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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 a public hearing (with

outlines of oral comments) must be

received by Thursday, October 24,1991.

The public hearing is scheduled for

Thursday, November 7. 1991, at 10 a.m.

See the notice of public hearing

publishd ,!sswhere in this issue of the

Federal Register.

AODRESSES: Send written comments and

requests to speak 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, DC 20044.

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 1 of title 26 of

the Code of Federal Regulations. These

temporary regulations provide guidance

on the treatment of OD that arises

under Code section 1286(a). For the text

of the new temporary regulations, see

T.D. 8358, published in the rules and

regulations section of this issue of the

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 in Executive Order 12291.

Therefore, a Regulatory Impact Analysis

is not required. It also has been

determined that section 553(b) of the

Administrative Procedure Act (5 U.S.C.

chapter 5) and the Regulatory Flexibility

Act (5 U.S.C. chapter 6) do not apply to

these regulations, and, therefore, an

initial Regulatory Flexibility Analysis is

not required. Pursuant to section 7805(f)

of the Internal Revenue Code, these

regulations will be submitted to the

Chief Counsel 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 be given to

any written comments 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 on November 7. 1991, at 10

a.m. See the notice of public hearing

published elsewhere in this issue of the

Federal Register.

Drafting Information

The principal author of these

proposed regulations is Mark S. Smith,

Office of the Assistant Chief Counsel

(Financial Institutions and Products),

Internal Revenue Service. However,

personnel from other offices of the IRS

and Treasury Department participated

in their development.

Michael j. Murphy,

Acting Commissioner of Internal Revenue.

[FR Doc. 91-19230 Filed 6-4-1; 3:10 pm]

BILLING CODE 03"-14A

26 CFR Part I

[FI-15-,8

RIN 1545-A003

Treatment of Certain Stripped Bonds

and Stripped Coupons; Hearing

AGENCY: Internal Revenue Service.

Treasury.

ACTION: Notice of public hearing on

proposed regulations.

SUMMARY: This document provides

notice of a public hearing on proposed

Income Tax Regulations that apply to

taxpayers holding stripped bonds and

stripped coupons under section 1286 of

the Internal Revenue Code.

DATES: The public hearing will be held

on Thursday, November 7, 1991,

beginning at 10 a.m. Requests to speak

and outlines of oral comments must be

received by Thursday, 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 of oral

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 of the Regulations Unit,

Assistant Chief Counsel (Corporate),

202-377-9231. (not a toll-free number).

SUPPLEMENTARY INFORMATION: The

subject of the 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 of certain

stripped bonds and stripped coupons.

These regulations appear in the

proposed rules section of this issue of

the Federal Register..

The rules of § 601.601(a)(3) of the

"Statement of Procedural 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 the proposed 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 (or group of speakers

representing a single entity) will be

limited to 10 minutes for an oral

presentation exclusive of the time

consumed by the questions from the

panel for the government and answers

to these questions.

Because of controlled access

restrictions, attendees cannot be

admitted beyond the lobby of the

Internal Revenue Building until 9:45 a.m.

An agenda showing the scheduling of

the speakers will be made after outlines

are received from the persons testifying.

Copies of the agenda will be available

free of charge at the hearing.

By direction of the Commissioner of

Intemal Revenue:

Dale D. Goode,

Federal Register Liaison Officer Assistant

Chief CounselfCorporate).

[FR Doc. 91-19231 Filed 6-8--91: 3:19 pm]

BILUNG CODE 48=4-

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[AD-FRL-3983-91

Approval and Promulgation of

implementation Plans: Revision of the

Visibility FIP for Arizona

AGENCY: U.S. Environmental Protection

Agency (EPA).

ACTION. Supplemental notice requesting

comment.

SUMMARY: On February 8, 1991, EPA

proposed to require the Navajo

Generating Station (NGS) in Page,

Arizona, to meet new emission

limitations to address visibility

impairment in the Grand Canyon

National Park (GCNP) (55 FR 5173).

Over 380 comments were received

during the initial comment period. Since

the close of the comment period, many

meetings have taken place among

representatives of Salt River Project

(SRP) acting on behalf of the NGS

owners, and representatives of the

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 of their organizations.

Representatives of the State of Arizona

and EPA also have participated in most

of the meetings. Very recently,

representatives of the 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 of planned maintenance would

occur between November 1 and March

15 each year. They have entered into a

memorandum of understanding (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 it has 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 of this

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 of the General

Counsel, ATTN: A-89--02A, room 1500,

401 M Street, Washington, DC 20460.

Docket

Pursuant to section 307(d)(1)(B) of the

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 of this notice, including

summaries of the meetings EPA has

participated in with the outside parties

and information exchanged, have been

placed in this docket. All dockets are available for public inspection and

copying between 8:30 a.m. to 12 noon

and 1:30 p.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 of Air Quality Planning and

Standards (MD-15), Research Triangle

Park, North Carolina 27711, (919) 541-

5350 or FTS 629-5350.

SUPPLEMENTARY INFORMATION:

Background

Section 169A of the Act, 42 U.S.C.

7491, sets as a national goal "the

prevention of any future, and the

remedying of any existing, impairment

of visibility" 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 of the

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 (see 40 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 of the State pursuant to a Federal

implementation plan (FIP) under section

110(c) of the Act, 42 U.S.C. 7410(c).

The State of Arizona 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 EPA had failed to

perform a nondiscretionary duty under

section 110(c) of the Act to promulgate

visibility FIP's for the States that had

failed to submit SIP's to EPA as called

for by 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

to promulgate FIP's for the States failing

to submit the required visibility SIP's.

As part of that program, on September 5,

1989, EPA published a notice (54 FR

36948) announcing a preliminary

decision to attribute a significant portion

of wintertime 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 of 0.30 lbs/MMBtu

with compliance determined on a 30-day

rolling average basis. The EPA proposed

that the limits would be phased 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 of the

hearing is in Docket A-89-02A.

A more extensive discussion of the

background for this rulemaking was

provided in EPA's February 8, 1991

notice of proposed 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 of SRP, 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

of a 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 of planned maintenance

would occur between November 1 and

March 15 each year. Under specific

conditions, less than a full six unitweeks of maintenance between

November 1 and March 15 may be

allowed.

Representatives of EPA participated

.in many of the 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, and provided technical

assistance. Representatives of the State

of Arizona also attended several of the

meetings and provided some technical

support. New technical materials and

cost information, including adjustment

of the potential control costs to 1992

dollars, were exchanged between the

parties and EPA. Summaries of the

meetings and significant conversations

in which EPA was involved and copies

of the 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 to EPA along with

recommended regulatory requirements

for the final ruemaking 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

to this notice. The first 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 July 30, 1991, attorneys for the

parties wrote to EPA to provide a legal rationale that they believed would

justify EPA's adoption of the control

alternative eventually recommended by the parties. A letter from Patrick M.

Raher, Hogan and Hartson for Grand

Canyon Trust and Environmental

Defense Fund. and Henry Nickel,

Hunton and Williams for Salt River

Project, dated July 30, 199L is an

attachment to the MOU and is set forth

in appendix a to this notice. Briefly, it

asserts that the regulatory alternative

that SRP, EDF, and GCT have

recommended to EPA meets the

requirements in section 169A(b)(2) of the

Act that implementation plan revisions

addressing visibility impairment achieve "reasonable progress" toward the

national visibility goal. The EPA's Office

of General Counsel reviewed the Raher/

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 of the rulemaking

alternative in question under the

specific circumstances of this case. A

memorandum entitled "Legal Rationale

for Rulemaking Alternative in Grad

Canyon Visibility Proceeding," from

Gregory B. Foote, Assistant General

Counsel to William G. Rosenberg,

Assistant Administrator, dated August

2, 199L is reprinted as appendix B to this

notice.

EPA Discretion

Throughout the meetings with the

representatives of the EDF, GCT, SRP,

and the State of Arizona, EPA staff have

noticed that the parties discussion in no

way infringed upon the Agency's

unfettered rulemaking discretion. In an

August 2, 1991 letter to representatives

of SRP. 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 over both the

substantive provisions of any final

regulations and the legal rationale

supporting that regulation." 1

Solicitation of Comments

The EPA believes that the parties'

agreement and associated

recommendation to EPA, the underlying

technical materials and cost information

which has been exchanged, and the

Agencys commitment to public

participation constitute good cause for

reopening the comment period.

Accordingly, EPA requests comments on

all aspects of the rulemaklng alternative

that is the subject of the MOU, including

the regulatory terms 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 of this notice in order to

facilitate their ability to comment on

this notice.

List of Subjects in 40 CFR Part 52

Air pollution control. Nitrogen

dioxide, Particulate matter, Reporting

and recordkeeping requirements, Sulfur

oxides.

Dated: August a 1991.

William B. Rosenberg,

Assistant Administrator forAir and

Radiation.

' Letter from E. Donald Elliott. General Counsel.

to Patrick Raher and Henry Nickel. 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 to Thomas C. Kiernan,

which are attached to this memorandum and

incorporated by reference.

The undersigned agree to recommend to

the managements of their respective

organizations I that their Governing or

Policy-Making Bodies or Office commit not to

appeal a final regulation that implements the

recommendations set forth in the attachments

to this memorandum nor support in any way

the efforts of another interested party in such

an appeal. The commitments adopted by the

Governing or Policy-Making Bodies or Office

of these organizations, after action on these

recommendations, to abide by the terms of

this memorandum will be expressed in an

exchange of letters of agreement-as soon as

possible and with the expectation that this

will occur no later than 30 days after

publication of the final rule in the Federal

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 EPA promulgates the final rule, EDF

and the NGS participants will petition (a) the

United States Circuit Court of Appeals for the

Ninth Circuit to vacate the judgement below

and remand the matter pending in EDFv.

Reilly, No. 90-t5284 to the court below with

instructions to dismiss and (b) the United

States District Court for the Northern District

of California to dismiss EDR v. Reilly, C-8850

RPA.

John McNamara,

AuthorizedRepresentative for and Chairman

of the Coordinating Committee for the

Participants in NG&

Edward Norton.

President, GrandCanyon Trust.

Robert Yuhnke,

Senior Attorney Environmental Defense

Fund.

The respective organizations for John

McNamara are the participants In NGS, Salt River

Project Agricultural Improvement and Power

District. Arizona Public Service Company. Tucson

Electric Power Company. Department of Water and

Power of the City of Los Angeles, Nevada Power

Company. and the United States Department of the

Interior. for Edward Norton are the Grand Canyon

Trust. The Wilderness Society, the National

Wildlife Federation. and the Sierra Club; and for

Robert Yunke is the Environmental Defense Fund,

I -36401
Fe8eiai 1Rb ter\/ Vd. 6d, No./ Tti V6 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 fossil fuel-firied, steamgenerating equipment designated as Units 1,

2, and 3 at the Navajo Generating Station

(NGS).

2. Consistent with the terms of this

document, the sulfur oxides emission

limitation for NGS is 0.10 lbs SO2/MMBtu of

heat input on an annual rolling average basis.

Emission controls will be installed and

operated on the following schedule:

-- One unit by 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 of start-up testing:

First unit ................................................... 5/97

Second unit .................. 5/98

Third unit ............................................... 2/99

The interim deadlines will be extended if it

can be demonstrated to the Administrator

that compliance with the deadlines in

paragraph 2 would not be 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

of 40 CFR part 60 and the quality assurance

procedures found in appendix F of 40 CFR

part 60.

5. Recordkeeping and reporting

requirements:

-Report to EPA emissions as required by the

procedures found in 40 CFR 60.7;

-Maintain records according to the

procedures found in 40 CFR 60.7;

-FGD unit outages must be reported to EPA

by the next business day; and

-A follow-up written report must be filed

within 30 days of the repair stating how the

repair was accomplished and justifying the

amount of time 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 of the fuel consumed during

the previous 365 boiler-operating days.

b. For each unit, in determining compliance

with the annual average emission limitation

during the first year of operation of the

control equipment installed to comply with

this emission limitation, periods during which

one of the 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

the periodic reports of compliance with this

emission limitation which shall identify the

times proposed 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 unit was

not fully operational. Whenever the time to

be excluded exceeds a cumulative total of 30

days for any FGD unit, the NGS owner or

operator shall file a report within 15 days

addressing the history of and prognosis for

the performance of the control equipment.

c. In addition to the foregoing, the

Administrator of EPA 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 unit which

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

of the filing to 3/15 of the next year showing

at least six unit-weeks of maintenance 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 of the North American

Electric Reliability Council to ensure

adequate reserve margin. The full six-unit

weeks of winter maintenance need not occur

if any of the 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 of the 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 of moving

NGS' maintenance out of the 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 of forced outage.

The NGS owner or operator must

demonstrate to the satisfaction of the

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

to prevent a violation of national ambient air

quality standard. Moreover, discussions with

the State of Arizona indicate that the visible,

water vapor plume that would be present

with a scrubber without reheat, instead of the

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 to the MOU

Hogan & Hartson,

Columbia Square,

555 Thirteenth Street, NW.

Washington, DC 20004-1109.

July 30, 1991

Thomas C. Kiernan,

Chief of Staff to the Assistant, Administrator

for Air and Radiation,

Environmental Protection Agency,

401 M Street, SW.,

Washington, DC 20460

Re: Timhing Issues in Arizona Visibility SIP

Dear Tom: The purpose of this 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

0.30 lbs./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

in by unit in 1997, 1998, and 1999, achieves

greater reductions 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

of any. existing, impairment of visibility in

mandatory class I Federal areas]." 40 CFR

51.300(a); 42 U.S.C. 169A(b](2) & 169A(a)(1).,

The parties-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 Air Act. 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 of controls at a lower cost than would

be provided by EPA's BART guidelines,

which focus on NSPS levels of control,

although the BART guidelines do provide the

methodology employed in deciding the level

of SO, reductions. Finally, we also hope that

the preamble notes that by imposing a 0.10

lbs.(MMBtuemisson limitation, which

requires the installation of a state-of-the-art

SO. scrubber, no other sulfur oxide emission

controls should be required at NGS under

section 109A.

Thank you for considering this matter in

the development of the final rule. Please

contact us if you have any questions.

Sincerely,

Patrick M. Raher,

Hogan & Hartson for Grand Canyon Trust and

Environmental Defense Fund.

Henry V. Nickel,

Hunton 8 Williams for Salt River Project.

Appendix B

United States Environmental Protection

Agency,

Washington. DC 20460,

Office of General 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 in support of a

rulemaking alternative for the February 1991

proposal to establish, under section 169A of

the Clean Air Act, 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 I review a joint letter dated July 30, 1991, from Patrick

M. Raher, representing the Grand Canyon

Trust and the Environmental 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

in by unit in 1997,1998, and 1999, EPA should

also adopt the legal rationale described. in the

* July 30 letter In support of such a finalxule..

At the outset. I note that General Counsel.

Don Elliott recently responded to Messrs.

Raher and Nickel by letter dated August 2,

199 (copy attached). Don Elliott's letter

reminded those parties that EPA must at all

times retain full discretion in deciding on both the substantive content of and 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 letter did not address the merits of

the Raher/Nickel letter, a subject that I will

address below.

Brief Answer

In brief, the Raher/Nickel letter would

focus on the "reasonable progress"

requirement in section 169A(B)(2) as the basis

for EPA's final action on the NGS rulemaking.

That general approach is basically sound and

could, in my opinon, provide the core of a

defensible rationale in support of the

prospective final rule in question. My views on this rulemaking alternative are set forth in

greater detail below. Please note that I have

not yet discussed those views in detail with

the General Counsel. Once he has reviewed

them, however, this memorandum could form

part of the basis for a supplemental notice

advising the public that EPA is considering

the specific regulatory option in question, and

soliciting comment on that option.

Discussion

Section 169A(b)(2) of the Clean Air Act

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 that implementation plan

revisions under section 169A(b}(2) must

address, while subparagraphs (A) and (B) are

n6re specific expressions of rulemaking

authority that are incorporated into the

parent subsection (b)(2). In crafting the

visibility reasonable progress requirements,

Congress did not explicitly address, and

apparently did not even consider, whether

there could be greater visibility improvement

at a lower cost In furtherance of the national

goal through an implementation plan

provision that relied more generally on subsection (b)(2), rather than on the specific

provisions of subparagraph (A) and/or

subparagraph (B). Where Congress has not

directly spoken to the precise question at

issue, EPA may make a reasonable

construction of the statute that is appropriate

in the context of the particular program at

issue. Chevron, U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837,

842-45 (1984).

In the notice of proposed rulemaking

published in the Federal Register on February 8,1991 (50 Fed. Reg 5173), EPA

proposed a 0.30 IbA/MMBtu emission.

limitationfor NGS,,to be determined on a 30-

day rolling aVerage and to be phased in by

unit in 1995,.1997 and 1999. EPA explicitly - requested comment on other control options

permitted under the Act including, inter'alia,

the following rule elements and specific

regulatory alternatives:

(1) Emission limitations, including a

- limitation of 0.10;

(2) Averaging times, including an annual

averaging period; and

(3) Implementation schedules, including a schedule th.at extended to 2000. EPA also

solicited comment generally on regulatory

issues raised by interested parties. In my

opinion, the specific rulemaking alternative now under consideration is within the scope

of the February 1991 proposal. However, in.

order to insure full public consideration of

this alternative, I strongly recommend that

EPA issue a supplemental notice providing a

further opportunity for public comment.

As you know, the staff of the Office of Air

and Radiation has considered the rulemaking

alternative consisting of a 0.10 Ibs/MMBtu

emission limitation, to be determined 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 staff has 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

BART Guidelines focusing on NSPS levels of 'control to the facts of this case. I understand

that the staff also referred to the BART

guidelines to provide the methodology

employed in developing the level of sulfur

dioxide reductions In the alternative

presently under consideration. See sections

169A(g).(1) and (2).

Based on the staff conclusions regarding

the factual circumstances of this case, EPA

could reasonably find that the present

alternative, with its higher 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 the national visibility goal.

Conclusion

In sum, subject to any significant points

that may be raised in the reopened comment

period, I believe that under the specific

circumstances of this case EPA could rely on

the provisions of section 169A(b)(2) as the source of delegated rulemaking authority for

the present alternative. The Agency has

weighed the relevant factors and could

appropriately conclude that this alternative

reasonably interprets and harmonizes the

statutory provisions in a way that best

furthers the overarching legislative purpose

to achieve reasonable progress toward the . national visibility goal See, e.g., Public

Citizen v. Department of justice, 109'S.Ct.'

2558, 2566 (i980); Church 6? the Holy Trinity

v. United States, 143 U.S. 457; 459, (1898); see also Citizens to Save Spencer County v. EPA,

6W F.2d-644 (D.C. Cir. 1979).

Finally,*1 note that by Pomulgating a 0.10

lbs/MMBtu emission limitation which

requires installation:of state-ofthe-art;SOi,

scrubber technology, the staff expects that no

other federal implementation plan revisions

requiring SO, control should be necessary at

NGS under section 169A. I express 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 of General Counsel

August 2, 1991

Mr. Patrick M. Raher,

Hogan & Hartson for Grand Canyon Trust

and Environmental Defense Fund.

Columbia Square,

555 Thirteenth Street, NW.,

Washington, DC 20004-1109

Mr. Henry V. Nickel,

Hunton & Williams for Salt River Project,

2000 Pennsylvania Ave., NW.,

Washington, DC 20036

RE: Timing Issues in Arizona Visibility FIP

Dear Mr. Raher and Mr. Nickel: This is in

response to your letter of July 30, 1991 to Tom

Kieman, Chief of Staff to Assistant

Administrator Bill Rosenberg.

I note 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 that may lead to an amicable

conclusion to this important rulemaking. The

Agency is giving your views careful

consideration as it moves toward final action.

I want to remind you, however, that of course EPA at all times retains complete and

unfettered discretion over both the

substantive provisions of any final-regulation

and the legal rationale supporting that final

action.

President Bush reiterated this important

principle in the Statement by the president

accompanying the signing of the Negotiated

Rulemaking Act of 1990, 104 Stat. 4969, 5

U.S.C. 581 (1990). A copy of the Statement is

enclosed for your reference.1 The Statement

noted that under the Appointments Clause of

the Constitution, Article II, Sec. 2, C1. 2.

governmental authority may be exercised

only by officers of the 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 all material aspects

of a final regulation under section 169A of the

Clean Air Act. 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 and General

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 of Presidential

Documents (Vol 26; no; 48, page 1945) December 3.

1990, and is not republished in this Federal Register

document.

FEDERAL MARITIME COMMISSION

,46 CFR Part 586

[Docket No. 91-241

'Actions To Adjust or Meet Conditions

Unfavorable to Shipping In the United

States/Korea Trade

AGENCY: Federal Maritime Commission.

ACTION: Notice of proposed.rulemaking;

extension of time 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 of fees 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 for rail services in

Korea. The effect of the 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 of time for

filing comments, citing discussions held

in Secul, July 8-9, 1991, between

delegations of the United States and

Republic of Korea and uncertainty over

the scope of the 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, DC 20573-0001, (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.,

[FR Doc. 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

of a 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

of the Court of Appeals for the District

of Columbia, which remanded of the

Commission for further consideration

two aspects of its 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 to join the

consortium at this time.

DATES: Comments may be filed on or

before September 4, 1991. Reply : .,

Comments may be filed on or before

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 of Appeals

remand in the mobile-satellite service

proqeeding, adopted July 30, 1991 and

released August 2, 1991.

The full text of this Commission

decision is available for inspection and

copying during the normal business

hours in the FCC Dockets Branch (room.

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