[Federal Register Volume 66, Number 99 (Tuesday, May 22, 2001)]
[Rules and Regulations]
[Pages 28063-28066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12699]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Region II Docket No. NJ44-220; FRL-6979-1]


Approval and Promulgation of Implementation Plans; New Jersey; 
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 
Jersey. 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 Jersey.

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 Jersey Department of Environmental Protection, Office of Air 
Quality Management, Bureau of Air Pollution Control, 401 East State 
Street, CN027, Trenton, New Jersey 08625.
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 Demian Ellis at (212) 637-3713 for information on 
the Budget Demonstration, all of the Air Programs Branch, Region II 
Office.

SUPPLEMENTARY INFORMATION:

Overview

    The Environmental Protection Agency (EPA) is approving the New 
Jersey Department of Environmental Protection's (New Jersey'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. Why is EPA approving this action?
    C. What is Phase 2 of the NO<INF>X</INF> SIP Call and how does 
it relate to today's action?
    D. What is the impact of today's action on EPA's finding under 
the Clean Air Act section 126 rule?
    E. When did EPA propose to approve New Jersey's SIP revision?
    F. What are the public comments on EPA's proposal?
    G. 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 Jersey's ground level ozone SIP 
which New Jersey submitted on December 10,

[[Page 28064]]

1999 and July 31, 2000. These SIP revisions include an amended 
regulation, N.J.A.C. 7:27-31 (Subchapter 31), `` NO<INF>X</INF> Budget 
Program,'' adopted July 28, 2000, and a narrative entitled, ``State 
Implementation Plan (SIP) Revision for the Attainment and Maintenance 
of the Ozone and Carbon Monoxide National Ambient Air Quality 
Standards-Meeting the Requirements of the Regional NO<INF>X</INF> Cap 
Program and Transportation Conformity Budgets Related to the Attainment 
of the Ozone and Carbon Monoxide National Ambient Air Quality 
Standards,'' dated December 10, 1999 and supplemented on July 31, 2000. 
New Jersey 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 Jersey's submittal is fully approvable as a 
SIP-strengthening measure for New Jersey's one-hour ground level ozone 
SIP and as meeting the NO<INF>X</INF> SIP Call requirements. On May 31, 
2000, EPA found the mobile source emissions budgets to be adequate for 
transportation conformity purposes. (See 65 FR 36689, June 9, 2000).

B. Why is EPA approving this action?

    EPA is approving this action in order to:
    <bullet> Approve New Jersey's NO<INF>X</INF> Budget Trading Program 
(Subchapter 31) 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 nonattainment areas in New Jersey,
    <bullet> Fulfill New Jersey's and EPA's requirements under the 
NO<INF>X</INF> SIP Call,
    <bullet> Make New Jersey's NO<INF>X</INF> allowance trading 
regulation federally enforceable and available for credit in the SIP, 
and
    <bullet> Make New Jersey's SIP narrative, including the ozone 
season NO<INF>X</INF> budget and State reporting requirements, 
federally enforceable as part of the New Jersey SIP.
    These actions have the effect of assuring that the section 126 
requirements will no longer apply to New Jersey sources.

C. What is Phase 2 of the NO<INF>X</INF> SIP Call and how does it 
relate to today's action?

    On March 3, 2001, 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 Jersey. New Jersey met 
the Phase 1 SIP submittal requirements by its December 1999 and July 
2000 SIP revisions.
    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 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 Jersey, 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, Virgnia, and 
West Virginia.
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    EPA fully expects that the Phase 2 proposed rule would have no more 
than a slight effect on New Jersey Statewide NO<INF>X</INF> emission 
budgets. In the January 5, 2001 version of EPA's notice of proposed 
rulemaking, New Jersey's Phase 2 Statewide 2007 NO<INF>X</INF> 
emissions budget would be 96,876 tons. The corresponding Phase 2 
NO<INF>X</INF> emission reductions from the 2007 baseline emissions 
would be 8,613 tons. New Jersey's December 1999 and July 2000 SIP 
revisions, which EPA is approving today, includes a demonstration, 
including a detailed emission inventory, that the Statewide emissions 
would not exceed 96,275 tons in 2007 corresponding to NO<INF>X</INF> 
reductions of 9,214 tons (see 65 FR 71278 and 77695). Therefore, EPA 
fully expects that New Jersey's December 1999 and July 2000 SIP 
revisions will meet the Phase 2 Statewide budgets when finalized by 
EPA.
    Therefore, in today's action EPA is also approving New Jersey's 
December 1999 and July 2000 SIP revisions 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 Jersey's current budget. Once EPA finalizes the 
Phase 2 rule, should New Jersey's adopted 2007 NO<INF>X</INF> emissions 
budget (as submitted in December 1999 and July 2000) exceed the final 
Phase 2 budget (so that additional NO<INF>X</INF> reductions are 
needed), EPA will take appropriate action.

D. What is the impact of today's action on EPA's finding under the 
Clean Air Act section 126 rule?

    As stated in the November 30, 2000 Proposed Rulemaking (see 65 FR 
71278 at 71282), 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 Jersey, when finalized, will mandate any 
additional NO<INF>X</INF> reductions. Thus, meeting the March 2, 2000 
budget is adequate for New Jersey's SIP to meet the NO<INF>X</INF> SIP 
Call requirements. Since the New Jersey 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 Jersey pursuant to 40 CFR 52.34(i).

E. When did EPA propose to approve New Jersey's SIP revision?

    On November 30, 2000, as corrected on December 12, 2000, EPA 
published in the Federal Register (65 FR 71278 and corrected at 77695) 
a Proposed Rulemaking to approve New Jersey's regulation and SIP 
narrative as a SIP revision and providing for a 30-day public comment 
period, which ended on January 2, 2001.

F. What are the public comments on EPA's proposal?

    EPA received no public comments regarding the Proposed Rulemaking.

G. Where is additional information available on EPA's action?

    A detailed discussion of this program is available in the November 
30, 2000 Proposed Rulemaking (65 FR 71278), as corrected in the 
December 12, 2000

[[Page 28065]]

Federal Register (65 FR 77695). A Technical Support Document, prepared 
in support of the proposed rulemaking, contains the full description of 
New Jersey'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 Jersey's December 10, 1999 and July 31, 2000 
SIP submittals, including New Jersey's July 31, 2000 supplement, that 
address EPA's NO<INF>X</INF> SIP Call. EPA has reviewed New Jersey's 
control measures and projected reductions and finds them approvable. 
Therefore, EPA is approving Subchapter 31 and the SIP narrative into 
the New Jersey 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 Jersey.

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 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 FF--New Jersey

    2. Section 52.1570 is amended by adding new paragraph (c)(70) to 
read as follows:


Sec. 52.1570  Identification of plan.

* * * * *
    (c) * * *
    (70) Revisions to the State Implementation Plan submitted on 
December 10, 1999 and July 31, 2000 by the State of New Jersey 
Department of Environmental Protection that establishes the 
NO<INF>X</INF> Budget Trading Program, a 2007 Statewide NO<INF>X</INF> 
emissions budget, and a commitment by New Jersey to comply with the 
section 51.122 reporting requirements.
    (i) Incorporation by reference:
    (A) Regulation Subchapter 31 of Title 7, Chapter 27 of the New 
Jersey Administrative Code, entitled ``NO<INF>X</INF> Budget Program,'' 
adopted on July 31, 2000 and effective on August 21, 2000.
    (ii) Additional material:
    (A) Letter from State of New Jersey Department of Environmental 
Protection dated December 10, 1999, requesting EPA approval of the 
Ozone SIP, entitled ``State Implementation Plan (SIP)

[[Page 28066]]

Revision for the Attainment and Maintenance of the Ozone and Carbon 
Monoxide National Ambient Air Quality Standards; Meeting the 
Requirements of the Regional NO<INF>X</INF> Cap Program and 
Transportation Conformity Budgets Related to the Attainment of the 
Ozone and Carbon Monoxide National Ambient Air Quality Standards; 
December 1, 1999,'' as a revision to the State of New Jersey 
Implementation Plan for ozone.
    (B) Letter from State of New Jersey Department of Environmental 
Protection dated July 31, 2000, requesting EPA approval of the 
NO<INF>X</INF> Budget Program as a revision to the New Jersey State 
Implementation Plan for ozone. This submittal also contains 2007 State-
wide NO<INF>X</INF> emissions budget information that is supplemental 
to the December 10, 1999 SIP submittal.
* * * * *

    3. Section 52.1605 is amended by revising the entry under Title 7, 
Chapter 27 for Subchapter 31 in the table to read as follows:


Sec. 52.1605  EPA-approved New Jersey regulations

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         State regulation              State effective date       EPA approved date             Comments
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        Title 7, Chapter 27
 
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                                                        *
Subchapter 31, NO<INF>X</INF> Budget Program.  Aug. 21, 2000.............  5/22/01 66 FR 28066..  Incorporates NO<INF>X</INF> SIP Call
                                                                                        and NO<INF>X</INF> Budget Trading
                                                                                        Program for 1999 through
                                                                                        2003 and thereafter.
 
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[FR Doc. 01-12699 Filed 5-21-01; 8:45 am]
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