[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Proposed Rules]
[Pages 15074-15077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7954]



[[Page 15073]]

_______________________________________________________________________

Part VII





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 80



Fuels and Fuel Additives Regulation: Reformulated Gasoline Covered 
Areas Provision Modification; Proposed Rule Transitional and General 
Opt Out Procedures for Phase II Reformulated Gasoline Requirements; 
Proposed Rule

Federal Register / Vol. 62, No. 60 / Friday, March 28, 1997 / 
Proposed Rules

[[Page 15074]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL-5803-5]


Regulation of Fuels and Fuel Additives: Modification of the 
Covered Areas Provision for Reformulated Gasoline

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This action proposes to modify 40 CFR 80.70(k) of the 
reformulated gasoline (RFG) regulations to allow states to opt into the 
RFG program for any area classified as a marginal, moderate, serious or 
severe ozone nonattainment area as of November 15, 1990, the date of 
the enactment of the Clean Air Act Amendments of 1990 (1990 
Amendments), or any time later. This section currently provides that 
any area classified as a marginal, moderate, serious or severe ozone 
nonattainment area may be included in the RFG program on petition by 
the Governor of the State in which the area is located. Today's action 
will expand this provision to allow states to opt into the RFG program 
for areas which had been previously classified as marginal, moderate, 
serious or severe for ozone, but were subsequently redesignated to 
attainment. This will provide states an additional effective option 
that may be used to avoid the air quality problems that can lead to a 
violation of air quality standards. Allowing states to opt into the RFG 
program for these previously classified ozone nonattainment areas will 
help to ensure that these areas continue to achieve and maintain 
compliance with the ozone standard.

DATES: Comments on this proposed rule must be received by April 28, 
1997.

ADDRESSES: Interested parties may submit written comments (in 
duplicate, if possible) to Public Docket No. A-96-30, at Air Docket 
Section, U.S. Environmental Protection Agency, Waterside Mall, Room M-
1500, 401 M Street, S.W., Washington, D.C. 20460 (telephone 202/260-
7540, fax 202/260-4400). The Agency requests that commenters also send 
a copy of any comments to Karen Smith at the address listed in the FOR 
FURTHER INFORMATION CONTACT section. Documents may be inspected at the 
Air Docket Section between the hours of 8:00 a.m. and 5:30 p.m., Monday 
through Friday. A reasonable fee may be charged for copying docket 
materials.

FOR FURTHER INFORMATION CONTACT: Karen Smith, Policy Analyst, Fuels and 
Energy Division, US EPA, 401 M Street, S.W. (6406J), Washington, D.C. 
20460. (202) 233-9674.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially regulated by this action are those which 
produce, import or distribute gasoline for sale in areas formerly 
classified as marginal, moderate, serious or severe ozone nonattainment 
areas which opt into the RFG program, and retail gasoline stations 
located in those areas. Regulated categories and entities include:

------------------------------------------------------------------------
                                               Examples of  regulated   
                 Category                             entities          
------------------------------------------------------------------------
Industry.................................  Refiners, importers,         
                                            oxygenate blenders, terminal
                                            operators, distributors,    
                                            retail gasoline stations.   
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities potentially regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your company or facility may potentially be regulated by this action, 
you should carefully examine the applicability criteria of Part 80, 
Subpart D, of title 40 of the Code of Federal Regulations. If you have 
questions regarding the applicability of this action to a particular 
entity, consult the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section.

Availability on the TTNBBS

    A copy of this action is available on the OAQPS Technology Transfer 
Network Bulletin Board System (TTNBBS). The TTNBBS can be accessed with 
a dial-in phone line and a high-speed modem (PH# 919-541-5742). The 
parity of your modem should be set to none, the data bits to 8, and the 
stop bits to 1. Either a 1200, 2400, or 9600 baud modem should be used. 
When first signing on, the user will be required to answer some basic 
informational questions for registration purposes. After completing the 
registration process, proceed through the following series of menus:

(M)  OMS
(K)  Rulemaking and Reporting
(3)  Fuels
(9)  Reformulated Gasoline

    A list of ZIP files will be shown, all of which are related to the 
reformulated gasoline rulemaking process. Today's action will be in the 
form of a ZIP file and can be identified by the following title: 
OPTINDFR.ZIP. To download this file, type the following instructions 
and transfer according to the appropriate software on your computer: 
<D>ownload, <P>rotocol, <E>xamine, <N>ew, <L>ist, or <H>elp Selection 
or <CR> to exit: D filename.zip
    You will be given a list of transfer protocols from which you must 
choose one that matches with the terminal software on your own 
computer. The software should then be opened and directed to receive 
the file using the same protocol. Programs and instructions for de-
archiving compressed files can be found via <S>ystems Utilities from 
the top menu, under <A>rchivers/de-archivers. Please note that due to 
differences between the software used to develop the document and the 
software into which the document may be downloaded, changes in format, 
page length, etc. may occur.
    The remainder of this preamble is organized into the following 
sections:

I. Background
II. Modification of Sec. 80.70(k)
III. Compliance with the Regulatory Flexibility Act
IV. Administrative Designation
V. Paperwork Reduction Act
VI. Unfunded Mandates Act
VII. Statutory Authority

I. Background

    Section 107(d) of the Clean Air Act, as amended in 1990 (the Act), 
requires states to identify all areas that do not meet the national 
ambient air quality standards (NAAQS) for ozone, and directs EPA to 
designate these areas as ozone nonattainment areas. Section 181 of the 
Act requires EPA to classify each area designated as an ozone 
nonattainment area pursuant to section 107(d) as a marginal, moderate, 
serious, severe or extreme area, based on the design value for the 
area. Using this section 181 scheme, EPA classified all areas that were 
designated as in nonattainment for ozone at the time of the enactment 
of the 1990 Amendments, except for certain ``nonclassifiable'' 
areas.<SUP>1 56 FR 56694 (November 6, 1991).

[[Page 15075]]

Areas that were designated as in attainment for ozone as of the date of 
the 1990 Amendments were categorized as ``unclassifiable/attainment.''
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    \1\ ``Nonclassifiable'' areas include: ``transitional'' areas, 
defined in section 185A of the Act as areas which were designated as 
ozone nonattainment areas as of the date of enactment of the 1990 
Amendments, but which had not violated the primary NAAQS for ozone 
over the 3-year period from 1987-1989; ``submarginal'' areas, 
defined by EPA as those areas which had violated the ozone NAAQS 
during the period 1987-1989, but had design values less than the 
lower limit for marginal areas due to an adjustment for missing data 
when calculating expected exceedances; and ``incomplete/no data'' 
areas, defined by EPA as areas that were designated nonattainment 
areas prior to enactment of the 1990 Amendments, but at the time of 
enactment did not have sufficient air quality monitoring data to 
determine whether they were or were not violating the NAAQS.
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    Section 211(k)(5) of the Act prohibits the sale or dispensing by 
any person of conventional gasoline to ultimate consumers in any RFG 
covered area. Section 211(k)(6) of the Act, as amended in 1990, 
provides that, upon the application of the Governor of a State, the 
Administrator shall apply the prohibition contained in section 
211(k)(5) in any area in the State classified under Section 181 of the 
Act as a marginal, moderate, serious or severe <SUP>2 area (the ``opt-
in'' provision). In any such case, the Administrator must establish an 
appropriate effective date for such prohibition that is not later than 
1 year after such application is received, and publish the application 
and effective date in the Federal Register.
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    \2\ The Los Angeles area is the only area classified as extreme 
for ozone, and it is a mandatory RFG covered area under the Act.
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    In accordance with section 211(k)(6) of the Act, EPA promulgated 
Sec. 80.70(k) at 40 CFR part 80, which provides that any area 
classified under 40 CFR part 81, subpart C, as a marginal, moderate, 
serious or severe ozone nonattainment area may be included as a RFG 
covered area on petition of the Governor of the State in which the area 
is located.

II. Modification of Sec. 80.70(k)

    The modification proposed today revises the opt-in provision of 
Sec. 80.70(k) to apply it to areas classified as marginal, moderate, 
serious or severe ozone nonattainment areas as of November 15, 1990, 
the date the 1990 Amendments were enacted, or any time later. This 
proposed action will allow states to opt into the RFG program for areas 
which previously had been classified as marginal, moderate, serious or 
severe ozone nonattainment areas, but which have been redesignated to 
attainment. This will provide additional flexibility to the states to 
ensure continued compliance with the NAAQS for ozone. States with such 
redesignated areas will have the flexibility to include the RFG program 
in their maintenance plans or use RFG as a contingency measure for 
these areas.
    This action is consistent with the text of section 211(k)(6), which 
states that areas ``classified under subpart 2 of Part D of title I as 
marginal, moderate, serious, or severe'' for ozone can opt into the RFG 
program upon the application of the governor of a state. This provision 
does not expressly limit the state's opt-in ability to areas currently 
classified as marginal, moderate, serious or severe ozone nonattainment 
areas. It is reasonable and appropriate to allow areas classified as 
marginal, moderate serious, or severe for ozone as of the date of the 
enactment of the 1990 Amendments, or any time later, to opt into the 
RFG program, in light of the plain language of section 211(k)(6) and 
the intent of Congress in enacting it.
    The Conference Report to the 1990 Amendments, as passed, states 
that the opt-in provision ``clearly allows any nonattainment area which 
wants to opt-in to the reformulated gasoline programs to do so. They 
should be afforded every opportunity, and at the earliest possible 
date, to opt-in to the program subject to approval by EPA.'' (LH at 
1024.) Although section 211(k)(6) allows states to opt into the RFG 
program only for nonattainment areas classified as marginal, moderate, 
serious or severe, Congress clearly intended this provision to provide 
states an opportunity to opt into the RFG program for these 
nonattainment areas if the state determines it is an appropriate means 
of achieving and maintaining the NAAQS for ozone. Today's action 
furthers this Congressional goal by ensuring that areas previously 
classified as marginal, moderate, serious or severe nonattainment 
areas, which have been redesignated to attainment, have the flexibility 
to participate in the RFG program. Many of these areas have ozone 
levels which are relatively close to the NAAQS, and are concerned about 
experiencing violations in the future, although currently in 
attainment. This will provide states an additional effective option 
that may be used to avoid the air quality problems that can lead to 
redesignation as a nonattainment area. Allowing states to opt into the 
RFG program for these previously classified ozone nonattainment areas 
will help to ensure that these areas continue to achieve and maintain 
compliance with the ozone NAAQS. States who have former nonattainment 
areas that become eligible for participation in the RFG program under 
this proposed rule should be cognizant of the fact that the current RFG 
opt-out procedures end December 31, 1997. The Agency is considering 
proposing opt-out procedures for the transitional period to Phase II of 
RFG, that will require voluntary states to remain in the program for a 
period of time substantially longer than the current 90 day opt-out 
procedures. The agency reserves its discretion to set an effective date 
of up to one year from the receipt of an application to opt-into the 
RFG program if supply or other concerns exist, and may, extend the 
effective date for two additional one-year periods consistent with 
Section 211(k)(6)(b).
    EPA requests comment on whether a minimum lead-time of up to one 
year should be used in setting the effective date and whether this 
should apply to former non-attainment areas that opt-in and/or areas 
that are classified as non-attainment when they opt-in.
    One idea suggested by an outside party was that EPA should require 
that the Governor consider the costs of other programs in making the 
determination to adopt RFG. EPA requests comment on the approach, 
including whether EPA would have authority to impose such a requirement 
and whether it would be appropriate to do so. If EPA determinies the 
legal authority exists for such a requirement and that it would be 
appropriate, it may be considered for adoption in the final rulemaking.
    Today's action is consistent with EPA's interpretation of the opt-
in provision of section 211(k)(6) as expressed in the preamble to the 
final rule establishing RFG and anti-dumping standards. See 59 FR 7808-
7809 (April 16, 1994). Comments received on the rule included requests 
that certain areas categorized as unclassifiable/attainment areas, 
i.e., areas that were designated as in attainment for ozone as of the 
date of the 1990 Amendments, be allowed to opt into the RFG program. In 
response to these requests, EPA stated: ``Because of statutory 
limitations, attainment areas will not be allowed to opt-in to the RFG 
program.* * *'' 59 FR 7808. While this language indicates that 
unclassifiable/attainment areas are precluded from opting into the RFG 
program, it does not address the areas covered by this rule; i.e., 
areas previously designated as in nonattainment for ozone which have 
been redesignated to attainment. Today's proposed rule, therefore, 
addresses a sub-category of areas that EPA has not previously 
considered. EPA's interpretation of section 211(k)(6) as it applies to 
such areas is compatible with EPA's interpretation of this provision as 
it applies to current nonattainment areas. Since section 211(k)(6) 
allows states to opt into the RFG program only for nonattainment areas 
classified as marginal, moderate, serious or severe, this action 
extends the application of section 211(k)(6) only to redesignated areas 
which had been classified as marginal, moderate, serious or severe.

[[Page 15076]]

    Any area that opts into the RFG program under Sec. 80.70(k), 
whether currently or previously classified as marginal, moderate, 
serious or severe for ozone will be subject to all rules promulgated by 
the Agency for opting out of the RFG program.

III. Compliance with the Regulatory Flexibility Act

    For the following reasons, the Agency has determined that this rule 
will not have a significant economic impact on a substantial number of 
small entities and that a regulatory flexibility analysis is not 
necessary. In promulgating the RFG and anti-dumping regulations, the 
Agency analyzed the impact of the regulations on small businesses. The 
Agency concluded that the regulations may possibly have some economic 
effect on a substantial number of small refiners, but that the 
regulations may not significantly affect other small entities, such as 
gasoline blenders, terminal operators, service stations and ethanol 
blenders. See 59 FR 7810-7811 (February 16, 1994). As stated in the 
preamble to the final RFG/anti-dumping rule, exempting small refiners 
from the RFG regulations would result in the failure of meeting CAA 
standards. 59 FR 7810. However, since most small refiners are located 
in the mountain states or in California, which has its own RFG program, 
the vast majority of small refiners are unaffected by the federal RFG 
requirements (although all refiners of conventional gasoline are 
subject to the anti-dumping requirements). Moreover, all businesses, 
large and small, maintain the option to produce conventional gasoline 
to be sold in areas not obligated by the Act to receive RFG or those 
areas which have not chosen to opt into the RFG program. A complete 
analysis of the effect of the RFG/anti-dumping regulations on small 
businesses is contained in the Regulatory Flexibility Analysis which 
was prepared for the RFG and anti-dumping rulemaking, and can be found 
in the docket for that rulemaking. The docket number is: EPA Air Docket 
A-92-12.
    Today's proposed rule will affect only those refiners, importers or 
blenders of gasoline that choose to produce or import RFG for sale in 
areas which opt into the RFG program as a result of this action, and 
gasoline distributors and retail stations in those areas. As discussed 
above, EPA determined that, because of their location, the vast 
majority of small refiners would be unaffected by the RFG requirements. 
For the same reason, most small refiners will be unaffected by today's 
action. Other small entities, such as gasoline distributors and retail 
stations, located in areas which may become covered areas as a result 
of today's action, will be subject to the same requirements as those 
small entities which are located in current RFG covered areas. The 
Agency did not find the RFG regulations to significantly affect these 
entities. Since this action does not mandate any area to be included in 
the federal RFG program, but rather allows states the discretion to opt 
into the RFG program for certain areas, an estimate of the number of 
small entities which may ultimately be affected by this rule is 
unavailable.

IV. Administrative Designation

    Pursuant to Executive Order 12866, (58 FR 51735 (October 4, 1993)) 
the Agency must determine whether the regulatory action is 
``significant'' and therefore subject to OMB review and the 
requirements of the Executive Order. The Order defines ``significant 
regulatory action'' as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or lean programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, OMB has notified 
EPA that it considers this a significant regulatory action within the 
meaning of the Executive Order. EPA has submitted this action to OMB 
for review. Changes made in response to OMB suggestions or 
recommendations will be documented in the public record.

V. Paperwork Reduction Act

    This action does not add any new requirements under the provisions 
of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The Office of 
Management and Budget (OMB) has approved the information collection 
requirements contained in the final FRG/anti-dumping and has assigned 
OMB control number 2060-0277 (EPA ICR NO. 1951.03)
    Burden means the total time, effort , or financial resources 
expended by the persopns to generate, maintain, retain, or disclose or 
provide information to or for a Federal Agency. This includes the time 
needed to review instructions; develop, acquire, install and utilize 
technology and systems for the purposes of collecting, validating, and 
verfying information, processing and maintaing information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

VI. Unfunded Mandates Act

    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 by State, local, and tribal governments, in the aggregate; 
or by the private sector, of $100 million or more. 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 this rule.
    EPA has determined that the action taken today does not include a 
Federal mandate that may result in estimated costs of $100 million or 
more to either State, local, or tribal governments in the aggregate, or 
to the private sector. Therefore, the requirements of the Unfunded 
Mandates Act do not apply to this action.

VII. Statutory Authority

    The statutory authority for the action proposed today is granted to 
EPA by sections 211(c) and (k) and 301 of the Clean Air Act, as 
amended, 42 U.S.C. 7414, 7545(c) and (k), and 7601.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Gasoline, Motor vehicle pollution.


[[Page 15077]]


    Dated: March 21, 1997
Carol M. Browner,
Administrator.

    40 CFR part 80 is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

    Authority: Sections 114, 211 and 301(a) of the Clean Air Act as 
amended (42 U.S.C. 7414, 7545, and 7601(a)).

    2. Section 80.70 is amended by revising paragraph (k) to read as 
follows:


Sec. 80.70  Covered areas.

* * * * *
    (k) Any other area currently or previously classified under 40 CFR 
part 81, subpart C as a marginal, moderate, serious, or severe ozone 
nonattainment area as of November 15, 1990, or any time later, may be 
included on petition of the governor of the state in which the area is 
located.
* * * * *
[FR Doc. 97-7954 Filed 3-27-97; 8:45 am]
BILLING CODE 6560-50-P