the foreign oceanborne trade between the United States and Korea, has proposed the imposition offees on Korean-flag vessels calling at United States ports (56 FR 26361; June 7,1991). Korean law and regulations preclude U.S. carriers operating in the U.S./Korea trade from engaging in trucking activities and directly contracting forrail services in Korea. The effect ofthe proposed rule will be to adjust or meet unfavorable conditions created by those laws and regulations by imposing countervailing burdens on the Korean-flag carriers. American President Lines, Ltd. now requests a 45 day extension oftime for filing comments, citing discussions held in Secul, July 8-9, 1991, between delegations ofthe United States and Republic of Korea and uncertainty over the scope ofthe understanding reached
at those discussions. The extension is requested to provide time to obtain an interpretation from appropriate officials. The Commission grants the request.for a 45 day extension. Parties who have already filed comments will be allowed
to supplement those comments on or before the new due date. DATES: Comments due on or before September 16, 1991. ADDRESSES: Send comments (original and fifteen copies) to: Joseph C. Polking, Secretary, Federal Maritime Commission, 1100 L Street NW., Washington, DC20573-0001, (202] 523- 5725. FOR FURTHER INFORMATION CONTACT: Robert D. Bourgoin, General Counsel,. Federal Maritime Commission, 1100 L Street NW., Washington, DC 20573-0001, (202)523-5740.

By the Commission. Joseph C. Polklng, Secretary., [FRDoc. 91-19178 Filed 8-12-91; 8.45 am] BILLING CODE 6730-O-M 

### FEDERAL COMMUNICATIONS COMMISSION.

47 CFR Part 25
[Gen. Docket No.84-1234]

Mobile-Satellite Service

AGENCY: Federal Communications Commission. ACTION: Tentative decision.

SUMMARY: The Commission has issued a 

### Tentative Decision reconsidering several decisions related to the licensing ofa domestic mobile satellite service (MSS) provider in the 1545-1559 MHz and 1646.5-1660.5 MHz frequency bands. This action is promptly by the decision ofthe Court ofAppeals for the District ofColumbia, which remanded ofthe Commission for further consideration two aspects ofits decisions. (See Aeronautical Radio,Inc.v. FCC,No. 88- 1009, 

### slip op. (March 19, 1991).) 

### This Tentative Decision concludes that the Commission possesses statutory 

### authority to adopt a rule to require that the MSS licensee shall be a consortium comprised of qualified applicants. Further, the Commission tentatively concludes that a consortium requirement is a 

### reasonable exercise of the Commission's rulemaking authority and compelling factors unique to this proceeding require that a consortium approach, rather than comparative hearings, be adopted.Additionally, the decision tentatively concludes that the financial requirements previously imposed for participation in the consortium should be modified and the three entities whose applications were reinstated by the court should be provided an opportunity tojoin the consortium at this time. DATES: 

### Comments may be filed on or before September 4, 1991. Reply : ., Comments may be filed on orbefore September 23, 1991. ADDRESSES: Federal Communications 

### Commission, Washington. DC 20554.
FOR FURTHER INFORMATION CONTACT: 

### Fern Jarmulnek, Satellite Radio Branch, Common Carrier Bureau (202) 634-1624,

or Kathleen Abernathy, Office of General Counsel (202) 632-7020. SUPPLEMENTARY INFORMATION: This is a 

### summary of the Commission's Tentative Decision regarding the Court ofAppeals remand in the mobile-satellite service proqeeding, adopted July 30, 1991 and released August 2,1991.

The full text ofthis Commission decision is available for inspection and copying during the normal business hours in the FCC Dockets Branch (room. •38404