Request for Opt-Out of the Reformulated Gasoline Program: Jefferson County, Albany and Buffalo, New York; Twenty-Eight Counties in Pennsylvania; and Hancock and Waldo Counties in Maine, General Procedures for Future Opt-Outs and Extension of Stay

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[FRL-5219-4]

Request for Opt-Out of the Reformulated Gasoline Program:

Jefferson County, Albany and Buffalo, New York; Twenty-Eight Counties

in Pennsylvania; and Hancock and Waldo Counties in Maine, General

Procedures for Future Opt-Outs and Extension of Stay

AGENCY: Environmental Protection Agency.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: In today's action, EPA is proposing to remove Jefferson County

and the Albany and Buffalo areas in New York; twenty-eight counties in

Pennsylvania; and Hancock and Waldo counties in Maine from the list of

covered areas identified in section 80.70 of the reformulated gasoline

rule. This is based on requests from the Governors of New York,

Pennsylvania and Maine that these areas opt out of this federal

program. In a separate action signed by the EPA Administrator on

December 29, 1994, EPA stayed the application of the reformulated

gasoline regulations in Jefferson County and the Albany and Buffalo

areas of New York; the twenty-eight opt-in counties in Pennsylvania;

and Hancock and Waldo counties in Maine effective January 1, 1995 until

July 1, 1995, to allow finalization of this rulemaking. Today's notice

also proposes to extend this stay during the pendency of this

rulemaking, until the agency takes final action on the proposed opt-out

for these areas. This action does not affect the necessity for these

areas to comply with the requirements of the anti-dumping program.

EPA is also proposing general rules establishing the criteria and

procedures for states to opt-out of the RFG program.

DATES: Regarding the proposal to extend the stay of the reformulated

gasoline regulations in the designated New York, Pennsylvania, and

Maine counties, no public hearing will be held. Comments must be

received by June 28, 1995.

If a public hearing is held on the opt-out of the designated New

York, Pennsylvania, and Maine counties or on the general procedures for

future opt-outs, comments must be received by August 4, 1995. If a

hearing is not held, comments must be received by July 14, 1995. Please

direct all correspondence to the addresses shown below.

The Agency will hold a public hearing on the proposed opt-out of

the designated New York, Pennsylvania, and Maine counties or on the

general procedures for future opt-outs if one is requested by June 21,

1995. If a public hearing is held, it will take place on July 5, 1995.

To request a hearing, or to find if and where a hearing will be held,

please call Mark Coryell at (202) 233-9014.

ADDRESSES: Comments should be submitted (in duplicate, if possible) to

Air Docket Section, Mail Code 6102, U.S. Environmental Protection

Agency, 401 M Street, SW, Washington, DC 20460. A copy should also be

sent to Mr. Mark Coryell at U.S. Environmental Protection Agency,

Office of Air and Radiation, 401 M Street, SW (6406J), Washington, DC

20460.

Materials relevant to this notice have been placed in Docket A-94-

68. The docket is located at the Air Docket Section, Mail Code 6102,

U.S. Environmental Protection Agency, 401 M Street, SW, Washington, DC

20460, in room M-1500 Waterside Mall. Documents may be inspected from

8:00 a.m. to 4:00 p.m. A reasonable fee may be charged for copying

docket material.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Coryell, U.S. Environmental

Protection Agency Office of Air and Radiation, 401 M Street, SW

(6406J), Washington, DC 20460, (202) 233-9014.

SUPPLEMENTARY INFORMATION: A copy of this action is available on the

OAQPS Technology Transfer Network Bulletin Board System (TTNBBS). The

TTNBBS can be accessed with a dial-in phone line and a high-speed modem

(PH# 919-541-5742). The parity of your modem should be set to none, the

data bits to 8, and the stop bits to 1. Either a 1200, 2400, or 9600

baud modem should be used. When first signing on, the user will be

required to answer some basic informational questions for registration

purposes. After completing the registration process, proceed through

the following series of menus:

(M) OMS

(K) Rulemaking and Reporting

(3) Fuels

(9) Reformulated gasoline

A list of ZIP files will be shown, all of which are related to the

reformulated gasoline rulemaking process. Today's action will be in the

form of a ZIP file and can be identified by the following title:

OPTOUT.ZIP. To download this file, type the instructions below and

transfer according to the appropriate software on your computer:

ownload, rotocol, xamine, ew, ist, or elp Selection

or to exit: D filename.zip

You will be given a list of transfer protocols from which you must

choose one that matches with the terminal software on your own

computer. The software should then be opened and directed to receive

the file using the same protocol. Programs and instructions for de-

archiving compressed files can be found via ystems Utilities from

the top menu, under rchivers/de-archivers. Please note that due to

differences between the software used to develop the document and the

software into which the document may be downloaded, changes in format,

page length, etc. may occur.

I. Introduction

This notice describes EPA's proposed action to remove Jefferson

County and the Albany and Buffalo areas in New York (a total of nine

counties in New York); the twenty-eight opt-in counties in

Pennsylvania; and Hancock and Waldo counties in Maine from the list of

covered areas defined by Sec. 80.70 of the reformulated gasoline rule

per the request of the States of New York, Pennsylvania and Maine. It

also

[[Page 31270]]

describes the Agency's proposal for general rules concerning criteria

and procedures for states to opt out of the reformulated gasoline

program. Finally, today's notice also proposes to extend the stay of

application of the reformulated gasoline regulations in the designated

counties during the pendency of this rulemaking, until the agency takes

final action on the proposed opt-out for these areas.

II. Background

The reformulated gasoline (RFG) program is designed to reduce ozone

levels in the largest metropolitan areas of the U.S. with the worst

ground level ozone problems by reducing vehicle emissions of the ozone

precursors, specifically volatile organic compounds (VOC), through fuel

reformulation. Reformulated gasoline also achieves a significant

reduction in air toxics. In Phase II of the program nitrogen oxides

(NOX), another precursor of ozone, are also reduced. The 1990

Amendments to the Clean Air Act requires reformulated gasoline in the

nine cities with the highest levels of ozone. In section 211(k)(6),

Congress provided the opportunity for states to choose to opt-in to the

RFG program for their other nonattainment areas. Opting in under this

provision is relatively straightforward. The only area of discretion

for EPA involves establishing an appropriate effective date for the

start of the program in the opt-in area. To date, EPA has acted under

this provision on a case-by-case basis, given that the lead time needed

to supply a new area is often dependent on the specific refineries that

would supply the area and the specific distributional infrastructure

available between the refineries and the local retail stations. While

EPA is not now proposing regulations that would establish the effective

date for an opt-in area, EPA is interested in receiving comment on the

need and benefit of having such regulatory provisions, as well as the

most appropriate provisions.

EPA recognizes that there is considerable interest in allowing

attainment areas to participate in the federal reformulated gasoline

program. The Ozone Transport Commission, established under section 184

of the Act to assess the degree of interstate transport of ozone

throughout the ozone transport region,1 is reviewing the viability

of a region-wide reformulated gasoline program. Other areas which are

currently classified attainment for the ozone air quality standard but

which have ozone monitoring data close to the federal ozone standard

are considering various ozone control measures to mitigate the risk of

future ozone violations. One such control measure is the reformulated

gasoline program. In light of the expressed interest in allowing

attainment areas to participate in the reformulated gasoline program,

EPA is soliciting comment on the feasibilty of and need for attainment

area opt-in.

\1\ The ozone transport region is comprised of the following

states: Connecticut, Delaware, Maine, Maryland, Massachusetts, New

Hampshire, New Jersey, New York, Pennsylvania, Rhode Island,

Vermont, Virginia, and the District of Columbia.

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

EPA questions whether section 211(k) of the Act provides the Agency

with the discretion to allow attainment areas to opt-in to this federal

program. For example, section 211(k)(6) specifies that EPA shall extend

the prohibition of section 211(k)(5) to ozone nonattainment areas upon

the request of a governor. In addition, section 211(k)(1) authorizes

EPA to establish requirements for reformulated gasoline to be used in

specified nonattainment areas. EPA invites comment on its authority

under section 211(k). EPA also invites comment on whether the Agency

has authority under section 211(c) of the Act to establish a

requirement that federally certified RFG be sold in attainment areas

that ``opt-in'' under such a program.

EPA issued final rules establishing requirements for reformulated

gasoline on December 15, 1993. 59 FR 7716 (February 16, 1994). During

the development of the RFG rule a number of States inquired as to

whether they would be permitted to opt-out of the RFG program at a

future date, or opt-out of certain of the requirements. This was based

on their concern that the air quality benefits of RFG, given their

specific needs, might not warrant the cost of the program, specifically

focusing on the more stringent standards in Phase II of the program

(starting in the year 2000). Such States wished to retain their ability

to opt-out of the program. Other States indicated they viewed RFG as an

interim strategy to help bring their nonattainment areas into

attainment sooner than would otherwise be the case.

The regulation issued on December 15, 1993 did not include

procedures for opting out of the RFG program because EPA had not

proposed and was not ready to adopt such procedures. However, the

Agency did indicate that it intended to propose such procedures in a

separate rule.

Jefferson County and the other eight New York counties affected by

this proposal were included as covered areas in EPA's reformulated

gasoline regulations based on Governor Mario Cuomo's request of October

28, 1991, that these areas be included under the Act's opt-in provision

for ozone nonattainment areas (57 FR 7926, March 5, 1992). See 40 CFR

80.70(j)(10)(vi). On November 29, 1994, EPA received a petition from

the Commissioner of New York's Department of Environmental

Conservation, Mr. Langdon Marsh, to remove Jefferson County from the

list of areas covered by the requirements of the reformulated gasoline

program. EPA understands that Commissioner Marsh is acting for Governor

Cuomo in this matter. The Administrator responded to the State's

request in a letter to Commissioner Marsh dated December 12, 1994,

stating EPA's intention to grant New York's request, and conduct

rulemaking to implement this. In the letter of December 12, addressing

the opt-out request for Jefferson County, the Administrator also

indicated that effective January 1, 1995, and until the rulemaking to

remove Jefferson County from the list of covered areas is completed,

EPA would not enforce the reformulated gasoline requirements in

Jefferson County for reformulated gasoline violations arising after

January 1, 1995. This was based on the particular circumstances in

Jefferson County.

On December 23, 1994, Commissioner Marsh of New York's Department

of Environmental Conservation wrote to further request the opt-out of

the Albany and Buffalo areas which include the counties of Albany,

Greene, Montgomery, Rennsselaer, Saratoga, Schenectady, Erie and

Niagara. EPA Assistant Administrator for Air and Radiation, Mary

Nichols, responded to the state's request in a letter to Commissioner

Marsh dated December 28, 1994, stating EPA's intention to grant New

York's request, and conduct rulemaking to implement this. The December

28 letter also indicated EPA's intent to stay the reformulated gasoline

regulations from January 1, 1995, until July 1, 1995, in the specified

counties while the Agency completes rulemaking to appropriately change

the regulations. The letter stated, however, that the requirements of

the reformulated gasoline program would apply in these areas until the

stay becomes effective January 1, 1995.

Twenty-eight counties in Pennsylvania were included as covered

areas in EPA's reformulated gasoline regulations based on Governor

Robert P. Casey's request dated September 25, 1991. See 40 CFR

80.70(j)(11) (i) through (xxviii). The counties referred to are listed

as follows: Adams, Allegheny, Armstrong, Beaver, Berks, Blair, Butler,

Cambria, Carbon, Columbia,

[[Page 31271]]

Cumberland, Dauphin, Erie, Fayette, Lackawanna, Lancaster, Lebanon,

Lehigh, Luzerne, Mercer, Monroe, Somerset, Northhampton, Perry,

Washington, Westmoreland, Wyoming and York. On December 1, 1994, EPA

received a petition from Governor Casey to remove these twenty-eight

counties from the list of covered areas defined by Sec. 80.70 of the

reformulated gasoline rule. As with New York's request, the

Administrator responded to the State's request in a letter to Governor

Casey dated December 12, 1994, stating EPA's intention to grant

Pennsylvania's request, and conduct rulemaking to implement this.

Effective January 1, 1995, and until formal rulemaking to remove the

twenty-eight counties from the list of covered areas is completed, EPA

would not enforce the reformulated gasoline requirements in these

twenty-eight counties for reformulated gasoline violations arising

after January 1, 1995. This was based on the particular circumstances

in Pennsylvania. EPA has reserved its authority to enforce the

reformulated gasoline program for violations that may have occurred

prior to January 1, 1995.

Hancock and Waldo Counties in Maine were included as covered areas

in EPA's reformulated gasoline regulation based on Governor John R.

McKernan's request of June 26, 1991, that these counties be included

under the Act's opt-in provision for ozone nonattainment areas. (56 FR

46119, September 10, 1991) See 40 CFR 80.70(j)(5) (viii) and (ix). On

December 27, EPA received a petition from the Acting Commissioner of

Maine's Department of Environmental Protection, Ms. Deborah Garrett, to

remove Hancock and Waldo Counties in Maine from the list of areas

covered by the requirements of the reformulated gasoline program. EPA

understands that Commissioner Garrett is acting for Governor McKernan

in this matter. EPA Assistant Administrator for Air and Radiation, Mary

Nichols, responded to the state's request in a letter to Commissioner

Garrett, dated December 28, 1994, stating EPA's intention to grant

Maine's request, and conduct rulemaking to implement this. The December

28 letter also stated EPA's intent to stay the reformulated gasoline

regulations from January 1, 1995 until July 1, 1995, in the specified

counties while the Agency completes rulemaking to appropriately change

the regulations. However, EPA has reserved its authority to enforce the

reformulated gasoline program for violations that may have occurred

prior to January 1, 1995.

III. EPA's Proposal To Grant New York's, Pennsylvania's and Maine's

Requests To Remove Selected Opt-In Areas From the Requirements of the

Reformulated Gasoline Program and Extension of the Stay of Application

of the Reformulated Gasoline Regulations

EPA believes that it is reasonable to construe section 211(k) as

authorizing the Agency to establish procedures and requirements for

states to opt out of the reformulated gasoline program. This would only

apply to areas that have previously opted in under section 211(k)(6);

the mandatory covered areas would not be allowed to opt out of the

program.

In section 211(k)(6), Congress expressed its clear intention

regarding state opt-in to this program. That paragraph establishes that

``upon the application of the Governor of a State, the Administrator

shall apply the prohibition set forth in paragraph (5) in any (ozone

nonattainment) area in the State * * * The Administrator shall

establish an effective date for such prohibition * * *.''2

However, with respect to opting out, ``the statute is silent or

ambiguous with respect to the specific issue'' and the question is

whether EPA's interpretation ``is based on a permissible construction

of the statute.'' Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 843 (1984). In addition, ``[i]f Congress

has explicitly left a gap for the Agency to fill, there is an express

delegation of authority to the Agency to elucidate a specific provision

of the statute by regulation.'' Id. at 843-44. If the delegation is

implicit, the Agency may adopt a reasonable interpretation of the

statute. Id. at 844.

\2\ Paragraph 5 of section 211(k) prohibits the sale of

conventional, or non-reformulated gasoline, in covered areas.

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

Section 211(k)(1) provides that EPA is to promulgate ``regulations

establishing requirements for reformulated gasoline.'' This provision

therefore delegates to EPA the authority to define the requirements for

reformulated gasoline. Clean Air Act section 301(a)(1) also delegates

to EPA the general authority to promulgate ``such regulations as are

necessary'' for EPA to carry out its function under the Act. Given

these delegations of legislative rulemaking authority, EPA's

interpretation of section 211(k) with respect to opting out should be

upheld unless manifestly contrary to the Act. Chevron, 467 U.S. at 843-

44.

EPA believes that it is appropriate to interpret section 211(k) as

authorizing states to opt-out of this program, provided that a process

is established for a reasonable transition out of the program.3

There are really two aspects to this, the first being whether states

should be allowed to opt out at all, the second being what conditions,

if any, should be placed on opting out. With respect to the former, the

ability to opt out is consistent with the Act's recognition that states

have the primary responsibility to develop a mix of appropriate control

strategies needed to reach attainment with the NAAQS. While various

mandatory control strategies were established under the Clean Air Act,

the Act still evidences a clear commitment to allowing states the

flexibility to determine the appropriate mix of other measures needed

to meet their air pollution goals. Section 211(k)'s opt-in provision

reflects this deference to state choice, providing that opt-in will

occur upon application by the governor. The only discretion EPA retains

regarding opt-in is in setting or extending the effective date.

Allowing states the ability to opt-out is a logical extension of these

considerations of deference to state decision making.

\3\ The preamble to the December 15, 1993, final regulations

failed to provide a clear discussion of EPA's views on this issue.

While EPA noted that it ``may pursue a separate action in the future

that would allow states to opt out of the RFG program, provided

sufficient notice is given,'' the preamble also indicated there were

concerns over whether EPA had authority to allow states to opt-out.

59 FR 7808 (February 16, 1994). The context for these statements,

however, makes it clear that EPA's concerns were based on issues

surrounding questions of opting-in for only Phase I of the

reformulated gasoline program. See 59 FR 7809. As noted above, EPA

believes that it does have authority to establish requirements that

allow states to opt-out of this program.

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

Given such deference, it follows that opting out should be

accomplished through application of the governor. It also follows that

the conditions on opting out should be geared towards achieving a

reasonable transition out of the reformulated gasoline program, as

compared to requiring a state to justify its decision. EPA has

identified two principal areas of concern in this regard. The first

involves coordination of air quality planning. For example,

reformulated gasoline in opt-in areas has been relied upon by several

states in their State Implementation Plan submissions or in their

redesignation requests. The second involves appropriate lead time for

industry to transition out of the program.

With respect to air quality planning, EPA believes there is no

reason to delay the removal of the 39 affected counties, or portions of

counties, in New York, Pennsylvania and Maine. The 39 counties have not

had an ozone exceedance over a consecutive three-year period. Certain

of these thirty-nine

[[Page 31272]]

counties have pending requests with EPA for redesignation to attainment

status, and the remaining areas intend to seek such redesignation. The

State Implementation Plans for these areas do not include or rely on

reformulated gasoline as a control measure. For the moderate areas in

Pennsylvania, reformulated gasoline is included in the redesignation

plan as a contingency measure in the maintenance plan. Allowing the

areas to opt-out now would not interfere with implementing that

contingency. The areas could opt into the reformulated gasoline program

in the future, if necessary.

EPA's letters of December 12 and 28, 1994, to the States of New

York, Pennsylvania and Maine state that reformulated gasoline will no

longer be required in the specified areas effective January 1, 1995,

pending completion of the rulemaking to remove the affected counties.

These letters, combined with the requests from New York, Pennsylvania

and Maine to opt-out, have given the industries involved in the supply,

distribution and sale of reformulated gasoline to these areas notice of

the Agency's intent to remove these areas from the reformulated

gasoline program. This has provided time for industry to plan for the

transition from reformulated gasoline to conventional gasoline in the

affected areas. In a separate notice signed by the EPA Administrator on

December 29, 1994, and for the reasons described therein, EPA has

stayed the program in these thirty-nine counties, or portions thereof,

effective January 1, 1995, until July 1, 1995. Based on this

chronology, EPA proposes that these areas be removed from the

reformulated gasoline program effective upon the issuance of final

action in this rulemaking.

As mentioned above, on December 29, 1994, EPA issued a final rule

staying the application of the reformulated gasoline regulations for

certain areas that had opted in to the reformulated gasoline program.

60 FR 2696 (January 11, 1995). This stay applied to Jefferson County

and the Albany and Buffalo areas of New York, the twenty eight opt-in

counties in Pennsylvania, and Hancock and Waldo counties in Maine. It

stayed the regulations in these areas effective January 1, 1995 until

July 1, 1995. EPA now proposes to extend this stay during the pendency

of this rulemaking, until the agency takes final action on the proposed

opt-out for these areas. This extension of the stay is based on the

reasons described in the December 29, 1994 rule, and the fact that EPA

will not be able to complete the opt-out rulemaking for these areas

prior to July 1, 1995.

EPA intends to take final action on the proposed extension of the

stay before July 1, 1995, to avoid the serious disruption to the

gasoline distribution system, the regulated industry and the public

that would be caused by a temporary imposition of the reformulated

gasoline requirements in these areas. Based on this potential for

serious disruption, and the reasons noted by EPA when it issued the

stay in December 29, 1994 (60 FR 2698, January 11, 1995), EPA has

determined that there is good cause under 5 U.S.C. 553(b) and Clean Air

Act section 307(d)(1) to limit the public comment period on the

proposed extension of the stay to June 28, 1995, and to not provide an

opportunity for a public hearing on this proposed extension. EPA finds

that additional notice and public procedure would be impracticable,

unnecessary, and contrary to the public interest.

IV. General Procedures for EPA's Processing of Future Opt-Out Requests

EPA is also proposing general rules to cover future opt-out

requests by states. EPA's proposal would authorize the Administrator to

approve a petition to opt-out all or a portion of an opt-in area. Such

a petition would have to be submitted by the governor, or their

authorized representative, and would need to include information

describing how, if at all, reformulated gasoline has been relied upon

by the state in its State Implementation Plans, revisions to such

plans, or redesignation requests, both pending or already approved.

This would include, for example, attainment as well as maintenance

plans.

If a state did rely on reformulated gasoline as a control measure

in such plans or requests, then the state would have to describe if and

how it intended to replace reformulated gasoline as a control measure.

In addition, the state would need to identify whether it intended to

submit a revision to its Plan or request for redesignation, the current

schedule for submitting any revised submission, and the current status

of state action on such revised submission, and if not, the reasons for

not submitting a revision. This would include, for example, the status

of any legislative or administrative action, including notice and

comment on such a revision.

The Administrator would have authority to establish an appropriate

effective date for removal of an area from the list of covered areas

defined in Sec. 80.70 of the reformulated gasoline rule, subject to

certain important limitations. For example, if reformulated gasoline

was relied upon as a control measure in an approved plan, then the opt-

out would not become effective until 30 days after the Agency had

approved an appropriate revision to the state plan. Likewise, if

reformulated gasoline was not relied upon in an approved or pending

SIP, SIP revision, or redesignation request, then the opt-out would

become effective 30 days from receipt of a complete opt-out petition.

If reformulated gasoline was relied upon as a control measure in a plan

that had been submitted to the Agency but is still pending, and the

Agency has found the plan to be complete and/or made a protectiveness

finding under 40 CRF 51.448 and 93.128, then the opt-out would become

effective 120 days from the date a complete petition is received. When

the state has a pending plan that the Agency has determined complete

and/or for which the Agency has made a protectiveness finding and the

state has decided to withdraw the submission or has indicated to the

Agency the state's intention to submit a revision, then the opt-out

would become effective 30 days from receipt of a complete petition from

the state, as described above and specified in the proposed regulatory

language.

Under this proposal, the regulated community would typically have

thirty days lead time to transition out of the program for that area,

from the point a complete opt-out petition had been received by EPA.

Where a state's approved SIP includes reformulated gasoline as a

control measure, there would typically be a longer period of notice, as

the opt-out would not be effective until 30 days from the effective

date for EPA approval of a revised SIP which removes reformulated

gasoline as a control measure. EPA's experience to date with the

current opt-out requests indicates that the regulated community can, in

most cases, act relatively quickly to reroute supplies and change

plans. It also is clear that a short transition period will avoid

problems of market uncertainty and market disruptions. Some

representatives of industry have communicated to EPA their concern for

sufficient lead time for affected industries to make adjustments to

their infrastructure and the need for a period of public comment on

each reformulated gasoline program covered area opt-out request. Some

have suggested that opt-out not be effective until 90 days after a

governor's request is received by EPA, while others have suggested that

the opt-out timeframe be dealt with on a case-by-case basis. EPA will

consider this suggestion and specifically requests comments on these

issues and other suggestions.

[[Page 31273]]

The proposal is structured so that the effective date for opting

out is based on coordination with the state's air quality planning.

Where no state SIP or redesignation request relies on reformulated

gasoline, no further coordination is needed. Where a submission pending

before the Agency contains reformulated gasoline as a control measure,

and the Agency has not taken final action on the submission, it would

be appropriate to allow opt-out to occur quickly where the state either

withdraws the pending SIP submission or indicates its intention to make

a substitute for RFG at some future date. This would provide

flexibility for the states and allow for orderly state planning, as the

state's planning would be consistent with the use of RFG in the area.

On the other hand, where the Agency has taken final action approving a

SIP, it is appropriate for the Agency to maintain the status quo until

the state submits and EPA approves a revision removing RFG as a control

measure in the approved SIP. This recognizes the requirement that

states implement an approved plan until such time EPA approves its

revision. Finally, where a plan submission is pending before EPA, and

EPA has made a protectiveness finding for purposes of conformity and/or

the submission has been found or deemed complete, then opt-out should

be delayed for 120 days to provide the Agency an adequate opportunity

to review the current completeness determination and/or protectiveness

finding on the SIP submission without the use of RFG as a control

measure and to communicate to the state any potential change in SIP

status.

EPA believes that it is important that a state choosing to opt-out

of the reformulated gasoline program should plan to make any

appropriate revisions to its SIP, if necessary, to replace the

reformulated gasoline program as a control measure. Careful planning is

needed by the state as EPA analysis indicates that reductions from

other sources are often much less practicable. Reformulated gasoline is

one of the most cost-effective measures for ozone control available and

also yields significant air toxic benefits.

EPA specifically reserves its authority to monitor compliance with

the reformulated gasoline program and to take appropriate action to

address violations that may occur prior to the effective date for any

opt-out.

V. Environmental Impact

If an area opts out of the reformulated gasoline program, it will

not receive the reductions in volatile organic compounds, oxides of

nitrogen (NOX), and air toxics that are expected from this

program. Instead, the areas would be subject to the federal controls on

Reid vapor pressure for gasoline in the summertime, and would receive

control of NOX and air toxics through the requirements of the

conventional gasoline anti-dumping program. These latter requirements

are designed to ensure that gasoline quality does not degrade from the

levels found in 1990. The specific areas covered by this rule have data

showing compliance with the National Ambient Air Quality Standard

(NAAQS) for ozone for three or more consecutive years. With regard to

the general rule for opt-out, EPA is proposing that before opt-out is

allowed, States requesting opt-out must provide information on

substitutes for the reformulated gasoline program or in some cases have

substitutes approved, depending on the status of EPA's processing of

the SIP. EPA expects that this and the SIP process will ensure that our

air quality is maintained. However, these areas would be foregoing the

additional air quality benefits obtained from the use of reformulated

gasoline.

VI. Economic Impact

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5

U.S.C. 605(b), the Administrator certifies that this rule will not have

a significant impact on a substantial number of small entities. This

proposed rule is not expected to result in any additional compliance

cost to regulated parties and in fact is expected to decrease

compliance costs and decrease costs to consumers in the affected areas.

VII. Administrative Requirements

Under Executive Order 12866 (58 FR 51735, October 4, 1993) the

Agency must determine whether a regulation 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 legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

It has been determined that this rule is not a ``significant

regulatory action'' under the terms of Executive Order 12866 and is

therefore not subject to OMB review.

Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., EPA must

obtain Office of Management and Budget (OMB) clearance for any activity

that will involve collecting substantially the same information from 10

or more non-Federal respondents. While this proposed rule does require

information from a state requesting opt-out, EPA does not believe it

will receive more than nine opt-out requests per year. If EPA

determines that 10 or more states will be affected in any year, EPA

will prepare an Information Collection Request and make it available

for public review and comment.

Unfunded Mandates

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a Federal mandate that may result in estimated

costs to State, local, or tribal governments in the aggregate; or to

the private sector, of $100 million or more. Under Section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves the objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by the rule.

EPA has determined that the action promulgated today does not

include a Federal mandate that may result in estimated costs of $100

million or more to either State, local, or tribal governments in the

aggregate, or to the private sector. Therefore, the requirements of the

Unfunded Mandates Act do not apply to this action.

VIII. Statutory Authority

The statutory authority for the action in this rule is granted to

EPA by sections 211 (c) and (k) and section 301(a) of the Clean Air Act

as amended, 42 U.S.C. 7545 (c) and (k) and 7601(a).

List of Subjects in 40 CFR Part 80

Environmental protection, Air pollution control, Fuel additives,

Gasoline, Motor vehicle pollution.

[[Page 31274]]

Dated: June 2, 1995.

Carol M. Browner,

Administrator.

40 CFR part 80 is proposed to be amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

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

Authority: Sections 114, 211 and 301(a) of the Clean Air Act as

amended (42 U.S.C. 7414, 7545, and 7601(a)).

2. Section 80.2 is amended by adding paragraph (vv) to read as

follows:

Sec. 80.2 Definitions.

* * * * *

(vv) Opt-in area. An area which becomes a covered area under

Sec. 80.70 pursuant to section 211(k)(6) of the Clean Air Act.

3. Section 80.70 is amended by revising the first sentence of

paragraph (j) introductory text to read as follows:

Sec. 80.70 Covered areas.

* * * * *

(j) The ozone nonattainment areas listed in this paragraph (j) of

this section are covered areas beginning on January 1, 1995, except

that those areas listed in paragraphs (j)(5)(viii) and (ix),

(j)(10)(i), (iii) and (v) through (xi) and (j)(11) of this section

shall not be covered areas until EPA takes final action on the proposal

to remove these areas as covered areas. * * *

* * * * *

Sec. 80.70 [Amended]

4. Section 80.70 is amended by removing paragraphs (j)(5)(viii) and

(ix).

5. Section 80.70 is amended by removing paragraphs (j)(10)(i),

(iii) and (v) through (xi), and redesignating paragraphs (j)(10)(ii)

and (iv) as (j)(10)(i) and (ii).

6. Section 80.70 is amended by removing paragraph (j)(11) and

redesignating paragraphs (j)(12) through (15) as (11) through (14).

7. Section 80.70 is amended by adding paragraph (l) to read as

follows:

Sec. 80.70 Covered areas.

* * * * *

(l) Upon the effective date for removal under Sec. 80.72(a), the

geographic area covered by such approval shall no longer be considered

a covered area for purposes of subparts D, E and F of this part.

8. Section 80.72 is added to read as follows:

Sec. 80.72 Procedures for opting out of the covered areas.

(a) In accordance with paragraph (b) of this section, the

Administrator may approve a petition from a state asking for removal of

any opt-in area, or portion of an opt-in area, from inclusion as a

covered area under Sec. 80.70. In approving any such petition, the

Administrator shall establish an appropriate effective date for such

removal, pursuant to paragraph (c) of this section.

(b) To be approved under paragraph (a) of this section, a petition

must be signed by the governor of a state, or his or her authorized

representative, and must include the following:

(1) A geographic description of each opt-in area, or portion of

each opt-in area, which is covered by the petition;

(2) A description of all ways in which reformulated gasoline is

relied upon as a control measure in any approved state or local

implementation plan or plan revision, or in any submission to the

Agency containing any proposed plan or plan revision (and any

associated request for redesignation) that is pending before the Agency

when the petition is submitted; and

(3) For any opt-in areas covered by the petition for which

reformulated gasoline is relied upon as a control measure as described

under paragraph (b)(2) of this section, the petition shall include the

following information:

(i) Identify whether the state is withdrawing any such pending plan

submission;

(ii)(A) Identify whether the state intends to submit a revision to

any such approved plan provision or pending plan submission that does

not rely on reformulated gasoline as a control measure, and describe

the alternative air quality measures, if any, that the state plans to

use to replace reformulated gasoline as a control measure;

(B) A description of the current status of any proposed revision to

any such approved plan provision or pending plan submission, as well as

a projected schedule for submission of such proposed revision;

(C) If the state is not withdrawing any such pending plan

submission and does not intend to submit a revision to any such

approved plan provision or pending plan submission, describe why no

revision is necessary;

(D) If reformulated gasoline is relied upon in any pending plan

submission, other than as a contingency measure consisting of a future

opt-in, and the Agency has found such pending plan submission complete

or made a protectiveness finding under 40 CFR 51.448 and 93.128,

demonstrate whether the removal of the reformulated gasoline program

will affect the completeness and/or protectiveness determinations;

(4) Upon request by the Adminstrator, the Governor of a State, or

his or her authorized representative, shall submit additional

information upon request of the Administrator

(c) (1) Except as provided in paragraph (c)(2) and (3) of this

section, the Administrator shall set an effective date for removal of

an area under paragraph (a) of this section of 30 days from receipt of

a complete petition by EPA.

(2) If reformulated gasoline is contained as an element of any plan

or plan revision that has been approved by the Agency, other than as a

contingency measure consisting of a future opt-in, then the effective

date under paragraph (a) of this section shall be 30 days from the

effective date for Agency approval of a revision to the plan that

removes reformulated gasoline as a control measure.

(3) Unless the state has withdrawn the submission or indicated its

intention to submit a revision, if reformulated gasoline is contained

as an element in any plan or plan revision that has been submitted to

and is pending approval by the Agency, other than as a contingency

measure consisting of a future opt-in, and where such pending plan or

plan revision has been found or deemed to be complete and/or the Agency

has made a protectiveness finding under 40 CFR 51.448 and 93.128

concerning such submission, then the effective date under paragraph (a)

of this section shall be 120 days from the date a complete petition is

received by the Agency.

(d) The Administrator shall publish a notice in the Federal

Register of any petition approved under paragraph (a) of this section,

announcing the effective date for removal.

[FR Doc. 95-14573 Filed 6-13-95; 8:45 am]

BILLING CODE 6560-50-P