[Federal Register Volume 66, Number 99 (Tuesday, May 22, 2001)]
[Rules and Regulations]
[Pages 28059-28063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12700]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Region II Docket No. NY48-221; FRL-6979-2]


Approval and Promulgation of Implementation Plans; New York; 
Nitrogen Oxides Budget and Allowance Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a State 
Implementation Plan (SIP) revision submitted by the State of New York. 
This SIP revision meets the requirements of the EPA's regulation 
entitled, ``Finding of Significant Contribution and Rulemaking for 
Certain States in the Ozone Transport Assessment Group Region for 
Purposes of Reducing Regional Transport of Ozone,'' known as the `` 
NO<INF>X</INF> SIP Call.'' The SIP revision includes a narrative and a 
regulation that establish a statewide nitrogen oxides (NO<INF>X</INF>) 
budget and a NO<INF>X</INF> allowance trading program that begins in 
2003 for large electricity generating and industrial sources. The 
intended effect of this SIP revision is to reduce emissions of 
NO<INF>X</INF> in order to help attain the national ambient air quality 
standard for ozone. EPA is approving this action pursuant to section 
110 of the Clean Air Act. In addition, as a result of today's action, 
the Clean Air Act section 126 rule requirements will no longer apply to 
sources in the State of New York.

EFFECTIVE DATE: This rule will be effective June 21, 2001.

ADDRESSES: Copies of the state submittal are available at the following 
addresses for inspection during normal business hours:

Environmental Protection Agency, Region II Office, Air Programs Branch, 
290 Broadway, 25th Floor, New York, New York 10007-1866.
New York State Department of Environmental Conservation, Division of 
Air Resources, 50 Wolf Road, Albany, New York 12233.

[[Page 28060]]

Environmental Protection Agency, Air and Radiation Docket and 
Information Center, Air Docket (6102), 401 M Street, SW., Washington, 
DC 20460.

FOR FURTHER INFORMATION CONTACT: Ted Gardella at (212) 637-3892 for 
general information, Rick Ruvo at (212) 637-4014 for information on the 
Trading Program, or Raymond Forde at (212) 637-3716 for information on 
the Budget Demonstration, all of the Air Programs Branch, EPA Region II 
Office.

SUPPLEMENTARY INFORMATION:

Overview

    The Environmental Protection Agency (EPA) is approving the New York 
State Department of Environmental Conservation's (New York's) Nitrogen 
Oxides ( NO<INF>X</INF>) SIP Call State Implementation Plan (SIP) 
revision. The following table of contents describes the format for this 
SUPPLEMENTARY INFORMATION section:

I. EPA's Action
    A. What action is EPA approving today?
    B. What administrative changes result from today's action?
    C. Why is EPA approving this action?
    D. What is Phase 2 of the NO<INF>X</INF> SIP Call and how does 
it relate to today's action?
    E. What is the impact of today's action on EPA's finding under 
the Clean Air Act section 126 rule?
    F. When did EPA propose to approve New York's SIP revision?
    G. What are the public comments on EPA's proposal?
    H. Where is additional information available on EPA's action?
II. Conclusion
III. Administrative Requirements

I. EPA's Action

A. What Action is EPA Approving Today?

    EPA is approving revisions to New York's ground level ozone SIP 
which New York submitted on April 3, 2000 and April 18, 2000. These SIP 
revisions include a new regulation, 6 NYCRR Part 204, ``NO<INF>X</INF> 
Budget Trading Program,'' adopted January 18, 2000, and a narrative 
entitled, ``New York State Implementation Plan For Ozone; Meeting The 
Statewide Oxides of Nitrogen ( NO<INF>X</INF>) Budget Requirements 
Contained In The NO<INF>X</INF> SIP Call (63 FR 57356, October 27, 
1998),'' dated April 18, 2000 and supplemented on May 16, 2000. New 
York submitted the regulation and narrative, including NO<INF>X</INF> 
reducing measures, in order to strengthen its one-hour ozone SIP and to 
comply with the NO<INF>X</INF> SIP Call during each ozone season, i.e., 
May 1 through September 30, beginning in 2003. EPA has determined that 
New York's submittal is fully approvable as a SIP-strengthening measure 
for New York's one-hour ground level ozone SIP and as meeting the 
NO<INF>X</INF> SIP Call requirements.
    Separately, EPA is also approving administrative revisions to the 
New York SIP.

B. What Administrative Changes Result From Today's Action?

    Independent of New York's NO<INF>X</INF> SIP Call SIP revision, New 
York submitted various regulations as revisions to New York's SIP on 
August 10, 1979. The August 1979 submittal included, among other 
things, the repeal of part 204 ``Hydrocarbon Emissions From Storage and 
Loading Facilities--New York City Metropolitan Area,'' because part 204 
was superceded by part 229. By Federal Register notice published on 
February 5, 1980 (45 FR 7803), one of the conditions EPA imposed was 
either to regulate the storage of petroleum liquids other than gasoline 
or provide acceptable justification for not regulating such storage. 
New York submitted adopted revisions to part 229 to address the 
inclusion of petroleum liquids. On July 1, 1980 (see 45 FR 44273), EPA 
took final rulemaking to remove this condition after New York revised 
part 229 to include petroleum liquids. Since part 229 regulated all the 
sources previously regulated in part 204 and in some cases was more 
stringent, EPA should have, but inadvertently failed to, remove part 
204 from the SIP at that time.
    As part of today's action, EPA is now revising Title 40, 
Sec. 52.1679 ``EPA-approved New York State regulations,'' by removing 
the entry for old part 204, Hydrocarbon Emissions From Storage and 
Loading Facilities--New York City Metropolitan Area, and adding an 
entry for the new part 204, ``NO<INF>X</INF> Budget Trading Program.''
    In addition to part 204, New York made administrative amendments to 
regulations part 200 ``General Provisions,'' part 220 ``Portland Cement 
Plants,'' Subpart 227-1, ``Stationary Combustion Installations,'' 
subpart 227-2, ``Reasonably Available Control Technology (RACT) for 
Oxides of Nitrogen (NO<INF>X</INF>),'' and subpart 227-3, ``Pre-2003 
Nitrogen Oxides Emissions Budget and Allowance Program.''
    EPA is approving amendments to part 200, subpart 227-1, subpart 
227-2, and subpart 227-3 for the purposes of enforcing the SIP, as well 
as for enforcing New York's NO<INF>X</INF> Budget Trading Program. 
Since New York's amendments to part 200, subpart 227-1, subpart 227-2, 
and subpart 227-3 were administrative, EPA is revising the SIP to 
include the amended regulations. With respect to the administrative 
amendments to part 220, ``Portland Cement Plants,'' EPA is currently 
reviewing other amendments to part 220 adopted on January 18, 2000. 
Therefore, EPA will address all part 220 amendments at the same time in 
a future rulemaking.

C. Why is EPA Approving This Action?

    EPA is approving this action in order to:
    <bullet> Approve New York's NO<INF>X</INF> Budget Trading Program 
(part 204) under the NO<INF>X</INF> SIP Call as a control program that 
reduces NO<INF>X</INF> emissions, a precursor of ozone, and which 
therefore helps to achieve the national ambient air quality standard 
for ozone in the New York City metropolitan nonattainment area,
    <bullet> Fulfill New York's and EPA's requirements under the 
NO<INF>X</INF> SIP Call,
    <bullet> Approve administrative changes to New York's regulations 
part 200, part 204, subpart 227-1, subpart 227-2 and subpart 227-3.
    <bullet> Make New York's NO<INF>X</INF> allowance trading 
regulation federally enforceable and available for credit in the SIP, 
and
    <bullet> Make New York's SIP narrative, including the ozone season 
NO<INF>X</INF> budget and State reporting requirements, federally 
enforceable as part of the New York SIP.
    These actions have the effect of assuring that the section 126 
requirements will no longer apply to New York sources.

D. What is Phase 2 of the NO<INF>X</INF> SIP Call and how Does it 
Relate to Today's Action?

    On March 3, 2000, the Circuit Court of the District of Columbia 
handed down its decision in Michigan v. EPA, which largely upheld the 
NO<INF>X</INF> SIP Call but remanded a few minor issues to EPA. After 
this decision, EPA decided to separate the requirements of the regional 
strategy into two phases. The deadline for states to submit their plans 
to comply with Phase 1 of the strategy was October 30, 2000. Details of 
Phase 1 were outlined in April 11, 2000 letters to Governors in the 
affected states, including New York. New York met the Phase 1 SIP 
submittal requirements by its April 2000 SIP revision.
    On January 5, 2001, the outgoing Administrator signed a notice of 
proposed rulemaking for Phase 2 of the NO<INF>X</INF> SIP Call. This 
notice was placed on EPA's website at http://www.epa.gov/ttn/rto/sip/related.html#prop but has not been published pending further EPA 
evaluation. Phase 2 is designed to respond to issues remanded by the 
court by addressing, among other things, whether, and if so, how, a 
small subclass of facilities that generate

[[Page 28061]]

electricity--cogenerators--should be included in the rule, and what 
control levels should be assumed in reducing NO<INF>X</INF> from large, 
stationary internal combustion (IC) engines. The proposal would affect 
22 jurisdictions,\1\ including New York, and would identify a range of 
due dates for the affected states subject to Phase 2 to submit a SIP 
revision.
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    \1\ Alabama, Connecticut, Delaware, District of Columbia, 
Georgia, Illinois, Indiana, Kentucky, Massachusetts, Maryland, 
Michigan, Missouri, North Carolina, New Jersey, New York, Ohio, 
Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, and 
West Virginia.
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    EPA fully expects that the Phase 2 rule would have no more than a 
slight effect on New York Statewide NO<INF>X</INF> emission budgets. In 
the January 5, 2001 version of EPA's notice of proposed rulemaking, New 
York's Phase 2 Statewide 2007 NO<INF>X</INF> emissions budget would be 
240,285 tons or 240,322 tons based on IC engines with control 
efficiencies of 91% and 82%, respectively. The corresponding Phase 2 
NO<INF>X</INF> emission reductions from the 2007 baseline emissions 
would be 15,368 tons and 15,331 tons, respectively. New York's April 
2000 SIP revision, which EPA is approving today, includes a 
demonstration, including a detailed emission inventory, that the 
Statewide emissions would not exceed 239,549 tons in 2007, 
corresponding to NO<INF>X</INF> reductions of 16,103 tons (see 65 FR 
76197). Therefore, EPA fully expects that New York's April 2000 SIP 
revision will meet the Phase 2 Statewide budgets when finalized by EPA.
    Therefore, in today's action EPA is also approving New York's April 
2000 SIP revision as fully meeting the NO<INF>X</INF> SIP Call 
requirements including the Phase 2 Statewide NO<INF>X</INF> emissions 
budget that will apply when the Phase 2 rulemaking is completed. EPA 
recognizes that its Phase 2 rulemaking has not been completed, but as 
noted above, fully expects that the final Statewide budget promulgated 
in that rulemaking will be no more stringent than New York's current 
budget. Once EPA finalizes the Phase 2 rule, should New York's adopted 
2007 NO<INF>X</INF> emissions budget (as submitted in April 2000) 
exceed the final Phase 2 budget (so that additional NO<INF>X</INF> 
reductions are needed), EPA will take appropriate action.

E. What is the Impact of Today's Action on EPA's Finding Under the 
Clean Air Act Section 126 Rule?

    As stated in the December 6, 2000 Proposed Rulemaking (see 65 FR 
76197 at 76202), a SIP meeting the March 2, 2000 budgets and providing 
for reductions by May 1, 2003, should fully address the significant 
NO<INF>X</INF> transport from that state. Therefore, upon approval of 
such a SIP, Sec. 52.34(i) of the section 126 rule would apply to 
automatically withdraw the section 126 requirements for sources in that 
state. As noted immediately above, EPA has no reason to expect that the 
Phase 2 budget for New York, when finalized, will mandate any 
additional NO<INF>X</INF> reductions. Thus, meeting the March 2, 2000 
budget is adequate for New York's SIP to meet the NO<INF>X</INF> SIP 
Call requirements. Since the New York SIP revision meets the March 2, 
2000 budgets, provides for reductions by May 1, 2003, and is fully 
approved today as proposed, the section 126 requirements are 
automatically withdrawn, as of the effective date of this final rule, 
for sources in the State of New York pursuant to 40 CFR 52.34(i).

F. When Did EPA Propose To Approve New York's SIP Revision?

    On December 6, 2000, EPA published in the Federal Register (65 FR 
76197) a Proposed Rulemaking to approve New York's regulation and SIP 
narrative as a SIP revision and providing for a 30-day public comment 
period, which ended on January 5, 2001.

G. What Are the Public Comments on EPA's Proposal?

    EPA received no public comments regarding the Proposed Rulemaking.

H. Where is Additional Information Available on EPA's Action?

    A detailed discussion of this program is available in the December 
6, 2000 Proposed Rulemaking (65 FR 76197). A Technical Support 
Document, prepared in support of the proposed rulemaking, contains the 
full description of New York's submittal and EPA's evaluation. A copy 
of the Technical Support Document is available upon request from the 
EPA Regional Office listed in the ADDRESSES section.

II. Conclusion

    EPA is approving New York's April 3, 2000 and April 18, 2000 SIP 
submittals, as supplemented on May 16, 2000, that address EPA's 
NO<INF>X</INF> SIP Call. EPA has reviewed New York's control measures 
and projected reductions and finds them approvable. Therefore, EPA is 
approving Part 204 and the SIP narrative into the New York SIP at this 
time. In addition, as a result of today's action, the Clean Air Act 
section 126 rule requirements will no longer apply to sources in the 
State of New York.

III. Administrative Requirements

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. This action 
merely approves state law as meeting federal requirements and imposes 
no additional requirements beyond those imposed by state law. 
Accordingly, the Administrator certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because 
this rule approves pre-existing requirements under state law and does 
not impose any additional enforceable duty beyond that required by 
state law, it does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Public Law 104-4). This rule also does not 
have a substantial direct effect on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000) nor will this rule have substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government, as specified 
in Executive Order 13132 (64 FR 43255, August 10, 1999), because it 
merely approves a state rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. This rule also is 
not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), 
because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. As required by

[[Page 28062]]

section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996), in 
issuing this rule, EPA has taken the necessary steps to eliminate 
drafting errors and ambiguity, minimize potential litigation, and 
provide a clear legal standard for affected conduct. EPA has complied 
with Executive Order 12630 (53 FR 8859, March 15, 1988) by examining 
the takings implications of the rule in accordance with the ``Attorney 
General's Supplemental Guidelines for the Evaluation of Risk and 
Avoidance of Unanticipated Takings'' issued under the executive order. 
This rule does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.)

Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major'' rule as defined by 5 U.S.C. 804(2). This rule will be 
effective June 21, 2001.

Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by July 23, 2001. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Reporting and recordkeeping requirements.

    Dated: May 7, 2001.
William J. Muszynski,
Acting Regional Administrator, Region 2.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart HH--New York

    2. Section 52.1670 is amended by adding new paragraph (c)(100) to 
read as follows:


Sec. 52.1670  Identification of plan.

* * * * *
    (c) * * *
    (100) Revisions to the State Implementation Plan submitted on April 
3, 2000, April 18, 2000 and as supplemented on May 16, 2000 by the New 
York State Department of Environmental Conservation that establishes 
the NO<INF>X</INF> Budget Trading Program, a 2007 Statewide 
NO<INF>X</INF> emissions budget, and a commitment by New York to comply 
with the Sec. 51.122 reporting requirements.
    (i) Incorporation by reference: 
    (A) Regulation Part 204 of Title 6 of the New York Code of Rules 
and Regulations, entitled ``NO<INF>X</INF> Budget Trading Program,'' 
adopted on January 18, 2000 and effective on February 25, 2000.
    (B) Amendments to Title 6 of the New York Code of Rules and 
Regulations, Part 200, ``General Provisions,'' Subpart 227-1, 
``Stationary Combustion Installations,'' and Subpart 227-2, 
``Reasonably Available Control Technology (RACT) for Oxides of Nitrogen 
( NO<INF>X</INF>)'' adopted on January 18, 2000 and effective on 
February 25, 2000.
    (ii) Additional material: 
    (A) Letter from New York State Department of Environmental 
Conservation dated April 3, 2000, requesting EPA approval of the 
NO<INF>X</INF> Budget Trading Program as a revision to the New York 
State Implementation Plan for ozone.
    (B) Letter from New York State Department of Environmental 
Conservation dated April 18, 2000, requesting EPA approval of the 
Oxides of Nitrogen ( NO<INF>X</INF>) SIP, entitled ``New York State 
Implementation Plan For Ozone; Meeting The Statewide Oxides of Nitrogen 
( NO<INF>X</INF>) Budget Requirements Contained In The NO<INF>X</INF> 
SIP Call (63 FR 57356, October 27, 1998),'' as a revision to the New 
York State Implementation Plan for ozone.
    (C) Letter from New York State Department of Environmental 
Conservation dated May 16, 2000, transmitting supplemental information 
to the Oxides of Nitrogen ( NO<INF>X</INF>) SIP submitted on April 18, 
2000.


    3. Section 52.1679 is amended by revising the entry Under Title 6 
for Part 200, Part 204, Subpart 227-1, Subpart 227-2, and Subpart 227-3 
in the table to read as follows:


Sec. 52.1679  EPA--approved New York State regulations.

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                                            State
       New York State regulation          effective    Latest EPA approval date              Comments
                                             date
----------------------------------------------------------------------------------------------------------------
                Title 6
Part 200, General Provisions Sections        2/25/00  5/22/01 66 FR 28062.......  Redesignation of non-
 200.1, 200.6, 200.7 and 200.9.                                                    attainment areas to
                                                                                   attainment areas (200.1(av))
                                                                                   does not relieve a source
                                                                                   form compliance with
                                                                                   previously applciable
                                                                                   requirements as per letter of
                                                                                   Nov. 13, 1981 from H. Hovey,
                                                                                   NYSDEC.
                                                                                  Changes in definitions are
                                                                                   acceptable to EPA unless a
                                                                                   previously approved
                                                                                   definition is necessary for
                                                                                   implementation of an existing
                                                                                   SIP regulation.

[[Page 28063]]

 
                                                                                  EPA is including the
                                                                                   definition of ``federally
                                                                                   enforceable'' with the
                                                                                   understanding that (1) the
                                                                                   definition applies to
                                                                                   provisions of a Title V
                                                                                   permit that are correctly
                                                                                   identified as federally
                                                                                   enforceable, and (2) a source
                                                                                   accepts operating limits and
                                                                                   conditions to lower its
                                                                                   potential to emit to become a
                                                                                   minor source, not to
                                                                                   ``avoid'' applicable
                                                                                   requirements.
                                                                                  EPA is approving incorporation
                                                                                   by reference of those
                                                                                   documents that are not
                                                                                   already federally
                                                                                   enforceable.
 
*                  *                  *                  *                  *                  *
                                                        *
Part 204, NO<INF>X</INF> Budget Trading Program...      2/25/00  5/22/01 66 FR 28063.......  Incorporates NO<INF>X</INF> SIP Call and
                                                                                   NO<INF>X</INF> Budget Trading Program
                                                                                   for 2003 and thereafter.
 
*                  *                  *                  *                  *                  *
                                                        *
Subpart 227-1, Stationary Combustion         2/25/00  5/22/01 66 FR 28063.......  Renumbered sections 227-
 Installations.                                                                    1.2(a)(2), 227-1.4(a), and
                                                                                   227-1.4(d) continue to be
                                                                                   disapproved according to 40
                                                                                   CFR 52.1678(d) and
                                                                                   52.1680(a). (New York
                                                                                   repealed existing Part
                                                                                   227.5.)
Subpart 227-2, Reasonably Available          2/25/00  5/22/01 66 FR 28063.......  ..............................
 Control Technology (RACT) for Oxides
 of Nitrogen (NO<INF>X</INF>).
Subpart 227-3, Pre-2003 Nitrogen Oxides       3/5/99  5/22/01 66 FR 28063.......  Approval of NO<INF>X</INF> Budget Trading
 Emissions Budget and Allowance Program.                                           Program for 1999, 2000, 2001
                                                                                   and 2002. NO<INF>X</INF> caps in the
                                                                                   State during 2003 and
                                                                                   thereafter established in
                                                                                   Part 204.
 
*                  *                  *                  *                  *                  *
                                                        *
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[FR Doc. 01-12700 Filed 5-21-01; 8:45 am]
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