Document ID: EPA-HQ-OAR-2007-1158-0001
Agency: epa
Document Type: Rule
Title: Regulation of Fuels and Fuel Additives: Alternative Affirmative Defense Requirements for Ultra-low Sulfur Diesel and Gasoline Benzene Technical Amendment; Direct Final Rule
Posted Date: 2010-05-11T04:00Z

[Federal Register: May 11, 2010 (Volume 75, Number 90)]
[Rules and Regulations]               
[Page 26121-26131]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11my10-14]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2007-1158; FRL-9147-4]
RIN 2060-AO71

 
Regulation of Fuels and Fuel Additives: Alternative Affirmative 
Defense Requirements for Ultra-Low Sulfur Diesel and Gasoline Benzene 
Technical Amendment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is issuing a direct final rule to amend the diesel sulfur 
regulations to allow refiners, importers, distributors, and retailers 
of highway diesel fuel the option to use an alternative affirmative 
defense if the Agency finds highway diesel fuel samples above the 
specified sulfur standard at retail facilities. This alternative 
defense consists of a comprehensive program of quality assurance 
sampling and testing that would cover all participating companies that 
produce and/or distribute highway diesel fuel if certain other 
conditions are met. The sampling and testing program would be carried 
out by an independent surveyor. The program would be conducted pursuant 
to a survey plan approved by EPA that is designed to achieve the same 
objectives as the current regulatory quality assurance requirement. 
This rule also amends the gasoline benzene regulations to allow 
disqualified small refiners the same opportunity to generate gasoline 
benzene credits as that afforded to non-small refiners.

DATES: This rule is effective on July 12, 2010 without further notice, 
unless EPA receives adverse comment by June 10, 2010. If EPA receives 
adverse comment, we will publish a timely withdrawal in the Federal 
Register informing the public that this rule, or the relevant 
provisions of this rule, will not take effect. The incorporation by 
reference of a certain publication listed in the regulations is 
approved by the Director of the Federal Register as of July 12, 2010.
    Hearings: If EPA receives a request from a person wishing to speak 
at a public hearing by May 26, 2010, a public hearing will be held at a 
time and location to be announced in a subsequent Federal Register 
notice. To request to speak at a public hearing, send a request to the 
contact in FOR FURTHER INFORMATION CONTACT.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2007-1158, by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: a-and-r-docket@epa.gov.
     Fax: (202) 566-9744.
     Mail: Air and Radiation Docket, Environmental Protection 
Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 
20460.
     Hand Delivery: EPA Docket Center, Room 3334, EPA West 
Building, 1301 Constitution Avenue, NW., Washington, DC, Attention Air 
Docket ID No. EPA-HQ-OAR-2007-1158. Such deliveries are only accepted 
during the Docket's normal hours of operation, and special arrangements 
should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2007-1158. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://
www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will 
automatically be captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket, visit the EPA Docket Center homepage at http://www.epa.gov/
epahome/dockets.htm.
    Docket: All documents in the docket are listed in the http://
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA 
West, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The 
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through 
Friday, excluding legal holidays. The telephone number for the Public 
Reading Room is (202) 566-1744, and the telephone number for the Air 
Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Jaimee Dong, Compliance and Innovative 
Strategies Division, Office of Transportation and Air Quality, Office 
of Air and Radiation, Environmental Protection Agency, Mail Code 6405J, 
1200 Pennsylvania Avenue, Washington, DC 20460; telephone number: (202) 
343-9672; fax number: (202) 343-2800; e-mail address: 
Dong.Jaimee@epa.gov.

SUPPLEMENTARY INFORMATION:

Why is EPA using a direct final rule?

    EPA is publishing this rule without a prior proposed rule because 
we view this as a noncontroversial action and anticipate no adverse 
comment. However, in the ``Proposed Rules'' section of today's Federal 
Register, we are publishing a separate document that will serve as the 
proposed rule to amend the diesel sulfur regulations and the gasoline 
benzene regulations if adverse comments are received on this direct 
final rule. We do not intend to institute a second comment period on 
this action. Any parties interested in commenting must do so at this 
time. For further information about commenting on this rule, see the 
ADDRESSES section of this document.
    If EPA receives adverse comment on a distinct provision of this 
rulemaking, we will publish a timely withdrawal in the Federal Register 
indicating which provisions we are withdrawing. The provisions that are 
not withdrawn will become effective on the date set out above, 
notwithstanding adverse comment on any other provision. We will address 
all public comments in any subsequent final rule based on the proposed 
rule.

[[Page 26122]]

Does this action apply to me?

    Entities potentially affected by this action include those involved 
with the production, importation, distribution, marketing, or retailing 
of diesel fuel and production of gasoline. Categories and entities 
affected by this action include:

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                                                  NAICS codes                        Examples of potentially
                   Category                           \a\        SIC codes \b\         regulated entities
----------------------------------------------------------------------------------------------------------------
Industry......................................          324110            2911  Petroleum Refiners.
Industry......................................          422710            5171  Diesel Fuel Marketers and
                                                                                 Distributors.
Industry......................................          484220            4212  Diesel Fuel Carriers.
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC) system code.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
action; however, other types of entities not listed in the table could 
also be affected. To determine whether your entity is affected by this 
action, you should examine the applicability criteria of parts 79 and 
80 of title 40 of the Code of Federal Regulations. If you have any 
question regarding applicability of this action to a particular entity, 
consult the person in the preceding FOR FURTHER INFORMATION CONTACT 
section.

What should I consider as I prepare my comments for EPA?

    A. Submitting CBI. Do not submit this information to EPA through 
http://www.regulations.gov or e-mail. Clearly mark the information that 
you claim to be CBI. For CBI information on a disk or CD ROM that you 
mail to EPA, mark the outside of the disk or CD ROM as CBI and then 
identify electronically within the disk or CD ROM the specific 
information that is claimed as CBI. In addition to one complete version 
of the comment that includes information claimed as CBI, a copy of the 
comment that does not contain the information claimed as CBI must be 
submitted for inclusion in the public docket. Information marked as CBI 
will not be disclosed except in accordance with procedures set forth in 
40 CFR part 2.
    B. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.
    C. Docket Copying Costs. You may be charged a reasonable fee for 
photocopying docket materials, as provided by 40 CFR part 2.

Outline of This Preamble

I. Background
II. Need for Action
III. This Action
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Acts that Significantly Affect Energy 
Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations.
    K. Congressional Review Act
    L. Clean Air Act Section 307(d)
V. Statutory Provisions and Legal Authority

I. Background

    The diesel sulfur regulations were designed to ensure widespread 
availability of highway diesel fuel containing 15 parts per million 
(ppm) sulfur or less by October 2006. Almost all highway diesel engines 
produced beginning in 2007 will be equipped with emissions control 
systems that are sensitive to sulfur. These vehicles should be fueled 
with diesel fuel produced to contain no more than 15 ppm sulfur (called 
Ultra-Low Sulfur Diesel or ULSD highway diesel fuel) in order for the 
emissions control systems to function properly, and to prevent damage 
to the emissions control systems.
    The diesel sulfur regulations require refiners, importers, 
distributors and retailers who produce, import, sell, store or 
transport ULSD highway diesel fuel to meet the standards specified in 
the diesel sulfur regulations. Where a violation of the standards is 
identified at a retail outlet, the retailer responsible for dispensing 
the noncompliant fuel is deemed liable, as well as the refiner(s), 
importer(s) and distributor(s) of such fuel. See 40 CFR 80.612(a). In 
addition, where the corporate, trade or brand name of a refiner appears 
at a retail outlet found to be in violation, that branded refiner is 
also deemed liable for the violation. See 40 CFR 80.612(a)(3).
    The diesel sulfur regulations further provide, however, that any 
person deemed liable can rebut this presumption by establishing an 
affirmative defense that includes, among other things, showing that it 
conducted a quality assurance sampling and testing program as 
prescribed by the regulations. See 40 CFR 80.613(a)(1) and 40 CFR 
80.613(d). Branded refiners and importers are not liable if they can 
establish, among other things, that the violation was caused by the 
action of a third-party distributor or retailer who violated product 
handling procedures that were contractually required by the refiner, 
despite periodic sampling and testing to ensure compliance with the 
contractual obligation.

II. Need for Action

    EPA received questions from several large branded refiners of ULSD 
highway diesel fuel regarding how EPA would enforce violations of the 
downstream sulfur standard in instances where a ULSD highway diesel 
fuel sample test result exceeded the downstream standard by an amount 
less than the 2

[[Page 26123]]

ppm adjustment factor.\1\ These questions led to discussions between 
EPA and the refiners about establishing an optional nationwide sampling 
and testing program in which refiners could participate to satisfy the 
affirmative defense requirements under Sec.  80.613. This program, 
which would be generally modeled on the reformulated gasoline (RFG) 
survey program set forth in 40 CFR 80.68, would be conducted by an 
independent survey organization following a survey plan approved 
annually by EPA, and funded by a consortium of refiners, importers and 
distributors.
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    \1\ The diesel sulfur regulations at Sec.  80.580(d) provide for 
an adjustment factor to be subtracted from test results for samples 
taken downstream of the refinery gate, to account for test 
variability. The adjustment factor was 3 ppm prior to October 15, 
2008, and is now 2 ppm as of October 15, 2008. Thus, ULSD highway 
diesel fuel downstream of the refinery gate would be deemed to be 
compliant beginning October 15, 2008 if a test result showed it 
contained no more than 17 ppm sulfur. For ease of reference, this 
preamble uses the term ``downstream sulfur standard'' to refer to 
the 15 ppm standard plus the adjustment factor, i.e. 17 ppm, 
beginning October 15, 2008. The term ULSD means diesel fuel subject 
to the 15 ppm standard applicable at the refinery gate, and subject 
to the downstream sulfur standard of 15 ppm plus the 2 ppm 
adjustment factor.
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    For the reasons discussed below, EPA believes it is appropriate to 
provide branded refiners or importers who sell ULSD highway diesel fuel 
at retail stations with an alternative means of meeting the affirmative 
defense requirements in Sec.  80.613. We also believe it is appropriate 
to provide this alternative to unbranded refiners and importers, as 
well as distributors and retailers. As a result, this rule amends the 
diesel sulfur regulations to provide an optional alternative means of 
meeting the defense requirements in Sec.  80.613, which will be 
available to any refiner, importer, distributor or retailer of ULSD 
highway diesel fuel.
    We believe that the use of the new alternative quality assurance 
compliance program will result in a quality assurance program 
equivalent to that currently required under the diesel sulfur 
regulations. The provisions in this rule are equivalent to those in an 
existing program that was implemented by EPA's Office of Enforcement 
and Compliance Assurance in October, 2006 through enforcement 
discretion, and which has efficiently provided significant amounts of 
statistically valid information on a nationwide basis. Sampling results 
from the program (aggregated on a quarterly basis) are available on the 
Web site of the Clean Diesel Fuel Alliance at http://www.clean-
diesel.org/pump_survey.html. This rule will not have any adverse 
environmental impact and will provide refiners, importers and 
distributors additional flexibility in complying with the diesel sulfur 
regulations.

III. This Action

    This action provides refiners, importers, distributors and 
retailers of ULSD highway diesel fuel the option of an alternative 
defense to liability that consists in part of a nationwide program of 
sampling and testing designed to provide oversight of all retail 
stations that sell ULSD highway diesel fuel. Under this option, a 
refiner, importer, distributor or retailer must participate in an 
organization that arranges to have an independent surveyor conduct a 
program of compliance surveys pursuant to a survey plan designed to 
achieve the same quality assurance objectives as the current regulatory 
requirement. A detailed survey plan must be submitted to EPA for 
approval by November 1 of the year preceding the year in which the 
alternative quality assurance sampling and testing program would be 
implemented. The survey plan must include a methodology for determining 
when the survey samples will be collected, the locations of the retail 
outlets where the samples will be collected, the number of samples to 
be included in the survey, and any other elements that EPA determines 
are necessary to achieve the same level of quality assurance as the 
current requirement.
    Under this alternative quality assurance program, the independent 
surveyor is required to collect samples of ULSD highway diesel fuel at 
retail stations and have the samples tested for sulfur content. This 
nationwide sampling and testing program would be designed to ensure 
comprehensive geographic coverage of regulated highway diesel fuel sold 
at retail outlets, would provide proportionate coverage of such fuel in 
three sampling strata, and would be done in accordance with the 
provisions in 40 CFR 80.580. These three strata generally refer to: (1) 
Densely populated areas, which include Metropolitan Statistical Areas 
and the reformulated gasoline control areas; (2) transportation 
corridors, which are based on interstate highways outside the densely 
populated areas. Transportation corridors include areas immediately 
adjacent to the highways themselves and a swath within several miles on 
each side of the highway. For any given survey, a certain length of any 
specific highway may be deemed appropriate as a sampling unit or 
cluster; (3) rural areas, which include all areas not included in the 
previous two strata. These areas are subdivided into clusters, 
generally based on groupings of counties. The specific criteria used 
for selecting sampling areas for each survey plan is subject to EPA 
approval.
    The surveyor would generate and report summary sulfur content 
statistics to EPA each calendar quarter. In addition, where the survey 
finds noncompliant samples of ULSD highway diesel fuel, the liable 
parties would be responsible for identifying and addressing the root 
cause of the violation to prevent future violations.
    EPA recognizes that any alternative quality assurance program must 
result in the same level of consistency in meeting the ULSD standard 
for highway fuel as the current quality assurance requirements. A 
sampling and testing program that accomplishes this must both 
accurately estimate the proportion of retail stations that sell non-
compliant ULSD highway diesel fuel and provide a credible deterrent to 
deliberate or inadvertent violations of downstream enforcement 
standards.
    While not mutually exclusive, the two overall objectives differ 
significantly in how an adequate number of samples for an alternative 
quality assurance program is calculated. The amount of sampling needed 
to satisfy either objective depends on a number of considerations which 
pose separate difficulties for the two objectives. On the one hand, the 
amount needed to estimate the proportion of retail stations that sell 
non-compliant ULSD highway diesel fuel varies as a function of the 
expected underlying proportion of stations selling non-compliant fuel, 
the proportion of stations needed to be non-compliant to determine that 
fuel is non-compliant, the selected confidence level, and various 
sample design parameters. Thus, arriving at the sampling requirement 
for determining the proportion of retail stations that sell non-
compliant ULSD highway diesel relies on determining tolerable levels of 
non-compliance and confidence that would provide a suitable degree of 
accuracy.
    On the other hand, the amount of sampling needed to maintain 
adequate deterrence rests on sound judgment by experienced field 
enforcement personnel based on the attractiveness/profitability of 
deliberate violations, the likelihood of inadvertent violations, the 
nature of penalty policies, and the speed with which information about 
enforcement actions and their outcomes is disseminated throughout the 
regulated community. Therefore, deciding how much sampling is needed 
for effective deterrence is a less deterministic process.

[[Page 26124]]

    For the reasons discussed above, no single statistical formula can 
be used exclusively to determine the size of an acceptable sampling 
program if both objectives are to be met. The use of a rigorous survey 
sampling methodology serves both principal objectives. For non-
compliance estimation purposes, the need for such statistical rigor is 
necessary for an accurate measure of the proportion of retail stations 
selling non-compliant ULSD highway diesel fuel. Another benefit from 
the use of such methodology is that it makes the most efficient use of 
limited resources by distributing sampling in a way that no regulated 
party can be confident that it will not be sampled and tested.
    When a violation occurs, today's rule allows branded refiners that 
participate in the consortium to establish a defense for themselves, 
and also establish a defense for distributors and retailers that 
operate under the branded refiners' trade or brand name under new 
provisions in Sec.  80.613(e). Unbranded refiners and distributors that 
do not operate under the trade or brand name of a refiner, as well as 
distributors that operate under a refiner's trade or brand name but the 
refiner has elected to not participate in the consortium, also may use 
these new defense provisions by independently participating in the 
consortium. In certain situations, a distributor's operations may be 
partially under the brand name of a participating refiner and partially 
under the brand name of a non-participating refiner or partially not 
under the brand name of a refiner. Such distributors, if they seek to 
use the alternative defense discussed here, must participate 
independently in the consortium to meet their defense requirements 
under Sec.  80.613(e) for their operations that are under the brand 
name of a non-participating refiner, or operations not under the brand 
name of a refiner.
    Where the survey association finds a sample of ULSD highway diesel 
fuel that exceeds the downstream sulfur standard, participants in the 
consortium have different requirements for establishing their defense 
under Sec.  80.613(e), depending on the amount of the exceedance. For 
exceedances of up to 2 ppm over the downstream standard, consortium 
participants will be deemed to have met all of their defense 
requirements under Sec.  80.613(e) provided they demonstrate to EPA 
that diesel fuel last supplied to the retail station contained no more 
than 15 ppm sulfur prior to subtracting the 2 ppm adjustment factor 
when dispensed at the supplying terminal, and take several actions, 
described in further detail below, to stop distribution of the 
violating fuel, to determine why the violation occurred, and to provide 
a report to EPA explaining how such violations will be avoided in the 
future. However, for exceedances of more than 2 ppm over the downstream 
standard, consortium participants must also meet additional defense 
requirements as described in further detail below.
    EPA chose 2 ppm as a threshold based on past sulfur testing 
experience in order to provide an incentive for regulated parties to 
participate in the consortium while encouraging participants to take 
appropriate steps to comply. Exceedances of more than 2 ppm over the 
downstream standard indicate that a regulated party may not have taken 
appropriate steps to comply, and that more analysis is required to 
determine the cause of the exceedance. The exceedance threshold of 2 
ppm is equal to the 2 ppm adjustment factor allowed for downstream 
parties in the diesel sulfur regulations. Due to variability in sulfur 
test methods, downstream parties are allowed to subtract 2 ppm from 
their sulfur test result to determine compliance with the 15 ppm sulfur 
standard, which means that a downstream sulfur test result of 17 ppm is 
considered to be compliant with the 15 ppm sulfur standard. However, a 
test variability of 2 ppm means actual sulfur content may also be 2 ppm 
greater than the test result, so if diesel fuel containing 17 ppm 
sulfur is tested twice for sulfur, one test result may be 15 ppm and 
one test result may be 19 ppm. Thus, if a terminal has a sulfur test 
result of 15 ppm for their diesel fuel prior to subtracting the 2 ppm 
adjustment factor, it is possible for another party to test the same 
diesel fuel and obtain a test result of 19 ppm. Requiring the supplying 
terminal to demonstrate that their diesel fuel when tested contained no 
more than 15 ppm sulfur prior to subtracting the 2 ppm adjustment 
factor means that a retail test result of 19 ppm would show 
noncompliance but would still be consistent with other test results 
that show compliance under the regulations.
    When the survey association finds a sample of ULSD highway diesel 
fuel which exceeds the downstream standard by 2 ppm or less, branded 
refiners that participate in the consortium must take several actions 
to meet all of their defense requirements under Sec.  80.613(e). These 
include demonstrating to EPA that diesel fuel last supplied to the 
retail station contained no more than 15 ppm sulfur when dispensed at 
the supplying terminal, and that best efforts and accepted business 
practices are used by downstream parties to avoid diesel fuel 
contamination. Also, following notification to the branded refiner by 
the survey association of the test result, appropriate steps must be 
taken within 24 hours to ensure the diesel fuel is not dispensed into 
motor vehicles until remedial action is taken to ensure the fuel sulfur 
content is no greater than the applicable downstream standard. This 
action may include either shutting down the pumps which supply the 
diesel fuel, or placing new labels on the pumps stating they dispense 
500 ppm highway diesel fuel rather than 15 ppm highway diesel fuel 
(prior to June 1, 2010). Lastly, the branded refiner must submit a 
report to EPA within 120 days of the exceedance, which explains the 
circumstances and root cause of the exceedance and steps taken to 
prevent distribution of noncompliant fuel, and lists actions that will 
be taken to prevent future exceedances. The refiner must also provide 
EPA with copies of contracts which include the procedures in place to 
prevent contamination of ULSD highway diesel fuel. The survey 
association must also retest ULSD highway diesel fuel dispensed at the 
retail station during its next survey, in addition to its scheduled 
sampling.
    Unbranded refiners, distributors and retailers that participate in 
the consortium have slightly different requirements from branded 
refiners for establishing their defense when the survey association 
finds a retail sample which exceeds the downstream standard by 2 ppm or 
less. Participating unbranded refiners will be deemed to have met all 
of their affirmative defense requirements under Sec.  80.613(e) if they 
carry out all of the actions listed previously for branded refiners 
(except for providing EPA with copies of contracts that include 
procedures in place to prevent contamination of ULSD highway diesel 
fuel). Participating distributors and retailers will be deemed to have 
met all of their defense requirements under Sec.  80.613(e) if they 
carry out all of the actions listed previously for branded refiners 
(except for providing EPA with copies of contracts that include 
procedures in place to prevent contamination of ULSD highway diesel 
fuel). Additionally, the retail outlet at which the sample was 
collected must have had no previous instances of a tested sample of 
ULSD highway diesel fuel exceeding the downstream standard for two 
years prior to the exceedance. If a tested sample of ULSD highway 
diesel fuel exceeded the downstream standard within the prior two 
years, participating distributors and retailers must also meet

[[Page 26125]]

the defense elements under Sec.  80.613(a)(1)(i) and (ii), and Sec.  
80.613(c).
    When the survey association finds a sample that exceeds the 
downstream sulfur standard by more than 2 ppm, under Sec.  80.613(e) 
branded refiners must carry out the actions listed previously for 
branded refiners. In addition, such branded refiners must also meet the 
defense elements in Sec.  80.613(b), such as showing they did not cause 
the violation, or that the violation was caused by another person. 
Similarly, under Sec.  80.613(e), unbranded refiners, distributors and 
retailers must carry out all of the actions listed previously for 
branded refiners (except for providing EPA with copies of contracts 
that include procedures in place to prevent contamination of ULSD 
highway diesel fuel). In addition, such distributors must also meet the 
defense elements under Sec.  80.613(a)(1)(i) and (ii), and Sec.  
80.613(c).
    Use of this alternative affirmative defense and participation in 
this quality assurance program is optional, and refiners, importers, 
distributors, and retailers may choose to conduct their own quality 
assurance program as provided currently in the regulations instead of 
participating in this nationwide program. A refiner that does not 
participate in the consortium will continue to be subject to the 
sampling and testing defense provisions under Sec.  80.613, as will 
distributors that operate under such a refiner's trade or brand name 
unless such a distributor independently participates in the consortium.
    Today's rule also makes one minor correction to the gasoline 
benzene regulations clarifying when a small refiner who loses their 
small refiner status may generate gasoline benzene credits. 
Disqualified small refiners are allowed a grace period of up to 36 
months after the date of the disqualifying event to begin meeting the 
gasoline benzene standards applicable to non-small refiners. The 
gasoline benzene regulations currently prohibit disqualified small 
refiners from generating either early or standard gasoline benzene 
credits at any of their refineries during this grace period. This 
results in limitations on credit generation for disqualified small 
refiners that are more stringent than limitations on credit generation 
for non-small refiners, which was not EPA's intent. Today's rule amends 
the gasoline benzene regulations at Sec.  80.1339(e)(4) to allow 
disqualified small refiners the same opportunity to generate gasoline 
benzene credits during the grace period as that afforded to non-small 
refiners.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action.'' Accordingly, EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review under EO 12866 and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    The information collection requirements in this direct final rule 
have been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The 
Information Collection Request (ICR) document prepared by EPA has been 
assigned EPA ICR number 2364.03.
    This direct final rule provides refiners, importers and 
distributors of ULSD highway diesel fuel with additional flexibility to 
comply with the diesel sulfur regulations. The flexibility afforded 
under this rule is optional. Modest information collection requirements 
in the form of reports for noncompliant diesel sulfur samples are 
required for those parties who avail themselves of the flexibility 
provided in this rule. The information under this rule will be 
collected by EPA's Transportation and Regional Programs Division, 
Office of Transportation and Air Quality, Office of Air and Radiation 
(OAR), and by EPA's Air Enforcement Division, Office of Regulatory 
Enforcement, Office of Enforcement and Compliance Assurance (OECA). The 
information collected will be used by EPA to evaluate compliance with 
the requirements under the diesel sulfur program. This oversight by EPA 
is necessary to ensure attainment of the air quality goals of the 
diesel sulfur program.
    The estimated hourly burden per respondent for the diesel surveys 
is 16 hours. The estimated annual hourly burden is 320 hours for all 
respondents (assuming 20 respondents per year). The estimated hourly 
cost is $71 per hour. The total estimated cost per respondent is 
$1,136. The total estimated cost for all respondents is $22,270. Burden 
is defined at 5 CFR 1320.3(b).
    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 in 40 CFR are listed in 40 CFR part 9.
    To comment on the Agency's need for this information, the accuracy 
of the provided burden estimates, and any suggested methods for 
minimizing respondent burden, EPA has established a public docket for 
this rule, which includes this ICR, under Docket ID number EPA-HQ-OAR-
2007-1158. Submit any comments related to the ICR to EPA and OMB. See 
ADDRESSES section at the beginning of this notice for where to submit 
comments to EPA. Send comments to OMB at the Office of Information and 
Regulatory Affairs, Office of Management and Budget, 725 17th Street, 
NW., Washington, DC 20503, Attention: Desk Office for EPA. Comments 
must be submitted on or before July 12, 2010.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute 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 organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of today's rule on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's (SBA) regulations at 13 CFR 
121.201; (2) a small governmental jurisdiction that is a government of 
a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field.
    After considering the economic impacts of today's final rule on 
small entities, we certify that this action will not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities since the primary 
purpose of the regulatory flexibility analyses is to identify and 
address regulatory alternatives ``which minimize any significant 
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant 
economic impact on a substantial number of small

[[Page 26126]]

entities if the rule relieves regulatory burden, or otherwise has a 
positive economic effect on all of the small entities subject to the 
rule.
    Today's final rule provides additional flexibility to refiners, 
importers, and distributors of diesel fuel by amending the diesel 
sulfur regulations to allow a voluntary nationwide sampling and testing 
program to be used as an alternative means of meeting the sampling and 
testing defense elements under 40 CFR 80.613. Participation in the 
program should reduce regulatory burden on all participants. Any small 
entities may choose whether or not to join the program. Today's rule 
also amends the gasoline benzene regulations to allow disqualified 
small refiners the same opportunity to generate gasoline benzene 
credits as that afforded to non-small refiners. We have therefore 
concluded that today's final rule will relieve the regulatory burden 
for all affected small entities.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
This rule provides refiners, distributors, and importers of diesel fuel 
with additional flexibility in complying with regulatory requirements. 
As a result, this rule will have the overall effect of reducing the 
burden of the diesel sulfur regulations on these regulated parties. 
These requirements also codify existing practices designed to ensure 
that ULSD highway diesel fuel meets downstream standards. Today's rule 
also amends the gasoline benzene regulations to allow disqualified 
small refiners the same opportunity to generate gasoline benzene 
credits as that afforded to non-small refiners, relieving burden on 
small refiners. Thus, this rule is not subject to the requirements of 
sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. The action imposes 
no enforceable duty on any State, local or tribal governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not 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. This rule provides refiners, 
distributors, and importers of diesel fuel with additional flexibility 
in complying with regulatory requirements. These requirements also 
codify existing practices designed to ensure that ULSD highway diesel 
fuel meets downstream standards. Today's rule also amends the gasoline 
benzene regulations to allow disqualified small refiners the same 
opportunity to generate gasoline benzene credits as that afforded to 
non-small refiners. The requirements of the rule will be enforced by 
the Federal government at the national level. Thus, Executive Order 
13132 does not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule 
applies to refiners, distributors, and importers of diesel fuel. This 
action contains certain modifications to the federal requirements for 
diesel sulfur, and will not impose any enforceable duties on 
communities of Indian tribal governments. Today's rule also amends the 
gasoline benzene regulations to allow disqualified small refiners the 
same opportunity to generate gasoline benzene credits as that afforded 
to non-small refiners, and will not impose any enforceable duties on 
communities of Indian tribal governments. Thus, Executive Order 13175 
does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it does not establish an environmental standard intended 
to mitigate health or safety risks.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355 (May 22, 2001)) because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Further, we have concluded that this 
rule is not likely to have any adverse energy effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This rule does not involve technical standards. Therefore, EPA did 
not consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. This is a rule amendment that does not relax the control 
measures on sources regulated by the rule and therefore will not cause 
emissions increases from these sources.

K. Congressional Review Act

    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

[[Page 26127]]

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. A Major rule cannot take effect until 60 days after it is 
published in the Federal Register. This action is not a ``major rule'' 
as defined by 5 U.S.C. 804(2). This rule will be effective July 12, 
2010.

L. Clean Air Act Section 307(d)

    This rule is subject to Section 307(d) of the CAA. Section 
307(d)(7)(B) provides that ``[o]nly an objection to a rule or procedure 
which was raised with reasonable specificity during the period for 
public comment (including any public hearing) may be raised during 
judicial review.'' This section also provides a mechanism for the EPA 
to convene a proceeding for reconsideration, ``[i]f the person raising 
an objection can demonstrate to the EPA that it was impracticable to 
raise such objection within [the period for public comment] or if the 
grounds for such objection arose after the period for public comment 
(but within the time specified for judicial review) and if such 
objection is of central relevance to the outcome of the rule.'' Any 
person seeking to make such a demonstration to the EPA should submit a 
Petition for Reconsideration to the Office of the Administrator, U.S. 
EPA, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, with a copy to both the person(s) listed in the 
preceding FOR FURTHER INFORMATION CONTACT section, and the Director of 
the Air and Radiation Law Office, Office of General Counsel (Mail Code 
2344A), U.S. EPA, 1200 Pennsylvania Ave., NW., Washington, DC 20004.

V. Statutory Provisions and Legal Authority

    Regulation of Fuels and Fuel Additives: Alternative Affirmative 
Defense Requirements for Ultra-low Sulfur Diesel and Gasoline Benzene 
Technical Amendment.
    Statutory authority for the fuel controls set in this direct final 
rule comes from sections 211 and 301(a) of the CAA.

List of Subjects in 40 CFR Part 80

    Environmental protection, Air pollution control, Fuel additives, 
Diesel, Gasoline, Imports, Incorporation by reference, Labeling, Motor 
vehicle pollution, Penalties, Reporting and recordkeeping requirements.

    Dated: May 3, 2010.
Lisa P. Jackson,
Administrator.

0
For the reasons set out in the preamble, part 80 Chapter I, title 40 of 
the Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUEL AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority:  42 U.S.C. 7414, 7542, 7545, and 7601(a).

0
2. Section 80.613 is amended by adding paragraph (e) to read as 
follows:

Sec.  80.613  What defenses apply to persons deemed liable for a 
violation of a prohibited act under this subpart?

* * * * *
    (e) Alternative defense requirements. A person deemed liable under 
Sec.  80.612(a) for a violation of Sec.  80.610(a)(1), concerning 
diesel fuel that is sold, offered for sale, or dispensed at a retail 
outlet and that does not meet the applicable sulfur content standard 
under Sec.  80.520(a)(1), as adjusted under Sec.  80.580(d), may comply 
with the following alternative defense requirements in lieu of the 
requirements in paragraphs (a) through (d) of this section to the 
extent provided for, and subject to the conditions and limitations set 
forth in this paragraph (e):
    (1) Independent survey association. To comply with the alternative 
defense requirements under this paragraph (e), a person must 
participate in the funding of a consortium which arranges to have an 
independent survey association conduct a statistically valid program of 
annual compliance surveys pursuant to a survey plan which has been 
approved by EPA, in accordance with the requirements of paragraphs 
(e)(2) through (e)(4) of this section.
    (2) General requirements. The consortium survey program under this 
paragraph (e) must be:
    (i) Planned and conducted by an independent survey association that 
meets the requirements in Sec.  80.68(c)(13)(i);
    (ii) Conducted at diesel fuel retail outlets nationwide; and
    (iii) Representative of all motor vehicle diesel fuel subject to 
the 15 ppm sulfur standard under Sec.  80.520(a)(1) dispensed at diesel 
fuel retail outlets nationwide.
    (3) Independent survey association requirements. The consortium 
described in paragraph (e)(1) of this section shall require the 
independent survey association conducting the surveys to:
    (i) Submit to EPA for approval each calendar year a proposed survey 
plan in accordance with the requirements of paragraph (e)(4) of this 
section.
    (ii) Obtain samples of motor vehicle diesel fuel subject to the 15 
ppm sulfur standard under Sec.  80.520(a)(1) in accordance with the 
survey plan approved under this paragraph (e), or immediately notify 
EPA of any refusal of retail outlets to allow samples to be taken;
    (iii) Test, or arrange to be tested, the samples required under 
paragraph (e)(3)(ii) of this section for sulfur content as follows--
    (A) Samples collected at retail outlets shall be shipped the same 
day the samples are collected via overnight service to the laboratory, 
and analyzed for sulfur content within twenty-four hours after receipt 
of the sample in the laboratory.
    (B) Any laboratory to be used by the independent survey association 
for sulfur testing shall be approved by EPA and its sulfur test method 
shall comply with the provisions of Sec. Sec.  80.584, 80.585 and 
80.586.
    (C) For purposes of the alternative defense requirements in this 
paragraph (e), test results shall be rounded to a whole number using 
ASTM E 29-02[egr]\1\, Standard Practice for Using Significant Digits in 
Test Data to Determine Conformance with Specifications, rounding method 
procedures. The Director of the Federal Register approved the 
incorporation by reference of ASTM E 29-02[egr]\1\ as prescribed in 5 
U.S.C. 552(a) and 1 CFR part 51. Anyone may purchase copies of this 
standard from ASTM International, 100 Barr Harbor Dr., West 
Conshohocken, PA 19428, (610) 832-9585. Anyone may inspect copies at 
the U.S. EPA, EPA Docket Center, Room 3334, EPA West Building, 1301 
Constitution Ave., NW., Washington, DC 20460, (202) 566-9744, or at the 
National Archives and Records Administration (NARA). For information on 
the availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal-register/cfr/ibr-locations.html.
    (iv) Provide notice of samples with sulfur content greater than the 
15 ppm standard under Sec.  80.520(a)(1), as adjusted under Sec.  
80.580(d), as follows:
    (A) In the case of any test result that is one or two ppm greater 
than the 15 ppm standard under Sec.  80.520(a)(1), as adjusted under 
Sec.  80.580(d), the independent survey association shall, within 
twenty-four hours after the laboratory receives the sample, send 
notification of the test result as follows: In the case of a sample 
collected at a retail outlet at which the brand name of

[[Page 26128]]

a refiner or importer is displayed, to the refiner or importer, and 
EPA; and in the case of a sample collected at other retail outlets, to 
the retailer and EPA. This initial notification to a refiner shall 
include specific information concerning the name and address of the 
retail outlet, contact information, the brand, and the sulfur content 
of the sample.
    (B) In the case of any test result that is three or more ppm 
greater than the 15 ppm standard under Sec.  80.520(a)(1), as adjusted 
under Sec.  80.580(d), or for a test result that is one or two ppm 
greater than the 15 ppm standard under Sec.  80.520(a)(1), as adjusted 
under Sec.  80.580(d), and the retail outlet has had an exceedance 
within the previous two years, the independent survey association 
shall, within the time limits specified in paragraph (e)(3)(iv)(A) of 
this section, provide notice to the parties described in paragraph 
(e)(3)(iv)(A) of this section. The notice to EPA must include the name 
and address of the retail outlet, and the telephone number, if known.
    (C) The independent survey association shall provide notice to the 
identified contact person or persons for each party specified in 
paragraphs (e)(3)(iv)(A) and (B) of this section in writing (e.g. e-
mail or facsimile) and, if requested by the identified contact person, 
by telephone.
    (v) Provide to EPA quarterly and annual summary survey reports 
which include the information specified in paragraph (e)(8) of this 
section.
    (vi) Maintain all records relating to the surveys conducted under 
this paragraph (e) for a period of at least 5 years.
    (vii) At any time permit any representative of EPA to monitor the 
conduct of the surveys, including sample collection, transportation, 
storage, and analysis.
    (4) Survey plan design requirements. The proposed survey plan 
required under paragraph (e)(3)(i) of this section shall, at a minimum, 
include the following:
    (i) Number of surveys. The survey plan shall include four surveys 
each calendar year. The four surveys collectively are called the survey 
series.
    (ii) Sampling areas. The survey plan shall include sampling in 
three types of areas, called sampling strata, during each survey: 
Densely populated areas, transportation corridors and rural areas. 
These sampling strata shall be further divided into discrete sampling 
areas, or clusters. Each survey shall include sampling in at least 40 
sampling areas in each stratum, randomly selected.
    (iii) No advance notice of surveys. The survey plan shall include 
procedures to keep confidential from any regulated party, but not from 
EPA, the identification of the sampling areas that are included in any 
survey plan prior to the beginning of a survey in an area.
    (iv) Retail outlet selection.
    (A) The retail outlets to be sampled in a sampling area shall be 
selected from among all retail outlets in the sampling area that sell 
motor vehicle diesel fuel subject to the 15 ppm sulfur standard under 
Sec.  80.520(a)(1), with probability of selection proportionate to the 
volume of motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard under Sec.  80.520(a)(1) sold at the retail outlets, and 
inclusion of retail outlets with different brand names and unbranded, 
if possible.
    (B) In the case of any retail outlet from which a sample of motor 
vehicle diesel fuel subject to the 15 ppm sulfur standard under Sec.  
80.520(a)(1) was collected during a survey and determined to have a 
sulfur content that exceeds the 15 ppm sulfur standard under Sec.  
80.520(a)(1), as adjusted under Sec.  80.580(d), that retail outlet 
shall be included in the subsequent survey.
    (C) Only a single sample shall be collected at each retail outlet, 
except that where a retail outlet had a sample from the preceding 
survey with a test result that exceeds the 15 ppm standard under Sec.  
80.520(a)(1), as adjusted under Sec.  80.580(d), separate samples shall 
be taken that represent the diesel fuel contained in each storage tank 
containing motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard under Sec.  80.520(a)(1), unless collection of separate 
samples is not practicable (for example, due to diesel piping 
arrangements or pump outages).
    (v) Number of samples.
    (A) The minimum number of samples to be included in the survey plan 
for each calendar year shall be calculated as follows:

[GRAPHIC] [TIFF OMITTED] TR11MY10.288

Where:

    n = minimum number of samples in a year-long survey series. 
However, in no case shall n be larger than 9,600 or smaller than 
5,250.
Z[alpha] = upper percentile point from the normal distribution to 
achieve a one-tailed 95% confidence level (5% [alpha]-level). Thus, 
Z[alpha] equals 1.645.
Z[beta] = upper percentile point to achieve 95% power. Thus, Z[beta] 
equals 1.645.
[phis]l = the maximum proportion of stations selling non-compliant 
fuel for the fuel in a region to be deemed compliant. In this test, 
the parameter needs to be 5% or greater, i.e., 5% or more of the 
stations, within a stratum such that the region is considered non-
compliant. For this survey, [phis]l will be 5%.
[phis]o = the underlying proportion of non-compliant stations in a 
sample. For calendar year 2011, [phis]owill be 1.9%. For calendar 
years 2012 and beyond, [phis]o will be the average of the proportion 
of stations to be non-compliant over the previous four surveys.
Stn = number of sampling strata. For purposes of this 
survey program, Stn equals 3.
Fa = adjustment factor for the number of extra samples 
required to compensate for collected samples that cannot be included 
in the survey, based on the number of additional samples required 
during the previous four surveys. However, in no case shall the 
value of Fa be smaller than 1.1. For purposes of this 
adjustment factor, a sample shall be treated as one that can be 
included in the survey only if the fuel was offered for sale as 
motor vehicle diesel fuel subject to the 15 ppm sulfur standard 
under Sec.  80.520(a)(1) at the retail outlet where the sample was 
collected and if an appropriate laboratory analysis of this fuel is 
conducted.
Fb = adjustment factor for the number of samples required 
to resample each retail outlet with test results greater than 17 ppm 
(resampling), based on the rate of resampling required during the 
previous four surveys. However, in no case shall the value of 
Fb be smaller than 1.1.
Sun = number of surveys per year. For purposes of this 
survey program, Sun equals 4.

    (B) The number of samples obtained from the formula in paragraph 
(e)(4)(v)(A) of this section, after being incremented as necessary to 
allocate whole numbers of samples to each cluster, shall be distributed 
approximately equally for the surveys conducted during the calendar 
year. Within a survey, the samples shall be divided approximately 
equally for the three strata.
    (5) Sulfur test result that is one or two ppm Greater than the 15 
ppm standard under Sec.  80.520(a)(1), as adjusted under Sec.  
80.580(d). The following provisions apply if the tested sulfur level of 
a

[[Page 26129]]

diesel fuel sample collected by the independent survey association is 
one or two ppm greater than the 15 ppm standard under Sec.  
80.520(a)(1), as adjusted under Sec.  80.580(d).
    (i) Branded refiner or importer. Where the sample was collected at 
a retail outlet at which the brand name of a refiner or importer is 
displayed, the branded refiner or importer will be deemed to have 
established its defense under this section, provided that the refiner 
or importer participates in a consortium as described in paragraph 
(e)(1) of this section, and provided that the refiner or importer also 
demonstrates the following:
    (A) The sulfur content of the diesel fuel at the terminal(s) that 
most recently supplied the retail outlet was no greater than 15 ppm 
prior to adjustment under Sec.  80.580(d) when dispensed for delivery 
to the retail outlet;
    (B) Best efforts and accepted business practices are used by 
parties downstream from the refiner or importer to avoid diesel fuel 
contamination. These would include, for example, procedures for 
ensuring motor vehicle diesel fuel subject to the 15 ppm sulfur 
standard under Sec.  80.520(a)(1) is not contaminated in delivery 
trucks, and procedures for ensuring delivery truck drivers can identify 
retail outlet drop points for motor vehicle diesel fuel subject to the 
15 ppm sulfur standard under Sec.  80.520(a)(1).
    (C) Upon receiving the notification required under paragraph 
(e)(3)(iv)(A) of this section, any pumps supplied by the retail storage 
tank where the noncompliant diesel fuel was found were shutdown until 
such time that the fuel at issue was retested and the sulfur content of 
the fuel was found to be no greater than the 15 ppm standard under 
Sec.  80.520(a)(1), as adjusted under Sec.  80.580(d). Prior to May 31, 
2010, as an alternative to shutting down pumps supplied by the retail 
storage tank where the noncompliant diesel fuel was found, such pumps 
may be relabeled with the language required under Sec.  80.571(b). The 
steps required in this paragraph (e)(5)(i)(C) must be taken as soon as 
practicable after receiving the notification required under paragraph 
(e)(3)(iv)(A) of this section, which normally will be within the same 
business day, but no longer than twenty-four hours after notification 
is received unless the refiner or importer demonstrates this timing is 
not possible.
    (D) A root cause analysis is performed to determine the cause of 
the noncompliant diesel fuel and appropriate actions are taken to 
prevent future violations.
    (E) The independent survey association samples and retests the 
diesel fuel at the retail outlet during its next survey, in addition to 
the scheduled sampling and testing under the approved survey program.
    (F) The refiner or importer submits a report to EPA no later than 
120 days following the date the sample was collected at the retail 
outlet, which includes the information specified in paragraph (e)(7) of 
this section.
    (G) The refiner or importer supplies EPA with copies of the 
contracts with downstream parties specified in Sec.  80.613(b)(2) or 
the specifications or inspections of procedures and equipment described 
in Sec.  80.613(b)(3), as appropriate, which are designed to prevent 
the contamination of motor vehicle diesel fuel subject to the 15 ppm 
sulfur standard under Sec.  80.520(a)(1).
    (ii) Unbranded refiner or importer. Any unbranded refiner or 
importer that is deemed liable under Sec.  80.612(a) for a violation of 
Sec.  80.610(a)(1), concerning diesel fuel that is sold, offered for 
sale, or dispensed at a retail outlet and that does not meet the 
applicable sulfur content standard under Sec.  80.520(a)(1), as 
adjusted under Sec.  80.580(d), will be deemed to have established its 
defense under this section if the unbranded refiner or importer is a 
member of the consortium described in paragraph (e)(1) of this section 
and the refiner or importer meets the requirements of paragraphs 
(e)(5)(i)(A) through (F) of this section.
    (iii) Distributor or retailer. Any distributor (e.g., pipeline, 
terminal operator, marketer, truck carrier) or retailer that is deemed 
liable under Sec.  80.612(a) for a violation of Sec.  80.610(a)(1), 
concerning diesel fuel that is sold, offered for sale, or dispensed at 
a retail outlet and that does not meet the applicable sulfur content 
standard under Sec.  80.520(a)(1), as adjusted under Sec.  80.580(d), 
will be deemed to have established its defense under this section, 
provided that, within two years prior to the time the diesel fuel 
sample was collected by the independent survey association, the retail 
outlet had no instances where the tested sulfur level of a diesel fuel 
sample was greater than the 15 ppm standard under Sec.  80.520(a)(1), 
as adjusted under Sec.  80.580(d); and
    (A) Where the retailer displays the brand name of a refiner or 
importer, the requirements in paragraphs (e)(5)(i) of this section are 
met by the branded refiner or importer; or
    (B) Where the branded refiner or importer has elected not to 
participate in a consortium as described in paragraph (e)(1) of this 
section, or where the retailer does not display the brand name of a 
refiner or importer, the distributor or retailer is a member of the 
consortium described in paragraph (e)(1) of this section and the 
distributor or retailer meets the requirements in paragraphs 
(e)(5)(i)(A) through (F) of this section.
    (C) If within two years prior to the time the diesel fuel sample 
was collected by the independent survey association, the retail outlet 
had an instance where the tested sulfur level of a diesel fuel sample 
was greater than the 15 ppm standard under Sec.  80.520(a)(1), as 
adjusted under Sec.  80.580(d), any distributor or retailer that is 
deemed liable for a violation under Sec.  80.612 will be deemed to have 
established its defense under this section if the party meets the 
requirements under paragraph (e)(5)(iii)(A) or (B) of this section (in 
lieu of the requirement in paragraph (a)(1)(iii) of this section), and 
the party meets the requirements under paragraphs (a)(1)(i), 
(a)(1)(ii), and (c) of this section.
    (6) Sulfur test result that is three or more ppm Greater than the 
15 ppm standard under Sec.  80.520(a)(1), as adjusted under Sec.  
80.580(d). The following provisions apply if the tested sulfur level of 
a diesel fuel sample collected by the independent survey association is 
three or more ppm greater than the 15 ppm standard under Sec.  
80.520(a)(1), as adjusted under Sec.  80.580(d):
    (i) Branded refiner or importer. Any branded refiner or importer 
that is deemed liable under Sec.  80.612(a) for a violation of Sec.  
80.610(a)(1), concerning diesel fuel that is sold, offered for sale, or 
dispensed at a retail outlet and that does not meet the applicable 
sulfur content standard under Sec.  80.520(a)(1), as adjusted under 
Sec.  80.580(d), will be deemed to have established its defense under 
this section if the refiner or importer meets the requirements under 
paragraph (e)(5)(i) of this section and meets the requirements under 
paragraphs (a)(1)(i), (a)(1)(ii), (b)(1), (b)(2), (b)(3), and (c) of 
this section.
    (ii) Unbranded refiner or importer. Any unbranded refiner or 
importer that is deemed liable under Sec.  80.612(a) for a violation of 
Sec.  80.610(a)(1), concerning diesel fuel that is sold, offered for 
sale, or dispensed at a retail outlet and that does not meet the 
applicable sulfur content standard under Sec.  80.520(a)(1), as 
adjusted under Sec.  80.580(d), will be deemed to have established its 
defense under this section if the refiner or importer meets the 
requirements under paragraph (e)(5)(ii) of this section and meets the 
requirements under

[[Page 26130]]

paragraphs (a)(1)(i), (a)(1)(ii), (a)(1)(iv), and (c) of this section.
    (iii) Distributor or retailer. Any distributor or retailer that is 
deemed liable under Sec.  80.612(a) for a violation of Sec.  
80.610(a)(1), concerning diesel fuel that is sold, offered for sale, or 
dispensed at a retail outlet and that does not meet the applicable 
sulfur content standard under Sec.  80.520(a)(1), as adjusted under 
Sec.  80.580(d), will be deemed to have established its defense under 
this section if the requirements under paragraph (e)(5)(iii)(A) or (B) 
of this section, as appropriate, are met, and the distributor or 
retailer meets the requirements under paragraphs (a)(1)(i), (a)(1)(ii), 
and (c) of this section. Distributors that blend a diesel fuel additive 
subject to the requirements of Sec.  80.521(b) into motor vehicle 
diesel fuel subject to the 15 ppm sulfur standard under Sec.  80.520(a) 
must also meet the requirement under paragraph (a)(1)(iv) of this 
section.
    (7) Report regarding motor vehicle diesel fuel subject to the 15 
ppm sulfur standard under Sec.  80.520(a)(1) with high sulfur content. 
The report that is required to be submitted to EPA under paragraph 
(e)(5)(i)(F) of this section shall contain the following information:
    (i) The name, address and contact information for the regulated 
party submitting the report;
    (ii) The name, address and contact information for the retail 
outlet where the high sulfur diesel fuel was found;
    (iii) The brand name of the refiner or importer displayed at the 
retail outlet, if any;
    (iv) The date of sampling, the analysis results, and the label that 
appeared on the pump where the sample was collected.
    (v) For each of the most recent three deliveries (i.e., the three 
deliveries that immediately preceded the taking of the violating 
sample) of diesel fuel to the retail outlet storage tank at issue, or 
the most recent five deliveries if the cause of the violation is not 
demonstrated following analysis of the most recent three deliveries:
    (A) A copy of the product transfer documents for the delivery;
    (B) The name, address and contact information for the terminal and 
truck distributor that supplied the diesel fuel;
    (C) The date of delivery and the volume of diesel fuel delivered;
    (D) The designation of the diesel fuel on the product transfer 
document;
    (E) The test results (or other evidence of the diesel sulfur 
content) for the diesel fuel in the terminal tank from which the 
delivery truck was loaded, and copies of the test result reports; and
    (F) A description of the procedures used by the truck distributor 
to avoid diesel contamination (e.g., dedicated trucks).
    (vi) A description of any actions taken to prevent sale of the 
noncompliant diesel fuel, including:
    (A) The date and time the regulated party was notified of the high 
sulfur test result, the date and time the retailer was notified, and 
the date and time the sale of motor vehicle diesel fuel subject to the 
15 ppm sulfur standard under Sec.  80.520(a)(1) was suspended;
    (B) A description of the actions taken to prevent sale of the 
noncompliant diesel fuel; and
    (C) The date and time that sales of motor vehicle diesel fuel 
subject to the 15 ppm sulfur standard under Sec.  80.520(a)(1) from the 
retail storage tank at issue were resumed, the results of the test used 
to establish the fuel met applicable standards, and a copy of the test 
result report.
    (vii) A description of the root-cause analysis required in 
paragraph (e)(5)(i)(D) of this section, including:
    (A) A description of the investigation conducted to determine the 
root-cause of the noncompliant diesel fuel, and the conclusions reached 
as a result of this investigation; and
    (B) A description of the steps taken to prevent future problems 
from the identified cause.
    (8) Summary survey reports. The quarterly and annual summary survey 
reports required under paragraph (e)(3)(v) of this section shall 
include the following information:
    (i) The identification of each sampling area included in a survey 
and the dates that the samples were collected in that area;
    (ii) For each retail outlet sampled:
    (A) The identification of the retail outlet;
    (B) The refiner or importer brand name displayed, if any;
    (C) The pump labeling; and
    (D) The sample test result.
    (iii) Sulfur level summary statistics by brand and unbranded for 
each sampling area, strata, survey and annual survey series. These 
summary statistics shall:
    (A) Include the number of samples, and the average, median and 
range of sulfur levels; and
    (B) Be provided separately for the diesel fuel samples from pumps 
labeled as dispensing motor vehicle diesel fuel subject to the 15 ppm 
sulfur standard under Sec.  80.520(a)(1), motor vehicle diesel fuel 
subject to the 500 ppm sulfur standard under Sec.  80.520(c), and pumps 
that are not labeled.
    (iv) The quarterly reports required under this paragraph (e)(8) are 
due sixty days following the end of the quarter. The annual reports 
required under this paragraph (e)(8) are due sixty days following the 
end of the calendar year.
    (v) The reports required under this paragraph (e)(8) shall be 
submitted to EPA in both electronic spreadsheet and hard copy form.
    (9) EPA inspections. If EPA inspects any facility and determines 
that the sulfur content of diesel fuel exceeds the 15 ppm standard 
under Sec.  80.520(a)(1), as adjusted under Sec.  80.580(d), liability 
for such sulfur content violation under Sec.  80.612 will be treated as 
provided in paragraph (e)(6) of this section for branded refiners or 
distributors that participate in the consortium under this paragraph 
(e). Any other party deemed liable for a violation under Sec.  80.612 
must establish a defense under paragraphs (a) through (d) of this 
section, as applicable.
    (10) Procedures for obtaining approval of survey plan. The 
procedure for obtaining EPA approval of a survey plan under this 
paragraph (e), and for revocation of such approval, is as follows:
    (i) A survey plan that complies with the requirements of this 
paragraph (e) must be submitted to EPA no later than November 1 of the 
year preceding the calendar year in which the surveys will be 
conducted;
    (ii) The survey plan must be signed by a responsible officer of the 
consortium which arranges to have an independent surveyor conduct the 
survey program;
    (iii) The survey plan must be sent to the following address: 
Director, Compliance and Innovative Strategies Division, U.S. 
Environmental Protection Agency, 1200 Pennsylvania Ave., NW. Mail Code 
6506J, Washington, DC 20460;
    (iv) EPA will send a letter to the party submitting a survey plan 
under this section, either approving or disapproving the survey plan;
    (v) EPA may revoke any approval of a survey plan under this section 
for cause, including an EPA determination that the approved survey plan 
has proved to be inadequate in practice or that it was not diligently 
implemented;
    (vi) The approving official for a survey plan under this section is 
the Director of the Compliance and Innovative Strategies Division, 
Office of Transportation and Air Quality.
    (vii) Any notifications or reports required to be submitted to EPA 
under this paragraph (e) must be directed to the official designated in 
paragraph (e)(10)(vi) of this section.
    (11) Independent surveyor contract. (i) No later than December 1 of 
the year preceding the year in which the surveys

[[Page 26131]]

will be conducted, the contract with the independent surveyor shall be 
in effect, and an amount of money necessary to carry out the entire 
survey plan shall be paid to the independent surveyor or placed into an 
escrow account with instructions to the escrow agent to pay the money 
to the independent surveyor during the course of the conduct of the 
survey plan.
    (ii) No later than December 15 of the year preceding the year in 
which the surveys will be conducted, EPA must receive a copy of the 
contract with the independent surveyor, proof that the money necessary 
to carry out the survey plan has either been paid to the independent 
surveyor or placed into an escrow account, and, if placed into an 
escrow account, a copy of the escrow agreement, to be sent to the 
official designated in paragraph (e)(10)(vi) of this section.
    (12) Failure to fulfill requirements. A failure to fulfill or cause 
to be fulfilled any of the requirements of this paragraph (e) will 
cause the option to use the alternative quality assurance requirement 
under this paragraph (e) to be void ab initio.

0
3. Section 80.1339 is amended by revising paragraph (e)(4) to read as 
follows:

Sec.  80.1339  Who is not eligible for the provisions for small 
refiners?

* * * * *
    (e) * * *
    (4) During the period provided under paragraph (e)(2) of this 
section, and any extension provided under paragraph (e)(3) of this 
section, the refiner may not generate gasoline benzene credits under 
Sec.  80.1275(b)(3) for any of its refineries where under Sec.  80.1342 
the refiner was previously allowed to defer compliance with the 
standards in Sec. Sec.  80.1230(a) and 80.1230(b).
* * * * *
[FR Doc. 2010-10915 Filed 5-10-10; 8:45 am]
BILLING CODE 6560-50-P