Approval and Promulgation of Implementation Plans; New Jersey; Nitrogen Oxides Budget and Allowance Trading Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Region II Docket No. NJ36-1-196, FRL-6457-2]

Approval and Promulgation of Implementation Plans; New Jersey;

Nitrogen Oxides Budget and Allowance Trading Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency proposes to conditionally

approve New Jersey's State Implementation Plan (SIP) revision for

ozone. This SIP revision relates to New Jersey's portion of the Ozone

Transport Commission's September 27, 1994 Memorandum of Understanding,

which includes a regional nitrogen oxides budget and allowance

(NOX Budget)

[[Page 55663]]

trading program that will significantly reduce NOX emissions

generated within the Ozone Transport Region. Today's action proposes a

conditional approval of New Jersey's regulations which implement Phase

II and Phase III of the NOX Budget Trading Program to reduce

NOX, and intends to help meet the national ambient air

quality standard for ozone. However, if New Jersey corrects the

deficiency discussed in today's proposed action between the time of

today's proposed action and a final rulemaking action, and the

correction is consistent with EPA's findings as discussed below, EPA

proposes full approval of New Jersey's NOX Budget Trading

Program.

DATES: EPA must receive written comments on or before November 15,

1999.

ADDRESSES: Address all comments to: Raymond Werner, Acting Chief, Air

Programs Branch, Environmental Protection Agency, Region II Office, 290

Broadway, 25th Floor, New York, New York 10007-1866.

Copies of the state submittal and supporting documents are

available for inspection during normal business hours, at the following

addresses:

Environmental Protection Agency, Region II Office, Air Programs Branch,

290 Broadway, 25th Floor, New York, New York 10007-1866.

New Jersey Department of Environmental Protection, Office of Air

Quality Management, Bureau of Air Quality Planning, 401 East State

Street, CN418, Trenton, New Jersey 08625.

FOR FURTHER INFORMATION CONTACT: Richard Ruvo, Air Programs Branch,

Environmental Protection Agency Region II, 290 Broadway, 25th Floor,

New York, New York 10007-1866, (212) 637-4014.

SUPPLEMENTARY INFORMATION:

Overview

The Environmental Protection Agency (EPA) proposes to conditionally

approve the New Jersey State Department of Environmental Protection's

(New Jersey's) Nitrogen Oxides Budget and Allowance (NOX

Budget) Trading Program.

The following table of contents describes the format for this

SUPPLEMENTARY INFORMATION section:

EPA's Action

What Action is EPA Proposing Today?

Why is EPA Proposing this Action?

What is a Budget and Allowance Trading Program?

What is EPA's Proposed Condition for Approval?

How can New Jersey Get Full Approval for Their Program?

What Guidance did EPA Use to Evaluate New Jersey's Program?

What is EPA's Evaluation of New Jersey's Program?

New Jersey's NOX Budget Trading Program

What is the Ozone Transport Commission's Memorandum of

Understanding (OTC MOU)?

Which States Signed the OTC MOU?

What Does the OTC MOU Require?

How Did States Meet the OTC MOU?

How Did New Jersey Meet the OTC MOU?

How Does New Jersey's Program Protect the Environment?

How Will New Jersey and EPA Enforce the Program?

When Did New Jersey Propose and Adopt the Program?

When Did New Jersey Submit the Program to EPA and What Did it

Include?

What Other Significant Items Relate to New Jersey's Program?

Conclusion

Administrative Requirements

EPA's Action

What Action Is EPA Proposing Today?

EPA proposes to conditionally approve a revision to New Jersey's

ozone State Implementation Plan (SIP) which New Jersey submitted to EPA

on April 26, 1999. This SIP revision relates to New Jersey's new

Subchapter 31 ``NOX Budget Program'' regulation for New

Jersey's NOX Budget Trading Program.

Why Is EPA Proposing this Action?

EPA is proposing this action to:

Give you the opportunity to submit written comments on

EPA's proposed action, as discussed in the DATES and ADDRESSES

sections.

Fulfill New Jersey's and EPA's requirements under the

Clean Air Act (the Act).

Make New Jersey's NOX Budget Trading Program

federally-enforceable and available for credit toward the attainment

SIP.

What Is a Budget and Allowance Trading Program?

Air emissions trading uses market forces to reduce the overall cost

of compliance for sources, such as a power plant, while maintaining

emission reductions and environmental benefits. One type of market-

based program is an emissions budget and allowance trading program,

also commonly referred to as a cap and trade program.

In a budget and allowance trading program, the state or EPA set a

regulatory limit, or budget, on mass emissions from a specific group of

sources. The state or EPA assigns or allocates allowances to the

sources, authorizing emissions up to the level of the budget. Sources

may sell or trade allowances with other sources, cost-effectively

complying with the budget. The budget limits the total number of

allocated allowances. The total effect is to reduce emissions. An

example of a budget and allowance trading program is EPA's Acid Rain

Program for reducing sulfur dioxide emissions.

What Is EPA's Proposed Condition for Approval?

EPA proposes to condition its approval of New Jersey's

NOX Budget Trading Program on New Jersey including a

definition of a violation and of the days of a violation which more

fully comports with the other state rules and EPA's guidance.

Originally, New Jersey proposed amendments to Subchapter 3 for the

NOX Budget Trading Program which included defining a

violation and for determining the number of days of a violation in

order to determine civil and criminal penalties. These provisions

stated:

Each ton of excess emissions is a separate violation

For purposes of determining the number of days of a

violation, each day in the control period (153 days), where there are

any excess emissions, constitutes a day in violation, unless the source

can demonstrate a lesser number of days, to the State's satisfaction.

However, in response to comments on the proposal, New Jersey

reserved these provisions when it adopted Subchapter 31 on June 17,

1998. In the adoption documents, New Jersey said it would propose

another amendment to clarify these provisions for defining violations.

The absence of these provisions in New Jersey's adopted

NOX Budget rule creates uncertainty about how the State will

define a violation and determine the number of days of a violation

should a source not hold enough allowances as of the allowance transfer

deadline. The other states in the Ozone Transport Commission (OTC)

included similar provisions in their adopted rules. Since the

NOX Budget Program is a regional program, each state rule

must be substantively consistent with the other state rules, in order

to ensure an allowance in one state has the same value as an allowance

in another state.

This area of New Jersey's NOX Budget Program does not

fully satisfy EPA's guidance for providing enforcement mechanisms. New

Jersey must revise Subchapter 3 and/or 31 to incorporate the provisions

for defining a violation and determining the number of days of a

violation should a source not hold enough allowances as of the

allowance transfer deadline. Correcting this deficiency will clarify

any confusion in how the State defines a violation and

[[Page 55664]]

will help to ensure consistency within the regional NOX

Budget Trading Program.

How Can New Jersey Get Full Approval for Their Program?

EPA proposes a conditional approval of New Jersey's NOX

Budget Trading Program due to the deficiency discussed in the ``What is

EPA's Proposed Condition for Approval?'' section. EPA informed New

Jersey of the deficiency in a July 8, 1999 letter. In a July 29, 1999

letter, New Jersey committed to correcting the deficiency within one

year of EPA's final action.

To achieve full approval, New Jersey must correct the deficiency

and submit it to EPA within one year of EPA's final action on New

Jersey's NOX Budget Trading Program SIP revision. However,

if New Jersey corrects the deficiency between the time of today's

proposed action and a final rulemaking action, and the correction is

consistent with EPA's findings as discussed earlier, EPA proposes full

approval of New Jersey's NOX Budget Trading Program. EPA

will consider all information submitted prior to any final rulemaking

action as a supplement or amendment to the April 26, 1999 submittal.

What Guidance Did EPA Use To Evaluate New Jersey's Program?

In 1994, EPA issued Economic Incentive Program (EIP) rules and

guidance (40 CFR part 51, subpart U), that outlines requirements for

establishing EIPs in cases where the Act requires States adopt EIPs to

meet the ozone and carbon monoxide standards in designated

nonattainment areas. There is no requirement for New Jersey to submit

an EIP. However, since subpart U also contains guidance on the

development of voluntary EIPs, New Jersey followed the EIP guidance in

the development and submittal of its NOX Budget Trading

Program.

EPA evaluated New Jersey's NOX Budget Trading Program to

determine whether the Program meets the SIP requirements described in

section 110 of the Act. EPA also evaluated the Program using the EIP of

1994 as guidance for voluntary EIPs, in coordination with other

guidance documents.

What Is EPA's Evaluation of New Jersey's Program?

EPA determined New Jersey's new Subchapter 31 regulation for New

Jersey's NOX Budget Trading Program is consistent with EPA's

guidance, except for the deficiency discussed in the ``What is EPA's

Proposed Condition for Approval?'' section. Specifically, New Jersey's

NOX Budget Trading Program is consistent with EPA's EIP

guidance of 1994.

New Jersey's Subchapter 31 contains provisions for definitions,

program applicability, opt-ins, interface with the emission offset

program and the open market emissions trading program, annual allowance

allocation, claims for incentive allowances, permitting, allowance

transfer, allowance banking, early reduction credits, the

NOX Allowance Tracking System, monitoring, recordkeeping,

reporting, end-of-season reconciliation, compliance certification,

excess emissions deduction, the program audit, and guidance documents

incorporated by reference and penalties.

Given the documentation in the SIP submittal and the provisions of

New Jersey's NOX Budget Trading Program, and New Jersey's

commitment for a periodic program audit, EPA determined that New Jersey

will continue to meet the reasonable further progress and SIP

attainment requirements.

A Technical Support Document (TSD), prepared in support of this

proposed action, contains the full description of New Jersey's

submittal and EPA's evaluation. A copy of the TSD is available upon

request from the EPA Regional Office listed in the ADDRESSES section.

New Jersey's NOX Budget Trading Program

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

The Ozone Transport Commission (OTC) adopted a Memorandum of

Understanding (MOU) on September 27, 1994, which committed the

signatory states to the development and proposal of a region-wide

reduction in NOX emissions, with one phase of reductions by

1999 and another phase of reductions by 2003. Since the Act required

reasonably available control technology (RACT) to reduce NOX

emissions by May of 1995, the OTC MOU refers to the reduction in

NOX emissions by 1999 as Phase II and the reduction in

NOX emissions by 2003 as Phase III.

Which States Signed the OTC MOU?

The OTC states include Maine, New Hampshire, Vermont,

Massachusetts, Connecticut, Rhode Island, New York, New Jersey,

Pennsylvania, Maryland, Delaware, the northern counties of Virginia and

the District of Columbia. All of the OTC jurisdictions, with the

exception of the Commonwealth of Virginia, signed the September 27,

1994 MOU.

What Does the OTC MOU Require?

The OTC MOU requires a reduction in ozone season (May 1 to

September 30) NOX emissions from utility and large

industrial combustion facilities within the Ozone Transport Region.

This reduction furthers the effort to achieve the health-based national

ambient air quality standard for ozone. In the MOU, the OTC states

agreed to propose regulations for the control of NOX

emissions according to the following guidelines:

The level of required NOX reductions is from a

1990 baseline emissions level.

The reduction would vary by location, or zone, and use a

two-phase region-wide trading program.

The reduction required by May 1, 1999 is the less

stringent of the following:

a. The affected facilities in the inner zone will reduce their

NOX emission rate by 65% from the 1990 baseline, or emit

NOX at a rate no greater than 0.20 pounds per million Btu.

b. The affected facilities in the outer zone will reduce their

NOX emission rate by 55% from the 1990 baseline, or emit

NOX at a rate no greater than 0.20 pounds per million Btu.

The reduction required by May 1, 2003 is the less

stringent of the following:

c. The affected facilities in the inner and outer zones will reduce

their NOX emission rate by 75% from the 1990 baseline, or

emit NOX at a rate no greater than 0.15 pounds per million

Btu.

d. The affected facilities in the northern zone will reduce their

NOX emission rate by 55% from the 1990 baseline, or emit

NOX at a rate no greater than 0.20 pounds per million Btu.

The inner zone consists of all contiguous moderate and above

nonattainment areas in the OTC, except those located in Maine. The

outer zone consists of the remainder of the OTC, except the northern

zone. The northern zone consists of Maine, Vermont and New Hampshire

(except for its moderate and above nonattainment areas) and the

northeastern attainment portion of New York.

New Jersey must meet the requirements for the inner zone.

How Did States Meet the OTC MOU?

First, after consideration of the reductions required in the OTC

MOU, the OTC States developed a 1990 baseline emission level and the

emission budgets for 1999 and 2003. The NOX Budget Trading

Program caps

[[Page 55665]]

NOX emissions in the Ozone Transport Region at 219,000 tons

in 1999 and 143,000 tons in 2003, less than half of the 1990 baseline

emission level of 490,000 tons.

Then, the OTC charged a Task Force of representatives from the OTC

States, organized through the Northeast States for Coordinated Air Use

Management (NESCAUM) and the Mid-Atlantic Regional Air Management

Association (MARAMA), with the task of developing a model rule to

implement the program defined by the OTC MOU. During 1995 and 1996, the

NESCAUM/MARAMA NOX Budget Task Force worked with EPA, as

well as representatives from industry, utilities, and environmental

groups, and developed a model rule as a template for OTC states to

adopt their own rules to implement the OTC MOU. EPA's EIP rules formed

the general regulatory framework for the model rule. The OTC issued the

model rule on May 1, 1996. The model rule was intended to be used by

the OTC states to implement the Phase II reductions called for in the

MOU. The model rule does not specifically include the implementation of

Phase III.

How Did New Jersey Meet the OTC MOU?

In accordance and consistent with the NESCAUM/MARAMA NOX

Budget model rule issued in May 1996, New Jersey developed their

regulation, new Subchapter 31 ``NOX Budget Program.''

Subchapter 31 includes reduction requirements to implement Phase II

and Phase III of the OTC's MOU. The regulation includes provisions for

a regional NOX Budget Trading Program, and establishes

procedures for defining NOX emission allowances for each

NOX control period beginning May 1, 1999 through the

NOX control period ending September 30, 2002 (Phase II), and

for each NOX control period beginning May 1, 2003 and

thereafter (Phase III). New Jersey's SIP submittal identifies the

budget sources and their initial NOX allowance allocations.

How Does New Jersey's Program Protect the Environment?

Specific to New Jersey, the NOX Budget Program will

result in NOX emissions reductions during the ozone season

of close to 80% between 1990 and 2003 from applicable sources. In 1990,

NOX emissions from NOX Budget sources totaled

more than 46,500 tons during the ozone season. In 1995, following New

Jersey's NOX RACT rules, emissions of NOX were

reduced to about 21,200 tons during the ozone season. The adopted

NOX Budget Program rules will further reduce NOX

emissions to 17,300 and 8,200 tons during the ozone season in 1999 and

2003, respectively.

In addition to contributing to attainment of the ozone standard,

decreases of NOX emissions will also likely help improve the

environment in several important ways. On a national scale, decreases

in NOX emissions will also decrease acid deposition,

nitrates in drinking water, excessive nitrogen loadings to aquatic and

terrestrial ecosystems, and ambient concentrations of nitrogen dioxide,

particulate matter and toxics. On a global scale, decreases in

NOX emissions will, to some degree, reduce greenhouse gases

and stratospheric ozone depletion.

How Will New Jersey and EPA Enforce the Program?

Under New Jersey's NOX Budget Trading Program, New

Jersey allocates allowances to budget sources. Each allowance permits a

source to emit one ton of NOX during the seasonal control

period. For each ton of NOX discharged in a given control

period, EPA will remove one allowance from the source's allowance

account. The source, or any other source will never use this allowance

again for compliance. This is known as a retirement of the allowance.

Allowances may be bought, sold, or banked. Unused allowances may be

banked for future use, with limitation. Each budget source must comply

with the program by demonstrating at the end of each control period

that actual emissions do not exceed the amount of allowances held for

that period. However, regardless of the number of allowances a source

holds, it cannot emit at levels that would violate other federal or

state limits, for example, RACT, new source performance standards, or

Title IV.

The State and EPA will determine compliance by ensuring that

allowances held by a source at the end of each control period meet or

exceed the emissions for that source for the given control period.

Source owners shall monitor emissions by certified monitoring systems

and must report resulting data to EPA. Violations are also possible for

not adhering to monitoring, reporting and record keeping requirements.

However, as discussed in the ``What is EPA's Proposed Condition for

Approval?'' section, the missing provisions in New Jersey's Program

limit the ability of New Jersey and EPA to enforce the Program.

Lastly, the federally-enforceable operating permits for budget

sources contain the applicable requirements of the NOX

Budget Program.

When Did New Jersey Propose and Adopt the Program?

New Jersey proposed their NOX Budget Trading Program on

September 15, 1997 and held a public hearing on October 17, 1997. New

Jersey requested public comments by November 24, 1997. New Jersey

adopted the NOX Budget Trading Program on June 17, 1998 with

an operative date of August 16, 1998.

When Did New Jersey Submit the Program to EPA and What Did it Include?

New Jersey submitted its NOX Budget Trading Program SIP

revision to EPA on April 26, 1999. EPA determined the submittal

administratively and technically complete on June 18, 1999.

New Jersey's NOX Budget Trading Program SIP revision

included the following elements:

New Subchapter 31

Amended Subchapter 3

Copies of monitoring guidance and energy efficiency

protocol to incorporate by reference

Allowance allocation file for 1999 and explanation of

allocation methodology, as supporting information.

What Other Significant Items Relate to New Jersey's Program?

New Jersey's NOX Budget Trading Program SIP

revision also fulfills the State's commitments to adopt the

NOX Budget Program with respect to the Alternative Ozone

Attainment Demonstration submittals sent to EPA on December 31, 1996

and August 31, 1998.

New Jersey's Subchapter 31 contains NOX

emissions budget and allocation schemes for 1999 through the ozone

season of 2002 (Phase II), and for the ozone season of 2003 and beyond

(Phase III) of the OTC NOX Budget Program. Therefore,

Subchapter 31 satisfies New Jersey's obligations under the OTC MOU to

make specific additional NOX reductions by May 1, 2003 and

continue to make reductions thereafter. Additionally, New Jersey's

attainment demonstrations will rely on the NOX reductions

associated with the OTC program in 2003 and beyond to achieve

attainment with the one hour ozone standard. In its current form,

except for the deficiency discussed in the ``What is EPA's Proposed

Condition for Approval?'' section, Subchapter 31 is approvable for

1999, 2000, 2001, 2002 and 2003 and thereafter.

In September 1998, EPA issued the final Regional Transport of Ozone

Rule (``NOX SIP Call'') requiring 22 eastern

[[Page 55666]]

States and the District of Columbia to submit SIP's to address the

regional transport of ground-level ozone through reductions in

NOX. New Jersey did not submit the April 26, 1999 SIP

revision for Subchapter 31 to satisfy the requirements of the

NOX SIP Call. Therefore, in order to meet EPA's

NOX SIP Call, New Jersey will need to submit an additional

SIP revision that establishes the NOX caps for the State

during 2003 and beyond, but New Jersey's Phase III limits may be

equivalent to the SIP Call limits.

Conclusion

EPA proposes a conditional approval of New Jersey's NOX

Budget Trading Program due to the deficiency discussed in the ``What is

EPA's Proposed Condition for Approval?'' section. In a July 29, 1999

letter, New Jersey committed to correcting the deficiency within one

year of EPA's final action.

To achieve full approval, New Jersey must correct the deficiency

and submit it to EPA within one year of EPA's final action on New

Jersey's NOX Budget Trading Program SIP revision. However,

if New Jersey corrects the deficiency between the time of today's

proposed action and a final rulemaking action, and the correction is

consistent with EPA's findings as discussed earlier, EPA proposes full

approval of New Jersey's NOX Budget Trading Program.

EPA requests public comment on the issues discussed in today's

action. EPA will consider all public comments before taking final

action. Interested parties may participate in the Federal rulemaking

procedure by submitting written comments to the EPA Regional office

listed in the ADDRESSES section.

Administrative Requirements

Executive Order 12866

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

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

entitled ``Regulatory Planning and Review.''

Executive Order on Federalism

Under E.O. 12875, 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. If the mandate is unfunded, EPA must 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 written

communications from the governments, and a statement supporting the

need to issue the regulation. In addition, E.O. 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.

On August 4, 1999, President Clinton issued a new executive order

on federalism, Executive Order 13132, [64 FR 43255 (August 10, 1999),]

which will take effect on November 2, 1999. In the interim, the current

Executive Order 12612, [52 FR 41685 (October 30, 1987),] on federalism

still applies. This rule will not have a substantial direct effect on

States, on the relationship between the national government and the

States, or on the distribution of power and responsibilities among the

various levels of government, as specified in Executive Order 12612.

The rule affects only one State, and does not alter the relationship or

the distribution of power and responsibilities established in the Clean

Air Act.

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 preferable to other

potentially effective and reasonably feasible alternatives considered

by the Agency.

This rule is not subject to E.O. 13045 because it is not an

economically significant regulatory action as defined by E.O. 12866,

and it does not address environmental health or safety risk that would

have a disproportionate effect on children.

Executive Order 13084

Under E.O. 13084, 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. If the mandate is unfunded,

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

separately identified section of the preamble to the rule, a

description of the extent of EPA's prior consultation with

representatives of affected tribal governments, a summary of the nature

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

regulation. In addition, E.O. 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.

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 proposed rule will not have a significant impact on

a substantial number of small entities because conditional approvals of

SIP submittals under section 110 and subchapter I, part D of the Clean

Air Act does not create any new requirements but simply approve

requirements that the state is already imposing. Therefore, because the

Federal SIP approval does not impose 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).

[[Page 55667]]

If the conditional approval is converted to a disapproval under

section 110(k), based on the state's failure to meet the commitment, it

will not affect any existing state requirements applicable to small

entities. Federal disapproval of the state submittal does not affect

its state-enforceability. Moreover, EPA's disapproval of the submittal

does not impose a new Federal requirement. Therefore, I certify that

this disapproval action will not have a significant economic impact on

a substantial number of small entities because it does not remove

existing requirements nor does it substitute a new federal requirement.

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 proposed conditional approval action

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.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and

recordkeeping requirements, Volatile organic compounds.

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

Dated: September 30, 1999.

William J. Muszynski,

Acting Regional Administrator, Region 2.

[FR Doc. 99-26855 Filed 10-13-99; 8:45 am]

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