[Federal Register Volume 59, Number 80 (Tuesday, April 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10042]
[[Page Unknown]]
[Federal Register: April 26, 1994]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 51
[FRL-4878-3]
Proposed Rulemaking on Ozone Transport Commission; Emission
Vehicle Program for the Northeast Ozone Transport Region
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: On February 10, 1994, the Northeast Ozone Transport Commission
(OTC) submitted a recommendation to EPA under section 184 of the Clean
Air Act (the Act), for additional control measures to be applied
throughout the Northeast Ozone Transport Region (OTR). Specifically,
the OTC recommended that EPA require all State members of the OTC to
adopt an Ozone Transport Commission Low Emission Vehicle (OTC LEV or
LEV) program for the entire OTR. The OTC's recommendation, developed
after notice-and-comment pursuant to section 184(c)(1), is published
here as an appendix to this document.
Under section 184(c)(3), EPA is to review the OTC's recommendation
to determine whether the additional control measures are necessary to
bring any area in the OTR into attainment by the dates specified in the
Act, and are otherwise consistent with the Act. Based on this review,
EPA is obligated to determine whether to approve, disapprove, or
partially approve and partially disapprove the OTC's recommendation. If
EPA disapproves or partially disapproves the OTC recommendation, it is
to explain why the recommended measures are not necessary or are not
otherwise consistent with the Act, and to specify additional control
measures that would be equally effective. Upon EPA approval or partial
approval of the OTC recommendation, EPA is to make a finding that the
relevant States' State Implementation Plans (SIPs) are inadequate under
section 110(a)(2)(D) of the Act (relating to contribution to
nonattainment in downwind States), and those States are to submit a SIP
revision within one year of the finding adopting the approved control
measures. This notice describes the framework for EPA's action on the
OTC's recommendation and describes the issues EPA is considering in
deciding whether to approve, disapprove, or partially approve and
partially disapprove the recommendation.
DATES: EPA will be holding a public hearing on the OTC recommendation
on Monday, May 2, 1994 from 1 p.m. to 4:30 p.m. (EDT) and on Tuesday,
May 3, 1994 from 9 a.m. to 4:30 p.m. (EDT). The comment period will
remain open until June 3, 1994. Please direct all correspondence to the
addresses shown below.
ADDRESSES: The hearings will be held at the Fifth Floor Auditorium,
Connecticut Department of Environmental Protection Building, 79 Elm
Street, Hartford, Connecticut 06106. Written comments should be
submitted (in duplicate if possible) to the Air Docket (see address
below). Copies of information relevant to this matter are available for
inspection in public docket A-94-11 at the Air Docket (LE-131) of the
EPA, room M-1500, 401 M Street SW., Washington, DC 20460, (202) 260-
7548, between the hours of 8 a.m. to 12 p.m. and 1 p.m. to 5 p.m. on
Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Mike Shields, Office of Mobile
Sources, U.S. EPA, 401 M Street, SW., Washington, DC 20460, telephone:
(202) 260-3450.
SUPPLEMENTARY INFORMATION:
I. Background
A. Overview of Title I Scheme
The OTC's recommendation under section 184(c) of the Act that EPA
mandate that States in the OTR adopt the LEV program arises in the
context of the program designed to address ozone (or ``smog'')
pollution in subpart II of part D of title I of the Act. This program
is described in detail in EPA's General Preamble for the Implementation
of Title I of the Clean Air Act Amendments of 1990, 57 FR 13498 (April
16, 1992), and the Nitrogen Oxides Supplement to the General Preamble,
57 FR 55620 (Nov. 25, 1992).
A number of provisions in subpart 2 and elsewhere in the Act are
particularly important to emphasize here. Part D establishes a scheme
for more polluted areas to have more time to attain the National
Ambient Air Quality Standards (NAAQS), and subjects those more polluted
areas to a graduated program of additional and more stringent specific
control requirements to be accomplished over the longer time-frame.
Section 181(a) provides for classification of ozone nonattainment
areas based on the degree of the nonattainment problem in the area (as
measured by the area's ozone design value), and provides that
attainment ``shall be as expeditiously as practicable but not later
than'' specified deadlines expressed as years after enactment. The
areas, and the corresponding attainment deadlines are: Marginal (1993);
Moderate (1996); Serious (1999); Severe (2005 or 2007, depending on the
design value); and Extreme (2010). The Act also provides for additional
``unclassifiable/no data'' nonattainment areas. All classifications
other than Extreme are represented in the OTR. Section 184(b) also
specifies additional requirements applicable for attainment areas in
ozone transport regions, including: (1) Enhanced vehicle inspection and
maintenance programs in cities meeting specified size thresholds; (2)
state-wide implementation of reasonably available control measures
(RACT); (3) ``Stage II'' vehicle refueling vapor controls or
``comparable measures''; and (4) treatment of major stationary sources
of ozone precursors as if they were in moderate nonattainment areas.
Section 182 establishes the graduated control measures applicable
for each nonattainment classification. These measures are additive in
that the higher classifications must generally adopt, in addition to
measures specifically applicable to that higher classification, all
measures identified for lower classifications as well. A basic
requirement applicable to Marginal and above classifications is that
States are to submit inventories of actual emissions from all sources
in each nonattainment area. See sections 182(a)(1) and 172(c)(3). These
emissions inventories may be important in determining whether the LEV
program is necessary in the OTR. For example, the inventories may be
important to determining the magnitude of emissions reductions that may
be needed for attainment, and the effectiveness of various measures to
obtain such reductions.
Another potentially key requirement is that Moderate and above
areas must submit attainment demonstrations. Under section
182(b)(1)(A), for Moderate and above areas States are to specify in
their plans specific annual reductions in emissions ``as necessary to
attain the [NAAQS] for ozone by the attainment date applicable under
this Act.'' Under section 182(c)(2)(A), for Serious and above areas
States are to submit a demonstration that the State Implementation Plan
(SIP), ``as revised, will provide for attainment of the ozone [NAAQS]
by the applicable attainment date.'' Further, this provision continues,
``[t]his attainment demonstration must be based on photochemical grid
modeling or any other analytical method determined by the
Administrator, in the Administrator's discretion, to be at least as
effective.'' These requirements provide the motivation for the OTC's
recommendation; as additional measures may be necessary for the States
to demonstrate that their SIPs will achieve timely attainment. The
modeling information is, of course, important to determining what
reductions are necessary in what areas for attainment in the OTR.
It is also relevant that States are obligated to adopt various
measures specified for progress toward attainment, and to achieve
certain percentage reductions in emissions by interim dates. In
general, section 172(c)(2) requires that SIPs ``require reasonable
further progress'' (RFP), defined in section 171(1) to mean ``such
annual incremental reductions in emissions of the relevant air
pollutant as are required by this part or may reasonably be required by
the Administrator for the purpose of ensuring attainment of the [NAAQS]
by the applicable date.'' More specifically, section 182(b) provides
that for Moderate and above areas States were to submit, by November
15, 1993, SIP revisions providing for a 15% reduction in emissions of
volatile organic compounds (VOCs) from a 1990 baseline to be achieved
by 1996. Further, section 182(c)(2)(B) provides that for Serious and
above areas States are to submit, by November 15, 1994, SIP revisions
that will result, subject to a limited feasibility exception, in
additional reductions in VOC emissions from the 1990 baseline of 3%
each year averaged over consecutive 3-year periods beginning in 1996
and until the attainment date. Section 182(c)(2)(C) provides for
substitution of reductions in emissions of nitrogen oxides (NOX)
for VOC, in accordance with EPA guidance. These RFP requirements
establish minimum reductions that certain nonattainment areas in the
OTR will be required to achieve apart from whether EPA approves or
disapproves the recommendation.
Finally, section 110 of the Act establishes general requirements
for SIPs. Section 110(a)(2) specifies minimum elements of a State's
SIP, and subparagraph (D) specifies that a State's SIP shall contain
adequate provisions prohibiting, consistent with the provisions of this
title, any source or other type of emissions activity within the State
from emitting any air pollutant in amounts which will contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State with respect to any such national primary or secondary
ambient air quality standard.
This provision, as discussed in detail below, is the key mechanism
under the transport provisions of sections 176A and 184, and is central
to the OTC recommendation and to EPA's action on it.
B. Ozone Transport Region Provisions
The OTR was established by operation of law under section 184 of
the Act and is comprised of the States of Connecticut, Delaware, Maine,
Massachusetts, Maryland, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Vermont, the District of Columbia, and the
portion of Virginia that is within the Consolidated Metropolitan
Statistical Area that includes the District of Columbia. Congress
established the OTR in the 1990 Amendments to the Act based on the
recognition that the transport of ozone and ozone precursors throughout
the region may render the Northeast States' attainment strategies
interdependent.
Under section 184, the Administrator established a Northeast Ozone
Transport Commission for the OTR consisting of the Governor of each
State or their designees, the Administrator or her designee, the
Regional Administrators for the EPA regional offices affected (or the
Administrator's designees), and an air pollution control official
representing each State in the region, appointed by the Governor.
Section 184(c) specifies a procedure for the OTC to develop
recommendations for additional control measures to be applied within
all or a part of the OTR if the OTC determines that such measures are
necessary to bring any area in the OTR into attainment for ozone by the
applicable dates in the Act. Section 184(c)(1) provides that Upon
petition of any States within a transport region for ozone, and based
on a majority vote of the Governors on the Commission (or their
designees), the Commission may, after notice and opportunity for public
comment, develop recommendations for additional control measures to be
applied within all or a part of such transport region if the commission
determines such measures are necessary to bring any area in such region
into attainment by the dates provided by [subpart II of part D of title
I of the Clean Air Act].
Section 184(c) also lays out procedures the Administrator is to
follow in responding to recommendations from the OTC. Upon receipt of
the recommendations, the Administrator is to publish a Federal Register
notice stating that the recommendations are available and providing an
opportunity for a public hearing within 90 days. On March 18, 1994, EPA
published a notice announcing receipt of the OTC recommendation, 59 FR
12914. EPA further announced on April 8, 1994 that a public hearing
would be held in Hartford, Connecticut on May 2-3, 1994, 59 FR 16811
(April 8, 1994). The Administrator is also to ``commence a review of
the recommendations to determine whether the control measures in the
recommendations are necessary to bring any area in such region into
attainment by the dates provided by [subpart II] and are otherwise
consistent with [the] Act.'' Finally, in undertaking her review, the
Administrator is to consult with members of the OTC and is to take into
account the data, views, and comments received pursuant to the public
hearing.
Last, sections 184(c) (4) and (5) govern EPA's response to the OTC
recommendations. The Administrator is to determine whether to approve,
disapprove, or partially approve and partially disapprove the
recommendations within nine months of receipt. For any disapproval, the
Administrator is to specify:
(i) Why any disapproved additional control measures are not
necessary to bring any area in such region into attainment by the dates
provided by [subpart II] or are otherwise not consistent with the Act;
and
(ii) Recommendations concerning equal or more effective actions
that could be taken by the commission to conform the disapproved
portion of the recommendations to the requirements of [section 184].
Section 184(c)(5) provides that, upon approval or partial approval
of any recommendations, the Administrator is to issue to each State in
the OTR to which an approved requirement applies a finding under
section 110(k)(5) that the SIP for that State is inadequate to meet the
requirements of section 110(a)(2)(D), quoted above. Under section
184(c)(5), the Administrator's finding of inadequacy under section
110(a)(2)(D) is to require that each affected State revise its SIP to
include the approved additional control measures within one year after
the finding is issued.
Finally, section 184(d) provides that, for purposes of section 184,
the Administrator is to ``promulgate criteria for purposes of
determining the contribution of sources in one area to concentrations
of ozone'' in another nonattainment area. These criteria are to
``require that the best available air quality monitoring and modeling
techniques be used for purposes of making such determinations.''
C. Background Regarding OTC LEV Program
The Administrator convened the OTC on May 7, 1991. Thereafter, the
OTC moved to work toward a regional ozone strategy with emphasis on
consensus agreements to adopt regional measures to address the ozone
problem in the Northeast. To address the contribution of motor vehicles
to the Northeast ozone problem, the OTC focussed early on emissions
standards for new motor vehicles and on adoption of federal
reformulated gasoline throughout the OTR as potential additional
control measures. The Act, however, imposes certain limitations on the
States' ability to adopt new motor vehicle emissions standards.
Section 209 of the Act generally preempts States from establishing
new motor vehicle emissions standards, leaving such regulation to EPA
under section 202 of the Act. Section 209 does, however, provide an
exception for California to adopt new motor vehicle emissions standards
where the Administrator grants a preemption waiver based on a finding
that California's standards will be, ``in the aggregate, at least as
protective of public health and welfare as applicable Federal
standards.'' Further, under section 177 of the Act, any State which has
SIP provisions approved under part D of title I may adopt and enforce
new motor vehicle emission standards for any model year if:
(1) Such standards are identical to the California standards for
which a waiver has been granted for such model year, and
(2) California and such State adopt such standards at least two
years before commencement of such model year (as determined by
regulations of the Administrator).
EPA has granted a waiver for California's ``Low Emission Vehicle''
program (See 58 FR 4166 (Jan. 13, 1993)(announcing availability of
Waiver of Federal Preemption; California Low- Emission Vehicle
Standards (Jan. 8, 1993)). This program generally calls for five
categories of vehicles meeting progressively more stringent emissions
standards: California Tier I vehicles; Transitional Low Emission
Vehicles (TLEV); Low Emission Vehicles (LEV); Ultra-Low Emission
Vehicles (ULEV); and Zero Emission Vehicles (ZEV). California has also
established an overall non-methane organic gas (NMOG) standard that
each manufacturer must meet for its fleet of new vehicles in a
particular model year by selling any combination of vehicles certified
by California as meeting standards for one of the five categories. In
addition, under California's program, at least 2% of each
manufacturers' new vehicle fleet sold in California must be ZEV's by
1998, and 10% by 2003.\1\
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\1\In EPA's waiver decision regarding California's LEV program,
the EPA Administrator stated, ``Based on EPA's review of this
record, I find reasonable and so adopt California's finding that
there is adequate leadtime to permit the development of technology
necessary to meet those standards giving appropriate consideration
to the cost of compliance within the required time frame.'' Waiver
of Federal Preemption; California Low-Emission Vehicle Standards at
69 (Jan. 8, 1993).
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At its second meeting on July 16, 1991, the OTC adopted a
Memorandum of Understanding (MOU) in which the State and District of
Columbia representatives agreed that, in view of the significant
contribution of motor vehicles to the Northeast ozone problem, they all
support California's Motor Vehicle Control Program, and call on their
jurisdictions to cooperatively evaluate the feasibility, air quality
benefits, and associated costs of this Program in the OTR. At its third
meeting on October 29, 1991, the OTC States agreed to a further MOU
providing that each OTC state would take steps to implement
California's Low Emission Vehicle program as soon as possible. New York
and Massachusetts are the only States that have fully adopted the
California LEV program in legislation and regulations without
contingencies, and both States are set to implement their programs. The
automobile manufacturers' have challenged the legality of both programs
and both lawsuits are ongoing. Other States have adopted or are
adopting the program contingent on regional program adoption, and the
remaining States are at various stages of the legislative or regulatory
process to adopt the program.
In August 1993, Maine, Maryland, and Massachusetts petitioned the
OTC to adopt a recommendation calling for the application of the
California LEV program throughout the OTR. During the fall of 1993, the
OTC held a number of public forums in various locations in the
Northeast, and held a public hearing in Hartford, Connecticut on
December 16-17, 1993. Finally, at its winter meeting on February 1,
1994 in Washington, D.C., the OTC voted by a 9 to 4 majority to
recommend that EPA mandate the California LEV program throughout the
OTR. (The OTC refers to the program they recommend as ``OTC LEV.'') New
Hampshire, Virginia, Delaware, and New Jersey voted against the
recommendation. The OTC's recommendation contains the following
elements:
(1) The OTC LEV program would be applicable to all 1999 and
subsequent model year passenger cars and light duty trucks in the OTR;
(2) Subject to certain very limited exceptions, all vehicles sold,
imported, delivered, purchased, leased, rented, acquired, received, or
registered in the OTR that are subject to the OTC LEV program must be
certified pursuant to a California Air Resources Board (CARB) Executive
Order;
(3) The OTC LEV program would allow the sale of the five categories
of California vehicles: California Tier I, TLEV, LEV, ULEV, and ZEV;
(4) Manufacturers could choose any combination of California
certified vehicles to meet average NMOG fleet emission standards in the
OTR as follows:
1999--0.113 g/mi
2000--0.073 g/mi
2001--0.070 g/mi
2002--0.068 g/mi
2003 and later--0.062 g/mi
Regarding California's ZEV sales mandate, the OTC recommends that,
to the extent it must apply to satisfy section 177, it shall apply. But
if it is not required under section 177, the OTC recommends that the
``individual States within the OTC may at their option include such a
requirement and/or economic incentives designed to increase the sales
of ZEVs in the programs they adopt.''
(5) The effective date for the OTC LEV program would be January 1,
1996, allowing two vehicle model years prior to applicability of the
standards in 1999, but does not preclude earlier State implementation.
D. Legislative History of Section 184
The OTC provisions originated in Congress in the House bill as
introduced. That bill, as introduced, established an ozone transport
region for the Northeast, and incorporated the procedures specified for
general transport regions under what was finally enacted as section
176A of the Act. That provision in the House bill did not involve a
plan for specific additional control measures. See H.R. 3030 at 92-93
and 49 (July 27, 1989), reprinted in 2 1990 Legislative History of the
Clean Air Act Amendments of 1990, 103rd Cong., 1st. sess. (Nov. 1993)
(hereinafter ``1990 Legislative History'') at 3828-29 and 3785. The
House committee then marked-up H.R. 3030 to include the provisions as
finally enacted. See H.R. Rep't No. 101-490, part 1, 101st Cong., 2d
Sess. at 527-28 (May 17, 1989), reprinted in 2 1990 Legislative History
at 3551-52. It described the bill as establishing ``a public procedure
and structure'' for an OTC to transmit recommendations to EPA and
explained that EPA's response ``should be buttressed by supporting
material.'' It further stated, ``The Committee expects that the
Administrator's review of additional control measures recommended by an
ozone transport commission will fully acknowledge and respond to the
dimensions of the transport problems addressed by the commission's
recommendations.'' The report also set out the timetable for EPA's
response within nine months, and for EPA to issue a finding of SIP
inadequacy ``[u]pon full or partial approval'' followed by States' SIP
revisions within one year. H.R. Rep't. No. 101-490 at 256, reprinted in
2 1990 Legislative History at 3280.
The Senate bill, in contrast, as introduced provided that the
commission could, without any independent EPA review or approval,
``after notice and opportunity for comment, require additional control
measures to be applied within such transport region if the commission
determines such measures are necessary to bring all areas in such
region into attainment by the dates provided by this subpart.'' See S.
1630, 101st Cong., 1st Sess. (Sept. 4, 1989), reprinted in 5 1990
Legislative History at 9111.
The Senate bill, as introduced, was amended in committee to provide
for EPA review of an OTC ``plan'' for additional control measures.
Under the Senate committee mark-up, the OTC could, after notice and
comment, develop a plan for additional control measures for the OTR,
and would then transmit the plan to EPA for review. The committee then
included the general framework for EPA review that survives in section
184 as enacted, including EPA's obligation to explain any disapproval
and recommend alternatives. The bill differed from the statute as
enacted, however, in that: (1) EPA was obligated to state in the
Federal Register notice upon receipt of the plan that ``written data,
views, or comments on the plan may be submitted to the Administrator
within ninety days beginning on the receipt date'' but was not
obligated to conduct a public hearing; (2) EPA's period to determine
whether to approve the plan was 120 days, rather than nine months; and
(3) the bill provided that the plan would be deemed approved if the
Administrator failed to act within 120 days. The Senate committee mark-
up also included the mechanism for implementation whereby EPA would
issue a finding that the States' plans were inadequate, and that the
finding would require the States to revise their SIPs to include the
approved additional control measures within one year after the finding
is issued. See S. Rep. No. 101-228, 101st Cong., 1st Sess., at 34 and
610-11 (Dec. 20, 1989), reprinted in 5 1990 Legislative History at
8950-51. This version was reported out of committee to the full Senate.
See S. 1630 (Dec. 20, 1989), reprinted in 5 1990 Legislative History at
7986-7988.
In the Senate debate on the Senate bill, Senator Lieberman
explained these developments. He explained that President Bush's
bill\2\ would have left the final decision about imposing additional
controls to EPA. But Senator Lieberman explained that this was
``unacceptable'' because EPA's lack of support for past regional
efforts to adopt controls was in part responsible for their failure.
Senator Lieberman went on to explain that concerns were raised to the
committee that the commission was being given ``too much authority''
because it would have ``ultimate authority to impose additional
controls on sources of emissions in the separate States.'' Lieberman
emphasized the importance of taking from EPA the responsibility for
recommending baseline regional controls. He went on to explain that,
under the bill.
\2\President Bush's bill was H.R. 3030, as introduced.
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Final authority to disapprove additional measures actually rests
with EPA. However, EPA bears the burden, as clearly stated in the
bill, of demonstrating that the additional control measure is not
necessary to bring any area of the region into attainment by the
dates provided. In making their decision, EPA must not place unfair
burdens on the recipient State.
See Senate Debate on S. 1630 (Jan. 31, 1990), reprinted in 4 1990
Legislative History at 5077 (statement of Sen. Lieberman).
As noted, the conference adopted the House version. The debates on
the conference bill focused primarily on the importance of the
transport provisions to address a significant problem. In the Senate
Debate on the conference bill,
Senator Lieberman again explained EPA's responsibilities in responding
to an OTC recommendation:
The Administrator has the final authority to disapprove
additional measures recommended by the Commission. However, EPA
bears a heavy burden of demonstrating that the additional control
measure(s) is not necessary to bring any area of the region into
attainment by the dates provided and to recommend equal or more
effective actions that could be taken by the Commission to conform
the disapproved portion of the recommendations. Any recommendations
by EPA under this section designed to replace the recommendations of
the Commission shall not place an unfair burden on any state which
is the victim of the transported air pollution. Equal or more
effective actions recommended by the EPA shall mean actions which
achieve equivalent progress towards attainment of the standard,
given full consideration of the impact of transported air pollution.
Senate Debate (Oct. 27, 1990), 1 1990 Legislative History at 1053
(Statement of Senator Lieberman). Also in the Senate Debate on the
Conference bill, Senator Baucus inserted a detailed explanation of the
bill, known as the Baucus-Chafee Statement of Senate Managers. See 1
1990 Legislative History at 1000 and 1045. The Statement of Senate
Managers reiterated Senator Lieberman's points, using his exact
language quoted above to describe EPA's role in responding to an OTC
recommendation, including the emphasis on EPA's ``heavy burden'' to
disapprove. 1 1990 Legislative History at 1004.
II. Applicability of Rulemaking Procedure
Section 184(c) establishes a specific notice-and-comment procedure
both for OTC development of and EPA action to approve or disapprove
recommendations for additional control measures in the OTR. These
procedures are compatible with, but not necessarily identical to, the
procedures the Agency must follow to issue a rule. The statute is
silent as to whether EPA can take final action on the OTC
recommendation without complying with notice-and-comment rulemaking
procedures. EPA does not believe that rulemaking procedures are
necessary if EPA disapproves the OTC recommendation because such an
action would not have a binding future effect on any regulated parties.
It is less clear whether rulemaking procedures are necessary for
approval or partial approval of the OTC recommendation.
Regardless of whether rulemaking procedures are required, EPA
recognizes the importance of public participation in its decision-
making process. The procedures required by section 307(d) of the Clean
Air Act are an excellent vehicle for ensuring an open, public process.
Among other things, they require the establishment and maintenance of a
rulemaking docket that contains the information, data and documents
upon which EPA bases its proposed and final rules; they provide an
opportunity for the public to present written and oral comments to the
Agency, including an opportunity to rebut views presented at a public
hearing; and they require the Agency to respond to the significant
public comments, criticisms and new data submitted during the comment
period.
EPA has decided that the better course in this instance is to
follow section 307(d) rulemaking procedures and ensure that there is an
open public process that allows interested parties to put on the record
their views, comments, arguments and data relevant to the decision
before the Agency.\3\ The Administrator has determined that, pursuant
to section 307(d)(1)(V), if the Agency approves or partially approves
the OTC recommendation, section 307(d) will apply.\4\
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\3\EPA is not finding that it is legally obligated to use
rulemaking procedures to approve the OTC recommendation. EPA
reserves the right to approve future OTC recommendations without
following rulemaking procedures.
\4\The decision to follow rulemaking procedures is intended to
preserve EPA's option of approving or partially approving the OTC
recommendation. The Agency is not legally obligating itself to
follow rulemaking procedures to the extent it disapproves or
partially disapproves the OTC recommendation, although the Agency
currently intends to follow the procedures set forth in 307(d)
regardless of whether it approves or disapproves the OTC
recommendation.
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EPA has established Air Docket No. A-94-11 and placed in it the
data, information and documents upon which the Agency relied in
drafting this proposal, as required by section 307(d) (2), (3) and (4).
Section 307(d)(3)'s requirement that EPA publish a notice of proposed
rulemaking is met by this notice. In view of the limited nine month
timetable for EPA decision, to satisfy rulemaking requirements, EPA is
also relying on the OTC's recommendation itself (developed through the
OTC's statutory notice-and-comment process), the OTC's technical
analysis and response to comments, as well as EPA's discussion of
relevant issues, data, and other Agency information.\5\ This proposal
leaves open EPA's option to approve, disapprove, or partially approve
and partially disapprove the OTC recommendation in its final decision.
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\5\Courts have recognized the possibility of publishing State
submissions to EPA to satisfy rulemaking requirements for a
proposal. Under the 1977 Amendments, EPA argued that time
constraints constituted ``good cause'' to avoid notice-and-comment
rulemaking in designating areas according to their attainment
status. In New Jersey v. EPA, the Court of Appeals for the D.C.
Circuit emphasized that EPA could have published as proposed rules
the State designations shortly after it received them in order to
complete rulemaking under the short statutory timetable. New Jersey
v. EPA, 626 F.2d 1038, 1043 (D.C. Cir. 1980). Accord United States
Steel Corp. v. EPA, 595 F.2d 207 (5th Cir. 1979).
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EPA seeks public views, arguments, data and comments on all aspects
of its analysis in this notice and on the Agency's information placed
in the docket. EPA also seeks comment on the OTC's recommendation
(contained in an Appendix to this proposal), on the OTC's views that
are described in this notice, and on the OTC's technical support
document and response to comments document that may be found in the
docket. Finally, EPA will supplement the record with additional
rationales, discussions, data, and other pertinent information for
public participation and comment as that becomes available.
As indicated in detail below, EPA is considering a number of
complicated issues in determining whether to approve or disapprove the
OTC recommendation, and invites comments on all of these issues. EPA
intends to make every effort to afford the public an opportunity to
participate in the Agency's process to respond to the recommendation.
In addition to the opportunity to file written comments and present
oral views at the May 2-3 public hearing, EPA intends to hold a series
of public meetings in the Northeast to provide further opportunity for
oral presentation of views. EPA also expects to supplement the record
as necessary to allow the public to comment on new information and
considerations that EPA believes it should take into account in making
a decision.
III. Standards Applicable to EPA Review of OTC Recommendation
Section 184 of the Act specifies two general criteria that EPA is
to apply in evaluating whether to approve, disapprove, or partially
approve and partially disapprove the OTC recommendation. These are,
first, whether the additional control measures that the OTC recommends
are ``necessary'' and, second, whether the additional control measures
are ``otherwise consistent with th[e] Act.'' If the recommended measure
is necessary and consistent with the Act, EPA believes it would be
obligated to approve the recommendation.
A. Necessity
EPA believes that it has substantial discretion to interpret the
``necessary'' test, and is considering a number of approaches,
discussed below. EPA's evaluation of ``necessity'' could involve two
fundamental analytic steps: First, EPA believes it should consider the
magnitude of emissions reductions in ozone precursors needed for the
nonattainment areas in the OTR to attain. Second, it may be appropriate
to consider other potential emissions reduction measures that may be
available to satisfy the needed magnitude of emissions reductions, and
compare the LEV program to alternative measures. In connection with the
magnitude of reductions needed for attainment, EPA is considering: (1)
how it should address the geographic dimension of determining where the
LEV program is necessary for areas in the OTR to achieve attainment;
(2) how it should account for the timing of when the LEV program would
generate reductions that could contribute to attainment; and (3)
whether EPA can take into account the need for the LEV program for
maintenance purposes. In connection with alternatives to the LEV
program, EPA is evaluating relevant aspects of (1) the recommended LEV
program; (2) the FLEV alternative that the auto manufacturers have
proposed; and (3) other possible emissions reduction measures
identified by EPA, the OTC, or other State bodies.
1. Necessity Finding
EPA believes that more than one approach to defining what is
``necessary'' is conceivable. One possible approach is to consider as
necessary any additional control measures that contribute to
attainment, as long as measures specifically required by the Act or
that are otherwise in place are insufficient to achieve attainment.
Under this approach, the relevant question would be whether additional
reductions are needed for attainment, and the availability of
alternative control measures would not be relevant.
A second approach is to first consider what emissions reductions
are needed for attainment and then to compare the LEV program to
alternative measures that could be adopted to achieve those reductions.
Before enactment of the 1990 Amendments, EPA interpreted the term
``necessary'' generally in this manner under section 211(c)(4)(C) of
the Act, in the context of preemption of State fuel requirements.\6\
The section 211(c) provision specifically addresses how alternative
measures should be compared for purposes of evaluating necessity.
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\6\Other provisions of the Act also involve a ``necessary''
standard. Under section 110, the Administrator is to approve a
State's SIP revision if it meets the applicable requirements of the
Act, including the requirement in section 110(a)(2)(A) that the SIPs
include measures ``as may be necessary or appropriate to meet the
applicable requirements of this Act.'' Prior to the 1990 Amendments,
section 110(a)(2) provided that the Administrator shall approve a
State's SIP if it includes measures ``as may be necessary to insure
attainment and maintenance'' of the primary and secondary NAAQS. The
Supreme Court has interpreted the ``as may be necessary'' language
to mean that ``the Administrator must assure that the minimal, or
`necessary,' requirements are met, not that he detect and reject any
state plan more demanding than federal law requires.'' Union
Electric Co. v. EPA, 427 U.S. 246 at 263 (1976) (footnote omitted).
EPA currently does not believe that this test, and the Union
Electric Co. Court's analysis, are applicable under section 184. The
Union Electric Co. Court explained that the language, structure, and
purpose of the Act, are consistent with a State's decision to be
stricter within its borders than Federal law requires, here, in
contrast, section 184 appears to indicate that EPA is to disapprove
the OTC's recommended measures if those measures are not necessary.
Further, the Union Electric Court's analysis is inapplicable here
because a majority of OTC States is seeking to impose requirements
on dissenting OTC States over their objections. EPA requests comment
on this view.
Also, in connection with its study and rulemaking under section
202(i) related to ``Tier 2'' motor vehicle emissions standards, EPA
is to determine whether ``there is a need for further reductions in
emissions.'' (Emphasis supplied.) As discussed below, EPA has not
yet completed the Tier 2 study or the subsequent rulemaking, and
thus has not yet interpreted this standard in that context.
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Section 211(c)(4)(A) provides that, subject to specified
exceptions, States may not regulate characteristics of motor vehicle
fuels or additives in order to control motor vehicle emissions once EPA
has regulated that characteristic or has found that such regulation is
not necessary. Congress apparently sought to preempt States from
interfering with national uniformity in federal fuel regulations.
Subparagraph (C) specifies an exception for States to regulate fuels
and additives in their SIPs, which the Administrator may approve ``only
if [s]he finds that the State control or prohibition is necessary to
achieve the national primary or secondary ambient air quality standard
which the plan implements.''
Prior to the 1990 Amendments, the term ``necessary'' was not
further defined. At that time, EPA regulated the volatility of gasoline
under section 211(c) in order to control evaporative emissions of VOCs.
Certain States sought approval from EPA for more stringent volatility
controls on the grounds that such more stringent controls were
``necessary'' under section 211(c)(4)(C). EPA approved States' more
stringent volatility controls in New York and New Jersey, among
others\7\. In addition, EPA earlier approved Arizona's controls on
oxygenate content of gasoline in order to control carbon monoxide
emissions as necessary under section 211(c)(4)(C).\8\ In approving
these State controls, EPA articulated a test for determining
``necessity.'' There, EPA explained that if, after accounting for the
possible reductions from all other reasonable control measures, the
State could demonstrate that further measures are still needed for
attainment, then the fuel controls are ``necessary'' within the meaning
of section 211(c)(4)(C). EPA first articulated this test in the Arizona
case:
\7\See EPA's Approvals of Revisions for State Implementation
Plans for New York, 54 FR 26030, 26031 (June 21, 1989) and New
Jersey, 54 FR 25572, 25573 (June 16, 1989).
\8\See EPA's Approval of Revisions for State Implementation Plan
for Arizona, 53 FR 17378, 17413 (May 16, 1988) and 53 FR 30224,
20228 (Aug. 10, 1988).
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EPA believes that a fuel control measure may be ``necessary''
for timely attainment if no other measures that would bring about
timely attainment exist, or if such other measures exist and are
technically possible to implement but are unreasonable or
impracticable.'' 53 FR at 17413. In short, EPA's approach was that
the controls were necessary if they would still be needed for
attainment after adoption of all other reasonable and practicable
measures. Congress subsequently codified this interpretation when it
added a definition of ``necessary'' to section 211(c)(4)(C) in the
1990 Amendments.\9\
\9\Of course, Congress did not codify this or any other
definition of ``necessary'' in section 184. This difference might
arguably support EPA's discretion to adopt a different approach to
the term under section 184.
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In applying this definition of ``necessary'' in the fuel context,
EPA explained that it would not require that a State impose more
drastic measures (such as driving prohibitions, gas rationing, or plant
shutdowns), as alternatives to State fuel controls. See 54 FR at 26031
and 26035. EPA further explained that it would conclude that measures
are ``necessary'' when no other measures that EPA or the State has
found reasonable are available\10\ to achieve this reduction. Beyond
such identified ``reasonable'' measures, EPA need look at other
measures before [the fuel] control only if it has clear evidence that
[the fuel] control would have greater adverse impacts than those
alternatives. Therefore, EPA can defer to [the State's] apparent view
that [the fuel] control is the next less costly (or is itself a
reasonable) measure.
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\10\In context, it appears that EPA intended the word
``available'' to mean ``sufficient.''
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See 54 FR at 26031.
EPA did consider cost-effectiveness of alternative measures as one
criterion, but not the only criterion, for evaluating the
reasonableness of the alternatives. 54 FR at 26035. EPA also explained:
``Arguably, an alternative measure is `reasonable' only if its effects
are less drastic than the effects of the fuel controls.'' Id.
There may be some ambiguity whether EPA's test was whether
(considering cost and other factors), the fuel controls were more
reasonable than alternatives, or that alternatives were so drastic as
to prevent EPA from concluding that they were reasonable. EPA did state
that it determined that reasonable alternatives would not achieve
enough reductions, and that it ``determined that remaining controls
such as gas rationing, driving reductions, and source shutdowns are so
drastic that the State may resort to fuel controls first.'' 54 FR at
26033. But EPA immediately thereafter characterized its judgement as
being that ``State fuel regulation is a less drastic course than gas
rationing and other unpopular controls.'' Id. At the least, it seems
that EPA believed that comparing the reasonableness of fuel controls to
alternatives was a significant factor in determining whether the
alternatives were themselves reasonable. EPA also explained that its
judgment about what is too drastic ``is a complicated policy
determination'' requiring the Administrator to weigh factors such as
cost and popularity, and that such policy judgments need not be
supported by the same technical record as, for example, determinations
of as the magnitude or reductions an area needs for attainment. 54 FR
at 26033. Also, EPA did not insist that the State fuel controls be
sufficient to fill the shortfall to achieve attainment, or that all
measures needed to achieve attainment actually be adopted in order to
qualify for the section 211(c)(4)(C) exception. Most importantly, as
the paragraph quoted above indicates, EPA gave significant deference to
the State's determination regarding whether the fuel control was the
most reasonable and practicable measure to achieve the NAAQS.
Congress's codification of EPA's interpretation of ``necessary'' in
the fuel context confirms the validity of this interpretation in the
fuels context. EPA is considering whether this approach should apply
here, including deference to the OTC's view that no more ``reasonable''
and ``practicable'' alternatives to the recommended measure are
available that would be sufficient for purposes of attainment.
In addition to the fuels precedent, EPA believes that the statutory
structure, together with the legislative history, may further support
giving substantial weight, or deference, to the OTC's recommendation
that implementation of the LEV program throughout the OTR is necessary
for attainment in the region. While EPA is to review the OTC's
recommendations under section 184(c)(2)(B) ``to determine whether the
control measures are necessary,'' under section 184(c)(4) EPA is to
specify ``why any disapproved additional control measures are not
necessary'' if EPA disapproves or partially disapproves the
recommendations. Section 184 nowhere mentions a parallel obligation to
explain why the additional control measures are necessary in the case
of approval or partial approval. EPA believes it could reasonably
interpret these provisions to mean that EPA is to start with a
presumption of approving the OTC's recommendations, unless it finds
that the recommended measures are not necessary.
EPA believes the legislative history could be read to support this
view. As described above, the Baucus-Chafee Statement of Managers, in
discussing EPA's role in reviewing an OTC recommendation, pointed out
EPA's ``heavy burden'' to ``demonstrat[e] that the additional control
measure(s) is not necessary.'' See 1 1990 Legislative History at 1004,
supra (emphasis supplied). As noted above, the Statement of Managers'
discussion used identical language to Senator Lieberman's description
in the Senate debate. Further, Senator Lieberman characterized the
Senate bill as ``clearly stating'' that EPA must demonstrate that the
additional control measure is not necessary. See 1990 Legislative
History at 1053, supra.
To be sure, EPA generally has an obligation to explain the basis
for its decision, and the House Report did indicate that EPA's response
``should be buttressed by supporting material.'' H.R. Rep't. No. 101-
490 at 256, reprinted in 2 1990 Legislative History at 3280, supra. But
EPA's explicit statutory obligation to explain why a measure is ``not
necessary'' together with the Senate's unequivocal interpretations in
the legislative history may reasonably indicate that EPA should give
substantial weight to the OTC's determination of necessity.
EPA is mindful that its factual analysis of the LEV program's
necessity will be subject to substantial uncertainty within the nine
month timetable provided for a decision. EPA expects this to be so both
for the modeling information regarding its analysis of the magnitude or
reductions needed as well as the reasonableness of the LEV program and
alterative measures. Here, EPA is under a statutory obligation to reach
a decision by November 10, 1994. Meeting this deadline may be
particularly important in this case, because the OTC States are
obligated under section 182(b)(1)(A) and section 182(c)(2) of the Act
to submit for their ozone nonattainment areas, by November 15, 1994,
demonstrations that their SIPs, as revised, will provide for attainment
of the ozone NAAQS by the dates applicable to each area. These States
presumably intend to rely on EPA's decision regarding the recommended
LEV program in their attainment demonstrations to show that their SIPs
will provide for timely attainment. Without knowing whether EPA will
approve, disapprove, or partially approve and partially disapprove the
OTC's LEV recommendation, the States would not know what magnitude of
emissions reductions their other SIP measures must achieve.\11\ Under
these circumstances, and in light of the legislative history and
statutory structure, it appears appropriate for EPA to at least resolve
uncertainties in favor of approval, in deference to the OTC's
determination of necessity. In other words, it appears appropriate for
EPA to start with the position that it should approve the OTC's
recommendation unless it has a sufficient factual basis to find that
the LEV program is not necessary. EPA requests comment on whether and
the extent to which it should accord deference to the OTC's
determination that the LEV program is necessary.
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\11\EPA notes that it generally has found SIPs inadequate and
called for plan revisions after complete SIPs have been submitted or
where a new situation arises creating the inadequacy. Here, an
approval of the OTC recommendation within the nine month timetable
would result in a finding under section 110(k)(5) of SIP inadequacy
under section 110(a)(2)(D) prior to submission of attainment
demonstrations due November 15, 1994. EPA believes this is
appropriate. The Act does not specify a deadline for compliance with
section 110(a)(2)(D); section 184 does not limit EPA to finding SIPs
inadequate only after attainment demonstrations are submitted; and
section 110(k)(5) specifically authorizes EPA to require SIP
revisions ``to mitigate adequately the interstate pollutant
transport described in section [184] and or section [176A].''
Indeed, States may need to rely on EPA's decision here in their
attainment demonstrations.
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EPA also recognizes counter-arguments that it should apply a more
stringent variant of the section 211(c)(4)(C) approach, without
deference to the OTC's view that no more ``reasonable'' and
``practicable'' alternatives to the recommended measure exist. This
departure from the section 211(c) approach may be justified by a
difference in context between sections 211(c) and 184. In particular,
the purpose of preemption under section 211(c) is to preserve national
uniformity in EPA fuel regulations, which States can override where
``necessary'' for purposes of achieving attainment. In contrast, under
section 184 the OTC is authorized to specify, subject to EPA approval,
measures necessary for compliance with the prohibition in section
110(a)(2)(D) of the Act against significant contribution interfering
with attainment in any other State. States are already obligated to
comply with section 110(a)(2)(D) and are free to choose the control
measures to do so; section 184 adds an element of compulsion whereby
the OTC may override an objecting State to impose specific
``necessary'' measures.
Arguably, EPA deference might be less appropriate for the OTC,
which can specify measures overriding the objection of a minority of
its member States, and depriving them of their choice of measures to
comply with section 110(a)(2)(D). On the other hand, it can be argued
that Congress, in enacting section 184, intended the OTC to be given a
substantial voice for proposing solutions to the ozone transport
problem, even where its solutions override the views of some member
States. Moreover, strict insistence on showing that no reasonable and
practicable alternatives are available would seem to add little to the
States' independent obligation to comply with section 110(a)(2)(D),
since States are likely to choose reasonable and practicable means to
comply. Still, Congress's own emphasis in the 1990 Amendments on
specifying control measures it thought necessary for attainment, in
addition to specifying deadlines, may indicate that allowing the OTC to
specify additional control measures, even under a strict interpretation
of ``necessary,'' is significant.
EPA requests comment on whether, if that test should apply, EPA the
interpretation of ``necessary'' under section 211(c)(4)(C) should apply
here. In addition, EPA requests comment on whether it should defer to
the OTC's evaluation of whether ``reasonable'' and ``practicable''
alternatives to the LEV program are available.
Finally, EPA is considering how comparative cost-effectiveness and
other social and environmental factors should affect its analysis of
reasonable and practicable alternatives. One possible approach is that
the LEV program would be necessary if it is still needed after all more
cost-effective measures are adopted. As noted above, EPA considered
cost-effectiveness as a criterion, but not the only criterion, in
evaluating the reasonableness of controls under section 211(c)(4)(C).
EPA recognizes that other policy reasons may support adoption of
control measures that may not appear to be the most cost- effective for
purposes of attaining the ozone NAAQS. For example, the socio-economic
distribution of the burden of particular measures, employment impacts,
and cross-media environmental impacts may affect the choice of control
measures. EPA requests comment on how these factors should affect an
analysis of alternatives.
2. Magnitude of Reductions
As noted above, EPA believes it should address the amount of
reductions needed for attainment in the OTR as the first step in
evaluating whether the LEV program is necessary. In particular, EPA
believes it is important to evaluate what reductions are needed, where
they are needed, and when they are needed. In addition, EPA is
considering whether it may also consider whether the LEV program is
necessary for maintaining the ozone NAAQS even after it is achieved.
The OTC addressed the magnitude of reductions necessary for OTR
attainment in its response to comments and technical support documents.
There, the OTC expressed the belief that the control strategies
specifically mandated in the Clean Air Act would not be sufficient for
the nonattainment areas in the OTR to achieve and maintain the ozone
NAAQS. The OTC believes that more reductions will be needed than the
LEV program would generate. Also, the OTC notes that, despite an
overall recent decline in the frequency and severity of ozone
exceedances, it believes that short term trends have proven inaccurate
indicators of long term status. Further, the OTC notes that studies
indicate that the trend toward fewer exceedances will reverse without
significant additional NOX and VOC control.
Regarding the scientific basis, the OTC also contends that
emissions inventories, photochemical modeling and ambient monitoring
data constitute the best tools available to evaluate the need for
emissions reductions, despite continuing refinement of this scientific
information. The OTC recognized that most air quality analysis in the
past has focused on domains within a particular State rather than on a
broader region. It asserts that it assessed the need for and
effectiveness of reductions in the OTR using photochemical models,
monitoring data, trajectory analyses, and mobile emission models.
a. Focus on Contribution. At the outset, EPA believes the concern
in section 184 with ozone transport affects its analysis of where
emissions reductions are necessary for areas in the OTR to achieve
attainment. That is, EPA currently believes that the ``need'' for
additional measures in the OTR under section 184 should not focus on a
State's need to adopt the LEV program in its own jurisdiction for the
benefit of in-State nonattainment areas. States, of course, retain full
authority to adopt this program under section 177 without EPA approval.
Rather, EPA believes that the focus should be on the need for upwind
States that contribute to nonattainment downwind to adopt the LEV
program not for their own benefit but for the benefit of the downwind
areas that could not otherwise attain on time. The statutory structure,
including the reliance in section 184(c)(5) on section 110(a)(2)(D), as
well as the legislative history, support this conclusion.
Of course, EPA recognizes that upwind States also have an
independent obligation to adopt measures for purposes of their own
timely attainment. The measures upwind areas adopt for their own
benefit may well be sufficient to prevent contribution to nonattainment
downwind. While upwind areas may still contribute pollutants downwind
after they have reached attainment, their independent obligation to
attain should go a long way to reducing emissions that contribute to
downwind nonattainment.\12\ It nevertheless seems that reductions in
upwind areas may be necessary to prevent significant contribution to
nonattainment downwind, even if the upwind areas would have to achieve
those reductions for their own benefit, anyway. In other words, it does
not seem that upwind areas' own need to reduce emissions for their own
attainment should render those reductions unnecessary. To be sure,
upwind areas' independent implementation of the LEV program in their
SIPs may make it unnecessary for administrative purposes to mandate
those controls. But EPA's obligation to mandate the recommended LEV
measure does not appear to turn on whether the States already have or
would have to implement that program for their own benefit. Rather,
EPA's obligation seems to turn on whether the program is necessary for
purposes of downwind attainment, regardless of whether it is necessary
or has been adopted for upwind attainment purposes. EPA requests
comment on this view.
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\12\One complication, discussed further below, is the timing of
reductions upwind, where the upwind areas may have a later
attainment deadline.
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Finally, EPA notes that it may be possible for downwind areas that
are the recipients of transported pollution to counteract some portion
of the incoming pollutants by adopting more controls downwind than
would otherwise be necessary. Such areas might diminish the reductions
necessary upwind by adopting such more stringent controls downwind. For
downwind areas that are less polluted and have less stringent controls
in place, the downwind areas might even be able to ``over-control'' at
less cost than it would take for upwind areas to prevent some increment
of contribution. On the other hand, it may not be fair to insist that
downwind areas bear the cost of counteracting pollution that is
generated upwind. In any case, however, no area receives air at its
boundaries that is free of ozone or precursors. Thus, in evaluating
what upwind contribution ``needs'' to be reduced for attainment
downwind, it may be important to determine what ``boundary conditions''
downwind areas should be entitled to receive. EPA requests comment on
these issues, and particularly on the extent to which it should view
upwind reductions as necessary for attainment downwind, if the downwind
area could, through extra controls, make those upwind reductions
unnecessary.
b. Timing of Reductions. As noted above, the OTC recommendation
calls for adoption of the LEV program in the OTR in 1996, providing two
years lead-time to auto manufacturers with the LEV standards applicable
to model year 1999 vehicles. The benefits of this program are also
dependent upon turnover in the vehicle fleet. As referenced above, EPA
is thus mindful that this schedule for the LEV program will not
generate reductions in time to assist areas in meeting a moderate area
1996 and will generate only minimal reductions by the serious area 1999
attainment deadline. More benefits would be available for severe areas
with a 2005 or 2007 attainment deadline. The importance of when upwind
reductions are necessary for downwind attainment, and when the LEV
program will generate such reductions raises a number of important
issues.
First, in order for the LEV standards to apply in model year 1999,
EPA may have to reach a decision to approve the OTC recommendation by
the end of 1994. This may be an important factor supporting EPA's
action within the nine month statutory timetable based on the best
available current information. Under section 177 of the Act, States may
adopt motor vehicle emissions standards identical to California's
standards if ``California and the State adopt such standards at least
two years before commencement of such model year (as determined by
regulations of the Administrator).'' Under EPA's current regulations,
model year 1999 may begin as early as January 2, 1998 (See 40 CFR
86.082-2). To provide two years lead-time, States might then have to
adopt California's standards by January 2, 1996 in order for the
standards to apply for model year 1999.\13\ If EPA were to approve the
OTC's LEV recommendation, section 184(c)(5) provides that EPA's finding
of SIP inadequacy is to require that States revise their SIPs to
include the LEV program within one year of the finding.\14\ Therefore,
if EPA is to require that States adopt the LEV program and submit SIP
revisions by January 2, 1996, then EPA must make a finding of SIP
inadequacy no later than January 2, 1995. Delays in an EPA decision
could delay application of an approved program, and would further delay
the benefits and the degree to which such benefits could contribute to
timely attainment.
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\13\An issue in litigation in New York and Massachusetts has
been whether the model year and two-year lead-time requirement under
section 177 may vary for different manufacturers that begin their
model years at different times, or whether the model year begins for
purposes of section 177 for all manufacturers as soon as the model
year may begin for any manufacturer.
\14\It is not entirely clear whether EPA has discretion to give
States less than one full year to submit their SIP revisions. Under
section 110(k)(5), EPA ``may establish reasonable deadlines (not to
exceed 18 months after such notice) for submission of such plan
revisions.'' The more specific provision in section 184 that lacks
the explicit grant of discretion from section 110(k)(5) itself
arguably indicates that EPA does not have such discretion. EPA
requests comment on this view.
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Finally, EPA believes the time when the LEV program would generate
reductions also relates to the locations where reductions are needed
for purposes of relieving contribution of transported pollutants that
interfere with timely attainment. It appears that the LEV program will
generate reductions in time only to help areas to achieve attainment by
the severe classification deadline of 2005 or 2007. States in the most
northeast portion of the OTR, including Rhode Island, Massachusetts,
Maine, Vermont, and New Hampshire, contain no such areas. EPA believes
that its recent considerations in response to ozone transport problems
in a letter to Senator Carl Levin\15\ and in subsequent March 21, 1994
letters to the Massachusetts Department of Environmental Protection and
the Conservation Law Foundation (CLF)\16\ may be relevant to the timing
of LEV reductions. In particular, certain moderate nonattainment areas
have raised a concern that they may not be able to themselves adopt
controls to ensure attainment of the ozone standard by the 1996
deadline for areas classified as moderate because air pollution
transported from upwind may be the dominant factor accounting for their
nonattainment problem. The solution contemplated in the section 184
transport provision is for the responsible upwind areas to relieve
their significant contribution so that the downwind areas may attain on
time. Still, in certain cases this view could be at odds with the
overall title I scheme that establishes later deadlines for attainment
in more polluted areas and also establishes a graduated program of
additional and more stringent requirements to be accomplished in those
areas over the longer time-frame. If accelerating controls in the
upwind areas is impracticable and certain facts related to ozone
transport could be shown, EPA suggested it might consider reasonably
interpreting the Act to grant the downwind areas additional time to
reach attainment beyond the dates specified in section 181(a)(1). EPA
concluded its letters to Senator Levin and the CLF by indicating that
it is continuing to develop policy to address this problem. EPA
requests comment on the relevance of this policy here. In particular,
reductions generated over time through fleet turnover to vehicles
meeting LEV standards could be more important in assisting areas in
reaching attainment by later deadlines. If any moderate or serious
areas in the OTR have until later than 1999 to attain, this could
affect the utility of the LEV program for such areas to reach
attainment.
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\15\See letter from Mary D. Nichols, Assistant Administrator for
Air and Radiation, to the Hon. Carl Levin (March 7, 1994).
\16\See letters from John S. Seitz, Director, Office of Air
Quality Planning and Standards, to Renee J. Robins, Staff Scientist,
Conservation Law Foundation (March 21, 1994) and to Barbara Kweta,
Director, Division of Air Quality Control, Massachusetts Department
of Environmental Protection (March 21, 1994).
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For episodes in which the long-range transport is from the
southwest to the northeast in the OTR, States northeast of New York and
Connecticut would not contribute to nonattainment in any severe
nonattainment area. Under these circumstances, the LEV program in such
States would not assist any downwind areas in reaching attainment by
the deadlines specified in the Act. However, past episodes have shown
that high concentrations in the severe areas do not always occur only
when the wind blows from the southwest. When the wind blows in the
opposite direction from these States into severe areas to the south,
the LEV program in these States could assist the severe areas in
reaching attainment. EPA requests comment on whether it would be
appropriate to geographically limit any approval of the recommended LEV
program.
EPA is also considering whether it has discretion to take into
account whether the LEV program is necessary for areas to maintain the
ozone NAAQS after achieving attainment. Particularly in the case of
motor vehicle standards, whose benefits require time for the fleet to
turn over, taking the OTR's maintenance needs into account could
significantly affect the analysis. The OTC, in its response to
comments, noted that LEV is a significant factor in achieving
maintenance requirements.
Section 184(c)(1) specifies on its face that the OTC may develop
recommendations for additional control measures if the OTC determines
such measures are ``necessary to bring any area in such region into
attainment by the dates provided by this subpart.'' Identical language
appears in section 184(c)(2) to describe EPA's obligation in reviewing
the need for the control measures in the recommendations and a third
time in section 184(c)(4) to describe EPA's obligation to explain why
any control measures in the recommendation are not necessary. This
language, omitting any reference to maintenance, unless unintentional,
might suggest that Congress designed section 184(c) as a tool to reach
attainment alone, and not to ensure maintenance thereafter.
Congress explicitly addressed maintenance in connection with ozone
transport under section 110(a)(2)(D). As discussed above, if EPA
approves the OTC recommendation, under section 184(c)(5) it is to find
SIPs inadequate under section 110(a)(2)(D). That latter provision
specifies that SIPs are to contain adequate provisions to prohibit
emissions that will ``contribute significantly to nonattainment in, or
interfere with maintenance by, any other State'' with respect to any
primary or secondary NAAQS. To be sure, States continue to have an
obligation in any case to comply with the requirement in section
110(a)(2)(D) to prevent emissions that will interfere with maintenance
by any other State. But the omission of any reference to maintenance in
section 184 may indicate that Congress did not intend it to be a proper
basis for OTC recommendations.\17\
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\17\One might argue that the need to bring any area in the OTR
into timely attainment inherently carries with it the need to bring
such areas ``back'' into attainment if they attain and subsequently
relapse into nonattainment again. The difficulty with such a view,
however, is that it seems at odds with the distinction--clearly
delineated elsewhere in the Act--between attainment and maintenance.
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Section 176A(a) governs the establishment of transport regions, and
additions or removals of areas from such regions. Section 176A(b)
governs the establishment of transport commissions for such regions,
the representation on and voting of a commission, and a commission's
obligations to assess transport, strategies for addressing it, and to:
Recommend to the Administrator such measures as the Commission
determines to be necessary to ensure that the plans for the relevant
States meet the requirements of section [110(a)(2)(D)].
A commission under section 176A therefore appears obligated to
consider compliance with section 110(a)(2)(D) in its entirety,
including compliance with the requirement to prohibit interference with
maintenance by other States. Section 176A(c) governs requests from the
commission to EPA, providing simply that the commission ``established
under subsection (b) may request the Administrator to issue a finding
under section [110(k)(5)] that the [SIP] for one or more of the States
in the transport region is substantially inadequate to meet the
requirements of section [110(a)(2)(D)].'' That subsection also governs
EPA's obligation to approve, disapprove, or partially approve and
disapprove a commission's request within 18 months and to issue a
finding of SIP inadequacy under section 110(k)(5) at the time of any
approval. Under section 176A(c), again, the commission's authority to
request a finding of inadequacy appears to extend to all requirements
of section 110(a)(2)(D), including the obligations relating to
maintenance.
Section 184 does incorporate portions of section 176A by reference.
On this basis, one might argue that Congress intended the OTC's power
under section 184 to be broader than a commission's power under section
176A, and would thus reach maintenance issues in some manner. Section
184(a) provides that ``a single transport region for ozone (within the
meaning of section [176A(a)])'' for the Northeast States is established
by operation of law. That subsection further provides that the
Administrator is to convene the OTC ``required (under section
[176A(b)])'' that results from the establishment by operation of law.
These provisions arguably indicate that the OTC under section 184 is
also a creature of section 176A, as a transport region ``within the
meaning of'' section 176A(b) and ``convened'' under section 176A(b).
Indeed, it is section 176A(b), referenced in section 184(a), that
authorizes a commission to make recommendations for measures needed to
comply with section 110(a)(2)(D).
Of course, section 184(c) sets out a process for the OTC to
recommend additional control measures that the States must adopt
``within one year'' after EPA's approval and finding of SIP inadequacy.
Under section 176A, in contrast, EPA's approval results in a finding of
SIP inadequacy but does not result in specific new mandatory control
measures. Even if the OTC here has authority through section 176A to
recommend that EPA find SIPs inadequate in relation to maintenance,
section 176A would not appear to provide for EPA to require specific
new control measures for maintenance purposes. Perhaps Congress
intended to limit this extra power to create new mandatory control
measures to attaining the NAAQS, but not to extend to maintenance
thereafter. It might be reasonable to believe that EPA's difficulty in
ensuring attainment in the Northeast justified this extra invasion into
State discretion, but that Congress trusted EPA would be better able to
enforce States' obligations to prevent interference with maintenance
elsewhere, once contribution preventing attainment is addressed.
In any case, in considering the LEV measure, EPA believes that it
may consider maintenance in the course of its analysis here for
independent purposes of section 110(a)(2)(D). In other words, EPA's
process in responding to the OTC recommendation may provide an
appropriate forum in which to also consider what upwind control
measures may be necessary for purposes of preventing interference with
maintenance downwind. Instead of considering what reductions in current
emissions may be necessary to prevent contribution to nonattainment,
for maintenance the relevant concern would seem to be the need for
additional controls after attainment to counteract growth and prevent
emissions that would cause downwind areas to relapse into
nonattainment.
EPA believes it might reasonably determine in this proceeding that
States' SIPs would need to control an additional increment of emissions
to prevent interfering with maintenance downwind even after it is
achieved. EPA might then notify States that their SIPs are inadequate
to prevent interference with maintenance of the NAAQS. Apart from
mandating particular measures for maintenance under section 184, EPA
believes that it could identify the increment of controls that appear
to be ``necessary'' to prevent interference with maintenance downwind,
and the measures that appear ``necessary'' to achieve adequate
emissions control for this purpose. Under such circumstances, EPA
believes it has independent authority under section 110(k)(5) to insist
that States adopt such controls, or other comparably effective
controls, to address the maintenance concern.
Finally, in connection with maintenance, EPA believes that its
inability to establish more stringent ``Tier 2'' motor vehicle
standards under section 202(i) until model year 2004 is relevant.\18\
As noted above, under section 202(a), Congress explicitly provided that
EPA may not modify the ``Tier 1'' auto emissions standards specified in
subsections 202(a)(3)(B)(ii), (g), (h) and (i) prior to model year
2004. The OTC, in its response to comments, recognized this limitation.
The OTC recommendation calls for the LEV standards to apply beginning
in model year 1999, a full 5 model years earlier than Tier 2 standards
could at the earliest apply under section 202(i). Therefore, EPA should
consider the need for LEV standards during those years when Tier 2
could not be available, whether for purposes of reaching attainment or
for maintenance thereafter. The OTC, in its response to comments,
contends that the earlier implementation of LEV is important for severe
areas to achieve attainment by 2005 or 2007.
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\18\Subsection 202(i) sets out the scheme for EPA to consider
and possibly establish more stringent ``Tier 2'' standards beginning
with model year 2004. Under paragraphs (1) and (2) of subsection
202(i), EPA is to study whether more stringent ``Tier 2'' standards
should be adopted beginning with model year 2004, taking into
account such factors as the need for further reductions, technical
feasibility, cost, and alternatives. EPA is to submit this study to
Congress no later than June 1, 1997. Under paragraph (3), based on
this study EPA is to determine, through rulemaking, whether to
establish more stringent ``Tier 2'' standards to be applicable no
earlier than model year 2004 but not later than model year 2006.
Finally, subparagraph (3)(E) provides a default to ``Tier 2''
emissions standards specified in Table 3 in paragraph (1), unless
EPA affirmatively decides not to promulgate, to postpone or to
promulgate an alternative to such standards.
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EPA is considering whether it may account for the possibility of
Tier 2 standards beginning with model year 2004 in analyzing the need
for the LEV program. EPA's authority to adopt more stringent Tier 2
standards for model year 2004, if necessary, may make less pressing a
determination now that LEV is necessary for model years 2004 and after.
However, the impact of Tier 2 standards for reaching attainment
deadlines in 2005 or 2007 is likely to be small and this consideration
therefore may be more important for purposes of the OTR's maintenance
needs. Moreover, EPA is aware that it cannot prejudge the outcome of
the Tier 2 study that is to be the basis for its Tier 2 rulemaking. EPA
questions whether it is at all appropriate for its decision regarding
the necessity of the OTC-LEV program to be influenced by the mere
possibility of future federal regulations, where such regulations are
not assured and where states have little to no control regarding
whether such regulations will ever be promulgated. EPA also notes that
the issues relevant to the Tier 2 study are not identical to the issues
relevant to the establishment of the OTC-LEV program. For example, Tier
2 standards would apply nation-wide, and EPA's analysis would balance
the relevant factors on a national scale, whereas the analysis of need
for the OTC's LEV program should be more focused on the OTR.
EPA requests comment on all aspects of this analysis. In
particular, EPA requests comment on whether it can or should consider
the OTR's need for controls for purposes of maintenance in addition to
attainment, and on the relevance of Tier 2 standards to its analysis.
c. Technical considerations. Pursuant to section 184(d), EPA has
published criteria for assessing transport of ozone and ozone
precursors.\19\ These criteria recommend use of trajectory models and
timing considerations to provide a qualitative judgment regarding the
relative importance of transport in contributing to an area's
nonattainment problem. The OTC, to support its recommendation, relied
upon such approaches to establish the importance of transport as a
contributing factor to nonattainment in the OTR.
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\19\U.S. EPA, 1991, Criteria for Assessing the Role of
Transported Ozone/Precursors in Ozone Nonattainment Areas, EPA-450/
4-91-015.
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The criteria also identify more quantitative procedures for
considering effects of transport in urban scale modeling applications
applied in SIP attainment demonstrations. The criteria identify use of
regional grid photochemical models as the preferred approach for
providing quantitative estimates of transport. These estimates are used
as inputs to urban scale models, such as the Urban Airshed Model, in
order to estimate reductions in local emissions and/or transport
necessary to demonstrate attainment. Unfortunately, however, urban
modeling analyses using SIP databases are not yet available and are not
due to be submitted to EPA as part of States' attainment demonstrations
until November 15, 1994.
However, several regional modeling studies have been performed to
characterize regional transport of ozone in the OTR. It is not possible
to come up with precise control targets for ozone precursor emissions
from these studies, due to their use of an earlier emission inventory,
the broad spatial resolution available in the model used and the nature
of the control strategies investigated. Nevertheless, the studies are
useful for deriving approximate estimates. Further, their credence is
enhanced by the fact that they all lead to a consistent conclusion that
a substantial reduction in NOX emissions and VOC emissions are
likely to be necessary to reduce ozone to the 0.12 ppm NAAQS or below
throughout the OTR during periods of adverse meteorological conditions.
For example, Possiel, et al. (1991)\20\ conclude that ``stringent
maximum technology VOC and NOX controls'' with emissions
reductions on the order of 70% for VOC and 50% for NOX ``may be
necessary in all areas of the Northeast Corridor'', and additional
reductions of VOC may be needed in some portions of the corridor.
Results presented in another EPA study by Chu, et al. (1994)\21\
suggest that regional reductions in VOC and NOX of 50% or more may
be needed to reduce highest ozone levels to 0.12 ppm or less in the
northeastern United States.
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\20\Possiel, N.C., L.B. Milch and B.R. Goodrich (eds.), 1991,
Regional Modeling for Northeast Transport, EP-450/4-91-002a, U.S.
EPA, Research Triangle Park, NC.
\21\Chu. S.H. and W.M. Cox, 1994, ``Effects of Emissions
Reductions on Ozone Predicitions by the Regional Oxidant Model (ROM)
During the July 1988 Episode'', accepted for publication in J. of
Applied Meteorology.
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3. The OTC's Recommended LEV Program
a. OTC-LEV Provisions. The LEV program recommended by the OTC (OTC-
LEV) would apply to all 1999 and subsequent model year passenger cars
and light-duty trucks (LDTs) (0-5750 pounds loaded vehicle weight
(LVW)) in the OTR. The OTC-LEV program would establish five categories
of vehicles: California ``Tier I'' vehicles; transitional low emission
vehicles (TLEVs); low emission vehicles (LEVs); ultra-low emission
vehicles (ULEVs); and zero emission vehicles (ZEVs). Each vehicle
category has specific exhaust emission certification standards for
hydrocarbons (expressed in terms of ``non-methane organic gases,'' or
``NMOG''), carbon monoxide (CO), oxides of nitrogen (NOX),
particulate matter (PM) and formaldehyde (HCHO).
The OTC-LEV program would also establish a NMOG ``fleet average''
requirement that, for passenger cars and small light-duty trucks
(LDTs), would decline from a value of 0.113 gpm in 1999 to 0.062 gpm in
2003 and later years. Manufacturers would be obliged to produce larger
percentages of the more stringent categories of vehicles (LEVs, ULEVs
and ZEVs) in order to meet the increasingly stringent NMOG standard.
The program also includes a slightly higher NMOG fleet average for
larger LDTs.
Manufacturers would be free to decide the mix of vehicle categories
they would produce, provided the NMOG fleet average requirement is met,
except that if EPA determines that the California LEV program's ZEV
sales requirement must be included in the OTC-LEV program, then
manufacturers would be required to include in their vehicle fleet a
certain percentage of ZEVs per model year. (The OTC recommendation,
barring a determination that section 177 requires the adoption of a ZEV
mandate, leaves the decision to adopt a ZEV mandate to the individual
states. This issue will be discussed in the ``Consistency with the
Act'' section, below.) Under the ZEV sales requirement, when the OTC-
LEV program begins in 1999, two percent of a manufacturer's sales of
light-duty vehicles must be ZEVs. The sales requirement increases to a
maximum of 10 percent of sales for model year 2003 and beyond.
The OTC explicitly excluded California reformulated gasoline
requirements from its recommendation. Also, the OTC-LEV program is
limited to light-duty vehicles and trucks. The OTC-LEV program would be
enforced by the OTC states.
b. EPA Modeling for the OTC-LEV Program. EPA will use the MOBILE5a
emission factor model to quantify the HC, CO, and NOX emission
reductions associated with the OTC-LEV program. MOBILE5a incorporates
the latest technical information available on both the expected
certification and in-use performance of vehicles meeting LEV standards.
MOBILE5a uses emission factor equations for each OTC-LEV exhaust
standard, and the proportion of vehicles meeting each of these
standards necessary to meet the fleet average NMOG standard for each
model year, to calculate the average emissions of each model year of
the LEV program in any calendar year. EPA anticipates emissions
reductions for NOX and CO, as well as NMOG, due to the lower
NOX and CO standards required for vehicles in the OTC-LEV program.
The emissions factor equations are derived from an engineering analysis
of the performance of vehicles meeting existing exhaust standards and
of the effect of new emission controls needed to meet the OTC-LEV
standards. The emission factor equations for LEVs also take into
account differences between certification fuel in California and the
federal fuel which will be used in the OTR. Also, to evaluate the need
for the LEV program to maintain the NAAQS, EPA would have to model
emissions well past the attainment deadlines.
Emission factors from MOBILE5a are multiplied by vehicle miles
traveled (VMT) in order to create emissions inventories.
For this analysis, EPA will be comparing projected mobile source
inventories in future years with and without the OTC-LEV program. EPA
will follow the same guidance EPA has given the States when projecting
future VMT.
MOBILE5a has the ability to model a LEV program which includes a
ZEV sales mandate or a LEV program without a ZEV sales mandate, both
meeting the same NMOG fleet average requirement. To properly quantify
the emissions impact of the OTC recommendation, EPA will require
information on the extent to which ZEVs will be required, as well as
information on ZEV usage patterns and on their effect on power plant
emissions.
There are a number of other programs designed to reduce emissions
from highway vehicles, including federal reformulated fuel, control of
refueling emissions, and transportation control measures (TCMs), that
are either mandated by the Clean Air Act in all or parts of the OTR or
are programs that the States may opt into as part of a SIP. EPA intends
to quantify the emission reductions of the OTC-LEV program, taking into
account all mandatory measures and other regional measures that the OTC
has identified. The timing of reductions could be accelerated if States
were to adopt schemes to accelerate fleet turnover. But these schemes
would likely have to be drastic to significantly increase the
reductions that the LEV program would generate by 2005.
At this time, EPA believes that evaporative emissions from
California and federal vehicles will be the same, under a given fuel
and inspection regime. This assumption is reflected in MOBILE5a.
One current development that may affect EPA's modeling of the OTC-
LEV program is California's decision as to whether to require onboard
refueling vapor recovery systems (ORVR) as part of its motor vehicle
emission program. See CARB Mail-out #94-08, Workshop Notice (Feb. 9,
1994). Should California receive a waiver from EPA which would permit
them not to require ORVR, it would seem inappropriate to include any
emissions benefits from ORVR in modeling the benefits of the California
LEV program. Given that the OTC-LEVs would have to meet identical
standards as the California vehicles and that the OTC could not require
a ``third vehicle,'' the OTC-LEVs could also have no requirements for
onboard systems. The lack of an onboard refueling requirement for the
OTC-LEV program could affect the emission benefits of the LEV program.
The issue is related to section 184(b)(2)'s requirement that Stage II
vehicle refueling provisions, or provisions capable of achieving
comparable emissions reductions, shall be implemented in the OTR. EPA
requests comment on the effect that a California's decision not to
require ORVR would have on EPA's action on the OTC recommendation
implications which this would have for Stage II exemption levels and
enforcement provisions in the OTR.
EPA requests comment and technical data regarding the effect of the
OTC-LEV program on emissions in the OTR.
EPA will also review the cost effectiveness of the OTC-LEV program.
Cost estimates of California's LEV program have varied greatly. Much of
the variation is attributable to different assumptions regarding the
necessary technology, economies of scale, and how development costs
should be calculated. During EPA's consideration of California's waiver
for its LEV program, California estimated additional costs to be $170
per car, while the automobile industry estimated this figure to be over
$1000 per car. While both California and the industry have subsequently
refined and reduced their estimates based on new hardware assumptions,
the large difference remains an issue. Cost-effectiveness estimates for
the OTC-LEV program will be somewhat distinct from the California LEV
cost-effectiveness estimates because some or much of the costs that
were included in the California LEV estimates, particularly research
and development costs, may be reduced or eliminated in the OTC-LEV
context because the costs have already been expended in developing the
California LEV program. EPA requests comment on cost-effectiveness of
the OTC-LEV program, given the continuing existence of the California
LEV program.
4. Alternatives to the OTC's Recommended LEV Program
The recitation clauses to the OTC recommendation specifically
state:
Whereas the OTC expects the U.S. Environmental Protection
Agency, through the consultation process provided in Section 184(c)
of the Clean Air Act, to evaluate alternatives (including the
program presented by the automobile manufacturers with enhancements)
which are comparable in terms of enforceability, timeliness, and
quantity of emission reductions to those achieved by the OTC LEV
program, are consistent with the Clean Air Act, and advances
technology.
This indicates that the OTC intends that EPA consider alternatives,
and in particular that EPA should consider the auto manufacturers'
alternative.
a. Automobile Manufacturers' Alternative to the OTC's Recommended
LEV Program. The American Automobile Manufacturers Association's (AAMA)
alternative program to the California LEV program is known as the
Federal LEV or FLEV program. As proposed by the auto manufacturers,
manufacturers would provide FLEVs to all States in the OTC. The FLEV
automobiles would meet the following emission standards: 0.125 gpm
NMOG; 2.5 gpm CO; 0.3 gpm NOX at 100,000 miles; and 0.2 gpm
NOX at 50,000 miles. Light-duty trucks would also have FLEV
standards. The FLEV standards would be phased-in, with the standards
applicable to 30% of all new cars in model year 2001, 60% in model year
2002, and 100% in model year 2003. These standards represent a
substantial improvement from the federal Tier I standards (0.25 gpm
NMHC, 3.4 gpm CO, 0.4 NOX) with which manufacturers must now
comply. The standards are, however, less stringent than the federal
Tier II ``default'' standards specified in Table 1 in section 202(i)(1)
(0.125 gpm NMHC, 1.7 gpm CO, 0.2 gpm NOX), which cannot apply
before model year 2004. They are also less stringent than California's
LEV category standards for NMOG (0.075 gpm at 50,000, 0.090 gpm at
100,000) but more stringent than California's LEV category standards
for CO (3.4 gpm at 50,000, 4.2 gpm at 100,000).
The AAMA proposed that FLEV vehicles would be available nationwide.
A sales mandate for ZEVs was not included in the FLEV proposal. Under
the FLEV proposal, manufacturers would certify their vehicles to the
FLEV standards, but in-use standards would remain at the current
federal Tier 1 levels through at least model year 2003.
As proposed, the FLEV program would be implemented through a
consent decree settling litigation regarding implementation of the LEV
program in New York and Massachusetts. The consent decree mechanism was
proposed based on the contention that section 202(b)(1)(C) and 202(i)
prohibit EPA from imposing the FLEV standards prior to model year 2004
and that section 209 prohibits States from adopting the FLEV standards.
Under the proposal, in addition to the manufacturers' obligation to
provide cars meeting FLEV standards, the consent decree would reflect
the States' agreement not to adopt the LEV program; Massachusetts's and
New York's agreement to withdraw their programs; and an agreement that
the manufacturers' obligations to provide FLEV cars would terminate if
any State adopted a California LEV program. While States would have the
right to enforce the FLEV program through the court supervising the
consent decree, EPA might provide the information regarding whether
particular cars in fact meet the FLEV standards.
The auto manufacturers proffered their FLEV proposal to the OTC,
which determined that it would not achieve the same level of emission
control as the California LEV program. In reaching this conclusion, the
OTC emphasized a number of points in its response to comments document.
First, under the proposal the FLEV standards would apply two model
years later than the OTC-LEV standards, and would not be fully
implemented until two years thereafter. Second, the level of NMOG
emissions under the FLEV proposal would be considerably higher than
under the OTC-LEV program. Third, according to the OTC, projections
using EPA's MOBILE5 emissions model indicate that in the year 2020,
emissions of hydrocarbons under the OTC-LEV program will be about 30
percent lower than they would be under the FLEV program, due largely to
the portion of the fleet under the OTC-LEV program consisting of cars
meeting ULEV and ZEV standards. In sum, the OTC calculates that its LEV
program would provide 21 tons per day of VOC reductions and 38 tons per
day of NOX reductions in the OTR beyond the FLEV proposal.\22\
Fourth, the OTC notes that under the FLEV proposal, the FLEV standards
would apply for new car certification, but, until model year 2004, in-
use standards would be the same as the federal Tier I standards. This,
according to the OTC, may reduce the emissions reductions that would
otherwise be predicted from the FLEV program. Fifth, the OTC notes
that, since the FLEV proposal is premised on the withdrawal of the now-
adopted LEV programs in New York and Massachusetts, as many as eight or
nine years of emissions reductions from those programs would be lost
under the FLEV proposal.
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\22\This calculation assumed: (1) ``Maximum'' I/M for under both
programs; (2) Federal reformulated gasoline; (3) earlier
introduction of the LEV program. It is unclear whether the
calculation assumed the ZEV sales mandate under the OTC-LEV program.
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In addition, the OTC points out additional benefits of the OTC-LEV
program over the FLEV proposal. These include the expected increase in
use of alternative fuels under the OTC-LEV program, which will reduce
dependence on foreign oil and reduce emissions of greenhouse gases, as
well as the benefits of forcing advanced technology, particularly
associated with cars meeting ULEV and ZEV standards. Certain
technologies, such as electrically heated catalysts and hydrocarbon
traps would apparently not be needed to meet FLEV standards, nor would
electric car technology. Also, the OTC believes that technologies such
as adoptive transient learning controls, dual oxygen sensors, improved
fuel atomization and auxiliary air would not be used commonly for FLEV
vehicles. Further, the OTC believes its LEV program would force
advances in battery technologies, and potential initiatives such as
hydrogen fuel cells and fly wheels. (Of course, to the extent a ZEV
sales mandate is not part of the OTC LEV program, ZEV technologies may
not be advanced.) EPA seeks comment on the emission control and other
benefits of the FLEV program, particularly in comparison to the OTC-LEV
program.
In addition, the OTC expressed concerns regarding the
enforceability of the FLEV proposal. EPA is likewise concerned about
whether such a program could be adopted and enforced. As noted above,
it is likely that EPA could not alter Tier 1 standards prior to model
year 2004, and therefore could not impose the FLEV standards before
that time. Even beginning in model year 2004, EPA adoption of standards
comparable to the FLEV standards would have to be supported under the
criteria set out in section 202(i) of the Act. As the OTC pointed out,
States also cannot adopt or enforce the FLEV standards, because they
cannot adopt any new motor vehicle standards (other than the California
standards) under the preemption provisions of section 209 of the Act.
Section 209(a) prohibits States from adopting or attempting to enforce
``any standard relating to the control of emissions'' from new motor
vehicles and also prohibits States from requiring any approval relating
to emissions as a condition precedent to initial retail sale, titling,
or registration of new vehicles.''
To establish the legal framework for implementing the FLEV program,
the manufacturers have relied on the section 302(k) definition of
``emission standard'' (i.e. ``a requirement established by the State or
the Administrator''). They argue that the consent decree arrangement
does not involve an ``emission standard'' since the standards would not
be ``established'' by the State or the Administrator. The applicability
of the section 302(k) definition to section 209(a), however, is not
clear, since section 209(a) does not use the term ``emission standard''
but rather uses the perhaps broader language ``any standard relating to
the control of emissions from new motor vehicles.'' EPA requests
comment on whether using the consent decree mechanism to establish the
FLEV proposal would adequately avoid a conflict with section 209 and
allow States to enforce the FLEV program.
The consent decree mechanism raises a set of legal concerns. One
such concern is whether all the OTC States could become parties to the
consent decree. The auto manufacturers suggest that the OTC States
could intervene in the New York or Massachusetts litigation under Rule
24 of the Federal Rules of Civil Procedure. They contend that the OTC
States' October 29, 1991 Memorandum of Understanding (MOU) that each
State in the OTC would take steps to implement California's LEV program
as soon as possible constitutes adequate grounds for permissive
intervention under Rule 24(b). Other concerns are raised regarding the
role of the court in a consent decree. The consent decree mechanism
would require that the court determine that a decree is an appropriate
commitment of the court's limited resources. Under the FLEV proposal,
the district court overseeing the consent decree would presumably
directly enforce the FLEV standards sua sponte or at the behest of
parties to the decree. (The penalties for noncompliance are not clear.)
EPA is concerned that supervision of the FLEV program could require
substantial resources from the court. Finally, it is not clear how
enforcement would work if any auto manufacturers refused to sign the
consent decree. EPA requests comment on each of these issues,
particularly whether the consent decree mechanism is sufficient for
enforcement and on whether the OTC States could intervene in the
litigation under section 24(b) to be able to enforce the decree.
EPA is also concerned about its ability to grant SIP credits for
emissions reductions under the FLEV proposal. First, credits are
ordinarily limited to emissions reduction measures that are adopted in
a State's SIP, after reasonable notice and public hearing (as provided
in section 110(a)(2) of the Act). One issue is whether under the FLEV
proposal, the emissions controls could be part of the SIP, since to
make them part of the SIP could conflict with the preemption provisions
of section 209(a) of the Act. Further, once controls are adopted in the
SIP, they are ordinarily federally enforceable under section 113 of the
Act. Under the FLEV proposal, EPA would not be in a position to enforce
the controls, both because the controls would not be in the SIP, and
because the auto manufacturers have proposed that EPA not sign the
consent decree. And it is not clear what jurisdiction the court would
have to allow EPA to intervene in the New York or Massachusetts
litigation to sign the consent decree, or to otherwise seek judicial
enforcement of such a decree. For OTC States that would not sign the
consent decree, it is unclear how such States could seek enforcement of
the FLEV standards, or how EPA could grant SIP credits to them.
Finally, the existence of clauses allowing the auto manufacturers to
escape from their obligations to provide cars meeting the FLEV
standards under particular circumstances reduces the certainty of the
emissions controls. EPA is concerned that this lack of certainty
conflicts with the ordinary certainty of SIP creditable measures. EPA
requests comment on its ability to grant SIP credits for reductions
generated under the FLEV proposal.
b. Other Measures. The OTC in its recommendation stated that it
expects EPA to evaluate alternatives comparable to the OTC-LEV program
in terms of enforceability, timeliness, quantity of emissions
reductions, consistency with the Act, and advancement in technology.
EPA recognizes that the magnitude of emissions reductions needed to
mitigate significant contribution to nonattainment in the OTR is likely
to exceed the reductions that the measures specified in the Act plus
the LEV program will generate. To the extent more reductions will be
needed even with the LEV program, other measures that address that
shortfall would not, for that reason alone, qualify as ``alternatives''
to LEV. Rather, other measures might qualify as ``alternatives'' only
if such other measures, singly or in combination, generate enough
reductions to fill the entire shortfall needed without LEV. Any
conclusions about what may qualify as ``alternatives,'' therefore,
would depend on a prior evaluation of the magnitude of reductions
needed. Once the amount of reductions needed is ascertained, then the
emissions reductions and costs associated with measures other than LEV
that could fill the shortfall without LEV might be evaluated.
First, EPA believes it may be useful to consider the emissions
reductions associated with other emission control measures that the Act
specifically mandates for areas in the OTR, for example, reformulated
gasoline, enhanced inspection and maintenance programs, and Stage II
refueling vapor recovery controls. While these measures are not
``alternatives'' because they are mandatory, EPA believes that the
amount of reductions they will generate is important in evaluating the
magnitude of the shortfall for attainment.
Next, EPA believes it may evaluate the emissions reductions
associated with other measures that the OTC itself is considering and
has agreed to adopt (in addition to the LEV program) or further explore
through memoranda of understanding (MOU), including federal
reformulated gasoline in areas where it is not mandatory under the Act,
a ``second phase'' of NOX emission reductions from stationary
sources and an intrastate NOX emission offset trading program.
(See OTC MOUs signed October 29, 1991, March 10, 1992, and May 18,
1993.) Another source of measures is the menu of options identified by
STAPPA/ALAPCO in a document entitled ``Meeting the 15-Percent Rate-of-
Progress Requirement Under the Clean Air Act: A Menu of Options''
(September 1993). Finally, measures identified in the recent FIP
proposal for certain areas in California (EPA Air Docket No. A-94-09)
could be evaluated. EPA requests comment on measures from these sources
and other potential measures for evaluation that could be alternatives
to the recommended OTC-LEV program. EPA might evaluate the cost,
reasonableness, and other factors associated with these other measures
if they are shown, in fact, to be ``alternatives'' to the LEV program.
B. Consistency With the Clean Air Act
1. Introduction
As noted above, section 184 requires that in reviewing the
recommendation of the OTC, EPA must evaluate whether the additional
control measures are ``otherwise consistent with this Act.'' In
particular, the additional control measures must be consistent with
section 177 of the Act, which provides States with the authority to
adopt and enforce emission standards for new motor vehicles and engines
if such standards are identical to California standards and if the
State adopts the standards at least two years before the commencement
of the model year to which such standards apply. Also, the State
standards must not prohibit the manufacture or sale of California-
certified motor vehicles, nor may they create a ``third car.''
In two separate federal court cases, automobile manufacturers have
challenged the adoption of the LEV program in two OTC States, New York
and Massachusetts (Motor Vehicle Manufacturers Association v. NYDEC,
No. 92-CV-869 (N.D.N.Y.) and American Automobile Manufacturers
Association v. Greenbaum, No. 93-10799-MA (D. Mass.)). In these cases,
manufacturers are contending that the States have violated portions of
section 177 by their adoption, or their failure to adopt, certain
aspects of California's LEV and clean fuel programs. Many of the issues
that have been raised, and to some extent answered, in those cases are
likely to be relevant to EPA's decision in this proceeding. Moreover,
certain issues related to section 177 that were not raised in those
proceedings are likely to be relevant to this proceeding.
2. Clean Air Act Provisions Regarding State Motor Vehicle Emission
Standards
Section 209(a) of the Clean Air Act generally preempts States from
promulgating or attempting to enforce standards relating to the control
of emissions from new motor vehicles. However, section 209(b) allows
EPA to waive federal preemption for California under certain
circumstances. Section 177 allows other States to promulgate standards
relating to the control of emissions from new motor vehicles for any
model year, and to take other actions otherwise preempted under section
209(a), if--
(1) Such standards are identical to the California standards for
which a waiver has been granted for such model year, and (2) California
and such State adopt such standards at least two years before
commencement of such model year (as determined by regulations of the
Administrator). Nothing in this section or in Title II of this Act
shall be construed as authorizing any such State to prohibit or limit,
directly or indirectly, the manufacture or sale of a new motor vehicle
or motor vehicle engine that is certified in California as meeting
California standards, or to take any action of any kind to create, or
have the effect of creating, a motor vehicle or engine different than a
motor vehicle or engine certified in California under California
standards (a ``third vehicle'') or otherwise create such a ``third
vehicle''.
42 U.S.C. Sec. 7507
3. New York and Massachusetts Litigations
New York and Massachusetts have both promulgated regulations
incorporating aspects of California's LEV program into their State
regulations. Manufacturers have made several challenges under section
177 to the State regulations.
In particular, neither New York nor Massachusetts promulgated
regulations incorporating California's ``clean fuel'' provisions.
However, both New York and Massachusetts incorporated California's ZEV
sales mandate into their State regulations. Manufacturers challenged
the decisions not to incorporate California's fuel requirements and to
incorporate California's ZEV sales mandate, arguing that (1) the clean
fuel requirements are an inherent part of California's automobile
emission program and thus are subject to the identicality requirement
of section 177; (2) the failure to incorporate the clean fuel
requirements will require the manufacture of a ``third vehicle''
because the higher sulfur levels in federal fuels may cause problems
with certain catalysts and may cause other vehicle problems; (3) the
ZEV sales mandate violates section 177's prohibition on indirect State
limitations on the sale of California vehicles; and 4) the ZEV sales
mandate will require manufacture of a ``third vehicle'' in violation of
section 177.\23\
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\23\Manufacturers also make other challenges related to leadtime
that are not likely to be relevant to this proceeding. The OTC
recommendation states that the LEV program will be effective on
January 1, 1996. This provides States and manufacturers with two
years of leadtime required under section 177. However, if the OTC-
LEV program does not become effective for any State until after
January 2, 1996, then certain leadtime-related issues raised by
manufacturers in the above court cases may be relevant in subsequent
proceeding.
---------------------------------------------------------------------------
In a recent opinion, the U.S. Court of Appeals for the Second
Circuit ruled on these issues in the context of the New York
regulations, except issue two, which the District Court is still
considering. MVMA v. NYDEC, No. 93-7938 (2d Cir., Feb. 9, 1994). In
addition, U.S. District Judge Mazzone (D. Mass.) provided a preliminary
ruling on issues one and two. AAMA v. Greenbaum, No. 93-10799-MA
(October 27, 1993). Manufacturers initially appealed Judge Mazzone's
decision to the First Circuit, but have since requested that the appeal
be withdrawn with regard to these issues. EPA submitted amicus curiae
briefs to the Second Circuit and the First Circuit. (These briefs and
the court opinions are in the docket.)
On issue one, both courts ruled that State failure to incorporate
California's clean fuel provisions did not violate the identicality
provision of section 177. The courts ruled that since California's
clean fuel provisions were part of California's waiver application
under section 209, they are not ``standards * * * for which a waiver
has been granted'' and thus are not subject to the identicality
provisions of section 177. State fuel provisions are addressed in a
separate section of the Act, section 211. EPA's amicus curiae briefs
also took this position.
Regarding issue two, neither trial court has issued a final
determination, both deferring this issue to trial. However, in his
decision on manufacturers' motion for preliminary injunction on this
count, Judge Mazzone concluded that manufacturers had not shown a
likelihood of prevailing. In its amicus curiae brief to the First
Circuit, EPA argued that Massachusetts' failure to adopt the clean
fuels program did not violate the ``third car'' prohibition because (1)
manufacturers could not show that Massachusetts' LEV program compels
any design change--manufacturers are free to sell cars in Massachusetts
that are identical to California cars; (2) manufacturers' testing-based
concerns were not ripe for review; and (3) the term ``third vehicle''
is applied only to design changes necessary to meet certification
requirements, not minor changes unrelated to meeting applicable
emission standards.
On issue three, the Second Circuit found that New York's
promulgation of California's ZEV sales mandate did not violate section
177's requirement that States not limit, either directly or indirectly,
the sale of California cars. The court found that the ZEV mandate did
not prevent manufacturers from selling any California-certified
vehicles as long as they also sold the specified percentage of ZEVs.
``Like the third vehicle rule, the sales-limitation rule is designed to
reinforce the identicality requirement. It would be incongruous for us
to hold that the [State] wrongly mandated a ZEV sales percentage
identical to California's mandate.'' EPA had taken this position in its
amicus brief.
On issue four, the Second Circuit ruled that New York's adoption of
the ZEV mandate does not violate the ``third car'' prohibition because
New York is administering the mandate in the same manner as California
and any changes manufacturers make in their cars to sell them in New
York are based on marketing decisions by manufacturers, not a
requirement of the State. EPA's amicus brief was consistent with this
result.
4. Issues Implicated by the OTC Petition
Some of the section 177-related issues briefed in the New York and
Massachusetts cases are also implicated by the OTC petition. The OTC
recommendation, like the New York and Massachusetts regulations, does
not include California's clean fuel provisions. Moreover, the
recommendation states:
To the extent that a Zero Emission Vehicle sales requirement
must be a component of a LEV program adopted under Section 177, such
a requirement shall apply. Further, if such a Zero Emission Vehicle
sales requirement is not a required component of programs adopted
under Section 177, individual States within the OTC may at their
option include such a requirement and/or economic incentives
designed to increase the sales of ZEVs in the programs they adopt.
This provision relates to the same ZEV-related issues argued in the
court cases and also produces several section 177-related issues not
determined in the court cases. The issue of whether the ZEV sales
mandate is a required component in any State LEV program was not
addressed by the courts. Section 177 allows a State to adopt and
enforce ``for any model year standards relating to control of emissions
from new motor vehicles and * * * engines * * * if such standards are
identical to the California standards for which a waiver has been
granted for such model year.''
The first question presented by this issue is whether the ZEV sales
mandate is a ``standard relating to control of emissions.'' In letters
sent to New York and Virginia State officials on January 7, 1993, EPA
stated that it believed the ZEV sales mandate ``in light of the
existence of the NMOG [non-methane organic gases] fleet average
requirement (which is a motor vehicle emission standard), the
California ZEV sales requirement is not a motor vehicle emission
standard. Thus, a State which adopts California motor vehicle emission
standards is not required to, but may, adopt this particular provision
of California's program. The ZEV sales mandate simply limits the
flexibility otherwise accorded manufacturers to choose the mix of
vehicles produced to meet the NMOG fleet average requirement.''
The Administrator made this statement based on EPA's belief that
the ZEV sales mandate does not, given the existence of the NMOG
standard, create any additional requirements that will have any effect
on NMOG emissions from light-duty vehicles in California. The ZEV sales
mandate does not require that the overall NMOG emissions from
California vehicles be any lower than they would have been in the
absence of the sales mandate. The amount of emissions produced by such
vehicles is controlled by the NMOG fleet average requirement, not the
sales mandate. The ZEV mandate merely restricts the manufacturers'
choices with regard to the type of vehicle they must produce to meet
the NMOG requirement. Therefore, as the ZEV sales mandate does not
limit the quantity, rate or concentration of NMOG emissions, EPA stated
that the mandate was not an emission standard, but instead was an
accompanying enforcement procedure. In its recommendation, the OTC
States that the ZEV sales mandate is an accompanying enforcement
procedure and is not required by section 177.
EPA requests comment on whether the ZEV sales mandate should be
considered an emission standards. EPA is also requesting comments
regarding whether the ZEV sales mandate will have or is likely to have
a clear effect on emissions of NOx and CO, whether such effect is
substantial, and whether such a potential effect is relevant to the
question of whether the sales mandate is an emission standard.
The second question presented by this issue is whether States are
required under section 177's identicality provision to promulgate all
of California's motor vehicle emission standards for a given model
year, or whether only a certain subset of these regulations must be
promulgated. Section 177 provides that a State ``may adopt and enforce
* * * standards * * * if such standards are identical to the California
standards for which a waiver has been granted.'' The statute does not
necessarily indicate that if a State adopts one California standard for
a year it must adopt all of them. EPA believes that adoption of the
California LEV program does not require adoption of the California
heavy-duty engine program, which deals with different types of
vehicles. However, EPA has not finally determined whether section 177
requires a State to promulgate all California emission standards
related to a type of vehicle once a State has determined that it
intends to promulgate any California standards related to that type of
vehicle. Certainly, where a State intends to incorporate some portion
of California's emission standards, the State must promulgate all
regulations that are necessary to ensure that California cars are not
prohibited from sale in the State and all regulations necessary to
prevent the requirement of a third car. Must a State promulgate all
California vehicle-based emission standards relevant to a particular
type of vehicle? May a State promulgate only those provisions necessary
to ensure that the State program receives the emission reductions
California receives from its program, or only those provisions that are
central parts of the program? May a State promulgate merely those
regulations that ensure that its program is as protective of the public
health and welfare, in the aggregate, as the federal program? Under
this approach, a State would have considerable flexibility to determine
which parts of a particular program the State would promulgate, but the
State would not be assured of receiving the same SIP credits as
California for such a program. In addition, this approach may be
inconsistent with section 177's goal of preventing myriad different
motor vehicle programs in the several States and also may be
inconsistent with the statutory language and the legislative history of
section 177. EPA requests comment on this issue.
The identicality issue is also implicated by the form of the OTC's
initial recommendation to EPA. The OTC recommendation states that it
intends the OTC-LEV program to be consistent with section 177 and 184
of the Act. The recommendation also states that the program contains
standards identical to the California LEV program. However, rather than
directly incorporating California's regulations into its
recommendation, or citing to California's regulations, OTC gave a brief
overview of the parts of California's LEV program it intended to
incorporate and the time frame for the regulations. EPA initially had
questions regarding whether the OTC intended to incorporate certain
secondary provisions in California's LEV program into the OTC-LEV
program (in particular, the hybrid electric vehicle provisions, banking
and trading of NMOG credits, the small and intermediate volume
manufacturer provisions and reactivity adjustment factors). EPA also
had questions regarding whether California's NMOG fleet average
requirements were intended to apply to heavier light-duty trucks (3751-
5750 lbs) and whether the OTC intended medium-duty vehicles to be
included in the LEV program. EPA requested that the OTC clarify these
issues, becuase failure to incorporate certain secondary provisions
into the OTC program could conceivably have raised identicality
problems. On April 15, 1994 Bruce Carhart of the OTC sent a letter to
EPA stating, in part, the following:
[The OTC has] recommended regulation of passenger cars and
light-duty trucks up to 5750 lbs. loaded vehicle weight, not medium
duty vehicles. Our intention is to maintain identicality with
California as required by the Clean Air Act. Our recommendation
includes a fleet average for both classes of light-duty vehicles (0-
3750 and 3751-5750 lbs.); hybrid electric vehicles, in as far as
California has classified and certified such vehicles; banking and
trading provisions for purpose of the fleet average; the same
extensions and exemptions for intermediate and small manufacturers;
and RAFs as necessary for certification by California. Many of the
details of the above and any other issues can be worked out through
the consultation process as required by section 184 of the Clean Air
Act.
EPA requests comment on whether there are other concerns regarding
the identicality of the OTC-LEV program with the California LEV
program. EPA also requests comment on whether EPA can assume that, on
provisions on which OTC is silent, OTC means to require all provisions
that are necessary to ensure identicality and that such provisions must
be adopted.
Another issue in this rulemaking is whether the OTC's incorporation
of California's NMOG fleet average provisions violates any portion of
section 177. In their response to OTC's stated intention to include the
NMOG fleet average program in the OTC-LEV program, some manufacturers
claimed that the incorporation of the NMOG standard would violate
section 177. The OTC found that the NMOG fleet average did not violate
section 177 and that States may enforce these standards, consistent
with California protocols and testing requirements. EPA believes, for
the reasons given by the Second Circuit in the MVMA case in the context
of the ZEV sales mandate, that the fleet average requirement does not
violate the requirement of section 177 that States shall not prohibit
the sale of California cars. In addition, EPA has no evidence contrary
to the OTC's determination that the fleet average requirement does not
violate the ``third vehicle'' prohibition of section 177. EPA also
agrees that States are permitted to enforce this requirement,
consistent with California protocols and requirements. EPA believes
that the NMOG fleet average requirement is the heart of the California
LEV program and is the central mechanism for ensuring reductions from
the program, and that any State program implementing the LEV program
should, and is probably compelled to, include enforceable NMOG fleet
average requirements. EPA requests comment on these issues. EPA also
requests comment regarding whether the NMOG fleet average requirement
must be met statewide or whether it can be met regionwide.
Finally, EPA requests comment on the OTC statement that section 177
does not require a State to adopt the California LEV program in all
areas of a State. OTC's statement is consistent with EPA's
interpretation of section 177, as illustrated in Administrator Reilly's
response to Elizabeth Haskell, Virginia's Secretary of Natural
Resources, in which the Administrator noted that adoption of California
emission standards in part of a State is consistent with section 177's
title, ``New Motor Vehicle Standards in Nonattainment Areas.''
EPA does not at this time have any questions regarding the OTC
recommendation's consistency with any other sections of the Clean Air
Act. EPA requests comment on whether the recommendation may be
inconsistent with any other section of the Act.
IV. Statutory Authority
Authority for the action described in this notice is in sections
184, 176(a), 110, 307(d) and 301 of the Clean Air Act, as amended, 42
U.S.C. 7511a, 7506a, 7410, 7607(d) and 7601.
V. Administrative Designation and Regulatory Analysis
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 OMB review and the requirements of the
Executive Order. The 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 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 the Executive Order, since this action
could result in a rule that could have a substantial economic impact,
this notice was submitted to OMB for review. EPA intends to prepare an
economic analysis under E.O. 12866 for any final rule that is a
significant regulatory action. Any written comments to EPA and any
written EPA responses to those comments will be included in the docket
for this proceeding.
VI. Impact on Small Entities
The Regulatory Flexibility Act, 5 U.S.C. 601(a), provides that,
whenever an agency is required to publish a general notice of
rulemaking, it must prepare and make available a regulatory flexibility
analysis (RFA). While EPA intends to follow rulemaking procedures under
section 307(d) of the Clean Air Act, EPA believes it is not legally
required to publish a general notice of rulemaking here, and hence that
it need not prepare a RFA. But even if EPA is required to publish a
general notice of rulemaking here, a RFA is required only for small
entities which are directly regulated by the rule. See Mid-Tex Electric
Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985)(agency's
certification need only consider the rule's impact on regulated
entities and not indirect impact on small entities not regulated). The
OTC's recommended LEV program would directly regulate auto
manufacturers. Since these auto manufacturers generally do not qualify
as small businesses within the meaning of the Regulatory Flexibility
Act, EPA does not believe a RFA is needed for either the proposed or
final rules, even if rulemaking is required. Accordingly, pursuant to 5
U.S.C. 605(b), the Administrator certifies that this rule will not have
a significant economic impact on a substantial number of small
entities.
VII. Paperwork Reduction Act
The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and
implementing regulations, 5 CFR part 1320, do not apply to this action
as it does not involve the collection of information as defined
therein.
Dated: April 19, 1994.
Carol M. Browner,
Administrator.
Appendix--Recommendation of the States of the Ozone Transport
Commission of an OTC Low Emission Vehicle Program Under Section 184(c)
of the Clean Air Act
Whereas, the States composing the Ozone Transport Region (OTR)*
are faced with a pervasive ozone nonattainment problem; and
Whereas regional ozone modeling to date has shown the need for
emission reductions beyond those which will be realized through the
strategies specifically included in the Clean Air Act; and
Whereas the Clean Air Act, provides the Ozone Transport
Commission (OTC) with a mechanism under Section 184(c) to review and
recommend additional control measures in all or part of the OTR to
control regional ozone; and
Whereas motor vehicles, in the aggregate, are the single largest
source of ozone precursors within the OTR, and introduction of Low
Emission and Zero Emission Vehicles are essential; and
Whereas the Clean Air Act also grants States under Section 177
the option of adopting more stringent Low Emission Vehicle (LEV)
standards for new motor vehicles; and
Whereas based on the technical analysis done by the States of
the OTC to date LEVs provide substantial and cost effective emission
reductions; and
Whereas the OTC under Section 184(c) proposed on November 17,
1993, a regional LEV program, hereafter known as the Ozone Transport
Commission Low Emission Vehicle (OTC LEV) program, after having been
petitioned by three OTC States to consider developing such a
recommendation; and
Whereas the OTC provided at that time notice and opportunity for
public comment as required by Section 184(c) of the Clean Air Act,
including a public hearing in Hartford, Connecticut, on December 16-
17, 1993, and has analyzed and responded to the comments received in
the attached Response to Comments: and
Whereas the OTC has analyzed the impact and need for LEV in the
OTR as documented in the attached Technical Support Document; and
*The States of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, and Vermont, the District of Columbia, and the part of
Virginia within the Consolidated Metropolitan Statistical Area which
includes the District of Columbia.
Whereas the OTC received and analyzed an alternative proposal
from the automobile manufacturers which, while an improvement over
Tier I Federal vehicles, would require programmatic and timing
enhancements and the addition of an electric vehicle component to
ensure that enforceable vehicle emission reductions comparable to
those achieved by the OTC LEV program could be achieved in a more
timely manner; and
Whereas the OTC expects the U.S. Environmental Protection
Agency, through the consultation process provided in Section 184(c)
of the Clean Air Act, to evaluate alternatives (including the
program presented by the automobile manufacturers with enhancements)
which are comparable in terms of enforceability, timeliness, and
quantity of emission reduction to those achieved by the OTC LEV
program, are consistent with the Clean Air Act, and advances
technology;
Therefore, the Ozone Transport Commission determines that a
regional LEV program, the OTC LEV program, is necessary to bring the
Ozone Transport Region into attainment by the dates provided in the
Clean Air Act; and
Furthermore, that by majority vote of the States of the Ozone
Transport Commission, as indicated by the attached signature sheet,
the Ozone Transport Commission transmits the attached strategy
recommendation regarding the OTC LEV program to the Administrator of
the U.S. Environmental Protection Agency; and
Furthermore that adoption of this recommendation by the Ozone
Transport Commission or approval of this recommendation by the U.S.
Environmental Protection Agency will not require the adoption of
California reformulated gasoline standards by any X within the OTR;
and
Furthermore that as a part of this submittal, the Ozone
Transport Commission includes the attached Response to Comments
received during the public's opportunity to comment on this matter,
and the attached Technical Support Document which addresses the
requirements of Section 184(d) of the Clean Air Act; and
Furthermore that the Ozone Transport Commission will participate
fully in the consultation process on this recommendation with the
U.S. Environmental Protection Agency as provided in Section
1184(c)(3) of the Clean Air Act.
Text of February 1, 1994, Recommendation of the Ozone Transport
Commission to the U.S. Environmental Protection Agency
The Ozone Transport Commission (OTC) has developed the following
recommendation for an Ozone Transport Commission Low Emission
Vehicle (OTC LEV) program which is to be submitted to the U.S.
Environmental Protection Agency under Section 184(c) of the Clean
Air Act (CAA). The legal authority for the OTC recommendation is
described under Section 184(c)(1) of the Clean Air Act and could
result in a Federal requirement for regionwide adoption and
enforcement of motor vehicle emission standards available under
Section 177 of the Clean Air Act. The recommendation is as follows:
Under Section 184(c) of the Clean Air Act as amended in 1990,
the Ozone Transport Commission hereby recommends adoption of an
Ozone Transport Commission Low Emission Vehicle program including
the elements described below for the geographic region designated as
the Ozone Transport Region, defined as the States of Connecticut,
Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey,
New York, Pennsylvania, Rhode Island, and Vermont, the District of
Columbia and that part of Virginia within the Consolidated
Metropolitan Statistical Area which includes the District of
Columbia.
Adoption of this recommendation by the Ozone Transport
Commission or the United States Environmental Protection Agency will
not require the adoption of the California Reformulated Gasoline
Standards by any State, Commonwealth, or jurisdiction with the Ozone
Transport Region.
Elements of the Proposed OTC LEV Program Recommendation
Pursuant to the requirements of Section 177 of the Clean Air
Act, the Ozone Transport Commission Low Emission Vehicle (OTC LEV)
program is applicable to all 1999 and subsequent model year
passenger cars and light duty trucks (0-557550 pounds loaded vehicle
weight) in the Ozone Transport Region (OTR).
Emissions Requirements and Prohibition: No corporation, person
or other entity shall sell, import, deliver, purchase, lease, rent,
acquire, receive, or register a new vehicle subject to the OTC LEV
program in the OTR that has not received a California ARB Executive
Order, unless the vehicle is sold directly from one dealer to
another dealer, sold for purposes of being wrecked or dismantled,
sold exclusively for off-highway use or sold for registration out of
the OTR, as well as a vehicle purchased by a nonresident prior to
establishing residency or a vehicle transfer by inheritance, decree
of divorce, dissolution, or legal separation. Other exceptions would
include motor vehicles held for daily lease or rental to the general
public or engaged in interstate commerce that are registered and
principally operated outside the OTR and motor vehicles defined as
test vehicles, emergency vehicles, or qualifying for exemption under
Section 43656 of the California Health and Safety Code.
The OTC LEV program will allow five categories of vehicles:
California Tier I Vehicles, Transitional Low Emission Vehicles
(TLEV), Low Emission Vehicles (LEV), Ultra-Low Emission Vehicles
(ULEV) and Zero Emission Vehicles (ZEV). Manufacturers may choose
any combination of vehicles certified to the above standards, to
meet a prescribed fleet emission average standard in the OTR.
The effective date for the OTC/state implementation of the OTC
LEV program is January 1, 1996. This schedule allows for notice to
manufacturers of two vehicle model years and requires sales of
cleaner vehicles for the 1999 model year. The OTC LEV program does
not affect or preclude States from earlier implementation.
This program includes a fleet non-methane organic gases emission
average as follows:
------------------------------------------------------------------------
Fleet
average
Model year standard
(g/mi)
------------------------------------------------------------------------
1999.......................................................... 0.113
2000.......................................................... .073
2001.......................................................... .070
2002.......................................................... .068
2003 and later................................................ .062
------------------------------------------------------------------------
To the extent that a Zero Emission Vehicle sales requirement must
be a component of a LEV program adopted under section 177, such a
requirement shall apply. Further, if such a Zero Emission Vehicle sales
requirement is not a required component of programs adopted under
section 177, individual States within the OTC may at their option
include such a requirement and/or economic incentives designed to
increase the sales of ZEVs in the programs they adopt.
[FR Doc. 94-10042 Filed 4-25-94; 8:45 am]
BILLING CODE 6560-50-P
