00-9544. Approval and Promulgation of Implementation Plans; New York; Nitrogen Oxides Budget and Allowance Trading Program

AGENCY:

Environmental Protection Agency.

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is announcing approval of New York's State Implementation Plan (SIP) revision for ozone. This SIP revision relates to New York's portion of the Ozone Transport Commission's September 27, 1994 Memorandum of Understanding, which includes a regional nitrogen oxides budget and allowance (NO_X Budget) trading program that will significantly reduce NO_X emissions generated within the Ozone Transport Region, which includes New York State. EPA is approving New York's regulations, which implement Phase II of the NO_X Budget Trading Program, since they reduce NO_X emissions and help achieve the national ambient air quality standard for ozone.

DATES:

This rule is effective on May 19, 2000.

ADDRESSES:

Copies of the State submittal and supporting documents are available for inspection during normal business hours, at the following addresses:

Environmental Protection Agency, Region II Office, Air Programs Branch, 290 Broadway, 25th Floor, New York, New York 10007-1866.

New York State Department of Environmental Conservation, Division of Air Resources, 50 Wolf Road, Albany, New York 12233.

FOR FURTHER INFORMATION CONTACT:

Richard Ruvo, Air Programs Branch, Environmental Protection Agency, 290 Broadway, 25th Floor, New York, New York 10007-1866, [phone].

SUPPLEMENTARY INFORMATION:

Overview

The EPA is approving the New York State Department of Environmental Conservation's (New York's) Nitrogen Oxides Budget and Allowance (NO_X Budget) Trading Program for 1999, 2000, 2001 and 2002.

The following table of contents describes the format for this SUPPLEMENTARY INFORMATION section:

Overview

EPA's Action

What Action is EPA Approving?

Why is EPA Approving this Action?

When Did EPA Propose to Approve New York's Program?

What are the Public's Comments on EPA's Proposal?

What is the Ozone Transport Commission's Memorandum of Understanding?

Where is Additional Information Available on EPA's Action?

Conclusion

Administrative Requirements

EPA's Action

What Action Is EPA Approving?

The EPA is approving a revision to New York's Ozone State Implementation Plan (SIP) which New York submitted on April 29, 1999. This SIP revision relates to New York's NO_X Budget Trading Program, also referred to as Phase II. New York's regulations which implement the NO_X Budget Trading Program are:

• New Subpart 227-3, “Pre-2003 Nitrogen Oxides Emissions Budget and Allowance Program”
• Guidance for Implementation of Emissions Monitoring Requirements for the NO_X Budget Program, January 28, 1997
• NO_X Budget Program Monitoring Certification and Reporting Requirements, July 3, 1997
• Electronic Data Reporting, Acid Rain Program/NO_X Budget Program, July 3, 1997
• Amended Part 200, “General Provisions”
• Amended Subpart 227-1, “Stationary Combustion Installations” and
• Amended Subpart 227-2, “Reasonably Available Control Technology (RACT) for Oxides of Nitrogen (NO_X).”

Part 200 contains general provisions applicable to New York's Title 6 regulations. Part 200 includes definitions and references to other applicable documents, guidelines and methodologies that a source should consult when meeting requirements of specific New York regulations. New York originally incorporated these documents when New York proposed and adopted the regulations themselves. Part 200 lists these documents for reference along with where anyone can obtain them.

EPA is approving those provisions of part 200 needed for the purposes of enforcing the SIP, as well as for enforcing New York's NO_X Budget Trading Program. Specifically, EPA is approving sections 200.1 “Definitions,” section 200.6 “Acceptable ambient air quality,” section 200.7 “Maintenance of equipment,” and most of section 200.9 “Referenced material.”

EPA has previously discussed its approval of the state definitions in section 200.1 in prior actions which approved specific New York regulations that relied on the definitions, such as parts 218 and 227-3. Section 200.1 contains a definition of “federally enforceable” which EPA accepts with the following understanding: (1) the definition applies to provisions of a Title V permit that are correctly identified as federally enforceable, and (2) a source accepts operating limits and conditions to lower its potential to emit to become a minor source, not to “avoid” any applicable requirement. New York should clarify this definition in the future.

EPA is not incorporating sections 200.2 “Safeguarding information,” 200.3 “False statement,” 200.4 “Severability,” 200.5 “Sealing,” and 200.8 “Conflict of interest” because EPA can take enforcement actions related to one of these sections under its own corresponding federal regulations.

EPA is approving and including section 200.9 in the table in 40 CFR 52.1679 of EPA approved regulations for the benefit of the regulated community. Section 200.9 incorporates by reference specific federal and state laws and regulations including the three emissions monitoring guidance documents referenced above. Most of these were previously approved in past rulemakings. EPA is not approving the federal laws and regulations incorporated by reference in section 200.9 because they are already federally enforceable.

Section 200.10 lists regulations promulgated by the EPA. Since these regulations are already federally enforceable EPA is not incorporating them into the SIP. EPA is not including section 200.10 in the table in 40 CFR 52.1679.

Why Is EPA Approving This Action?

EPA is approving this action to:

• Fulfill New York's and EPA's requirements under the Clean Air Act (the Act)
• Make New York's NO_X Budget Trading Program federally-enforceable, and
• Make the significant NO_X emission reductions available for credit toward the attainment SIP.

When Did EPA Propose To Approve New York's Program?

On October 14, 1999, EPA published in the Federal Register (64 FR 55667) a Proposed Rulemaking to approve New York's regulations as a SIP revision and providing for a 30-day public comment period, which ended on November 15, 1999.

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

EPA received no public comments regarding the Proposed Rulemaking.

What Is the Ozone Transport Commission's Memorandum of Understanding?

The Ozone Transport Commission (OTC) adopted a Memorandum of Understanding (MOU) on September 27, 1994, which committed the signatory states to the development and proposal of a region-wide reduction in NO_X emissions, with one phase of reductions by 1999 and another phase of reductions by 2003. The Act required RACT to reduce NO_X emissions by May of 1995. The OTC MOU obligated further reductions in NO_X emissions by 1999 (known as Phase II) and by 2003 (known as Phase III).

Where Is Additional Information Available on EPA's Action?

A detailed discussion of this program is available in the October 14, 1999 Proposed Rulemaking (64 FR 55667). A Technical Support Document, prepared in support of the proposed rulemaking, contains the full description of New York's submittal and EPA's evaluation. A copy of the Technical Support Document is available upon request from the EPA Regional Office listed in the ADDRESSES section.

Conclusion

EPA is approving New York's program which implements the Ozone Transport Commission's September 27, 1994 Memorandum of Understanding (Phase II). The EPA is approving, as part of the SIP, the new regulation, Subpart 227-3, and amendments to the sections as discussed of the regulations part 200, subpart 227-1 and subpart 227-2, which implement Phase II of the NO_X Budget Trading Program. EPA is approving these regulations, submitted by New York on April 29, 1999, as part of the SIP.

Administrative Requirements

Executive Order 12866

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

Executive Order 13132

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that 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.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation. This final rule 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, because it merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act.

Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Executive Order 13045

Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency 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 the Agency.

This rule is not subject to Executive Order 13045 because it does not involve decisions intended to mitigate environmental health or safety risks.

Executive Order 13084

Under Executive Order 13084, EPA may not issue a regulation that is not required by statute, that significantly affects 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. If the mandate is unfunded, 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 affect the communities of Indian tribal governments. Accordingly, the requirements of section 3(b) of Executive Order 13084 do not apply to this rule.

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) 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 governmental jurisdictions.

This final rule will not have a significant impact on a substantial number of small entities because SIP approvals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. Therefore, because the Federal SIP approval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of state action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated annual costs to State, local, or tribal governments in the aggregate; or to private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the approval action promulgated does not include a Federal mandate that may result in estimated annual costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. 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).

National Technology Transfer and Advancement Act

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 19, 2000. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Hydrocarbons
• Incorporation by reference
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compounds

Dated: March 28, 2000.

William J. Muszynksi,

Acting Regional Administrator, Region 2.

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

PART 52—[AMENDED]

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

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

Subpart HH—New York

2. Section 52.1670 is amended by adding new paragraph (c)(95) to read as follows:

§ 52.1670

Identification of plan.

* * * * *

(c) * * *

* * * * *

(95) A revision to the State Implementation Plan submitted on April 29, 1999 by the New York State Department of Environmental Conservation that establishes the NO_X Budget Trading Program.

(i) Incorporation by reference:

(A) Regulation Subpart 227-3 of Title 6 of the New York Code of Rules and Regulations, entitled “Pre-2003 Nitrogen Oxides Emissions Budget and Allowance Program” adopted on January 12, 1999, and effective on March 5, 1999.

(B) Amendments to Title 6 of the New York Code of Rules and Regulations, Part 200, “General Provisions,” Subpart 227-1, “Stationary Combustion Installations,” and Subpart 227-2, “Reasonably Available Control Technology (RACT) for Oxides of Nitrogen (NO_X)” adopted on January 12, 1999, and effective on March 5, 1999.

(ii) Additional information:

(A) Letter from the New York Department of Environmental Conservation dated April 29, 1999, submitting the NO_X Budget Trading Program as a revision to the New York State Implementation Plan for ozone.

(B) Guidance for Implementation of Emissions Monitoring Requirements for the NO_X Budget Program, dated January 28, 1997.

(C) NO_X Budget Program Monitoring Certification and Reporting Requirements, dated July 3, 1997.

(D) Electronic Data Reporting, Acid Rain/NO_X Budget Program, dated July 3, 1997.

3. In § 52.1679, the table is amended as follows:

A. By revising the entry for Part 200;

B. By removing the entry for “Part 227, Stationary Combustion Installations (except as noted)”;

C. By removing the entry for “Part 227, Stationary Combustion Installations/section 27.2(b)(1)”; and

D. By adding a new entry for “Part 227, Stationary Combustion Installations”;

E. By adding a new entries for subparts 227-1, 227-2, and 227-3 to read as follows:

The revised and added entries read as follows:

§ 52.1679

EPA—approved New York regulations.

New York State regulation	State effective date	Latest EPA approval date	Comments
Part 200, General Provisions sections 200.1, 200.6, 200.7 and 200.9	3/5/99	[4/19/00 and FR page citation]	Redesignation of non-attainment areas to attainment areas (200.1(av)) does not relieve a source from compliance with previously applicable requirements as per letter of Nov. 13, 1981 from H. Hovey, NYSDEC.
			Changes in definitions are acceptable to EPA unless a previously approved definition is necessary for implementation of an existing SIP regulation.
			EPA is including the definition of “federally enforceable” with the understanding that (1) the definition applies to provisions of a Title V permit that are correctly identified as federally enforceable, and (2) a source accepts operating limits and conditions to lower its potential to emit to become a minor source, not to “avoid” applicable requirements.
			EPA is approving incorporation by reference of those documents that are not already federally enforceable.
*         *         *         *         *         *         *
Part 227, Stationary Combustion Installations [1972 version]/section 227.2(b)(1)	5/1/72	9/22/72 37 FR 19814
Part 227, Stationary Combustion Installations			Existing Part 227 is renumbered Subpart 227-1.
Subpart 227-1, Stationary Combustion Installations	3/5/99	[4/19/00 and FR page citation]	Renumbered sections 227-1.2(a)(2), 227-1.4(a), and 227-1.4(d) continue to be disapproved according to 40 CFR 52.1678(d) and 52.1680(a). (New York repealed existing Part 227.5.)
Subpart 227-2, Reasonably Available Control Technology (RACT) for Oxides of Nitrogen (NOX)/sections 227-2.3(h), 227-2.5(b), 227-2.5(e), and 227-2.6	3/5/99	[4/19/00 and FR page citation]	EPA is including sections 227-2.3(h), 227-2.5(b), 227-2.5(e), and 227-2.6 as part of the SIP for purposes of the NOX Budget Trading Program. EPA will act on the remaining sections of 227-2 in a future rulemaking.
Subpart 227-3, Pre-2003 Nitrogen Oxides Emissions Budget and Allowance Program	3/5/99	[4/19/00 and FR page citation]	Approval of NOX Budget Trading Program for 1999, 2000, 2001 and 2002. To meet its attainment demonstration commitments and the interstate MOU, New York will need to amend their regulations to establish the NOX caps in the State during 2003 and beyond.
*         *         *         *         *         *         *