61942 Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules

office box number, an electronic mail

address, a facsimile telephone number,

or other similar destination to which

paper or electronic documents are

transmitted, unless otherwise provided

in this section. If the company has

reason to believe that the address is a

street address of a multi-unit building

(for example, based on the Zip Code),

the address must include the unit

number.

9. Section 30d–2 is revised to read as

follows:

§ 270.30d–2 Reports to shareholders of

unit investment trusts.

(a) At least semiannually every

registered unit investment trust

substantially all the assets of which

consist of securities issued by a

management company must transmit to

each shareholder of record (including

record holders of periodic payment plan

certificates), a report containing all the

applicable information and financial

statements or their equivalent, required

by § 270.30d–1 to be included in reports

of the management company for the

same fiscal period. Each such report

must be transmitted within the period

allowed the management company by

§ 270.30d–1 for transmitting reports to

its stockholders.

(b) Any report required by this section

will be considered transmitted to a

shareholder of record if the unit

investment trust satisfies the conditions

set forth in § 270.30d–1(f) with respect

to that shareholder.

By the Commission.

Dated: November 13, 1997.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–30430 Filed 11–19–97; 8:45 am]

BILLING CODE 8010–01–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[AZ–MA–002–CGB; FRL–5925–6]

Approval and Promulgation of State

Implementation Plans; Arizona—

Maricopa County Ozone and PM10

Nonattainment Areas

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: EPA is proposing to approve

a State Implementation Plan (SIP)

revision submitted by the State of

Arizona on September 15, 1997,

establishing Cleaner Burning Gasoline

(CBG) fuel requirements for gasoline

distributed in the Phoenix (Maricopa

County) ozone nonattainment area.

Arizona has developed these fuel

requirements to reduce emissions of

volatile organic compounds (VOC) and

particulates (PM10) in accordance with

the requirements of the Clean Air Act

(CAA). EPA is proposing to approve

Arizona’s fuel requirements into the

Arizona SIP because either they are not

preempted by federal fuels requirements

or to the extent that they are or may be

preempted, since EPA is proposing to

find that the requirements are necessary

for the Maricopa area to attain the

national ambient air quality standards

(NAAQS) for ozone and particulates.

DATES: Comments on this proposed rule

must be received in writing by

December 22, 1997.

ADDRESSES: Written comments should

be sent to the Region IX contact listed

below. Copies of the SIP revision are

available in the docket for this

rulemaking, which is open for public

inspection at the addresses below. A

copy of this notice is also available on

EPA Region IX’s website at http://

www.epa.gov/region09.

Air Planning Office (AIR–2), Air

Division, Region IX, U.S.

Environmental Protection Agency, 75

Hawthorne Street, San Francisco, CA

94105

Arizona Department of Environmental

Quality, Office of Outreach and

Information, First Floor, 3033 N.

Central Avenue, Phoenix, Arizona

85012.

FOR FURTHER INFORMATION CONTACT:

Karina O’Connor, Air Planning Office,

AIR–2, Air Division, U.S.

Environmental Protection Agency,

Region IX, 75 Hawthorne Street, San

Francisco, CA 94105, Telephone: (415)

744–1247.

SUPPLEMENTARY INFORMATION:

I. Background

A. Arizona CBG

The State CBG fuel program for the

Maricopa area establishes limits on

gasoline properties and gasoline

emission standards which will reduce

emissions of volatile organic

compounds (VOCs), oxides of nitrogen

(NOX), carbon monoxide (CO) and

particulates (PM). Under the program, a

variety of different fuels will be able to

meet the fuel standards during different

implementation periods (see Table 1).

Starting June of 1998 through September

30, 1998, gasoline sold in Maricopa

County must meet standards similar to

EPA’s Phase I reformulated gas (RFG)

program or California’s Phase II RFG

program. Under the EPA Phase I RFG

standards, the Arizona Department of

Environmental Quality (ADEQ)

estimates that VOC emissions will be

reduced by 8.7 tons per summer day

(tpsd), NOX emissions by 0.2 tpsd, CO

emissions by 118.6 tpsd and PM10

emissions by 0.27 tpsd. With California

RFG, ADEQ estimates that VOC

emissions will be reduced by 14.1 tpsd,

NOX emissions by 8.2 tpd, CO emission

by 198 tpsd and PM10 by 0.76 tpsd.

California Phase II RFG can be used

to comply with the Arizona fuel

program during all implementation

periods since, starting May 1, 1999,

gasoline must meet standards similar to

EPA’s Phase II RFG program or

California’s RFG program. Under the

CBG Type 1 standards, ADEQ estimates

that VOC emissions will be reduced by

12.5 tpsd, NOX emissions by 2.0 tpsd,

CO emissions by 143.3 tpsd and PM10

by 0.4 tpsd.

TABLE 1.—FUEL TYPES MEETING ARIZONA CBG FUEL STANDARDS

Fuel type Fuel designation Implementation period

CBG Type 1 ................................................................ EPA’s Phase II RFG .................................................. June 1999–Future.

CBG Type 2 ................................................................ California Phase II RFG ............................................ June 1998–Future.

CBG Type 3 ................................................................ EPA’s Phase I RFG ................................................... June–September 30, 1998.

During both implementation periods,

gasoline sold in the Maricopa area can

comply with either of the two sets of

specified standards included in the

program. Therefore the actual emission

reductions benefits during either period
Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules 61943

1See 56 FR 56694 (November 6, 1991), CAA

Sections 181(a)(1) and 188(c)(1), 62 FR 60001

(November 6, 1997) and CAA Section 181(a)(1), 61

FR 21372 (May 10, 1996) and CAA Section

188(c)(2).

2This section is currently codified in the ARS as

section 41–2083(F).

3The State reformulated gasoline rules are

codified in the ARS as section 41–2124. Section 41–

2123 of HB 2307 also contains wintertime

oxygenate requirements for fuels. The bill changed

the effective dates of the oxygenate requirements

from October 15 to November 15 through March 31

of each year.

are difficult to estimate without specific

knowledge of the market penetration of

each of the two acceptable fuels.

However, emission reductions should,

at a minimum, reach the levels that

would result from the specific

performance standards associated with

CBG Types 1 and 3 during both periods

because the corresponding CBG Type 2

standards are, in all instances, more

stringent. These emissions reductions

will help the Maricopa area attain the

NAAQS for both ozone and particulates.

B. Clean Air Act Requirements

In determining the approvability of a

SIP revision, EPA must evaluate the

proposed revision for consistency with

the requirements of the CAA and EPA

regulations, as found in section 110 and

part D of the CAA and 40 CFR part 51

(Requirements for Preparation,

Adoption, and Submittal of

Implementation Plans).

For SIP revisions addressing certain

fuel measures, an additional statutory

requirement applies. CAA section

211(c)(4)(A) prohibits state regulation of

a fuel characteristic or component for

which EPA has adopted a control or

prohibition under section 211(c)(1),

unless the state control is identical to

the federal control. Section 211(c)(4)(C)

provides an exception to this

preemption if EPA approves the state

requirements in a SIP. Section

211(c)(4)(C) states that the

Administrator may approve preempted

state fuel standards in a SIP:

* * * only if [s]he finds that the State

control or prohibition is necessary to achieve

the national primary or secondary ambient

air quality standard which the plan

implements. The Administrator may find that

a State control or prohibition is necessary to

achieve that standard if no other measures

that would bring about timely attainment

exist, or if other measures exist and are

technically possible to implement, but are

unreasonable or impracticable. The

Administrator may make a finding of

necessity even if the plan for the area does

not contain an approved demonstration of

timely attainment.

EPA’s August 1997 ‘‘Guidance on Use of

Opt-in to RFG and Low RVP

Requirements in Ozone SIPS’’ gives

further guidance on what EPA is likely

to consider in making a finding of

necessity.

C. History of Related Actions

Under the Clean Air Act Amendments

of 1990, the Phoenix area was classified

as a moderate nonattainment area for

both ozone and PM10. The moderate

ozone attainment deadline was

November 15, 1996; the moderate PM10

attainment deadline was December 31,

1994. In 1997, the Phoenix area was

reclassified as serious for ozone with an

attainment deadline of no later than

November 15, 1999. In 1996, the

Phoenix area was reclassified as serious

for PM10 with an attainment deadline of

no later than December 31, 2001.1

The State, the Maricopa County air

pollution control agency, and the local

jurisdictions in Maricopa County have

adopted and implemented a broad range

of ozone control measures including a

summertime low Reid Vapor Pressure

(RVP) limit of 7.0 psi for gasoline, an

enhanced inspection and maintenance

(I/M) program, stage II vapor recovery,

an employer trip reduction program,

many transportation control measures,

and numerous stationary and area

source VOC controls. On November 12,

1993, in support of one of these

measures, the Arizona legislature passed

section 13 of Arizona House Bill (HB)

2001 (1993 Special Session), originally

codified in Arizona Revised Statutes

(ARS) at section 41–2083(E).2 This

provision limited the maximum summer

vapor pressure (or RVP) of gasoline fuel

sold in the Maricopa area to 7.0 psi

beginning May 31, 1995 through

September 30, 1995, and applying from

May 31 through September 30 of each

year thereafter. Gasoline distributed in

the Maricopa area by refineries,

importers, carriers, retail stations and

other end users who sell or dispense

gasoline must meet the 7.0 psi limit

during those periods.

On January 17, 1997, Governor

Symington applied to EPA to include

the Maricopa County ozone

nonattainment area in the federal RFG

program and the State submitted section

13 of HB 2001 to EPA as a SIP revision

on April 29, 1997. Because this State

fuel requirement established a control

on RVP of 7.0 psi, not identical to the

federal fuel RVP requirements

applicable to the area (i.e., federal

conventional gasoline RVP limit of 7.8

psi, federal phase I RFG RVP limit of 7.2

psi or federal phase II volatility limit of

7.8 psi), Arizona’s fuel requirement was

preempted under section 211(c)(4)(A) of

the CAA. Pursuant to the Governor’s

letter and section 211(k)(6) of the CAA,

EPA approved Governor Symington’s

request to opt in to the federal RFG

program on June 3, 1997. 62 FR 30260.

EPA also published a direct final

approval of Arizona’s low RVP SIP

revision on June 11, 1997. 62 FR 31734.

In approving the RVP SIP revision, EPA

found under section 211(c)(4)(C) that

the State’s fuel requirement is necessary

for the Maricopa area to attain the

NAAQS for ozone.

The State also enacted HB 2307 which

authorized the establishment of a more

stringent State reformulated gasoline

program.3 HB 2307 was passed as an

emergency measure, requiring ADEQ

and the Arizona Department of Weights

and Measures (ADWM) to adopt interim

rules reflecting the fuel requirements

included in the bill. The two agencies

implemented a facilitated rulemaking

process over the next three months

which resulted in the publication of

proposed rules on July 15, 1997 and a

public hearing on August 15, 1997.

ADEQ adopted these proposed rules as

the Arizona CBG Interim Rule on

September 12, 1997 following a public

comment period.

C. State Submittal

In a September 12, 1997 letter, Russell

Rhoades, Director, ADEQ, requested that

EPA approve the CBG Interim Rule as a

revision to the Arizona SIP and a CAA

section 211(c)(4)(C) waiver. See

‘‘Arizona Cleaner Burning Gasoline

Interim Rule SIP Revision and Clean Air

Act 211(c)(4)(C) Waiver Request,’’

September 1997. The SIP revision

package includes: (1) Arizona laws

providing the State authority for

submittal of SIP revisions; (2) a SIP

completeness checklist; (3) the CBG

Interim Rule; (4) a request for a waiver

from federal preemption pursuant to

CAA section 211(c)(4)(C); (5) a letter

from the Arizona Attorney General

concerning the status of the States

authority to enforce the rule out-of-state;

and (6) HB 2307.

As additional supporting technical

documentation for the section

211(c)(4)(C) waiver request, the States

CBG SIP submittal includes: (1) An

Assessment of Fuel Formulation

Options for Maricopa (see Attachment 3,

Exhibit 2, Appendix A); (2)

Demonstration of CO impacts of the

proposed fuel formulations (see

Attachment 3, Exhibit 2, Appendix G

and Appendix K); (3) Demonstrations of

NOX/PM impacts of the proposed fuel

regulations (see Attachment 3, Exhibit 2,

Appendix M); and (4) the Urban

Airshed Model (UAM) modeling

demonstration from the draft Voluntary

Early Ozone Plan (VEOP)(see

Attachment 3, Exhibit 6, Appendix B).
61944 Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules

4AAC R20–2–751.01.A.

5AAC R20–2–751.A.

6The opt-out is contingent on the CBG

requirements becoming effective upon EPA’s

approval of the regulations in the SIP.

The modeling used 1996 as the base

year and evaluated the effects of existing

and future control measures. Arizona’s

CBG requirements are built into the

1996 base year inventory and modeled

out to the 1999, and 2010 projected

attainment years.

To allow the Arizona CBG program to

substitute for the federal RFG program,

on September 15, 1997 the State also

submitted a separate letter to

Administrator Browner, requesting to

opt out of the federal RFG program,

effective June 1, 1998, contingent upon

EPA approval of the Arizona SIP

revision and the associated waiver

request. In response, Dick Wilson,

Acting Assistant Administrator for Air

and Radiation, EPA, sent a letter to

Governor Hull on October 3, 1997,

which states that upon Region IX

publication of a final approval of a SIP

revision incorporating the CBG Interim

Rule, the Office of Mobile Sources will

notify the State and publish a notice in

the Federal Register approving

Arizona’s opt-out from the federal RFG

program.

Arizona submitted a further

addendum to the SIP revision on

October 21, 1997, which contained

additional technical materials

supporting the State’s waiver request.

II. EPA Evaluation of SIP Submittal

A. General SIP Requirements

As discussed below, EPA has

evaluated the SIP revision and has

determined that it is consistent with the

requirements of the CAA and EPA

regulations. On November 13, 1997,

EPA found that the September 12, 1997

SIP revision conformed to EPA’s

completeness criteria in 40 CFR part 51,

Appendix V.

Information regarding enforcement

and compliance assurance for the SIP

revision can be found in the ARS

(specifically in Article 6, Chapter 15,

Department of Weights and Measures, of

Title 41) and the Arizona

Administrative Code (AAC). The

Arizona Department of Weights and

Measures (ADWM) implements the CBG

rule and has the necessary authority

under ARS 41–2124.C, ARS 41–

2124.01.B, ARS 41–2065.A.4, .14, and

.16, and ARS 41–2065.D to obtain

samples (AAC R20–2–721), test (AAC

R20–2–759), and complete surveys

(AAC R20–2–760). Any person violating

the CBG rule is subject to prosecution

pursuant to ARS 41–2113.B.4, civil

penalties pursuant to ARS 41–2115 and

stop-use, stop-sale, hold and removal

orders pursuant to ARS 41–2066.A.2

(AAC R20–2–762). The SIP submittal

also contains a letter from the Arizona

Attorney Generals office regarding

enforceability of the Arizona CBG rule

outside of the Arizona State boundaries

and a letter from the ADWM regarding

gasoline sampling analysis timeframes.

EPA has concluded that these

provisions confer on the State the

requisite authority to enforce

compliance with the CBG Interim Rule.

B. Section 211(c)(4)

1. Federal Preemption

The CBG Interim Rule establishes

state gasoline standards. As discussed

above, CAA section 211(c)(4)(A)

preempts certain state fuel regulations

by prohibiting a state from prescribing

or attempting to enforce ‘‘any control or

prohibition respecting any characteristic

or component of a fuel or fuel additive’’

for the purposes of motor vehicle

emission control, if the Administrator

has prescribed under section 211(c)(1),

‘‘a control or prohibition applicable to

such characteristic or component of the

fuel or fuel additive,’’ unless the state

prohibition is identical to the

prohibition or control prescribed by the

Administrator.

The CBG Interim Rule establishes

three types of gasoline standards. For

1998, the requirements for CBG Types 2

and 3 gasoline apply. In addition, all

Arizona CBG must meet specified fuel

property limits for that year.4 For 1999

and beyond, the requirements for CBG

Types 1 and 2 gasoline would apply. In

addition, all Arizona CBG would have

to meet the fuel property limits

specified for that time period.5 These

proposed types of gasoline include

performance standards as well as

requirements for specific fuel

parameters. EPA’s analysis of

preemption addresses the following

standards in the CBG Interim Rule:

performance standards for NOX and

VOC (under gasoline Types 1 and 3);

performance standards for NOX and HC

(under Type 2); and parameter

specifications for oxygen, sulfur, olefins,

aromatic HC, T50, and T90 (under

gasoline Type 2).

To determine whether a state fuel

requirement is preempted by a federal

requirement, EPA compares the

applicable federal fuel requirements in

the area with the proposed state fuel

requirements. For the purposes of this

analysis, the federal fuel requirement in

the Phoenix ozone nonattainment area

is federal conventional gasoline. While

Arizona has opted into the federal RFG

program for the 1997 season, the State

has requested to opt out of the program

before the State CBG requirements

would apply.6 Once the State has opted

out of the federal RFG program, the

applicable federal requirements would

be those for conventional gasoline. The

federal requirements for conventional

gasoline include a NOX performance

standard. CBG Types 1 and 3 also

contain a NOX performance standard, so

the CBG NOX performance standard is

preempted. The CBG Interim Rule

would allow refiners to meet the

requirements for Type 2 gasoline in lieu

of the requirements for CBG Type 1 or

3 gasoline. Whether the specifications

for CBG Type 2 are preempted is less

clear. The CBG Type 2 specifications

include performance standards for NOX

and HC and requirements for the fuel

parameters sulfur, olefins and aromatic

HCs. The federal conventional gasoline

standards do not include requirements

for these specific parameters. However,

refiners are required to use an emissions

performance model that determines

NOX and HC performance based in part

on these fuel parameters.

In this rulemaking, EPA does not need

to determine whether these types of

State fuel requirements are preempted

under section 211(c)(4)(A) prior to

acting on the proposed revision to the

Arizona SIP. If the sulfur, olefins and

aromatic HC requirements are not

preempted, there is no bar to EPA

approving them as a SIP revision. If they

are preempted, EPA would be able to

approve these requirements as necessary

under section 211(c)(4)(C) if EPA could

approve the NOX performance standard

as a SIP revision. Sulfur, olefins and

aromatic HC requirements all reduce

NOX emissions. Under Type 1 or 3 CBG,

refiners would obtain NOX reductions

through a NOX performance standard,

and under Type 2 CBG, refiners would

obtain comparable NOX reductions

through sulfur, olefins and aromatic HC

requirements. If EPA finds the NOX

reductions produced by the NOX

performance standard under CBG Types

1 and 3 to be necessary, then the

comparable reductions produced by the

alternative of CBG Type 2 gasoline

would also be necessary. Thus, based on

EPA’s finding, discussed below, that

NOX reductions are necessary under

section 211(c)(4)(C), EPA is proposing to

approve the sulfur, olefins and aromatic

HC requirements as well.

The CBG Interim Rule also requires

refiners to meet a VOC performance

standard (under CBG Types 1 and 3

gasoline); or a HC performance standard

or oxygen, T50 and T90 requirements
Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules 61945

7See 62 FR 31734 (June 11, 1997).

8The control measure analysis submitted for the

VEOP should be considered a preliminary draft

analysis. The Phoenix nonattainment area was

originally classified as moderate but was

reclassified to serious after the VEOP was

completed. Arizona is currently developing a

serious area plan. However, the plan has not been

completed in time for inclusion in this SIP revision

and therefore could not be examined to support the

necessity finding.

9 1999 was chosen as the modeling year because

it is the next ozone attainment date in the Clean Air

Act after 1996. See CAA 181(a)(1).

(under CBG Type 2 gasoline). Federal

conventional gasoline requirements do

not include a VOC performance

standard or controls on these specific

parameters. However, refiners are

required to meet summertime volatility

limits, and are required to use an

emissions performance model that

determines NOX performance based in

part on the same fuel parameters as

those used in the CBG Interim Rule. In

this rulemaking, EPA does not need to

determine whether these types of state

fuel requirements are preempted under

section 211(c)(4)(A) if EPA finds that

these fuel requirements are necessary

for the Phoenix nonattainment area to

meet the ozone NAAQS. Of course, if

these requirements are not preempted,

there is no bar to approving them as a

SIP revision.

Arizona has already demonstrated

that its 7.0 psi RVP requirement is

necessary under section 211(c)(4)(C) to

meet the ozone NAAQS in the Phoenix

area.7 Compliance with either the VOC

performance standard or the HC

performance standard or the oxygen,

T50 and T90 requirements would

produce some additional VOC

reductions beyond those produced by

the 7.0 psi RVP requirement. As with

the NOX performance standard and the

alternative fuel parameter requirements

discussed above, refiners would obtain

comparable VOC reductions through

either the VOC performance standard or

the oxygen, T50 and T90 requirements.

Thus, if EPA finds the VOC reductions

produced by the NOX performance

standard under CBG Type 1 and 3

gasoline to be necessary, then the

comparable emissions reductions

produced by the alternative of CBG

Type 2 gasoline would also be

necessary. EPA is proposing to approve

the VOC performance standard and the

oxygen, T50 and T90 requirements

because either they are not preempted

under section 211(c)(4)(C) or to the

extent that they are or may be

preempted, EPA is proposing, as

discussed below, that they are necessary

and hence approvable under section

211(c)(4)(C).

2. Finding of Necessity

As discussed below, EPA is proposing

to find that the CBG NOX performance

standards are necessary for the Phoenix

PM10 nonattainment area to meet the

PM10 NAAQS, and that the CBG VOC

and HC performance standards, and the

oxygen, T50 and T90 requirements are

necessary for the Phoenix ozone

nonattainment area to meet the ozone

NAAQS.

To make this determination, EPA

must consider whether there are other

reasonable and practicable measures

available that would produce sufficient

emissions reductions to attain the ozone

and PM10 standards without

implementation of the CBG

requirements. In considering other

measures for the purpose of

demonstrating necessity under section

211(c)(4)(C), EPA agrees that Arizona

need not submit an evaluation of

alternative fuels measures. As discussed

above, the State conducted an extensive

public process to evaluate emissions

control options, including fuels options.

Arizona not only considered other fuels

options, including opt-in to federal RFG,

it has actually implemented this

measure for a limited time. However,

Arizona did not address retention of

RFG or other fuels measures in its

section 211(c)(4)(C) submission, and

EPA concurs with this approach. EPA

interprets the reference to ‘‘other

measures’’ that must be evaluated as

generally not encompassing other state

fuels measures, including state opt-in to

federal RFG. The Agency believes that

the Act does not call for a comparison

between state fuels measures to

determine which measures are

unreasonable or impracticable, but

rather section 211(c)(4) is intended to

ensure that a state resorts to a fuel

measure only if there are no available

practicable and reasonable nonfuels

measures. Thus, in demonstrating that

measures other than requiring CBG

gasoline are unreasonable or

impracticable, a state need not address

the reasonableness or practicability of

other state fuel measures.

To determine whether the State

gasoline VOC performance standards are

necessary to meet the ozone NAAQS,

EPA must consider whether there are

other reasonable and practicable

measures available to produce the

needed emission reductions for ozone

control. As mentioned previously, the

State and local governments have

adopted and implemented a broad range

of ozone control measures. In addition,

the ADEQ has developed a Voluntary

Early Ozone Plan (VEOP) including air

quality modeling and additional control

measures.

EPA examined Urban Airshed

Modeling (UAM) completed for the

VEOP, which evaluated the effects of

existing and future VOC control

measures, to support the necessity

finding for this rulemaking.8 The fifteen

control measures that were evaluated for

1999 9 are: (1) purge test in I/M

(evaluated for 2010); (2) final I/M

cutpoints; (3) I/M testing of constant 4-

by-4 vehicles; (4) federal RFG (both

Phase I and Phase II RFG at 7.2 psi RVP;

(5) adoption of California standards for

off-road mobile sources; (6) voluntary

catalyst replacement program; (7)

voluntary vehicle retirement program;

(8) voluntary commercial lawn mower

replacement; (9) new standards for the

use of industrial cleaning solvents; (10)

alternative fuels tax incentives; (11)

Motor Vehicle Division registration

enforcement and mandatory insurance;

(12) pollution prevention; (13)

temporary power at construction sites;

(14) alternative-fuelled buses; and (15)

traffic light synchronization. (See

Appendix H, Exhibit 2, Attachment 3 of

the SIP submittal.)

Results from the modeling

demonstration showed that, using

Arizona CBG gasoline (modeled as

federal RFG or California RFP with an

RVP of 7.0 psi) plus all other measures

identified, the Maricopa area would still

fail to attain the 0.12 ppm ozone

NAAQS in 1999. The VEOP indicates

that ozone control measures need to

show a 13 percent reduction of ambient

ozone to attain the standard in 1999.

The percent reduction from Federal

Phase II RFG and California Phase II

RFG is 3.9 percent and 2.6 percent

respectively. The total percent reduction

available from the measures examined

in the VEOP is less than 6 percent.

If the State’s CBG VOC emissions

performance standards were not

implemented, the projected shortfall in

emissions reductions would be larger.

EPA recognizes that these estimates for

reductions needed, reductions produced

by various measures, and the scope of

the measures available are all based on

analysis that will be further refined and

updated as the State’s serious area plan

is developed. Nevertheless, EPA is

basing today’s action on the information

available to the Agency at this time,

which does not indicate that there are

other reasonable and practicable

measures available to the State that

would fill the projected emissions

reduction shortfall. Hence, EPA

proposes to find that the CBG VOC

emissions performance standards are

necessary for attainment of the ozone
61946 Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules

10For example, given the different criterion for

EPA’s section 211(c)(4)(C) evaluation, today’s

proposed finding does not in any way prejudge the

question of whether these same measures might be

reasonable in the context of the requirements in

section 189 (a) and (b) for reasonably available

control (RACM) and best available control measures

(BACM) for PM10 control.

11See footnote 10 and related discussion above

for explanation of limited applicability of this

proposed finding.

12Arizona CBG was included in the modeling

analysis as Federal RFG, Phase II at 100% market

share.

13 In its September 12, 1997 letter, ADEQ

submitted the CBG Interim Rule as a revision to the

Arizona ozone SIP. In order for EPA to take final

action approving the CBG rule into the Arizona

PM10 SIP, the State will need to formally submit the

rule as a revision to that SIP. ADEQ has informed

EPA that it intends to do so in the near future.

14AAC R20–2–751. Area A Arizona CBG

Requirements—1999 and AAC R20–2–751.01 Area

A Arizona CBG Requirements—1998.

NAAQS, and EPA proposes to approve

them as a revision to the Arizona SIP for

the Phoenix ozone nonattainment area.

The State, the Maricopa County air

pollution control agency, and the local

jurisdictions in Maricopa County have

adopted and implemented a broad range

of particulate control measures and are

currently considering additional

controls in the course of developing the

serious area PM10 plan for the Maricopa

County nonattainment area. The State’s

submission in support of the necessity

demonstration includes both measures

that are currently being implemented or

for which commitments are in place,

and various additional measures being

considered for implementation in the

serious area plan.

The air quality modeling submitted by

ADEQ shows that implementation of all

of the PM10 control measures identified

by the State would still result in an

emissions shortfall and the area would

need an additional 2.4 percent

reduction in the ambient concentrations

of PM10 to demonstrate attainment of

the PM10 NAAQS. The State’s analysis

projects that two additional measures,

paving 100% of unpaved roads and

controlling 100% of shoulders and

access points, would produce sufficient

emissions reductions to eliminate this

shortfall. However, Arizona has

characterized these measures as

unreasonable for purposes of section

211(c)(4)(C) and hence inappropriate to

consider as available control measures

in the necessity demonstration.

EPA agrees that, for purposes of

section 211(c)(4)(C), both paving 100%

of unpaved roads and controlling 100%

of shoulders and access points would be

unreasonable measures to implement in

the Phoenix area in comparison to the

CBG NOX performance standard. In

determining whether a control measure

is unreasonable or impracticable for

purposes of section 211(c)(4)(C),

reasonableness and practicability

should be determined taking into

account a comparison with the fuel

measure that the state is petitioning to

adopt. EPA must assess whether it

would be reasonable and practicable to

require the other control measure in

light of the potential availability of the

preempted state fuel control. Finding

another measure unreasonable or

impracticable under this criterion does

not necessarily imply that the measure

would be unreasonable or impracticable

for other areas, for the same area under

different circumstances, or for the same

area under an analysis outside of the

section 211(c)(4)(C) context.10 For

further discussion of this criterion see

‘‘Guidance on Use of Opt-In to RFG and

Low RVP Requirements in Ozone SIPs,’’

U.S. EPA, Office of Mobile Sources,

August 1997.

Controlling PM10 through paving

100% of unpaved roads and controlling

100% of shoulders and access points

raises concerns regarding costs,

feasibility, timing, administrative

burdens, and burdens on individual

citizens. ADEQ estimates the capital

cost of paving 100% of unpaved roads

to be $59.4 million, which is $54

million more than ADEQ’s identified

alternative of chemically controlling

100% of unpaved roads and would only

reduce emissions by an additional 1.9%.

To control 100% of shoulders and

access points through installing curbs

on 100% of paved road shoulders and

paving 100% of access points to paved

roads, ADEQ estimates a capital cost of

$733.3 million, which is $366.65

million more than the estimated cost of

its identified alternative measure which

would be to control 50% of shoulders

and access points. In addition, ADEQ

has serious concerns about the

feasibility of successfully paving all

unpaved roads in the area with greater

than 120 Average Daily Travel (ADT)

miles and controlling all shoulders and

access points before the attainment date

of December 31, 2001. Besides the

significant capital expenditure

associated with these measures,

implementation of these measures

would impose a substantial

administrative burden on local and state

agencies and would require significant

coordination of local and state agencies.

In addition, motorists throughout the

area would experience the

inconveniences and delays associated

with extensive road construction

projects.

In comparison to the measures

discussed above, the infrastructure for

implementation of the fuel measure is

already in place. This significantly

reduces the burden on the

implementing refineries, and would

allow implementation of the measure to

begin as early as the summer of 1998.

Most of the compliance burden

associated with the measures will be felt

by a limited number of fuel suppliers.

In addition, most of the compliance and

implementation burdens associated

with CBG have already been shown to

be necessary for compliance with the

ozone NAAQS. Therefore any additional

burden for compliance with NOX

performance standards will be minimal.

Finally, implementation of the measure

would require only limited new

coordination efforts between ADEQ and

ADWM. Thus, in comparison to the

CBG NOX performance standard, for the

purposes of section 211(c)(4)(C), it

would be unreasonable to require

paving 100% of unpaved roads and

controlling 100% of shoulders and

access points in the Phoenix area in the

timeframe considered here. 11

Because the State is currently working

on the underlying analysis for the

serious area PM10 plan for the Maricopa

County nonattainment area, due

December 10, 1997, EPA notes that the

information relied on here is

preliminary. The State may further

refine its estimates of the emissions

reductions needed, the emissions

reductions produced by various control

measures, and the scope of control

measures available. Nevertheless, the

information submitted by the State

indicates that even with the

implementation of all reasonable and

practicable control measures known to

be available at this time, including

CBG, 12 additional emissions reductions

will be needed for timely attainment of

the PM10 standard. Therefore, EPA

proposes to find that the NOX

performance standard in the CBG

requirements is necessary for attainment

of the PM10 standard, and EPA proposes

to approve this requirement as a

revision to the Arizona SIP for the

Phoenix PM10 nonattainment area. 13

C. Enforceability

The ADWM has developed

requirements for every entity in the

gasoline distribution system to ensure

that Maricopa County will receive

gasoline that meets the state CBG

standards. 14 The requirements, which

include registration of gasoline

suppliers, testing and sampling,

compliance surveys, and record keeping

and reporting, apply to (1) service

stations, (2) fleet owners, (3) third party

terminals, (4) pipelines and fuel

transporters, (4) oxygenate blenders, and
Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules 61947

15AAC R20–2–750. Registration Pertaining to

Arizona CBG or AZRBOB.

16AAC R20–2–752. General Requirements for

Registered Suppliers.

17AAC R20–2–755. Additional Requirements

Pertaining to AZRBOB and Downstrean Oxygenate

Blending.

18AAC R20–2–753. General Requirements for

Pipelines and Third Party Terminals.

19AZBOB, as defined in the CBG Interim Rule

(AAC R20–2–701.3) is ‘‘a petroleum-derived liquid

which is intended to be or is represented as a

product that will constitute Arizona CBG upon the

addition of a specified type and percentage (or

range of percentages) of oxygenate to the product

after the product has been supplied from the

production or import facility at which it was

produced or imported.’’

20AAC R20–2–709. Records Retention

Requirements for Service Stations and Fleet

Owners.

21AAC R20–2–759. Testing Methodologies.

22AAC R20–2–760. Compliance Surveys.

23The summer season will last from May 1

through September 15 and the winter season will

last from November 1 through March 15 of each

year.

24Under the CBG rule, if they submit to

compliance surveys, registered suppliers can

initially elect to comply with an average VOC

reduction standards of 29 percent with a minium

per gallon reduction of 25 percent instead of a flat

per gallon percent reduction standard of 27.5

percent. See AAC R20–2–751.01.

25AAC R20–2–751.01(F) Area A Arizona CGB

Requirements—1999 and Later, Consequences of

failure to comply with averages.

(5) producers and importers of CBG. The

requirements imposed by the CBG rule

apply to activity occurring both within

and outside of the State of Arizona. The

State Attorney General’s office has

provided an analysis concluding that

the State has full authority to enforce

the rules and the associated

requirements beyond the State borders.

Before any CBG suppliers may

produce or import CBG, it must register

with the ADWM.15 These suppliers

include any refiner, importer, oxygenate

blender, pipeline or third party terminal

who will produce, supply or have

custody of Arizona CBG after June 1,

1998. These registered suppliers must

certify that each batch of gas meets the

CBG standards as described in the

Interim Rule. They must retain records

of the sampling for five years; supply

these records to ADWM, if requested,

within 20 days; and notify ADWM of

transport methods other than pipelines.

They must also maintain a quality

assurance/quality control (QA/QC)

program to verify the accuracy and

effectiveness of fuel testing or use an

independent laboratory to complete

testing (unless computer-controlled inline blending equipment is in operation

which is supplying audit reports to EPA

and ADWM under 40 CFR 80.65(f)(4)).16

Registered oxygenate blenders must

follow the blending requirements

submitted by the registered supplier and

comply with additional blending

requirements. For all terminal blending

facilities, registered blenders must

determine the oxygen content and

volume of final blends before such

blends leave the oxygen blending

facility. Oxygenate blenders completing

operations in gasoline delivery trucks

must implement a quality assurance

sampling and testing program. In-line

blending operators using computer

controlled blending must sample the

fuel after the addition of oxygenate and

prior to combining the batch with other

gasoline, and they must notify the

pipeline and ADWM of any batch which

does not contain the specified type and

amount of oxygenate. Oxygenate

blenders must keep records of sampling

and shipments for five years and make

those records available within 20 days

of a request.17

Registered pipelines and third party

terminals may not accept Arizona CBG

from a supplier that is not registered

with ADWM and that cannot submit

written verification that the gasoline

meets CBG standards. These gasoline

transporters must also complete

sampling of all CBG batches, report noncompliance of any batches with CBG

standards within 24-hours of sampling

to ADWM, and develop a QA/QC

program to demonstrate the accuracy

and effectiveness of the laboratory

testing. Pipelines must also submit a

monthly report to ADWM summarizing

the results of laboratory testing of all

Arizona CBG that has entered a pipeline

(including the present location of the

fuel sample).18

Fleet owners and service stations do

not have to sample gasoline. However,

they must retain on-site records for their

most recent four deliveries, which verify

the quantity and identify of each grade

of motor fuel delivered. Service stations

and fleet owners may maintain these

records for the remainder of the

previous 12 months off-site if the

records are made available within two

working days from the time of a request.

These records shall contain: the name

and address of the transferor and

transferee; the volume, minimum octane

rating, VOC and NOX reduction

percentage standards, and origination

point of the CBG; the date of transfer,

proper identification of the gasoline as

Arizona CBG or AZRBOB;19 and the

type and quantity of oxygenate

contained in the Arizona CBG or

identification of the product as

AZRBOB, a statement that it does not

comply with CBG standards without the

addition of oxygenate, and the

oxygenate types and amount needed to

meet the properties claimed by the

registered supplier.20

To maintain compliance with Arizona

CBG standards, in addition to the

ongoing registration, testing,21 quality

assurance and recordkeeping activities

described above, ADWM will conduct

compliance surveys throughout the

year.22 Each producer and importer of

CBG must contribute to the costs of two

surveys of CBG quality in Phoenix in

the summer of 1998, followed by two

surveys during the summer and winter

seasons 23 for each following year, based

on gasoline samples collected at retail

outlets. Each compliance survey will be

conducted by an independent surveyor

who will develop a survey plan with

committed funding for the season, to be

submitted to ADWM by April 1 of each

year. These surveys will cover

compliance with VOC and NOX

reduction levels and average levels of

RVP, T50, T90, aromatic hydrocarbons,

olefins, sulfur and oxygen. The results

of each survey will be submitted to

ADWM within thirty days following

completion of the survey. If the survey

or other testing indicates that the

gasoline does not meet CBG VOC or

NOX reduction averaging 24 percentage

standards, the registered supplier must

pay penalties and comply with more

stringent applicable flat per gallon

standards during a probationary period.

For example, on each occasion that a

sample fails a VOC emission reductions

survey on or after May 1, 1999, the VOC

emissions performance reduction and

the minimum per gallon percentage

reduction shall be increased by an

absolute 1.0%, not to exceed the VOC

percent emission reduction per gallon

standard. 25

D. Proposed Action

EPA has evaluated the submitted SIP

revision and has determined that it is

consistent with the CAA and EPA

regulations. EPA has also found that the

various CBG requirements are either not

preempted by federal fuel requirements

or are necessary for the Phoenix

nonattainment area to attain the ozone

and PM10 NAAQS, pursuant to CAA.

Therefore, EPA is proposing to approve

the Arizona CBG Interim Rule into the

Arizona SIP for the Phoenix ozone and

PM10 nonattainment areas under section

110(k)(3) of the CAA as meeting the

requirements of section 110(a) and part

D.

Nothing in this action should be

construed as permitting or allowing or

establishing a precedent for any future

implementation plan. Each request for

revision to the state implementation

plan shall be considered separately in

light of specific technical, economic,
61948 Federal Register / Vol. 62, No. 224 / Thursday, November 20, 1997 / Proposed Rules

and environmental factors and in

relation to relevant statutory and

regulatory requirements.

V. Administrative Requirements

A. Executive Order 12866

This action has been classified as a

Table 3 action for signature by the

Regional Administrator under the

procedures published in the Federal

Register on January 19, 1989 (54 FR

2214–2225), as revised by a July 10,

1995 memorandum from Mary Nichols,

Assistant Administrator for Air and

Radiation. The Office of Management

and Budget (OMB) has exempted this

regulatory action from E.O. 12866

review.

B. Regulatory Flexibility

The Regulatory Flexibility Act (RFA),

5 U.S.C. 600 et seq., generally requires

an agency to conduct a regulatory

flexibility analysis of any rule subject to

notice and comment rulemaking

requirements unless the agency certifies

that the rule will not have a significant

economic impact on a substantial

number of small entities. Small entities

include small businesses, small not-forprofit enterprises, and small

governmental jurisdictions. This

proposed rule would not have a

significant impact on a substantial

number of small entities because this

federal action authorizes and approves

requirements previously adopted by the

State, and imposes no new

requirements. Therefore, because this

proposed action does not impose any

new requirements, the Administrator

certifies that it does not have a

significant impact on any small entities

affected. Moreover, due to the nature of

the Federal-State relationship under the

CAA, preparation of a flexibility

analysis would constitute Federal

inquiry into the economic

reasonableness of state action. The

Clean Air Act forbids EPA to base its

actions concerning SIPs on such

grounds. Union Electric Co. v. U.S. EPA,

427 U.S. 246, 255–66 (1976); 42 U.S.C.

7410(a)(2).

C. Unfunded Mandates

Under section 202 of the Unfunded

Mandates Reform Act of 1995

(Unfunded Mandates Act), signed into

law on March 22, 1995, EPA must

prepare a budgetary impact statement to

accompany any proposed or final rule

that includes a Federal mandate that

may result in expenditures to State,

local, and tribal governments in the

aggregate, or to the private sector, of

$100 million or more in any one year.

Under section 205, EPA must select the

most cost-effective and least

burdensome alternative that achieves

the objectives of the rule and is

consistent with statutory requirements.

Section 203 requires EPA to establish a

plan for informing and advising any

small governments that may be

significantly or uniquely impacted by

the rule.

EPA has determined that this

proposed approval action does not

include a Federal mandate that may

result in expenditures of $100 million or

more to either State, local, and tribal

governments in the aggregate, or to the

private sector in any one year. This

proposed Federal action authorizes and

approves requirements previously

adopted by the State, and imposes no

new requirements. Accordingly, no

additional costs to State, local, or tribal

governments, or to the private sector,

will result from this proposed action.

Dated: November 14, 1997.

Felicia Marcus,

Regional Administrator.

[FR Doc. 97–30517 Filed 11–19–97; 8:45 am]

BILLING CODE 6560–50–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[Region 2 Docket No. NJ29–1–175; FRL–

5925–5]

Approval and Promulgation of

Implementation Plans; State of New

Jersey; Clean Fuel Fleet Opt Out

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: In this action, the

Environmental Protection Agency (EPA)

is proposing to approve the State

Implementation Plan revision submitted

by the State of New Jersey for the

purpose of meeting the requirement to

submit the Clean Fuel Fleet program

(CFFP) or a substitute program that

meets the requirements of the Clean Air

Act (Act). EPA is proposing to approve

the State’s plan for implementing a

substitute program to opt out of the

CFFP.

DATES: Comments must be received on

or before December 22, 1997.

ADDRESSES: All comments should be

addressed to Ronald Borsellino, Chief,

Air Programs Branch, Environmental

Protection Agency, Region 2 Office, 290

Broadway, New York, New York 10007–

1866.

Copies of the State submittals are

available at the following addresses for

inspection during normal business

hours:

Environmental Protection Agency,

Region 2 Office, Air Programs Branch,

290 Broadway, 25th Floor, New York,

New York 10007–1866

New Jersey Department of

Environmental Protection, Bureau of

Air Quality Planning, 401 East State

Street, CN027, Trenton, New Jersey

08625

FOR FURTHER INFORMATION CONTACT:

Michael P. Moltzen, Air Programs

Branch, Environmental Protection

Agency, 290 Broadway, 25th Floor, New

York, New York 10007–1866, (212) 637–

4249.

SUPPLEMENTARY INFORMATION:

I. Background

Section 182(c)(4)(A) of the Clean Air

Act requires states containing areas

designated as severe ozone

nonattainment areas, including New

Jersey, to submit for EPA approval a

state implementation plan (SIP) revision

that includes measures to implement

the Clean Fuel Fleet program (CFFP).

Under this program, a certain specified

percentage of vehicles purchased by

fleet operators for covered fleets must

meet emission standards that are more

stringent than those that apply to

conventional vehicles. Covered fleets

are defined as fleets of 10 or more

vehicles that are centrally fueled or

capable of being centrally fueled. A

CFFP meeting federal requirements

would be a state-enforced program

which requires covered fleets to assure

that an annually increasing percentage

of new vehicle purchases are certified

clean vehicles and that those vehicles

operate on clean fuel. In New Jersey, the

program would apply in the State’s

portion of the New York-Northern New

Jersey-Long Island ozone nonattainment

area and in New Jersey’s portion of the

Philadelphia-Wilmington-Trenton

ozone nonattainment area.

The federal CFFP is divided into two

components. The first component is a

light duty (LD) CFFP which applies to

covered fleets of passenger cars and

trucks of gross vehicle weight rating

(GVWR) of 6,000 pounds and less, and

trucks between 6,000 and 8,500 pounds

GVWR. Covered fleets which fall under

the LD CFFP are required to assure that

30 percent of new purchases are clean

vehicles in the first year of the program,

50 percent in the second year and 70

percent in the third and subsequent

years.

The second component is a heavy

duty (HD) CFFP which applies to

covered fleets of trucks over 8,500

pounds GVWR and below 26,000