[Federal Register Volume 63, Number 238 (Friday, December 11, 1998)]
[Rules and Regulations]
[Pages 68400-68404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32990]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 72 and 73
[FRL-6201-3]
RIN 2060-AH60
Revisions to the Permits and Sulfur Dioxide Allowance System
Regulations Under Title IV of the Clean Air Act: Allowance Transfer
Deadline and Signature Requirements
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: Title IV of the Clean Air Act (the Act), as amended by the
Clean Air Act Amendments of 1990, authorizes the Environmental
Protection Agency (EPA or Agency) to establish the Acid Rain Program.
The program sets emissions limitations to reduce acidic particles and
deposition and their serious, adverse effects on natural resources,
ecosystems, materials, visibility, and public health.
The allowance trading component of the Acid Rain Program allows
utilities to achieve sulfur dioxide emissions reductions in the most
cost-effective way. Allowances are traded among utilities and recorded
in EPA's Allowance Tracking System for use in determining compliance at
the end of each year. The Acid Rain Program's permitting and allowance
trading, and emissions monitoring requirements are set forth in the
``core'' rules initially promulgated on January 11, 1993. This action
amends certain provisions in the permitting and allowance trading rules
for the purpose of improving the operation of the Allowance Tracking
System and the allowance market, while still preserving the Act's
environmental goals. The entities affected by this change fall under
Standard Industrial Code 49 (Electric, Gas and Sanitary Services).
EFFECTIVE DATE: January 11, 1999.
ADDRESSES: Docket. Docket No. A-98-15, containing supporting
information used in developing the proposed rule, is available for
public inspection and copying between 8:30 a.m. and 3:30 p.m., Monday
through Friday, at EPA's Air Docket Section, Waterside Mall, room 1500,
1st Floor, 401 M Street, S.W., Washington, DC 20460. A reasonable fee
may be charged for copying.
FOR FURTHER INFORMATION CONTACT: Donna Deneen, Permits and Allowance
Market Branch, Acid Rain Division (6204J), U.S. Environmental
Protection Agency, 401 M Street S.W., Washington, DC 20460 (202-564-
9089).
SUPPLEMENTARY INFORMATION: This preamble contains all of the responses
to public comments received on the revisions finalized in today's
action. There is no additional background information document.
The information in this preamble is organized as follows:
I. Affected Entities
II. Background
III. Public Participation
IV. Summary of Major Comments and Responses
A. Allowance Transfer Deadline
B. Signature Requirement for Transfer Requests
C. Impacts of Revisions on Acid Rain Permits
V. Administrative Requirements
A. Docket
[[Page 68401]]
B. Executive Order 12866
C. Executive Order 12875: Enhancing Intergovernmental
Partnerships
D. Executive Order 13084: Consultation and Coordination with
Indian Tribal Governments
E. Unfunded Mandates Act
F. Paperwork Reduction Act
G. Regulatory Flexibility
H. Applicability of Executive Order 13045: Children's Health
Protection
I. National Technology Transfer and Advancement Act
J. Congressional Review Act
I. Affected Entities
Entities potentially regulated by this action are fossil-fuel fired
boilers or turbines that serve generators producing electricity,
generate steam, or cogenerate electricity and steam. Regulated
categories and entities include:
------------------------------------------------------------------------
Examples of regulated
Category entities
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Industry SIC 49--Electric, Gas and Electric service providers,
Sanitary Services. boilers from a wide range
of industries.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your facility is regulated by this action, you should carefully examine
the applicability criteria in Sec. 72.6 and Sec. 74.2 and the
exemptions in Secs. 72.7, 72.8, and 72.14 of title 40 of the Code of
Federal Regulations. If you have questions regarding the applicability
of this action to a particular entity, consult the persons listed in
the preceding FOR FURTHER INFORMATION CONTACT section.
II. Background
On January 11, 1993, EPA promulgated the ``core'' regulations that
implemented the major provisions of title IV of the Clean Air Act (CAA
or the Act), as amended on November 15, 1990, including the Permits
rule (40 CFR part 72) and the Sulfur Dioxide Allowance System rule (40
CFR part 73). Since promulgation, these rules have applied to three
compliance years, 1995, 1996, and 1997, for which affected units were
required to meet the annual allowance holding requirements established
by the rules. During this time, the Agency gained experience in
implementing the requirements and also discovered ways that the
operation of the Allowance Tracking System and allowance market could
be improved. On August 3, 1998, EPA proposed changes to certain
provisions in 40 CFR parts 72 and 73 to make these improvements. (63 FR
41358 (1998)). These proposed changes were related to the allowance
transfer deadline, compliance determinations, and the signature
requirements for allowance transfer requests.\1\
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\1\ In addition, the proposal revised Sec. 73.34(c)(4) to
eliminate the reference to the direct sales provisions, which were
previously removed from part 73. 61 FR 28761, 28762 (1996).
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The Agency received seven comment letters on the proposed
revisions. All of the commenters strongly supported the revision to the
allowance transfer deadline and the clarification of the signature
requirements for allowance transfer requests. Today's action,
therefore, finalizes these two revisions as proposed. EPA is not taking
action at this time on the third proposed revision, which would allow
deduction of allowances from other unit accounts after the allowance
transfer deadline and on which EPA received adverse comment.
III. Public Participation
Revisions to 40 CFR parts 72 and 73 were proposed on August 3,
1998. (63 FR 41358). The notice invited public comments, and copies of
the proposed rule were made available to interested parties.
EPA offered to hold a public hearing upon request, but no such
request was made and no hearing was held. EPA did, however, receive a
request to extend the comment period 15 days from September 2, 1998 to
September 17, 1998. A notice granting the request was published on
August 24, 1998. 63 FR 45037 (1998).
IV. Summary of Major Comments and Responses
EPA received seven comment letters regarding the proposed changes
to the regulations. All of the commenters were representatives of
utility companies or groups of utility companies. A copy of each
comment letter received is included in the rulemaking docket.
All of the commenters supported the 30 day extension to the
allowance transfer deadline and the clarification of the signature
requirements on transfer forms. A summary of the comments received on
these two revisions and the Agency responses are set forth in the
following two sections.
A. Allowance Transfer Deadline
The ``allowance transfer deadline'' is the last day on which
allowance transfers may be submitted to EPA for recordation in a
compliance subaccount for use in meeting a unit's sulfur dioxide
(SO2) emissions limitation requirements for the year. 40 CFR
72.2 (definition of ``allowance transfer deadline''). EPA proposed to
extend the allowance transfer deadline from the current date of January
30 to March 1 (or February 29 in any leap year) to reflect the Agency's
experience in operating the Allowance Tracking System and the
technological advances that have been made regarding the submission of
continuous emissions monitoring system (CEMS) data.
Comments: All seven commenters strongly supported the proposed
extension of the allowance transfer deadline to March 1 (or February 29
in any leap year). Five of the commenters reiterated the arguments EPA
made in the proposal for extending the date, while the other two
commenters simply acknowledged support of the change.
Response: Because EPA received only supportive comments on its
proposed change to the allowance transfer deadline, EPA is extending
the allowance transfer deadline to the proposed date of March 1 (or
February 29 in any leap year) in today's final rule. The reasons for
extending the deadline are more fully explained in the preamble to the
proposed rule. 63 FR 41358.
B. Signature Requirement for Transfer Requests
Under the core rules, Sec. 73.50(b)(1) required authorized account
representatives seeking recordation of an allowance transfer to submit
a request for the transfer that contains, among other things,
signatures of the authorized account representatives for both the
transferor and the transferee accounts. In its August 3, 1998 proposed
rulemaking, the Agency proposed to add Sec. 73.50(b)(2) to clarify that
the authorized account representative for a transferee account can meet
the signature requirement by submitting, along with or in advance of a
transfer request from the authorized account representative for any
transferor account, a signed statement identifying the accounts into
which any transfer of allowances is authorized, on or after the date of
EPA's receipt of the statement. Receipt by EPA of the signed statement
satisfies the transferee signature requirement for all contemporaneous
or subsequent transfers into accounts identified in the statement. The
specific language for the statement was set forth in proposed
Sec. 73.50(b)(2).
Comments: All seven commenters strongly supported the clarification
of the signature requirements for transfer forms. One commenter noted
that the
[[Page 68402]]
Agency's proposal would simplify and streamline the allowance transfer
process. The same commenter and one other stated that advance approval
of allowance transfers would make more feasible the electronic
submission of electronic transfers. The other five commenters simply
acknowledged support of the revision.
Response: Because EPA received only supportive comments on its
proposed revision to the signature requirements for allowance transfer
requests, EPA is finalizing this rule revision (with the correction of
a minor citation error in Sec. 73.50(b)(2)(i)). The reasons for this
revision are more fully explained in the preamble to the proposed rule.
63 FR 41363.
C. Impacts of Revisions on Acid Rain Permits
Today's revisions are designed so that the contents of existing
acid rain permits and the State regulations required to issue acid rain
permits do not have to be changed in order for the revisions to become
effective. With the exception of a change in the definition of
``allowance transfer deadline,'' all of today's revisions are made in
40 CFR part 73. As explained in the preamble to the proposed rule (63
FR 41364), it is unnecessary for State permitting authorities to revise
the acid rain permits they have issued or regulations they have adopted
to reflect today's final revisions to 40 CFR part 73.
Similarly, the revisions can go into effect without State
permitting authorities revising acid rain permits or regulations to
reflect the revised definition of ``allowance transfer deadline'' in 40
CFR part 72. Even if a State issued an acid rain permit before today's
revision of the allowance transfer deadline becomes effective, the
Agency will apply the revised deadline to the units covered by the
permit in determining end-of-year compliance for all calendar years
beginning with 1998. See 63 FR 41364.
While EPA will apply the revised allowance transfer deadline in
Sec. 72.2, State permitting authorities should revise their own
regulations to reflect the new deadline after it is finalized. This
will avoid any potential confusion on the part of regulated entities
and the public as to when EPA determines end-of-year compliance.
IV. Administrative Requirements
A. Docket
A docket is an organized and complete file of all the information
considered by EPA in the development of this rulemaking. The docket is
a dynamic file since material is added throughout the rulemaking
development. The docketing system is intended to allow members of the
public and industries involved to identify and locate documents readily
so that they can effectively participate in the rulemaking process.
Along with the preambles of the proposed and final rule (which include
EPA responses to significant comments), the contents of the docket will
serve as the record in case of judicial review to the extent provided
in section 307(d)(7)(A) of the Act.
B. Executive Order 12866
Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Executive Order
defines ``significant regulatory action'' as one that is likely to
result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Pursuant to the terms of Executive Order 12866, EPA has determined
that today's rule is not a ``significant regulatory action.''
C. Executive Order 12875: Enhancing Intergovernmental Partnerships
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments or unless EPA consults with those governments. If EPA
complies by consulting, Executive Order 12875 requires EPA provide to
the Office of Management and Budget a description of the extent of
EPA's prior consultation with representatives of affected State, local
and tribal governments, the nature of their concerns, copies of any
written communications from the governments, and a statement supporting
the need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
Today's rule does not create a new mandate on State, local or
tribal governments. It modifies an existing mandate in a way that
imposes no additional duties and no additional costs on these entities.
Accordingly, the requirements of section 1(a) of Executive Order 12875
do not apply to this rule.
D. Executive Order 13084: Consultation and Coordination With Indian
Tribal Governments
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments or unless EPA consults with
those governments. If EPA complies by consulting, EPA must provide to
the Office of Management and Budget, in a separately identified section
of the preamble to the rule, a description of the extent of EPA's prior
consultation with representatives of affected tribal governments, a
summary of the nature of their concerns, and a statement supporting the
need to issue the regulation. In addition, Executive Order 13084
requires EPA to develop an effective process permitting elected and
other representatives of Indian tribal governments ``to provide
meaningful and timely input in the development of regulatory policies
on matters that significantly or uniquely affect their communities.''
Today's rule does not significantly or uniquely effect, or impose
any substantial direct compliance costs on, the communities of Indian
tribal governments. The rule does not impose any enforceable duties on
these entities. Accordingly, the requirements of section 3(b) of
Executive Order 13084 do not apply to this rule.
E. Unfunded Mandates Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for federal agencies to assess the
effects of their regulatory actions on State, local,
[[Page 68403]]
and tribal governments and the private sector. Under section 202 of
UMRA, EPA generally must prepare a written statement, including a cost-
benefit analysis, before promulgating a proposed or final rule that
includes a federal mandate that may result in expenditure by State,
local, and tribal governments, in aggregate, or by the private sector,
of $100 million or more in any one year. Section 205 generally requires
that, before promulgating a rule for which a written statement must be
prepared, EPA must identify and consider a reasonable number of
regulatory alternatives and adopt the least costly, most cost-
effective, or least burdensome alternative that achieves the objectives
of the rule. The provisions of section 205 do not apply when they are
inconsistent with applicable law. Moreover, section 205 allows EPA to
adopt an alternative other than the least costly, most cost-effective,
or least burdensome alternative if the Administrator explains why that
alternative was not adopted. Finally, section 203 requires that, before
establishing any regulatory requirements that may significantly or
uniquely affect small governments, EPA must have developed a small
government agency plan. The plan must provide for notifying any
potentially affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
Because today's rule is estimated to result in the expenditure by
State, local, and tribal governments or the private sector of less than
$100 million in any one year, the Agency has not prepared a budgetary
impact statement or specifically addressed the selection of the least
costly, most cost-effective, or least burdensome alternative. Because
small governments will not be significantly or uniquely affected by
this rule, the Agency is not required to develop a plan with regard to
small governments.
Today's final revisions to parts 72 and 73 will potentially reduce
the burden on regulated entities by streamlining the allowance transfer
process and extending the allowance transfer deadline. The revisions
will not otherwise have any significant impact on State, local, and
tribal governments.
F. Paperwork Reduction Act
Today's final revisions to parts 72 and 73 will not impose any new
information collection burden subject to the Paperwork Reduction Act
(44 U.S.C. 3501, et seq.). The extension of the allowance transfer
deadline does not result in any new information requirements and the
revisions made to the signature requirement simply clarify EPA's
existing practice of accepting the signature of the authorized account
representative for a transferee account in advance of an allowance
transfer form. OMB has previously approved the relevant information
collection requirements contained in parts 72 and 73 under the
provisions of the Paperwork Reduction Act and has assigned OMB control
number 2060-0258. 58 FR 3590, 3650 (1993).
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
Copies of the previously approved ICR may be obtained from the
Director, Regulatory Information Division; EPA; 401 M St. SW (mail code
2137); Washington, DC 20460 or by calling (202) 564-2740. Include the
ICR and/or OMB number in any correspondence.
G. Regulatory Flexibility
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, et seq.,
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small not-for-profit
enterprises, and small government jurisdictions.
As discussed above, today's final revisions will reduce the burden
on regulated entities by streamlining and adding flexibility to the
regulations. For these reasons, EPA has determined that this rule will
not have a significant economic impact on a substantial number of small
entities.
H. Applicability of Executive Order 13045: Children's Health Protection
Executive Order 13045 (62 FR 19885, April 29, 1997) applies to any
rule if EPA determines (1) that the rule is economically significant as
defined under Executive Order 12866, and (2) that the environmental
health or safety risk addressed by the rule has a disproportionate
effect on children. If the regulatory action meets both criteria, EPA
must evaluate the environmental health or safety effects of the planned
rule on children and explain why the planned regulation is preferable
to other potentially effective and reasonably feasible alternatives
considered by EPA.
This final action is not subject to Executive Order 13045, because
the action is not economically significant as defined by Executive
Order 12866 and does not address an environmental health or safety risk
having a disproportionate effect on children.
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, section 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, or business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA requires EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
Today's final rule does not involve any technical standards that
would require Agency consideration of voluntary consensus standards
pursuant to section 12(d) of the NTTAA.
J. 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 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
[[Page 68404]]
the Federal Register. A major rule cannot take effect until 60 days
after it is published 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 30 days after publication in the Federal Register.
List of Subjects in 40 CFR Parts 72 and 73
Environmental protection, Acid rain, Administrative practice and
procedure, Air pollution control, Compliance plans, Electric utilities,
Penalties, Reporting and recordkeeping requirements, Sulfur dioxide.
Dated: December 4, 1998.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as follows:
PART 72--[AMENDED]
1. The authority citation for part 72 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
2. Section 72.2 is amended by removing from the definition of
``Allowance transfer deadline'' the words ``January 30 or, if January
30'' and adding, in their place, the words ``March 1 (or February 29 in
any leap year) or, if such day.''
PART 73--[AMENDED]
3. The authority citation for part 73 continues to read as follows:
Authority: 42 U.S.C. 7601 and 7651, et seq.
4. Section 73.34 is amended by removing from paragraph (c)(4) the
words ``or direct sale pursuant to subpart E of this part''.
5. Section 73.50 is amended by redesignating paragraph (b)(2) as
(b)(3) and adding new paragraph (b)(2) as follows:
Sec. 73.50 Scope and submission of transfers.
* * * * *
(b) * * *
(2)(i) The authorized account representative for the transferee
account can meet the requirements in paragraphs (b)(1)(iii) and (iv) of
this section by submitting, in a format prescribed by the
Administrator, a statement signed by the authorized account
representative and identifying each account into which any transfer of
allowances, submitted on or after the date on which the Administrator
receives such statement, is authorized. Such authorization shall be
binding on any authorized account representative for such account and
shall apply to all transfers into the account that are submitted on or
after such date of receipt, unless and until the Administrator receives
a statement in a format prescribed by the Administrator and signed by
the authorized account representative retracting the authorization for
the account.
(ii) The statement under paragraph (b)(2)(i) of this section shall
include the following: ``By this signature, I authorize any transfer of
allowances into each Allowance Tracking System account listed herein,
except that I do not waive any remedies under 40 CFR part 73, or any
other remedies under State or federal law, to obtain correction of any
erroneous transfers into such accounts. This authorization shall be
binding on any authorized account representative for such account
unless and until a statement signed by the authorized account
representative retracting this authorization for the account is
received by the Administrator.''
* * * * *
[FR Doc. 98-32990 Filed 12-10-98; 8:45 am]
BILLING CODE 6560-50-P
