Approval and Promulgation of Implementation Plans; Nevada State Implementation Plan Revision, Clark County

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[NV-034-0016; FRL-6350-5]

Approval and Promulgation of Implementation Plans; Nevada State

Implementation Plan Revision, Clark County

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finalizing the approval of revisions to the Nevada

State Implementation Plan (SIP) proposed in the Federal Register on

December 11, 1998. This action specifically includes approval of

revisions to Clark County Health District's wintertime oxygenated fuels

program. This approval action will incorporate these revisions into the

federally approved SIP. The intended effect of approving these

revisions is to regulate emissions of carbon monoxides (CO) in

accordance with the requirements of the Clean Air Act, as amended in

1990 (CAA or the Act). Thus, EPA is finalizing the approval of these

revisions into the Nevada SIP under provisions of the CAA regarding EPA

action on SIP submittals, SIPs for national primary and secondary

ambient air quality standards and plan requirements for nonattainment

areas.

EFFECTIVE DATE: This action is effective on July 2, 1999.

ADDRESSES: Copies of the SIP revision and EPA's evaluation report are

available for public inspection at EPA's Region 9 office during normal

business hours. Copies of these documents are

[[Page 29574]]

also available for inspection at the following locations:

Nevada Division of Environmental Protection, Bureau of Air Quality, 123

W. Nye Lane, Carson City, NV

Clark County Health District, P.O. Box 3902, 625 Shadow Lane, Las

Vegas, NV

FOR FURTHER INFORMATION CONTACT: Roxanne Johnson, Air Planning Office

(AIR-2), Air Division, U.S. Environmental Protection Agency, Region IX,

75 Hawthorne Street, San Francisco, CA 94105-3901, (415) 744-1225.

SUPPLEMENTARY INFORMATION:

I. Applicability

The revisions being approved into the Nevada SIP include: Clark

County District Board of Health, (Clark County), Air Pollution Control

(APC) Section 53, Oxygenated Gasoline Program (as amended and approved

on September 25, 1997). This SIP revision was submitted by the Nevada

Division of Environmental Protection to EPA on August 7, 1998.

II. Background

On December 11, 1998, EPA proposed to approve Clark County's

Oxygenated Gasoline Program as a revision to the Nevada SIP. 63 FR

68415. EPA has evaluated the revisions for consistency with the

requirements of the CAA and EPA regulations. EPA has found that Clark

County's revisions to its wintertime gasoline oxygenated fuels program

meet applicable EPA requirements. A detailed discussion of the SIP

revisions and evaluation has been provided in the December 11, 1998

Federal Register (63 FR 68415), and in the technical support document

(TSD) available at EPA's Region IX office.

III. Response to Public Comments

A 30-day public comment period was provided in the notice of

proposed rulemaking, 63 FR 68415, December 11, 1998. EPA received only

one comment letter, from the Western States Petroleum Association

(WSPA). WSPA's comments and EPA's responses are set forth below.

A. Preemption

WSPA commented that Nevada's 3.5% oxygen content requirement is

preempted by section 211(c)(4) of the Act because EPA has previously

promulgated regulations to prescribe controls or prohibitions on the

oxygen content of gasoline and by section 211(m)(2) because this

section of the Act requires certain nonattainment areas to implement an

oxygenated gasoline program with not less than 2.7% oxygen. WSPA also

commented that Clark County's 3.5% gasoline oxygen content requirement

is preempted under the doctrines of conflict and field preemption.

EPA does not believe that Clark County's 3.5% gasoline oxygen

content requirement is barred by section 211(m) or preempted by the

Act, either explicitly under section 211(c)(4)(A) or implicitly based

on the judicial doctrines of conflict preemption or field preemption.

EPA's response to WSPA's preemption comments begins with a discussion

of consistency with section 211(m), followed by a response to the other

preemption arguments.

1. Consistency with Section 211(m)

On March 18, 1997, the Clark County Commission adopted a resolution

requesting that the Board of Health adopt the proposed regulations

specifying that the minimum oxygen content of wintertime gasoline shall

be 3.5% oxygen by weight, starting October 1, 1997. Because the Las

Vegas Valley was being designated by EPA as a serious nonattainment

area for carbon monoxide (CO), the Board of Health moved to propose the

minimum 3.5% oxygenate regulation to help reach attainment of the

National Ambient Air Quality Standards for CO.

Section 211(m)(1) requires that certain states with areas

designated nonattainment for CO implement an oxygenated gasoline

program. This applies to states containing CO nonattainment areas with

a CO design value 1 of at least 9.5 parts per million based

on 1988 and 1989 data.

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\1\ The carbon dioxide design value is a surrogate measure of

attainment status, a measure of progress, and an indicator of how

much concentrations must be reduced to meet the standard.

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Section 211(m) requires that various states submit revisions to

their SIP, and implement oxygenated gasoline programs. This section

also identifies certain elements that the state program must contain.

Section 211(m)(2)(A) identifies the geographic area of the state

program (it must apply throughout the Consolidated Metropolitan

Statistical Area (CMSA) or the Metropolitan Statistical Area (MSA)) and

the time period of the program (it must apply during that portion of

the year in which the area is prone to high ambient concentrations of

CO, as determined by the Administrator, but no less than four months).

Section 211(m)(2)(A)(B) requires that gasoline be blended to contain

not less than 2.7% oxygen. Under certain circumstances (section

211(m)(7)), gasoline must be blended to contain not less than 3.1%

oxygen. Section 211(m)(5) requires that EPA promulgate guidelines for

states to implement provisions for marketable oxygen credits. This

section also authorizes EPA to waive the above requirements under

limited circumstances.

WSPA argues that, under section 211(m), a state must adopt a 2.7%

standard and may not adopt any other standard, except as expressly

provided in section 211(m)(7). The requirement that gasoline be blended

to contain ``not less than 2.7 percent oxygen by weight'' would

therefore set both a floor and a ceiling for a minimum oxygen content

that a state must establish.2 Clark County's requirement of

a 3.5% minimum oxygen content would violate the requirements of section

211(m) under this interpretation. EPA believes that the better reading

of section 211(m)(2) is that, at a minimum, states must require that

gasoline contain 2.7% oxygen by weight, and that states could satisfy

this by requiring gasoline to contain 2.7% oxygen or by setting any

higher requirement such as 3.1% oxygen content, or 3.5% oxygen content.

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\2\ In support of its claim, WSPA points to the 1996 extension

of the CO attainment date for the Las Vegas area. WSPA argues that

in the preamble to that action EPA identified the 2.7% oxygen

content requirement without expressing that the requirement for the

area was a minimum content requirement. EPA believes WSPA has read

too much into the preamble's abbreviated listing of requirements for

the area. Nothing in that preamble indicated an intent to interpret

the confines of section 211(m)(2). In fact, EPA noted that Clark

County had revised its regulations ``to meet the minimum 2.7%

oxygenate by weight requirement of the CAA.'' 61 FR 41759, 41763

(Aug. 12, 1996).

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Neither the text of section 211(m) nor the legislative history

indicate a clear Congressional intent to prohibit states from adopting

any oxygen content requirement greater than 2.7%. This interpretation

would be inconsistent with the general structure of the Act because it

would restrict the ability of states to develop programs to meet the

federal ambient air quality standards. See Title I generally, sections

107, 110, and 116. Oxygenated gasoline is one of the simplest and most

cost-effective measures for control of carbon monoxide. This

interpretation would limit a state's ability to use this strategy for

air quality purposes, as any increase above the 2.7% minimum would only

be allowed where a severe nonattainment area had already failed to meet

its statutory deadline for attaining the NAAQS. Thus, states would be

barred from adopting any oxygen content requirement above 2.7%, even

where an area needed a more stringent

[[Page 29575]]

standard to attain the NAAQS. Instead, such a state with a moderate

nonattainment area could not take action needed to meet the air quality

standard. The area would likely have to continue to violate the

standard until it had been upgraded to a severe nonattainment area and

had missed the deadline for severe nonattainment areas to come into

compliance with the NAAQS, before it could adopt a more effective

control measure designed to help attain the NAAQS. There is no

indication that Congress intended a limitation so potentially injurious

to public health and so contrary to rational planning. This

interpretation is also inconsistent with the principle that a statute

should not be read to preempt state authority unless it is clear that

Congress intended such a result. See Medtronic, Inc. v. Lohr, 518 U.S.

470, 485 (1996); Cipollone v. Liggett Group, Inc., 505 U.S. 504, 518

(1992).

WSPA asserts that the legislative history of sections 211 (m) and

(k) shows that the 2.7% oxygen content level was set to ensure fuel

neutrality and opportunity for all oxygenates in the marketplace. They

argue that state programs requiring greater than 2.7% oxygen conflict

with this goal and Congress therefore intended to prohibit

them.3 However, while much of the legislative history of

section 211(m) concerns the appropriate level at which to set the

minimum federally mandated oxygenate requirement in the Clean Air Act,

there is no indication that Congress intended to bar the states from

setting more stringent oxygenate requirements.

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\3\ This concern arises because ethanol is currently the only

oxygenate additive that may lawfully be blended in gasoline at

levels greater than 2.7% oxygen by weight.

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The Chafee-Baucus Statement of the Senate Managers (discussing the

Conference Committee version of the bill which Congress adopted as the

1990 Amendments to the CAA) states merely that ``[t]he conference

agreement requires any gasoline sold in a carbon monoxide nonattainment

area to contain at least 2.7 percent oxygen. * * *'' Senate Committee

on Environment and Public Works, 103d Cong., 1st Sess., A Legislative

History of the Clean Air Act Amendments of 1990 (hereinafter

``Legislative History'') at 896 (1993) (statement from Senate debate on

October 27, 1990). Senator Simpson and Congressmen Sharp and Hall all

reiterated a statement that has been cited in support of the

proposition that section 211(m) bars states from requiring a higher

fuel oxygen content. ``The level of 2.7 percent was chosen in part to

provide more even opportunities for competition between the two major

oxygenates, methyl tertiary butyl ether, or MTBE, and ethyl alcohol, or

ethanol. * * * The Administrator may not discriminate among these

different oxygenates, and should encourage fair competition among

them.'' Legislative History at 1171 (statement from Senate debate on

October 26, 1990) (emphasis added). See also id. at 1216, 1328. Senator

Simpson and others added that in exercising its waiver authority under

section 211(m)(3), EPA may not approve partial waivers of the oxygenate

requirements. ``In particular, new 211 (k) and (m) already create

several new kinds of gasoline, and different oxygen concentrations may

already exist under the various NOX cap provisions of these

two subsections. Further balkanizing of the gasoline industry--with

different oxygenate concentrations in different east coast cities, for

example--potentially risks further disruptions and precision from

refiners that may not be possible.'' Id. at 1169 (statement from Senate

debate October 26, 1990). All of these statements address limitations

on EPA's, not states', authority to choose between oxygenates or set

more or less stringent oxygen content requirements. These statements

simply give no indication of whether or not Congress intended to limit

states' ability to set more stringent requirements, which might be

critical to carry out their responsibility to adopt state

implementation plans to protect the health of their citizens.

Other statements in the legislative history suggest that Congress

was primarily concerned about establishing a preference for one

oxygenate over another as a matter of federal law and intended to give

states flexibility in their fuels programs. The Senate version of the

bill provided that the wintertime oxygen content requirements would be

a direct federal mandate on the fuel producers to sell gasoline with at

least 3.1% oxygen content, rather than a directive to states for their

state implementation plans. S.1630, 103d Cong. (1990), reprinted in

Legislative History at 4119, 4388. Commenting on his proposed amendment

to substitute 2.7% for 3.1% oxygen content, Senator Lautenberg stated:

But the question is, should we, as a Federal initiative, provide

an advantage to one of these fuels over another? I do not think so.

* * * [A 2.7% requirement] would allow for open and free competition

among the various fuels and provide State and local officials with

the flexibility to decide what fuels they need in their areas. * * *

[The 3.1% requirement] takes away flexibility from State and local

officials. * * * [Quoting from State and Territorial Air Pollution

Program Administrators (STAPPA) and Association of Local Air

Pollution Control Officials (ALAPCO) letter] ``We believe it is

critically important that any alternative fuels programs be `fuel

neutral.' This would provide State and local governments with the

ability to select from a variety of fuels--not just gasohol--to

address problems (e.g., carbon monoxide and ozone) unique to their

jurisdictions.'' * * * [A]nd most importantly, as STAPPA noted, [my

amendment] would allow localities to use the fuels that best meet

their particular needs. * * * USDA notes that four States have

oxygenated fuels program in place: Arizona, Colorado, Nevada, and

New Mexico. * * * [The 3.1% requirement] would force the areas that

already have oxygenated fuels programs to scrap them and switch to

gasohol. * * *

Legislative History at 5429-5430 (statement from Senate debate on

March 7, 1990) (emphasis added). Senator Wirth added: ``As I understand

it, the amendment offered by the Senator from New Jersey would not set

this issue in concrete. It would require that oxygenated fuels sold in

these nonattainment areas contain 2.7 percent oxygen. If, a few years

down the road it makes sense for a State, or a city like Denver, to set

a higher minimum oxygen content, that possibility always exists. All we

are saying with this amendment is that we don't want to set a national

minimum oxygen content standard of 3.1 percent.'' Id. at 5457 (emphasis

added).

While Senator Lautenberg's 2.7% oxygen content amendment did not

pass in the Senate, the final CAA set a 2.7% oxygen content

requirement. Consequently, the arguments advanced by Senators

Lautenberg and Wirth should be considered indicative of some of the

reasons underlying Congress' final decision to adopt a 2.7% minimum

standard rather than a 3.1% minimum standard. As enunciated by Senators

Lautenberg and Wirth, preserving state flexibility to make choices

regarding the best fuel requirements for a particular locality was an

important motivation for preferring 2.7% over 3.1%. This goal hardly

comports with an intent to limit states' ability to adopt oxygen

content requirements more stringent than 2.7%. Senator Wirth's

statement, in particular, makes it clear that these provisions were not

intended to prevent states from adopting more stringent requirements.

Nor did Senator Wirth anticipate that states would have to jump any

particular hurdle before adopting such requirements. Rather, he stated

``that possibility always exists'' if ``down the road it makes sense.''

In addition, during the debates over the Senate bill several

senators referred to the existing oxygenated fuels

[[Page 29576]]

programs that states were already implementing at that time. At least

one of those programs was more stringent than 2.7%. Nowhere was it

suggested or noted that the legislation would require the state to

remove that program. In contrast, Senator Lautenberg explicitly raised

as an objection to the 3.1% requirement that it would negate existing

state programs mandating a 2.7% oxygen content.

The most reasonable inference from this legislative history is that

Congress did not want to directly mandate that all state programs under

section 211(m) require greater than 2.7% oxygen, as this would severely

reduce the flexibility of states to develop their own programs and

would by act of Congress directly limit open competition in the

marketplace between oxygenates.4 Congress rejected a

provision that would require all state oxygenated gasoline programs

under section 211(m) to require 3.1% oxygen content. Instead, Congress

set the minimum amount acceptable under section 211(m) at 2.7%, and

only mandated that states adopt standards setting a higher oxygen

content under limited circumstances. Section 211(m)(7) 5.

While Congress rejected a federal requirement for an oxygen content

greater than 2.7%, there is no similar indication that Congress

intended to prohibit states from adopting such programs where the state

considered it appropriate. To the contrary, the statements of

individual congressmen indicate an intent to preserve state

flexibility. Section 211(m)'s provision on marketable oxygen credits

also supports this view. While Congress did not mandate that states

adopt such credit programs, they are explicitly authorized to do so.

This gives states the flexibility to structure their programs as

desired, including the ability to adopt credit programs to promote the

use of various oxygenates even where the minimum oxygen content is

greater than 2.7%.6

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\4\ Similarly, certain members of Congress indicated that they

did not want EPA, the federal agency implementing section 211(m), to

use its waiver authority under sections 211(m) and 211(k) in a

manner that would limit the marketplace.

\5\ WSPA claims that treating the 2.7% oxygen content

requirement in section 211(m)(2) as merely a floor would effectively

read out of the statute section 211(m)(7), which requires serious

nonattainment areas to require gasoline with a minimum oxygen

content of 3.1 %. EPA is not persuaded by WSPA's logic. Because both

section 211(m)(2) and 211(m)(7) are phrased in terms of minimum

requirements, there is no inconsistency created by allowing states

to adopt programs that meet or exceed these requirements. Section

211(m)(7) still serves a purpose--it requires an increase in the

minimum oxygenate content for certain serious nonattainment areas

that have not previously exercised their discretion to require

greater oxygen content levels.

\6\ For example, if a state sets an oxygen content standard of

3.1% without any provisions for a credit program, refiners could not

meet such a requirement by using MTBE. If a state included a credit

program, however, refiners could meet a 3.1% oxygen content standard

by supplying a combination of some oxygenated gasoline using ethanol

(at 3.5% oxygen content) and some oxygenated gasoline using MTBE (at

2.7% oxygen content).

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Section 211(m) is most reasonably interpreted as requiring adoption

of an oxygenated gasoline program with any weight percent oxygen

content requirement that will result in gasoline being blended to

contain not less than 2.7% oxygen by weight. A content requirement of

2.7% or higher satisfies this requirement and is authorized by section

211(m). This interpretation is consistent with the terms of section

211(m) and the legislative history discussed above. It is also

consistent with the Clean Air Act's basic approach of providing

flexibility to the states in developing state programs to achieve and

maintain the NAAQS. Under the Act, states have the primary

responsibility for determining the manner by which to achieve these air

quality standards. See CAA section 116; Virginia v. EPA, 108 F.3d 1397

(D.C. Cir. 1997), reh'g granted, 116 F.3d 499 (D.C. Cir. 1997)

(modifying so as not to vacate Part 85 of EPA's final rule). EPA has

relied on this interpretation in approving SIP revisions for state

programs. See 62 FR 10690 (March 10, 1997) (approval of 3.1% oxygen

content requirement for Denver, CO); 62 FR 49442 (September 22, 1997)

(approval of 3.5% oxygen content as a contingency measure for Spokane,

WA).

2. Preemption under the Clean Air Act

WSPA has raised three separate arguments claiming that state

programs under section 211(m) requiring gasoline blending at levels

greater than 2.7% are preempted under the Act, except where required

under section 211(m)(7). The first argument is that section

211(c)(4)(A) prohibits such programs absent a showing of necessity

under section 211(c)(4)(C). The second argument is that the state

program is in conflict with the Clean Air Act and is therefore

preempted. Finally, it has been argued that the state program is

preempted because Congress through the Clean Air Act has occupied the

field of gasoline oxygen content controls.

a. Preemption under section 211(c)(4). Section 211(c)(4) of the Act

is a provision of general applicability that expressly prohibits state

fuel controls under specified circumstances. Section 211(c)(1) of the

Act authorizes EPA to prescribe a control or prohibition on a fuel or

fuel additive upon a finding that emissions products from such fuel or

fuel additive may endanger public health or welfare, or impair emission

control devices or systems.

Section 211(c)(4)(A) prohibits states from prescribing or

attempting to enforce a control or prohibition respecting any

characteristic or component of a fuel or fuel additive if EPA has

prescribed a control or prohibition applicable to the same

characteristic or component under section 211(c)(1).7 This

prohibition does not apply if the state control is identical to

EPA's.8 Section 211(c)(4)(C) provides that a state may

prescribe and enforce such a nonidentical fuel control or prohibition

if EPA approves the provision in a state implementation plan (SIP). EPA

may approve the state control or prohibition in a SIP only if it is

necessary to achieve the NAAQS that the plan implements.

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\7\ State regulation is also prohibited if EPA publishes a

finding in the Federal Register that no control or prohibition of

the characteristic or component is necessary.

\8\ The prohibition also does not apply to California. Section

211(c)(4)(B).

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For the purpose of determining whether a state gasoline requirement

is preempted under section 211(c)(4)(A), EPA believes it is appropriate

to look at the federal gasoline requirements applicable in the area

where the state requirements would apply. For further discussion see

the May 26, 1998 letter from Margo T. Oge, Director, US EPA Office of

Mobile Sources in the docket for this action. (See docket file: NV-OXY-

98-VI.) Clark County is subject to the conventional gasoline

requirements, not the RFG requirements. 40 CFR 80.70; 40 CFR

80.101(b)(3). Thus, any preemption under section 211(c)(4)(A) of Clark

County's oxygen content controls would have to be based on federal

oxygen content requirements found in the conventional gasoline

regulations. The only conventional gasoline provision adopted under

section 211(c)(1) that directly references oxygen content is the use of

oxygen content as an input into the Complex Model, which is used to

measure emissions performance for the exhaust toxics and NOX

performance standards. As discussed below, however, EPA need not

address the issue of whether the conventional gasoline provisions

arguably preempt state control of oxygen in conventional gasoline areas

because EPA believes that section 211(m) authorizes the Clark County

requirement and overrides any potential preemption under section

211(c)(4).

[[Page 29577]]

Even assuming a state control on oxygen content would otherwise be

preempted under section 211(c)(4)(A), in the absence of section 211(m),

a threshold issue is whether the CAA requires the state to satisfy both

the necessity requirement of section 211(c)(4)(C) as well as the

requirements of section 211(m) for the state oxygenated gasoline

program to be approved into a SIP.9 WSPA asserts, ``[I]f

Congress intended to exempt CAA Sec. 211(m) from the preemption

provisions of Sec. 211(c)(4)(A) it would certainly have done so

expressly within Sec. 211(m).'' EPA disagrees. EPA believes section

211(m) itself is an express statement on the ability of states to

control oxygen content. It seems more logical to conclude that, given

Congress' intent to provide state flexibility and ensure attainment of

the CO NAAQS, if Congress has intended states also to satisfy the

conditions of 211(c)(4), it would have expressly referenced that

section.

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\9\ This issue only arises where a state control would be

preempted under section 211(c)(4)(A) (without reference to the

requirements of section 211(m)). If the state control would not be

preempted under section 211(c)(4)(A), then the criteria for approval

of a SIP in section 211(c)(4)(C) are not applicable. The SIP

revision would have to be consistent with section 211(m) but not

section 211(c)(4)(C).

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EPA believes the most reasonable interpretation is that those

elements of a state oxygenated gasoline program within the range of

programs specified by section 211(m) are not subject to the preemption

provisions of section 211(c)(4). However, those elements of a state

oxygenated gasoline program beyond the range of programs specified by

section 211(m) would be subject to section 211(c)(4)(A) and, if

preempted, would be required to show necessity under section

211(c)(4)(C).10

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\10\ EPA discussed the relationship between 211(m) and 211(c)(4)

in approving a CO SIP revision for New Jersey. See 61 FR 5299

(February 12, 1996).

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The interaction of section 211(c)(4) and section 211(m) is not

addressed in the text of these provisions, and it is not discussed in

the legislative history. The structure of section 211, however,

indicates that section 211(m) is the best indication of Congressional

intent concerning the criteria for SIP approval of state programs in

the designated CO nonattainment areas. While section 211(c)(4)

addresses state fuel control programs in general, Congress specifically

addressed state oxygenated gasoline programs in section 211(m).

Congress required that certain states adopt these programs, and

Congress specified several elements that the programs must contain. Yet

Congress did not indicate that the section 211(m) requirements for a

state oxygenated gasoline program may be subject to preemption under

section 211(c)(4) and, if preempted, could not be approved absent a

showing of necessity under section 211(c)(4)(C). It is reasonable to

interpret section 211 such that the requirement of a necessity showing

under section 211(c)(4)(C) does not apply to those elements of a state

program that are specified in section 211(m) because the more specific

provisions of section 211(m) take precedence over the more general

provisions of section 211(c)(4) for those elements. Congress required

states to adopt those elements of a program and submit them as a SIP

revision, and Congress expected that EPA would be able to approve such

a SIP revision without a further showing of necessity under section

211(c)(4)(C).

Consider, for example, a state oxygenated gasoline program that

extends beyond the boundaries of the CMSA or MSA. Section 211(m)

contains a specific requirement regarding geographic scope--the program

must include the entire CMSA or MSA. Requiring oxygenated gasoline

within the CMSA/MSA is clearly within the range of program elements

specified under section 211(m), and thus such a state requirement would

not be subject to the preemption and necessity demonstration provisions

of section 211(c)(4). If section 211(m) and 211(c)(4) were not

interpreted in this manner, a state program might satisfy this

requirement of section 211(m), but if oxygen content requirements were

preempted under section 211(c)(4)(A), the state program might still not

be approvable into the SIP.11 This would be contrary to the

clear purpose of section 211(m) that certain states would have approved

into their SIPs and implement the oxygenated gasoline requirements

specified in section 211(m).

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\11\ For example, preempted state fuel controls may not be

approved for a waiver unless they are necessary for achieving a

NAAQS. As a result, waivers for fuel measures can only be justified

for areas where emission reductions are necessary for a NAAQS. The

211(m) program, however, requires adoption of the oxygen control

throughout the MSA or CMSA, irrespective of need. It is conceivable

that the area needing CO reductions to achieve the NAAQS is smaller

than the MSA or CMSA. Thus a state might find itself required by

211(m) to adopt a control for the entire MSA or CMSA, and yet unable

to justify a waiver under 211(c)(4) for an oxygen control applicable

to the entire area.

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That portion of the state program requiring oxygenated gasoline

beyond the CMSA or MSA, however, involves a state gasoline control

beyond that which Congress required or expected in order to comply with

section 211(m). Hence, such a provision should be subject to the

requirements of section 211(c)(4)(C) if the state program would

otherwise be preempted under section 211(c)(4)(A). The structure of

section 211 does not indicate that oxygenated gasoline requirements

beyond the geographic area specified in section 211(m) should be

approvable without restriction under section 211(c)(4)(C).

The elements of geographic scope and control period are clearly

specified in section 211(m) as a single area or time

period.12 However, the oxygen content requirement is not

limited to a single specified value. Congress did not specify, for

example, that the state program must require exactly 2.7% oxygen

content, nor, as discussed above, did Congress prohibit states from

establishing a larger weight percent requirement. Instead Congress

specified that the SIP revisions must contain provisions requiring that

gasoline be blended to contain not less than 2.7% oxygen by weight.

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\12\ Section 211(m)(2) provides that the requirements shall

apply during the portion of the year in which the area is prone to

high ambient concentrations of CO, which shall be as determined by

the Administrator. The Administrator may not select a time period of

less than four months, except under limited specified circumstances.

For any given area, the Administrator would determine a specific

time period in which the area is prone to high ambient

concentrations of CO.

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Arguably, the oxygen content requirements of section 211(m) could

be read in the same manner as the geographic scope and control period

provisions. Under this approach, a state requirement that is set at

2.7% would not be subject to the preemption provisions of section

211(c)(4), including the necessity showing under section 211(c)(4)(C).

However, for any requirement above 2.7%, the state would have to show

that the requirement is necessary, if the state program would otherwise

be preempted under section 211(c)(4)(A).13

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\13\ Section 211(c)(4)(C) would not apply under this

interpretation where a state program was required to require at

least 3.1% oxygen content under section 211(m).

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An alternative interpretation is that the oxygen content

requirements of section 211(m)(2) call for any one of a range of

minimum concentrations, and not one specific level. Any content

requirement that results in gasoline containing not less 2.7% oxygen is

within the scope of programs authorized and envisioned by Congress

under section 211(m). Under this interpretation, a state requirement of

greater than 2.7% oxygen content would not be subject to preemption

under section 211(c)(4) and the state would

[[Page 29578]]

not need to show necessity under section 211(c)(4)(C).

EPA believes that the latter interpretation better implements

Congressional intent. The text of section 211(m)(2) is reasonably read

to envision a range of oxygen contents, whereas the geographic scope

and control period are specifically identified as a single area or time

period. The legislative history indicates that Congress intended to

provide flexibility to states regarding oxygen content, and did not

want to restrain that flexibility by setting a federal mandate for a

specific oxygen level that states must require. While Congress

deliberately rejected a federal mandate that would reduce the market

opportunities for various oxygenates, it did this with the goal of

preserving state flexibility, not limiting it, and the latter

interpretation is consistent with this goal. Moreover, the overall

structure established by the Act supports this interpretation, as the

Act assigns states the primary responsibility to adopt programs to

achieve clean air goals and preserves flexibility for the states in

developing the programs needed to satisfy this role. This

interpretation is also consistent with the general principle of

avoiding a statutory interpretation that preempts state action unless

Congressional intent to do so is clear. See Medtronic, Inc. v. Lohr,

518 U.S. 470, 485 (1996); Cipollone v. Liggett Group, Inc., 505 U.S.

504, 518 (1992); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230

(1947). Thus, EPA believes that a state is not preempted under the

provisions of section 211(c)(4) from adopting a weight percent oxygen

requirement greater than 2.7% under a section 211(m) state program,

within the geographic scope and control period specified in section

211(m), and that EPA may approve a SIP revision to implement such a

section 211(m) program without a showing of necessity under section

211(c)(4)(C).

b. Conflict preemption. WSPA commented that Clark County's 3.5%

oxygen rule is preempted under the doctrine of conflict preemption

because it hinders the accomplishment of a federal objective--namely

EPA's ``charge'' under the waiver provisions of section 211(m)(3) to

``ensur(e) that the areas with the greatest need for oxygenated

gasoline receive priority in obtaining such gasoline.'' WSPA has not

documented any problem with the supply or availability of compliant

gasoline or oxygenates. In fact, refiners have been providing gasoline

containing a minimum 3.5% oxygen content for at least two winter

seasons, and there are no indications of a lack of supply of oxygenates

in other areas subject to section 211(m). Thus, there do not appear to

be concerns under 211(m)(3). Likewise, WSPA has not supported its

conflict preemption assertion.

A federal statute implicitly overrides a state law when the state

law is in actual conflict with the federal law. This occurs when it is

impossible for a private party to comply with both the state and

federal requirements, or where the state law stands as an obstacle to

the accomplishment and execution of the full purposes and objectives of

Congress. Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995)

(quoting English v. General Electric Co., 496 U.S. 72, 78-79 (1990) and

Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). Contrary to WSPA's

comments, EPA has not seen any evidence indicating that the Clark

County provisions for oxygenated gasoline would lead to either of these

results. First, there is no impossibility here; it is practically and

legally possible to blend and supply gasoline that meets the federal

conventional gasoline requirements and that has an oxygen content of

3.5%. Second, EPA does not believe that the 3.5% oxygen content

requirement would be an obstacle to the accomplishment and execution of

Congress' purposes. Here, a primary objective of Congress is that

gasoline meet all of the applicable requirements specified in section

211, including the oxygenated gasoline provisions of section 211(m),

the summertime RVP requirements of section 211(h), and the conventional

gasoline requirements of section 211(k)(8). A state program requiring

greater than 2.7% oxygen content is not an obstacle to accomplishing

this Congressional objective; rather, it is consistent with the

requirements of section 211(m) and the goals of Congress embodied in

this provision. By providing that states must set an oxygen content at

least as stringent as 2.7%, section 211(m) contemplates that states may

require higher oxygen contents. In addition, such higher oxygen content

requirements do not conflict with the federal summertime RVP or

conventional gasoline requirements applicable in Clark

County.14 There is no evidence that the Clark County

requirement would conflict with or interfere with the specifications

for annual oxygen content limits in the conventional gasoline program,

or interfere with refiners' or importers' ability to produce complying

conventional gasoline.

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

\14\ Issues concerning conflict with the requirements or goals

of the federal reformulated gasoline program need not be addressed

to evaluate the Clark County program.

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

c. Field preemption. WSPA further commented that Clark County's

3.5% oxygen requirement is preempted under the doctrine of field

preemption. WSPA, however, does not elaborate on this claim.

A state program is preempted under field preemption where Congress

has implicitly indicated an intent to occupy a given field to the

exclusion of state law. ``Such a purpose properly may be inferred where

the pervasiveness of the federal regulation precludes supplementation

by the States, where the federal interest in the field is sufficiently

dominant, or where the object sought to be obtained by federal law and

the character of obligations imposed by it * * * reveal the same

purpose.'' Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300 (1987)

(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947).

Here, neither section 211(m) nor section 211 as a whole establishes

a comprehensive federal presence. Instead, the fuels programs under

section 211 provide a number of federal requirements but also

explicitly preserve a role for the states in regulating fuels. Section

211(c)(4) explicitly preempts state action, but only under certain

circumstances, and provides an exemption from preemption under section

211(c)(4)(C). Section 211(m) requires states, not the federal

government, to adopt oxygenated gasoline programs. As discussed above,

state programs requiring greater than 2.7% oxygen content are within

the range of programs authorized under section 211(m), and Congress did

not intend to prohibit them. Thus, federal regulation here is not so

pervasive as to preclude supplementation by states, nor is the federal

interest in the field sufficiently dominant to preempt state action.

State programs under section 211(m) requiring greater than 2.7%

oxygen content are therefore not preempted based on either conflict or

field preemption.

d. Preemption under 211(f). WSPA also appears to argue that EPA's

authority to grant waivers from the substantially similar prohibition

of section 211(f)(1), and its authority to control or ban fuel

additives under section 211(c)(1), mean that only EPA can act to

allegedly ban the use of a fuel additive such as MTBE, not states. In

addition, WSPA claims that EPA must satisfy the requirements of section

211(c)(1) before it could approve Nevada's SIP provision.

[[Page 29579]]

EPA has explained above that the Clark County provision is neither

expressly prohibited under section 211(c)(4), nor implicitly prohibited

under conflict or field preemption. EPA's authority under sections

211(c)(1) and (f)(4) does not provide an additional basis for

preemption of state fuel controls. Congress indicated expressly in

section 211(c)(4) what state fuel controls are prohibited, and there is

no reason to believe EPA's authority to act under section 211(c)(1) and

(f)(4) indicates a Congressional intent to preempt state fuel controls

not otherwise preempted under section 211(c)(4). In addition, EPA's

authority to act on a state SIP submission is not based on or limited

by section 211(c)(1). Nothing in section 211(c) or (m) or section 110

indicates that section 211(c)(1) applies to EPA's action on a state SIP

submission involving a state oxygenated gasoline program. Such an

interpretation would run counter to the central structure of the Act,

by limiting a state's SIP measures to only those provisions that EPA

could or would be able to adopt under it's own federal authority.

B. Regulatory Negotiation Agreement

WSPA commented that EPA's approval of Clark County's SIP revision

``violates the spirit, if not the letter * * * '' of an Agreement in

Principle entered into in August 1991 between EPA, environmental

groups, state and local agencies, and industry. WSPA claims the parties

agreed that during the control periods for CO nonattainment areas the

required oxygenate level in gasoline would be set at 2.7 percent by

weight. WSPA also claims that EPA agreed on how to limit components in

conventional gasoline areas and to invoke 211(c) to preempt state

regulation of fuel. The 1991 Agreement in Principle was an agreement on

the underlying principles to be proposed for implementation of the

then-new provisions of sections 211(k) and 211(m). Nothing in the

Agreement suggests that states subject to 211(m) are prohibited from

requiring oxygen content levels greater than the statutory minimum. The

Agreement outlines the minimum oxygen content levels to be proposed for

reformulated gasoline (RFG) and describes the ranges of oxygen content

that will be deemed to comply with NOX standards in RFG

areas. These provisions both applied to the ``simple model'' for

certifying RFG. These provisions are not informative for this

rulemaking because: (1) Las Vegas is not an RFG area; (2) nothing in

the provisions states that higher oxygen content levels are prohibited;

and, (3) the simple model described in these provisions has been

replaced by the ``complex model'' throughout the country.15

See 40 CFR 80.42(c)(2).

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

\15\ The complex model includes ranges of fuel components that

the model can accept for predicting the emissions that will result

from use of a particular fuel. The range for oxygen content that the

model can accept is 0.0 to 4.0 percent by weight. See 40 CFR

80.45(f)(1). Clark County's 3.5% requirement fits within the range

limits of the model.

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

The Agreement also described the oxygenated gasoline guidelines

that EPA would recommend. This section of the Agreement highlighted

state flexibility by stating, ``While recognizing state discretion, EPA

guidelines shall recommend a credit program. * * *'' The elements of

the recommended credit program do not suggest that states be limited to

the statutory minimum requirements of 211(m). Likewise nothing in the

Agreement suggests that 211(c) preempts state compliance with 211(m) or

that 211(c) would be used in any way beyond that provided by the

statute.

C. Commerce Clause of the U.S. Constitution

Finally, WSPA commented that Clark County's 3.5% gasoline oxygen

content requirement is barred by the Commerce Clause. WSPA argues that

the Clark County Board of Health's purpose for enacting the requirement

is unclear and that the Board may have enacted the requirement with the

ulterior motive of ``protect(ing) economic interests of ethanol

providers within the state. * * * '' The record clearly indicates that

the Board's purpose in adopting the requirement is to address Clark

County's carbon monoxide air quality problem and the attendant health

risks which it poses to the local population. WSPA has not submitted

any documentation to the contrary and there is no basis for EPA to

believe that the Board's motives were other than those stated in the

record. WSPA has also failed to submit documentation to support its

assertion that the 3.5% oxygen content requirement imposes an

unreasonable burden on interstate commerce. Fuel suppliers in Clark

County have been complying with the 3.5% oxygen requirement for a

number of years--first voluntarily and, since October 1997, pursuant to

the Clark County rule.

IV. EPA Action

EPA is finalizing action to approve the above revisions for

inclusion into the Nevada SIP. EPA is approving the submittal under

section 110(k)(3) as meeting the requirements of section 110(a) and

Part D of the CAA. This approval action will incorporate Clark County's

revisions into the federally approved SIP. The intended effect of

approving these revisions is to regulate emissions of CO in accordance

with the requirements of the CAA.

V. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from Executive Order (E.O.) 12866, Regulatory

Planning and Review.

B. Executive Order 12875

Under Executive Order 12875, Enhancing the Intergovernmental

Partnership, EPA may not issue a regulation that is not required by

statute and that creates a mandate upon a State, local or tribal

government, unless the Federal government provides the funds necessary

to pay the direct compliance costs incurred by those governments, or

EPA consults with those governments. If EPA complies by consulting,

Executive Order 12875 requires EPA to provide to the Office of

Management and Budget a description of the extent of EPA's prior

consultation with representatives of affected State, local and tribal

governments, the nature of their concerns, copies of any written

communications from the governments, and a statement supporting the

need to issue the regulation. In addition, Executive Order 12875

requires EPA to develop an effective process permitting elected

officials and other representatives of State, local and tribal

governments ``to provide meaningful and timely input in the development

of regulatory proposals containing significant unfunded mandates.''

Today's rule does not create a mandate on State, local or tribal

governments. The rule does not impose any enforceable duties on these

entities. Accordingly, the requirements of section 1(a) of E.O. 12875

do not apply to this rule.

C. Executive Order 13045

Protection of Children from Environmental Health Risks and Safety

Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is

determined to be ``economically significant'' as defined under E.O.

12866, and (2) concerns an environmental health or safety risk that EPA

has reason to believe may have a disproportionate effect on children.

If the regulatory action meets both criteria, the Agency must evaluate

the environmental health or safety effects of the planned rule on

children, and explain why the planned regulation is

[[Page 29580]]

preferable to other potentially effective and reasonably feasible

alternatives considered by the Agency. This rule is not subject to E.O.

13045 because it does not involve decisions intended to mitigate

environmental health or safety risks.

D. Executive Order 13084

Under Executive Order 13084, Consultation and Coordination with

Indian Tribal Governments, EPA may not issue a regulation that is not

required by statute, that significantly or uniquely affects the

communities of Indian tribal governments, and that imposes substantial

direct compliance costs on those communities, unless the Federal

government provides the funds necessary to pay the direct compliance

costs incurred by the tribal governments, or EPA consults with those

governments. If EPA complies by consulting, Executive Order 13084

requires EPA to provide to the Office of Management and Budget, in a

separately identified section of the preamble to the rule, a

description of the extent of EPA's prior consultation with

representatives of affected tribal governments, a summary of the nature

of their concerns, and a statement supporting the need to issue the

regulation. In addition, Executive Order 13084 requires EPA to develop

an effective process permitting elected officials and other

representatives of Indian tribal governments ``to provide meaningful

and timely input in the development of regulatory policies on matters

that significantly or uniquely affect their communities.'' Today's rule

does not significantly or uniquely affect the communities of Indian

tribal governments. Accordingly, the requirements of section 3(b) of

E.O. 13084 do not apply to this rule.

E. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for-profit enterprises, and small governmental

jurisdictions. This final rule will not have a significant impact on a

substantial number of small entities because SIP approvals under

section 110 and subchapter I, part D of the Clean Air Act do not create

any new requirements but simply approve requirements that the State is

already imposing. Therefore, because the Federal SIP approval does not

create any new requirements, I certify that this action will not have a

significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the

Clean Air Act, preparation of flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

Clean Air Act forbids EPA to base its actions concerning SIPs on such

grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976);

42 U.S.C. 7410(a)(2).

F. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

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

must prepare a budgetary impact statement to accompany any proposed or

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

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

or to private sector, of $100 million or more. Under section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves the objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by the rule.

EPA has determined that the approval action promulgated does not

include a Federal mandate that may result in estimated annual costs of

$100 million or more to either State, local, or tribal governments in

the aggregate, or to the private sector. This Federal action approves

pre-existing requirements under State or local law, and imposes no new

requirements. Accordingly, no additional costs to State, local, or

tribal governments, or to the private sector, result from this action.

G. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives, and the Comptroller General of the United States prior

to publication of the rule in the Federal Register. This rule is not a

``major'' rule as defined by 5 U.S.C. 804(2).

H. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by August 2, 1999. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Incorporation by reference, Intergovernmental relations, Reporting and

recordkeeping requirements.

Dated: May 19, 1999.

Laura Yoshii,

Acting Regional Administrator, Region IX.

Part 52, chapter I, title 40 of the Code of Federal Regulations is

amended as follows:

PART 52--[AMENDED]

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

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

Subpart DD--Nevada

2. Section 52.1470 is amended by adding paragraph (c)(38)to read as

follows:

Sec. 52.1470 Identification of plan.

* * * * *

(c) * * *

(38) On August 7, 1998, regulations for the following Health

District were submitted by the Governor's designee.

(i) Incorporation by reference.

(A) Clark County Health District.

(1) Section 53 adopted on September 25, 1997.

[FR Doc. 99-13805 Filed 6-1-99; 8:45 am]

BILLING CODE 6560-50-P