Approval and Promulgation of Implementation Plans; Carbon Monoxide State Implementation Plan Revision, State of New Jersey

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Region II Docket No. 131, NJ 15-1-6341; FRL-5104-8]

Approval and Promulgation of Implementation Plans; Carbon

Monoxide State Implementation Plan Revision, State of New Jersey

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve portions of a request from New

Jersey to revise its State Implementation Plan (SIP) related to the

control of carbon monoxide and disapprove remaining portions. EPA is

proposing approval of New Jersey's vehicle miles travelled forecast,

carbon monoxide emission inventory, oxygenated fuels rule, and multi-

state coordination. EPA is also proposing approval of the employee

commute option and transportation control measures as contingency

measures. In addition, EPA is proposing a limited approval and a

limited disapproval of New Jersey's new source review regulation which

covers all nonattainment pollutants. EPA proposes to disapprove New

Jersey's November 15, 1993, proposal for an enhanced inspection and

maintenance program. In addition, the attainment demonstration is also

being disapproved since it relies on the enhanced inspection and

maintenance program as a control measure. These revisions have been

submitted in response to requirements established in the Clean Air Act

as amended in 1990.

DATES: Comments must be received on or before December 12, 1994.

ADDRESSES: Written comments should be addressed to:

William J. Muszynski, P.E., Deputy Regional Administrator,

Environmental Protection Agency, Region II Office, 26 Federal Plaza,

New York, New York 10278 Attention: William S. Baker.

Copies of the State submittal are available at the following

addresses for inspection during normal business hours:

Environmental Protection Agency, Region II Office, Library, 26 Federal

Plaza, Room 402, New York, New York 10278.

New Jersey Department of Environmental Protection, Office of Energy,

Bureau of Air Quality Planning, 401 East State Street, CN027, Trenton,

New Jersey 08625.

FOR FURTHER INFORMATION CONTACT: William S. Baker, Chief, Air Programs

Branch, Environmental Protection Agency, 26 Federal Plaza, room 1034A,

New York, New York 10278, (212) 264-2517.

SUPPLEMENTARY INFORMATION:

Background

The Clean Air Act (Act), as amended in 1990, sets forth a number of

requirements that states designated as moderate nonattainment for

carbon monoxide had to submit as revisions to their State

Implementation Plans (SIPs) by November 15, 1992. These requirements

are: an attainment demonstration, an enhanced vehicle inspection and

maintenance program, an oxygenated fuels rule, a vehicle miles

travelled forecast, contingency measures, a carbon monoxide emission

inventory, a revised New Source Review program, and multi-state

coordination. In addition, a conformity plan is required to be

submitted by November 25, 1994.

On November 15, 1992, New Jersey submitted to the Environmental

Protection Agency (EPA) proposed revisions to its carbon monoxide SIP

that addressed each of the above requirements for its two moderate

carbon monoxide nonattainment areas. In addition, in a submittal dated

October 4, 1993, New Jersey submitted to EPA information on TCMs which

New Jersey will use as a contingency measure.

The New Jersey portion of the New York-Northern New Jersey-Long

Island carbon monoxide nonattainment area is classified as a moderate 2

area (an area that has a design value of 12.8-16.4 ppm.), while the

other area, Camden County, is classified as a moderate 1 area (an area

with a design value of 9.1-12.7 ppm). The New York-Northern New Jersey-

Long Island carbon monoxide nonattainment area is part of the New York-

Northern New Jersey-Long Island Consolidated Metropolitan Statistical

Area and includes the Counties of Bergen, Essex, Hudson, Union, and

parts of Passaic. The nonattainment area in Passaic County includes the

Cities of Clifton, Paterson, and Passaic. The remainder of the State is

either in attainment or is not classified.

EPA has issued a ``General Preamble'' describing its preliminary

views on how it intends to review SIPs and SIP revisions submitted in

order to meet title I requirements (see generally 57 FR 13498 (April

16, 1992) and 57 FR 18070 (April 28, 1992)). The reader should refer to

the General Preamble for a more detailed discussion of the title I

requirements and what EPA views as necessary to adequately comply with

title I provisions. The following summarizes EPA's evaluation of New

Jersey's SIP submittals and EPA's proposed actions. The details of

EPA's review of New Jersey's submittals are contained in the Technical

Support Document available at EPA's Region II office.

Attainment Demonstration

Section 187(a)(7) of the Act requires each state that contains all

or part of a moderate 2 area to submit to the Administrator an

attainment demonstration by November 15, 1992. This attainment

demonstration should document how the State will attain the 8-hour

carbon monoxide National Ambient Air Quality Standard (NAAQS) of 9 ppm

by December 31, 1995.

New Jersey, using emissions from the EPA-approved MOBILE4.1 model,

demonstrated attainment of the carbon monoxide standard with the EPA-

approved CAL3QHC air quality dispersion model. New Jersey took emission

reductions credit from an enhanced inspection and maintenance program,

oxygenated fuels, and the federal motor vehicle control program

(vehicle turnover) as control measures to attain the standard. The

following is a summary of the methods and modeling techniques New

Jersey used in its attainment demonstration. A more detailed

explanation of this modeling is contained in the Technical Support

Document.

To begin the modeling process, New Jersey first selected then

ranked the ``worst case'' intersections that the New Jersey Department

of Transportation, working in conjunction with the county and local

governments, had identified. Next, New Jersey chose a background

concentration and an ambient temperature for use in the CAL3QHC

intersection model. Once all the parameters were selected, the modeling

was performed and maximum future carbon monoxide concentrations were

predicted.

New Jersey ranked the ``worst case'' intersections with a technique

other than that prescribed by the EPA guidance, ``Guideline for

Modeling Carbon Monoxide from Roadway Intersections.'' This guidance

specifies that such rankings use Level Of Service (LOS) calculations

which measure the operating conditions in the intersection and how

those conditions affect traffic flow and delay. As such, LOS is a

measure of the combined traffic volume, signal timing, and related

congestion and delay. New Jersey did not have LOS data in its database,

and the time and cost of collecting this data prohibited the use of

this method. Instead, New Jersey used traffic volume information and a

survey conducted by the New Jersey Department of Transportation which

examined the geometry of various intersections. Since this traffic

volume information is closely related to delay, it is a valid

alternative method for ranking.

New Jersey then used the EPA default background carbon monoxide

value of 3.5 ppm for a central business district from the ``Guideline

for Modeling Carbon Monoxide from Roadway Intersections.'' This

background was used in place of EPA's Urban Airshed Model (UAM) or RAM

model. Given the lack of reliable gridded traffic information, the UAM

or RAM model would have no advantage over the default value in this

instance. Further, the default value was shown to be conservative when

compared with background values for the entire New York-Northern New

Jersey-Long Island carbon monoxide nonattainment area.

New Jersey, using the above parameters along with additional

traffic and air quality data inputs required by the CAL3QHC

intersection model, then performed an air quality modeling analysis on

the 25 ``worst case'' intersections. This analysis demonstrated that

all of the modeled intersections will attain the 8-hour carbon monoxide

standard of 9 ppm. The highest value obtained was 8.0 ppm, which is 11%

below the 8-hour carbon monoxide standard. Since air quality at the

most congested intersections was determined to be below the standard,

New Jersey has demonstrated that the entire area will be in attainment

for carbon monoxide by December 31, 1995.

New Jersey used appropriate modeling techniques and modeling inputs

in this demonstration, however one of the control measures used to

demonstrate attainment, the enhanced inspection and maintenance

program, submitted on November 15, 1993 has not been fully adopted in

accordance with State requirements. In addition, New Jersey has

publicly declared its intention to make a revised submittal at a later

date. Therefore, EPA is proposing to disapprove the attainment

demonstration because it is dependent on an unadopted program.

Enhanced Inspection and Maintenance Program

Section 187(a)(6) of the Act requires implementation of enhanced

inspection and maintenance programs in moderate 2 carbon monoxide

nonattainment areas which includes provisions as required under section

182(c)(3) concerning serious ozone nonattainment areas. Such provisions

require implementation of an enhanced inspection and maintenance

program in urbanized areas with a population greater than 200,000.

On November 15, 1993 New Jersey submitted proposed regulations and

other information pertaining to the enhanced inspection and maintenance

program. Since New Jersey did not submit a fully adopted enhanced

inspection and maintenance program, on February 2, 1994 EPA notified

the State that this submittal was incomplete and a sanctions process

was begun. Because these regulations were not adopted at the time of

their submittal (or since), EPA is proposing the disapproval of the

enhanced inspection and maintenance program as submitted.

Oxygenated Fuels Rule--Subchapter 25

Section 211(m) of the Act requires that states submit revisions to

their SIPs to require an oxygenated gasoline program by no later than

November 1, 1992. This requirement applies to all states with moderate

carbon monoxide nonattainment areas having a design value of 9.1 ppm or

greater based generally on 1988 and 1989 air quality data. Each state's

oxygenated gasoline program must require gasoline for the specified

control area(s) to contain not less than 2.7% oxygen by weight during

that portion of the year in which the areas are prone to high ambient

concentrations of carbon monoxide. Under section 211(m)(2), the

oxygenated gasoline requirements generally are to cover all gasoline

sold or dispensed in the larger of either the Consolidated Metropolitan

Statistical Area or the Metropolitan Statistical Area in which the

nonattainment area is located. Under section 211(m)(2), the length of

the control period, to be established by the EPA Administrator, shall

not be less than four months unless a state can demonstrate that,

because of meteorological conditions, a reduced control period will

assure that there will be no carbon monoxide exceedances outside of

such reduced period. EPA announced guidance on the establishment of

control periods by area in the Federal Register on October 20, 1992 (57

FR 47849).

In this guidance, EPA also announced the availability of an

oxygenated gasoline credit program. Under a credit program, marketable

oxygen credits may be generated from the sale of gasoline with a higher

oxygen content than is required (i.e. an oxygen content greater than

2.7% by weight). These oxygen credits may be used to offset the sale of

gasoline with a lower oxygen content than is required. Where a credit

program has been adopted, EPA's guidelines provide that no gallon of

gasoline should contain less than 2.0% oxygen by weight. EPA also

issued labeling regulations under section 211(m)(4) of the Act, which

were published in the Federal Register on October 20, 1992.

New Jersey was required to submit a revised SIP by November 15,

1992 under section 110 and part D of title I of the Act and which was

to include an oxygenated gasoline program for the New Jersey portions

of the New York-Northern New Jersey-Long Island Consolidated

Metropolitan Statistical Area and the Philadelphia-Wilmington-Trenton

Consolidated Metropolitan Statistical Area.

As part of the November 15, 1992, submittal, the New Jersey

Department of Environmental Protection (NJDEP) submitted adopted

amendments and new rule Subchapter 25, ``Control and Prohibition of Air

Pollution by Vehicular Fuels,'' of Chapter 27, Title 7 of the New

Jersey Administrative Code. Subchapter 25 contains the requirements for

New Jersey's oxygenated gasoline program, which was adopted by New

Jersey on September 1, 1992.

A more detailed analysis of the submittal is contained in the

Technical Support Document. The following is EPA's review of the major

elements of the State's submittal.

Type of Program and Oxygen Content Requirement

New Jersey has elected to adopt a regulation requiring 2.7% oxygen

content for each gallon of gasoline sold in a control area. The

regulation also contains a variance that allows, upon individual

facility request and subsequent State approval, the establishment of a

2.0% minimum oxygen content. Under EPA's credit program guidelines, all

gasoline sold or dispensed during the control period by each control

area responsible party (CAR or Blender CAR) must contain an average

oxygen content of not less than 2.7% by weight. New Jersey has adopted

an oxygen content requirement, though it also provides for variances

from this requirement.

Applicability and Program Scope

Section 211(m)(2) requires oxygenated gasoline to be sold during a

control period established by the EPA Administrator based on air

quality monitoring data. New Jersey has established control periods

consistent with the EPA guidance.

Subchapter 25 has an ``averaging period'' scheme which provides

that all gasoline sold or dispensed within the control areas during a

one month averaging period must comply with the 2.7% average oxygen

content standard.

Subchapter 25 requires oxygenated gasoline to be sold statewide and

divides New Jersey into a northern and southern area. The two areas

differ only in the relative length of their control periods: seven

months (October 1 to April 30) in the northern area and four months

(November 1 to the last day of February) in the southern area. The

length of each control period is consistent with the requirements of

section 211(m)(2) of the Act.

Registration and Reporting Requirements

EPA's credit program guidelines specify that all parties intending

to sell or dispense gasoline obtained from a Control Area Terminal

should register with the state at least 30 days in advance of each

control season. At the time of registration, every CAR will be required

to declare its intention to comply with the regulation. Upon

acceptance, CAR identification numbers should be issued by the state.

EPA guidelines specify that no party should be allowed to generate,

trade, buy or sell credits without a CAR identification number.

Subchapter 25 provides CAR identification numbers. However, if the

applicant fails to provide all information requested by the NJDEP, the

application may be denied.

EPA has also specified that records should be retained by all

parties in the gasoline distribution system. EPA's guidelines impose

responsibilities on various parties in the gasoline industry. Persons

who produce or import gasoline are responsible for assuring that the

gasoline is tested and that the accompanying documentation accurately

reflects oxygen content. Persons who transport, store, or sell gasoline

have various responsibilities associated with assuring that only

oxygenated gasoline is sold or dispensed for use in control areas.

Terminal owners and operators are responsible for assuring that the

oxygen content of the gasoline they receive, handle, or dispense is

accurate. Retailers and wholesale purchaser-consumers are responsible

for assuring that gasoline intended for sale during the control period

contains at least 2.0% oxygen by weight if they are participating in

the averaging program.

New Jersey requires all parties in the gasoline distribution

network who are located or do business within a control area, and whose

product is eventually sold into the control area for ultimate use, to

keep records concerning certain day-to-day activities.

New Jersey's regulation requires any terminal or facility that is

granted a variance to submit to the NJDEP, on a monthly basis during

the applicable averaging period, a report that states the

contemporaneous average of the oxygen content of the gasoline

transferred to or from that terminal or facility during that month.

With respect to the implementation of an averaging program, EPA

guidelines also require that CARs commission an annual attest

engagement (a report detailing relevant activities), performed by

either an internal auditor or independent Certified Public Accountant.

Since New Jersey does not provide for the use of oxygenate credits in

their averaging program, there is no need for a requirement to conduct

a review or audit for averaging purposes.

Prohibited Activities

EPA's credit program guidelines contain provisions designed to

ensure that gasoline that fails to meet the minimum oxygen content

requirement is not available for use within a control area. Generally,

CARs or blender CARs may not transfer gasoline for use in a control

area that contains less than the minimum percentage of oxygen by weight

to parties who are not themselves registered as CARs or blender CARs.

EPA's guidelines further recommend that records be maintained. New

Jersey's program addresses these requirements.

Transfer Documents

EPA's credit program guidelines specify that transfer documents

should include the following information: date of the transfer, name

and address of the transferor, name and address of the transferee, the

volume of gasoline which is being transferred, the proper

identification of the gasoline as oxygenated or nonoxygenated, the

location of the gasoline at the time of the transfer, the type of

oxygenate, and the oxygen content of the gasoline (for transfers

upstream of the control area terminal and for transfers between CARs,

include the oxygenate volume of the gasoline). Records are to be kept

in a location where they are available for state review.

Subchapter 25 requires that facilities and terminals keep such

records available, upon request, for review by the NJDEP.

Subchapter 25 includes requirements related to transfer

documentation in its regulation. These transfer document requirements

will enhance the enforcement of the oxygenated gasoline regulation by

providing a paper trail for each gasoline sample taken by State

enforcement personnel.

Enforcement and Penalty Schedules

State oxygenated gasoline regulations must be enforceable by the

state oversight agency. EPA recommends that states visit at least 20%

of the regulated parties during a given control period. Inspections

should consist of product sampling and record review. In addition, EPA

guidelines recommend that each state should devise a comprehensive

penalty schedule. Penalties should reflect the severity of a party's

violation, the compliance history of the party, as well as the

potential environmental harm associated with the violation. New

Jersey's regulation contains a comprehensive penalty schedule in

accordance with EPA guidance. New Jersey, in addition to having

authority to assess a civil administrative penalty, reserves its

authority to revoke a violator's operating certificate or variance.

Test Methods and Laboratory Review

EPA's sampling procedures are detailed in Appendix D of 40 Code of

Federal Regulation part 80. EPA has recommended, in its credit program

guidelines, that states adopt these sampling procedures. New Jersey has

adopted EPA sampling procedures, which include established federal

testing procedures and tolerances.

Labeling

EPA requires the labeling of gasoline pumps and has strongly

recommended that states adopt their own labeling regulations,

consistent with the federal regulation. New Jersey has adopted labeling

regulations consistent with the federal regulation.

EPA's review of subchapter 25 and supporting materials indicates

that New Jersey has adopted an oxygenated gasoline regulation that

meets the requirements of the Act. Therefore, EPA is proposing to

approve New Jersey's Subchapter 25 oxygenated fuels program.

Vehicle Miles Travelled Forecast

Section 187(a)(2)(A) of the Act requires moderate carbon monoxide

nonattainment areas, such as that portion of New Jersey included in the

New York-Northern New Jersey-Long Island nonattainment area, to submit

a SIP revision that forecasts vehicle miles travelled (VMT) through the

year 1995. In addition, annual reports and annual updates are required

by the state, the first of these is required by September 30, 1994.

The VMT forecast must meet two requirements. First, it must

estimate the VMT from 1990 through 1995 using a method acceptable to

EPA, and must be conducted in the appropriate geographic area. Second,

there must be proper coordination between the state agencies involved

in developing the VMT forecast.

Contingency measures are to be implemented in a case where the

actual annual VMT or the updated forecast exceeds the most recent prior

VMT forecast by 5.0 percent in 1994, 4.0 percent in 1995, and 3.0

percent thereafter. In addition, if these annual exceedances are less

than these maximum percentages but cumulatively exceed 5 percent, then

contingency measures are also triggered.

The estimated VMT for 1990 and 1991 are 94.9 and 97.4 million miles

per day, respectively. In addition, the future forecasts are (in

million miles per day) 99.8 for 1992, 102.2 for 1993, 104.6 for 1994,

and 107.1 for 1995.

EPA proposes to find that New Jersey has submitted documentation

satisfying these requirements, and therefore proposes approval of its

VMT forecast SIP revision.

Contingency Measures

Section 187(a)(3) of the Act requires that states adopt contingency

measures to take effect without further action by the Administrator or

the state if the state fails to attain the NAAQS by the required date

or if the VMT forecast is exceeded beyond the allowable limit as

discussed in the VMT forecast section. New Jersey submitted three

contingency measures, the Employee Commute Option (ECO) program, an

enhanced inspection and maintenance program (benefit from emission

reductions outside of the carbon monoxide nonattainment area), and

Transportation Control Measures (TCMs) to fulfill this requirement. The

ECO program will act as a contingency measure for failure to attain the

carbon monoxide standard while the state-wide enhanced inspection and

maintenance program and the TCMs will be used as measures for exceeding

the VMT forecast.

1. ECO Program New Jersey is required by section 182(d)(1) of the

Act to submit its ECO program as part of its ozone nonattainment SIP.

New Jersey's program will apply to employers with 100 or more employees

who arrive at the workplace between the hours of 6 and 10 a.m. The goal

of this program is to increase the average passenger occupancies (APO)

by 25% above the average for vehicles arriving at the workplace. This

would decrease the amount of automobiles arriving at the workplace, and

therefore, decrease the VMT.

New Jersey submitted a SIP revision on November 15, 1993 that

contained an adopted ECO program. EPA is proposing to approve the

State's ECO program as a carbon monoxide contingency measure since it

is an adopted measure which will serve to reduce VMT. However, EPA will

be taking action on the ECO program submittal as a requirement of the

ozone SIP in a separate Federal Register notice since there are

specific requirements an ECO program must meet for an ozone SIP but not

for a carbon monoxide SIP.

2. Statewide Enhanced Inspection and Maintenance Program New Jersey

also submitted this program as a revision for its ozone SIP, and it is

identical to that required by section 187(a)(6) of the Act (see section

on enhanced inspection and maintenance program earlier in this notice).

Since the program is being established on a state-wide basis, carbon

monoxide reductions derived from outside of the Northeastern New Jersey

nonattainment area will have a benefit in the carbon monoxide

nonattainment areas and could be used for contingency purposes. Once

adopted, the enhanced inspection and maintenance program will act as an

additional contingency measure should the VMT forecast be exceeded.

3. TCMs The Act requires states in carbon monoxide non-attainment

areas to develop VMT forecasts. In addition, states must develop TCMs

that will be used as contingency measures in the event that the VMT

forecast included in the 1992 carbon monoxide SIP is exceeded.

New Jersey's SIP submittal includes TCMs as contingency measures.

These TCMs are incorporated into three major program areas, which

includes traffic flow improvements, park & ride lots, and increased

ridesharing. EPA proposes to approve these TCMs as viable contingency

measures to offset excess growth in VMT.

EPA proposes to approve the ECO program as an adequate contingency

measure for failure to attain the carbon monoxide standard. While New

Jersey identified two contingency measures should the VMT forecast be

exceeded, only one measure was adopted. EPA proposes to approve the

TCMs as an adequate contingency measure for exceeding the VMT forecast.

Once the enhanced inspection and maintenance program is adopted, it

will act as an additional contingency measure should further carbon

monoxide reductions be necessary.

Carbon Monoxide Emission Inventory

New Jersey submitted a comprehensive carbon monoxide emission

inventory on November 15, 1992 as required by section 187(a)(1) and as

described in section 172(c)(3) of the Act. Additional inventory

information was submitted on January 12, 1993.

The emission inventory represents a comprehensive, actual inventory

of all carbon monoxide emission sources in the nonattainment areas. It

includes emissions from point, area, and mobile sources (see 1990 base

year carbon monoxide emissions summary in Tables 1 and 2).

The inventory was developed according to EPA guidance and has been

quality assured. Sources that emit in excess of 100 tons per year of

carbon monoxide are defined as point sources. Stationary sources that

emit below this threshold are too small to be considered point sources

and are, therefore, considered to be area sources. The area and off-

highway mobile sources include such categories as stationary source

fuel combustion, aircraft, marine vessels, and railroads. Highway

mobile source emissions were calculated using EPA's MOBILE 4.1 model.

Input parameters to this model included VMT, speed, temperature, and

registration distribution.

EPA proposes to approve New Jersey's 1990 base year emission

inventory for carbon monoxide.

In addition, it should be noted that New Jersey may be undertaking

a revised analysis of its attainment demonstration and emissions budget

based on more recent traffic information now being developed. EPA would

evaluate, in a future Federal Register notice, any additional

information provided by New Jersey.

Table 1.--Summary of 1990 Base Year Carbon Monoxide Emissions by Source

Category for New Jersey Portion of the New York-Northern New Jersey-Long

Island Carbon Monoxide Nonattainment Area

------------------------------------------------------------------------

CO

emissions

Source category (tons/

day)

------------------------------------------------------------------------

Point........................................................ 36.43

Area......................................................... 31.98

Non-Road Mobile.............................................. 228.40

On-Road Mobile............................................... 1613.56

----------

Total.................................................. 1910.37

------------------------------------------------------------------------

Table 2.--Summary of 1990 Base Year Carbon Monoxide Emissions by Source

Category for Camden County Carbon Monoxide Nonattainment Area

------------------------------------------------------------------------

CO

emissions

Source category (tons/

day)

------------------------------------------------------------------------

Point........................................................ 1.12

Area......................................................... 11.78

Non-Road Mobile.............................................. 33.47

On-Road Mobile............................................... 576.39

----------

Total.................................................. 622.76

------------------------------------------------------------------------

Multi-State Coordination

Section 187(e) of the Act establishes the requirements for ``multi-

state carbon monoxide nonattainment areas,'' which are defined as

single carbon monoxide nonattainment areas that cover more than one

state. To satisfy this requirement, states must develop and submit to

EPA a joint workplan to demonstrate early cooperation and integration.

This workplan can be in the form of a letter co-signed by all states in

the nonattainment area, or EPA has decided, it can consist of signed

individual letters from each of the states. New Jersey submitted its

letter, containing a detailed schedule of milestones and a commitment

to coordinate with EPA and each of the states involved, on October 27,

1992.

Therefore, EPA proposes to find that New Jersey has fulfilled this

requirement and proposes approval of this SIP revision.

Conformity Plan

Section 176(c) of the Act requires states to revise their SIPs to

establish criteria and procedures to ensure that federal actions,

before they are taken, conform to the air quality planning goals in the

applicable state SIP. The requirement to determine conformity applies

to transportation plans, programs and projects developed, funded or

approved under title 23 U.S.C. or the Federal Transit Act

(``transportation conformity''), as well as to all other federal

actions (``general conformity''). Section 176 further provides that the

conformity revisions to be submitted by states must be consistent with

federal conformity regulations that the Act required EPA to promulgate.

Congress provided for the state revisions to be submitted one year

after the date for promulgation of final EPA conformity regulations.

When that date passed without such promulgation, EPA's General Preamble

for the Implementation of title I informed states that its conformity

regulations would establish a submittal date (see 57 FR 13498 (April

16, 1992)).

The USEPA promulgated final transportation conformity regulations

on November 24, 1993 (58 FR 62188) and general conformity regulations

on November 30, 1993 (58 FR 63214). These conformity rules require that

states adopt both transportation and general conformity provisions in

the SIP for areas designated nonattainment or subject to a maintenance

plan approved under section 175A of the Act. Pursuant to Sec. 51.396 of

the transportation conformity rule, the State of New Jersey is required

to submit a SIP revision containing transportation conformity criteria

and procedures consistent with those established in the federal rule by

November 25, 1994. Similarly, New Jersey is required to submit a SIP

revision containing general conformity criteria and procedures

consistent with those established in the federal rule by November 30,

1994, pursuant to Sec. 51.851 of the general conformity rule. Those

deadlines have not yet come due.

The State of New Jersey has committed to develop and submit a SIP

revision containing conformity procedures that are consistent with the

final federal conformity rules. EPA will evaluate and take action at a

later time on any such submittal. Until EPA approves a conformity SIP

revision for New Jersey, EPA's general conformity and transportation

conformity rules, along with the provisions of section 176(c), will

govern conformity determinations.

According to EPA's transportation conformity regulation, 40 CFR

93.128, the conformity status of the transportation plan and TIP shall

lapse 120 days following the date of final disapproval of the control

strategy implementation plan revision, and no new project-level

conformity determinations may be made. No new transportation plans,

TIPs, or projects may be found to conform until another control

strategy implementation plan revision is submitted and conformity is

demonstrated according to transitional period criteria and procedures.

Therefore, should EPA's proposed disapproval be finalized, the

conformity status of the North Jersey Transportation Planning

Authority's transportation plan and TIP will lapse 120 days later.

New Source Review Regulation--Subchapter 18

Section 173 of the Act requires states to submit New Source Review

(NSR) revisions that, among other things, incorporate new offset ratios

and applicability limits in new source review permitting regulations by

November 15, 1992.

I. Background

EPA is currently developing a proposed rule to implement all

changes required by the 1990 Amendments in the new source review

provisions in parts C and D of title I of the Act. EPA will refer to

the proposed rule as the most authoritative guidance available

regarding the approvability of the submittals. When final federal

regulations are promulgated, EPA will review those NSR SIP submittals

on which it may have taken final action to determine whether additional

SIP revisions are necessary.

In this proposed rulemaking on New Jersey's nonattainment NSR SIP,

Subchapter 18 ``Control and Prohibition of Air Pollution from New and

Altered Sources Affecting Ambient Air Quality,'' EPA is applying its

current view of the Act's requirements. New Jersey addressed all

pollutants in its revision to Subchapter 18 and therefore, EPA is

taking action on the NSR program as it relates to all criteria

pollutants.

II. Evaluation of State Program

The following summarizes EPA's evaluation of New Jersey's revised

NSR rule and EPA's proposed action. The State of New Jersey held a

public hearing on November 5, 1992 to entertain public comment on its

revised NSR implementation plan. Subchapter 18 was adopted on February

19, 1993, and submitted to EPA on the same date as part its proposed

revision to its ozone SIP. EPA found the submittal to be complete on

April 29, 1993.

General Nonattainment NSR Requirements

The statutory requirements for nonattainment NSR review permitting

SIPs are found at sections 172, 173 and 182-189 of the Act. It is on

this basis that EPA is making its decision today. The Act requires all

states to have submitted the following nonattainment NSR requirements

to EPA by November 15, 1992:

1. Provisions to ensure that the construction bans imposed by EPA

may be lifted by states. New Jersey had no such bans because it had an

approved nonattainment NSR regulation in place. This provision,

therefore, does not apply to New Jersey.

2. Provisions to assure that calculation of emissions offsets, as

required by section 173(a)(1)(A) of the Act, are based on the same

emissions baseline used in the demonstration of reasonable further

progress. New Jersey's emissions baseline for offsets calculation is an

inventory based on actual 1990 emissions. This provision meets federal

requirements and is, therefore, approvable.

3. Provisions, in accordance with section 173(c)(1) of the Act, to

allow offsets to be obtained in another nonattainment area, if the area

has an equal or higher nonattainment classification and emissions from

the other nonattainment area contribute to a NAAQS violation in the

area in which the source would construct. New Jersey has chosen not to

allow offsets from other nonattainment areas. This approach is more

restrictive than the federal requirement and is, therefore, approvable.

4. Provisions, in accordance with section 173(c)(1) of the Act, to

assure that any emissions offsets obtained in conjunction with the

issuance of a permit to a new or modified source must be in effect and

enforceable by the time the new or modified source commences operation.

New Jersey has included a provision requiring such a demonstration from

all permit applicants. However subchapter 18 does not contain

definitions of ``initiation of construction or operation.'' In addition

New Jersey's rule does not specify that changes to existing permits

from sources which are to provide offsets must be in place by the time

of permit issuance to the new or altered source. New Jersey's rule must

be clarified accordingly. Therefore, these deficiencies are a basis for

disapproval.

5. Provisions to assure that emissions increases from new or

modified major stationary sources are offset by real reductions in

actual emissions as required by section 173(c)(1) of the Act. New

Jersey has defined reductions to be used as offsets as actual

reductions in emissions that must be federally enforceable. This

definition also applies to the use of banked emission reductions. This

definition meets federal requirements and is, therefore, approvable.

6. Provisions, in accordance with section 173(c)(2) of the Act, to

prevent emissions reductions otherwise required by the Act from being

credited for purposes of satisfying the part D offset requirements. New

Jersey has defined reductions used as offsets as reductions not

otherwise required pursuant to any federal or state law, rule, order,

permit, or other legal document. In addition, its definition states

that emission reductions to be used as offsets cannot have been relied

upon to demonstrate attainment, maintenance of reasonable further

progress or of a NAAQS. This definition satisfies the requirements of

the Act and is, therefore, approvable.

7. Provisions, in accordance with sections 172(c)(4) and

173(a)(1)(B) of the Act, that reflect changes in the use of growth

allowances. Though New Jersey has no growth allowance program in place,

it does have a program for banking emissions reductions to be used as

offsets. This program incorporates pre-1990 reductions which have been

incorporated into the emission inventory as future growth. This

approach is consistent with the requirements for the achievement of

reasonable further progress. This provision meets the requirement of

section 172(c)(4) of the Act and is, therefore, approvable.

8. Provisions, in accordance with section 173(a)(5) of the Act,

that require as a prerequisite to the issuance of any part D permit, an

analysis of alternative sites, sizes, production processes, and

environmental control techniques for proposed sources that demonstrates

that the benefits of the proposed source significantly outweigh the

environmental and social costs imposed as a result of its location,

construction, or modification. New Jersey has included this analysis as

part of its permit requirements. This provision is, therefore,

approvable.

9. Provisions, in accordance with section 173(d) of the Act, for

supplying information from nonattainment NSR permits to EPA's control

technology clearinghouse. New Jersey has not included this provision in

its revised NSR nonattainment rule. New Jersey must revise its rule to

incorporate this provision. Therefore, EPA finds this as a basis for

disapproval.

10. Provisions, in accordance with section 173(e) of the Act, that

allow any existing or modified source that tests rocket engines or

motors to use alternative or innovative means to offset emissions

increases from firing and related cleaning if certain conditions are

met, or impose a fee on such source. New Jersey's NSR nonattainment

rule does not include provisions which allow for these alternative

means of meeting offset requirements. While the Act requires this

provision, since New Jersey has no sources which fall into this

category, we are not proposing to disapprove on this basis.

11. Provisions, in accordance with section 819 of the Act, that

effectively exempt activities related to stripper wells from the new

NSR requirements of new subparts 2, 3, and 4 for PM-10, ozone, or

carbon monoxide nonattainment areas classified as serious or less, and

having a population of less than 350,000. New Jersey's NSR

nonattainment rule does not include provisions which allow for these

exemptions. However, since states are allowed under the Act to

implement NSR provisions that are more stringent than the Act

requirements, New Jersey's approach is acceptable.

12. Provisions, in accordance with section 328 of the Act, to

assure that sources located on the outer continental shelf are subject

to the same requirements applicable if the source were located in the

corresponding onshore area. New Jersey's NSR nonattainment rule does

not include provisions which address this requirement. It is EPA's

understanding that New Jersey has no sources to which this requirement

would apply.

13. A definition, in accordance with sections 302(z) and 111(a)(3)

of the Act, of ``stationary source'' reflecting Congressional intent

that certain internal combustion engines be subject to control under

state programs, but excluding the newly defined category of ``nonroad

engines.'' New Jersey's NSR nonattainment rule does not include

provisions which address this requirement. New Jersey must revise its

definition of ``stationary source'' to exclude this category. EPA,

therefore, finds this as a basis for disapproval. EPA will be proposing

a definition of ``nonroad engines'' in its rulemaking package to

implement provisions of part D of the Act.

14. Exemptions, in accordance with section 415(b)(2) of the Act,

from nonattainment NSR provisions for installation, operation,

cessation, or removal of a temporary clean coal technology

demonstration project. New Jersey's NSR nonattainment rule does not

include provisions which allow for these exemptions. However, since

states are allowed under the Act to implement NSR provisions that are

more stringent than the Act requirements, New Jersey's approach is

acceptable.

15. Provisions in accordance with section 173(a)(3) of the Act,

that owners or operators of each proposed new or modified major

stationary source demonstrate the compliance of all other major

stationary sources under the same ownership in the state. New Jersey's

revised rule requires this demonstration from all permit applicants.

This provision is approvable.

16. For new major stationary sources, Lowest Achievable Emission

Rate (LAER) is to apply to each nonattainment pollutant which the

source has the potential-to-emit in major amounts. New Jersey's

definition of LAER incorporates all necessary requirements. New

Jersey's regulations specify that LAER applies to sources which have

the potential to emit regulated pollutants above threshold levels.

Application of LAER to the equipment constructed or altered is a

requirement for permit issuance. These provisions meet the federal

requirements and are approvable.

NSR Requirements for Ozone

The statutory permit requirements for ozone nonattainment areas are

generally contained in sections 172 and 173, and in subpart 2 of part D

of the Act. For all classifications of ozone nonattainment areas and

for ozone transport regions, states must adopt the appropriate major

source thresholds and offset ratios, and provisions to ensure that any

new or modified major stationary source of nitrogen oxides (NOX)

satisfies the requirements applicable to any major source of volatile

organic compounds (VOC), unless a special NOX exemption is granted

by the Administrator under the provision of section 182(f) of the Act.

For serious and severe ozone nonattainment areas, state plans must

implement the requirements of sections 182(c) (6), (7) and (8) with

regard to modifications.

Though New Jersey contains marginal, moderate and severe ozone

nonattainment areas, it has elected to treat the entire State as a

severe nonattainment areas for purposes of nonattainment review.

Consequently, it has adopted uniform major source threshold, offset

ratio, and NOX provisions for the entire State.

These are:

------------------------------------------------------------------------

Minimum

Area classification Major source offset NOX provisions

threshold ratio

------------------------------------------------------------------------

Severe............. 25 tons/year....... 1.3:1.0 LAER/Emission

offsets equivalent

to VOC

requirements.

------------------------------------------------------------------------

These provisions meet the requirements for severe nonattainment

areas at sections 182(d) and (d)(2) of the Act. In addition, New Jersey

has adopted offset ratios for all pollutants, except lead, which

increase with distance from the source. Since this approach is stricter

than that required under the Act, these offset ratios are approvable.

New Jersey's rule submittal does not include the additional

modification provisions for serious and severe areas required by

sections 182(c) (6), (7) and (8) of the Act. First, the amended Act

establishes a de minimis emissions threshold of 25 tons for both VOC

and (where applicable) NOX. Second, it requires an aggregation of

past net increases over a 5-year period, even when the proposed

increase itself is below the de minimis level. The Act establishes

different requirements if the modification occurs at sources emitting

less than 100 tons per year (TPY) of VOC or emitting 100 TPY or more of

VOC. New Jersey must revise its rule to conform to these requirements.

Therefore, EPA finds this as a basis for disapproval.

NSR Requirements for Carbon Monoxide

The general statutory permit requirements for carbon monoxide

nonattainment areas are contained in revised section 173, and in

subpart 3 of part D of the Act. States must adopt the appropriate major

source threshold and offset ratio.

New Jersey contains areas classified as moderate nonattainment for

carbon monoxide. New Jersey has established a major source threshold of

100 TPY and an offset ratio that equals or exceeds 1.0:1.0 for these

areas. These provisions meet the federal requirements and are,

therefore, approvable.

NSR Requirements for PM-10

The general statutory permit requirements for PM-10 nonattainment

areas are contained in section 173 and in subpart 4 of part D of the

Act. For both classifications of PM-10 nonattainment areas, moderate

and severe, states must adopt the appropriate major source threshold,

offset ratio, significance level for modifications, and provisions for

PM-10 precursors.

New Jersey has no areas classified as PM-10 nonattainment areas.

New Jersey has established a major source threshold of 25 TPY, a

minimum offset ratio which equals or exceeds 1.0:1.0, and a

modification significance level of 15 TPY. These provisions exceed the

minimum federal requirements and are, therefore, approvable. If any

area is subsequently reclassified as nonattainment for PM-10, New

Jersey will be required to amend its SIP and include the requirements

for PM-10 precursors and the applicable threshold, offset and

significance level requirements for that area classification.

NSR Requirements for Sulfur Dioxide

The general statutory permit requirements for SO2

nonattainment areas are contained in section 173, and in subpart 5 of

part D of the Act. For SO2 nonattainment areas, states must adopt

the appropriate major source threshold, offset ratio, and significance

level for modifications.

New Jersey has one SO2 nonattainment area. New Jersey has

established a major source threshold of 100 TPY, a minimum offset ratio

which equals or exceeds 1.0:1.0, and a modification significance level

of 40 TPY. These provisions meet the federal requirements and are,

therefore, approvable.

NSR Requirements for Lead

The general statutory permit requirements for lead nonattainment

areas are generally contained in section 173, and in subpart 5 of part

D of the Act. For lead nonattainment areas, states must adopt the

appropriate major source threshold, offset ratio, and significance

level for modifications.

New Jersey has no lead nonattainment areas. New Jersey has

established a major source threshold of 10 TPY, an offset ratio of

1.0:1.0, and a modification significance level of 0.6 TPY. These

provisions meet the federal requirements for offset ratio and

significance level, and exceed the requirements for major threshold

level and are, therefore, approvable.

NSR Requirements for Nitrogen Dioxide

The statutory permit requirements for nitrogen dioxide

nonattainment areas are contained in section 173, and in subpart 5 of

part D of the Act. For nitrogen dioxide nonattainment areas, states

must adopt the appropriate major source threshold, offset ratio, and

significance level for modifications. New Jersey did not address this

requirement since there are no nitrogen dioxide nonattainment areas in

the State.

General Savings Clause

Section 193 of the Act states that no control requirement, in

effect before November 15, 1990, in any area which is a nonattainment

area for any air pollutant, may be modified after November 15, 1990

unless the modification ensures equivalent or greater emission

reductions of that air pollutant. New Jersey's revised NSR rule

contains three modifications to control requirements. First, the

revised regulations relax the NOX emission offset ratio from

2.0:1.0 to 1.3:1.0. Second, the revised regulations relax the VOC

offset ratio from 2.0:1.0 to 1.3:1.0. Third, the revised regulations

relax the carbon monoxide applicability threshold from 50 to 100 TPY.

In all three instances, New Jersey has demonstrated that the revised

rule, taken as a whole, provides equivalent or greater emission

reductions than the current rule. It thus complies with section 193,

the General Savings Clause.

EPA Policy Issues

EPA has identified the following provisions of New Jersey's NSR

rule which do not adhere to current EPA guidance.

1. Net Air Quality Benefit. Current EPA guidance (1989 SO2

Guidance EPA-450/2-89-019) states that a net air quality benefit

analysis must be demonstrated for sources that do not satisfy the

location requirements for emission offsets as specified in 40 CFR part

51, appendix S. According to that guidance, the net air quality benefit

is made with a modeling analysis that predicts that the LAER and

emission offsets proposed will result in a net concentration change

that is less than zero at an agreed upon number of receptors within the

nonattainment area of the emission increase.

As in the Act prior to 1990, section 173(a) specifies that emission

increases from a proposed major source or major modification must

achieve LAER and sufficient offsetting emission reductions in order to

represent, when considered together with other provisions of the SIP,

reasonable further progress towards attainment of the NAAQS.

Section 173(c)(1), which was added in the 1990 amendments,

specifies conditions on the location of emission reductions that may

qualify as offsets. EPA intends to continue to require the net air

quality benefit test consistent with prior practice, so that it can be

assured that the area affected by the source progresses toward

attainment on balance. It need not be interpreted as requiring an air

quality improvement at every location affected by the new source (44 FR

3279, (January 16, 1979)), but rather assuring progress toward

attainment for the area where the new source is locating. Also, as

explained in the Offset Rule, the reviewing authority should consider

atmospheric simulation modeling for SO2, particulates, and carbon

monoxide sources. Also, EPA's view in the Offset Rule continues to

apply that in most cases the permitting authority may assume that

offsets obtained from an existing source on the same premises or in the

immediate vicinity of the new source and from the same effective stack

height satisfy the net air quality benefit test.

EPA believes that it is prudent for states to reserve the right in

their regulations to reject emission reductions proposed to satisfy

offset requirements which do not provide a net air quality benefit in

the nonattainment area where the proposed emission increase will occur.

EPA does not believe that a new source should be permitted which will

inhibit progress toward attainment due to the fact that the offsets are

obtained from an inappropriate location.

New Jersey's approach toward a net air quality benefit analysis is

inadequate. This is because the Air Quality Impact Analysis Section

does not specifically require a dispersion modeling analysis which

demonstrates a net decrease in ambient impacts on balance in the

nonattainment area where the net emission increase is proposed. This

test is required for major new or modified sources whose emission

decrease (offset) does not meet the location requirements specified in

40 CFR part 51, appendix S. This test need not be performed at every

location but rather on balance in the nonattainment area of the

proposed emission increase (refer to Technical Support Document). EPA

requires that the NJDEP modify subchapter 18, 7:27-18.4 to 18.5 to

include a net air quality benefit test. Therefore, EPA finds this as a

basis for disapproval.

2. Calculation of ``Net Emission Increase''. EPA has identified a

problem with the provision which requires the calculation of ``Net

Emission Increase.'' As part of EPA's review of New Jersey's revised

nonattainment NSR rule, EPA evaluated whether the formula used to

determine whether a source is subject to this rule follows EPA guidance

for determining applicability. New Jersey's rule determines a ``net

emission increase'' by using a modified ``potential to potential''

test. However, 40 CFR 51.165 requires that an ``actual to potential''

test be performed. Consequently, EPA cannot approve this methodology

and New Jersey must correct this deficiency in its rule. Therefore, EPA

finds this as a basis for disapproval.

3. Definition of ``Contemporaneous''. New Jersey defines

``contemporaneous,'' in reference to the construction of new or altered

equipment as ``* * * occurring within a time period which includes: 1.

The five years prior to the initiation of the construction; and 2. The

period between the initiation of construction and the initiation of

operation of that new or altered equipment.'' However, New Jersey has

not specifically defined the terms ``initiation of construction'' and

``initiation of operation.'' Consequently, EPA cannot approve this

definition of ``contemporaneous'' and New Jersey must correct this

deficiency in its rule. Therefore, EPA finds this as a basis for

disapproval.

NSR Conclusion

The EPA is proposing to grant a limited approval and limited

disapproval to New Jersey's rule for NSR in nonattainment areas (NJAC

7:27-18). EPA cannot grant full approval under section 110(k)(3) of the

Act because the rule does not fully meet the requirements of part D of

the Act.

In addition, because the provisions are not composed of separable

parts, EPA cannot grant partial approval as provided under section

110(k)(3). However, the rule does contain the major new requirements

under the Act for new offset requirements, lower emission thresholds,

and new provisions for NOX in ozone nonattainment areas.

Consequently, this rule strengthens New Jersey's SIP. In light of EPA's

rulemaking authority under section 301(a), EPA is granting a limited

approval of the rule in order to further progress in air quality in the

state.

At the same time, EPA is also proposing a limited disapproval of

New Jersey's nonattainment NSR rule because the rule lacks provisions

that will:

1. Revise offset provisions such that permit changes in existing

permits providing offsets must be in effect by the time of permit

issuance.

2. Supply information from nonattainment NSR permits to EPA's control

technology clearinghouse;

3. Revise the definition of ``stationary source'' to exclude the new

category of ``nonroad engines;''

4. Add provisions for modifications in serious and severe ozone

nonattainment areas required under sections 182(c)(6), (7) and (8);

5. Provide a net air quality benefit test; and

6. Provide a methodology for calculating net emissions increase that

adheres to EPA guidance and policy.

7. Provide definitions for ``initiation of construction'' and

``initiation of operation.''

If finalized, this disapproval would constitute a disapproval under

section 179(a)(2) of the Act (see generally 57 FR 13566-13567). It

should be noted that EPA's limited disapproval does not prevent EPA and

the State of New Jersey from enforcing the NSR rule.

Summary

EPA is proposing approval of New Jersey's vehicle miles travelled

forecast, emission inventory, Subchapter 25--oxygenated fuels rule, and

the employee commute option and transportation control measures as

contingency measures, and the multi-state coordination as revisions to

its carbon monoxide SIP. EPA is also proposing a limited approval and a

limited disapproval of New Jersey's Subchapter 18--new source review

regulation. EPA is proposing a disapproval of New Jersey's enhanced

inspection and maintenance program since it has not been adopted. In

addition, since the attainment demonstration relies on the enhanced

inspection and maintenance program, the attainment demonstration is

also being proposed for disapproval.

For those elements for which EPA is proposing disapproval, under

section 179(a) of the Act, the State of New Jersey would have up to 18

months after final disapproval to correct the deficiencies responsible

for the disapproval before EPA would be required to impose sanctions.

Section 179(b) describes the sanctions available to the Administrator.

Any final disapproval also would trigger the section 110(c)(1) Federal

Implementation Plan provision of the Act. To obtain full approval of

this carbon monoxide SIP, New Jersey must correct the identified

deficiencies in the new source review regulation, and an enhanced

inspection and maintenance program must be submitted and approved.

Nothing in this rulemaking should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any SIP. Each request for revision to any SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

This proposed rule has been classified as a Table 2 action by the

Regional Administrator under the procedures published in the Federal

Register on January 19, 1989 (54 FR 2214-2225), as revised by an

October 4, 1993 memorandum from Michael H. Shapiro, Acting Assistant

Administrator for Air and Radiation. A future document will inform the

general public of these tables. On January 6, 1989, the Office of

Management and Budget waived Table 2 and 3 SIP revisions (54 FR 2222)

from the requirements of section 3 of Executive Order 12291 for two

years. The EPA has submitted a request for a permanent waiver for Table

2 and 3 SIP revisions. The Office of Management and Budget has agreed

to continue the temporary wavier until such time as it rules on EPA's

request. This request continues in effect under Executive Order 12866

which superseded Executive Order 12291 on September 30, 1993.

Under 5 U.S.C. 605(b), the Administrator certifies that SIP

approvals under sections 107, 110 and 172 will not have a significant

economic impact on a substantial number of small entities. SIP

approvals do not create any new requirements but simply approve

requirements that are already state law. SIP approvals, therefore, do

not add any additional requirements for small entities. Moreover, due

to the nature of the federal-state relationship under the Act,

preparation of a flexibility analysis for a SIP approval would

constitute federal inquiry into the economic reasonableness of the

state actions. The Act forbids EPA to base its actions concerning SIPs

on such grounds.

List of Subjects in 40 CFR Part 52

Air pollution control, Carbon monoxide, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Particulate matter,

Reporting and recordkeeping requirements, Sulfur dioxide, Volatile

organic compounds.

Authority: 42 U.S.C. 7401-7671q.

Dated: October 3, 1994.

William J. Muszynski,

Deputy Regional Administrator.

[FR Doc. 94-27876; Filed 11-9-94; 8:45 am]

BILLING CODE 6560-50-P