issue-1996-06-27•Federal Register proposed rules — 1996-06-27
Federal Register proposed rules — 1996-06-27
issue-1996-06-27Federal Register proposed rules — 1996-06-27Proposed Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 96-16587 Glyphosate; Proposed Revision of Tolerances
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33469-33474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16587]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 180, 185 and 186
[OPP-300433; FRL-5380-9]
RIN 2070-AC18
Glyphosate; Proposed Revision of Tolerances
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA has completed the reregistration process and issued a
Reregistration Eligibility Decision document (RED) for the herbicide
glyphosate (N-phosphonomethyl glycine). In the reregistration process,
all information to support a pesticide's continued registration is
reviewed for
[[Page 33470]]
adequacy and, when needed, supplemented with new scientific studies.
Based on the RED tolerance assessments for glyphosate and subsequent
comments, EPA is proposing to revise food and feed tolerances, food
additive regulations and feed additive regulations. In addition, this
document proposes to revise the tolerance expression for residues of
glyphosate for all glyphosate food and feed tolerances, food additive
regulations and feed additive regulations.
DATES: Written comments, identified by the docket control number OPP-
300433, must be received on or before August 26, 1996.
ADDRESSES: By mail, submit comments to Public Response and Program
Resources Branch, Field Operations Division (7506C), Office of
Pesticide Programs, 401 M St., SW., Washington, DC 20460. In person,
deliver comments to Rm. 1132, Crystal Mall #2, 1921 Jefferson Davis
Highway, Arlington, VA 22202.
Comments and data may also be submitted electronically by sending
electronic mail (e-mail) to: [email protected]. Electronic
comments must be submitted as an ASCII file avoiding the use of special
characters and any form of encryption. Comments and data will also be
accepted on disks in WordPerfect 5.1 file format or ASCII file format.
All comments and data in electronic form must be identified by the
docket number OPP-300433. No Confidential Business Information (CBI)
should be submitted through e-mail. Electronic comments on this
proposed rule may be filed online at many Federal Depository Libraries.
Additional information on electronic submissions can be found in the
SUPPLEMENTARY INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: By mail: Paul Parsons, Special Review
and Reregistration Division (7508W), Environmental Protection Agency,
401 M St., SW., Washington, DC 20460. Office location, telephone
number, and e-mail address: Special Review Branch, Crystal Station #1,
3rd floor, 2800 Crystal Drive, Arlington, VA. Telephone (703) 308-8037,
e-mail: [email protected].
SUPPLEMENTARY INFORMATION
I. Legal Authorization
The Federal Food, Drug, and Cosmetic Act (FFDCA) [21 U.S.C. 301 et
seq.] authorizes the establishment of tolerances (maximum legal residue
levels) and exemptions from the requirement of a tolerance for residues
of pesticide chemicals in or on raw agricultural commodities pursuant
to section 408 [21 U.S.C. 346(a)]. Without such tolerances or
exemptions, a food containing pesticide residues is considered to be
``adulterated'' under section 402 of the FFDCA, and hence may not
legally be moved in interstate commerce [21 U.S.C. 342]. To establish a
tolerance or an exemption under section 408 of the FFDCA, EPA must make
a finding that the promulgation of the rule would ``protect the public
health'' [21 U.S.C. 346a(b)]. To establish food additive regulations
(FARs) to cover pesticide residues in processed foods under section 409
of FFDCA, EPA must determine that the proposed use of the food additive
will be safe (21 U.S.C. 348). For a pesticide to be sold, distributed,
and used in the production of food crops, animals, or processed food,
the pesticide must not only have appropriate tolerances or FARs under
the FFDCA, but also must be registered under the Federal Insecticide,
Fungicide, and Rodenticide Act (FIFRA, 7 U.S.C. 136 et seq.).
In 1988, Congress amended the Federal Insecticide, Fungicide and
Rodenticide Act (FIFRA) and required EPA to review and reassess the
potential hazards arising from currently registered uses of pesticides
registered prior to November 1, 1984. As part of this process, the
Agency must determine whether a pesticide is eligible for
reregistration and if any subsequent actions are required to fully
attain reregistration status. EPA has chosen to include in the
reregistration process a reassessment of existing tolerances or
exemptions from the need for a tolerance. Through this reassessment
process, EPA can determine whether a tolerance must be amended,
revoked, or established, or whether an exemption from the requirement
of one or more tolerances must be amended or is necessary.
The procedure for establishing, amending, or repealing tolerances
or exemptions from the requirement of tolerances is set forth in the
Code of Federal Regulations at 40 CFR part 177 through 180. The
Administrator of EPA or any person may initiate an action proposing to
establish, amend, revoke, or exempt a tolerance for a pesticide
registered for food uses. Each petition or request for a new tolerance,
an amendment to an existing tolerance, or a new exemption from the
requirement of a tolerance must be accompanied by a fee or a request
for a waiver of such fee. Current Agency policy on tolerance actions
arising from the reregistration process is to administratively process
some actions without requiring payment of a fee; this waiver of fees
applies to revisions or revocations of established tolerances, and to
proposed exemptions from the requirement of a tolerance if the proposed
exemption requires the concurrent revocation of an established
tolerance. Comments submitted in response to the Agency's published
proposals are reviewed; the Agency then publishes its final
determination regarding the specific tolerance actions.
II. Regulatory Background and Proposed Actions
A. Regulatory Background
The tolerance proposals described in this action follow the
Agency's tolerance reassessment that was completed and included in the
Reregistration Eligibility Decision (RED) for glyphosate dated
September 1993. While the reassessment determined that many tolerances
established for glyphosate are adequate and supported by sufficient
data, many changes are needed to other glyphosate tolerances for
various reasons, including: increasing or decreasing existing
tolerances based on new data, harmonizing with CODEX when appropriate,
and revising commodity terminology, Crop Group designations, and
definitions that are not in accordance with the revised Crop Group
Regulation (40 CFR part 180, 60 FR 26626, May 17, 1995; FRL-4939-9) or
with the final 860 Series Residue Chemistry Guidelines (860.1000)
published as public drafts on August 25, 1995 (60 FR 44343) (formerly
Table II of Subdivision O, Residue Chemistry, of the Pesticide
Assessment Guidelines). Also, this notice will correct any errors in
the RED tolerance reassessment.
Several maximum residue limits (MRLs) for glyphosate have been
established by the Codex Committee on Pesticide Residues, a committee
within the Codex Alimentarius Commission, an international organization
formed to promote the coordination of international food standards.
When the Agency has sufficient data to make a determination that the
risk is not unreasonable, EPA seeks to harmonize U.S. tolerances with
CODEX MRLs. CODEX regulates glyphosate per se while the United States
regulates the combined residues of glyphosate and its metabolite
aminomethylphosphonic acid (AMPA). The Agency has determined that AMPA
no longer needs to be regulated and therefore is proposing to delete it
from the tolerance expression. Based on this determination, the
expression of the U.S. tolerances and the CODEX MRLs will be the same.
This document also takes into account final tolerance actions taken
subsequent
[[Page 33471]]
to the RED. The first of these actions was establishment of a tolerance
of 25 ppm on almond, hulls, 1 ppm on the tree nuts crop group, 5 ppm on
wheat, grain, 85 ppm on wheat, straw, and 20 ppm on wheat milling
fractions (except flour) on July 7, 1993 (58 FR 36358). Wheat milling
fractions have subsequently been renamed wheat bran, middlings, and
shorts.
The second group of actions was published in the Federal Register
April 5, 1996 (61 FR 15192; FRL-5351-1). That final rule established or
amended tolerances for alfalfa and soybeans and their associated
commodities, sunflowers, animal kidneys, and citrus fruit and
associated commodities, revoked the tolerance for soybean straw, and
deleted AMPA from the tolerance expression for all tolerances affected
by the notice. This document proposes to include the tolerance for
alfalfa forage and alfalfa hay in the tolerance for the non-grass
animal feeds group, forage and hay.
This document amends 40 CFR 180.364, 185.3500, and 186.3500.
B. Proposed Actions
1. AMPA. The food and feed tolerances currently listed in 40 CFR
180.364(a), (b), and (c), and the food additive and feed additive
regulations listed in 40 CFR 185.3500 and in 40 CFR 186.3500 are for
the combined residues of glyphosate and its metabolite (AMPA) resulting
from the application of glyphosate and its salts for herbicidal or
plant growth regulation purposes. Upon receipt and review of additional
toxicological data, EPA has determined that AMPA is no longer of
toxicological concern. EPA bases this conclusion on a 90-day feeding
study in rats (EPA MRID #241351) which shows the very low toxicity of
AMPA. Therefore, there is no need to monitor levels of AMPA residue and
EPA is proposing to delete this compound from the tolerance expression
in 40 CFR 180.364(a), (b), and (c), 185.3500 and in 186.3500.
The tolerances currently listed in Sec. 180.364(d), which were
established after the issuance of the RED in September 1993, do not
include AMPA in the tolerance expression. Therefore, the tolerances now
in Sec. 180.364(d) are proposed to be incorporated in Sec. 180.364(a),
and Sec. 180.364(d) will be deleted.
2. Negligible residue terminology. Some tolerances currently listed
under 40 CFR 180.364(a) are described as being negligible residues,
denoted ``N.'' The Agency no longer uses negligible residue
terminology, and so this notice proposes to delete references to
negligible residues. These deletions do not change the numerical value
of the tolerances. The current tolerances affected by this proposed
change are grain crops (except wheat); grasses, forage; leafy
vegetables; seed and pod vegetables; seed and pod vegetables, forage;
and seed and pod vegetables, hay.
3. Revisions to tolerances and food and feed additive regulations.
The RED identified the need to revise or revoke tolerances and food or
feed additive regulations for glyphosate. These proposed actions are
based on new data which indicate that a change is needed in the
tolerance or food and feed additive regulations. When possible, EPA has
sought to harmonize tolerances and food and feed additive regulations
with CODEX MRLs.
The dietary risk resulting from the changes proposed in the RED do
not result in an unreasonable risk. The Agency estimates chronic
dietary risks for noncancer endpoints by comparing dietary exposure to
the Reference Dose (RfD). The RfD is an estimate of the daily oral
exposure to humans over a lifetime that is not expected to result in
adverse health effects. The RfD is based on the determination of a
critical effect from a review of all toxicity data and a judgment of
uncertainty. In the case of glyphosate, the RfD is 2 mg/kg body weight/
day, based on a no-observed effect level (NOEL) of 175 mg/kg
bodyweight/day from a developmental toxicity study in rabbits, and an
uncertainty factor of 100 to account for extrapolation from animal data
to humans and variability in the human population. Using conservative
assumptions, glyphosate residues represent 1.4 percent of the RfD.
The following sections describe the proposed substantive changes in
the glyphosate tolerances and food and feed additive regulations.
a. Food and feed tolerances: 40 CFR 180.364(a). i. Commodity name
changes. EPA has changed the name of the commodity acerola to Barbados
cherry, and the name of the commodity genip to marmaladebox.
ii. Cotton forage. EPA proposes to revoke the tolerance for cotton
hay and cotton forage since these are no longer used as livestock feed
items.
iii. Forage grasses. In accordance with the revised Crop Group
Regulation (40 CFR part 180) (60 FR 26626, May 17, 1995), the grass
forage, fodder, and hay group now includes all of the forage grasses
for which tolerances have been established. EPA proposes to replace the
established tolerances for forage grasses (0.2 ppm); grasses, forage
(0.2 ppm); Bahiagrass; Bermudagrass; bluegrass; bromegrass; fescue;
orchardgrass; ryegrass; timothy; and wheatgrass (all currently set at
200 ppm), with a tolerance for residues in or on the grass forage,
fodder, and hay group at 100 ppm. The available field data indicate
that following registered use, residues in or on the grass forage,
fodder, and hay group are greater than 0.2 ppm but will not exceed 100
ppm, so the higher tolerance level of 200 ppm is unnecessary.
iv. Kiwifruit. EPA proposes to decrease the tolerance for kiwifruit
from 0.2 ppm to 0.1 ppm. The Agency has re-examined field data to
support this tolerance, and its reconsideration shows that this value
will be appropriate and will harmonize with the Codex Maximum Residue
Levels (MRLs).
v. Okra. Okra was included in the now-obsolete seed and pod
vegetables crop group, which has been replaced by ``legume vegetables
(succulent or dried) group.'' This new group does not include okra.
Therefore, EPA proposes to establish a tolerance for okra at the same
level as before, 0.2 ppm.
vi. Root vegetables. The Monsanto Company, sole technical
registrant of glyphosate, noted that all of the representative
commodities (carrot, potato, radish, and sugar beet) for the Root and
Tuber Vegetables Crop Group have established tolerances at 0.2 ppm.
Therefore, EPA proposes to establish a tolerance of 0.2 ppm for this
Crop Group. The listings for individual commodities in this crop group
(Jerusalem artichoke, garden beet, chicory root, carrot, horseradish,
parsnip, potato, radish, rutabaga, salsify, sugar beet, sweet potato,
turnip, and true yam), do not need to be listed separately in
Sec. 180.364(a), and so will be deleted.
vii. Sapote. Sapote has been a general term for a number of
different tropical fruits. EPA proposes to replace the tolerance for
sapote at 0.2 ppm with separate tolerances for black sapote and white
sapote, already established at 0.2 ppm, and mamey sapote, also at 0.2
ppm.
viii. Small fruits and berries. EPA proposes to establish separate
tolerances for strawberries, cranberries and grapes at 0.2 ppm. All
three commodities were members of the former small fruits and berries
group, which has been revised to no longer include them.
ix. Seed and pod vegetables; legume crops. EPA proposes to replace
the existing tolerances for alfalfa (200 ppm), alfalfa fresh and hay
(0.2 ppm), clover (200 ppm), and forage legumes (except soybeans and
peanuts) (0.4 ppm) with a tolerance of 200 ppm for residues in or on
the non-grass animal feeds (forage, fodder, straw, and hay) group,
which now includes these commodities. In
[[Page 33472]]
establishing this group tolerance, EPA has considered field data to
show that this value is appropriate. EPA also proposes to include the
tolerance for alfalfa forage (75 ppm) and alfalfa hay (200 ppm),
published in the Federal Register April 5, 1996 (61 FR 15192) in the
non-grass animal feeds group, forage and hay (200 ppm) and to delete
the individual tolerances for alfalfa forage and alfalfa hay.
EPA proposes to replace the established crop group tolerances for
the now-obsolete crop group ``seed and pod vegetables'' with ``legume
vegetables (succulent or dried) group (except soybeans),'' and to
increase these tolerances from 0.2 ppm to 5 ppm. The Agency has
considered field data to show that this value is appropriate and will
harmonize with the Codex MRLs. Soybeans are excluded from the legume
vegetable crop group because the use pattern for soybeans is different
from other legume vegetables, resulting in higher residues. Notice of a
final rule revising tolerances for soybeans and associated commodities
was published in the Federal Register April 5, 1996 (61 FR 15192).
b. Food and feed tolerances: 40 CFR 180.364(b). EPA proposes to
revoke the tolerance for peanut, hulls (shells) since these are no
longer used as a livestock feed item.
EPA proposes to increase the U.S. tolerance for cattle, liver from
0.5 ppm to 2.0 ppm; and to increase the U.S. tolerance for hogs, liver
from 0.5 ppm to 1.0 ppm. The Agency has considered livestock residue
data to show that these values are appropriate, and will harmonize with
the Codex MRLs.
c. Food and feed tolerances: 40 CFR 180.364(c). EPA proposes to
establish a tolerance for okra at 0.1 ppm. Okra is a nonleguminous
member of the now-obsolete seed and pod vegetables crop group, which
has been replaced by ``legume vegetables (succulent or dried) group.''
This new group does not include okra. There are no other changes to
these tolerances except in crop terminology.
d. Food and feed tolerances: 40 CFR 180.364(d). There are no other
changes to these tolerances except in crop terminology.
e. Food additive regulations: 40 CFR 185.3500. There are no changes
to these food additive regulations except in crop terminology.
f. Feed additive regulations: 40 CFR 186.3500. EPA proposes to
revoke the tolerance for citrus, molasses, since this is no longer used
as a livestock feed item. There are no other changes to these feed
additive regulations except in crop terminology.
4. Revising commodity definitions. Many current glyphosate
tolerances and food or feed additive regulations include commodity
terminology, crop group designations or definitions that are not in
accordance with the revised Crop Group Regulation (40 CFR Part 180, 60
FR 26626, May 17, 1995) or with the final 860 Series Residue Chemistry
Guidelines (860.1000) published as public drafts on August 25, 1995 (60
FR 44343) (formerly Table II of Subdivision O, Residue Chemistry, of
the Pesticide Assessment Guidelines). These changes in commodity
terminology do not involve any change in the numerical value of the
tolerance or food or feed additive regulation. The proposed amendments
at the end of this document list these changes in commodity
terminology.
5. Corrections to the RED. The RED indicated that there were no
registered glyphosate products for use on many minor crops, mostly
subtropical fruits and vegetables, for which there are established
tolerances in Sec. 180.364(a). Therefore, the RED noted that these
tolerances should be revoked. However, the Agency has discovered that
these uses are listed on current glyphosate labels, and so will not
propose to revoke the associated tolerances.
The RED also indicated that the tolerances for cranberries and
grapes in Sec. 180.364(a) should be revoked, since these commodities
would be included under the small fruits and berries group. On August
25, 1993, the Agency proposed to revise this crop grouping to exclude
cranberries and grapes (58 FR 44990). This action would, in effect,
leave cranberries and grapes with no established tolerances, so the EPA
will not propose to revoke these established tolerances.
The RED also indicated that the tolerance for instant tea in
Sec. 185.3500 should be revoked, since this commodity was not listed in
Table II of Subdivision O, Residue Chemistry, of the Pesticide
Assessment Guidelines. However, the most recent update of Table II,
from September 1995, does include instant tea as a processed commodity,
so the tolerance will be retained at 1.0 ppm.
III. Comments Received in Response to RED Regarding Tolerances
The Monsanto Company made several comments in response to the RED
tolerance reassessment. Monsanto commented on inconsistencies in the
RED document and provided new information or clarifications regarding
proposals in the RED tolerance reassessment. In most cases the Agency
agreed with Monsanto and the Agency's decision is reflected in this
proposal.
IV. Public Comment Procedures
Interested persons are invited to submit written comments,
information, or data in response to this proposed rule. Comments must
be submitted by August 26, 1996.
Information submitted as a comment concerning this document may be
claimed confidential by marking any or all of that information as
``Confidential Business Information'' (CBI). Information so marked will
not be disclosed except in accordance with procedures set forth in 40
CFR part 2. A copy of a comment that does not contain CBI must be
submitted for inclusion in the public record. Information not marked
confidential may be disclosed publicly by EPA without prior notice.
A record has been established for this proposal under docket number
OPP-300433 (including comments and data submitted electronically as
described below). A public version of this record, including printed,
paper versions of electronic comments, which does not include any
information claimed as CBI, is available for inspection from 8 a.m. to
4:30 p.m., Monday through Friday, excluding legal holidays. The public
record is located in Rm. 1132 of the Public Response and Program
Resources Branch, Field Operations Division (7506C), Office of
Pesticide Programs, Environmental Protection Agency, Crystal Mall #2,
1921 Jefferson Davis Highway, Arlington, VA.
Electronic comments can be sent directly to EPA at:
[email protected].
Electronic comments must be submitted as an ASCII file avoiding the
use of special characters and any form of encryption.
The official record for this proposal, as well as the public
version, as described above will be kept in paper form. Accordingly,
EPA will transfer all comments received electronically into printed,
paper form as they are received and will place the paper comments in
the official rulemaking record which will also include all comments
submitted directly in writing. The official rulemaking record is the
paper record maintained at the Virginia address in ``ADDRESSES'' at the
beginning of this document.
Any person who has registered or submitted an application for
registration of a pesticide, under the Federal Insecticide, Fungicide,
and Rodenticide Act (FIFRA) as amended, which contains any of the
ingredients listed herein, may request within 30 days after
[[Page 33473]]
publication of this proposed rule in the Federal Register that this
rulemaking proposal be referred to an Advisory Committee in accordance
with section 408(e) of the FFDCA.
To satisfy requirements for analysis specified by Executive Order
12866 and the Regulatory Flexibilitys Act, EPA has considered impacts
of this proposal, and determined that they will be negligible.
V. References
The following reference was used in the preparation of this final
rule.
U.S. Environmental Protection Agency. Reregistration
Eligibility Document (RED) Glyphosate Case 0178. September 1993.
VI. Regulatory Assessment Requirements
To satisfy requirements for analysis specified by Executive Order
12866, the Regulatory Flexibility Act, the Paperwork Reduction Act, and
the Unfunded Mandates Reform Act, EPA has analyzed the impacts of this
proposal.
A. Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to all the requirements of the Executive Order
(i.e., Regulatory Impact Analysis, review by the Office of Management
and Budget (OMB)). Under section 3(f), the order defines
``significant'' as those actions likely to lead to a rule (1) having an
annual effect on the economy of $100 million or more, or adversely and
materially affecting a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local or tribal governments or communities (also known as
``economically significant''); (2) creating serious inconsistency or
otherwise interfering with an action taken or planned by another
agency; (3) materially altering the budgetary impacts of
entitlement, grants, user fees, or loan programs; or (4) raising
novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in this Executive
Order.
Pursuant to the terms of this Executive Order, EPA has determined
that this rule is not ``significant'' and is therefore not subject to
OMB review.
B. Regulatory Flexibility Act
Pursuant to the requirements of the Regulatory Flexibility Act (5
U.S.C. 601-612), the Administrator has determined that regulations
establishing new tolerances or raising tolerance levels or establishing
exemptions from tolerance requirements do not have a significant
economic impact on a substantial number of small entities. A
certification statement explaining the factual basis for this
determination was published in the Federal Register of May 4, 1981 (46
FR 24950).
C. Paperwork Reduction Act
This proposed regulatory action does not contain any information
collection requirements subject to review by OMB under the Paperwork
Reduction Act of 1980, 44 U.S.C. 3501 et seq.
D. Unfunded Mandates Reform Act
This action does not impose any enforceable duty, or contain any
``unfunded mandates'' as described in Title II of the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), or require prior consultation as
specified by Executive Order 12875 (58 FR 58093, October 28, 1993),
entitled Enhancing the Intergovernmental Partnership, or special
consideration as required by Executive Order 12898 (59 FR 7629,
February 16, 1994).
List of Subjects
40 CFR Part 180
Environmental Protection, Administrative practice and procedure,
Agricultural commodities, Pesticides and pests, Reporting and
recordkeeping requirements.
40 CFR Part 185
Food additives, Pesticides and pest.
40 CFR Part 186
Animal feeds, Pesticides and pest.
Dated: June 20, 1996.
Lois Rossi,
Director, Special Review and Reregistration Division, Office of
Pesticide Programs.
Therefore, 40 CFR, Chapter I, parts 180, 185 and 186 are proposed
to be amended as follows:
PART 180--[AMENDED]
1. In Part 180:
a. The authority citation for part 180 continues to read as
follows:
Authority: 21 U.S.C. 346a and 371.
b. Section 180.364 is revised to read as follows:
Sec. 180.364 Glyphosate, tolerances for residues.
(a) Tolerances are established for the residues of glyphosate (N-
phosphonomethyl glycine) per se resulting from application of the
isopropylamine salt of glyphosate and/or the monoammonium salt of
glyphosate in or on the following agricultural commodities:
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Almond, hulls.............................................. 25
Asparagus.................................................. 0.5
Atemoya.................................................... 0.2
Avocado.................................................... 0.2
Banana..................................................... 0.2
Barbados cherry............................................ 0.2
Berries group.............................................. 0.2
Brassica (Cole) leafy vegetables group..................... 0.2
Breadfruit................................................. 0.2
Bulb vegetables (Allium spp.) group........................ 0.2
Cacao bean................................................. 0.2
Canistel................................................... 0.2
Carambola.................................................. 0.2
Cereal grains group (except wheat)......................... 0.1
Cherimoya.................................................. 0.2
Citrus fruits group........................................ 0.5
Coconut.................................................... 0.1
Coffee bean, green......................................... 1.0
Cotton, undelinted seed.................................... 15
Cranberry.................................................. 0.2
Cucurbit vegetables group.................................. 0.2
Date....................................................... 0.2
Fig........................................................ 0.2
Foliage of legume vegetables group (except soybean forage
and hay).................................................. 0.2
Forage, fodder, and straw of cereal grains group (except
wheat straw).............................................. 0.2
Fruiting vegetables (except Cucurbits) group............... 0.1
Grape...................................................... 0.2
Grass forage, fodder, and hay group........................ 100
Guava...................................................... 0.2
Jaboticaba................................................. 0.2
Jackfruit.................................................. 0.2
Kiwifruit.................................................. 0.1
Leafy vegetables (except Brassica vegetables) group........ 0.2
Leaves of root and tuber vegetables (human food or animal
feed) group............................................... 0.2
Legume vegetables (succulent or dried) group (except
soybean).................................................. 5
Longan..................................................... 0.2
Lychee..................................................... 0.2
Mamey sapote............................................... 0.2
Mango...................................................... 0.2
Marmaladebox............................................... 0.2
Non-grass animal feeds (forage and hay) group.............. 200
Okra....................................................... 0.2
Olive...................................................... 0.2
Papaya..................................................... 0.2
Passion fruit.............................................. 0.2
Peanut, hay................................................ 0.5
Persimmon.................................................. 0.2
Pineapple.................................................. 0.1
Pistachio.................................................. 0.2
Pome fruits group.......................................... 0.2
Pomegranate................................................ 0.2
Root and tuber vegetables.................................. 0.2
Sapodilla.................................................. 0.2
[[Page 33474]]
Sapote, black.............................................. 0.2
Sapote, white.............................................. 0.2
Soursop.................................................... 0.2
Soybean, seed.............................................. 20
Soybean, forage............................................ 100
Soybean, hay............................................... 200
Soybean, aspirated grain fractions......................... 50
Stone fruits group......................................... 0.2
Strawberry................................................. 0.2
Sugar apple................................................ 0.2
Sunflower, seed............................................ 0.1
Tamarind................................................... 0.2
Tree nuts group............................................ 1.0
Wheat, grain............................................... 5.0
Wheat, straw............................................... 85
------------------------------------------------------------------------
(b) Tolerances are established for the residues of glyphosate (N-
phosphonomethyl glycine) per se resulting from application of the
isopropylamine salt of glyphosate and/or the monoammonium salt of
glyphosate for herbicidal and plant growth regulator purposes and/or
the sodium sesqui salt for plant regulator purposes in or on the
following agricultural commodities:
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Cattle, kidney............................................. 4.0
Cattle, liver.............................................. 2.0
Fish....................................................... 0.25
Goat, kidney............................................... 4.0
Goat, liver................................................ 0.5
Hog, kidney................................................ 4.0
Hog, liver................................................. 1.0
Horse, kidney.............................................. 4.0
Horse, liver............................................... 0.5
Peanut..................................................... 0.1
Peanut, hay................................................ 0.5
Poultry, kidney............................................ 0.5
Poultry, liver............................................. 0.5
Sheep, kidney.............................................. 4.0
Sheep, liver............................................... 0.5
Shellfish.................................................. 3.0
Sugarcane.................................................. 2.0
------------------------------------------------------------------------
(c) Tolerances are established for the residues of glyphosate (N-
phosphonomethyl glycine) per se resulting from the use of irrigation
water containing residues of 0.5 ppm following applications on or
around aquatic sites on the following agricultural commodities. Where
tolerances are established at higher levels from other uses of
glyphosate in or on the subject crops, the higher tolerance should also
apply to residues from the aquatic uses cited in this paragraph.
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Avocado.................................................... 0.1
Brassica (Cole) leafy vegetables group..................... 0.1
Bulb vegetables (Allium spp.) group........................ 0.1
Cereal grains group........................................ 0.1
Citrus fruits group........................................ 0.1
Cotton, undelinted seed.................................... 0.1
Cucurbit vegetables group.................................. 0.1
Foliage of legume vegetables group......................... 0.1
Forage, fodder, and straw of cereal grains group........... 0.1
Fruiting vegetables (except Cucurbits) group............... 0.1
Grass forage, fodder, and hay group........................ 0.1
Hops....................................................... 0.1
Leafy vegetables (except Brassica vegetables) group........ 0.1
Leaves of root and tuber vegetables (human food or animal
feed) group............................................... 0.1
Legume vegetables (succulent or dried) group............... 0.1
Non-grass animal feeds (forage, fodder, straw, and hay)
group..................................................... 0.1
Okra....................................................... 0.1
Pome fruits group.......................................... 0.1
Root and tuber vegetables group............................ 0.1
Stone fruits group......................................... 0.1
Tree nuts group............................................ 0.1
------------------------------------------------------------------------
PART 185--[AMENDED]
2. In Part 185:
a. The authority citation for part 185 continues to read as
follows:
Authority: 21 U.S.C. 346a and 348.
b. Section 185.3500 is revised to read:
Sec. 185.3500 Glyphosate.
(a) Food additive regulations are established for the residues of
glyphosate (N-phosphonomethyl glycine) per se when present therein as a
result of the herbicide application to the growing crops:
(1) Glyphosate (N-phosphonomethyl glycine) per se resulting from
the application of the isopropylamine salt of glyphosate for herbicidal
purposes and/or the sodium sesqui salt for plant growth regulator
purposes.
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Sugarcane, molasses........................................ 30.0
------------------------------------------------------------------------
(2) Glyphosate (N-phosphonomethyl glycine) per se resulting from
the application of the isopropylamine salt of glyphosate for herbicidal
purposes.
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Olive...................................................... 0.1
Palm, oil, refined......................................... 0.1
Tea, dried................................................. 1.0
Tea, instant............................................... 7.0
------------------------------------------------------------------------
(3) Glyphosate (N-phosphonomethyl glycine) per se resulting from
the application of the isopropylamine salt of glyphosate or the
monoammonium salt of glyphosate for herbicidal purposes.
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Wheat bran, middlings, and shorts.......................... 20.0
------------------------------------------------------------------------
(b) [Reserved]
PART 186--[AMENDED]
3. In Part 186:
a. The authority citation for part 186 continues to read as
follows:
Authority: 21 U.S.C. 348.
b. Section 186.3500 is revised to read:
Sec. 186.3500 Glyphosate.
A feed additive regulation is established permitting residues of
glyphosate per se (N-phosphonomethyl glycine) in or on the following
feed commodities from application of the isopropylamine salt of
glyphosate and/or the monoammonium salt of glyphosate to the raw
agricultural commodities citrus and soybeans:
------------------------------------------------------------------------
Parts per
Commodity million
------------------------------------------------------------------------
Citrus, pulp, dried........................................ 1.5
Soybean, hulls............................................. 100
------------------------------------------------------------------------
[FR Doc. 96-16587 Filed 6-26-96; 8:45 am]
BILLING CODE 6560-50-F
Complete official Federal Register PDF
FR Doc. 96-16431 Papayas Grown in Hawaii; Continuance Referendum
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Page 33388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16431]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 /
Proposed Rules
[[Page 33388]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 928
[Docket No. FV-96-928-2]
Papayas Grown in Hawaii; Continuance Referendum
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Referendum order.
-----------------------------------------------------------------------
SUMMARY: This document directs that a referendum be conducted among
eligible growers of Hawaiian papayas to determine whether they favor
continuance of the marketing order regulating the handling of papayas
grown in the production area.
DATES: The referendum will be conducted from July 1 through July 26,
1996. The representative production period is from July 1, 1994,
through June 30, 1995.
ADDRESSES: Copies of the text of the aforesaid marketing order may be
obtained from the office of the referendum agent at 2202 Monterey
Street, Suite 102B, Fresno, California 93721, or the Office of the
Docket Clerk, Marketing Order Administration Branch, Fruit and
Vegetable Division, AMS, USDA, P.O. Box 96456, Room 2525-S, Washington,
D.C., 20090-6456.
FOR FURTHER INFORMATION CONTACT: Martin J. Engeler, California
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Division, Agricultural Marketing Service, U.S. Department
of Agriculture, 2202 Monterey Street, Suite 102B, Fresno, California,
93721; telephone: (209) 487-5901; or Charles L. Rush, Marketing Order
Administration Branch, Fruit and Vegetable Division, Agricultural
Marketing Service, U.S. Department of Agriculture, room 2522-S, P.O.
Box 96456, Washington, D.C. 20090-6456; telephone: (202) 720-2431.
SUPPLEMENTARY INFORMATION: Pursuant to Marketing Order No. 928 (7 CFR
Part 928), hereinafter referred to as the ``order,'' and the applicable
provisions of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act,'' it
is hereby directed that a referendum be conducted to ascertain whether
continuance of the order is favored by growers. The referendum shall be
conducted during the period July 1 through July 26, 1996, among growers
in the production area. Only growers who were engaged in the production
of papayas during the period July 1, 1994, through June 30, 1995, may
participate in the continuance referendum.
The Secretary of Agriculture has determined that continuance
referenda are an effective means for ascertaining whether growers favor
continuation of marketing order programs. The Secretary would consider
termination of the order if less than two-thirds of the growers voting
in the referendum and growers of less than two-thirds of the volume of
papayas represented in the referendum favor continuance. In evaluating
the merits of continuance versus termination, the Secretary would not
only consider the results of the continuance referendum. The Secretary
would also consider all other relevant information concerning the
operation of the order and the relative benefits and disadvantages to
growers, handlers, and consumers in order to determine whether
continued operation of the order would tend to effectuate the declared
policy of the Act.
In any event, section 608c(16)(B) of the Act requires the Secretary
to terminate an order whenever the Secretary finds that a majority of
all growers favor termination, and such majority produced for market
more than 50 percent of the commodity covered under such order.
The order requires that a referendum be held every 6 years to
determine whether growers favor continuance of their marketing order
program. The most recent referendum was held in May 1993. The next
referendum was scheduled for 1999. However, due to concerns regarding
the operation of the order including program compliance, the Department
has determined that a referendum should be held at this time to
ascertain whether growers favor continuance of the order.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 38), the ballot materials to be used in the referendum herein
ordered have been submitted to and approved by the Office of Management
and Budget (OMB) and have been assigned OMB No. 0581-0102. It has been
estimated that it will take an average of 20 minutes for each of the
approximately 400 growers of papayas to participate in the voluntary
referendum balloting. Ballots postmarked after July 26, 1996 will not
be included in the vote tabulation.
Martin J. Engeler, California Marketing Field Office, Fruit and
Vegetable Division, Agricultural Marketing Service, USDA, is hereby
designated as the referendum agent of the Secretary of Agriculture to
conduct such referendum. The procedure applicable to the referendum
shall be the ``Procedure for the Conduct of Referenda in Connection
With Marketing Orders for Fruits, Vegetables, and Nuts Pursuant to the
Agricultural Marketing Agreement Act of 1937, as Amended'' (7 CFR Part
900.400 et seq.).
Ballots will be mailed to all known growers and may also be
obtained from the referendum agent and from his appointees at the above
address.
List of Subjects in 7 CFR Part 928
Marketing agreements, Papayas, Reporting and recordkeeping
requirements.
Authority: Agricultural Marketing Agreement Act of 1937, 48
Stat. 31, as amended; 7 U.S.C. 601-674.
Dated: June 24, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-16431 Filed 6-26-96; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-16412 Proposed Establishment of Class E Airspace; Coolidge, AZ
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33390-33391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16412]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 71
[Airspace Docket No. 95-AWP-40]
Proposed Establishment of Class E Airspace; Coolidge, AZ
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This notice proposes to establish Class E airspace area at
Coolidge, AZ. The development of a Global Positioning System (GPS)
Standard Instrument Approach Procedure (SIAP) to Runway (RWY) 23 and a
VHF Omnidirectional Range/Distance Measuring Equipment (VOR/DME) to RWY
05 has made this proposal necessary. The intended effect of this
proposal is to provide adequate controlled airspace for Instrument
Flight Rules (IFR) operations at Coolidge Municipal Airport, Coolidge,
AZ.
DATES: Comments must be received on or before July 29, 1996.
ADDRESSES: Send comments on the proposal in triplicate to: Federal
Aviation Administration, Attn: Manager, Operations Branch, AWP-530,
Docket No. 95-AWP-40, Air Traffic Division, P.O. Box 92007, Worldway
Postal Center, Los Angeles, California 90009.
The official docket may be examined in the Office of the Assistant
Chief Counsel, Western Pacific Region, Federal Aviation Administration,
Room 6007, 15000 Aviation Boulevard, Lawndale, California 90261.
An informal docket may also be examined during normal business at
the Office of the Manager, Operations Branch, Air Traffic Division at
the above address.
FOR FURTHER INFORMATION CONTACT: William Buck, Airspace Specialist,
Operations Branch, AWP-530, Air Traffic Division, Western-Pacific
Region, Federal Aviation Administration, 15000 Aviation Boulevard,
Lawndale, California, 90261, telephone (310) 725--6556..
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory
[[Page 33391]]
decisions on the proposal. Comments are specifically invited on the
overall regulatory, aeronautical, economic, environmental, and energy-
related aspects of the proposal. Communications should identify the
airspace docket number and be submitted in triplicate to the address
listed above. Commenters wishing the FAA to acknowledge receipt of
their comments on this notice must submit with the comments a self-
addressed, stamped postcard on which the following statement is made:
``Comments to Airspace Docket No. 95-AWP-40.'' The postcard will be
date/time stamped and returned to the commenter. All communications
received on or before the specified closing date for comments will be
considered before taking action on the proposed rule. The proposal
contained in this notice may be changed in light of comments received.
All comments submitted will be available for examination in the
Operations Branch, Air Traffic Division, at 15000 Aviation Boulevard,
Lawndale, California 90261, both before and after the closing date for
comments. A report summarizing each substantive public contact with FAA
personnel concerned with this rulemaking will be filed in the docket.
Availability of NPRM
Any person may obtain a copy of this Notice of Proposed Rulemaking
(NPRM) by submitting a request to the Federal Aviation Administration,
Operations Branch, P.O. Box 92007, Worldway Postal Center, Los Angeles,
California 90009. Communications must identify the notice number of
this NPRM. Persons interested in being placed on a mailing list for
future NPRM's should also request a copy of Advisory Circular No. 11-
2A, which describes the application procedures.
The Proposal
The FAA is considering an amendment to part 71 of the Federal
Aviaiton Regulations (14 CFR part 71) by establishing Class E airspace
area at Coolidge, AZ. The development of a GPS and VOR/DME SIAP at
Coolidge Municipal Airport has made this proposal necessary. The
intended effect of this proposal is to provide adequate Class E
airspace for aircraft executing the GPS RWY 23 and VOR/DME RWY 05 SIAP
at Coolidge Municipal Airport, Coolidge, AZ. Class E airspace
designations for airspace areas extending upward from 700 feet or more
above the surface of the earth are published in Paragraph 6005 of FAA
Order 7400.9C dated August 17, 1995, and effective September 16, 1995,
which is incorporated by reference in 14 CFR 71.1. The Class E airspace
designation listed in this document would be published subsequently in
this Order.
The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
Therefore, this proposed regulation--(1) is not a ``significant
regulatory action'' under Executive Order 12866; (2) is not a
``significant rule'' under DOT Regulatory Policies and Procedures (44
FR 10034; February 26, 1979); and (3) does not warrant preparation of a
Regulatory Evaluation as the anticipated impact is so minimal. Since
this is a routine matter that will only affect air traffic procedures
and air navigation, it is certified that this proposed rule would not
have a significant economic impact on a substantial number of small
entities under the criteria of the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
The Proposed Amendment
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for 14 CFR part 71 continues to read as
follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.
* * * * *
AWP AZ E5 Coolidge, AZ [New]
Coolidge Municipal Airport, AZ.
(Lat. 32 deg.56'00'' N, long. 111 deg.25'32'' W)
That airspace extending upward from 700 feet above the surface
bounded by a line beginning at lat. 32 deg.19'55'' N, long.
111 deg.24'00'' W; thence west to lat. 32 deg.17'20'' N, long.
111 deg.44'30'' W; thence north to lat. 32 deg.58'50'' N, long.
111 deg.46'00'' W; thence northeast to lat. 33 deg.08'10'' N, long.
111 deg.10'20'' W; thence southeast to lat. 32 deg.58'50'' N, long.
111 deg.04'15'' W; thence southwest to the point of beginning.
* * * * *
Issued in Los Angeles, California, on June 13, 1996.
George D. Williams,
Manager, Air Traffic Division, Western-Pacific Region.
[FR Doc. 96-16412 Filed 6-26-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-16397 IsoStent, Inc., Receipt of a Petition for Rulemaking
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33388-33390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16397]
=======================================================================
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
10 CFR Part 35
[Docket No. PRM-35-14]
IsoStent, Inc., Receipt of a Petition for Rulemaking
AGENCY: Nuclear Regulatory Commission.
ACTION: Petition for rulemaking; Notice of receipt.
-----------------------------------------------------------------------
SUMMARY: The Nuclear Regulatory Commission (NRC) has received and
[[Page 33389]]
requests public comment on a petition for rulemaking filed by IsoStent,
Inc. The petition has been docketed by the Commission and assigned
Docket No. PRM-35-14. The petitioner requests that the NRC amend its
regulations by adding a new section to address permanently implanted
intraluminal stents, including phosphorus-32 and strontium-89
radioisotope stents. These stents would be permanently implanted in the
patient's vessels and arteries. The petitioner also requests that the
NRC add a new section to specify training and experience requirements
for qualified physicians responsible for placing radioisotope stents in
patients. The petitioner believes the suggested amendments would
address an innovative approach for the treatment of stenotic arteries
and vessels with low-activity, beta-emitting stents.
DATES: Submit comments by September 10, 1996. Comments received after
this date will be considered if it is practical to do so, but assurance
of consideration cannot be given except to those comments received on
or before this date.
ADDRESSES: For a copy of the petition, write: Rules Review Section,
Rules Review and Directives Branch, Division of Freedom of Information
and Publications Services, Office of Administration, U.S. Nuclear
Regulatory Commission, Washington, DC 20555-0001.
Submit comments to: Secretary, U.S. Nuclear Regulatory Commission,
Washington, DC 20555-0001. Attention: Docketing and Service Branch.
Deliver comments to 11555 Rockville Pike, Rockville, Maryland,
between 7:45 am and 4:15 pm on Federal workdays.
For information on sending comments by electronic format, see
``Electronic Access,'' under the Supplementary Information section of
this notice.
FOR FURTHER INFORMATION CONTACT: Michael T. Lesar, Office of
Administration, U.S. Nuclear Regulatory Commission, Washington, DC
20555-0001. Telephone: 301-415-7163 or Toll Free: 800-368-5642, or E-
mail [email protected]
SUPPLEMENTARY INFORMATION:
Receipt of Petition for Rulemaking
The NRC received the IsoStent, Inc., petition for rulemaking on May
10, 1996. The petition is dated May 9, 1996, and was docketed as PRM-
35-14 on May 20, 1996.
Background
The petitioner states that preliminary data indicates that stents,
combined with a low-activity, beta-emitting source (less than 3
microcuries per millimeter of length), may significantly reduce
restenosis of the vessel following therapeutic intervention. The
petitioner refers to a source that estimates total societal costs of
restenosis in the United States is somewhere between $800 million and
$2 billion a year.
The petitioner states that it is important to ensure that the
stents are appropriately classified and regulated because radioactive
stents could significantly benefit the healthcare system and the
quality of life of patients suffering from restenosis of the vessel
following therapeutic intervention. The petitioner believes, after
reviewing existing NRC regulations pertaining to the medical uses of
byproduct materials, that a new section is necessary to address
permanently implanted radioisotope intraluminal stents. The petitioner
states that standard coronary stents, 15 millimeters in length, would
contain less than 20 microcuries (740 kBq) of beta-emitting isotope,
and longer and larger diameter stents for other anatomical sites would
contain less than 3 microcuries of beta-emitting isotope per millimeter
of length.
Petitioner's Suggested Amendments
The petitioner requests that the NRC amend its regulations by
adding a new section that would be applicable to permanently implanted
intraluminal stents. The new section would govern stents that include
phosphorus-32 and strontium-89 radioisotope sealed sources. These
sealed sources would have removable contamination of less than 1
percent of the total device activity. The petitioner further requests a
new section be created on training and experience requiring the stents
to be placed in the patient by a licensed physician who--
(1) Is certified either by the American Board of Radiology in
diagnostic radiology with additional specialization in intravascular
radiology or by the American Board of Internal Medicine with special
competence in cardiology; and
(2) Has received 8 hours of classroom and laboratory training in
the basic handling of beta-emitting sources.
Discussion of the Petition
The petitioner states that the existing regulations do not include
phosphorus-32 and strontium-89 as sealed sources for medical
therapeutic use. Therefore, the petitioner believes that these sources
would be regulated under sources used for traditional brachytherapy.
The petitioner believes this category is not appropriate to control
low-activity, beta-emitting stents for the following reasons:
1. Training and Competency Requirements.
Low-activity, beta-emitting stents differ significantly from those
sources that are used for traditional brachytherapy. Traditional
brachytherapy sources have higher activity and require significant dose
calculations. To be used safely, traditional brachytherapy sources
require extensive knowledge in radiobiology, radiation physics, and
radiation protection. Low-activity beta-emitting stents do not require
this same level of radiation expertise because they have significantly
lower radioactivity levels and are permanently implanted devices that
do not require any calculation of dose or dwell time.
Under current NRC regulations, any procedure using a source defined
under Sec. 35.400 would require the supervision of a certified
radiation oncologist. Stents are currently prescribed and implanted by
physicians trained in cardiovascular specialties. Once given required
training in the proper handling of these low dose-rate, beta-emitting
sources, these physicians could safely and effectively implant
radioactive stents. Access to low-activity, beta-emitting stents should
be allowed for those physicians who are already certified for stent
implantation specialties. Requiring the additional oversight of a
radiation oncologist for these stent applications could potentially
limit the accessibility of this technology and add significant cost to
each procedure. Such a requirement would unnecessarily burden the
medical system.
2. Safety Requirements
Low-activity, beta-emitting stents can be shielded with
approximately 1 centimeter of plastic material and have half-lives of
less than two months, and, when shielded, should not pose a significant
hazard to the public or medical staff. The radioactive stent remains
within the shield until it is passed into the patient by means of a
stent delivery catheter. Once in the patient, these beta-emitters are
shielded by the patient's tissues, and because of their shorter half-
lives, do not represent a significant long-term risk to the public or
to medical personnel. A precedent for the release of patients with such
short half-life sources has been set with sources such as iodine-125
seeds having a 60-day half-life and 10\3\ to 10\4\ times higher
activity per seed, as well as with the more penetrating photon
radiation.
[[Page 33390]]
3. Facility Licensing Requirements
Medical facilities without a broad-scope license also should have
access to low-activity, beta-emitting stents, as do facilities with a
broad-scope license under current regulations. There are a large number
of medical facilities that currently implant stents, but do not meet
these licensing requirements. Therefore, maintaining these requirements
also could limit the accessibility of this technology.
The petitioner believes that these suggested changes would have a
potentially large benefit to patients and the healthcare system.
Electronic Access
Comments may be submitted electronically in either ASCII text or
WordPerfect format (version 5.1 or later) by calling the NRC Electronic
Bulletin Board (BBS) on FedWorld. The bulletin board may be accessed
using a personal computer, a modem, and one of the commonly available
communications software packages, or directly via Internet. Background
documents on the petition for rulemaking also are available, as
practical, for downloading and viewing on the bulletin board.
If using a personal computer and modem, the NRC rulemaking
subsystem on FedWorld can be accessed directly by dialing the toll free
number 800-303-9672. Communication software parameters should be set as
follows: parity to none, data bits to 8, and stop bits to 1 (N,8,1).
Using ANSI or VT-100 terminal emulation, the NRC rulemaking subsystem
can then be accessed by selecting the ``Rules Menu'' option from the
``NRC Main Menu.'' Users will find the ``FedWorld Online User's
Guides'' particularly helpful. Many NRC subsystems and data bases also
have a ``Help/Information Center'' option that is tailored to the
particular subsystem.
The NRC subsystem on FedWorld also can be accessed by a direct-dial
telephone number for the main FedWorld BBS, 703-321-3339, or by using
Telnet via Internet: fedworld.gov. If using 703-321-3339 to contact
FedWorld, the NRC subsystem will be accessed from the main FedWorld
menu by selecting the ``Regulatory, Government Administration and State
Systems,'' then selecting ``Regulatory Information Mall.'' At that
point, a menu will be displayed that has an option ``U.S. Nuclear
Regulatory Commission'' that will take the user to the NRC online main
menu. The NRC online area also can be accessed directly by typing ``/go
nrc'' at a FedWorld command line. If NRC is accessed from FedWorld's
main menu, the user may return to FedWorld by selecting the ``Return to
FedWorld'' option from the NRC online main menu. However, if NRC is
accessed at FedWorld by using NRC's toll-free number, the user will
have full access to all NRC systems, but will not have access to the
main FedWorld system.
If FedWorld is contacted using Telnet, the user will see the NRC
area and menus, including the Rules Menu. Although the user will be
able to download documents and leave messages, he or she will not be
able to write comments or upload files (comments). If FedWorld is
contacted using FTP, all files can be accessed and downloaded, but
uploads are not allowed. Only a list of files will be shown without
descriptions (normal Gopher look). An index file listing all files
within a subdirectory, with descriptions, is available. There is a 15-
minute time limit for FTP access.
Although FedWorld also can be accessed through the World Wide Web,
like FTP, that mode only provides access for downloading files and does
not display the NRC Rules Menu.
For more information on NRC bulletin boards, call Mr. Arthur Davis,
Systems Integration and Development Branch, NRC, Washington, DC 20555-
0001, telephone 301-415-5780; E-mail AXD[email protected].
Single copies of this petition for rulemaking may be obtained by
written request or telefax (301-415-5144) from the Rules Review and
Directives Branch, Division of Freedom of Information and Publications
Services, Office of Administration, Mail Stop T6-D59, U.S. Nuclear
Regulatory Commission, Washington DC 20555-0001. Certain documents
related to this petition for rulemaking, including comments received,
may be examined at the NRC Public Document Room, 2120 L Street NW.
(Lower Level), Washington, DC. These same documents also may be viewed
and downloaded electronically via the Electronic Bulletin Board
established by NRC for this petition for rulemaking as indicated above.
Dated at Rockville, Maryland, this 21st day of June 1996.
For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 96-16397 Filed 6-26-96; 8:45 am]
BILLING CODE 7590-01-P
Complete official Federal Register PDF
FR Doc. 96-16395 Grandfathered Short-Spaced FM Stations
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33474-33476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16395]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-120, FCC 96-236]
Grandfathered Short-Spaced FM Stations
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This Notice of Proposed Rule Making (NPRM) in MM Docket No.
96-120 seeks comment regarding various proposals to modify a current
rule to permit certain short-spaced stations to make changes based on a
showing that no interference is caused or received, or
[[Page 33475]]
if interference already exists, based on the total of such interference
not being increased. The NPRM also proposes to permit certain stations
short-spaced to a second-adjacent-channel or a third-adjacent-channel
station to change transmitter location or other station facilities
without regard to such short-spacing, and to eliminate the need to
obtain agreements by grandfathered stations proposing increased
facilities. The types of modifications that are proposed for this
revised rule are expected to have no potential to increase interference
to other stations.
DATES: Initial comments are due July 22, 1996; reply comments are due
August 5, 1996. Written comments by the public on the proposed and/or
modified information collections are due July 22, 1996. Written
comments must be submitted by the Office of Management and Budget (OMB)
on the proposed and/or modified information collections on or before
August 26, 1996.
ADDRESSES: Office of the Secretary, Federal Communications Commission,
Washington, D.C. 20554. In addition to filing comments with the
Secretary, a copy of any comments on the information collections
contained herein should be submitted to Dorothy Conway, Federal
Communications Commission, Room 234, 1919 M Street, N.W., Washington,
DC 20554, or via the Internet to [email protected], and to Timothy Fain,
OMB Desk Officer, 10234 NEOB, 725--17th Street, N.W., Washington, DC
20503 or via the Internet to [email protected].
FOR FURTHER INFORMATION CONTACT: James Bradshaw, Mass Media Bureau,
Audio Services Division, (202) 418-2720, or via the Internet at
[email protected]. For additional information concerning the information
collections contained in the NPRM, contact Dorothy Conway at (202) 418-
0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This is the synopsis of the Commission's
Notice of Proposed Rule Making in MM Docket No. 96-120, adopted May 23,
1996, and released June 14, 1996.
The complete text of this NPRM, which was adopted in MM Docket No.
96-120, is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, N.W.,
Washington, DC, and may also be purchased from the Commission's copy
contractor, International Transcription Services, Inc., at (202) 857-
3800, 2100 M Street, N.W., Suite 140, Washington, DC 20037.
Synopsis of Order and Notice of Proposed Rule Making
1. In the NPRM, the Commission seeks comment regarding various
proposals to streamline the Commission's rules specifically dealing
with modifications of commercial FM stations that became short-spaced
in 1964, and have remained short-spaced since that time. The NPRM
proposes to modify portions of Section 73 of the rules to lift
restrictions which unnecessarily impede flexibility as to site
selection for grandfathered stations and substitute the currently
required interference showings in applications, which have proven
ineffective, with showings that directly relate to the impact such
modification proposals have on other stations and the public.
2. In the NPRM, the Commission proposes to change three aspects of
the rule section dealing with grandfathered short-spaced stations.
First, the Commission proposes use of predicted interference area
analysis based on field strength protection ratios, instead of the
current limitation based on the relative locations of the 1 mV/m (60
dBu) service contour of the short-spaced stations. Second, the
Commission proposes to eliminate the second-adjacent-channel and third-
adjacent-channel protection criteria for grandfathered short-spaced
stations. Finally, the Commission proposes to eliminate the provision
for agreements between grandfathered short-spaced stations. In this
Notice, the Commission invites comments relating to possible
modification of these rule sections.
3. In addition, in the NPRM, the Commission invites engineering
firms and other parties with knowledge about grandfathered stations to
assist in identifying grandfathered short-spaced stations so that these
can be classified in the Commission's engineering database.
4. The proposed rules set forth in the NPRM would put the focus on
more accurately evaluating and controlling interference. The proposed
rules would also return some flexibility when stations with second-
adjacent-channel or third-adjacent-channel grandfathered short-spacings
proposed modifications. And for stations with co-channel or first-
adjacent-channel grandfathered short-spacings, the proposed rules would
allow a more accurate determination of predicted interference. In
addition, the proposed rules would eliminate the Commission's policy
regarding agreements between grandfathered stations.
Initial Paperwork Reduction Act of 1995 Analysis
The Federal Communications, as part of its continuing effort to
reduce paperwork burdens invites the general public and other Federal
agencies to take this opportunity to comment on the following proposed
and/or continuing information collections, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Comments are requested
concerning (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commissions burden estimates; (c) ways
to enhance the quality, utility, and clarity of the information
collected and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Control Number: None.
Title: NPRM: Grandfathered Short-Spaced FM Stations.
Form Number: 301/340.
Type of Review: New collection.
Affected Public: Business or other for-profit, not-for-profit
institutions.
Number of Respondents: 15 FM broadcast licensees.
Estimated time per response: 5 hours per showing (0.5 hours
consultation time/4.5 hours contracting time).
Annual Burden: 7 hours.
Needs and Uses: This NPRM proposes to eliminate unnecessary
regulations and streamline the current method of modifying pre-1964
grandfathered short-spaced FM stations. This NPRM is seeking comment on
a proposal to lift restrictions which unnecessarily impede flexibility
as to site selection for grandfathered stations and substitute the
currently required interference showings in applications with showings
that directly relate to the impact such modification proposals have on
other stations and the public. The data are used by Commission staff to
determine if the public interest will be served and that existing
levels of interference will not be increased to other stations.
Initial Regulatory Flexibility Analysis
As required by section 603 of the Regulatory Flexibility Act, the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the expected impact on small entities of the proposals
suggested in the NPRM. Written public comments are requested on the
IRFA. These comments must be filed in accordance with the same filing
deadlines as comments on the rest of the
[[Page 33476]]
NPRM, but they must have a separate and distinct heading designating
them as responses to the Initial Regulatory Flexibility Analysis. The
Secretary shall send a copy of the NPRM, including the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration in accordance with paragraph 603 (a)
of the Regulatory Flexibility Act, Public Law No. 96-354, 94 Stat.
1164, 5 U.S.C. 601, et seq. (1980).
I. Reason for Action: This proposed action is necessary to provide
more flexibility for grandfathered short-spaced FM broadcast stations
to effectuate minor modifications of their facilities. In addition,
this proposed action would allow such minor modifications to be made
more quickly than under the current procedures.
II. Objectives: The objective of this proceeding is to provide
grandfathered short-spaced FM station licensees better defined
standards for modifying their current facilities and to bring improved
service to the public more efficiently and expeditiously while
controlling interference to other stations.
III. Legal Basis: The action taken in this NPRM is authorized by
sections 4(i), 5(c)(1), 302, and 303 of the Communications Act of 1934,
as amended, 47 U.S.C. 154(i), 155(c)(1), 302, and 303.
IV. Description, Potential Impact and Number of Small Entities
Affected: The entities affected by this proposal are pre-1964
grandfathered short-spaced FM radio station licensees seeking to effect
minor modifications of facilities that have previously been authorized
by the Commission. The total number of such licensees is approximately
400. Because the NPRM proposes provisions which allow for greater
flexibility in operation, the option of whether or not to take
advantage of the new rules rests with each licensee. There is no
requirement that any licensee make any change as a result of these rule
amendments. The number of licensees who might decide to modify their
stations pursuant to these rule amendments is unknown, but under the
present rules, approximately 15 stations each year file applications
that propose the types of facilities modifications that are the subject
of these rule amendments.
V. Recording, Record Keeping and Other Compliance Requirements:
None.
VI. Federal Rules which Overlap, Duplicate or Conflict with these
Rules: None.
VII. Any Significant Alternative Minimizing Impact on Small
Entities and Consistent with the Stated Objectives: None.
List of Subjects in 47 CFR Part 73
Radio broadcasting, Television broadcasting.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 96-16395 Filed 6-26-96; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-16392 Addition of Facilities in Certain Industry Sectors; Toxic Chemical Release Reporting; Community Right-to-Know
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33588-33618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16392]
[[Page 33587]]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 372
Addition of Facilities in Certain Industry Sectors; Toxic Chemical
Release Reporting; Community Right-to-Know; Proposed Rule
Emergency Planning and Community Right-to-Know; Notice of Public
Meeting; Notice
Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 /
Proposed Rules
[[Page 33588]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 372
[OPPTS-400104; FRL-5379-3]
RIN 2070-AC71
Addition of Facilities in Certain Industry Sectors; Toxic
Chemical Release Reporting; Community Right-to-Know
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA is proposing to add seven industry groups to the list of
industry groups subject to the reporting requirements under section 313
of the Emergency Planning and Community Right-to-Know Act of 1986
(EPCRA) and section 6607 of the Pollution Prevention Act of 1990 (PPA).
These industry groups are metal mining, coal mining, electric
utilities, commercial hazardous waste treatment, chemicals and allied
products-wholesale, petroleum bulk stations-wholesale, and solvent
recovery services. EPA believes that the addition of these industry
groups to EPCRA section 313 will significantly add to the public's
right-to-know about releases and other waste management activities of
toxic chemicals in their communities. EPA believes that these industry
groups meet the criteria of EPCRA section 313(b)(1)(B). Reporting for
these sectors will be required for the first full year following
publication of the final rule.
DATES: Written comments on this proposed rule must be received on or
before August 26, 1996.
ADDRESSES: Written comments should be submitted in triplicate to: OPPT
Docket Clerk, TSCA Document Receipt Office (7407), Office of Pollution
Prevention and Toxics, Environmental Protection Agency, Rm. E-G099, 401
M St., SW., Washington, DC 20460. Comments containing information
claimed as confidential must be clearly marked as confidential business
information (CBI). If CBI is claimed, three additional sanitized copies
must also be submitted. Nonconfidential versions of comments on this
proposed rule will be placed in the rulemaking record and will be
available for public inspection. Comments should include the docket
control number for this proposal, OPPTS-400104 and the EPA contact for
this proposal. Unit VII. of this preamble contains additional
information on submitting comments containing information claimed as
CBI.
Comments and data may also be submitted electronically by sending
electronic mail (e-mail) to: [email protected]. Electronic
comments must be submitted as an ASCII file avoiding the use of special
characters and any form of encryption. Comments and data will also be
accepted on disks in WordPerfect 5.1 file format or ASCII file format.
All comments and data in electronic form must be identified by the
docket number OPPTS-400104. No CBI should be submitted through e-mail.
Electronic comments on this proposed rule may be filed online at many
Federal Depository Libraries. Additional information on electronic
submissions can be found in Unit VII. of this document.
FOR FURTHER INFORMATION CONTACT: Tim Crawford at 202-260-1715, e-mail:
[email protected] or Brian Symmes at 202-260-9121, e-mail:
[email protected] for specific information regarding this
proposed rule. For further information on EPCRA section 313, contact
the Emergency Planning and Community Right-to-Know Hotline,
Environmental Protection Agency, Mail Stop 5101, 401 M St., SW.,
Washington, DC 20460, Toll free: 1-800-535-0202, in Virginia and
Alaska: 703-412-9877 or Toll free TDD: 800-553-7672.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Regulated Entities
Entities potentially regulated by this proposed action are those
facilities within the industry groups being proposed for addition to
the list of Standard Industrial Classification (SIC) codes which
manufacture, process, or otherwise use chemicals listed at 40 CFR
372.65 and meet the reporting requirements of section 313 of the
Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA), 42
U.S.C. 11023 and section 6607 of the Pollution Prevention Act of 1990
(PPA), 42 U.S.C. 13106. Some of the potentially regulated categories
and entities include:
------------------------------------------------------------------------
Examples of regulated
Category entities
------------------------------------------------------------------------
Industry; facilities that manufacture, Metal mining, Coal mining,
process, or otherwise use certain Electric utilities,
chemicals. Commercial hazardous waste
treatment, Chemicals and
allied products-wholesale,
Petroleum bulk stations-
wholesale, Solvent recovery
services, Manufacturing.
------------------------------------------------------------------------
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
proposed action. This table lists the types of entities that EPA is now
aware could potentially be regulated by this proposed action. Other
types of entities not listed in the table could also be regulated. To
determine whether your facility would be regulated by this action, you
should carefully examine this proposal and the applicability criteria
in part 372 subpart B of Title 40 of the Code of Federal Regulations.
B. Statutory Authority
This proposed rule is issued under sections 313(b) and 328 of
EPCRA, 42 U.S.C. 11023 et seq. EPCRA is also referred to as Title III
of the Superfund Amendments and Reauthorization Act of 1986 (SARA)
(Pub. L . 99-499).
C. Background
Section 313 of EPCRA requires certain facilities manufacturing,
processing, or otherwise using listed toxic chemicals to report their
environmental releases of such chemicals annually. Beginning with the
1991 reporting year, such facilities also must report source reduction
and recycling data for such chemicals, pursuant to section 6607 of the
PPA, 42 U.S.C. 13106. Section 313(b)(1)(A) specifically applied these
reporting requirements to owners and operators of facilities that have
10 or more full time employees and that are in Standard Industrial
Classification (SIC) codes 20 through 39. EPCRA section 313(b)
authorizes EPA to add facilities and industry groups to the EPCRA
section 313 list. The purpose of this proposed rule is to expand the
universe of industry groups that are subject to EPCRA section 313 and
PPA section 6607.
[[Page 33589]]
II. Preparation for Expansion of Section 313 Industry Groups
A. General Background
In 1986, Congress enacted EPCRA to ensure that the presence,
management, and routine and emergency releases of toxic chemicals in
the United States were well understood. It was evident that there were
facilities in the United States where toxic chemicals were
manufactured, used and stored--but knowledge of this was undisclosed to
emergency response teams, state and local governments, and perhaps most
importantly, the citizens who lived and shared common neighborhoods
with these facilities.
At the core of these new provisions was the concept of a facility-
specific, chemical-based inventory. This inventory, termed the Toxics
Release Inventory (TRI), created a national data base identifying
facilities and their annual accidental and routine releases of toxic
chemicals. Prior to EPCRA, this information was not readily available
to the federal government, state governments, emergency preparedness
teams or the general public, and often did not become available until
after serious accidents occurred or until major impacts on human health
and the environment were evident. This ``after-the-fact'' disclosure of
information did little to help plan or prevent such serious health and
environmental impacts.
EPCRA section 313 currently requires certain manufacturing
facilities in SIC codes 20 through 39 to report annually on their
releases, transfers, and other waste management practices for more than
600 listed toxic chemicals and chemical categories (hereafter ``toxic
chemicals''). Information on the release (including disposal),
transfer, and other waste management activities of these chemicals,
which is provided to EPA and States, is then made publicly available
through a variety of means, including an annual report issued by EPA.
The data that EPA receives from these approximately 23,000
facilities have provided the public, industry, and all levels of
government with critical information related to toxic chemical releases
and transfers that occur within their communities and across the United
States. These data have become an essential component of facility
planning and community preparedness and response. Further, these data
allow States, communities and the public to engage in an informed way
in environmental decision making. The TRI data are a yardstick by which
progress can be measured by industry and local communities and
governments. These data enable all interested parties to establish
credible baselines, to set realistic goals for environmental progress,
and to measure progress in meeting these goals over time.
Data about releases and other waste management activities of toxic
chemicals at the community level were generally nonexistent prior to
EPCRA. While permit data are generally cited as a public source of
environmental data, they are often difficult to obtain, are not cross-
media and present only a limited perspective on the facility's overall
performance. While other sources of data are often cited as substitutes
for TRI data, EPA is unaware of any other publicly available,
nationwide data base that provides multi-media, facility-specific
release and waste information to the public. With EPCRA, and the real
gains in understanding it has produced, communities now know what a
subset of industrial facilities in their area release or otherwise
manage as waste for listed toxic chemicals.
EPCRA section 313 facility coverage is currently limited to
facilities in the manufacturing sector, i.e., in SIC codes 20 through
39. These manufacturing facilities account for only a small portion of
the toxic chemicals released or handled as waste in the United States.
Facilities currently covered by EPCRA section 313 account for only 0.4
percent of the facilities in the United States (Ref. 14). In 1989, the
Office of Technology Assessment estimated that the TRI represents 5
percent of toxic releases to the environment. Adding non-manufacturing
industries to the EPCRA section 313 list of facilities will provide
basic information to millions of Americans on releases and other waste
management information on toxic chemicals from additional industrial
facilities in their communities.
As discussed in detail in Unit III.A. of this preamble, Congress
gave EPA clear authority to expand TRI, both in terms of the chemicals
reported and the facilities required to report. The limited list of
chemicals and facilities identified in the original legislation was
meant as a starting point, or a core program. Congress recognized that
the TRI program would need to evolve to meet the needs of a better
informed public and to fill information gaps that would become apparent
over time.
In implementing the expansion of the TRI program, EPA is pursuing
the course set by Congress. The information EPA is seeking to provide
the public through this proposal currently is largely unavailable.
While many non-manufacturing facilities may be subject to various
reporting requirements at the Federal, State, and local levels, these
reporting systems are not comparable to TRI. These systems, which were
reviewed as part of the analysis for this proposal, have been found to
be limited in scope, content, coverage, and accessibility compared to
TRI. Many do not focus on the collection and dissemination of
information but are used to support other regulatory activities, such
as the issuance of permits. While other reporting systems may serve
their statutorily mandated purposes, none provide accessible data on
releases to all media from such a large number of facilities.
Therefore, these existing data systems, which may serve other useful
purposes, do not provide as useful information for communities on toxic
chemicals as TRI does. Moreover, duplication between TRI data and data
contained in other systems is minimal, data contained in those other
systems often reflect permitted releases rather than actual releases,
and these data may represent wastestream level data rather than the
chemical-specific data that comprises TRI.
In a critical analysis of the TRI program, the Congressional
General Accounting Office (GAO) in 1991 noted that EPA had not used its
statutory authority to expand the types of facilities required to
report under EPCRA section 313. GAO recognized that the value of the
TRI program could be enhanced significantly by expanding the program's
reporting requirements to cover industries outside the manufacturing
sector, and noted that industry group expansion is supported by a
variety of stakeholders. More discussion of the GAO's report, entitled
Toxic Chemicals: EPA's Toxic Release Inventory Is Useful But Can Be
Improved (hereafter GAO Report), can be found in Unit III.A. of this
preamble (Ref. 2).
EPA has undertaken a number of actions to expand and enhance TRI.
These actions include expanding the number of reportable toxic
chemicals by adding 286 toxic chemicals and chemical categories to the
EPCRA section 313 list in 1994. At the same time, EPA sought to reduce
burden for facilities with low annual reportable amounts of toxic
chemicals by establishing an alternate reporting threshold that allows
facilities with 500 pounds or less of reportable releases and other
wastes to file a certification statement instead of the standard TRI
report, the Form R. Further, a new category of facilities was added to
TRI on August 3, 1993 through Executive Order 12856, which requires
Federal
[[Page 33590]]
facilities meeting threshold requirements to file annual TRI reports,
regardless of SIC code.
EPA first announced its intention to consider the expansion of TRI
to include additional industry groups at a public meeting held on May
29, 1992 (57 FR 19126). Today's proposal to expand the coverage of TRI
to include additional industry groups has been undertaken in order to
provide new and valuable information on toxic chemicals in the U.S. The
proposed industry groups are responsible for substantial use, release
and generation of EPCRA section 313 chemicals as waste, and are engaged
in activities similar to or related to activities conducted at
facilities within the manufacturing sector that currently reports. This
action is proposed in order to more completely account for releases,
transfers, and waste management in the U.S., and to provide the public,
all levels of government, and the regulated community with information
that will improve decision making, measurement of pollution, and the
understanding of the environmental consequences of toxic chemical
emissions.
On August 8, 1995, the President issued a directive to EPA for
``continuation on an expedited basis of the public notice and comment
rulemaking proceedings to consider whether, as appropriate and
consistent with section 313(b) of EPCRA, 42 U.S.C. 11023(b), to add to
the list of Standard Industrial Classification (``SIC'') Code
designations of 20 through 39 (as in effect on July 1, 1985)'' (60 FR
41791). The President directed that EPA ``complete the rulemaking
process on an accelerated schedule.'' EPA is now proposing a number of
carefully selected industry segments for coverage under EPCRA section
313. Although EPA may be ``expediting'' this activity, it is doing so
only after lengthy deliberations and consultation with stakeholders.
EPA recognizes that expansion of TRI reporting to cover a broader
range of facilities raises some communication issues that may not be
presented by the original list of manufacturing facilities in SIC codes
20 through 39. For example, inclusion of certain waste management
facilities as proposed could mean that a facility's primary business
could equate to a reportable release. As discussed in Unit V.F.6. of
this preamble, this could lead to the misperception that an
uncontrolled release is taking place, when in reality the facility is
legally and responsibly managing waste materials. This type of
misperception is not a result intended or desired by EPA. Similarly, a
concern has been expressed by some that because waste management
activities may involve transfers from one facility to another that the
same material may appear more than once in the TRI data base. EPA
believes that, since transfers and releases are tracked separately,
this should not mislead the public, but seeks comment on the issue. As
this rulemaking proceeds, EPA will be evaluating how it presents--
including in its annual data release--and otherwise communicates the
information reported by these new facilities. When considering this
proposed rule, commenters are encouraged to address how best to
communicate information from the new industries in a way that continues
to serve the purposes of TRI without fostering misperceptions.
B. Outreach
Prior to this proposed rulemaking, EPA engaged in a significant and
comprehensive outreach effort. This outreach served to inform
interested parties, including industries under consideration, state
regulatory officials, environmental organizations, labor unions,
community groups, and the public of EPA's intention to propose adding
additional industry groups to the EPCRA section 313 list. The outreach
effort also allowed EPA to gather additional information that assisted
in the development of this proposed rulemaking. EPA has also received
substantial public comment regarding the Agency's proposed action, and
has considered these comments in its deliberations.
EPA recognized the need for comprehensive and thorough outreach
regarding this proposal. Consequently, EPA held two public meetings
prior to publication of this proposal. The first public meeting,
announcing EPA's intentions, was held on May 29, 1992. The second was
held on May 25, 1995. These meetings were announced in the Federal
Register (57 FR 19126, May 4, 1992 and 60 FR 21190, May 1, 1995). The
public meetings allowed interested parties, including representatives
of the industries included in this proposal, to voice opinions and
concerns regarding the facility expansion undertaking. EPA used these
meetings as an opportunity to inform interested parties about the
possibility of this proposed action and to make available information
regarding its analysis for comment. Issues papers, summaries,
statements submitted and additional public comments from these
meetings, are included in the public docket supporting this rulemaking.
In addition, over the course of the past 5 years, EPA has used the
regularly-held public meetings of the Forum on State and Tribal
Toxicities Action (FOSTTA), which represents state environmental
agencies, and the National Advisory Council on Environmental Policy and
Technology (NACEPT), which includes representatives from industry,
environmental organizations, states, and academia, to discuss the
expansion of the EPCRA section 313 industry group list. These groups
have provided EPA with substantive input prior to this proposal for
structuring its screening and analytical activities conducted in
support of this proposal. EPA has recently held discussions with other
state regulatory officials, in particular with the Interstate Mining
Compact Commission (IMCC). These discussions have allowed EPA to
understand more clearly state regulatory concerns regarding the
addition of certain industry groups. With the publication of this
proposal, EPA will be continuing the dialogue initiated in these
meetings.
EPA also recognized that public meetings were not the sole means to
engage in the substantive discussion of issues specific to the proposed
industries. Therefore, EPA initiated a series of formal and informal
meetings with industry representatives as well as with representatives
of environmental, community and labor organizations. Although meetings
with such groups have been held since 1992, EPA substantially increased
this element of its outreach effort since 1994, and continued to do so
until the publication of this proposal. The more formal of these
meetings, referred to as ``focus group meetings,'' involved
representatives of various trade associations and companies from the
various industry groups under consideration. These meetings primarily
involved discussions with EPA officials regarding the expansion of
EPCRA section 313 reporting requirements as well as issues specific to
the industries under consideration. A ``focus group meeting'' was also
held with environmental, labor and community organizations. EPA also
used these meetings as an opportunity to share data and additional
information collected as part of its expansion effort, and to solicit
comment regarding the analytic approach used in the screening process
(A description of the screening process is provided in Unit II.C. and
II.D of this preamble). Summaries of these meetings and lists of
participants are available in the public docket supporting this
rulemaking.
EPA officials have also held meetings with industry representatives
and others on a regular basis to discuss issues involved in this
proposed rulemaking.
[[Page 33591]]
EPA has used these meetings as a means to keep interested parties
closely informed of progress in developing this proposed action, and to
gather information to assist the Agency in its activities. These
meetings are documented in the public docket supporting this
rulemaking.
EPA and other government officials have routinely discussed this
proposed action in public speaking engagements before a variety of
groups and organizations. Most notably, the President addressed
community groups in Baltimore, Maryland on August 8, 1995, regarding
the Administration's commitment to community right-to-know, including
his directive to the Administrator of EPA and Heads of Executive
Departments and Agencies to continue the expansion of the EPCRA section
313 industry group list. The President's statements concerning the
expansion of the TRI program were widely reported and increased public
awareness of EPA's efforts. Considerable media coverage, including
detailed trade press stories, has provided many more individuals,
businesses, and organizations with information regarding this proposed
action.
Unfunded mandates that may be imposed on other government entities
are of particular concern to the Agency, especially since issuance of
Executive Order 12875 (``Enhancing the Intergovernmental Partnership'')
and the Unfunded Mandates Reform Act of 1995 (compliance with this Act
is discussed in Unit XI.D. of this preamble). EPA has held discussions
with a wide range of state and local officials regarding this proposal,
particularly through FOSTTA as described above, and with
representatives of publicly-owned and operated facilities. EPA will
continue a constructive dialogue to ensure that unfunded mandates
issues are fully understood, analyzed, and addressed.
EPA recognizes that particular concerns have been raised regarding
the expansion of the EPCRA section 313 industry group list in so far as
the reporting requirements may affect small businesses. Many trade
associations and other industry organizations with which EPA has held
discussions include small businesses as members or participants. These
groups have represented the interests of some small businesses to EPA,
and have helped to inform businesses about EPA's intentions. In
addition, EPA has addressed forums such as the Small Business
Roundtable regarding this proposed action, and has briefed officials of
the Small Business Administration as well as EPA's Small Business
Omsbudsman and Regional Small Business Liaisons on this matter.
Activities specific to small businesses are documented in the public
docket supporting this rulemaking.
A variety of materials have been made available to interested
parties and the public regarding this proposed action. Widely
distributed Agency publications have provided updates regarding the
expansion of the TRI program. More specific materials, including
analytical products developed as part of this effort, have been
provided to industry groups and further disseminated at events such as
annual meetings. EPA is also aware of and appreciates the many industry
efforts to disseminate this information to members. Documentation of
these publications and materials, to the extent available, is included
in the public docket supporting this rulemaking.
EPA intends to continue its outreach efforts in regards to this
proposed action. The Agency has found outreach to be beneficial to all
parties and essential to sound public policy decisions. The Agency will
be providing additional forums for public comment by holding two public
meetings during the public comment period for this proposal.
C. Development of Industry Group Candidates
Prior to this proposed rulemaking, EPA conducted a screening
process designed to identify the best candidate industry groups in
order to focus on those industries potentially most relevant to further
the purposes of EPCRA section 313. The purpose of the screening process
was to focus the Agency's limited resources on those industries for
which reporting would be most beneficial to community right-to-know.
Provided below is a brief overview of the screening activities
conducted by EPA prior to this rulemaking. For a more detailed
discussion of the screening activities, refer to Development of SIC
Code Candidates: Screening Document, available in the public docket for
this rulemaking (Ref. 19).
EPA began the screening process by analyzing chemical waste
information routinely reported by industries and collected in several
existing EPA data systems. While the information reported in these data
systems have some inconsistencies with the type of information
collected on TRI, the data systems selected provided a reasonable
method of comparing industries by chemicals and estimated volumes for
industries regulated under each program (Ref. 5).
The initial screening activity ranked industries by the volume of
EPCRA section 313 chemicals found in each reporting system. Those 2-
digit SIC codes that made up 99 percent of the matched EPCRA section
313 chemical release estimates for non-manufacturing facilities were
selected from each reporting system. This list of 25 2-digit SIC codes
was referred to as the ``Tier I'' list, and included the following
Major Groups: Metal Mining; Coal Mining; Oil and Gas Exploration and
Production; Non-metal Mining; Heavy Construction; Railroad
Transportation; Motor Freight Transportation and Warehousing;
Transportation by Air; Pipelines, Except Natural Gas; Transportation
Services; Electric, Gas, and Sanitary Services; Wholesale Trade Durable
Goods; Wholesale Trade Nondurable Goods; Automotive Dealers and
Gasoline Service Stations; Business Services; Automotive Repair,
Service, and Parking; Miscellaneous Repair and Service; Health
Services; Educational Services; Engineering, Research, Management, and
Related Services; Services not elsewhere classified; Administration of
Environmental Quality and Housing Programs; Administration of Economic
Services; National Security and International Affairs; and
Nonclassifiable Establishments.
The Tier I list represents an extremely large number of diverse
individual industries. EPA began compiling information useful in
explaining what the industries in these Major Groups are and what
activities they conduct with emphasis on those activities that may
involve section 313 chemicals. This information was organized into
documents for each 2-digit SIC code and are referred to as ``industry
profiles'' (Refs. 6, 7, 8, 9, and 10).
The next step in the screening process involved a comparison
between industry groups currently reporting under section 313
(manufacturing industries) and those under consideration, in terms of
the types of activities they perform and the services they provide to
the manufacturing sector. One of the primary objectives of expanding
TRI coverage to additional industry groups is to fill in gaps
associated with chemical management activities currently reported under
EPCRA section 313. EPA determined that those industries that either
supply or otherwise manage chemicals and related materials both to and
from the point of manufacturing would further this objective. EPA
categorized all 25 major industry groups in terms of their relation to
manufacturing. This step in the screening process resulted in the
following list of candidates: metal mining; coal mining; oil and gas
exploration and production; non-metal
[[Page 33592]]
mining; motor freight transportation and warehousing; transportation by
air; pipelines, except natural gas; electric, gas, and sanitary
services; wholesale durable and non-durable goods; and business
services.
Once this candidate list was developed, EPA engaged in further
discussions with representatives of many of the industries on the list,
as well as environmental and labor organizations, state environmental
and regulatory representatives, and groups established to provide
feedback on TRI initiatives. These discussions provided an opportunity
to educate various industry groups about the TRI program, to obtain
feedback on the information developed to characterize their industry,
and to listen to concerns. A more detailed discussion of the outreach
activities conducted as part of this rulemaking can be found in Unit
II.B. of this preamble.
A greater level of specificity in the analysis was required to
better identify which industry groups and activities were of greater
importance in terms of their potential value to section 313 reporting.
To refine the analysis, EPA developed data reported in the reporting
data systems to the more specific 4-digit SIC code level. These data
were incorporated into a ranking model that allowed the management of
large volumes of information. For a more detailed discussion of the
ranking model, see Development of SIC Code Candidates: Screening
Document (Ref. 19).
The last stage in the screening process involved an overlay of
regulatory definitions and developments, existing program guidance, and
any exemptions pertinent to activities identified for the primary
candidates. This stage of the analysis allowed EPA to evaluate the
degree to which reporting would be expected to occur under EPCRA
section 313 for these candidate industry groups. EPA used information
developed for this analysis, along with input from specific industries
in making further reductions in the list of candidate industry groups
(Ref. 19).
As a result of this screening process, EPA eliminated SIC code 16,
heavy construction; SIC code 40, railroad transportation; SIC code 42,
motor freight, transportation, and warehousing; SIC code 45, air
transportation SIC code 46, pipelines, except natural gas; SIC code 47,
transportation services; SIC code 55, automotive dealers and gasoline
service stations; SIC code 75, automotive repair, service, and parking;
SIC code 80, health services; SIC code 82, educational services; and
SIC code 87 engineering, research, management, and related services;
SIC code 89, miscellaneous services; SIC code 95, administration of
environmental quality and housing programs; SIC code 96, administration
of economic services; SIC code 97, national security and international
affairs; and SIC code 99, nonclassifiable establishments.
D. Additional Considerations in Selecting Additional Industry Group
Candidates
In addition to the activities conducted as part of the screening
process described above, EPA also excluded certain industry groups from
consideration in this proposed action for a number of other reasons.
Provided below is a brief discussion of those additional industry
groups that were excluded after the application of the screening
process.
1. Impacts on intergovernmental entities. EPA considered potential
impacts on other governmental entities resulting from addition of
certain industry groups. As a result of issues raised by this
consideration, several industry groups were excluded from consideration
for addition under EPCRA section 313 at this time, including Municipal
Solid Waste Landfills (MSWLFs), Publicly-Owned-Treatment Works (POTWs),
and water supply systems. Each of these industry groups are part of the
Major Group SIC code 49, Electric Gas and Sanitary Services. Water
systems are classified within SIC code 4941, POTWs are classified
within SIC code 4952, and MSWLFs are classified within 4953. These
facilities are primarily operated by local municipalities and regional
governmental entities. Although each industry group may manage
significant quantities of EPCRA section 313 listed toxic chemicals, the
manner in which they manage these chemicals raises several cross-
governmental issues EPA is continuing to address. As a result, EPA is
not considering these industry groups at this time.
2. Economic considerations. EPA's economic analysis identified
several industry groups that may be adversely affected at a
substantially disproportionately high rate, if coverage under EPCRA
section 313 was extended to include them. Petroleum and petroleum
products wholesalers classified as SIC code 5172, farm supplies
classified as SIC code 5191, and paints, varnishes, and supplies
classified in SIC code 5198 may have a disproportionately large
economic impact if EPCRA section 313 reporting requirements were
extended to their industry (Ref. 20). Further, based on a preliminary
review, the projected value of reporting for these industry groups is
questionable. EPA continues to refine this information and explore
alternatives for these industry groups.
3. Non-listed primary chemical association. Two industries, non-
metal mining classified in SIC code 14 and wholesale durable goods
classified in SIC code 50, were excluded from further consideration for
this action based on the belief that the majority of activities
conducted by facilities operating in these industry groups are believed
to involve materials that are not EPCRA section 313 listed chemicals.
4. Standard facility unit. One industry group, oil and gas
extraction classified in SIC code 13, is believed to conduct
significant management activities that involve EPCRA section 313
chemicals. EPA is deferring action to add this industry group at this
time because of questions regarding how particular facilities should be
identified. This industry group is unique in that it may have related
activities located over significantly large geographic areas. While
together these activities may involve the management of significant
quantities of EPCRA section 313 chemicals in addition to requiring
significant employee involvement, taken at the smallest unit
(individual well), neither the employee nor the chemical thresholds are
likely to be met. EPA will be addressing these issues in the future.
EPA may reconsider at a later date some or all of the industry
groups which were excluded as a result of the considerations mentioned
above. For more detail regarding EPA's exclusion of these industry
groups, refer to Additional Considerations in Selecting Industries for
Addition to EPCRA Section 313 (Ref. 17).
For the industry groups outside of SIC codes 20 through 39 which
are not part of today's proposal, EPA requests comment on adding any of
these industry groups through a future rulemaking. Commenters should
take into account the current limitations of EPCRA section 313
reporting requirements, i.e, exemptions and thresholds, in addressing
whether these industries should be required to report under EPCRA
section 313.
III. EPCRA Section 313 Statutory Criteria
A. Statutory Construction
Recognizing that the American public has a right-to-know what is
happening in the environment near their homes, schools, and business,
Congress provided EPA with explicit statutory authority to expand the
categories of
[[Page 33593]]
facilities required to report under EPCRA section 313. Section
313(b)(1)(A) applies section 313 to facilities that are in SIC codes 20
through 39. Section 313(b)(1)(B) states:
The Administrator may add or delete Standard Industrial
Classification Codes for purposes of subparagraph (A), but only to
the extent necessary to provide that each Standard Industrial
Classification Code to which this section applies is relevant to the
purposes of this section.
EPA believes that this provision grants the Agency broad discretion to
add industry groups to the industries subject to the reporting
requirements under EPCRA section 313. The Conference Report restates
EPA's authority to add industry groups and provides additional
guidance:
[EPA's] authority is limited, however, to adding SIC codes for
facilities which, like facilities within the manufacturing sector
SIC codes 20 through 39, manufacture, process or use toxic chemicals
in a manner such that reporting by these facilities is relevant to
the purposes of this section (emphasis added) (Ref. 13).
Thus, the statute directs EPA, when adding industry groups, to
consider and be guided by the ``purposes'' of EPCRA section 313. While
EPCRA section 313 does not explicitly identify the purposes of the
section, the Conference Report makes clear that subsection (h) of
section 313
Describes the intended uses of the toxic chemical release forms
required to be submitted by this section and expresses the purposes
of this section. The information collected under this section is
intended to inform the general public and the communities
surrounding covered facilities about releases of toxic chemicals, to
assist in research, to aid in the development of regulations,
guidelines, and standards, and for other similar purposes.
(Conference Report at 299, Ref. 13)
Statements by Congress are consistent with this stated language. For
example, Congressman Edgar, a principal architect of EPCRA, stated
during debate on the Conference Report:
Congress recognizes a compelling need for more information about
the Nation's exposure to toxic chemicals. Until now, the success of
regulatory programs such as the Clean Air Act, the Resource
Conservation and Recovery Act, and the Clean Water Act has been
impossible to measure because no broad-based national information
has been compiled to indicate increases or decreases in the amounts
of toxic pollutants entering our environment. As a result, the
reporting provisions in this legislation should be construed
expansively to require the collection of the most information
permitted under the statutory language. Any discretion to limit the
amount of information reported should be exercised only for
compelling reasons. A second major principle of this program is to
make information regarding toxic chemical exposure available to the
public, particularly the local communities most affected. For too
long, the public has been left in the dark about its exposure to
toxic chemicals. Information that has been available under existing
environmental statutes such as the Clean Water Act or the Clean Air
Act, has been difficult to aggregate and interpret, which has made
it difficult, if not impossible, for the public to gain an overall
understanding of their toxic chemical exposure.
Consequently, the reporting requirements should be construed to
allow the public the broadest possible access to toxic chemical
information in formats that are straightforward and easy to
understand. (H. Rep. 99-975, 99th Cong., 2nd Sess., p. 5313 (Oct. 7,
1986)).
Section 313(b) specifies the facilities covered by the toxic
chemical release reporting requirement, but also provides the
Administrator with the discretion to include additional facilities
[either] by specifying additional SIC codes covered by this
section--section 313(b)(1)(B) [....] Congress designated facilities
in SIC codes 20-39 only as a starting point for this reporting
requirement. The principal consideration is whether the addition
would meet the objectives of this section to provide the public with
a complete profile of toxic chemical releases. The fact that
Congress applied the reporting requirement to those in the
manufacturing sector should not be considered a limiting criteria in
the Administrator's determination. (H. Rep. 99-975, 99th Cong., 2nd
Sess., p. 5315 (Oct. 7, 1986)).
Other supporters of EPCRA's community right-to-know provisions
echoed Congressman Edgar's view that broad dissemination of information
concerning the presence of toxic chemicals in the community is a
primary purpose of EPCRA section 313. See, for example, Senator
Stafford's statements during debate on the Conference Report:
But the bill goes beyond concern about accidental releases of
these toxic and hazardous chemicals. It also recognizes that the
public has a right to be informed about routine releases of these
chemicals to the air, and the water and the land (H. Rep. 99-975,
99th Cong., 2nd Sess., p. 5185 (Oct. 7, 1986)).
In implementing this section, the Administrator should keep in
mind that its primary purpose is to inform the public about routine
releases of toxic chemicals. The computer database [established by
EPA] must be managed in such a way as to maximize its accessibility
and utility to the public (H. Rep. 99 975, 99th Cong., 2nd Sess., p.
5186 (Oct. 7, 1986)).
EPA's reading of the Agency's broad statutory authority to add
industry groups to the industries required to report under EPCRA
section 313 is echoed in the GAO Report. This report, which represents
a critical analysis of the TRI program and provides recommendation on
the direction of the program in keeping with Congressional intent,
states that ``EPCRA authorizes EPA to revise the chemical list and to
require nonmanufacturers to report their emissions'' (Ref. 2). This
report further notes that many relevant industries currently are not
required to report under EPCRA section 313:
Many industries outside the manufacturing sector that use
substantial quantities of toxic chemicals annually are not currently
required to report their emissions . . . Because of these reporting
exemptions, many persons whom we contacted during our review
believed that the inventory's reporting requirements should be
revised. We found strong support among government officials, states,
reporting facilities, and environmental and public interest groups
for expanding the programs reporting requirements to cover
industries outside the manufacturing sector. Moreover, we found that
28 states and about half of all reporting facilities favored, for
example, requiring reporting by hazardous waste treatment, storage,
and disposal facilities (Ref. 2).
Because of this, GAO recommended that EPA expand the number of
industries that report under EPCRA section 313:
We believe that to maximize the inventory's usefulness to
policymakers and the public, the inventory data must be as
comprehensive as possible, with the data from additional emissions
sources and on additional toxic chemicals. The concerns EPA
expressed should be carefully considered. However, these concerns
should not override efforts to make the inventory more
comprehensive--especially since policymakers and the public need the
data to establish environmental priorities and to better measure
progress in reducing pollution (Ref. 2).
Based on the Agency's reading of the statute, pertinent legislative
history, and the GAO Report, EPA recognizes several purposes of the
EPCRA section 313 program, as envisioned by Congress, including: (1)
Providing a complete profile of toxic chemical releases and management;
(2) compiling a broad-based national data base for determining the
success of environmental regulations; and (3) ensuring that the public
has easy access to these data on releases of toxic chemicals to the
environment. EPA has considered these purposes when exercising its
broad discretion to add particular industries to the EPCRA section 313
reporting program.
B. Interpretation of Statutory Criteria
As discussed in Unit III.A. of this preamble, the Conference Report
on EPCRA section 313 provides guidance on EPA's authority to add
industry
[[Page 33594]]
groups to those industry groups that, ``like facilities within the
manufacturing sector SIC codes 20 through 39, manufacture, process or
use toxic chemicals in a manner such that reporting by these facilities
is relevant to the purposes this section'' (Conference Report, p.
5108). For purposes of this rulemaking, which is EPA's first use of
section 313(b)(1)(B), EPA has identified three primary factors that the
Agency considers as reasonable decision criteria for adding facilities
in industry groups under EPCRA section 313(b)(1)(B). The three primary
factors identified by EPA are the following: (1) Whether one or more
toxic chemicals are reasonably anticipated to be present at facilities
within the candidate industry group (``chemical'' factor), (2) whether
facilities within the candidate industry group manufacture, process, or
otherwise use these toxic chemicals (``activity'' factor), and (3)
whether facilities within the candidate industry group could reasonably
be anticipated to increase the information made available pursuant to
EPCRA section 313, or otherwise further the purposes of EPCRA section
313 (``information'' factor).
EPA believes that each of these three primary factors is important
in adding industry groups (referenced by SIC code) to EPCRA section
313(b)(1) because each will help ensure that adding the industry groups
will further the purposes of EPCRA section 313. Namely, each of these
primary factors ensures that EPA will be able to provide the public
with easy access to more complete information concerning toxic chemical
releases and other waste management data. This more complete picture
also will allow EPA, other Federal, state, and local governments,
regulated entities, and the public to measure the success of regulatory
and voluntary environmental initiatives. Therefore, EPA believes that
these decision criteria are relevant to the purposes of the statute and
are appropriate to use in making listing determinations pursuant to
EPCRA section 313(b)(1)(B).
A general discussion of each primary factor is included below, and
a more detailed discussion of how each primary factor was applied to
each industry group proposed for listing can be found in Unit V. of
this preamble. EPA is requesting comment on the use of these decision
factors for the EPCRA section 313 program.
1. Whether one or more listed toxic chemicals are reasonably
anticipated to be present at facilities within the candidate industry
group (``Chemical'' Factor). In addressing whether the chemical factor
is met, EPA will consider evidence indicating that facilities within an
industry group are reasonably anticipated to have involvement with one
or more EPCRA section 313 listed toxic chemicals as part of its routine
operations. Association with section 313 listed toxic chemicals
suggests that facilities within industry groups should be covered under
EPCRA section 313, given the purpose of EPCRA section 313 is to provide
information to the public about toxic chemicals in their communities.
2. Whether facilities within the candidate industry group
manufacture, process, or otherwise use EPCRA section 313 listed toxic
chemicals (``Activity'' Factor). In addressing the ``activity'' factor,
EPA will consider evidence indicating that facilities within the
candidate industry group manufacture, process, or otherwise use one or
more EPCRA section 313 listed toxic chemicals. This ``activity'' factor
relates directly to the manner in which EPCRA section 313 listed
chemicals are managed. To make this determination, EPA will use the
EPCRA section 313 statutory definitions of manufacturing and
processing. In addition, for purposes of determining whether facilities
within a candidate SIC code otherwise use a toxic chemical, EPA will
consult its regulatory definition and guidance for ``otherwise use.''
For this rulemaking, EPA examined whether its current guidance on
``otherwise use,'' which was developed for the manufacturing sector in
SIC codes 20 through 39, is appropriate for facilities in industry
groups outside SIC codes 20 through 39. Based on this review and other
considerations, the Agency is planning to modify its interpretation of
``otherwise use'' to include disposal, stabilization, and treatment for
destruction. See Unit IV. of this preamble for a more detailed
discussion of ``otherwise use.''
3. Whether facilities within the candidate industry group could
reasonably be anticipated to increase the information made available
pursuant to EPCRA section 313, or otherwise further the purposes of
EPCRA section 313 (``Information'' Factor). In addressing the
``information'' factor, EPA will consider any information that bears on
whether reporting by facilities within the candidate industry group
could reasonably be anticipated to increase the information made
available pursuant to EPCRA section 313, or otherwise further the
purposes of EPCRA section 313. The information considered for any
specific industry group will necessarily vary from industry group to
industry group based on the nature of the industry group and what
relevant information is available. Under this factor, EPA may consider
information relating to, but not limited to, one or more of the
following topics: (1) Whether the addition of the candidate industry
group will lead to reporting by facilities within that candidate
industry group (e.g., whether facilities within the candidate industry
group will conduct activities which exceed the reporting thresholds in
section 313(f)); (2) whether facilities within the candidate industry
group are likely to be subject to an existing statutory or regulatory
exemption from the requirement to file a Form R; (3) whether submitted
Form R reports from that industry group could be expected to contain
release and waste management data; or (4) whether a significant portion
of the facilities in the industry group would be expected to file a
Toxic Chemical Release Inventory Certification Statement (see 59 FR
61488, November 30, 1994).
EPA believes that the above three primary factors may be addressed
by evaluating data collected by EPA or other government agencies (e.g.,
National Institute of Occupational Safety and Health (NIOSH) and
Occupational Safety and Health Administration (OSHA)), as well as
information provided by facilities through case studies, surveys, or
site visits; facility records or operation plans; information on
materials in commerce; or common practices as found in the literature,
such as trade journals and industry reports; or other available
sources. Some of the pertinent EPA data systems include the Aerometric
Information Retrieval System (AIRS, collected under the Clean Air Act),
the Permit Compliance System (PCS, collected under the Clean Water
Act), and the Biennial Report System (BRS, collected under the Resource
Conservation and Recovery Act). While EPA cannot use these data to
estimate likely TRI releases and other waste management volumes, EPA
can and has used information from these and other sources, such as
those listed above, to assist in identifying appropriate candidates. In
the absence of any such data, EPA will rely on other relevant sources
of data.
For example, during EPA's evaluation of the electric services
industry group (SIC code 4911), 40 million pounds of releases or waste
volumes were identified in BRS, 31 million pounds in AFS, and 15
million pounds in PCS. EPA does not believe that this information can
be used to predict TRI data or that it is an adequate substitute for
TRI data; however, EPA did use this
[[Page 33595]]
information to identify the electric services industry group as a
candidate for inclusion in this proposed rule. See Appendix B:
Routinely Reported Information - Chemical Detail (Ref. 8), for similar
information on other candidate industry groups.
EPA recognizes that different industry groups may be regulated
under different statutory and regulatory regimes. An industry may have
very limited regulatory requirements that require their reporting of
chemical uses and management practices, for example, and, therefore,
this industry would not be represented in some data sources. This often
leads to different amounts and types of information being available to
the Agency from these sources. Thus, EPA recognizes that in some cases
the available data from these sources may not reflect an industry's
actual involvement with section 313 chemicals. For those industry
groups for which such information is limited, EPA believes that it is
appropriate to rely more heavily on sources of data other than
regulatory sources. EPA requests comment on other sources of
appropriate information.
IV. Clarification of Threshold Activities
A. Statutory Background
Only facilities that exceed certain chemical activity thresholds
(and that meet the SIC code and employee threshold criteria) are
required to report under EPCRA section 313. These thresholds are
detailed in section 313(f)(1) of EPCRA:
The threshold amounts for purposes of reporting toxic chemicals
under this section are as follows:
(A) With respect to a toxic chemical used at a facility, 10,000
pounds of the toxic chemical per year.
(B) With respect to a toxic chemical manufactured or processed
at a facility--
* * *
(iii) For the form required to be submitted on or before July 1,
1990, and for each form thereafter, 25,000 pounds of the toxic
chemical per year. EPCRA 313(f)(1), (emphases added).
In addition to the reporting thresholds specifically listed in EPCRA
section 313(f)(1), EPA has established an alternate threshold for
facilities with low reportable releases and wastes under section
313(f)(2).
EPCRA section 313 defines ``manufacture'' and ``process''; however,
the statute does not specifically define ``use'' or ``otherwise use.''
The only limitation Congress placed on what activities could be
considered ``use'' are those chemical activities that are exempt from
EPCRA section 313 reporting as provided in EPCRA section 327. These
exempted activities relate to the ``transportation, including the
storage incident to such transportation, of any substance or chemical
subject to the requirements including the transportation and
distribution of natural gas.''
Because the statutory language does not include a specific
definition of ``use,'' EPA has looked to other sources for guidance in
formulating the Agency's interpretation of the term. The dictionary
definitions of ``use'' are so encompassing that they can be argued to
cover nearly any activity impacting a toxic chemical. For example, the
Random House College Dictionary, Revised Edition (1982) includes a
broad range of definitions of the term, including ``to employ for some
purpose,'' ``to expend or consume in use,'' and ``to consume
entirely.'' Given the breadth in these definitions, EPA's
interpretation of what might be ``otherwise use'' activities could
capture a significant range of activities impacting a toxic chemical
subject to the relevant purposes of EPCRA section 313. Thus to
determine the appropriate scope of this definition, EPA has considered
Congress' stated purposes for enacting EPCRA section 313 as found in
the statutory language and the legislative history.
As discussed in Unit II.A. of this preamble, Congress wanted the
reporting requirements of EPCRA section 313 to be applied broadly, and
to provide the greatest amount of information to the public and
federal, state, and local governments. In furtherance of this goal,
Congress recognized that EPA may need to add chemicals and industry
groups to the chemicals and industry groups originally listed in EPCRA
section 313 to provide more complete chemical and facility profiles
important to the local public and for local decision making. Moreover,
Congress found information on chemical management activities relevant
to the needs of local communities in requiring that reporting include,
for example, information on waste streams and how they are handled.
See, e.g., 42 U.S.C. 11023(g). Given the primary goal of providing
information to the public on listed toxic chemicals present, released,
and managed in communities, EPA does not believe that it is reasonable
to conclude that Congress would intend any provision of EPCRA section
313 to be interpreted to significantly limit the information available
to the public. Because interpreting the definition of ``use'' narrowly
can have the unintended impact of limiting the amount and kind of
information readily available to local communities, EPA believes that
the term ``otherwise use'' should be interpreted broadly. Consistent
with this belief, EPA promulgated the broad definition of ``otherwise
use or use'' in 40 CFR 372.3.
B. Regulatory Background
In 1988, to address the lack of a statutory definition, EPA
promulgated a definition of ``otherwise use'' in the regulations
implementing EPCRA section 313:
Otherwise use or use means any use of a toxic chemical that is
not covered by the terms manufacture or process and includes use of
a toxic chemical contained in a mixture or trade name product.
Relabeling or redistributing a container of a toxic chemical where
no repackaging of the toxic chemical occurs does not constitute use
or processing of the toxic chemical (53 FR 4525, February 16, 1988).
However, in the preamble to the final rule, EPA distinguished its
interpretation of ``otherwise use'' from ``processing'' by stating that
``otherwise use'' involves a non-incorporative activity.
EPA is interpreting otherwise using a [listed] toxic chemical to
be activities that support, promote, or contribute to the facility's
activities, where the chemical does not intentionally become part of
a product distributed in commerce. (53 FR 4506.)
EPA also recognized that it was appropriate to place some
limitations on those quantities of toxic chemicals that should be
included in a facility's threshold calculations. These exemptions were
based on review of comments and questions received on the proposed rule
and in workshops held prior to the publication of the final rule. The
following uses of chemicals are currently exempt from section 313
threshold determinations and from the EPCRA section 313 reporting
requirements. (40 CFR 372.38; 53 FR 4528, February 16, 1988).
(1) Use as a structural component of the facility. This type of use
refers to materials containing listed section 313 chemicals that may be
present at a facility but that are not involved in the processes
conducted by the facility for purposes of their chemical properties. An
example of this type of case is use of copper in copper pipes. EPA
believes this type of activity is an ancillary use of copper which
would not add to the purposes served by providing information to the
public.
(2) Use of products for routine janitorial or facility grounds
maintenance. Examples include uses of janitorial cleaning supplies,
fertilizers, and pesticides similar in type or concentration to
consumer products.
[[Page 33596]]
EPA believes that these types of chemical uses are incidental to the
function of the facility. While grounds maintenance may be seen as a
contributing activity to the facility overall, it is not a necessary
action that promotes the function or purpose of the facility.
(3) Personal uses by employees or other persons at the facility of
foods, drugs, cosmetics, or other personal items containing toxic
chemicals, including supplies of such products within the facility such
as in a facility-operated cafeteria, store, or infirmary.
(4) Use of products containing toxic chemicals for the purpose of
maintaining motor vehicles operated by the facility. For similar
reasons provided for the janitorial and facility grounds maintenance
exemption, the use of materials containing listed section 313 chemicals
for the purpose of maintaining motor vehicles is believed by EPA to be
an incidental chemical use relative to the overall function of
facilities currently covered under section 313.
(5) Use of toxic chemicals present in process water as drawn from
the environment or from municipal sources or toxic chemicals present in
air used either as compressed air or as part of combustion. While air
and water may be necessary ingredients in particular manufacturing or
processing activities, EPA determined that the generally small
quantities of listed section 313 chemicals that each may contain would
not be reportable. EPA established this exemption both to reduce the
burden on the reporting industry and to have industry focus on those
quantities of toxic chemicals over which they exercise some control.
(6) Uses of articles. The inclusion of the article exemption was
for the expressed purpose of exempting articles that contain listed
toxic chemicals from threshold and reporting determinations. EPA
determined that it is appropriate to exempt chemicals that are
contained in articles as defined by a modification of the definition in
the OSHA Hazard Communication Standard (HCS). The HCS places a
condition on the use of things classified as articles such that when
they are used they do not result in any section 313 listed chemical
releases. EPA has further modified the OSHA HCS definition such that
any use or processing of the articles that results in releases makes
the activity ineligible for the exemption.
(7) Use of toxic chemicals in certain laboratory activities. This
exemption allows the exclusion of amounts of chemicals from threshold
calculations that are manufactured, processed or otherwise used in
laboratory activities conducted under the supervision of a technically
qualified individual. This exemption was provided in part to be
consistent with other sections of EPCRA, specifically sections 311 and
312, as well as the OSHA HCS. EPA limited this exemption to non-
specialty chemical production laboratories and non-pilot plant scale
operations. EPA expressed some concerns over the releases of chemicals
from exempted laboratory activities in the final rule and stated that
the Agency would review these types of facilities for potential future
coverage.
At this time, EPA is not proposing a change to any of the
exemptions listed above. EPA may, however, reconsider the application
of these exemptions in the future. (For additional information on these
exemptions contact the EPCRA Hotline at the telephone number or address
listed in the FOR FURTHER INFORMATION CONTACT unit of this document.)
The exemptions promulgated by EPA to date are intended to exclude
from threshold and reporting calculations those activities that are not
principal to the primary function of the facility. The exemptions were
provided to allow facilities to focus on those chemical management
activities that support, promote, or significantly contribute to the
primary purpose of the facility. EPA believes that these activities are
ones over which the facility has primary control.
C. Current ``Otherwise Use'' Interpretive Guidance
EPCRA section 313 reporting guidance has been developed to assist
covered facilities in complying with section 313. This reporting
guidance has been provided to reporting facilities as responses to
questions to EPA's EPCRA Hotline, as response to letters from subject
facilities, and distribution of a ``Question and Answer'' document. For
some reference to these other sources of information on ``otherwise
use'' see the document EPCRA Section 313 Otherwise Use Activities (Ref.
21).
Given that the original section 313 facilities list was limited to
those facilities which principally operate in the manufacturing sector,
the reporting guidance was tailored to address the principal activities
conducted by manufacturing facilities. In particular, facilities were
instructed not to consider amounts of chemicals treated or disposed in
calculating ``otherwise use'' reporting thresholds. Although current
guidance instructs facilities to include the amounts of listed
chemicals released during treatment or disposal in a facility's release
and waste management estimates (assuming that the facility exceeds a
manufacture, process, or otherwise use threshold for the chemical
elsewhere at the facility), current guidance instructs facilities not
to include the amounts treated or disposed toward the ``manufacture,''
``process,'' or ``otherwise use'' threshold.
Current guidance was not based on an evaluation of activities
actually conducted by manufacturing facilities, but instead was
conceived with the mind that the industrial classification system
places facilities primarily engaged in waste treatment and disposal
activities outside the manufacturing sector, and therefore, were not
subject to the original EPCRA section 313 requirements.
D. Proposed Changes to Interpretive Guidance
As the focus of EPCRA section 313 expands to include industry
groups whose primary activities are similar to or support manufacturing
either as inputs (e.g., energy) or outputs (e.g., waste treatment), EPA
reconsidered its interpretive guidance on otherwise use for facilities
within SIC code 20 through 39, and facilities within the industry
groups being proposed. EPA is concerned that, based on current
guidance, the public may not have access to information relating to
releases of toxic chemicals from facilities within SIC codes 20 through
39 that are receiving materials for the purposes of treatment for
destruction, stabilization, or disposal. As a result, EPA believes that
it is appropriate to develop guidance addressing this concern. Further,
EPA believes it is appropriate to develop guidance that is consistent
with the primary activities conducted by facilities within the
candidate industry groups. Therefore, EPA is modifying its
interpretation of activities considered ``otherwise used'' as it
applies to activity thresholds under section 313 to include treatment
for destruction, disposal, and waste stabilization (hereafter referred
to as ``stabilization'') when the EPCRA section 313 facility engaged in
these activities receives materials containing any chemical (not
limited to EPCRA section 313 listed toxic chemicals) from one or more
other facilities (regardless of whether the generating and receiving
facilities have common ownership) for the purposes of further waste
management activities.
EPA interprets waste stabilization consistent with the definition
at 40 CFR 265.1081, except that for purposes of EPCRA section 313 the
definition
[[Page 33597]]
should be interpreted to apply to any EPCRA section 313 listed toxic
chemical or waste containing any EPCRA section 313 listed toxic
chemical. A synonym for waste stabilization is waste solidification.
EPA interprets ``treatment for destruction'' to mean the destruction of
the toxic chemical such that the substance is no longer a toxic
chemical subject to reporting under EPCRA section 313. Also, for
purposes of the EPCRA section 313 ``otherwise use'' reporting
threshold, disposal would include underground injection, placement in
landfills/surface impoundments, land treatment, or other intentional
land disposal. See ``Toxic Chemical Release Inventory Reporting
Instructions'' (1995 version) at p. 35 for a list of activities to be
reported under ``Transfers Off-site for Purposes of Disposal.''
The following are four examples of this revised interpretation.
Example 1: For example, a facility receives a material containing
22,000 pounds of chemical ``A.'' Chemical ``A'' is an EPCRA section 313
listed toxic chemical. The facility treats for destruction chemical
``A.'' Included among the various activities covered by EPA's revised
interpretation of ``otherwise use'' is the ``treatment for
destruction'' of a toxic chemical received by the facility from off-
site. Because the facility received and treated for destruction
chemical ``A,'' the amount of chemical ``A'' treated for destruction
would be included in the calculation of the amount of chemical ``A''
``otherwise used'' at the facility. In this case, 22,000 pounds of
chemical ``A'' would be considered ``otherwise used.'' Thus, because
the facility ``otherwise used'' chemical ``A'' above the 10,000 pound
statutory threshold for ``otherwise use,'' the facility would be
required to report all releases of, and management activities
involving, chemical ``A.''
Example 2: Assume now that the same facility, in treating for
destruction chemical ``A,'' manufactures 11,000 pounds of chemical
``B.'' Chemical ``B'' is also an EPCRA section 313 listed toxic
chemical. This manufacture of chemical ``B'' is below the
``manufacturing'' reporting threshold. However, the facility disposes
of chemical ``B'' on-site. Included among the various activities
covered by EPA's revised interpretation of ``otherwise use'' is the
disposal of a toxic chemical that is produced from the management of a
waste that is received by the facility. In this example, because the
facility received from off-site a material containing a chemical that
is treated for destruction (i.e., chemical ``A'') and during that
treatment produced and subsequently disposed of chemical ``B,'' the
disposal of chemical ``B'' under EPA's revised interpretation would be
considered ``otherwise used.'' Because the facility disposed of, or
otherwise used, 11,000 pounds of chemical ``B,'' the 10,000 pound
statutory threshold for ``otherwise use'' is met. Thus, the facility
would need to report all releases of, and management activity
involving, chemical ``B.''
Example 3: As another example, a facility produces on-site a
material containing 22,000 pounds of chemical ``C.'' Chemical ``C'' is
not an EPCRA section 313 listed toxic chemical. Also, chemical ``C''
was not manufactured as a result of managing a waste received from off-
site. The facility treats for destruction chemical ``C'' and during
treatment manufactures 11,000 pounds of chemical ``D.'' Chemical ``D''
is an EPCRA section 313 listed toxic chemical. The facility
subsequently disposes of chemical ``D.'' In this example, although the
facility disposes of chemical ``D,'' the 11,000 pounds of chemical
``D'' is not considered ``otherwise used'' under EPA's revised
interpretation because the material from which chemical ``D'' is
produced (i.e., the material containing the 22,000 pounds of chemical
``C'') was not received by the facility from off-site. Thus, in
disposing of chemical ``D,'' the facility does not exceed the 10,000
pound statutory threshold for ``otherwise use.''
Example 4: However, based on Example 3, if chemical ``C'' were
received from off-site or was created in waste management activities
conducted on materials received from off-site, the disposal of chemical
``D'' would be considered an ``otherwise use'' activity involving
chemical ``D.'' Therefore, the disposal of the 11,000 pounds of
chemical ``D'' would exceed the 10,000 pound statutory threshold for
``otherwise use,'' and the facility would need to report all releases
and management activities involving, chemical ``D.''
EPA requests comment on its revised interpretation as explained by
these examples.
EPA believes that this modified interpretation of ``otherwise use''
better serves the purposes of providing communities with information
that assists them in making decisions. EPA believes that these waste
management activities represent activities that generate, use, and are
the source of significant releases of listed toxic chemicals. Thus, EPA
believes that current guidance, which allows amounts of listed
chemicals that are disposed, stabilized, or treated for destruction to
be reported only when the chemical exceeds thresholds elsewhere at the
facility, potentially excludes from reporting a large amount of listed
chemicals managed at certain facilities.
In addition, this modification of the interpretation of ``otherwise
use'' is consistent with EPA's approach for interpreting
``manufacture.'' For example, EPA's regulatory definition of
``manufacture'' and current guidance includes as ``manufacturing'' the
amount of a listed toxic chemical that is coincidentally manufactured
during waste treatment or disposal by the facility (40 CFR 372.3).
Therefore, the amounts of these chemicals must be counted toward the
manufacturing threshold. Further, assuming that the manufacturing
threshold is met under EPCRA section 313, the facility must report the
amount of
FR Doc. 96-16392 Addition of Facilities in Certain Industry Sectors; Toxic Chemical Release Reporting; Community Right-to-Know
that manufactured chemical that is released or otherwise
managed as waste. EPA believes that modifying the interpretation of
``otherwise use'' to include activities such as treatment for
destruction, stabilization, and disposal makes that definition more
consistent with EPA's guidance on calculating manufacturing thresholds.
Finally, EPA believes that current guidance that omits amounts
disposed, stabilized, or treated for destruction is inconsistent with
the spirit of EPCRA when applied to the additional facilities proposed
for listing in this action. Excluding such activities from the
interpretation of ``otherwise use'' would prevent the dissemination of
information deemed useful in serving the public's interest and the
purposes of section 313.
Because EPA believes that most facilities in SIC codes 20 through
39 dispose or treat only waste that was already manufactured,
processed, or otherwise used at their facility, the Agency does not
believe that this change in guidance will affect the EPCRA section 313
reporting status of a significant number of facilities within the
manufacturing sector. There is one category of facilities in the
manufacturing sector that could be affected by this revised guidance.
Specifically, it could affect those facilities in the manufacturing
sector that receive wastes from other facilities and manage those
wastes through treatment or disposal. Under the revised guidance, the
quantity of EPCRA section 313 listed toxic chemicals that undergo these
activities must be included in the ``otherwise use'' threshold, whereas
currently such facilities are instructed to exclude from the
``otherwise use'' threshold determination the quantity of
[[Page 33598]]
the toxic chemical treated for destruction, stabilized, or disposed.
EPA requests comment on its revised interpretation of ``otherwise
use.'' EPA also requests comment on the number of facilities within the
manufacturing sector that would be affected by this revised
interpretation.
An alternative to modifying the scope of ``otherwise use'' through
reporting guidance is amending the regulatory definition of ``otherwise
use'' or ``use'' consistent with this modified approach. As noted
above, the current regulatory definition of ``otherwise use'' is very
broad and covers EPA's revised interpretation. While EPA does not
believe a change in the regulatory definition is necessary to clarify
its interpretation, EPA is requesting comment on whether it should
amend the regulatory text to make clear this revision. The regulatory
definition would read as follows:
Otherwise use or use means any use of a toxic chemical that is
not covered by the terms ``manufacture'' or ``process'', and
includes treatment for destruction, stabilization (without
subsequent distribution in commerce), disposal, and other use of a
toxic chemical, including a toxic chemical contained in a mixture or
trade name product. Except that
(1) Facilities engaged in treatment for destruction,
stabilization, or disposal are not using a toxic chemical in these
activities unless the facility receives materials from other
facilities for purposes of further waste management activities.
(2) Relabeling or redistributing a container of a toxic chemical
where no repackaging of the toxic chemical occurs does not
constitute use of the toxic chemical.
EPA requests comment on whether the regulatory definition of
``otherwise use'' should be amended.
An alternative interpretation is including in the definition of
``otherwise use'' all disposal, treatment for destruction, and
stabilization, regardless of whether the facility receives materials
from off-site for the purposes of treatment for destruction,
stabilization, or disposal. This alternative approach may affect those
facilities that manufacture or process a listed chemical below the
25,000 pound threshold, but that treat or dispose of more than 10,000
pounds of that chemical; the disposal is the activity that would cause
the facility to exceed the otherwise use threshold. The Agency requests
comment on the number of facilities in this category that may be
affected by this alternate approach for modifying EPA's guidance, and
or whether this alternative interpretation and whether it would better
serve the purposes of EPCRA section 313.
E. Relationship Among Manufacture, Process, and Otherwise Use
EPA believes that the revised interpretation and change in
reporting guidance is consistent with the general focus of section 313
on the collection and dissemination of information relating to the
activities involving toxic chemicals in a community. Further, EPA
believes that toxic chemicals that are disposed, stabilized, or treated
for destruction are more appropriately considered otherwise used, as
opposed to manufactured or processed.
Under EPCRA section 313, ``manufacture'' means to produce, prepare,
import, or compound a chemical listed under section 313, including
coincidental production of a toxic chemical. Thus, disposal,
stabilization, or treatment for destruction of a toxic chemical,
whether or not it was produced at the facility, is not appropriately
considered manufactured.
EPCRA section 313 defines ``process'' as ``the preparation of a
toxic chemical, after its manufacture, for distribution in commerce-
(I) in the same form or physical state as, or in a different form or
physical state from, that in which it was received by the person so
preparing such chemical, or (II) as part of any article containing the
toxic chemical.'' Although the act of treatment of a chemical contained
in a waste may closely relate to many of the activities described by
the processing definition, the statute provides a limitation that the
chemical be incorporated into a product that is further distributed in
commerce. In a case where a facility receives a chemical that is
contained in a ``waste,'' and the facility recovers the chemical from
the ``waste'' and distributes the chemical in commerce, EPA believes
the facility is processing the chemical. In a case where a facility
receives a waste containing a toxic chemical and disposes or treats for
destruction the toxic chemical on-site, EPA does not believe the
facility is processing the toxic chemical because the toxic chemical is
not distributed in commerce. EPA requests comment on the relationship
of ``manufacture,'' ``process,'' and EPA's revised interpretation of
``otherwise use.''
EPA requests comment on all aspects of the Agency's broadening of
the concept of ``otherwise use.''
V. EPA's Technical Review
A. Introduction
Data on the candidate industry groups were reviewed for evidence
indicating whether EPCRA section 313 listed toxic chemicals are present
at facilities within that industry group, whether facilities within
that industry group manufacture, process, or otherwise use listed toxic
chemicals, and whether listing facilities within that industry group
could reasonably be anticipated to increase the available information
on TRI.
For each industry group proposed for addition to EPCRA section 313
in this rulemaking, EPA conducted an extensive assessment. Only after
this careful review was a final determination made as to whether to
propose to list the industry group pursuant to EPCRA section
313(b)(1)(B). The information summarized below for each industry group
describes the key data elements upon which EPA relied to determine that
the addition of the facility sector is relevant to the purposes of
EPCRA section 313 pursuant to section 313(b)(1)(B) criteria. A more
extensive review of the existing data base for each industry group
proposed for listing, which reflects the entire weight-of-the-evidence
considered by EPA, is contained in the following support documents and
in the record supporting this proposed rulemaking: ``SIC Code Profile
10: Metal Mining'' (Ref. 6); ``SIC Code Profile 12: Coal Mining'' (Ref.
7); ``SIC Code Profile 49: Electric, Gas, and Sanitary Services'' (Ref.
8); ``SIC Code Profile 51: Wholesale Trade - Nondurable Goods'' (Ref.
9); ``SIC Code Profile 73: Business Services'' (Ref. 10); and
``Economic Analysis of the Proposed Rule to Add Certain Industries to
EPCRA Section 313'' (Ref. 20). These documents contain a complete list
of the references that were used in support of these proposed
additions. Each industry group is identified by facility sector name
and SIC code.
EPA requests comment on the industry groups proposed for addition.
In addition, EPA requests comment on any issues that may be specific to
any of the individual industry groups.
B. Chemicals and Allied Products - Wholesale
EPA is proposing to require facilities operating in SIC code 5169,
Wholesale Nondurable Goods--Chemicals and Allied Products, Not
Elsewhere Classified (hereafter ``Chemicals and Allied Products''), be
subject to EPCRA section 313. Facilities within this industry group
receive EPCRA section 313 chemicals in bulk, take possession of those
chemicals and reformulate, introduce chemical additives, or repackage
materials containing section 313 chemicals. These activities fall
within the statutory definition of ``process,'' and are currently being
reported by facilities operating in the manufacturing sector.
[[Page 33599]]
1. Description of industry. Facilities operating in SIC code 5169,
Wholesale Nondurable Goods--Chemicals and Allied Products, not
elsewhere classified, consists of facilities engaged primarily in the
consolidation of a variety of bulk chemicals and packaged products
prior to their distribution to a variety of destinations including
retailers, other wholesale facilities, and in some cases to
manufacturing facilities for industrial use or for product formulation.
Goods managed by facilities in the Chemicals and Allied Products
industry group may include any of a number of EPCRA section 313 listed
chemicals.
2. Summary of evaluation. Based on EPA's evaluation of this
industry, the Agency believes that reformulation and repackaging
activities conducted by facilities in the Chemicals and Allied Products
industry group routinely involve the manufacture, processing, or
otherwise use of EPCRA section 313 chemicals and that the facilities
within this industry group are likely to report information relevant to
the purposes of EPCRA section 313. The present determination is
consistent with current reporting guidance, and the application of
existing thresholds and exemptions under EPCRA section 313. The Agency
anticipates reporting of releases and other waste management
information from facilities operating in SIC code 5169.
3. Chemicals associated with the Chemicals and Allied Products
industry group. Facilities classified in the Chemicals and Allied
Products industry group, are involved in the wholesale distribution and
management of a variety of chemicals from such industrial chemical
categories as alkalines and chlorine, industrial gases, specialty
cleaning and sanitation preparations, noncorrosive products and
materials, and industrial salts and polishes. Included within these
industrial chemical categories are such specific EPCRA section 313
chemicals as chlorine, sodium cyanide, formaldehyde, and methyl ethyl
ketone to name a few (Refs. 1 and 3). EPA's analysis has identified
several EPCRA section 313 listed toxic chemicals that are commonly
managed by facilities operating in the Chemicals and Allied Products
industry group (Ref. 20). Based on this finding, EPA believes that a
strong indication exists that those facilities classified in the
Chemicals and Allied Products industry group are involved with EPCRA
section 313 listed toxic chemicals on a routine basis.
4. Manufacture, process, or otherwise use activities involving
EPCRA section 313 chemicals. Some of the facilities within the
Chemicals and Allied Products industry group are involved in the
preparation of EPCRA section 313 listed toxic chemicals, or mixtures
containing EPCRA section 313 listed toxic chemicals, after their
manufacture, for distribution in commerce. The type of preparation
activities conducted by facilities classified in the Chemicals and
Allied Products industry group include reformulation and or repackaging
prior to being distributed.
For example, a facility may purchase and distribute organic
chemicals, which are mostly liquids and many of which may be EPCRA
section 313 listed toxic chemicals. The chemicals are transferred
into various size containers for resale. In addition to any material
losses during the transfer, some toxic chemical wastes may be
generated as pumps and hoses are flushed. As another example, a
facility may routinely blend chemicals (many of which may be EPCRA
section 313 listed toxic chemicals) to formulate, for example,
lacquer thinner for autobody shops. Some facilities may routinely
handle 27 or more EPCRA section 313 listed toxic chemicals.
EPA believes that these types of preparation activities of EPCRA
section 313 listed toxic chemicals clearly fit within the statutory
definition of process and would constitute a reportable activity under
EPCRA section 313. EPA believes that those facilities whose management
of EPCRA section 313 chemicals is limited to the receipt and
distribution of products containing EPCRA section 313 listed toxic
chemicals without the products being reformulated or repackaged would
not be required to submit Form R reports for these chemicals because
these activities do not meet the definition of manufacture, process, or
otherwise use. Also, EPA does not believe that the limited act of
storage of a chemical constitutes a reportable activity under EPCRA
section 313.
5. Types of information anticipated. Based on EPA's analysis,
releases and other waste management information resulting from the
reformulation and repackaging of EPCRA section 313 chemicals and
products containing section 313 chemicals are anticipated. Reports are
expected for formaldehyde, methyl ethyl ketone, and methanol. As
discussed below, facilities in this industry group engage in many of
the same activities as facilities in SIC codes 20 through 39.
Therefore, it is reasonable to believe that these similar activities
would result in similar types of release and waste management
information. For example, while releases can and do occur from
accidents, inadequate storage procedures, or damages during transport,
EPA is not proposing the inclusion of this industry based solely on
these activities (Ref. 3).
Based on data required by the Massachusetts Toxic Use Reduction
Act, which requests similar information to that required under EPCRA
section 313, evidence suggests that facilities operating within the
Chemicals and Allied Products industry group will report on a number of
EPCRA section 313 chemicals (Ref. 3). Based on these data, it appears
that these facilities will report primarily on releases to air of
volatile compounds likely originating from reformulation and
repackaging activities. Based on the Massachusetts data, 8 facilities
reported a primary SIC code of 5169 and submitted a total of 50 reports
that were also EPCRA section 313 chemicals. These 8 facilities reported
an average of 6.25 reports per facility as compared to the average
number of reports for currently listed manufacturing facilities of 3.7.
The total releases reported were approximately 75,450 pounds for 17
listed chemicals. The median facility release to air was approximately
3,180 pounds of listed toxic chemicals (Ref. 3).
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 8,354 Form R reports and 2,785 Toxic Chemical
Release Certification Statements annually submitted by 782 facilities.
This number of facilities estimated to report represents 9 percent of
all industries facilities within this industry group.
6. Reporting considerations. Some facilities, which are primarily
classified as manufacturers (SIC codes 20 through 39) but that also
warehouse and distribute their products, are currently reporting
release and waste management information associated with these
activities that are similar to those conducted by facilities whose
primary classification is in SIC code 5169. EPA believes that
facilities operating in the Chemicals and Allied Products industry
group (SIC code 5169) that are engaged in the manufacture, process, or
otherwise use of EPCRA section 313 listed toxic chemicals above
reporting thresholds should also be required to inform the public about
releases and other waste management activities of EPCRA section 313
listed toxic chemicals.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $51.5 million and $33.5 million in
subsequent years.
7. Conclusion. For the reasons identified above, EPA believes that
facilities in the Chemicals and Allied Products industry group in SIC
code 5169 satisfy the requirements of EPCRA
[[Page 33600]]
section 313(b)(1)(B) because EPA believes that reporting for this
industry group is relevant for the purposes of EPCRA section 313.
Accordingly, EPA proposes to add this industry group to the list of
industry groups required to report pursuant to EPCRA section 313 and
the PPA section 6607.
C. Petroleum Bulk Stations and Terminals - Wholesale
EPA is proposing to require petroleum bulk stations and terminals
in SIC code 5171 to report under EPCRA section 313. This industry group
includes facilities that receive petroleum products and petroleum
additives that contain EPCRA section 313 chemicals, take possession of
those chemicals and reformulate the products and/or repackage those
petroleum products prior to their distribution in commerce.
1. Description of industry. The petroleum industry maintains many
bulk stations and terminals that manage a variety of refined petroleum
products. The types of petroleum products managed by these facilities
include crude oil, motor gasoline, diesel, heating fuel, aviation jet
fuel, asphalt, and liquid petroleum hydrocarbons. The primary functions
of these facilities include storage, mixing, blending, distribution,
and sale of refined petroleum products (Ref. 9).
2. Summary of evaluation. Based on EPA's evaluation of this
industry, the Agency believes that the mixing, blending, repackaging,
and preparation activities conducted by facilities in the petroleum
bulk stations and terminals industry routinely involve the manufacture,
process, or otherwise use of EPCRA section 313 listed toxic chemicals
and that facilities within this industry group are likely to report
information relevant to the purposes of EPCRA section 313. The present
determination is consistent with current reporting guidance, and the
application of existing thresholds and exemptions under EPCRA section
313. EPA anticipates reporting of releases and other waste management
information from facilities in this industry group.
3. Chemicals associated with the industry. Bulk petroleum terminals
principally manage refined petroleum products prior to their
distribution in commerce. The types of petroleum products managed by
bulk terminals are likely to include one or more EPCRA section 313
chemicals. Based on EPA's analysis, EPCRA section 313 listed toxic
chemicals in gasoline managed by bulk terminals that are likely to be
present include benzene, cyclohexane, ethyl benzene, toluene, 1,2,4-
trimethylbenzene, and xylene. Section 313 chemicals present in crude
oil, No. 2 fuel oil, diesel and No. 6 fuel oil include benzene,
phenanthrene, and benz(a)anthracene (Refs. 9 and 20).
4. Manufacture, process, or otherwise use activities involving
EPCRA section 313 chemicals. Bulk petroleum terminals serve as an
intermediate point in the commerce cycle of the petroleum industry.
Based on EPA's analysis, facilities operating in SIC 5171 take
possession of refined petroleum products and perform mixing, blending,
and reformulation activities prior to their distribution in commerce.
EPA believes that the mixing, blending, and reformulation activities,
of petroleum products containing EPCRA section 313 listed toxic
chemicals, prior to their distribution in commerce clearly fits within
the EPCRA section 313 statutory definition of processing.
Facilities in this industry group may also introduce petroleum
additives in order to reformulate the product prior to distribution.
This activity involves the intentional incorporation of an EPCRA
section 313 listed toxic chemical into a product prior to distribution.
Thus, EPA believes that this activity constitutes processing of an
EPCRA section 313 listed toxic chemical as defined by the statutory
definition. In addition, EPCRA section 313 chemicals may be otherwise
used during normal facility maintenance activities (excluding exempt
routine janitorial or facilities grounds maintenance activities) (Ref.
9).
5. Type of information anticipated. Storage, mixing, blending, and
product transfer are among the activities during which significant
releases of EPCRA section 313 chemicals are likely to occur at bulk
terminal facilities. These releases are likely to be in the form of
fugitive air emissions, tank sludges, or spills into surface water,
groundwater, or land of section 313 chemicals contained in petroleum
products. EPA anticipates information on these and other waste
management practices for chemicals such as, cyclohexane, ethyl benzene,
toluene, 1,2,4-trimethylbenzene, xylene, phenanthrene, and
benz(a)anthracene (Ref. 20). While storage tanks at bulk terminals are
generally equipped with internal floating roofs and other features
designed to reduce loss of volatile components, losses of some section
313 chemicals resulting from tank breathing still occur. Based on EPA's
analysis, a small bulk terminal manages on average an annual throughput
of 36.5 million gallons, and is estimated to process petroleum products
in sufficient quantities to exceed the EPCRA section 313(f) reporting
thresholds for all EPCRA section 313 listed toxic chemicals that are
components of gasoline, No. 2 fuel oil/diesel, No. 6 fuel oil, and
crude oil. In addition, EPA estimates that some bulk terminals will
also exceed the EPCRA section 313(f) reporting thresholds for EPCRA
section 313 listed toxic chemicals contained in petroleum additives
(Ref. 20).
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 12,394 Form R reports annually submitted by
3,842 facilities. This number of facilities estimated to report
represents 34 percent of all facilities identified within this industry
group.
6. Reporting considerations. Based on EPA's analysis, many of the
activities conducted by petroleum bulk stations and terminals meet the
definition of manufacture, process, or otherwise use. EPA believes that
current interpretations of manufacture, process, or otherwise use will
apply directly to facilities operating in this industry segment with
minimal inconsistencies.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $69.3 million and $40.7 million in
subsequent years.
7. Conclusions. For the reasons identified above, EPA believes that
facilities in the SIC code 5171 petroleum bulk stations and terminals
satisfy the requirements of EPCRA section 313(b)(1)(B) because EPA
believes that reporting for this industry group is relevant for the
purposes of EPCRA section 313. Accordingly, EPA proposes to add this
industry group to the list of industry groups required to report
pursuant to EPCRA section 313 and the PPA section 6607.
D. Electric Utilities
EPA is proposing to require coal and oil-fired electric utility
plants in SIC code 49 to report under EPCRA section 313. These
facilities are classified in SIC code 4911 Electric Services, SIC code
4931 Electric and Other Services Combined, and SIC code 4939
Combination Utilities, Not Elsewhere Classified. EPA is requesting
comment on whether to add SIC code 4960 Steam and Air Conditioning
Supply. Although information is limited on this industry group, EPA
expects the activities conducted by this industry group to be similar
to those conducted in SIC codes 4911, 4931, and 4939.
Due to the fact that nuclear, hydroelectric, gas and other non
coal/oil-fired electric generating stations do not use fuel containing
EPCRA section 313 listed toxic chemicals, EPA is proposing to add only
those facilities within this industry group which combust fuels
containing EPCRA
[[Page 33601]]
section 313 listed toxic chemicals. While EPA recognizes that non coal/
oil-fired electric generating stations may otherwise use EPCRA section
313 chemicals in maintenance, cleaning, and purifying operations, and
that information on releases and other waste management data from these
activities may have some value, these support activities are not the
primary function of the facility. EPA also recognizes that generating
facilities may switch fuels as part of normal operations, including
switching between natural gas and other fossil fuels. Natural gas does
not contain EPCRA section 313 listed toxic chemicals above de minimis
concentrations, and EPA would not expect reporting to result from the
combustion of natural gas. However, any facility which combusts coal or
oil in whatever percentage of its fuel use, and whether for primary or
back-up generation, would become a covered facility for purposes of
EPCRA section 313, and be required to make a compliance determination.
Thus, EPA has chosen, as a matter of prioritizing, to propose the
addition of only coal and oil-fired plants at this time.
1. Description of industry. The electric services industry includes
facilities which generate electricity with different fuels: fossil
fuels (i.e., coal, oil and natural gas); gas turbines; internal
combustion turbines; nuclear; hydroelectric; and other sources
including geothermal, wind, and solar. The combination electric
services industry includes electric generating facilities that receive
50 to 95 percent of their revenues from electricity sales. Both
industries generate electricity primarily through the combustion of
fossil fuels (Ref. 8).
2. Summary of evaluation. Based on EPA's evaluation of this
industry, the Agency believes that electric generation routinely
involves the manufacture, process, or otherwise use of EPCRA section
313 listed toxic chemicals and that the facilities within SIC code 49
which generate electricity by combusting coal and oil are likely to
report information relevant to the purposes of EPCRA section 313. The
present determination is consistent with current reporting guidance,
and the application of existing thresholds and exemptions under EPCRA
section 313. The Agency anticipates reporting of releases and other
waste management information from facilities within this industry
group.
3. Chemicals associated with electric utilities. A variety of
chemicals are associated with electricity generation. Coal and oil used
to generate electricity may include EPCRA section 313 listed toxic
chemicals as constituents. Among the EPCRA section 313 listed toxic
chemicals which may be found in coal and oil are polycyclic aromatic
compounds, chlorine, benzene, toluene, ethylbenzene, manganese, xylene,
nickel, biphenyl, and naphthalene. Also, the following EPCRA section
313 metals and their compounds may be found in coal and oil: beryllium,
cadmium, selenium, antimony, arsenic, copper, lead, barium, chromium,
vanadium, zinc, and mercury and their compounds. In addition, other
EPCRA section 313 listed toxic chemicals may be present in maintenance,
cleaning, and purification operations. These may include copper
compounds, hydrazine, zinc compounds, hydrochloric and sulfuric acid
(aerosols), brominated compounds, formic acid, ammonia, thiourea,
methylene chloride, and ethylene glycol (Ref. 20).
4. Manufacture, process or otherwise use activities involving EPCRA
section 313 chemicals. While differing in some important respects, all
conventional steam electric generating stations rely on the same basic
process. Fuel is ignited and burned within a boiler chamber composed of
thousands of feet of water-filled tubes. The heat of combustion heats
the water in the boiler tubes, creating high temperature and high
pressure steam. The steam passes through turbines causing the turbine
blades to rotate. A shaft connected to the turbine blades drives
electric generators, yielding electric power. In this fashion, the
chemical energy of the coal or oil is converted to heat energy through
combustion, then to mechanical energy in the turbines, and finally to
electrical energy in the generators. Transmission lines, substations,
and switching stations channel generated electricity to various end
users. A range of maintenance, cleaning, and purifying operations are
also conducted (Ref. 8).
Electric services and combination electric utilities manufacture or
otherwise use a variety of EPCRA section 313 listed toxic chemicals, as
part of the combustion process and as part of maintenance, cleaning,
and purification operations. The combustion of coal creates certain
EPCRA section 313 listed toxic chemicals, including formaldehyde,
hydrogen chloride, hydrochloric acid (aerosol), primary sulfates
(including sulfuric acid aerosol), hydrogen fluoride, hydrofluoric
acid, and the following metals and their compounds, arsenic, beryllium,
cadmium, chromium, copper, lead, mercury, manganese, and nickel.
Similarly, the combustion of fuel oil manufactures sulfuric acid
aerosols, formaldehyde, and the following metals and their compounds,
arsenic, beryllium, cadmium, chromium, copper, lead, mercury,
manganese, nickel, and zinc. Since the inception of the program, EPA
has interpreted ``manufacture'' to include coincidental production of a
listed toxic chemical. Coincidental manufacture is the generation of a
listed toxic chemical as a byproduct or impurity (53 FR 4504, February
16, 1988). In the combustion of coal and oil, metal compounds may be
produced from either the parent metal or a metal compound contained in
the coal or oil. This may or may not involve a change of valence state.
A change in valence state results in the manufacture of a metal
compound. Metal compounds which are produced in the combustion process
are considered ``manufactured'' for purposes of EPCRA section 313. The
de minimis concentration exemption does not apply to coincidental
manufacture (see 53 FR 4504, Februry 16, 1988; see also Refs. 8 and 2).
Thus, all quantities of the metal compound manufactured in the
combustion process must be compared to the ``manufacture'' threshold.
Constituents of coal and oil fuels are otherwise used in the
combustion process, including the EPCRA section 313 chemicals listed in
the above section, since they are combusted as part of the fuel. Metal
compounds may be manufactured by the oxidation of metals and metal
compounds contained in the fuel. In addition, a variety of chemicals
also listed in the above section are otherwise used in maintenance,
cleaning, and purifying operations. For example, several EPCRA section
313 listed toxic chemicals are otherwise used in corrosion control such
as copper compounds, hydrazine, and zinc compounds, with data from
cooling tower waste blowdown streams of coal-fired boilers indicating
that copper and zinc compounds may be used in large quantities (Refs. 8
and 20). In addition, brominated compounds, ammonia, hydrochloric acid
or chlorine may be used to treat intake water. Further, the water-side
or steam-side of the boiler (including the boiler tubes, superheater,
and condenser) requires occasional cleaning. Formic acid, and thiourea
may all be used, along with large volumes of abrasives. Ethylene glycol
is also otherwise used in generating station chillers and in some
instances is applied to coal to prevent coal piles from freezing (Refs.
8 and 20).
5. Types of information anticipated. EPA recognizes that fuel
composition may vary, and that the quantity and chemical composition of
the wastes produced from cleaning and maintenance operations is
dependent on
[[Page 33602]]
plant-specific factors such as plant size, type of equipment used and
age of equipment. Based on EPA's evaluation of this industry, the
Agency believes that most section 313 chemicals present in coal and oil
fuels that are combusted in these facilities are present in
concentrations below de minimis levels. EPA anticipates limited
reporting resulting from the use of EPCRA section 313 chemicals in
combustion of coal. EPCRA section 313 listed toxic chemicals that are
components of No. 2 fuel oil above the de minimis concentration limit
that would be reported as used in combustion include biphenyl,
napthalene, and members of the polycyclic aromatic compounds category.
EPCRA section 313 listed toxic chemicals in No. 6 fuel oil above the de
minimis concentration limit that would be reported as used in
combustion include members of the polycyclic aromatic compounds
category. EPA also anticipates reportable quantities of EPCRA section
313 listed toxic chemicals to be manufactured during combustion
processes involving coal and oil. These include many of the metal
compounds such as cadmium, chromium, and zinc compounds. Further, EPA
believes that some EPCRA section 313 chemicals that are routinely
manufactured or otherwise used at coal/oil-fired electric utility
plants are not exempt under current EPCRA section 313 exemptions.
EPCRA section 313 chemicals, which EPA has preliminarily
identified, that are manufactured or otherwise used above de minimis
concentrations in reportable activities include sulfuric and
hydrochloric acid aerosols, hydrofluoric acid, formaldehyde, chlorine,
bromine, ethylene glycol, hydrazine, and copper. Based on EPA's
evaluation of this industry, EPA anticipates reporting on releases and
other waste management information relevant to the purposes of EPCRA
section 313. This type of routine information regarding EPCRA section
313 chemicals is not publicly-available. Indications exist that routine
releases occur at these facilities. This assessment is based on the
identification of reported releases of EPCRA section 313 chemicals in
other EPA data systems. EPA also believes that quantities of wastes
containing EPCRA section 313 listed toxic chemicals are generated and
may result in reporting of waste management information. Therefore, EPA
reasonably anticipates that facilities in this industry may report
information relevant to the purposes of EPCRA section 313 on releases
and other waste management information.
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 4,175 Form R reports and 1,392 Toxic Chemical
Release Certification Statements annually submitted by 974 facilities.
This number of facilities estimated to report represents 31 percent of
all facilities identified within this industry group.
6. Reporting considerations. Based on EPA's understanding of this
industry, facilities possess a wide range of knowledge regarding the
EPCRA section 313 chemicals involved in their activities. While coal/
oil-fired facilities in SIC Code 4911 are clearly identified as coal/
oil-fired facilities and thus would be subject to this proposed action,
facilities in SIC codes 4931 and 4939 may also engage in combustion of
waste to generate electricity. Any facility in these SIC codes which
generates electricity through coal or oil combustion in any proportion
would be subject to reporting requirements and must determine if
reporting thresholds are exceeded. Facilities in SIC code 4911 engaged
in electricity generation using gas, nuclear, hydroelectric electric or
other sources such as solar and wind, are not subject to these
reporting requirements.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $26.6 million and $16.6 million in
subsequent years.
7. Conclusions. For the reasons identified above, EPA believes that
facilities in the electric utilities industry in SIC codes 4911, 4931,
4939 satisfy the requirements of EPCRA section 313(b)(1)(B) because EPA
believes that reporting for this industry group is relevant for the
purposes of EPCRA section 313. Accordingly, EPA proposes to add this
industry group to the list of industry groups required to report
pursuant to EPCRA section 313 and the PPA section 6607.
E. Mining
1. Exemption of extraction activities. Mining facilities conduct
two primary operations: extraction and beneficiation. Both operations
may occur within the same facility. While EPA believes that activities
associated with beneficiation include EPCRA section 313 reportable
activities and will result in reports relevant to the purposes of EPCRA
section 313, it has not reached a similar conclusion regarding
extraction activities, particularly in regards to coal extraction. EPA
interprets ``extraction'' for purposes of EPCRA section 313 to mean the
physical removal or exposure of ore, coal, minerals, waste rock, or
overburden prior to beneficiation, and encompasses all extraction-
related activities prior to beneficiation. Included within these
extraction activities is removal of spoil. ``Spoil'' is a non-technical
term that refers to dirt removed from a mine site. While the term
``spoil'' apparently has different connotations from mine to mine, it
is, in essence, considered a part of overburden. The typical extraction
sequence includes the removal of any unconsolidated overburden followed
by drilling, blasting, and mucking the broken ore and waste rock
material. Extraction does not include beneficiation, coal preparation,
mineral processing, in situ leaching or any further activities.
As a result of EPA's evaluation of coal mining, the Agency
believes, based on currently available data, that facilities in this
industry which conduct extraction-only activities would not conduct
EPCRA section 313 reportable activities and are unlikely to submit
reporting information. EPA bases this conclusion on its belief that
EPCRA section 313 chemicals are not present above de minimis
concentration levels during coal extraction, and the use of EPCRA
section 313 chemicals in coal extraction activities in concentrations
above de minimis is unlikely to occur. Beneficiation, or preparation,
of coal, does however involve the use of EPCRA section 313 chemicals,
and the Agency believes that reporting resulting from coal preparation
activities is likely. Reporting requirements for coal mining facilities
where no further processing occurs is likely to result in an
unnecessary imposition of burden which would provide no additional
EPCRA section 313 information. Therefore, EPA is proposing to exclude
extraction activities, as defined above, conducted in SIC code 12 in
all EPCRA section 313 reporting requirements. Facilities engaged in the
extraction of coal only would not be required to make compliance
determinations and report releases and other waste management
information associated with these extraction activities. Facilities
engaged in both extraction of coal and coal preparation would be
required to perform compliance determinations, and, to the extent then
necessary, report releases and other waste management information
associated with coal preparation and any other activities outside of
extraction that are conducted on-site. Facilities classified in SIC
code 12 which engage in preparation only, and do not engage in any
extraction on-site would also be required to perform compliance
determinations and report on releases and other waste management
activities. This exemption
[[Page 33603]]
would apply only to extraction as defined above, and not to
beneficiation or any other activities conducted at facilities in this
industry. Further, this exemption is proposed to apply only to
extraction activities in SIC code 12, and not activities that occur in
SIC code 10 metal mining. EPA is requesting comment on this exemption
of extraction activities conducted in SIC code 12 from the EPCRA
section 313 reporting requirements.
EPA is also requesting comment regarding whether this exemption
should be applied to metal mining extraction as well. Data and
information concerning EPCRA section 313 chemical activity in metal
mining extraction activities are limited. EPA believes that metal
mining extraction and coal mining extraction are similar types of
operations, and that the use of EPCRA section 313 chemicals in
concentrations above de minimis during extraction is also unlikely in
both industries. Specifically, EPA does not have information indicating
that typical overburden would contain EPCRA section 313 chemicals in
concentrations above de minimis levels. Further, based on EPA's
understanding of metal mining operations at this time, EPA would not
expect these operations to have a great deal of knowledge regarding the
constituents present in overburden. During the comment period, EPA may
receive information confirming or refuting this understanding. If, as
EPA suspects, overburden does not typically contain EPCRA section 313
chemicals above de minimis concentrations, there would be little or no
reporting associated with the removal of overburden. In the event EPA
extends the coal extraction exemption to metal mining, the issue of
``spoil,'' or reporting on overburden, becomes moot.
On the other hand, the composition of extracted material is
different in metal mining and coal mining. EPA believes that EPCRA
section 313 chemicals are often present above de minimis concentrations
in metal ore. Consequently, these facilities, which typically also
conduct beneficiation on site, may have EPCRA section 313 chemicals
present in reportable volumes during extraction as well as during
beneficiation. EPA is requesting comment on whether the exemption of
extraction activities, including removal of overburden, should also be
applied to metal mining extraction in SIC code 10.
2. Metal mining. EPA is proposing to require facilities engaged in
metal mining to report under EPCRA section 313. This proposed
requirement is limited to facilities in SIC Code 10 (Metal Mining)
except SIC Code 1081 Metal Mining Services. Facilities in SIC code 1081
do not conduct reportable activities; activities performed by firms in
SIC code 1081 primarily consist of contracted services for mining
operations in the other SIC codes.
a. Description of industry. The metal mining industry includes
facilities engaged primarily in exploring for metallic minerals,
developing mines, and ore mining. Metal bearing ores are valued chiefly
for the metals they contain, which are recovered for use as such, or as
constituents of alloys, chemicals, pigments, or other products. This
industry also includes all ore dressing and beneficiating operations,
whether performed at mills operated in conjunction with the mines
served, or at mills, such as custom mills, operated separately. These
include mills which crush, grind, wash, dry, sinter, calcine, or leach
ore, or perform gravity separation or flotation operations (Refs. 4 and
6). EPA's Office of Solid Waste has produced a series of Technical
Resource Documents on extraction and beneficiation of ores and
minerals. These documents have been included in the public docket for
reference.
Although this SIC code includes all metal ore mining, the scope of
mining industries with a significant domestic presence is concentrated
in iron, copper, lead, zinc, gold, and silver. Metals generated from
U.S. mining operations are used domestically in a wide range of
manufactured products, including automobiles, electrical and industrial
equipment, jewelry, and photographic materials (Ref. 16).
b. Summary of evaluation. Based on EPA's evaluation of this
industry, the Agency believes that beneficiation activities routinely
involve the manufacturing, processing or otherwise use of EPCRA section
313 chemicals and that the facilities within this SIC code are likely
to report information relevant to the purposes of EPCRA section 313.
The present determination is consistent with current reporting
guidance, and the application of existing thresholds and exemptions
under EPCRA section 313. The Agency anticipates reporting of releases
and other waste management information from facilities.
c. Chemicals associated with metal mining. A wide variety of
chemicals are found at mining facilities in SIC code 10. Various EPCRA
section 313 listed metals and metal compounds are found in the ores
that are mined and beneficiated. The nature of the ore that is mined by
a particular facility is extremely site specific. Further, although
relatively standardized processes are used to recover the target
metal(s) from ores at various types of mines, the chemicals used in
these recovery processes by specific facilities (both in type and
quantity) are strongly influenced by the nature of the ore and of the
recovery process used.
Based on EPA's evaluation of this industry, it believes that the
EPCRA section 313 chemicals associated with the metal mining industry
which may be expected to be reported under this proposed action include
constituents of ore such as copper, antimony, silver, lead, zinc,
cadmium, mercury, chromium, manganese, and nickel and their compounds;
flotation reagents such as cyanide compounds, copper sulfate, and zinc
sulfate; agglomeration agents such as chlorine; elution acids such as
nitric acid; electrowinning agents such as cyanide compounds and lead
nitrate; and beneficiation agents such as cyanide compounds (Refs. 6,
16, 18, and 20).
d. Manufacture, process or otherwise use activities involving EPCRA
section 313 chemicals. Metal mining includes extraction and
beneficiation steps during the preparation of a specific metal
concentrate. Extraction involves the removal or exposure of the ore
from surface and underground deposits prior to beneficiation. The
typical extraction sequence includes the removal of any unconsolidated
overburden followed by drilling, blasting, and mucking the broken ore
and waste rock material.
Beneficiation is the preparation of a specific metal concentrate.
The purpose of beneficiation is to concentrate the sought after metal
in the ore by separating the values from the other materials in the ore
(Ref. 6). The most common beneficiation methods include gravity
concentration, milling and floating, leaching, dump leaching, and
magnetic separation (Refs. 6 and 16). EPA interprets ``ore
beneficiation'' for purposes of EPCRA section 313 to mean the
preparation of ores to regulate the size of the product, to remove
unwanted constituents, or to improve the quality, purity, or grade of a
desired product. (Ref. 16) Under regulations drafted pursuant to the
Resource Conservation and Recovery Act (RCRA, 40 CFR 261.4),
beneficiation is restricted to the following activities: crushing;
grinding; washing; dissolution; crystallization; filtration; sorting;
sizing; drying; sintering; pelletizing; briquetting; calcining to
remove water and/or carbon dioxide; roasting; autoclaving, and/or
chlorination in preparation for leaching; gravity concentration;
magnetic separation; electrostatic separation; flotation; ion exchange;
solvent extraction; electrowinning; precipitation; amalgamation; and
heap,
[[Page 33604]]
dump, vat, tank, and in situ leaching. (40 CFR 261.4) EPA's
interpretation of ``beneficiation'' for EPCRA section 313 purposes
should be read consistent with the RCRA definition and guidance.
Beneficiation of ore is, in essence, the preparation of the
constituents of the ore. In many mining operations, such as lead,
silver, and copper, the primary metal is a constituent of the ore (i.e.
lead, silver, and copper) and is a toxic chemical. There may be other
constituents of the ore that are also toxic chemicals. Because
beneficiation of the ore is preparation of the constituents, any
beneficiation of ore containing toxic chemicals is also preparation of
all of the toxic chemical constituents. If the preparation of the toxic
chemical constituent is for distribution in commerce, the toxic
chemical is ``processed'' for purposes of EPCRA section 313.
In addition, other EPCRA section 313 chemicals may be otherwise
used during the beneficiation operations. For example, cyanide
leaching, using solutions of sodium and potassium cyanides as leaching
agents, to extract gold from gold ore, represents an otherwise use of
EPCRA section 313 chemicals.
e. Types of information anticipated. EPA recognizes that the nature
of the ore mined and the preparation of its constituents is site-
specific and therefore variable.
EPA's evaluation of this industry indicates that facilities
routinely handle large volumes of EPCRA section 313 chemicals and that
there is reason to believe that routine releases occur based on data in
existing EPA data systems. For example, releases to air of toxic
chemicals including arsenic, antimony, lead, and copper were reported
in EPA's AIRS-AFS data base. EPA reasonably anticipates, therefore,
that facilities in this industry may report information on releases and
other waste management consistent with the purpose of EPCRA section
313. As a result, information on the presence, management, and releases
of toxic chemicals will be available to interested communities,
governments, and individuals, that was previously unavailable to the
public.
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 1,176 Form R reports annually by 328 facilities.
This number of facilities estimated to report represents 31 percent of
all facilities identified within this industry group.
f. Reporting considerations. Because the activities in this
industry, particularly beneficiating, are similar to processing
activities performed in currently covered facilities, no new guidance
is required to enable facilities in this industry to comply with EPCRA
section 313 reporting requirements.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $6.5 million and $3.8 million in
subsequent years.
g. Conclusions. For the reasons identified above, EPA believes that
facilities in the metal mining industry in SIC code 10 except SIC code
1018 satisfy the requirements of EPCRA section 313(b)(1)(B) because EPA
believes that reporting for this industry group is relevant for the
purposes of EPCRA section 313. Accordingly, EPA proposes to add this
industry group to the list of industry groups required to report
pursuant to EPCRA section 313 and the PPA section 6607.
3. Coal mining. EPA is proposing to require establishments engaged
in coal mining to report under EPCRA section 313. This proposed
requirement is limited to establishments in SIC code 12 Coal Mining
except SIC code 1241 Coal Mining Services. EPA does not believe that
SIC code 1241 includes facilities which conduct reportable activities
or routinely handle large volumes of EPCRA section 313 chemicals.
a. Description of industry. The coal mining industry includes
establishments primarily engaged in producing bituminous coal,
anthracite, and lignite. Included are mining operations and preparation
plants (also known as cleaning plants and washeries), whether or not
such plants are operated in conjunction with mine sites (Ref. 7). Coal
is extracted from surface and underground mines; production from
surface mines is increasing as production from underground mines
decreases. The sequence of steps in coal production is similar to metal
mining and includes extraction and beneficiation. Facilities in these
SIC codes may manufacture, process, or otherwise use EPCRA section 313
chemicals when conducting blasting activities; extraction of coal and
impurities; and preparation activities, including cleaning to reduce
ash and sulfur content, washing, crushing, screening, and loading (Ref.
20).
b. Summary of evaluation. Based on EPA's evaluation of this
industry, the Agency believes that beneficiation and processing
operations performed in coal preparation plants routinely involve
manufacturing, processing, or the otherwise use of EPCRA section 313
chemicals and that the facilities within this SIC code are likely to
report information relevant to the purposes of EPCRA section 313. The
present determination is consistent with current reporting guidance,
and the application of existing thresholds and exemptions under EPCRA
section 313. The Agency anticipates reporting of releases and other
waste management information from facilities in this industry.
c. Chemicals associated with coal mining. There are three sources
of EPCRA section 313 chemicals in SIC code 12: (1) EPCRA section 313
chemicals that are commonly found in coal; (2) EPCRA section 313
chemicals that are subsequently used during the coal preparation
process; and (3) EPCRA section 313 chemicals incidental to coal
production, e.g., explosives, acid mine drainage. Metals and minerals
present in coal may include antimony, arsenic, barium, cadmium,
chromium, copper, lead, manganese, mercury, nickel, selenium, silver,
vanadium (fume or dust), and zinc (fume or dust) and their compounds.
Chemicals used during coal preparation may include tetrachloroethylene,
1,1,1-trichloroethane, phenanthrene, dichlorodifluoromethane, xylene,
and ethylene glycol. Chemicals incidental to coal production include
ammonium nitrate and fuel oil, used for explosives. Fuel oil may
contain EPCRA section 313 chemicals as constituents.
Based on EPA's evaluation of this industry, the Agency believes
that the EPCRA section 313 chemicals associated with coal mining which
may be expected to be reported under this proposed action are primarily
associated with coal preparation plants and would include
tetrachloroethylene, 1,1,1-trichloroethane, phenanthrene,
dichlorodifluoromethane, xylene, and ethylene glycol (Ref. 20).
d. Manufacture, process, or otherwise use activities involving
EPCRA section 313 chemicals. Coal beneficiation, also known as coal
preparation, is the process of upgrading raw coal using physical
methods to improve the energy value and remove impurities such as
pyrite and non-coal mineral material. It is intended to produce a
standardized product and reduce ash and sulfur content. The extent of
upgrading is determined by the intended end use and compliance with
emission standards (Ref. 7). Coal is crushed and slurried with water at
coal preparation plants to separate organics from inorganic impurities.
The inorganic impurities are denser than the combustible, organic
fraction of the coal, and the density difference is used to separate
the inorganic fractions using cyclones and dense-medium tanks.
Flotation tanks are also used to remove pyrite from finely ground coal.
The coal-water slurry is introduced into a series of flotation cells
spragged with air from below. Alcohols are used to create a froth, and
kerosene
[[Page 33605]]
or diesel fuel is added to collect the coal into the froth, leaving the
pyrite behind. At the completion of the cleaning steps, the coal is
dried using hot gases from a coal burning furnace.
While the possibility exists that the coincidental manufacture of
EPCRA section 313 chemicals may occur as a result of chemical reactions
during either extraction or beneficiation operations, EPA has not
identified instances where this occurs routinely. EPA, as part of its
evaluation of this industry, has not determined that processing, as
defined in EPCRA section 313, routinely occurs for EPCRA section 313
listed toxic chemicals above de minimis concentrations. However, EPA
has identified routine activities involving EPCRA section 313 toxic
chemicals. Beneficiation of coal routinely involves the otherwise use
of EPCRA section 313 chemicals to aid in separating coal from
impurities during coal preparation processes. The use of these
chemicals during the beneficiation, or preparation, activities
described above constitute the otherwise use of chemicals. EPA
believes, based on its evaluation, that these activities will be the
primary source of EPCRA section 313 information from these facilities.
e. Types of information anticipated. Based on EPA's evaluation of
this industry, the Agency believes that coal mining facilities
routinely handle large volumes of EPCRA section 313 chemicals and that
there is reason to believe that routine releases occur based on data in
existing EPA data systems. For example, routine releases to air were
reported in EPA's Aerometric Information Retrieval System (AIRS)
Facility Subsystem (AFS) of ethylene glycol and dichlorodifluoromethane
for facilities in SIC code 12 (Ref. 18). EPA reasonably anticipates,
therefore, that facilities in this industry will report information on
releases and other waste management activities of EPCRA section 313
chemicals such as tetrachloroethylene, xylene, and ethylene glycol. As
a result, information on the presence, management and releases of toxic
chemicals will be available to interested communities, governments, and
individuals, that was previously unavailable to the public.
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 642 Form R reports annually submitted by 321
facilities. This number of facilities estimated to report represents 10
percent of all facilities identified within this industry group.
f. Reporting considerations. Because the activities conducted by
facilities within this industry sector, particularly coal preparation
or beneficiation, are similar to manufacturing, processing, and
otherwise use activities performed in currently covered facilities, no
new guidance is required to enable facilities in this industry to
comply with EPCRA section 313 reporting. There may be activities other
than those discussed here that should be examined by a reporting
facility for reporting purposes. For example, although coal contains
EPCRA section 313 constituents, EPA believes that these constituents
generally exist in concentrations below de minimis levels, and
therefore may be exempt from reporting as the constituents are further
processed with the coal. However, in the event that coal preparation
plants process a product other than coal, for further distribution in
commerce, and that product contains EPCRA section 313 chemicals above
de minimis concentrations, the facility may need to file a Form R for
that chemical.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $5.4 million and $2.5 million in
subsequent years.
g. Conclusion. For the reasons identified above, EPA believes that
facilities in the coal mining industry in SIC code 12 except SIC code
1241 satisfy the requirements of EPCRA section 313(b)(1)(B).
Accordingly, EPA proposes to add this industry group to the list of
industry groups required to report pursuant to EPCRA section 313 and
the PPA section 6607.
F. RCRA Subtitle C Hazardous Waste Facilities
EPA is proposing to require facilities regulated under RCRA
Subtitle C that are classified in SIC code 4953 to report under EPCRA
section 313.
1. Description. Facilities operating in SIC code 4953 that are
regulated under RCRA subtitle C (the primary federal law addressing
hazardous waste mangement), are engaged primarily in the collection,
transportation, treatment for destruction, stabilization, and/or
disposal of RCRA subtitle C hazardous waste. These facilities include
incinerators, underground injection facilities, waste treatment plants,
landfills, and other facilities designed for the treatment for
destruction, stabilization, and disposal of hazardous waste.
2. Summary of evaluation. EPA has determined that facilities
regulated under RCRA subtitle C that are classified in SIC code 4953
conduct activities that routinely involve the management of EPCRA
section 313 chemicals. Based on EPA's revised interpretation of
activities considered as otherwise use as discussed in Unit IV. of this
preamble, EPA believes that facilities regulated under RCRA Subtitle C
that are classified in SIC code 4953 manage as waste a substantial
volume of EPCRA section 313 chemicals. Under the revised otherwise use
interpretation articulated in Unit IV. of this preamble, amounts of
section 313 chemicals treated for destruction, stabilization, or
disposal would be considered otherwise use for purposes of threshold
determinations and the amounts released or managed as a waste would be
subject to reporting under EPCRA section 313, provided that the
appropriate EPCRA section 313(f) threshold is met.
3. Chemicals associated with the industry. Facilities regulated
under RCRA subtitle C that are classified in SIC code 4953 manage an
extremely large number and quantity of EPCRA section 313 chemicals. The
EPCRA section 313 list of toxic chemicals includes 195 specifically
listed chemicals that are also regulated as hazardous waste under RCRA
(40 CFR 261.33(e) and 40 CFR 261.33(f)). The EPCRA section 313 list of
toxic chemicals also contains two chemical categories that are also
regulated under the RCRA program. Therefore, the number of EPCRA
section 313 chemicals that may be managed and potentially reported by
facilities within this industry group is rather large.
4. Manufacture, process, or otherwise use activities involving
EPCRA section 313 chemicals. Facilities regulated under RCRA subtitle C
that are within SIC code 4953 receive waste containing section 313
chemicals for the purposes of storage, treatment for destruction,
stabilization, and disposal. These facilities manage a substantial
amount of EPCRA section 313 chemicals contained in waste. While these
activities result in the generation of and in limited cases may include
the use of EPCRA section 313 chemicals, the vast majority of section
313 chemicals managed by these facilities are in the amounts managed as
waste.
As stated in Unit IV. of this preamble, EPA is modifying its
interpretation of ``otherwise use'' to include the treatment for
destruction, stabilization, or disposal of EPCRA section 313 chemicals.
Given this interpretation, most of the activities conducted by
facilities regulated under RCRA subtitle C that are in SIC code 4953
will be considered otherwise use. In addition, some EPCRA section 313
listed toxic chemicals may be coincidentally manufactured in the
treatment of hazardous waste streams (Ref. 20).
[[Page 33606]]
Some EPCRA section 313 listed toxic chemicals that may be
manufactured, processed, or otherwise used by facilities in this
industry group include: hydrochloric acid, hydrofluoric acid and
sulfuric acid (aerosol), which may be coincidentally manufactured
during some treatment for destruction activitives; chlorine, which is
used in some treatment operations (Ref. 20); and numerous other
chemicals otherwise used under EPA's revised interpretation, such as
chlorobenzene, dichlorobenzene, formaldehyde, and metals (e.g., lead)
and their compounds.
5. Types of information anticipated. Congress created EPCRA section
313 to provide a unique function--to make multimedia information on
releases of toxic chemicals and other waste management activities
readily available to communities. Although at that time, existing
statutes provided some information, sponsers of EPCRA section 313
recognized that existing information did not serve the need of
providing publicly available information on releases and other waste
management activities of toxic chemicals in a consistent and
comprehensive format for all media.
EPA and the states currently collect much of [the information to
be collected by the section], and a number of states and cities have
instituted similar inventories... However, many states and the EPA
do not have so-called multimedia inventories. The information may be
scattered in air files, water files and on RCRA manifest
forms,...but not pulled together in one place to provide a complete
and usable picture of total environmental exposure. (Senator
Lautenberg, Ref. 11).
Similarly, the sponsors also recognized that industries that were
the initial focus of EPCRA section 313 (i.e., facilities in SIC codes
20 through 39) were already subject to extensive regulations, but
determined that these industries should be included in those initially
subject to EPCRA section 313 reporting.
With respect to the contents of the toxic release inventory
form, estimates of releases into each environmental medium must be
provided. This shall include any releases into the air, water, as
well as releases from waste treatment and storage facilities. This
should include all releases of toxic chemicals in surface waters
whether or not such releases are pursuant to Clean Water Act
permits. Similarly, all toxic chemicals dumped into and disposal
facilities must be reported whether or not such facilities are
regulated under the Resource Conservation and Recovery Act.
(Congressman Edgar, Congressional Record, p. 15316-15317 October 8,
1986)
While EPA recognizes that facilities regulated under RCRA subtitle
C are subject to considerable regulation, EPA believes that requiring
these facilities to report under EPCRA section 313 does not constitute
a significant overlap with other regulations. Although the permitting
process makes some chemical management information on a facility-
specific basis available to the public, the type of information
collected from facilities regulated under RCRA subtitle C is typically
at the waste stream level and not at the constituent-specific level.
This is very different from the type of information collected under
EPCRA section 313. The information collected under EPCRA section 313 is
chemical-specific and in contrast to RCRA data is designed to be used
by the public.
EPA has been encouraged to consider the addition of waste treatment
and disposal facilities to EPCRA section 313 since the initial passage
of the statute. Comments received on the proposed rule (53 FR 4504) to
implement EPCRA section 313 reporting included strong support for the
addition of the commercial waste treatment industry. Given the purpose
of EPCRA section 313 (providing the public with information on toxic
chemicals), EPA believes it is appropriate to expand the focus of the
TRI program to include information from facilities that treat for
destruction, stabilize, and/or dispose of toxic chemicals. Certainly,
facilities regulated under RCRA subtitle C are locations where
substantial quantities of concentrated toxic chemicals are collected,
and treated for destruction, stabilized, and/or disposed. As discussed
above, Congress intended that the information provided by EPCRA section
313 reporting would include releases from waste treatment and disposal
facilities regardless of whether these releases were permitted or not.
Therefore, it is EPA's belief that the inclusion of RCRA subtitle C
facilities operating within SIC code 4953 under EPCRA section 313
reporting requirements is appropriate and will add significantly to the
information that is available on how and where toxic chemical wastes
are released and managed.
As stated above, facilities regulated under RCRA subtitle C that
are within SIC code 4953 manage a large number of EPCRA section 313
chemicals, often in large quantities. The types of treatment activities
and concentrations of chemicals in waste received will greatly affect
the types and amounts of section 313 chemicals released or managed as a
waste from any particular facility. As a whole, EPA anticipates that
facilities operating in this industry group will contribute more
release and management information on a per facility basis than any
other industry group currently reporting or being proposed for addition
by this rulemaking.
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 6,637 Form R reports and 74 Toxic Chemical
Release Certification Statements annually by 164 facilities. This
number of facilities estimated to report represents 100 percent of all
facilities identified within this industry group.
6. Reporting consideration. EPA's revised interpretation of
``otherwise use'' can significantly impact the information reported by
facilities within this industry group. See Unit IV.D. of this preamble
for reporting examples.
EPA estimates the potential costs for reporting for the first year
by this industry group to be $31.2 million and $21.5 million in
subsequent years.
The Agency believes it is important to provide the public with TRI
information from the hazardous waste management industry. However, the
Agency recognizes that facilities in this industry present specific
issues with regard to reporting under EPCRA section 313. Placement of a
toxic chemical into a RCRA hazardous waste landfill is reported as a
release under EPCRA section 313, even though disposal of hazardous
waste in that landfill is a permissible waste management activity under
RCRA. Through its outreach efforts in developing this proposal, EPA
discussed the hazardous waste management industry's concerns with the
differing perceptions of the term ``release.'' Although RCRA does not
define the term ``release,'' some may perceive that term, when used in
the RCRA context, to indicate failure of the hazardous waste management
unit, such as a landfill. For TRI purposes, EPCRA section 329 defines
``release'' to mean ``spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, leaching, dumping, or disposing into
the environment (including the abandonment or discarding of barrels,
containers, and other closed receptacles) of any hazardous chemical,
extremely hazardous substance, or toxic chemical.'' Disposal includes
underground injection, placement in landfills/surface impoundments,
land treatment, or other intentional land disposal. (See ``Toxic
Chemical Release Inventory Reporting Instructions'' (1995 version) at
p. 35 for a list of activities to be reported under ``Transfers Off-
site for Purposes of Disposal.'')
The Agency is mindful of the concern that TRI release information
involving
[[Page 33607]]
hazardous waste management activities not be misleading. For example,
the public should not construe a release into a landfill reported under
EPCRA section 313 to mean that a landfill has failed. In developing the
final rule, EPA will consider approaches to assist the public in
understanding the proper meaning of reporting data from the hazardous
waste management industry. EPA requests comment on approaches to
address this concern.
Although facilities that receive hazardous waste are provided with
information on the constituents of that hazardous waste, these
facilities may be provided with limited information on EPCRA section
313 listed chemicals and the exact quantities of those constituents.
EPA requests comment on the quantity of constituents, difficulty and
costs of reporting, and ways to aid facilities in reporting under EPCRA
section 313, in the least burdensome manner, on those constituents that
are EPCRA section 313 listed toxic chemicals.
7. Conclusion. For the reasons identified above, EPA believes that
those RCRA subtitle C facilities in SIC code 4953 satisfy the
requirements of EPCRA section 313(b)(1)(B) because EPA believes that
reporting for this industry sector is relevant for the purposes of
EPCRA section 313. Accordingly, EPA proposes to add this industry group
to the list of industry groups required to report pursuant to EPCRA
section 313 and the PPA section 6607.
G. Solvent Recovery Services
EPA is proposing to require facilities engaged in solvent recovery
operations to report under EPCRA section 313. These facilities are
classified in SIC code 7389 Business Services, not elsewhere
classified, that are primarily engaged in solvent recovery activities.
1. Description of the industry. Solvent recovery is the act of
removing contaminants and reconditioning a previously used industrial
solvent to a form suitable for reuse. Solvent recovery is a beneficial
activity that ultimately reduces wastes and the demand for raw
materials. However, the activities used to recover solvents may result
in significant releases and other waste management activities involving
EPCRA section 313 chemicals.
Many facilities are engaged in solvent recovery, in part due to the
widespread use of solvents, the value of the material, and the
technologies available. Most facilities conducting solvent recovery
operations are primarily engaged in other activities, making the number
of facilities primarily engaged in solvent recovery relatively few.
Many facilities identified as operating within the manufacturing sector
conduct solvent recovery operations and may currently report under
EPCRA section 313 those releases and waste management activities that
result from their solvent recovery operations (Ref. 20).
2. Summary of evaluation. Based on EPA's evaluation of facilities
primarily engaged in solvent recovery operations, the Agency believes
their associated activities routinely involve the manufacturing,
processing, or otherwise use of EPCRA section 313 listed toxic
chemicals. This determination is consistent with current reporting
guidance and the application of existing exemptions under EPCRA section
313. EPA anticipates reporting of releases and other waste management
information from facilities primarily engaged in solvent recovery
operations.
3. Chemicals associated with the industry. Solvents appropriate for
recovery include alcohols, aliphatics, aromatics, chlorinated
hydrocarbons, chloroflorocarbons, ketones, and other flammable and non-
flammable compounds. Many solvents commonly recovered are also EPCRA
section 313 listed toxic chemicals and include carbon tetrachloride,
chloroform, methanol, methyl ethyl ketone, methylene chloride,
perchloroethylene, toluene and xylene. Indu
FR Doc. 96-16392 Addition of Facilities in Certain Industry Sectors; Toxic Chemical Release Reporting; Community Right-to-Know
strial uses of solvents
typically result in the introduction of chemical contaminants such as
pigments, ink, resin, oil, grease, metals and dirt. A number of
processes are used to separate contaminants to recover the economically
beneficial solvent. These include distillation, stripping, thin-film
evaporation and extraction. The type of process applied is generally
dependent on the solvent and type of contamination (Ref. 10).
4. Manufacture, process, or otherwise use activities involving
EPCRA section 313 chemicals. The recovery of an EPCRA section 313
listed toxic chemical from a mixture for further distribution or
commercial use is processing of that chemical. This is the primary
function of most solvent recovery businesses.
The type of separation method(s) applied by some facilities may
also involve the otherwise use of EPCRA section 313 listed toxic
chemicals. Under current EPCRA section 313 guidance, the use of a
chemical to react with another chemical constitutes a use (provided the
first chemical does not become incorporated and distributed in
commerce). In addition, some of the contaminants contained in a spent
solvent mixture may also include EPCRA section 313 chemicals. The
disposal of a listed toxic chemical removed from the spent solvent is
the otherwise use of that toxic chemical under the revised
interpretation articulated in this rulemaking (see Unit IV. of this
preamble).
5. Types of information anticipated. Based on the type of process
used, various releases of solvent, contaminant, and chemicals used to
aid in the recovery of the solvent may occur. Releases can include:
light ends or vapors from process units or solvent holding tanks, heavy
ends or still bottoms and sludge, and oil from various other process
units. Other wastes such as descaling solutions and caustic streams are
generated during routine maintenance and feed stock switch over
operations. Some of these wastes generated may contain section 313
chemicals and are generated or are used in quantities large enough that
reporting may result. Some of these chemicals are carbon tetrachloride,
perchloroethylene, and xylene. While EPA's proposed broader
interpretation of ``otherwise use'' may capture the disposal of spent
toxic chemicals, based on EPA's analysis, contaminants removed from
spent solvent mixtures are not likely to be present in quantities that
would exceed reporting thresholds, and subsequently no reports are
expected on these chemicals (Ref. 20). In addition, based on EPA's
analysis, the process of recovering spent solvents is considered to be
most economical when preformed on a larger scale, and therefore, it is
estimated that all operations primarily engaged in solvent recovery
will process enough of one or more of the EPCRA section 313 chemicals
identified in Unit V.G.3. of this preamble to exceed reporting
thresholds (Ref. 10).
EPA estimates that reporting under EPCRA section 313 from this
industry may result in 85 Form R reports annually submitted by 17
facilities. This number of facilities estimated to report represents 43
percent of all facilities identified within this industry group.
6. Reporting consideration. While EPA wishes to encourage
alternatives to disposal such as recycling, the Agency believes that
the releases and waste management information resulting from facilities
primarily involved in solvent recovery operations should be made
publicly available. EPA believes that the activities conducted by
facilities primarily engaged in solvent recovery are very similar if
not identical to solvent recovery activities conducted by currently
reporting facilities and that statutory reporting definitions, as well
as reporting guidance, will directly apply to these operations.
[[Page 33608]]
EPA estimates potential costs for reporting for the first year by
this industry group to be $0.4 million and $0.3 million in subsequent
years.
7. Conclusions. For the reasons identified above, EPA believes that
facilities that are primarily engaged in solvent recovery operations in
SIC code 7389 satisfy the requirements of EPCRA section 313 (b)(1)(B)
because EPA believes that reporting for this industry group is relevant
for the purposes of EPCRA section 313. Accordingly, EPA proposes to add
this industry group to the list of industry groups required to report
pursuant to EPCRA section 313 and the PPA section 6607.
VI. Request for Public Comment
EPA requests comment on any aspect of this proposal. In particular,
EPA requests specific comment as detailed in the following paragraphs.
EPA requests comment on the information considered for each of the
industry groups proposed for addition in Unit V. of this preamble. In
addition, EPA requests comment on any issues that may be specific to
any of the individual industry groups.
EPA is requesting comment on the use of the criteria used in
today's proposal for listing decisions for the EPCRA section 313
program.
EPA requests comment on the sufficiency of the evidence and any
additional information for each of the industry groups proposed for
addition. In addition, EPA requests comment on any issues that may be
specific to any of the individual industry groups.
EPA requests comment on the exemption for extraction activities
under the coal mining industry sector. EPA is also requesting comment
regarding whether this exemption should be applied to metal mining
extraction as well.
EPA is requesting comment on requiring reporting from those
facilities in SIC code 4953 that have interim status under RCRA
subtitle C.
EPA is requesting comment on whether to add SIC code 4960 Steam and
Air Conditioning Supply. Although information is limited on this
industry group, EPA expects the activities conducted by this industry
group to be similar to those conducted in SIC codes 4911, 4931, and
4939.
The Agency is mindful of the concern that TRI release information
involving hazardous waste management activities not be misleading. For
example, the public should not construe a release into a landfill
reported under EPCRA section 313 to mean that a landfill has failed. In
developing the final rule, EPA will consider approaches to assist the
public in understanding the proper meaning of reporting data from the
hazardous waste management industry. EPA requests comment on approaches
to address this concern.
Although facilities that receives hazardous waste are provided with
information on the constituents of that hazardous waste, these
facilities may be provided with limited information on the exact
quantities of those constituents. EPA requests comment on ways to aid
facilities in reporting under EPCRA section 313, in the least
burdensome manner, on those constituents that are EPCRA section 313
listed toxic chemicals.
EPA requests comment on the alternatives to reduce impacts on small
facilities in SIC code 5169 and facilties regulated under RCRA subtitle
C that are classified within SIC code 4953. EPA requests comment on
whether any of the alternatives presented in this proposed rule would
accomplish the stated objective of EPCRA section 313 while minimizing
significant impact on small entities.
For the industry groups outside of SIC codes 20 through 39 which
are not part of today's proposal, EPA requests comment on adding any of
these industry groups through a future rulemaking. Commenters should
take into account the current limitations of EPCRA section 313
reporting requirements, i.e., exemptions and thresholds, in addressing
whether these industries should be required to report under EPCRA
section 313.
EPA requests comment on all aspects of the Agency's broadening of
the concept of ``otherwise use.'' Specifically, EPA requests comment on
(1) the Agency's proposed modification of the reporting guidance for
``otherwise use,'' (2) whether the regulatory definition of ``otherwise
use'' should be amended, (3) the Agency's alternate approach to
modifying the reporting guidance for ``otherwise use;'' and (4) the
number of facilities in SIC codes 20 through 39 that may be affected by
EPA's alternate approach to modifying the reporting guidance for
``otherwise use.''
EPA requests comment on its revised interpretation as explained by
these examples, and by the additional examples described in the
document entitled Interpretive Guidance for Revised Interpretation of
Otherwise Use. This document is in the public docket.
EPA requests comment on whether the treatment for destruction,
stabilization, and disposal fit within the statutory definition of
``process.''
Comments should be submitted to the address listed under the
ADDRESSES section. All comments must be received on or before August
26, 1996.
VII. Rulemaking Record
A record has been established for this rulemaking under docket
number ``OPPTS-400104'' (including comments and data submitted
electronically as described below). A public version of this record,
including printed, paper versions of electronic comments, which does
not include any information claimed as confidential business
information (CBI), is available for inspection from noon to 4 p.m.,
Monday through Friday, excluding legal holidays. The public record is
located in the TSCA Nonconfidential Information Center, Rm. NE-B607,
401 M St., SW., Washington, DC 20460.
Electronic comments can be sent directly to EPA at:
[email protected]
Electronic comments must be submitted as an ASCII file avoiding the
use of special characters and any form of encryption.
The official record for this rulemaking, as well as the public
version, as described above will be kept in paper form. Accordingly,
EPA will transfer all comments received electronically into printed,
paper form as they are received and will place the paper copies in the
official rulemaking record which will also include all comments
submitted directly in writing. The official rulemaking record is the
paper record maintained at the address in ``ADDRESSES'' at the
beginning of this document.
VIII. Public Meeting
EPA will hold two 1-day public meetings, one in San Francisco, CA
and one in Washington, DC, to discuss the issues presented above. The
tentative agenda for this public meeting will include a discussion of
the issues presented in Unit VII. of this preamble. Specific
information on these public meetings are contained in a notice of
public meeting published elsewhere in this issue of the Federal
Register.
IX. Economic Analysis
EPA has prepared an economic analysis of the impact of this action,
which is contained in a document entitled Economic Analysis of the
Proposed Rule to Add Certain Industries to EPCRA Section 313 (Ref. 20).
This document is available in the public docket for this rulemaking.
The analysis assesses the costs, benefits, and associated impacts of
the rule, including potential effects on small business and the
environmental justice implications
[[Page 33609]]
of the rule. The major findings of the analysis are briefly summarized
here.
A. Market Failure
Federal regulations are used to correct significant market
failures. Markets will fail to achieve socially efficient outcomes when
differences exist between market values and social values. Two of the
causes of market failure are externalities and information asymmetries.
In the case of negative externalities, the actions of one economic
entity impose costs on parties that are ``external'' to the market
transaction. For example, entities may release toxic chemicals without
accounting for the consequences to other parties, such as the
surrounding community. The market may also fail to efficiently allocate
resources in cases where consumers lack information. Where information
is insufficient regarding toxic releases, individuals' choices
regarding where to live and work may not be the same as if they had
more complete information. Since firms ordinarily have a disincentive
to provide complete information on their releases of toxic chemicals,
the market fails to allocate society's resources in the most efficient
manner. This proposed rule is intended to correct the market failure
created by the lack of information available to the public about the
releases and transfers of toxic chemicals in their communities, and to
help address the externality created when choices regarding toxic
chemical releases and transfers have not fully considered external
effects.
Through requiring the provision of data on toxic chemical releases
and waste management practices, TRI overcomes firms' disincentive to
provide information on their toxic chemical releases. TRI serves to
inform the public of the toxic chemical releases in their communities.
Individuals can then make choices that better optimize their well-
being. Some choices made by a more informed public, including
consumers, corporate lenders, and communities, may effectively lead
firms to internalize into their business decisions at least some of the
costs to society of their releases. In addition, by identifying hot
spots, setting priorities and monitoring trends, TRI data can also be
used to make more informed decisions regarding the design of more
efficient regulations and voluntary programs, which moves society
towards an optimal allocation of resources.
If EPA were to take no action, i.e., not add industries to TRI, the
market failure (and the associated social costs) resulting from the
lack of information on releases and waste management practices would
continue. EPA believes that adding the proposed industry groups to the
EPCRA section 313 list of facilities will improve the scope of multi-
media data on releases and transfers of toxic chemicals. This, in turn,
will provide information to communities, empower communities to play a
meaningful role in environmental decision-making, improve the quality
of environmental decision-making by government officials, and provide
useful information to facilities themselves. EPA believes that this is
a sound rationale for proposing the addition of industry groups to the
EPCRA section 313 list.
B. Existing Reporting Requirements
The Toxics Release Inventory includes multimedia data on releases,
transfers and pollution prevention activities for over 600 toxic
chemicals. While there are no national data bases that are comparable
to the whole of TRI, several data sources exist that contain media-
specific data on releases and transfers. Sources maintained by EPA
include the AIRS Facility Subsystem (AFS) of the Aerometric Information
Retrieval System (AIRS), which tracks air emissions from industrial
plants; the Permit Compliance System (PCS), which tracks permit
compliance and enforcement status of facilities regulated by the
National Pollutant Discharge Elimination System (NPDES) under the Clean
Water Act; and the Biennial Reporting System (BRS), maintained by the
Office of Solid Waste and Emergency Response (OSWER). Other sources
include the chemical inventory data collected under section 312 of
EPCRA and Clean Air Act Title V operating permits.
TRI data cannot be replicated using these alternative sources. Even
if information from these data bases could be combined to form an
analog of the data contained in TRI, none of these sources provides
release and transfer or pollution prevention data that could replace
the data reported on TRI. In addition, these other data collections
differ in the information collected, the chemical and facility
coverage, the various thresholds and reporting frequencies, and how the
data are reported. The definitional consistency provided by TRI creates
important advantages over any emissions data system that might be
assembled from non-TRI sources. These other data sources perform the
functions for which they were designed, but they were not intended to
serve the same purposes as TRI. For all these reasons, EPA has
concluded that while there may be some degree of overlap between the
reporting required under EPCRA section 313 and PPA section 6607 and
that required under other statutes, these reporting requirements do not
duplicate or conflict with each other.
C. Regulatory Alternatives
EPA evaluated a number of options in the course of developing this
proposed rule. The options were created by varying the scope of the
expansion (i.e., choosing alternative industry groups) and modifying
selected structural elements of the program (i.e., modifying the
guidance for otherwise use, changing the de minimis exemption for
certain industries under consideration, etc.). This analysis was based
on the options under consideration before the completion of the
screening process described in Unit II.C. and II.D. of this preamble.
The following alternatives summarize the scope of EPA's analysis.
Alternative I.A
Comprehensive industry coverage. Includes the following industries
at the 2-digit SIC code level: mining; transportation; electric,
sanitary and gas services; and wholesale trade. Also includes solvent
recovery services. Maintains current interpretation of otherwise use.
Alternative I.B
Same industries as Alternative I.A, but with revised interpretation
of otherwise use.
Alternative II.A
Limited industry coverage, with a mix of 2-digit and 4-digit SIC
codes. Includes the following industries: metal mining; coal mining;
electric services, electric and other services combined; combination
utilities; commercial hazardous waste treatment; storage and disposal
facilities that are RCRA subtitle C facilities; chemical and allied
products - wholesale; and petroleum bulk stations and terminals -
wholesale. Also includes solvent recovery services. Maintains current
interpretation of otherwise use.
Alternative II.B
Same industries as Alternative II.A, but with revised
interpretation of otherwise use.
Alternative III.A:
Modified limited industry coverage. A mix of 2-digit and 4-digit
SIC codes, with certain exemptions and limitations. Includes the
following industries: metal mining, excluding mining services; coal
mining, excluding mining services and extraction activities; coal- and
oil-fired electric utilities; commercial hazardous waste treatment,
storage and disposal facilities that are RCRA subtitle C facilities;
chemical and allied products - wholesale; petroleum bulk stations and
[[Page 33610]]
terminals - wholesale; and solvent recovery services. Maintains current
interpretation of otherwise use.
Alternative III.B
Same industries as Alternative III.A, but with revised
interpretation of otherwise use. This is the proposed alternative.
Alternative IV.A
Same industries as Alternative I.A, but with limited reporting from
mines. The threshold determination for those toxic chemicals being
extracted or mined would be required only for the primary product
distributed in commerce.
Alternative IV.B
Same industries as Alternative I.A, but with expanded reporting
from mines. Mining and extraction of ore would be interpreted as
manufacturing, not processing, so that the de minimis exemption would
not apply to other constituents in the ore.
Alternative V
Same industries as Regulatory Alternative I.A, but with expanded
reporting from electric utilities. The de minimis exemption would not
be applied to constituents of fuels at electric utilities.
Table I in Unit XI of this preamble provides a summary of the
number of facilities estimated to submit reports under EPCRA section
313, the number of reports they are anticipated to submit, and the
associated costs under each regulatory alternative. Costs are lower
after the first year because facilities will be familiar with the
reporting requirements, and many will be able to update or modify
information reported on the previous year's report instead of
originating data for the first time. See Unit XI.C. of this preamble
for more information on costs for different compliance tasks under
EPCRA section 313.
In proposing this rule, EPA has sought to balance the right of the
public to know about releases and other generation of toxic chemicals
as waste in their neighborhoods and the benefits provided by the
expanded knowledge with the costs which the rule will impose on
industry, including the impact on small entities.
D. Proposed Alternative
Table II in Unit XI of this preamble displays the results by
industry for the proposed option (which is Alternative III.B in Unit
IX.C.). EPA estimates that a total of 6,400 facilities will submit
38,000 reports, which include both Form Rs and Toxic Chemical Release
Inventory Certification Statements (see 59 FR 61488, November 30,
1994). Total incremental compliance costs are also presented in Table
II by industry sector. As shown, aggregated costs in the first year are
estimated to be $191 million; in subsequent years they are estimated to
be $118 million per year.
EPA's quantitative analysis does not include the effect on
facilities in SIC codes 20 through 39 of changing the guidance for
otherwise use to include disposal, stabilization, and treatment for
destruction. As indicated in Unit IV.D. of this preamble, EPA does not
believe that this change in guidance will affect the EPCRA section 313
reporting status of a significant number of facilities in the
manufacturing sector. Facilities in the manufacturing sector may be
affected if they receive wastes from other facilities, manage these
wastes through treatment or disposal and do not manufacture, process or
otherwise use the chemicals under current definitions, or do so below
the reporting threshold. The Agency is requesting comment on the extent
to which the revised interpretation may affect facilities that
currently report on TRI.
EPA will incur additional costs for adding new industry groups
under EPCRA section 313. These costs include developing policy and
guidance for the new industries, providing outreach and training,
processing the reports that are submitted, disseminating the resulting
information and performing compliance and enforcement audits. The total
costs to EPA are estimated to be $2.7 million per year.
E. Associated Requirements
There are various state and federal requirements that are triggered
by other statutes and regulations when a facility files a report under
EPCRA section 313. The associated requirements include state taxes and
fees, state pollution prevention planning requirements, and special
requirements for certain NPDES storm water permits. While these
associated requirements are discussed in the economic analysis, they
are not costs of the proposed rule, and are not treated as such in the
analysis.
Sixteen states have fees, taxes or pollution prevention
requirements associated with the requirement to file a Form R. EPA's
economic analysis includes a conservative estimate that the proposed
rule could result in total payments of $1 million to $8 million per
year in fees and taxes by affected facilities. It is important to note
that these fees and taxes do not necessarily equate with social costs,
since payments that do not result in the consumption of a resource
(e.g., labor) are transfer payments and do not represent costs to
society. Insufficient information was available to classify the fee
payments as either social costs or transfer payments. Nor did EPA
attempt to estimate the benefits of these fees and taxes (which are
used in some states to fund technical assistance programs and grants,
and which may also result in a more efficient allocation of resources
in and of themselves by working as economic incentives to reduce
emissions).
Although the state fees, taxes and pollution prevention planning
requirements are associated with EPCRA section 313 reporting, they are
not required by this rulemaking. EPA has not included the costs or
benefits of associated state requirements along with the costs and
benefits of the rule, because it is inappropriate to do so. States
which have these requirements may wish to assess the benefits and costs
of applying them to new industries.
EPA has also established associated requirements for some
facilities applying for certain storm water permits under the NPDES
program. These NPDES storm water permit requirements are based on the
coverage of EPCRA section 313 at the time the permits were issued. The
NPDES requirements do not apply to industries or chemicals that are
added to the EPCRA section 313 list until the time of permit renewal
(which occurs every 5 years), and may not apply in subsequent permits,
depending on the Agency's decisions at the time those permits are
issued.
EPA has not estimated the aggregate costs of the associated
requirements for new facilities. It would also be inappropriate to
making a listing determination under EPCRA section 313 on the basis of
these NPDES requirements. There will be no impact at the current time,
because there will be no changes to the NPDES requirements while the
current permits are in effect. Moreover, the costs and benefits of the
special requirements are best considered when the NPDES storm water
permits are reissued, and a decision can be made on whether they should
be applied in subsequent permits.
F. Benefits
In enacting EPCRA and PPA, Congress recognized the significant
benefits of providing information on toxic chemical releases. TRI has
proven to be one of the most powerful forces in empowering the federal
government, state governments, industry, environmental groups and the
general public to fully participate in an informed dialogue about the
environmental impacts of toxic chemicals in the United States. TRI's
publicly available data base provides
[[Page 33611]]
quantitative information on toxic chemical releases, transfers,
recycling, and treatment. With the collection of this information
starting in 1987 came the ability for the public, government, and the
regulated community to understand the magnitude of chemical emissions
in the United States, and to assess the need to reduce these releases
and transfers. TRI enables all interested parties to establish credible
baselines, to set realistic goals for environmental progress over time,
and to measure progress in meeting these goals over time. The TRI
system has become a neutral yardstick by which progress can be measured
by all stakeholders.
The proposed rule to expand the number and type of reporting
facilities subject to TRI is intended to build upon the past success of
the program. The information reported to TRI increases knowledge of the
levels of toxic chemicals released to the environment and the pathways
of exposure, improving scientific understanding of the health and
environmental risks of toxic chemicals; allows the public to make
informed decisions on where to work and live; enhances the ability of
corporate leaders and purchasers to more accurately gauge a facility's
potential environmental liabilities; provides reporting facilities with
information on unregulated emissions that can be used to save money as
well as reduce emissions; and assists federal, state, and local
authorities in making better decisions on acceptable levels of toxics
in communities.
There are two types of benefits associated with TRI reporting --
direct and follow-on. The first type of benefit is direct, the pure
value of information on releases, transfers and other waste management
practices. It is expected that this rulemaking will generate benefits
by providing the public with access to information that otherwise would
not be available to them. The direct benefits of the rule itself
include improvements in access, understanding, awareness and decision-
making related to the provision and distribution of information.
The second types of benefit derive from changes in behavior that
result from the information reported to TRI. The changes in behavior,
including reductions in the releases and changes in the waste
management practices for toxic chemicals, yield health and
environmental benefits. These changes in behavior come at some cost to
industry, and the net benefits of the follow-on activities are the
difference between the benefits of decreased chemical releases and
transfers and the costs of the actions needed to achieve the decrease.
These follow-on activities, however, are not required by the rule.
Because the current state of knowledge about the economics of
information is not highly developed, EPA has not attempted to monetize
the pure information benefits of adding new industry groups to the list
of industries required to report to TRI. Furthermore, because of the
inherent uncertainty in the chain of events, EPA has also not attempted
to predict the changes in behavior that result from the information, or
the resultant net benefits (i.e., the difference between benefits and
costs). EPA does not believe that there are adequate methodologies to
make reasonable monetary estimates of either type of benefits.
Rather, EPA assessed the potential for the proposed rule to
generate benefits comparable to those generated by the currently
reporting industries by seeking data on certain characteristics of
releases and other waste management activities, specifically air
release data, which could be compared among the various sectors
currently subject to, and proposed for, addition to EPCRA section 313.
EPA analyzed release data collected under authority of the Clean
Air Act and maintained in the Aerometric Information Retrieval System
(AIRS). The analysis compared estimated air releases of toxic chemicals
from manufacturing facilities (currently subject to TRI reporting) to
those from facilities proposed for addition to EPCRA section 313. While
limitations in the data set and methodology did not permit estimates of
potential TRI releases to be developed, the analysis clearly indicated
that substantial volumes of TRI chemical releases will be captured by
expanding the coverage to include the additional industry groups being
proposed. EPA believes this evidence supports its preliminary
determination that the industry groups proposed for addition are likely
to generate useful information as part of the TRI program. The
experience of the past seven years shows that reporting on TRI by
manufacturing facilities has produced real gains in understanding about
exposure to toxic chemicals. EPA believes that reporting by the
industry groups being proposed for addition will yield similar
benefits.
X. References
1. D B. Standard Industrial Classification Manual SIC 2+2. Dun and
Bradstreet Information Services, (1988).
2. GAO/RCED. Report to Congress Toxic Chemicals: EPA's Toxic
Release Inventory Is Useful but Can Be Improved, Government Accounting
Office, Washington, DC, 91-121, (1991).
3. MADEP. Data Submitted by Non-Manufacturing Facilities in
Massachusetts in 1993. Massachusetts Department of Environmental
Protection, Boston, MA (1993).
4. OMB. Standard Industrial Classification Manual 1987. Executive
Office of the President, Office of Management and Budget, Washington,
DC, (1987).
5. SAIC. Data Analysis Documentation - All Systems (Draft). Science
Applications International Corporation, Falls Church, VA (1996).
6. SAIC. SIC Code Profile 10 Metal Mining (Draft). Science
Application International Corporation, Falls Church, VA (1996).
7. SAIC. SIC Code Profile 12 Coal Mining (Draft). Science
Application International Corporation, Falls Church, VA (1996).
8. SAIC. SIC Code Profile 49 Electric, Gas and Sanitary Services
(Draft). Science Application International Corporation, Falls Church,
VA (1996).
9. SAIC. SIC Code Profile 50-51 Wholesale Trade Durable and
Nondurable Goods (Draft). Science Application International
Corporation, Falls Church, VA (1996).
10. SAIC. SIC Code Profile 73 Business Services (Draft). Science
Application International Corporation, Falls Church, VA (1996).
11. U.S. Congress. Congressional Record, Senate Debate on Passage,
Vol. 131 (1985).
12. U.S. Congress. Congressional Record, Debate Prior to Passage of
House Bill, Vol. 132 (1985).
13. U.S. Congress, House of Representatives. Conference Report No.
962. 99th Cong., 2nd Session (1986).
14. USDOC. County Business Patterns 1993: United States. Department
of Commerce, Bureau of the Census, Washington, DC, BP-93-1 (1995).
15. USEPA/OAR. Report to Congress: Waste from Combustion of Coal by
Electric Utilities. U.S. Environmental Protection Agency, Washington,
DC (1988).
16. USEPA/OECA. Office of Compliance Sector Notebook Project:
Profile of the Metal Mining Industry. U.S. Environmental Protection
Agency, Washington, DC, 310-R-95008, (1995).
17. USEPA/OPPT. Additional Considerations in Selecting Industries
for Addition to EPCRA Section 313. U.S. Environmental Protection
Agency, Washington, DC (1986).
18. USEPA/OPPT. Appendix B: Routinely Reported Information -
Chemical Detail. U.S. Environmental Protection Agency, Washington, DC
(1996).
[[Page 33612]]
19. USEPA/OPPT. Development of SIC Code Candidates: Screening
Document. U.S. Environmental Protection Agency, Washington, DC (1996).
20. USEPA/OPPT. Economic Analysis of the Proposed Rule to Add
Certain Industries to EPCRA Section 313. U.S. Environmental Protection
Agency, Washington, DC (1996).
21. USEPA/OPPT. EPCRA Section 313 Otherwise Use Activities. U.S.
Environmental Protection Agency, Washington, DC (1986).
22. USEPA/OPPT. Toxic Chemical Release Inventory Reporting Form R
and Instructions (Revised 1995 Version). U.S. Environmental Protection
Agency, Washington, DC, 745-K-96-001, (1996).
23. USEPA/OSWER. Report to Congress: Wastes from the Extraction and
Beneficiation of Metallic Ores, Phosphate Rock, Asbestos, Overburden
from Uranium Mining, and Oil Shale. U.S. Environmental Protection
Agency, Washington, DC (1985).
XI. Regulatory Assessment Requirements
A. Executive Order 12866
Pursuant to Executive Order 12866 (58 FR 51735, October 4, 1993),
it has been determined that this is a ``significant regulatory action''
because the proposed action is likely to have an annual effect of $100
million or more. This action was submitted to OMB for review, and any
comments or changes made during that review have been documented in the
public record.
B. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.),
the Agency must consider whether a regulatory action will have a
significant adverse economic impact on a substantial number of small
entities. Section 605(b) requires the Agency to either certify that a
proposed regulatory action will not have such an impact or prepare an
initial regulatory flexibility analysis. EPA has prepared an Initial
Regulatory Flexibility Analysis (IRFA), which is included as part of
the economic analysis for the proposed rule (Ref. 20). The IRFA is
summarized below.
1. Methodology. In preparing the IRFA for this proposal, EPA has
defined small business as any firm having 10 to 49 employees, instead
of using the Small Business Administration's (SBA's) definition of 500
employees or less. Under the Regulatory Flexibility Act (RFA), agencies
have been authorized to develop and apply alternative definitions of
small business where appropriate and after providing the public with
notice of and an opportunity to comment on the alternative, in
consultation with the SBA. For TRI purposes, EPA adopted the
alternative definition of 10-to-49 employees in proposing and
promulgating the original TRI reporting rule in 1987-88 (see 52 FR
21166, 53 FR 4523 and accompanying regulatory impact analyses).
For today's proposal, EPA has applied the 10-to-49 employee
definition to maintain consistency in IRFA analyses across TRI
rulemakings. Nonetheless, the economic analysis prepared for the
proposal also includes alternative definitions of small entities,
consistent with the definition used by the Small Business
Administration (SBA). Economic impacts on small entities were
calculated assuming that all TRI reports are Form Rs (and not Toxic
Chemical Release Inventory Certification Statements), which yields a
conservative estimate of costs (i.e., it is likely to overestimate the
true impacts). Impacts were calculated in both the first year of
reporting and in subsequent years.
The Agency estimates that of the 6,400 facilities potentially
affected by the proposed rule, no more than 72 percent are small
entities. Thus, approximately 4,600 of the 6,400 facilities potentially
affected may need to file at least one report. However, approximately
15,000 small entities in the industry groups being proposed would not
have to file a report because they are expected to have less than 10
full-time employees, and thus would be exempt from the requirement to
file a report. The overwhelming majority of these entities are small
businesses as defined above (10 to 49 employees). A small number of
small entities are utilities owned by small governmental jurisdictions.
For purposes of this analysis, EPA has considered small entities by
industry sector, including governmentally-owned utilities together with
private utilities.
To assess the potential impacts on these small entities of
expanding the TRI program to additional industry groups, EPA first
conducted a preliminary screening analysis. The screening analysis used
compliance costs as a percentage of annual company sales to measure
potential impacts. This methodology was based on the premise that the
cost impact percentage is a good measure of a firm's ability to afford
the costs attributable to a regulatory change. For purposes of
screening small entity impacts, comparing compliance costs to revenues
provides a reasonable first-order indication of the magnitude of the
regulatory burden relative to a commonly available measure of a
company's business volume. Where regulatory costs represent a very
small fraction of a typical firm's revenue (for example, less than 1
percent), the financial impacts of the regulation are expected to be
minimal. EPA is currently in the process of considering how to define
the RFA statutory terms ``significant impact'' and ``substantial
number.'' Until EPA determines how best to define those terms, the
Agency has decided for this proposal to prepare an initial regulatory
flexibility analysis if compliance costs for a substantial number of
small entities would be greater than 1 percent of sales.
Detailed analyses of certain SIC codes were conducted when the
screening analysis indicated the proposed rule would cross the
analytical thresholds stated above for potentially affected industry
groups. The methodology for each respective detailed analysis was
tailored to reflect the unique characteristics of each industry group
examined.
Based on the screening analysis, and where appropriate on more
detailed analyses, EPA identified one group for which an initial
regulatory flexibility analysis would be justified, the chemical
wholesaling industry (SIC code 5169 - Chemicals Allied Products).
Because there are sufficient uncertainties regarding the impacts on
another industry, RCRA subtitle C hazardous waste facilities in SIC
code 4953, EPA is also requesting comment on the magnitude and
incidence of the impacts on this industry and the need for and
appropriateness of adopting regulatory alternatives like those
described for SIC code 5169. For all other potentially affected
industry groups, EPA found the likely impact of the proposed rule
either would be compliance costs less than 1 percent of sales or may
not affect a substantial number of small entities, or both.
Today's action describes the reporting and recordkeeping
requirements associated with the proposal. The professional skills
needed to comply with those requirements are the same as those required
to comply with current TRI reporting requirements. Those skills were
described in the regulatory flexibility analyses for the 1988 TRI
reporting rule and today's proposal.
2. SIC code 5169. Because facilities in SIC code 5169 are chemical
wholesalers, they handle large numbers of chemicals, including toxic
chemicals listed under EPCRA section 313. Facilities in this industry
are expected to report primarily due to mixing, blending, reformulating
and repackaging of EPCRA section 313 chemicals. EPA
[[Page 33613]]
estimates that about 10 percent of chemical wholesalers will be
required to submit reports and that reporting facilities will file
between 1 and 27 reports each. The actual number of reports per
facility will be distributed throughout this range. Based on the
revenue data for typical facilities, impacts above 1 percent are
predicted for facilities reporting the high number of reports in the
first year, and for small businesses reporting the high number of
reports in subsequent years. However, EPA believes that relatively few
businesses in this industry will file the high number of reports. The
compliance costs associated with EPCRA section 313 reporting could have
a potentially significant impact on the smaller and less financially
solvent companies in this industry. The majority of companies, however,
will not have to submit the maximum number of reports, and will face
lower costs.
3. Alternatives to reduce impacts on small businesses in SIC code
5169. Because of the potential for significant impacts on a substantial
number of facilities in SIC code 5169, EPA's economic analysis includes
a number of alternatives to reduce the impact on small businesses in
this industry. While the Agency could have elected not to propose the
addition of SIC code 5169, thereby avoiding any small business impacts
from this proposed rule to facilities in that group, the Agency has
chosen to include the industry group in the proposal. EPA believes that
reporting from this industry group will result in a significant amount
of new toxic chemical release information to the public, particularly
to communities in which these facilities are located. Moreover, the
activities of this industry--handling chemicals--and its involvement
with TRI chemicals are very similar to those of the manufacturing
universe already subject to TRI reporting.
The alternatives EPA analyzed to reduce the impact on small
businesses are described below.
Alternative 1. Expand eligibility for the alternate threshold (59
FR 61488, November 30, 1994) for facilities in SIC code 5169 by
increasing the annual reportable amount from 500 pounds and raising the
alternate manufacture, process and otherwise use threshold from 1
million pounds. Some small facilities in SIC 5169 with large numbers of
reports may still incur significant impacts to determine their
eligibility for the alternate threshold. EPCRA section 313(f)(2)
requires that any revision to the current reporting thresholds continue
to capture a substantial majority of total releases of each listed
chemical or chemical category. Because these facilities have not
reported under TRI in the past, the Agency may not have sufficient
information about releases (both types of chemicals and release levels)
with which to justify expanding the alternate threshold eligibility for
this industry group. In addition, because of the type of information
submitted on the Toxic Chemical Release Certification Statement, the
resulting data would be of more limited utility than the data that
would otherwise be reported on Form R.
Alternative 2. Allow facilities in SIC code 5169 an additional year
before they must begin reporting. EPA would use this time to perform
intensive outreach, training and technical assistance to industry. This
alternative would result in the loss of 1 year's worth of data, in
return for a relatively modest reduction in reporting burden.
Alternative 3. Require facilities in SIC code 5169 to report only
on air releases and off-site transfers. State data indicate that these
two routes account for nearly all of the releases and transfers from
facilities in SIC code 5169. Adopting this option would mean forfeiting
some information that is reported pursuant to EPCRA section 313 and all
additional information reported pursuant to the PPA section 6607. This
option, therefore, appears to be inconsistent with the existing
authorities and requirements under EPCRA section 313 and PPA section
6607. Further, to the extent that facilities in this industry actually
report only air releases and off-site transfers under the current
requirements, EPA has overestimated both compliance costs and small
business impacts in the standard analysis.
Alternative 4. Expand the range reporting option for facilities in
SIC code 5169 beyond the current 1,000 pound limit to a higher level
such as 2,000, 5,000 or 10,000 pounds. Adopting this alternative would
reduce the precision of the data in return for a relatively modest
reduction in reporting burden.
Alternative 5. Require facilities in SIC code 5169 to report on
their throughput for each chemical and on the types of processes and
equipment being used. EPA would then combine this information with
emission factors to develop release and transfer estimates. This
alternative would reduce the reporting burden, because facilities in
this industry are presumed to track their throughput and could readily
identify the activities and types of equipment used. However, the
resulting release data would be of reduced utility to the public,
because they would be based on average emission factors and would not
be specific to an individual facility. Finally, this option appears to
be inconsistent with the existing authorities and requirements under
EPCRA section 313 and PPA section 6607.
Alternative 6. Exempt small businesses in SIC 5169 from reporting.
The overwhelming majority of businesses in this industry are small;
however, it is anticipated that a significant portion of reported
releases would be from small businesses. Adopting this option could
lead to substantial gaps in information, especially at the community
level. Furthermore, only those small firms submitting a large number of
reports may face significant impacts. By contrast, this alternative
would substantially reduce the amount of information available without
targeting the relief to those particular facilities facing high impacts
(i.e., those submitting a large number of reports).
EPA is seeking comment on the alternatives to reduce impacts on
small facilities in SIC code 5169. EPA requests comment on whether any
of the alternatives would accomplish the stated objective of EPCRA
section 313 while minimizing a potential economic impact on small
entities.
4. RCRA Subtitle C Facilities in SIC Code 4953. The screening
analysis indicated that TRI reporting by facilities in SIC code 4953
may impose a compliance costs of more than one percent of sales on some
small facilities in this SIC code if EPA revises the guidance on
otherwise use to include disposal, stabilization, and treatment for
destruction. EPA is not highly confident of the accuracy of the
estimated number of reports per facility if the guidance on otherwise
use is revised, and believes that the current figure is an over-
estimate. Consequently, the actual number of reports submitted by
facilities in SIC code 4953 and the costs to prepare and submit them
may be considerably lower than estimated by the screening analysis.
Furthermore, relatively few of the facilities in this industry group
are small businesses according to the definition EPA has used to
develop this analysis (i.e., less than 50 employees). Recognizing this
uncertainty, EPA is particularly interested in comments and data
related to these issues. EPA will consider alternatives, similar to
those considered for SIC code 5169, if there is sufficient reason to
believe that requiring RCRA subtitle C facilities to report on TRI
would impose a significant burden on a substantial number of small
entities. EPA seeks comment on this issue.
[[Page 33614]]
5. Conclusions. EPA has determined that this regulatory action may
impose an adverse impact on small entities in SIC code 5169 (Chemicals
and Allied Products Wholesale). EPA currently has insufficient
information to determine the impact on affected RCRA subtitle C
facilities in SIC code 4953 that are small entities. This action would
not be expected to have a significant impact on a substantial number of
small entities in the remainder of the industries being proposed.
Information relating to this determination has been provided to the
Chief Counsel for Advocacy of the Small Business Administration, and is
included in the docket for this rulemaking. Any comments regarding the
economic impacts that this proposed regulatory action may impose on
small entities should be submitted to the Agency at the address listed
above.
C. Paperwork Reduction Act
The information collection requirements in this proposed rule, as
well as Form R have been submitted for approval to the Office of
Management and Budget (OMB) under the Paper Work Reduction Act, 44
U.S.C. 3501 et seq. An Information Collection Request (ICR) document
that covers the burden associated with today's proposal has been
prepared by EPA (ICR No. 1784.01) and a copy may be obtained from Sandy
Farmer, OPPE Regulatory Information Division; U.S. Environmental
Protection Agency (2136); 401 M St., S.W.; Washington, DC 20460, by
calling (202) 260-2740, or electronically by sending an e-mail message
to ``[email protected].'' If necessary, EPA may be
augmenting the docket with additional information.
This information would be collected from industrial facilities in
local communities in order to provide basic information to those
communities and the general public, as well as the regulated community
and all levels of government, on releases and other waste management
practices involving listed toxic chemicals. Collection of this data
would further EPA's goal of enhancing community right-to-know.
Provision of this information would be mandatory, pursuant to EPCRA
section 313 (42 U.S.C. 11023) and PPA section 6607 (42 U.S.C. 13106).
Regulations codifying the EPCRA section 313 reporting requirements can
be found at 40 CFR part 372. Respondents may designate the specific
chemical identity of a substance as a trade secret, pursuant to EPCRA
section 322 (42 U.S.C. 11042). Regulations codifying the trade secret
provisions can be found at 40 CFR part 350. Currently, approximately
23,000 facilities report on TRI.
EPA's economic analysis includes burden and cost estimates for
specific compliance tasks under EPCRA section 313 (Ref. 20). Such tasks
include rule familiarization, completion of Form Rs and Toxic Chemical
Release Inventory Certification Statements and recordkeeping. Total
burden and cost can be calculated by combining these estimates with the
number of affected facilities and reports predicted. The five component
tasks are described below. The ICR submitted to OMB provides burden and
cost estimates for those facilities proposed for addition in today's
proposed rule.
1. Compliance determination. Facilities must determine whether they
meet the criteria for section 313 reporting. Costs attributed to making
this determination result from time required to become familiar with
the definitions, exemptions, and threshold requirements under the TRI
program, to review the list of EPCRA section 313 chemicals, and to
conduct preliminary threshold determinations in order to determine if
the facility would be required to report. These costs are also applied
to facilities that would not be required to report, but that would
incur some cost to ascertain that fact. Thus, the number of facilities
undertaking compliance determination activities exceeds the number of
reporting facilities.
2. Rule familiarization. Facilities that would be reporting under
section 313 for the first time must read the reporting package and
become familiar with the reporting requirements. This would involve
reading the instructions to the Toxic Chemical Release Inventory
Reporting Form R, and may also involve other activities such as
consulting EPA guidance documents. Costs for rule familiarization would
only be incurred in the first year after a facility becomes subject to
reporting, since in subsequent years the staff would be familiar with
the requirements that apply to their facility.
3. Calculations and report completion. Facilities that determine
they must report under section 313 would incur costs to retrieve,
process, review, and transcribe information to complete Form R.
Facilities qualifying for the alternate reporting threshold may file a
Toxic Chemical Release Inventory Certification Statement, a streamlined
form containing limited informational requirements, which is estimated
to require less burden and cost to complete than Form R. Report
completion costs would be somewhat higher in the first year of
reporting, relative to subsequent years. In many instances the process
in subsequent years would consist of updating data and modifying the
information reported on the previous year's report, rather than
originating or retrieving data for the first time.
4. Recordkeeping. Following completion of the appropriate report,
additional labor costs are incurred for record keeping, which would
allow a facility to use past information in making calculations in
subsequent years.
Table III lists the estimated average burden and cost for each of
the tasks in the first year of reporting. Table IV describes the
average burden and costs in subsequent years. Economies of scale for
facilities filing multiple reports have not been estimated. The time
estimates used by EPA are average values. As with any average, some
facilities will be above the average and others will be below it. EPA
recognizes that large, complex facilities may require more than the
average time to comply. However, there are many other facilities
subject to the rule that are not large or complex. These facilities
will often have a simpler compliance process. EPA believes that its
time estimates represent reasonable averages.
For Form R, the industry reporting burden for collecting this
information (including recordkeeping) is estimated to average 74 hours
per report in the first year, at a cost of $4,587. In subsequent years,
the burden is estimated to average 52.1 hours per report at a cost of
$3,023. For a Toxic Chemical Release Inventory Certification Statement,
the burden is estimated to average 49.4 hours per report in the first
year at a cost of $3,101. In subsequent years, the burden is estimated
to average 34.6 hours per report at a cost of $2,160.
These estimates include the time needed to review instruction;
search existing data sources; gather and maintain the data needed;
complete and review the collection of information; and transmit or
otherwise disclose the information. The actual burden to a specific
facility may deviate from this estimate depending on the complexity of
the facilitys operations and the profile of the releases at the
facility.
The proposed rule would result in an estimated 6,428 additional
respondents submitting an estimated total of an additional 33,463 Form
Rs and 4,251 Toxic Chemical Release Inventory Certification Statements.
This results in a total hour burden of 3.1 million hours in the first
year and 1.9 million hours in subsequent years, at a total cost of $191
million in the first year and $119 million in subsequent years.
Burden means the total time, effort, or financial resources
expended by persons
[[Page 33615]]
to generate, maintain, retain, or disclose or provide information to or
for a Federal agency. This includes the time needed to review
instructions; develop, acquire, install, and utilize technology and
systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
Comments are requested on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the EPA at
the address provided above, with a copy to the Office of Information
and Regulatory Affairs, Office of Management and Budget, 725 17th St.,
N.W., Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''
Please remember to include the ICR number in any correspondence.
The collection of information and other requirements under section
313 of EPCRA and section 6607 of the PPA on the Form R are covered
under OMB approval number 2070-0093, which was issued on May 14, 1992.
Although this approval normally would have expired on November 30,
1992, it remains in effect until further Agency action pursuant to the
1993 Department of Veterans Affairs and Housing and Urban Development
and Independent Agencies Appropriations Act, Pub. L. 102-389, signed
October 6, 1992, which states that:
Notwithstanding the Paperwork Reduction Act of 1980 or any
requirements thereunder the Environmental Protection Agency Toxic
Chemical Release Inventory TRI Form R and instructions, revised 1991
version issued May 19, 1992, and related requirements (OMB No. 2070-
0093), shall be effective for reporting under section 6607 of the
Pollution Prevention Act of 1990 (Public Law 101-508) and section
313 of the Superfund Amendments and Reauthorization Act of 1990
(Public Law 99-499) until such time as revisions are promulgated
pursuant to law.
Facilities subject to this proposed rule also would be eligible to
submit a certification statement under the Toxic Release Inventory
Certification Statement. The Office of Management and Budget (OMB) has
approved the information collection requirements for the Toxic Release
Inventory Certification Statement under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control
number 2070-0143 (EPA ICR No. 1704).
These ICR approvals for currently reporting facilities remains in
effect until further Agency action.
D. Unfunded Mandates Reform Act and Executive Order 12875 Unfunded
Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments and the private sector. Under section 202 of UMRA, EPA must
generally prepare a written statement, including a cost-benefit
analysis for proposed and final rules with ``Federal mandates'' that
may result in expenditures by state, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
1 year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of UMRA generally requires EPA to identify and
consider a reasonable number of regulatory alternatives and adopt the
least costly, most cost-effective, or least burdensome alternatives
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective, or least burdensome alternative if the
Administrator publishes with the final rule an explanation of why the
alternative was not adopted. Before EPA establishes any regulatory
requirements that significantly or uniquely affect small governments,
including tribal governments, it must have developed under section 203
of UMRA, a small government agency plan. The plan must provide for
notifying potentially affected small governments, enabling officials of
affected small governments to have meaningful and timely input into the
development of the regulatory proposals with significant Federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with the regulatory requirements.
EPA has determined that this proposed rule is likely to contain a
Federal mandate that may result in expenditures of $100 million or more
for the private sector in any 1 year. EPA has prepared, under section
202 of the UMRA, a written statement, entitled ``Unfunded Mandates
Reform Act Statement on Federal Mandate Imposed by the Expansion of the
Toxic Release Inventory to Include Certain Non-Manufacturing
Industries.'' This document is available in the docket for this
rulemaking.
EPA is proposing this rule under sections 313 and 328 of EPCRA. EPA
estimates that private expenditures will exceed the threshold of $100
million in all years and that public expenditures will fall well below
the threshold for all years. EPA prepared an economic impact analysis
of the proposal, entitled Economic Analysis of the Proposed Rule to Add
Certain Industries to EPCRA Section 313, in which it considered several
regulatory alternatives (Ref. 20). EPA estimates that the costs of the
proposed rule will be $190 million in the first year and $118 million
in subsequent years. Of this, only $8 million in the first year and $5
million in subsequent years is expected to consist of costs to state,
local, or tribal governments. These cost estimates are based on the
anticipated reporting from publicly-owned electric utilities that are
coal- or oil-fired.
EPA estimates that the proposed regulation is highly unlikely to
have any measurable effect on the national economy, nor is it expected
to have disproportionate budgetary effects on a particular segment of
the private sector. EPA has not identified any sources that are
available from either EPA or other Federal Agencies to pay for State,
local, or tribal government costs, nor has it identified any EPA or
Federal resources specifically intended to carry out the
intergovernmental mandate.
Section 203 of UMRA provides that before establishing any
regulatory requirements that might significantly or uniquely affect
small governments, the agency shall develop a small government agency
plan. Because costs to the public sector are estimated to be
considerably below $100 million in any year, EPA finds no significant
impacts on small governments; nor is the proposed rule expected to
uniquely affect them.
Because this proposed rule does not contain a significant Federal
intergovernmental mandate, the UMRA section 204 requirements are not
triggered. The Agency, however, has sought interaction with state and
local officials of the type contemplated by
[[Page 33616]]
section 204 of UMRA and Executive Order 12875, ``Enhancing the
Intergovernmental Partnership.'' EPA has conducted outreach to
organizations representing these entities, and will continue a
constructive dialogue to ensure that pertinent issues are addressed.
E. Executive Order 12898
Pursuant to Executive Order 12898 (59 FR 7629, February 11, 1994),
entitled Federal Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations, the Agency has considered
environmental justice-related issues with regard to the potential
impacts of this proposed action on the environmental and health
conditions in low-income populations and minority populations.
In keeping with Executive Order 12898, as part of its analysis in
support of this proposed expansion of the TRI program to include new
industry groups, EPA has examined the distribution patterns of public
information on toxic chemical releases and transfers (which may have
substantial environmental impacts on surrounding communities). The
Agency believes that the Environmental Justice Analysis described below
is an important part of its overall environmental justice strategy, and
is in keeping with the spirit of the Executive Order. The Agency
interprets its responsibilities under the Order as they would apply to
this rulemaking activity to include exploring the distribution of
information benefits, in demographic terms, of the expansion.
To assess the implications of the rulemaking on environmental
justice, the Agency examined demographic characteristics for
populations residing in jurisdictions (counties or zip codes) where
facilities in the proposed industries are located. The analysis is
included as part of the economic analysis for the proposal (Ref. 20).
The analysis found that households with annual incomes less than
$15,000 and minority and urban populations are slightly over-
represented in communities containing facilities in the proposed
industry groups. The TRI expansion would also result in persons in a
large number of communities receiving TRI information about facilities
in their vicinity for the first time. By adding the proposed industry
groups, EPA will be creating informational benefits for certain
subpopulations that previously did not receive TRI information on
releases and transfers of toxic chemicals in their communities.
Table 1.--Summary of Regulatory Alternatives
----------------------------------------------------------------------------------------------------------------
Annual Industry Costs ($ million per year)
---------------------------------------------------------------------------
Regulatory Alternative Number of
Reporting Number of Reports First Year Subsequent Year
Facilities
----------------------------------------------------------------------------------------------------------------
I.A Comprehensive industries,
current otherwise use
interpretation..................... 49,174 110,217 793 349
I.B Comprehensive industries,
revised otherwise use
interpretation..................... 52,378 249,063 1,437 794
II.A Limited industries, current
otherwise use interpretation....... 8,354 37,077 176 116
II.B Limited industries, revised
otherwise use interpretation....... 8,385 43,637 206 137
III.A Proposed industries, current
otherwise use interpretation....... 6,397 31,154 149 98
III.B Proposed industries, revised
otherwise use interpretation....... 6,428 37,714 191 119
IV.A Comprehensive industries,
current otherwise use
interpretation, limited mining
reporting.......................... 49,127 109,695 791 347
IV.B Comprehensive industries,
current otherwise use
interpretation, expanded mining
reporting.......................... 50,602 120,905 846 383
V. Comprehensive industries, current
otherwise use interpretation,
expanded electric utility reporting 49,174 116,833 821 368
----------------------------------------------------------------------------------------------------------------
Table 2.--Summary of Reporting for Proposed Industries
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Industry Costs ($ million per year)
Number of Number of Facilities in Annual Number of -------------------------------------
Industry Facilities in Reporting Industry Reports
Industry Facilities Reporting First Year Subsequent Years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Metal Mining.......................... 1,060 328 31% 1,176 6.5 3.8
Coal Mining........................... 3,312 321 10% 642 5.4 2.5
Electric Utilities.................... 3,213 974 30% 5,567 26.6 16.6
Hazardous Waste Treatment Disposal
Facilities........................... 164 164 100% 6,711 31.2 21.5
Chemicals & Allied Products Wholesale. 9,014 782 9% 11,139 51.5 33.5
Petroleum Bulk Stations & Terminals
Wholesale............................ 10,292 3,842 37% 12,394 69.3 40.7
Solvent Recovery Services............. 40 17 43% 85 0.4 0.3
Total................................. 28,021 6,428 23% 37,714 191.1 118.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 33617]]
Table 3.--First Year Burden and Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Time (hours)
Activity --------------------------------------------------------------------------- Average Cost
Managerial Technical Clerical
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rule Familiarization........................ 12.0 22.5 0.0 $2,243 per facility
Compliance Determination.................... 4.0 12.0 0.0 $1,010 per facility
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form R Calculations and Completion.......... 20.9 45.2 2.9 $4,330 per report
Certification Calculations and Completion... 16.5 27.7 2.2 $2,947 per report
Recordkeeping (Form R)...................... 0.0 4.0 1.0 $257 per report
Recordkeeping (Certification)............... 0.0 2.4 0.6 $154 per report
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 33618]]
Table 4.--Subsequent Year Burden and Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average Time (hours)
Activity --------------------------------------------------------------------------- Average Cost
Managerial Technical Clerical
--------------------------------------------------------------------------------------------------------------------------------------------------------
Compliance Determination............................ 1.0 3.0 0.0 $252 per facility
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form R Calculations and Completion.................. 14.3 30.8 2.0 $2,946 per report
Certification Calculations and Completion........... 11.2 18.9 1.5 $2,006 per report
Recordkeeping (Form R).............................. 0.0 4.0 1.0 $257 per report
Recordkeeping (Certification)....................... 0.0 2.4 0.6 $154 per report
--------------------------------------------------------------------------------------------------------------------------------------------------------
List of Subjects in 40 CFR Part 372
Environmental protection, Community right-to-know, Reporting and
recordkeeping requirements, Toxic Chemicals.
Dated: June 21, 1996.
Carol M. Browner,
Administrator.
Therefore, it is proposed that 40 CFR part 372 be amended to read
as follows:
PART 372--[AMENDED]
1. The authority citation for part 372 would continue to read as
follows:
Authority: 42 U.S.C. 11013 and 11028.
2. In Sec. 372.3, by alphabetically adding the following
definitions to read as follows:
Sec. 372.3 Definitions.
* * * * *
Extraction means the physical removal or exposure of ore, coal,
minerals, waste rock, or overburden prior to beneficiation, and
encompasses all extraction-related activities prior to beneficiation.
Extraction does not include beneficiation, coal preparation, mineral
processing, in situ leaching or any further activities.
* * * * *
Treatment for destruction means the destruction of the toxic
chemical such that the substance is no longer a toxic chemical subject
to reporting under EPCRA section 313.
3. In Sec. 372.22, by revising paragraph (b) to read as follows:
Sec. 372.22 Covered facilities for toxic chemical release reporting.
* * * * *
(a) * * *
(b) The facility is in Standard Industrial Classification major
group codes 10 (except 1081), 12 (except 1241), and 20 through 39 and
industry codes 4911 (limited to facilities that combust coal and/or
oil), 4931 (limited to facilities that combust coal and/or oil), 4939
(limited to facilities that combust coal and/or oil), 4953 (limited to
facilities regulated under the Resource Conservation and Recovery Act,
subtitle C, 42 U.S.C. section 6921 et seq.), 5169, 5171, and 7389
(limited to facilities primarily engaged in solvents recovery services
on a contract fee basis) (as in effect on January 1, 1987) by virtue of
the fact that it meets one of the following criteria:
(1) The facility is an establishment with primary SIC major group
codes 10 (except 1081), 12 (except 1241), and 20 through 39 and
industry codes 4911 (limited to facilities that combust coal and/or
oil), 4931 (limited to facilities that combust coal and/or oil), 4939
(limited to facilities that combust coal and/or oil), 4953 (limited to
facilities regulated under the Resource Conservation and Recovery Act,
subtitle C, 42 U.S.C. section 6921 et seq.), 5169, 5171, and 7389
(limited to facilities primarily engaged in solvents recovery services
on a contract fee basis).
(2) The facility is a multi-establishment complex where all
establishments have major codes 10 (except 1081), 12 (except 1241), and
20 through 39 and industry codes 4911 (limited to facilities that
combust coal and/or oil), 4931 (limited to facilities that combust coal
and/or oil), 4939 (limited to facilities that combust coal and/or oil),
4953 (limited to facilities regulated under the Resource Conservation
and Recovery Act, subtitle C, 42 U.S.C. section 6921 et seq.), 5169,
5171, and 7389 (limited to facilities primarily engaged in solvent
recovery services on a contract fee basis).
(3) The facility is a multi-establishment complex in which one of
the following is true:
(i) The sum of the value of products shipped and/or produced from
those establishments that have a primary major code 10 (except 1081),
12 (except 1241), and 20 through 39 and industry codes 4911 (limited to
facilities that combust coal and/or oil), 4931 (limited to facilities
that combust coal and/or oil), 4939 (limited to facilities that combust
coal and/or oil), 4953 (limited to facilities regulated under the
Resource Conservation and Recovery Act, subtitle C, 42 U.S.C. section
6921 et seq.), 5169, 5171, and 7389 (limited to facilities primarily
engaged in solvent recovery services on a contract fee basis) is
greater than 50 percent of the total value of all products shipped and/
or produced from all establishments at the facility.
(ii) One establishment having primary major codes 10 (except 1081),
12 (except 1241), and 20 through 39 and industry codes 4911 (limited to
facilities that combust coal and/or oil), 4931 (limited to facilities
that combust coal and/or oil), 4939 (limited to facilities that combust
coal and/or oil), 4953 (limited to facilities regulated under the
Resource Conservation and Recovery Act, subtitle C, 42 U.S.C. section
6921 et seq.), 5169, 5171, and 7389 (limited to facilities primarily
engaged in solvent recovery services on a contract fee basis)
contributes more in terms of value of products shipped and/or produced
than any other establishment within the facility.
* * * * *
4. In Sec. 372.38, by adding paragraph (g) to read as follows:
Sec. 372.38 Exemptions
* * * * *
(g) Coal extraction activities. If a toxic chemical is
manufactured, processed, or otherwise used in extraction in SIC code
12, a person is not required to consider the quantity so manufactured,
processed, or otherwise used when determining whether an applicable
threshold has been met under Sec. 372.25 or 372.27, or determining the
amounts to be reported under Sec. 372.30.
[FR Doc. 96-16392 Filed 6-26-96; 8:45 am]
BILLING CODE 6560-50-F
Complete official Federal Register PDF
FR Doc. 96-16384 Excess Flow ValveCustomer Notification
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33476-33480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16384]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
49 CFR Part 192
[Docket PS-118A; Notice 1]
RIN 2137-AC55
Excess Flow Valve--Customer Notification
AGENCY: Research and Special Programs Administration (RSPA), DOT.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This notice proposes to require operators of natural gas
distribution systems to notify in writing their customers of the
availability of excess flow valves (EFVs) meeting DOT-prescribed
performance standards, the safety benefits of these valves, and the
costs of installation. If a customer requests installation, the notice
proposes that an operator will be required to install the EFV if the
customer pays all costs of installation. EFVs restrict the flow of gas
by closing automatically when a service line is severed, thus
mitigating the consequences of service line failures. This proposed
regulation would enhance public awareness of the safety benefits that
can be derived from installation of EFVs.
DATES: Comments on this notice of proposed rulemaking (NPRM) must be
received on or before August 26, 1996. Late-filed comments will be
considered to the extent practicable. Interested persons should submit
as part of their written comments all the material that is considered
relevant to any statement or argument made.
ADDRESSES: Written comments must be submitted in duplicate and mailed
or hand-delivered to the Dockets Unit, room 8421, U.S. Department of
Transportation, Research and Special Programs Administration, 400
Seventh Street, SW., Washington, DC 20590. Identify the docket and
notice numbers stated in the heading of this notice. All comments and
materials cited in this document will be available for inspection and
copying in room 8421 between 8:30 a.m. and 4:30 p.m. each business day.
Non-federal employee visitors are admitted to the DOT headquarters
building through the southwest entrance at Seventh and E Streets.
FOR FURTHER INFORMATION CONTACT: Mike M. Israni, (202) 366-4571,
regarding the content of this document, or the Dockets Unit (202) 366-
4453 for copies of this NPRM or other material in the docket.
SUPPLEMENTARY INFORMATION:
Background
In the process of routine excavation activities, excavators often
sever gas service lines causing loss of life, injury, or property
damage by fire or explosion. EFVs restrict the flow of gas by closing
automatically when a line is severed, thus mitigating the consequences
of service line failures. Despite efforts, such as damage prevention
programs, to reduce the frequency of excavation-related service line
incidents on natural gas service lines, such incidents persist and
continue to result in death, injury, fire, or explosion. Because damage
prevention measures are not foolproof, RSPA has sought to determine an
appropriate means to mitigate the consequences of these incidents. The
National Transportation Safety Board (NTSB) and others have recommended
the use of EFVs as a means to mitigate the consequences of such
incidents, thus saving lives and lessening the extent of property
damage.
By informing customers of the availability of EFVs for installation
at a cost and the resultant safety benefits, customers can decide for
themselves if they want the operator to install an EFV on their service
line. Notification giving information on EFVs may encourage the
increased use of EFVs and, by encouraging such use, may lead to a
reduction in fatalities, injuries, and property damage that can result
from excavation-related incidents on gas service lines.
Statutory Requirement
Federal law requires DOT to prescribe regulations requiring
operators to notify customers in writing about EFV availability, the
safety benefits derived from installation, and costs associated with
installation. The regulations are to provide that, except where
installation is already required, the operator will install an EFV that
meets prescribed performance criteria at the customer's request, if the
customer pays all costs associated with installation. (49 U.S.C.
60110).
[[Page 33477]]
Before DOT prescribes notification regulations, the statute
requires DOT to issue regulations prescribing the circumstances under
which operators of natural gas distribution systems must install EFVs,
unless DOT determines that there are no circumstances under which EFVs
should be installed.
RSPA published an NRPM (Notice 2; 58 FR 21524; April 21, 1993),
titled ``Excess Flow Valve Installation on Service Lines,'' proposing
to require installation of EFVs on single-residence gas service lines.
During the rulemaking process RSPA reviewed technical information,
sought advice from state safety representatives, and analyzed available
operational data. RSPA determined, primarily for cost reasons, that
there were no circumstances under which RSPA should require EFV
installation. As required by the statute, RSPA reported this
determination to Congress on April 4, 1995. A copy of this report is
available in the docket. As further required by 49 U.S.C. 60110, RSPA
developed performance standards for EFVs to ensure that an EFV
installed in a single-residence gas service line operates reliably and
safely. These standards were published as a final rule 61 FR 31449;
June 20, 1996.
AGA Petition
On July 14, 1995, the American Gas Association (AGA) submitted a
petition for a rulemaking on EFV customer notification requirements. In
this petition, AGA urged RSPA to develop customer notification
regulations that minimize any regulatory burden on gas operators. AGA
said that the congressional committee responsible for the original
notification mandate, as well as proposed changes to that mandate in
current pipeline re-authorization legislation, intended that an
operator be required to notify a customer about EFVs if the operator
was installing a new service line or replacing a part of a service
line, the line would accommodate an EFV, and the operating conditions
on the line were the same as those prescribed in the performance
standards. AGA further said that Congress intended an operator be
required to install an EFV if the customer agreed to pay all the costs
associated with the installation, maintenance, and operation of the
EFV. AGA's other main concerns about customer notification are listed
as follows:
(a) Operators are concerned about potential liability should an EFV
fail to perform to the satisfaction of the customer and the customer
claims that the gas company overstated the merits of the product.
(b) Because operators may have difficulty determining whom to
notify if the occupant is not the owner, the regulation should clearly
identify the customer who is to receive notification.
(c) The notification requirements should acknowledge and
accommodate that state or local restrictions may prevent or restrict
the gas utility's ability to accept a customer's payment for anything
except gas service.
(d) Notification should be required only on services where the
conditions are identical to those in the EFV performance standards.
(e) Exemption should be allowed from the notification requirements
where compliance would be infeasible, impractical or unreasonable.
AGA's petition is on file in the docket and was taken into
consideration during development of this notice of proposed rulemaking.
Pre-NPRM Meetings
On August 2 and September 6, 1995, RSPA met with representatives of
AGA, the American Public Gas Association (APGA), NTSB, and the Gas
Safety Action Council (GASAC). These meetings were early consultations
for RSPA to gather information before proposing a notification rule.
APGA generally had the same concerns as AGA. AGA and APGA again
recommended that the costs associated with installation include EFV
maintenance and replacement costs, as well as the initial installation
cost. As support, they pointed to the proposed change in the pipeline
re-authorization legislation allowing for such costs. AGA and APGA also
recommended that RSPA limit required notification to only new and
replaced service line customers to minimize the burden on operators.
They explained that because an operator could have difficulty in
determining if operating conditions on existing service lines are the
same as those found in the prescribed performance standards an operator
should be allowed to determine whether to expand notification to all
its existing residential customers. NTSB and GASAC, on the other hand,
suggested that a notification rulemaking include all residential
natural gas customers, as well as commercial enterprises. They pointed
out that 49 U.S.C. 60110 did not limit notification to single-residence
customers.
NTSB also recommended that a notification rule should require
operators to include brochures from two or three EFV manufacturers,
along with a consumer group's telephone number, to help customers make
an informed decision on installation.
Proposed Rule
RSPA proposes to amend part 192 by adding Sec. 192.383 prescribing
requirements for excess flow valve customer notification.
Scope
The statute requires notification of customers with service lines
in which EFVs that meet prescribed performance criteria can be
installed. Because the final rule setting EFV performance standards
covers only EFVs installed on single-residence service lines operating
continuously throughout the year at a pressure not less than 10 psig,
RSPA proposes to limit the scope of customer notification to those
customers. RSPA developed the performance standards from the comments
and recommendations received during the rulemaking process on proposed
EFV installation on single-residence gas service lines.
Of those single-residence services for which performance standards
were prescribed, RSPA proposes to require operators to notify in
writing their new and replaced service line customers. This proposal is
based on RSPA's belief that it would not be practical for operators to
send notifications to all single-residence customers because
determining whether EFVs can be installed on existing lines presents
difficulties (such as lack of relevant records and historical data) not
encountered on new and replaced lines. Furthermore, RSPA's preliminary
economic evaluation showed that requiring notification to all single-
residence customers would result in substantially higher costs with
marginal safety benefits due to the increased time an operator would
have to spend in responding to inquiries from customers and determining
operating conditions on existing lines. Because of the increased
installation costs to retrofit an existing line, it would be unlikely
that many existing customers would choose to pay the costs of
installation. Nonetheless, RSPA encourages operators to consider
expanding notification to all single-residence customers.
RSPA may consider extending the scope of notification to hospitals,
schools, commercial enterprises, and apartment buildings after
publication of EFV standards by the American Society of Testing and
Materials (ASTM) F17.40 committee and the American National Standards
Institute (ANSI)/Gas Piping Technology Committee (GPTC) Z380.
Definition of ``Replaced'' Service Line
RSPA proposes to define a ``replaced'' service line as a natural
gas service line
[[Page 33478]]
undergoing a repair in which a section of pipe is replaced between the
gas main and the meter set assembly.
Definition of ``Service Line Customer''
RSPA recognizes that determining whom an operator should notify may
be difficult because the occupant of the residence where the EFV may be
installed is not always the owner. RSPA is proposing to define the
service line customer an operator should notify as the person who pays
the gas bill, or where service has not yet been established, the owner
of the property. Under this proposed definition, the person who pays
the gas bill may be the tenant, the owner, or a third party. In cases
where service has not yet been established, such as a new subdivision
or cluster of homes, the property owner at the time the service is
installed may be the home builder.
Information in the Notification
RSPA is proposing that the notification contain the minimum amount
of information required by the statute. Under the proposal, the
operator can decide how to word that information as long as sufficient
information is given to provide the customer a basis to decide whether
to pay for EFV installation and the information is written in language
easily comprehended by the average customer. This flexibility should
address operators' concerns about potential liability problems.
--Meets DOT Performance Standards
An explanation that an excess flow valve meeting minimum DOT-
prescribed performance standards is available for the operator to
install on the service line if the customer pays the cost of
installation. The explanation should make clear to the customer that
EFV installation is not mandatory, but that if the customer requests
installation and pays all costs associated with installation, the
operator will install an EFV.
--Safety Benefits
An explanation of the potential safety benefits of installing an
EFV, to include that an EFV is designed to shut off the flow of natural
gas automatically when the service line is ruptured. The rule proposes
that as long as the operator describes the benefits to be derived from
installation, the operator may choose how best to describe those
benefits.
--Cost associated with installation
An explanation that if the customer requests the operator to
install an EFV, the customer bears the costs associated with
installation and what those costs are. AGA suggested in its petition
that costs ``associated'' with installation should include initial
installation, maintenance, and replacement costs of the EFV. Although
such costs are allowed in proposed re-authorization legislation, RSPA
is following the language in 49 U.S.C. 60110 that limits costs to costs
associated with installation. RSPA believes the reason for the customer
notification requirement was to allow customers to have a reasonably
available extra safety protection. Therefore, to assure costs are not
prohibitive to customers desiring EFV installation, RSPA is proposing
that an operator be limited in recoupment of its costs of installation,
specifically, to direct costs (parts and labor) of installation. Thus,
excavation costs for new and replaced services are not to be included
in the direct cost of EFV installation.
Supplementary Material
Additional information, such as EFV manufacturers' brochures and a
consumer group's telephone number, may help customers in deciding
whether to have an operator install an EFV. However, RSPA believes
requiring such information to be included would burden operators with
trying to include every manufacturer's brochure and every applicable
consumer group's telephone number, or would leave operators open to
criticism from those whose information was not included. Nonetheless,
RSPA encourages operators to include additional information, such as
one or more EFV manufacturer's brochures or a consumer group's
telephone number, if in the operator's judgment the information would
aid the customer's decision making.
Time and Frequency of Notification
RSPA proposes that an operator notify each applicable service line
customer the later of 1 year after date of publication of a final rule
in the Federal Register or at least 30 days before the operator
installs a new service line or replaces the service line. One year
should be adequate time for operators to learn which customers to
notify, to draft notices, and to instruct personnel to handle
inquiries.
Exemptions
In RSPA's judgment the regulatory waiver process now in place
should alleviate concern about an operator's recourse if a jurisdiction
(state or local) prevents or restricts the gas utility from accepting a
customer's payment for anything other than gas service. To RSPA's
knowledge, when a customer voluntarily asks for extra safety
protection, a state or local jurisdiction may not prevent a gas
operator from charging that customer for providing that extra service.
However, if an operator is so prevented, it may apply for a waiver from
the regulation. In any case, because we lack information on how
prevalent this situation is, we seek comment from operators, state
pipeline safety agencies, their representative associations and others
on this issue. We also seek comment on whether the waiver process in
such a situation would be too burdensome. Similarly, if an operator
believes that in a particular situation, compliance would be
infeasible, impractical or unreasonable, the operator may apply for a
regulatory waiver. Again, we seek comment on this issue.
RSPA is proposing that the notification requirements would not
apply in certain limited circumstances--
(1) To service lines in which the operator will install an excess
flow valve voluntarily or where installation is required by the state
or local jurisdiction;
(2) If excess flow valves meeting the RSPA-prescribed performance
standards are not available to the operator;
(3) Where an operator has prior experience with contaminants in the
gas stream that could interfere with operation of the EFV, cause loss
of service to a residence, or where the installation of an excess flow
valve would interfere with necessary operation or maintenance
activities, such as blowing liquids from the line.
The burden will be on the operator to demonstrate that any of these
circumstances prevent it from installing an EFV.
As previously noted, AGA's petition requested that a notification
rule allow an exemption in emergency situations. RSPA recognizes that
in some situations an operator may not be able to notify a customer
before replacing a service line. However, RSPA does not want such an
exemption to be used on all repairs. We seek comment and information on
how to implement and define this requested exclusion. What type of
emergency repairs do operators see that could justify such an
exemption? How can an exemption be limited so that it can not be used
for any repair needing replacement?
Record
To check compliance, RSPA and State inspectors will need to view a
copy of the notice operators send customers and proof that notices have
been sent to customers. Therefore, RSPA proposes that each operator
must make the
[[Page 33479]]
following records available for inspection by the Administrator or a
State agency participating under 49 U.S.C. 60105 or 60106:
(1) A copy of the notice currently in use; and
(2) Proof that notices have been sent to customers within the
previous three years.
Regulatory Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
This proposed rule is not considered a significant regulatory
action under section 3(f) of Executive Order 12866 and, therefore, was
not subject to review by the Office of Management and Budget. The
proposed rule is not considered significant under the regulatory
policies and procedures of the Department of Transportation (44 FR
11034; February 26, 1979).
A regulatory evaluation has been prepared based on the estimated
expense involved in developing and sending customer notification to new
and replaced single-residence service line customers.
RSPA estimates that large and moderate-sized gas operators will
develop their own customer notice. This should take approximately 40
hours at approximately $25 an hour or a one-time cost of $1,000 per
company (40 hours x $25 per hour = $1,000). RSPA estimates in its
regulatory evaluation (based on analysis done for an earlier rulemaking
on customer-owned service lines) that there are 106 large gas operators
and 145 moderate-sized gas operators. Therefore, the cost to the
industry to develop this proposed notice will be a one-time cost of
$251,000 (251 x $1,000). The cost of mailing this notice will be
$0.32 plus the estimated $0.1 copying cost for a one-page notice, for a
total cost of $0.42 per customer. If there are 900,000 new or renewed
customers annually, the cost of this notice should be $378,000 (900,000
*.42 mailing) per year. Assuming 10% of all notified customers were to
call operators for more information, that would result in 90,000 phone
calls. Each call lasting five minutes would amount to 7,500 hours
(90,000 * \5/60\ hrs) spent answering customer inquiries. If the
employee responsible for answering were paid $15 per hour the
additional cost of these conversations would be $112,500 (7,500 * $15)
per year. The total cost to the industry will be the one time cost of
developing the proposed notice, $251,000, and the additional cost per
year of mailing and handling inquiries, $490,500 ($112,500 + $378,000).
As discussed in the Regulatory Evaluation, the American Public Gas
Association (APGA), which represents municipal gas distribution
companies (the bulk of small operators), has agreed to assist small and
medium-sized operators in developing a generic EFV notification. RSPA
also believes that EFV manufacturers, as well as other large companies
and state gas associations, are likely to assist smaller gas operators
in their development of an EFV notification. With this help, RSPA
believes that small and medium-sized operators will choose to use a
generic notification rather than incur the cost of developing their own
notice. However, there will be the cost of notice reproduction,
mailing, and handling phone inquiries as described above. Therefore,
RSPA estimates that the cost of developing this notice as proposed will
be minimal for small and medium-sized operators.
RSPA considered requiring notification of the availability of EFVs
to all customers, not simply new and renewed customers. This
alternative was rejected as not being cost-beneficial for two reasons.
First, the cost of this rule would be an additional $5.36 million (53.6
million customers x $.10 per copy) just for developing the notice. In
addition, assuming 10% of all notified customers were to telephone
operators for more information, that would result in 5.36 million
additional phone calls. Each call lasting five minutes would amount to
446,666 hours (5.36 million* \5/60\ hours). If the employees
responsible for answering these inquiries were paid a salary of $15 per
hour, the additional cost of handling inquiries would be $6.7 million
(5.36M * \5/6\ * 15) to the industry. Therefore, the total cost of
notifying existing customers would be additional $12 million ($5.36M +
$6.7M). Second, there would be marginal safety benefit as few existing
service line customers would be likely to request EFV installation that
could cost more than $500 per service line, mainly due to the
excavation costs associated with such installation. Therefore, RSPA
concludes that requiring operators to notify all existing customers
would cost significantly more and would provide little additional
benefit to the public.
Benefits that are expected to result from this proposed rule are
the increased use of EFVs, which could potentially reduce the
fatalities, injuries and property damage that can result from
excavation-related incidents on gas service lines.
The regulatory evaluation is available for review in the docket.
Based on the findings of this evaluation this proposed rule should have
minimal economic impact on industry and the public.
Regulatory Flexibility Act
The Federal Government is required to determine the impact of its
regulations on small entities. Based on the regulatory evaluation, RSPA
has determined that the proposed rule will not have a significant
impact on a substantial number of small entities. Approximately 1,600
natural gas distribution operators will be affected by this rule. APGA,
the trade association of the majority of small operators, has indicated
it will assist operators in preparing a notification. Additionally, EFV
manufacturers have also offered to assist operators. It is also likely
that regional gas associations and large operators will assist smaller
operators in developing the appropriate notification. All these actions
will serve to minimize the costs to small operators because small
operators are apt to use a generic notice created by one of these
groups rather than incur the expenses of developing their own notice.
Paperwork Reduction Act
This NPRM contains proposed information collections that have been
submitted for review by the Office of Management and Budget (OMB) under
section 3507(d) of the Paperwork Reduction Act of 1995 (Pub. L. 104-
13).
Interested persons are invited to comment on the proposed
collection of information. Comments should address: (1) The necessity
and utility of the proposed information collection for the proper
performance of the agency's functions; (2) the accuracy of the agency's
burden estimates, including the validity of the methodology and
assumptions used; (3) ways to enhance the quality, utility, and clarity
of the information to be collected; and (4) ways to minimize the
information collection burden on the respondents, including the use of
automated, electronic, mechanical, or other technological collection
techniques.
Administration: Department of Transportation, Research and Special
Programs Administration;
Title: Excess Flow Valves: Customer Notification.
Need for Information: By notifying customers that they may have an
excess flow valve installed on their line at cost, some of the
consequences of service line failures (fatalities, injuries and
property damage) could be mitigated.
Summary: Operators must demonstrate that they have sent the EFV
notification to their customers.
Proposed Use of Information: The notification will advise customers
that
[[Page 33480]]
they may request an excess flow valve be installed on their service
line at their own expense. Also, by keeping proof that notification was
sent, RSPA will be able to ascertain that operators are complying with
this regulation.
Frequency: Occasionally, once for each new and renewed customer.
Number of Respondents: 1,590.
Estimate of Burden: 17,541 hours.
Respondents: Natural Gas Distribution Operators.
Estimated Total Annual Burden on Respondents: 11 hours (first year)
4.75 hours each subsequent year.
For further information contact: Mr. Marvin Fell, Office of
Pipeline Safety, Research and Special Programs Administration, 400
Seventh St., SW., Washington, DC 20590.
Comments on the proposed information collection requirements should
be submitted within 30 days of the publication of this notice to: the
Office of Management and Budget, Office of Information and Regulatory
affairs, New Executive Office Building, 725 17th St., NW., Washington,
DC 20503, Attn: Desk Officer RSPA. Persons submitting comments to OMB
are also requested to submit a copy of their comments to RSPA as
indicated above under ADDRESSES.
Persons are not required to respond to a collection of information
unless it displays a currently valid OMB control number.
Federalism
This proposed rule will not have substantial effects on states, on
the relationship between the federal government and the states, or on
the distribution of power and responsibilities among the various levels
of government. Therefore, in accordance with E.O. 12612 (52 FR 41685,
October 30, 1987), RSPA has determined that this proposed rule does not
have sufficient federalism implications to warrant preparation of a
Federalism Assessment.
List of Subjects in 49 CFR Part 192
Pipeline Safety, Reporting requirements.
The Rule
In consideration of the foregoing, RSPA proposes to amend 49 CFR
part 192 as follows:
PART 192--[AMENDED]
1. The authority citation for part 192 continues to read as
follows:
Authority: 49 U.S.C. 5103, 60102, 60104, 60110, and 60118; 49
CFR 1.53.
2. Part 192 would be amended by adding Sec. 192.383 to read as
follows:
Sec. 192.383 Excess flow valve Customer Notification.
(a) Prior to installing a new service line or replacing an existing
service line that operates continuously throughout the year at a
pressure not less than 10 psig and that serves a single residence, each
operator of a natural gas distribution system shall notify the service
line customer in writing that:
(1) An excess flow valve meeting performance standards prescribed
under Sec. 192.381 is available for installation by the operator if the
customer bears the costs associated with installation;
(2) Potential safety benefits may be derived from installing an
excess flow valve. Benefits are to include that an excess flow valve is
designed to shut off the flow of natural gas automatically when the
service line is ruptured.
(3) The costs the customer bears shall be the direct costs (parts
and labor) of installing or replacing the excess flow valve and what
those costs are.
(4) The notice shall provide explanation in sufficient detail, and
in language easily comprehended by the average customer, to provide the
basis upon which the customer can decide whether to pay for
installation.
(5) For the purpose of this section, a ``replaced'' service line
refers to a natural gas service line in which a section of pipe is
replaced between the gas main and the meter set assembly. A ``service
line customer'' means the person who pays the gas bill, or where
service has not yet been established, the owner of the property.
(b) The operator shall install an excess flow valve in accordance
with paragraph (a) of this section if the customer agrees to pay all
costs associated with installation.
(c) Each operator shall notify each customer not later than [insert
date 1 year after date of publication of a final rule] or at least 30
days before a new or replaced service line is installed, whichever is
later.
(d) Each operator must make the following records available for
inspection by the Administrator or a State agency participating under
49 U.S.C. 60105 or 60106:
(1) A copy of the notice currently in use; and
(2) Proof that notices have been sent to customers within the
previous 3 years.
(e) The notification requirements of paragraph (a) of this section
do not apply--
(1) To service lines in which the operator will install an excess
flow valve voluntarily or where installation is required by the state
or local jurisdiction;
(2) If excess flow valves meeting the RSPA prescribed performance
standards are not available to the operator;
(3) Where an operator has prior experience with contaminants in the
gas stream that could interfere with the EFV, cause loss of service to
a residence or where the installation of an excess flow valve would
interfere with necessary operation or maintenance activities, such as
blowing liquids from the line.
Issued in Washington, DC, on June 21, 1996.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 96-16384 Filed 6-26-96; 8:45 am]
BILLING CODE 4910-60-P
Complete official Federal Register PDF
FR Doc. 96-16378 Arbitrage Restrictions on Tax-Exempt Bonds
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33405-33407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16378]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
26 CFR Part 1
[FI-28-96]
RIN 1545-AU39
Arbitrage Restrictions on Tax-Exempt Bonds
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations on the arbitrage
restrictions applicable to tax-exempt bonds issued by state and local
governments. Changes to applicable law were made by the Tax Reform Act
of 1986. These proposed regulations affect issuers of tax-exempt bonds
and would provide guidance for complying with the arbitrage
regulations.
DATES: Written comments must be received by September 25, 1996.
Requests to speak (with outlines of oral comments) at a public hearing
scheduled for Thursday, October 24, 1996, at 10 a.m. must be received
by October 3, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (FI-28-96), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (FI-28-96), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. The public hearing will be held in the Commissioner's
Conference Room, Internal Revenue Building, 1111 Constitution Avenue,
NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Loretta J. Finger, (202) 622-3980; concerning submissions and the
hearing, Michael Slaughter, (202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information contained in this notice of proposed
rulemaking have been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507).
Comments on the collections of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Washington, DC 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, T:FP, Washington, DC 20224.
Comments on the collections of information should be received by August
26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collections of information are in proposed Sec. 1.148-5(d)(6)
(v), (vi), and (vii). This information is required by the IRS to verify
compliance with section 148. This information will be used to establish
a rebuttable presumption that a Treasury obligation is purchased at
fair market value. The likely respondents and/or recordkeepers are
state or local governments. Responses to this collection of information
are required to establish a rebuttable presumption that a Treasury
obligation is purchased at fair market value.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information
[[Page 33406]]
are confidential, as required by 25 U.S.C. 6103.
Estimated total annual reporting and recordkeeping burden: 2,400
hours.
The estimated annual burden per respondent/recordkeeper varies from
2 hours to 30 hours, depending on individual circumstances, with an
estimated average of 6 hours.
Estimated number of respondents/recordkeepers: 400.
Estimated annual frequency of responses: on occasion.
Background
This document contains proposed regulations amending the Income Tax
Regulations (26 CFR part 1) under section 148 of the Internal Revenue
Code to provide guidance on nonpurpose investments for purposes of
arbitrage yield restrictions under section 148.
Explanation of Provisions
A. Background of Proposed Regulations
Section 148 provides rules concerning the use of proceeds of state
and local bonds to acquire higher yielding investments. Section 148(a)
provides that, except as otherwise permitted by section 148, interest
on a state or local bond generally is tax-exempt only if the issuer
invests bond proceeds at a yield not exceeding the bond yield. Section
148(f) provides, in general, that interest on a state or local bond is
tax-exempt only if the issuer rebates to the United States certain
earnings from investing bond proceeds at a yield exceeding the bond
yield.
Section 1.148-6(c) provides that gross proceeds of an issue of
bonds are not allocated to a payment for a nonpurpose investment in an
amount greater than the fair market value of that investment on the
purchase date. For this purpose only, the fair market value of a
nonpurpose investment is adjusted to take into account qualified
administrative costs allocable to that investment.
Regulations relating to the arbitrage yield restriction rules are
in Secs. 1.148-0 through 1.148-11 and in Secs. 1.148-1T, 1.148-2T,
1.148-3T, 1.148-4T, 1.148-5T, 1.148-6T, 1.148-9T, 1.148-10T, and 1.148-
11T. The proposed regulations would clarify and revise certain
provisions of these regulations.
B. Bona Fide Solicitation
Section 1.148-5(d)(6)(iii) provides that the purchase price of a
guaranteed investment contract is treated as its fair market value on
the purchase date if the issuer makes a bona fide solicitation for a
guaranteed investment contract that meets the requirements of that
section. The proposed regulations would clarify that a solicitation for
a guaranteed investment contract is rebuttably presumed to be bona fide
if the following requirements are met: (i) If the issuer uses an agent
to conduct the bidding process, the agent does not bid to provide the
investment; (ii) all bidders have equal opportunity to bid so that, for
example, no bidder is given the opportunity to review other bids (a
last look) before bidding; and (iii) all bidders are reasonably
competitive providers of investments of the type purchased.
C. Rebuttable Presumption for Establishing Fair Market Value
Section 1.148-5(d)(6)(iii) provides a safe harbor for establishing
fair market value for guaranteed investment contracts. The definition
of guaranteed investment contract generally does not include the
purchase of investments for an escrow for an advance refunding
transaction.
The proposed regulations would provide a rebuttable presumption for
establishing fair market value for United States Treasury obligations
purchased other than directly from the United States Treasury. The
proposed regulations would apply the principles underlying the safe
harbor in the regulations for establishing fair market value for
guaranteed investment contracts.
D. Qualified Administrative Costs
Section 1.148-5(e)(2)(i) provides in general that, in determining
payments and receipts on nonpurpose investments, qualified
administrative costs are taken into account. Thus, qualified
administrative costs increase the payments for, or decrease the
receipts from, the investments.
The proposed regulations would provide a special rule to determine
qualified administrative costs for United States Treasury obligations
purchased other than directly from the United States Treasury.
Proposed Effective Dates
The regulations are proposed to apply to bonds sold on or after the
date 60 days after the adoption of final regulations. In addition,
these regulations are proposed to apply after that date to permit an
issuer to apply these regulations to bonds to which certain other
regulations under section 148 apply that were sold prior to that date.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for Thursday, Ocotber 24, 1996,
at 10 a.m., in the Commissioner's Conference Room, Internal Revenue
Building, 1111 Constitution Avenue, NW., Washington, DC. Because of
access restrictions, visitors will not be admitted beyond the Internal
Revenue Building lobby more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments by September 25, 1996 and submit an outline of
the topics to be discussed and the time to be devoted to each topic
(signed original and eight (8) copies) by October 3, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Loretta J. Finger,
Office of Assistant Chief Counsel (Financial Institutions and
Products). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
[[Page 33407]]
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.148-5 is amended by adding paragraphs (d)(6)(iv)
through (d)(6)(viii) and (e)(2)(iv) to read as follows:
Sec. 1.148-5 Yield and valuation of investments.
* * * * *
(d) * * *
(6) * * *
(iv) Rebuttable presumption for establishing that a solicitation
for a guaranteed investment contract is bona fide. For purposes of
paragraph (d)(6)(iii)(A) of this section, a solicitation for a
guaranteed investment contract is rebuttably presumed to be bona fide
if the other requirements of paragraph (d)(6)(iii) of this section and
the following requirements are satisfied:
(A) If the issuer uses an agent to conduct the bidding process, the
agent does not bid to provide the investment;
(B) All bidders have equal opportunity to bid so that, for example,
no bidder is given the opportunity to review other bids (a last look)
before bidding; and
(C) All bidders are reasonably competitive providers of investments
of the type purchased.
(v) Rebuttable presumption for establishing fair market value for
United States Treasury obligations purchased other than directly from
the United States Treasury. The purchase price of United States
Treasury obligations that are purchased other than directly from the
United States Treasury is rebuttably presumed to be the fair market
value on the purchase date if all of the following requirements are
satisfied:
(A) The issuer conducts in good faith a solicitation for the
purchase of Treasury obligations that meets the requirements of
paragraphs (d)(6)(iv)(A) through (C) of this section, and the issuer
receives at least three bona fide bids from providers that have no
material financial interest in the issue. For this purpose,
underwriters and financial advisors for an issue are considered to have
a material financial interest in the issue.
(B) The issuer purchases the highest-yielding Treasury obligations
for which a qualifying bid is made.
(C) The yield on the Treasury obligations purchased is not
significantly less than the yield then available from the provider on
reasonably comparable Treasury obligations offered to other persons for
purchase on terms comparable to those offered to the issuer from a
source of funds other than gross proceeds of tax-exempt bonds. If
closely comparable forward prices are not offered to other persons for
purchase from a source other than gross proceeds of tax-exempt bonds, a
reasonable basis for this comparison may be by reference to implied
forward prices for Treasury obligations based on standard financial
formulas. In general, a certificate provided by an agent conducting the
bidding process detailing this comparison establishes that this
comparability standard is met.
(D) In no event is the yield on any Treasury obligation purchased
less than the highest yield then available on a United States Treasury
security--State and Local Government Series from the United States
Department of the Treasury, Bureau of Public Debt, with the same
maturity.
(E) The terms of the agreement to purchase the Treasury obligations
are reasonable.
(F) The issuer retains the items enumerated in paragraphs (d)(vi)
and (vii) of this section with the bond documents.
(vi) Copies. The items described in this paragraph (d)(vi) are a
copy of each of the following--
(A) The purchase agreement or confirmation and a statement
detailing any oral and other terms of the agreement;
(B) The receipt or other record of the amount actually paid by the
issuer for the Treasury obligations, including a statement setting out
the amount of any brokerage commission, broker fee, or bidding fee paid
to or by the seller of the Treasury obligations; and
(C) Each bid that is received with respect to the solicitation of
the Treasury obligations (clearly stamped to show date and time when
the bid was received) and a description of the bidding procedure used.
(vii) Statement. The item described in this paragraph (d)(vii) is a
statement from the issuer, dated as of the issue date of the bonds,
certifying, under penalties of perjury, that--
(A) If the issuer used an agent to conduct the bidding process, the
agent did not bid to provide the investment;
(B) All bidders had equal opportunity to bid so that, for example,
no bidder had an opportunity to review other bids before bidding;
(C) All bidders are reasonably competitive sellers of Treasury
obligations; and
(D) The issuer received at least three bona fide bids from
providers that have no material financial interest in the issue.
(viii) For purposes of paragraphs (d)(6) (v) through (vii) of this
section, the term issuer means only the entity that actually issues the
bonds and not a conduit borrower of the issuer.
(e) * * *
(2) * * *
(iv) Special rule for United States Treasury obligations purchased
other than directly from the United States Treasury. For Treasury
obligations purchased other than directly from the United States
Treasury, a fee paid to a bidding agent is a qualified administrative
cost only if the following requirements are satisfied:
(A) The fee must be reasonable. In general, a fee must be
separately stated in order for the issuer to have a basis for
determining that a fee is reasonable. The fee is presumed to be
reasonable if it does not exceed .02 percent of the amount invested in
Treasury obligations.
(B) The fee must be comparable to a fee that would be charged for a
reasonably comparable investment of Treasury obligations if acquired
with a source of funds other than gross proceeds of tax-exempt bonds.
This comparability standard must be applied even if no identical
investments are customarily acquired with a source of funds other than
gross proceeds of tax-exempt bonds. In general, reference must be made
to the bidding fees paid by investors that are not issuers of tax-
exempt bonds in those transactions that are most closely comparable to
the purchase of investments by the issuer of tax-exempt bonds. For
example, reference to the bidding fees generally paid for the purchase
of forward contracts for Treasury obligations is ordinarily a
reasonable method of determining whether bidding fees are reasonable.
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-16378 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-U
Complete official Federal Register PDF
FR Doc. 96-16377 Extensions of Time To Make Elections
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33407-33409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16377]
-----------------------------------------------------------------------
[[Page 33408]]
DEPARTMENT OF THE TREASURY
26 CFR Part 301
[IA-29-96]
RIN 1545-AU42
Extensions of Time To Make Elections
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking by cross-reference to temporary
regulations and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations relating to
extensions of time for making certain elections under the Internal
Revenue Code (Code). The regulations provide the standards that the
Commissioner will use to grant taxpayers extensions of time for making
these elections. The text of those temporary regulations also serves as
the text of these proposed regulations. This document also provides
notice of a public hearing on these proposed regulations.
DATES: Written comments must be received by September 25, 1996.
Outlines of oral comments to be presented at the public hearing
scheduled for Wednesday, October 30, 1996, at 10 a.m. must be received
by October 9, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (IA-29-96), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be delivered between the
hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (IA-29-96), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW,
Washington, DC. The public hearing will be held in the IRS Classroom
(room 2617), Internal Revenue Building, 1111 Constitution Avenue NW,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Robert A.
Testoff of the Office of Assistant Chief Counsel (Income Tax &
Accounting) at (202) 622-4960; concerning submissions and the hearing,
Christina Vasquez of the Regulations Unit, (202) 622-7190 (not toll-
free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
(OMB) for review in accordance with the Paperwork Reduction Act of 1995
(44 U.S.C. 3507).
Comments on the collection of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Washington, DC 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, T:FP, Washington, DC 20224.
Comments on the collection of information should be received by August
26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collection of information is in Secs. 301.9100-2T and 301.9100-
3T. This information is required for a taxpayer to obtain an extension
of time to make an election. This information will be used by the IRS
to determine whether to grant an extension of time to make an election.
The likely respondents are businesses or other for-profit institutions,
small businesses or organizations, nonprofit institutions, individuals
or households, and farms.
Books or records relating to the collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 5,000 hours.
Estimated annual burden per respondent: 10 hours.
Estimated number of respondents: 500.
Estimated annual frequency of responses: Occasional.
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend 26 CFR part 301. The temporary
regulations contain rules relating to extensions of time for making
certain elections.
The text of those temporary regulations also serves as the text of
these proposed regulations. The preamble to the temporary regulations
explains the temporary regulations.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It has also been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small businesses.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for Wednesday, October 30,
1996, at 10 a.m. in the IRS Classroom (room 2617), Internal Revenue
Building, 1111 Constitution Avenue NW, Washington, DC. Because of
access restrictions, visitors will not be admitted beyond the building
lobby more than 15 minutes before the hearing starts.
The rules of Sec. 601.601(a)(3) apply to the hearing.
Persons that have submitted written comments by September 25, 1996
and want to present oral comments at the hearing must submit, by
October 9, 1996, an outline of the topics to be discussed and the time
to be devoted to each topic (signed original and eight (8) copies). A
period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal author of the temporary regulations is Robert A.
Testoff of the Office of Assistant Chief Counsel (Income Tax and
Accounting). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
PART 301--PROCEDURE AND ADMINISTRATION
Paragraph 1. The authority citation for part 301 is amended by
removing the entries for Secs. 301.9100-1T through
[[Page 33409]]
301.9100-3T and adding entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 301.9100-1 also issued under 26 U.S.C. 6081;
Section 301.9100-2 also issued under 26 U.S.C. 6081;
Section 301.9100-3 also issued under 26 U.S.C. 6081; * * *
Par. 2. Sections 301.9100-1 and 301.9100-1T through 301.9100-3T are
removed.
Par. 3. Sections 301.9100-1 through 301.9100-3 are added to read as
follows:
Sec. 301.9100-1 Extensions of time to make elections.
Sec. 301.9100-2 Automatic extensions.
Sec. 301.9100-3 Other extensions.
[The text of these above proposed sections are the same as the text
of Secs. 301.9100-1T through 301.9100-3T published elsewhere in this
issue of the Federal Register.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-16377 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-U
Complete official Federal Register PDF
FR Doc. 96-16350 Amortizable Bond Premium
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33396-33405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16350]
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DEPARTMENT OF THE TREASURY
26 CFR Part 1
[FI-48-95]
RIN 1545-AU09
Amortizable Bond Premium
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations relating to the
federal income tax treatment of bond premium and bond issuance premium.
The proposed regulations reflect changes to the law made by the Tax
Reform Act of 1986 and the Technical and Miscellaneous Revenue Act of
1988. The proposed regulations in this document would provide needed
guidance to holders and issuers of debt instruments. This document also
provides a notice of a public hearing on the proposed regulations.
DATES: Written comments must be received by September 25, 1996.
Requests to appear and outlines of topics to be discussed at the public
hearing scheduled for October 23, 1996, at 10 a.m. must be received by
October 2, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (FI-48-95), room 5226,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (FI-48-95), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW,
Washington, DC. A public hearing will be held in the Commissioner's
Conference Room, Internal Revenue Building, 1111 Constitution Avenue
NW, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, William P.
Cejudo, (202) 622-4016, or Jeffrey W. Maddrey, (202) 622-3940;
concerning submissions and the hearing, Christina Vasquez, (202) 622-
7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information contained in this notice of proposed
rulemaking have been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507).
Comments on the collections of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of Treasury, Office of Information and Regulatory Affairs, Washington,
DC 20503, with copies to the Internal Revenue Service, Attn: IRS
Reports Clearance Officer, T:FP, Washington, DC 20224. Comments on the
collections of information should be received by August 26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collections of information are in proposed Secs. 1.163-
13(h)(3), 1.171-4(a)(1), and 1.171-5(c)(2)(iii). This information is
required by the IRS to monitor compliance with the federal tax rules
for amortizing bond premium and bond issuance premium. The likely
respondents are taxpayers who either
[[Page 33397]]
acquire a bond at a premium or issue a bond at a premium. Responses to
this collection of information are required to determine whether a
holder of a bond has elected to amortize bond premium and to determine
whether an issuer or a holder has changed its method of accounting for
premium.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 50,000 hours. The
estimated annual burden per respondent varies from 0.25 hours to 0.75
hours, depending on individual circumstances, with an estimated average
of 0.5 hours.
Estimated number of respondents: 100,000.
Estimated annual frequency of responses: One time per respondent.
Background
Sections 1.171-1 through 1.171-4 of the Income Tax Regulations were
promulgated in 1957 and last amended in 1968. In the Tax Reform Act of
1986, section 171(b) was amended to require that bond premium be
amortized by reference to a constant yield. In the Technical and
Miscellaneous Revenue Act of 1988, section 171(e) was amended to
require that bond premium be amortized as an offset to interest income.
The proposed regulations would substantially revise the existing
regulations to reflect these amendments. In addition, the proposed
regulations would revise existing guidance addressing the issuer's
treatment of bond issuance premium.
Explanation of Provisions
In general, bond premium arises when a holder acquires a bond for
more than the principal amount of the bond. Similarly, bond issuance
premium arises when an issuer issues a bond for more than the principal
amount of the bond. A holder will purchase, and an issuer will issue, a
bond for more than its principal amount when the stated interest rate
on the bond is higher than the current market yield for the bond.
The holder's treatment of bond premium is addressed in proposed
regulations under section 171. The issuer's treatment of bond issuance
premium is addressed in proposed regulations under section 163. In each
case, the amortization of premium is based on constant yield
principles. For this reason, the proposed regulations use concepts and
definitions from the original issue discount (OID) regulations
(Secs. 1.1271-0 through 1.1275-6).
Determination of Bond Premium
Under the proposed regulations, bond premium is defined as the
excess of a holder's basis in a bond over the sum of the remaining
amounts payable on the bond other than payments of qualified stated
interest. The holder generally determines the amount of bond premium as
of the date the holder acquires the bond.
The proposed regulations provide special rules that limit a
holder's basis solely for purposes of determining bond premium. For
example, if a bond is convertible into stock of the issuer at the
holder's option, for purposes of determining bond premium, the holder
must reduce its basis in the bond by the value of the conversion
option. This reduction prevents the holder from inappropriately
amortizing the cost of the embedded conversion option.
Amortization of Bond Premium
Under section 171, the holder of a taxable bond acquired at a
premium may elect to amortize bond premium. The holder of a tax-exempt
bond acquired at a premium must amortize the premium. As premium is
amortized, the holder's basis in the bond is reduced by a corresponding
amount under section 1016(a)(5).
Under the proposed regulations, a holder amortizes bond premium by
offsetting qualified stated interest income with bond premium. An
offset is calculated for each accrual period using constant yield
principles. However, the offset for an accrual period is only taken
into account when the holder takes qualified stated interest into
account under the holder's regular method of accounting. Thus, a holder
using the cash receipts and disbursements method of accounting does not
take bond premium into account until a qualified stated interest
payment is received.
For certain bonds (e.g., bonds that pay a variable rate of interest
or that provide for an interest holiday), the amount of bond premium
allocable to an accrual period could exceed the amount of qualified
stated interest allocable to that period. The proposed regulations
address this situation by providing that the excess bond premium is not
allowed as a deduction but is carried forward to future accrual
periods.
Variable Rate Debt Instruments
Because a variable rate debt instrument (VRDI) provides for
variable interest payments, the yield and payment schedule of a VRDI
cannot be determined without making assumptions about the amount of the
variable payments. Under the OID regulations, OID on a VRDI is
determined and allocated among accrual periods by reference to an
equivalent fixed rate debt instrument constructed as of the issue date
of the VRDI. The proposed regulations provide that bond premium on a
VRDI is determined and allocated in a similar manner. Under the
proposed regulations, bond premium on a VRDI is determined and
allocated by reference to an equivalent fixed rate debt instrument.
However, the equivalent fixed rate debt instrument is constructed as of
the date the holder acquires the VRDI rather than the issue date.
Bonds Subject to Certain Contingencies
If a bond provides for one or more alternative payment schedules,
the yield of the bond cannot be determined without making assumptions
about the actual payment schedule. The OID regulations provide three
rules for making these assumptions. First, if one payment schedule is
significantly more likely than not to occur, the yield of the debt
instrument is determined by reference to this payment schedule. Second,
if the debt instrument is subject to a mandatory sinking fund
provision, the yield is determined without regard to the mandatory
sinking fund provision. Third, notwithstanding the first two rules, if
the debt instrument provides for an unconditional option or options to
alter the payment schedule, the yield is determined by assuming that
the issuer will exercise its options in the manner that minimizes the
yield of the debt instrument and that the holder will exercise its
options in the manner that maximizes the yield of the debt instrument.
The proposed regulations generally use similar assumptions to
determine the holder's yield on a bond that provides for alternative
payment schedules. However, in the case of an issuer's option on a
taxable bond, the proposed regulations reverse the assumption by
assuming that the issuer will exercise the option only if doing so
would increase the yield on the bond. See section 171(b)(1)(B)(ii). As
a result of this rule, a holder generally must amortize bond premium on
a taxable bond by reference to the stated maturity date, even if it
appears likely the bond will be called. In this case, if the bond is
actually called, the proposed regulations provide that the holder may
deduct the unamortized premium. If the bond is partially called and the
partial call is not a pro-rata prepayment, the proposed regulations do
not allow the
[[Page 33398]]
holder to deduct a portion of the unamortized premium. Instead, the
holder must recompute the yield of the bond on the date of the partial
call and amortize the remaining premium by reference to the recomputed
yield.
Treasury and IRS request comments on the application of the
alternative payment schedule rules. Specifically, comments are
requested on whether the ``significantly more likely than not to
occur'' standard is appropriate for taxable bonds, whether ignoring
mandatory sinking fund provisions is appropriate for tax-exempt bonds,
and whether the distinction between pro-rata and non-pro-rata calls is
appropriate.
Bond Issuance Premium
Under existing Sec. 1.61-12(c), a corporate issuer treats premium
received upon issuance of a bond as a separate item of income. Over the
term of the bond, the premium is taken into income, and the full amount
of the stated interest is deducted. The proposed regulations would
revise the treatment of bond issuance premium. Under the proposed
regulations, bond issuance premium is amortized as an offset to the
issuer's otherwise allowable interest deduction, not as a separate item
of income. The amount of bond issuance premium amortized in any period
is based on a constant yield. In addition, the proposed regulations
would apply to all issuers, not just corporate issuers.
De Minimis Rules and Aggregate Rules
The proposed regulations do not provide rules for de minimis
amounts of premium or for aggregate methods of accounting for premium.
Treasury and IRS request comments on whether de minimis rules or
aggregate rules are necessary or appropriate.
Bonds Not Subject to the Proposed Regulations
The proposed regulations generally apply to bonds acquired or
issued at a premium. Certain bonds, however, are excluded from the
application of the proposed regulations. For example, the proposed
regulations exclude debt instruments subject to section 1272(a)(6)
(relating to certain prepayable debt instruments). No inference is
intended regarding the treatment of these debt instruments.
Proposed Effective Dates
The proposed regulations relating to bond premium provide that the
final regulations generally will apply to bonds acquired on or after
the date 60 days after the date final regulations are published in the
Federal Register. However, if a holder makes the election to amortize
bond premium for the taxable year containing the date 60 days after the
date final regulations are published, the regulations apply to bonds
held on or after the first day of that taxable year.
The proposed regulations relating to bond issuance premium provide
that the final regulations will apply to debt instruments issued on or
after the date 60 days after the date final regulations are published
in the Federal Register.
The proposed regulations also would provide automatic consent for a
taxpayer to change its method of accounting for premium in certain
circumstances. Because the change is made on a cut-off basis, no items
of income or deduction are omitted or duplicated. Therefore, no
adjustment under section 481 is allowed.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for October 23, 1996, at 10
a.m. in the Commissioner's Conference Room, Internal Revenue Building,
1111 Constitution Avenue NW, Washington, DC. Because of access
restrictions, visitors will not be admitted beyond the building lobby
more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments by September 25, 1996. and submit an outline of
the topics to be discussed and the time to be devoted to each topic
(signed original and eight (8) copies) by October 2, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal authors of these regulations are William P. Cejudo
and Jeffrey W. Maddrey of the Office of Assistant Chief Counsel
(Financial Institutions and Products). However, other personnel from
the IRS and Treasury Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.171-2 also issued under 26 U.S.C. 171(e).
Section 1.171-3 also issued under 26 U.S.C. 171(e).
Section 1.171-4 also issued under 26 U.S.C. 171(c). * * *
Par. 2. Section 1.61-12 is amended by revising paragraph (c) to
read as follows:
Sec. 1.61-12 Income from discharge of indebtedness.
* * * * *
(c) Issuance and repurchase of debt instruments--(1) Issuance. An
issuer does not realize gain or loss upon the issuance of a debt
instrument (as defined in Sec. 1.1275-1(d)).
(2) Repurchase--(i) In general. An issuer does not realize gain or
loss upon the repurchase of a debt instrument. For purposes of this
paragraph (c)(2), the term repurchase includes the retirement of a debt
instrument, the conversion of a debt instrument into stock of the
issuer, and the exchange (including an exchange under section 1001) of
a newly issued debt instrument for an existing debt instrument.
(ii) Repurchase at a discount. An issuer realizes income from the
discharge of indebtedness upon the repurchase of a debt instrument for
an amount less than its adjusted issue price (as defined in Sec. 1.163-
13(d)(5)). The
[[Page 33399]]
amount of discharge of indebtedness income is equal to the excess of
the adjusted issue price over the repurchase price. To determine the
repurchase price of a debt instrument that is repurchased through the
issuance of a new debt instrument, see section 108(e)(10). See
Sec. 1.108-2 for rules relating to the realization of discharge of
indebtedness income upon the acquisition of a debt instrument by a
person related to the issuer.
(iii) Repurchase at a premium. An issuer may be entitled to a
repurchase premium deduction upon the repurchase of a debt instrument
for an amount greater than its adjusted issue price (as defined in
Sec. 1.163-13(d)(5)). See Sec. 1.163-7(c) for the treatment of
repurchase premium.
(3) Bond issuance premium. For rules relating to an issuer's
interest deduction for a debt instrument issued with bond issuance
premium, see Sec. 1.163-13.
(4) Effective date. This paragraph (c) applies to debt instruments
issued on or after the date that is 60 days after the date final
regulations are published in the Federal Register.
* * * * *
Par. 3. Section 1.163-7 is amended by revising the first sentence
of paragraph (c) to read as follows:
Sec. 1.163-7 Deduction for OID on certain debt instruments.
* * * * *
(c) Deduction upon repurchase. Except to the extent disallowed by
any other section of the Internal Revenue Code (e.g., section 249) or
this paragraph (c), if a debt instrument is repurchased by the issuer
for a price in excess of its adjusted issue price (as defined in
Sec. 1.163-13(d)(5)), the excess (repurchase premium) is deductible as
interest for the taxable year in which the repurchase occurs. * * *
* * * * *
Par. 4. Section 1.163-13 is added to read as follows:
Sec. 1.163-13 Treatment of bond issuance premium.
(a) General rule. If a debt instrument is issued with bond issuance
premium, this section limits the amount of the issuer's interest
deduction otherwise allowable under section 163(a). In general, the
issuer determines its interest deduction by offsetting the interest
allocable to an accrual period with the bond issuance premium allocable
to that period. Bond issuance premium is allocable to an accrual period
based on a constant yield. The use of a constant yield to amortize bond
issuance premium is intended to conform the treatment of debt
instruments having bond issuance premium with those having original
issue discount. Unless otherwise provided, the terms used in this
section have the same meaning as those terms in section 163(e),
sections 1271 through 1275, and the corresponding regulations.
Moreover, the provisions of this section apply in a manner consistent
with those of section 163(e), sections 1271 through 1275, and the
corresponding regulations. In addition, the anti- abuse rule in
Sec. 1.1275-2(g) applies for purposes of this section. For rules
dealing with the treatment of bond premium by a holder, see
Secs. 1.171-1 through 1.171-5.
(b) Exceptions. This section does not apply to--
(1) A debt instrument to which section 1272(a)(6) applies (relating
to certain interests in or mortgages held by a REMIC, and certain other
debt instruments with payments subject to acceleration); or
(2) A debt instrument to which Sec. 1.1275-4 applies (relating to
certain debt instruments that provide for contingent payments).
(c) Bond issuance premium. Bond issuance premium is the excess, if
any, of the issue price of a debt instrument over its stated redemption
price at maturity. For purposes of this section, the issue price of a
convertible bond (as defined in Sec. 1.171-1(e)(1)(iii)(C)) does not
include an amount equal to the value of the conversion option.
(d) Offsetting qualified stated interest with bond issuance
premium--(1) In general. An issuer amortizes bond issuance premium by
offsetting the qualified stated interest allocable to an accrual period
with the bond issuance premium allocable to the accrual period. This
offset occurs when the issuer takes the qualified stated interest into
account under its regular method of accounting.
(2) Qualified stated interest allocable to an accrual period. See
Sec. 1.446-2(b) to determine the accrual period to which qualified
stated interest is allocable and to determine the accrual of qualified
stated interest within an accrual period.
(3) Bond issuance premium allocable to an accrual period. The bond
issuance premium allocable to an accrual period is determined under
this paragraph (d)(3). Within an accrual period, the bond issuance
premium allocable to the period accrues ratably.
(i) Step one: Determine the debt instrument's yield to maturity.
The yield to maturity of a debt instrument is determined under the
rules of Sec. 1.1272-1(b)(1)(i).
(ii) Step two: Determine the accrual periods. The accrual periods
are determined under the rules of Sec. 1.1272-1(b)(1)(ii).
(iii) Step three: Determine the bond issuance premium allocable to
the accrual period. The bond issuance premium allocable to an accrual
period is the excess of the qualified stated interest allocable to the
accrual period over the product of the adjusted issue price at the
beginning of the accrual period and the yield. In performing this
calculation, the yield must be stated appropriately taking into account
the length of the particular accrual period. Principles similar to
those in Sec. 1.1272-1(b)(4) apply in determining the bond issuance
premium allocable to an accrual period.
(4) Bond issuance premium in excess of qualified stated interest.
If the bond issuance premium allocable to an accrual period exceeds the
qualified stated interest allocable to the accrual period for a debt
instrument, the excess is carried forward to the next accrual period
and offsets qualified stated interest in that accrual period to the
extent of the disallowed amount. If the amount carried forward to an
accrual period exceeds the qualified stated interest for that period,
the excess is carried forward to subsequent accrual periods, beginning
with the next accrual period, and is used to offset qualified stated
interest in those accrual periods to the extent of the excess. If an
excess amount exists on the date the debt instrument is retired, the
issuer takes this amount into account as ordinary income.
(5) Adjusted issue price. In general, the adjusted issue price of a
debt instrument is determined under the rules of Sec. 1.1275-1(b). In
addition, the adjusted issue price of the debt instrument is decreased
by the amount of bond issuance premium previously allocable under
paragraph (d)(3) of this section.
(e) Special rules--(1) Variable rate debt instruments issued with
bond issuance premium. Bond issuance premium on a variable rate debt
instrument is determined by reference to the stated redemption price at
maturity of the equivalent fixed rate debt instrument constructed as of
the issue date. In addition, the issuer allocates bond issuance premium
on a variable rate debt instrument among the accrual periods by
reference to the equivalent fixed rate debt instrument. The equivalent
fixed rate debt instrument is determined using the principles of
Sec. 1.1275-5(e).
(2) Remote and incidental contingencies. For purposes of
determining and amortizing bond issuance premium, if a bond provides
[[Page 33400]]
for a contingency that is remote or incidental (within the meaning of
Sec. 1.1275-2(h)), the contingency is taken into account under the
rules for remote and incidental contingencies in Sec. 1.1275-2(h).
(f) Example. The following example illustrates the rules of this
section.
Example--(i) Facts. On February 1, 1999, X issues for $110,000 a
debt instrument maturing on February 1, 2006, with a stated
principal amount of $100,000, payable at maturity. The debt
instrument provides for unconditional payments of interest of
$10,000, payable on February 1 of each year. X uses the calendar
year as its taxable year, X uses the cash receipts and disbursements
method of accounting, and X decides to use annual accrual periods
ending on February 1 of each year. X's calculations assume a 30-day
month and 360-day year.
(ii) Amount of bond issuance premium. The issue price of the
debt instrument is $110,000. Because the interest payments on the
debt instrument are qualified stated interest, the stated redemption
price at maturity of the debt instrument is $100,000. Therefore, the
amount of bond issuance premium is $10,000 ($110,000 - $100,000).
(iii) Bond issuance premium allocable to the first accrual
period. Based on the payment schedule and the issue price of the
debt instrument, the yield of the debt instrument is 8.07 percent,
compounded annually. (Although, for purposes of simplicity, the
yield as stated is rounded to two decimal places, the computations
do not reflect this rounding convention.) The bond issuance premium
allocable to the accrual period ending on February 1, 2000, is the
excess of the qualified stated interest allocable to the period
($10,000) over the product of the adjusted issue price at the
beginning of the period ($110,000) and the yield (8.07 percent,
compounded annually). Therefore, the bond issuance premium allocable
to the accrual period is $1,118.17 ($10,000 - $8,881.83).
(iv) Premium used to offset interest. Although X makes an
interest payment of $10,000 on February 1, 2000, X only deducts
interest of $8,881.83, the qualified stated interest allocable to
the period ($10,000) offset with bond issuance premium allocable to
the period ($1,118.17).
(g) Effective date. This section applies to debt instruments issued
on or after the date that is 60 days after the date final regulations
are published in the Federal Register.
(h) Consent to change method of accounting. The Commissioner grants
consent for an issuer to change its method of accounting for bond
issuance premium on debt instruments issued on or after the date that
is 60 days after the date final regulations are published in the
Federal Register. However, this consent is granted only if--
(1) The change is made to comply with this section;
(2) The change is made for the first taxable year for which the
issuer must account for a debt instrument under this section; and
(3) The issuer attaches to its federal income tax return for the
taxable year containing the change a statement that it has changed its
method of accounting under this section.
Par. 5. Sections 1.171-1 through 1.171-4 are revised to read as
follows:
Sec. 1.171-1 Bond premium.
(a) Overview--(1) In general. This section and Secs. 1.171-2
through 1.171-5 provide rules for the determination and amortization of
bond premium by a holder. In general, a holder amortizes bond premium
by offsetting the interest allocable to an accrual period with the
premium allocable to that period. Bond premium is allocable to an
accrual period based on a constant yield. The use of a constant yield
to amortize bond premium is intended generally to conform the treatment
of bond premium to the treatment of original issue discount under
sections 1271 through 1275. Unless otherwise provided, the terms used
in this section and Secs. 1.171-2 through 1.171-5 have the same meaning
as those terms in sections 1271 through 1275 and the corresponding
regulations. Moreover, the provisions of this section and Secs. 1.171-2
through 1.171-5 apply in a manner consistent with those of sections
1271 through 1275 and the corresponding regulations. In addition, the
anti-abuse rule in Sec. 1.1275-2(g) applies for purposes of this
section and Secs. 1.171-2 through 1.171-5.
(2) Cross-references. For rules dealing with the adjustments to a
holder's basis to reflect the amortization of bond premium, see
Sec. 1.1016-5(b). For rules dealing with the treatment of bond issuance
premium by an issuer, see Sec. 1.163-13.
(b) Scope--(1) In general. Except as provided in paragraph (b)(2)
of this section, this section and Secs. 1.171-2 through 1.171-5 apply
to any bond that, upon its acquisition by the holder, is held with bond
premium. For purposes of this section and Secs. 1.171-2 through 1.171-
5, the term bond has the same meaning as the term debt instrument in
Sec. 1.1275-1(d).
(2) Exceptions. This section and Secs. 1.171-2 through 1.171-5 do
not apply to--
(i) A bond to which section 1272(a)(6) applies (relating to certain
interests in or mortgages held by a REMIC, and certain other debt
instruments with payments subject to acceleration);
(ii) A bond to which Sec. 1.1275-4 applies (relating to certain
debt instruments that provide for contingent payments);
(iii) A bond held by a holder that has made a Sec. 1.1272-3
election with respect to the bond;
(iv) A bond that is stock in trade of the holder, a bond of a kind
that would properly be included in the inventory of the holder if on
hand at the close of the taxable year, or a bond held primarily for
sale to customers in the ordinary course of the holder's trade or
business; or
(v) A bond issued before September 28, 1985, unless the bond bears
interest and was issued by a corporation or by a government or
political subdivision thereof.
(c) General rule--(1) Tax-exempt obligations. A holder must
amortize bond premium on a bond that is a tax-exempt obligation. See
Sec. 1.171-2(c) Example 4.
(2) Taxable bonds. A holder may elect to amortize bond premium on a
taxable bond. Except as provided in paragraph (c)(3) of this section, a
taxable bond is any bond other than a tax-exempt obligation. See
Sec. 1.171-4 for rules relating to the election to amortize bond
premium on a taxable bond.
(3) Bonds the interest on which is partially excludable. For
purposes of this section and Secs. 1.171-2 through 1.171-5, a bond the
interest on which is partially excludable from gross income (e.g., a
securities acquisition loan under section 133) is treated as two
instruments, a tax-exempt obligation and a taxable bond. The holder's
basis in the bond and each payment on the bond are allocated between
the two instruments based on the ratio of the interest excludable to
the total interest payable on the bond.
(d) Determination of bond premium--(1) In general. A holder
acquires a bond at a premium if the holder's basis in the bond
immediately after its acquisition by the holder exceeds the sum of all
amounts payable on the bond after the acquisition date (other than
payments of qualified stated interest). This excess is bond premium,
which is amortizable under Sec. 1.171-2.
(2) Additional rules for amounts payable on certain bonds.
Additional rules apply to determine the amounts payable on a variable
rate debt instrument and on a bond that provides for certain
alternative payment schedules. See Sec. 1.171-3.
(e) Basis. A holder determines its basis in a bond under this
paragraph (e). This determination of basis applies only for purposes of
this section and Secs. 1.171-2 through 1.171-5. Because of the
application of this paragraph (e), the holder's basis in the bond for
purposes of these sections may differ from the
[[Page 33401]]
holder's basis for determining gain or loss on the sale or exchange of
the bond.
(1) Determination of basis--(i) In general. In general, the
holder's basis in the bond is the holder's basis for determining loss
on the sale or exchange of the bond.
(ii) Bonds acquired in certain exchanges. If the holder acquired
the bond in exchange for other property (other than in a reorganization
defined in section 368) and the holder's basis in the bond is
determined in whole or in part by reference to the holder's basis in
the other property, the holder's basis in the bond may not exceed its
fair market value immediately after the exchange. See paragraph (f)
Example 1 of this section. If the bond is acquired in a reorganization,
see section 171(b)(4)(B).
(iii) Convertible bonds--(A) General rule. If the bond is a
convertible bond, the holder's basis in the bond is reduced by an
amount equal to the value of the conversion option. The value of the
conversion option may be determined under any reasonable method. For
example, the holder may determine the value of the conversion option by
comparing the market price of the convertible bond to the market prices
of similar bonds that do not have conversion options. See paragraph (f)
Example 2 of this section.
(B) Convertible bonds acquired in certain exchanges. If the bond is
a convertible bond acquired in a transaction described in paragraph
(e)(1)(ii) of this section, the holder's basis in the bond may not
exceed its fair market value immediately after the exchange reduced by
the value of the conversion option.
(C) Definition of convertible bond. A convertible bond is a bond
that provides the holder with an option to convert the bond into stock
of the issuer, stock or debt of a related party (within the meaning of
section 267(b) or 707(b)(1)), or into cash or other property in an
amount equal to the approximate value of that stock or debt.
(2) Basis in bonds held by certain transferees. Notwithstanding
paragraph (e)(1) of this section, if the bond is transferred basis
property (as defined in section 7701(a)(43)) and the transferor had
acquired the bond at a premium, the holder's basis in the bond is--
(i) The holder's basis for determining loss on the sale or exchange
of the bond; reduced by
(ii) Any amounts that the transferor could not have amortized under
this paragraph (e) or under Sec. 1.171-4(c).
(f) Examples. The following examples illustrate the rules of this
section.
Example 1. Bond received in liquidation of a partnership
interest--(i) Facts. PR is a partner in partnership PRS. PRS does
not have any unrealized receivables or substantially appreciated
inventory items as defined in section 751. On January 1, 1997, PRS
distributes to PR a taxable bond, issued by an unrelated
corporation, in liquidation of PR's partnership interest. At that
time, the fair market value of PR's partnership interest is $40,000
and the basis is $100,000. The fair market value of the bond is
$40,000.
(ii) Determination of basis. Under section 732(b), PR's basis in
the bond is equal to PR's basis in the partnership interest.
Therefore, PR's basis for determining loss on the sale or exchange
of the bond is $100,000. However, under paragraph (e)(1)(ii) of this
section, PR's basis in the bond is $40,000 for purposes of this
section and Secs. 1.171-2 through 1.171-5.
Example 2. Convertible bond--(i) Facts. On January 1, 1997, A
purchases for $1,100 B corporation's bond maturing on January 1,
2000, with a stated principal amount of $1,000, payable at maturity.
The bond provides for unconditional payments of interest of $30 on
January 1 and July 1 of each year. In addition, the bond is
convertible into 15 shares of B corporation stock at the option of
the holder. On January 1, 1997, B corporation's nonconvertible,
publicly-traded, three-year debt with similar credit rating trades
at a price that reflects a yield of 6.75 percent, compounded
semiannually.
(ii) Determination of basis. A's basis for determining loss on
the sale or exchange of the bond is $1,100. As of January 1, 1997,
discounting the remaining payments on the bond at the yield at which
B's similar nonconvertible bonds trade (6.75 percent, compounded
semiannually) results in a present value of $980. Thus, the value of
the conversion option is $120. Under paragraph (e)(1)(iii)(A) of
this section, A's basis is $980 ($1,100-$120) for purposes of this
section and Secs. 1.171-2 through 1.171-5. The sum of all amounts
payable on the bond other than qualified stated interest is $1,000.
Because A's basis (as determined under paragraph (e)(1)(iii)(A) of
this section) does not exceed $1,000, A does not acquire the bond at
a premium.
Sec. 1.171-2 Amortization of bond premium.
(a) Offsetting qualified stated interest with premium--(1) In
general. A holder amortizes bond premium by offsetting the qualified
stated interest allocable to an accrual period with the bond premium
allocable to the accrual period. This offset occurs when the holder
takes the qualified stated interest into account under the holder's
regular method of accounting.
(2) Qualified stated interest allocable to an accrual period. See
Sec. 1.446-2(b) to determine the accrual period to which qualified
stated interest is allocable and to determine the accrual of qualified
stated interest within an accrual period.
(3) Bond premium allocable to an accrual period. The bond premium
allocable to an accrual period is determined under this paragraph
(a)(3). Within an accrual period, the bond premium allocable to the
period accrues ratably.
(i) Step one: Determine the holder's yield. The holder's yield is
the discount rate that, when used in computing the present value of all
remaining payments to be made on the bond (including payments of
qualified stated interest), produces an amount equal to the holder's
basis in the bond as determined under Sec. 1.171-1(e). For this
purpose, the remaining payments include only payments to be made after
the date the holder acquires the bond. The yield is calculated as of
the date the holder acquires the bond, must be constant over the term
of the bond, and must be calculated to at least two decimal places when
expressed as a percentage.
(ii) Step two: Determine the accrual periods. A holder determines
the accrual periods for the bond under the rules of Sec. 1.1272-
1(b)(1)(ii).
(iii) Step three: Determine the bond premium allocable to the
accrual period. The bond premium allocable to an accrual period is the
excess of the qualified stated interest allocable to the accrual period
over the product of the holder's adjusted acquisition price (as defined
in paragraph (b) of this section) at the beginning of the accrual
period and the holder's yield. In performing this calculation, the
yield must be stated appropriately taking into account the length of
the particular accrual period. Principles similar to those in
Sec. 1.1272-1(b)(4) apply in determining the bond premium allocable to
an accrual period.
(4) Bond premium in excess of qualified stated interest. If the
bond premium allocable to an accrual period exceeds the qualified
stated interest allocable to the accrual period for that bond, the
excess is carried forward to the next accrual period and offsets
qualified stated interest in that accrual period to the extent of the
disallowed amount. If the bond premium carried forward to an accrual
period exceeds the qualified stated interest for that period, the
excess is carried forward to subsequent accrual periods, beginning with
the next accrual period, and is used to offset qualified stated
interest in those accrual periods to the extent of the excess.
(5) Additional rules for certain bonds. Additional rules apply to
determine the amortization of bond premium on a variable rate debt
instrument and on a bond that provides for certain alternative payment
schedules. See Sec. 1.171-3.
(b) Adjusted acquisition price. The adjusted acquisition price of a
bond at the beginning of the first accrual period is the holder's basis
as determined under Sec. 1.171-1(e). Thereafter, the
[[Page 33402]]
adjusted acquisition price is the holder's basis in the bond decreased
by--
(1) The amount of bond premium previously allocable under paragraph
(a)(3) of this section; and
(2) The amount of any payment previously made on the bond other
than a payment of qualified stated interest.
(c) Examples. The following examples illustrate the rules of this
section. Each example assumes the holder uses the calendar year as its
taxable year and has elected to amortize bond premium, effective for
all relevant taxable years. In addition, each example assumes a 30-day
month and 360-day year. Although, for purposes of simplicity, the yield
as stated is rounded to two decimal places, the computations do not
reflect this rounding convention.
Example 1. Taxable bond--(i) Facts. On February 1, 1999, A
purchases for $110,000 a taxable bond maturing on February 1, 2006,
with a stated principal amount of $100,000, payable at maturity. The
bond provides for unconditional payments of interest of $10,000,
payable on February 1 of each year. A uses the cash receipts and
disbursements method of accounting, and A decides to use annual
accrual periods ending on February 1 of each year.
(ii) Amount of bond premium. The interest payments on the bond
are qualified stated interest. Therefore, the sum of all amounts
payable on the bond (other than the interest payments) is $100,000.
Under Sec. 1.171-1, the amount of bond premium is $10,000 ($110,000-
$100,000).
(iii) Bond premium allocable to the first accrual period. Based
on the remaining payment schedule of the bond and A's basis in the
bond, A's yield is 8.07 percent, compounded annually. The bond
premium allocable to the accrual period ending on February 1, 2000,
is the excess of the qualified stated interest allocable to the
period ($10,000) over the product of the adjusted acquisition price
at the beginning of the period ($110,000) and A's yield (8.07
percent, compounded annually). Therefore, the bond premium allocable
to the accrual period is $1,118.17 ($10,000-$8,881.83).
(iv) Premium used to offset interest. Although A receives an
interest payment of $10,000 on February 1, 2000, A only includes in
income $8,881.83, the qualified stated interest allocable to the
period ($10,000) offset with bond premium allocable to the period
($1,118.17). Under Sec. 1.1016-5(b), A's basis in the bond is
reduced by $1,118.17 on February 1, 2000.
Example 2. Alternative accrual periods--(i) Facts. The facts are
the same as in Example 1 of this paragraph (c) except that A decides
to use semiannual accrual periods ending on February 1 and August 1
of each year.
(ii) Bond premium allocable to the first accrual period. Based
on the remaining payment schedule of the bond and A's basis in the
bond, A's yield is 7.92 percent, compounded semiannually. The bond
premium allocable to the accrual period ending on August 1, 1999, is
the excess of the qualified stated interest allocable to the period
($5,000) over the product of the adjusted acquisition price at the
beginning of the period ($110,000) and A's yield, stated
appropriately taking into account the length of the accrual period
(7.92 percent/2). Therefore, the bond premium allocable to the
accrual period is $645.29 ($5,000-$4,354.71). Although the accrual
period ends on August 1, 1999, the qualified stated interest of
$5,000 is not taken into income until February 1, 2000, the date it
is received. Likewise, the bond premium of $645.29 is not taken into
account until February 1, 2000. The adjusted acquisition price of
the bond on August 1, 1999, is $109,354.71 (the adjusted acquisition
price at the beginning of the period ($110,000) less the bond
premium allocable to the period ($645.29)).
(iii) Bond premium allocable to the second accrual period.
Because the interval between payments of qualified stated interest
contains more than one accrual period, the adjusted acquisition
price at the beginning of the second accrual period must be adjusted
for the accrued but unpaid qualified stated interest. Therefore, the
adjusted acquisition price on August 1, 1999, is $114,354.71
($109,354.71+$5,000). The bond premium allocable to the accrual
period ending on February 1, 2000, is the excess of the qualified
stated interest allocable to the period ($5,000) over the product of
the adjusted acquisition price at the beginning of the period
($114,354.71) and A's yield, stated appropriately taking into
account the length of the accrual period (7.92 percent/2).
Therefore, the bond premium allocable to the accrual period is
$472.88 ($5,000-$4,527.12).
(iv) Premium used to offset interest. Although A receives an
interest payment of $10,000 on February 1, 2000, A only includes in
income $8,881.83, the qualified stated interest of $10,000 ($5,000
allocable to the accrual period ending on August 1, 1999, and $5,000
allocable to the accrual period ending on February 1, 2000) offset
with bond premium of $1,118.17 ($645.29 allocable to the accrual
period ending on August 1, 1999, and $472.88 allocable to the
accrual period ending on February 1, 2000). As indicated in Example
1 of this paragraph (c), this same amount would be taken into income
at the same time had A used annual accrual periods.
Example 3. Holder uses accrual method of accounting--(i) Facts.
The facts are the same as in Example 1 of this paragraph (c) except
that A uses the accrual method of accounting. Thus, for the accrual
period ending on February 1, 2000, the qualified stated interest
allocable to the period is $10,000, and the bond premium allocable
to the period is $1,118.17. Because the accrual period extends
beyond the end of A's taxable year, A must allocate these amounts
between the two taxable years.
(ii) Amounts allocable to the first taxable year. The qualified
stated interest allocable to the first taxable year is $9,166.67
($10,000 x 11/12). The bond premium allocable to the first taxable
year is $1,024.99 ($1,118.17 x 11/12).
(iii) Premium used to offset interest. For 1999, A includes in
income $8,141.68, the qualified stated interest allocable to the
period ($9,166.67) offset with bond premium allocable to the period
($1,024.99). Under Sec. 1.1016-5(b), A's basis in the bond is
reduced by $1,024.99 in 1999.
(iv) Amounts allocable to the next taxable year. The remaining
amounts of qualified stated interest and bond premium allocable to
the accrual period ending on February 1, 2000, are taken into
account for the taxable year ending on December 31, 2000.
Example 4. Tax-exempt obligation--(i) Facts. On January 15,
1999, C purchases for $120,000 a tax-exempt obligation maturing on
January 15, 2006, with a stated principal amount of $100,000,
payable at maturity. The obligation provides for unconditional
payments of interest of $9,000, payable on January 15 of each year.
C uses the cash receipts and disbursements method of accounting, and
C decides to use annual accrual periods ending on January 15 of each
year.
(ii) Amount of bond premium. The interest payments on the
obligation are qualified stated interest. Therefore, the sum of all
amounts payable on the obligation (other than the interest payments)
is $100,000. Under Sec. 1.171-1, the amount of bond premium is
$20,000 ($120,000-$100,000).
(iii) Bond premium allocable to the first accrual period. Based
on the remaining payment schedule of the obligation and C's basis in
the obligation, C's yield is 5.48 percent, compounded annually. The
bond premium allocable to the accrual period ending on January 15,
2000, is the excess of the qualified stated interest allocable to
the period ($9,000) over the product of the adjusted acquisition
price at the beginning of the period ($120,000) and C's yield (5.48
percent, compounded annually). Therefore, the bond premium allocable
to the accrual period is $2,420.55 ($9,000-$6,579.45).
(iv) Premium used to offset interest. Although C receives an
interest payment of $9,000 on January 15, 2000, C only receives tax-
exempt interest income of $6,579.45, the qualified stated interest
allocable to the period ($9,000) offset with bond premium allocable
to the period ($2,420.55). Under Sec. 1.1016-5(b), C's basis in the
obligation is reduced by $2,420.55 on January 15, 2000.
Sec. 1.171-3 Special rules for certain bonds.
(a) Variable rate debt instruments. Bond premium on a variable rate
debt instrument is determined by reference to the stated redemption
price at maturity of the equivalent fixed rate debt instrument
constructed for the variable rate debt instrument. In addition, a
holder allocates bond premium on a variable rate debt instrument among
the accrual periods by reference to the equivalent fixed rate debt
instrument. The equivalent fixed rate debt instrument is determined as
of the date the variable rate debt instrument is acquired by the holder
and is constructed using the principles of Sec. 1.1275-5(e). See
paragraph (d) Example 1 of this section.
(b) Yield and remaining payment schedule of certain bonds subject
to
[[Page 33403]]
contingencies--(1) Applicability. This paragraph (b) provides rules
that apply in determining the yield and remaining payment schedule of
certain bonds that provide for an alternative payment schedule (or
schedules) applicable upon the occurrence of a contingency (or
contingencies). This paragraph (b) applies, however, only if the timing
and amounts of the payments that comprise each payment schedule are
known as of the date the holder acquires the bond (the acquisition
date) and the bond is subject to paragraph (b)(2), (3), or (4) of this
section. A bond does not provide for an alternative payment schedule
merely because there is a possibility of impairment of a payment (or
payments) by insolvency, default, or similar circumstances. See
Sec. 1.1275-4 for the treatment of a bond that provides for a
contingency that is not described in this paragraph (b).
(2) Remaining payment schedule that is significantly more likely
than not to occur. If, based on all the facts and circumstances as of
the acquisition date, a single remaining payment schedule for a bond is
significantly more likely than not to occur, this remaining payment
schedule is used to determine and amortize bond premium under
Secs. 1.171-1 and 1.171-2.
(3) Mandatory sinking fund provision. Notwithstanding paragraph
(b)(2) of this section, if a bond is subject to a mandatory sinking
fund provision described in Sec. 1.1272-1(c)(3) and the use and terms
of the provision meet reasonable commercial standards, the provision is
ignored for purposes of determining and amortizing bond premium under
Secs. 1.171-1 and 1.171-2.
(4) Treatment of certain options--(i) Applicability.
Notwithstanding paragraphs (b) (2) and (3) of this section, the rules
of this paragraph (b)(4) determine the remaining payment schedule of a
bond that provides the holder or issuer with an unconditional option or
options, exercisable on one or more dates during the remaining term of
the bond, to alter the bond's remaining payment schedule.
(ii) Operating rules. A holder determines the remaining payment
schedule of a bond by assuming that each option will (or will not) be
exercised under the following rules:
(A) Issuer options. The issuer of a tax-exempt obligation is deemed
to exercise or not exercise an option or combination of options in the
manner that minimizes the holder's yield on the obligation. The issuer
of a taxable bond is deemed to exercise or not exercise an option or
combination of options in the manner that maximizes the holder's yield
on the bond.
(B) Holder options. A holder is deemed to exercise or not exercise
an option or combination of options in the manner that maximizes the
holder's yield on the bond.
(C) Multiple options. If both the issuer and the holder have
options, the rules of paragraphs (b)(4)(ii) (A) and (B) of this section
are applied to the options in the order that they may be exercised.
Thus, the deemed exercise of one option may eliminate other options
that are later in time.
(5) Subsequent adjustments--(i) In general. Except as provided in
paragraph (b)(5)(ii) of this section, if a contingency described in
this paragraph (b) (including the exercise of an option described in
paragraph (b)(4) of this section) actually occurs or does not occur,
contrary to the assumption made pursuant to this paragraph (b) (a
change in circumstances), then solely for purposes of section 171, the
bond is treated as retired and reacquired by the holder on the date of
the change in circumstances for an amount equal to the adjusted
acquisition price of the bond as of that date. If, however, the change
in circumstances results in a substantially contemporaneous pro-rata
prepayment as defined in Sec. 1.1275-2(f)(2), the pro-rata prepayment
is treated as a payment in retirement of a portion of the bond. See
paragraph (d) Example 2 of this section. (ii) Bond premium deduction on
the issuer's call of a taxable bond. If a change in circumstances
results from an issuer's call of a taxable bond or a partial call that
is a pro-rata prepayment, the holder may deduct as bond premium an
amount equal to the excess, if any, of the adjusted acquisition price
of the bond over the greater of the amount received on redemption or
the amount payable on maturity.
(c) Remote and incidental contingencies. For purposes of
determining and amortizing bond premium, if a bond provides for a
contingency that is remote or incidental (within the meaning of
Sec. 1.1275-2(h)), the contingency is taken into account under the
rules for remote and incidental contingencies in Sec. 1.1275-2(h).
(d) Examples. The following examples illustrate the rules of this
section. Each example assumes the holder uses the calendar year as its
taxable year and, except as otherwise stated, has elected to amortize
bond premium, effective for all relevant taxable years. In addition,
each example assumes a 30-day month and 360-day year. Although, for
purposes of simplicity, the yield as stated is rounded to two decimal
places, the computations do not reflect this rounding convention.
Example 1. Variable rate debt instrument--(i) Facts. On March 1,
1999, E purchases for $110,000 a taxable bond maturing on March 1,
2007, with a stated principal amount of $100,000, payable at
maturity. The bond provides for unconditional payments of interest
on March 1 of each year based on the percentage appreciation of a
nationally-known commodity index. On March 1, 1999, it is reasonably
expected that the bond will yield 12 percent, compounded annually. E
uses the cash receipts and disbursements method of accounting, and E
decides to use annual accrual periods ending on March 1 of each
year. Assume that the bond is a variable rate debt instrument under
Sec. 1.1275-5.
(ii) Amount of bond premium. Because the bond is a variable rate
debt instrument, E determines and amortizes its bond premium by
reference to the equivalent fixed rate debt instrument constructed
for the bond as of March 1, 1999. Because the bond provides for
interest at a single objective rate that is reasonably expected to
yield 12 percent, compounded annually, the equivalent fixed rate
debt instrument for the bond is an eight-year bond with a principal
amount of $100,000, payable at maturity. It provides for annual
payments of interest of $12,000. E's basis in the equivalent fixed
rate debt instrument is $110,000. The sum of all amounts payable on
the equivalent fixed rate debt instrument (other than payments of
qualified stated interest) is $100,000. Under Sec. 1.171-1, the
amount of bond premium is $10,000 ($110,000-$100,000).
(iii) Bond premium allocable to each accrual period. E allocates
bond premium to the remaining accrual periods by reference to the
payment schedule on the equivalent fixed rate debt instrument. Based
on the payment schedule of the equivalent fixed rate debt instrument
and E's basis in the bond, E's yield is 10.12 percent, compounded
annually. The bond premium allocable to the accrual period ending on
March 1, 2000, is the excess of the qualified stated interest
allocable to the period for the equivalent fixed rate debt
instrument ($12,000) over the product of the adjusted acquisition
price at the beginning of the period ($110,000) and E's yield (10.12
percent, compounded annually). Therefore, the bond premium allocable
to the accrual period is $870.71 ($12,000-$11,129.29). The bond
premium allocable to all the accrual periods is listed in the
following schedule:
------------------------------------------------------------------------
Adjusted
acquisition Premium
Accrual period ending price at allocable
beginning of to accrual
accrual period period
------------------------------------------------------------------------
3/1/00..................................... $110,000.00 $870.71
3/1/01..................................... 109,129.29 958.81
3/1/02..................................... 108,170.48 1,055.82
3/1/03..................................... 107,114.66 1,162.64
3/1/04..................................... 105,952.02 1,280.27
3/1/05..................................... 104,671.75 1,409.80
3/1/06..................................... 103,261.95 1,552.44
3/1/07..................................... 101,709.51para
. 1,709.51
------------
10,000.00
------------------------------------------------------------------------
[[Page 33404]]
(iv) Qualified stated interest for each accrual period. Assume
the bond actually pays the following amounts of qualified stated
interest:
------------------------------------------------------------------------
Qualified
Accrual period ending stated
interest
------------------------------------------------------------------------
3/1/00.................................................. $15,000.00
3/1/01.................................................. 0.00
3/1/02.................................................. 0.00
3/1/03.................................................. 10,000.00
3/1/04.................................................. 8,000.00
3/1/05.................................................. 12,000.00
3/1/06.................................................. 15,000.00
3/1/07.................................................. 8,500.00
------------------------------------------------------------------------
(v) Premium used to offset interest. E's interest income for
each accrual period is determined by offsetting the qualified stated
interest allocable to the period with the bond premium allocable to
the period. For the accrual period ending on March 1, 2000, E
includes in income $14,129.29, the qualified stated interest
allocable to the period ($15,000) offset with the bond premium
allocable to the period ($870.71). For the accrual period ending on
March 1, 2001, the bond premium allocable to the period ($958.81)
exceeds the qualified stated interest allocable to the period ($0).
Therefore, the excess of $958.81 ($958.81-$0) is carried forward to
the next accrual period. For the next accrual period, the qualified
stated interest for the period is insufficient to offset the bond
premium allocable to the period ($1,055.82) and the amount carried
forward from the prior period ($958.81). Thus, $2,014.63 ($1,055.82
+ $958.81) is carried forward to the accrual period ending on March
1, 2003, and offsets qualified stated interest allocable to that
period. The amount E includes in income for each accrual period is
shown in the following schedule:
----------------------------------------------------------------------------------------------------------------
Qualified Premium Premium
Accrual period ending stated allocable to Interest carry
interest accrual period income forward
----------------------------------------------------------------------------------------------------------------
3/1/00............................................. $15,000.00 $870.71 $14,129.29 ...........
3/1/01............................................. 0.00 958.81 0.00 958.81
3/1/02............................................. 0.00 1,055.82 0.00 2,014.63
3/1/03............................................. 10,000.00 1,162.64 6,822.73 ...........
3/1/04............................................. 8,000.00 1,280.27 6,719.73 ...........
3/1/05............................................. 12,000.00 1,409.80 10,590.20 ...........
3/1/06............................................. 15,000.00 1,552.44 13,447.56 ...........
3/1/07............................................. 8,500.00 1,709.51 6,790.49 ...........
----------------
10,000.00
----------------------------------------------------------------------------------------------------------------
Example 2. Partial call that results in a pro-rata prepayment--
(i) Facts. On April 1, 1999, M purchases for $110,000 N's taxable
bond maturing on April 1, 2006, with a stated principal amount of
$100,000, payable at maturity. The bond provides for unconditional
payments of interest of $10,000, payable on April 1 of each year. N
has the option to call all or part of the bond on April 1, 2001, at
a 5 percent premium over the principal amount. M uses the cash
receipts and disbursements method of accounting.
(ii) Determination of yield and the remaining payment schedule.
M's yield determined without regard to the call option is 8.07
percent, compounded annually. M's yield determined by assuming N
exercises its call option is 6.89 percent, compounded annually.
Under paragraph (b)(4)(ii)(A) of this section, it is assumed N will
not exercise the call option because exercising the option would
minimize M's yield. Thus, for purposes of determining and amortizing
bond premium, the bond is assumed to be a seven-year bond with a
single principal payment at maturity of $100,000.
(iii) Amount of bond premium. The interest payments on the bond
are qualified stated interest. Therefore, the sum of all amounts
payable on the bond (other than the interest payments) is $100,000.
Under Sec. 1.171-1, the amount of bond premium is $10,000 ($110,000-
$100,000).
(iv) Bond premium allocable to the first two accrual periods.
For the accrual period ending on April 1, 2000, M includes in income
$8,881.83, the qualified stated interest allocable to the period
($10,000) offset with bond premium allocable to the period
($1,118.17). The adjusted acquisition price on April 1, 2000, is
$108,881.83 ($110,000-$1,118.17). For the accrual period ending on
April 1, 2001, M includes in income $8,791.54, the qualified stated
interest allocable to the period ($10,000) offset with bond premium
allocable to the period ($1,208.46). The adjusted acquisition price
on April 1, 2001, is $107,673.37 ($108,881.83-$1,208.46).
(v) Partial call. Assume N calls one-half of M's bond for
$52,500 on April 1, 2001. Because it was assumed the call would not
be exercised, the call is a change in circumstances. However, the
partial call is also a pro-rata prepayment within the meaning of
Sec. 1.1275-2(f)(2). As a result, the call is treated as a
retirement of one-half of the bond. Under paragraph (b)(5)(ii) of
this section, M may deduct $1,336.68, the excess of its adjusted
acquisition price in the retired portion of the bond ($107,673.37/2,
or $53,836.68) over the amount received on redemption ($52,500). M's
adjusted basis in the portion of the bond that remains outstanding
is $53,836.68 ($107,673.37-$53,836.68).
Sec. 1.171-4 Election to amortize bond premium on taxable bonds.
(a) Time and manner of making the election--(1) In general. A
holder makes the election to amortize bond premium by offsetting
interest income with bond premium in the holder's timely filed federal
income tax return for the first taxable year to which the holder
desires the election to apply. The holder should attach to the return a
statement that the holder is making the election under this section.
(2) Coordination with OID election. If a holder makes an election
under Sec. 1.1272-3 for a bond with bond premium, the holder is deemed
to have made the election under this section.
(b) Scope of election. The election under this section applies to
all taxable bonds held during or after the taxable year for which the
election is made.
(c) Election to amortize made in a subsequent taxable year--(1) In
general. If a holder elects to amortize bond premium and holds a
taxable bond acquired before the taxable year for which the election is
made, the holder may not amortize amounts that would have been
amortized in prior taxable years had an election been in effect for
those prior years.
(2) Example. The following example illustrates the rule of this
paragraph (c).
Example--(i) Facts. On May 1, 1999, C purchases for $130,000 a
taxable bond maturing on May 1, 2006, with a stated principal amount
of $100,000, payable at maturity. The bond provides for
unconditional payments of interest of $15,000, payable on May 1 of
each year. C uses the cash receipts and disbursements method of
accounting and the calendar year as its taxable year. C has not
previously elected to amortize bond premium, but does so for 2002.
(ii) Amount to amortize. C's basis for determining loss on the
sale or exchange of the bond is $130,000. Thus, under Sec. 1.171-1,
the amount of bond premium is $30,000. Under Sec. 1.171-2, if a bond
premium election were in effect for the prior taxable years, C would
have amortized $3,257.44 of bond premium on May 1, 2000, and
$3,551.68 of bond premium on May 1, 2001, based on annual accrual
periods ending on May 1.
[[Page 33405]]
Thus, for 2002 and future years to which the election applies, C may
amortize only $23,190.88 ($30,000-$3,257.44-$3,551.68).
(d) Revocation of election. The election under this section may not
be revoked unless approved by the Commissioner.
Par. 6. Section 1.171-5 is added to read as follows:
Sec. 1.171-5 Effective date and transition rules.
(a) Effective date--(1) In general. This section and Secs. 1.171-1
through 1.171-4 apply to bonds acquired on or after the date 60 days
after the date final regulations are published in the Federal Register.
However, if a holder makes the election under Sec. 1.171-4 for the
taxable year containing the date 60 days after the date final
regulations are published in the Federal Register, this section and
Secs. 1.171-1 through 1.171-4 apply to bonds held on or after the first
day of that taxable year.
(2) Transition rule for use of constant yield. Notwithstanding
paragraph (a)(1) of this section, Sec. 1.171-2(a)(3) (providing that
the bond premium allocable to an accrual period is determined with
reference to a constant yield) does not apply to a bond issued before
September 28, 1985.
(b) Coordination with existing election. A holder is deemed to have
made the election under Sec. 1.171-4 if the holder elected to amortize
bond premium under section 171 and that election is effective on the
date 60 days after the date final regulations are published in the
Federal Register.
(c) Accounting method changes--(1) Consent to change. A holder
required to change its method of accounting for bond premium to comply
with Secs. 1.171-1 through 1.171-3 must secure the consent of the
Commissioner in accordance with the requirements of Sec. 1.446-1(e).
Paragraph (c)(2) of this section provides the Commissioner's automatic
consent for certain changes. A holder making the election does not need
the Commissioner's consent.
(2) Automatic consent. The Commissioner grants consent for a holder
to change its method of accounting for bond premium with respect to
bonds to which Secs. 1.171-1 through 1.171-3 apply. The consent granted
by this paragraph (c)(2) applies provided--
(i) The holder elected to amortize bond premium under section 171
for a taxable year prior to the taxable year containing the date 60
days after the date final regulations are published in the Federal
Register and that election has not been revoked;
(ii) The change is made for the first taxable year for which the
holder must account for a bond under Secs. 1.171-1 through 1.171-3; and
(iii) The holder attaches to its return for the taxable year
containing the change a statement that it has changed its method of
accounting under this section.
Par. 7. Section 1.1016-5 is amended by revising paragraph (b) to
read as follows:
Sec. 1.1016-5 Miscellaneous adjustments to basis.
* * * * *
(b) Amortizable bond premium. A holder's basis in a bond is reduced
by the amount of bond premium used to offset qualified stated interest
income under Sec. 1.171-2. This reduction occurs when the holder takes
the qualified stated interest into account under the holder's regular
method of accounting. In addition, a holder's basis in a taxable bond
is reduced by the amount of bond premium allowed as a deduction under
Sec. 1.171-3(b)(5)(ii) (relating to the issuer's call of a taxable
bond).
* * * * *
Sec. 1.1016-9 [Removed]
Par. 8. Section 1.1016-9 is removed.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-16350 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-P
Complete official Federal Register PDF
FR Doc. 96-16342 Approval and Promulgation of Implementation Plans; Approval of Revisions to the State Implementation Plan; Georgia
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33414-33415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16342]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[GA-30-3-9615b; FRL-5519-1]
Approval and Promulgation of Implementation Plans; Approval of
Revisions to the State Implementation Plan; Georgia
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: EPA is approving the State Implementation Plan (SIP) revision
submitted by the State of Georgia through the Department of Natural
Resources, Environmental Protection Division (GA EPD) for the purpose
of deleting the volatile organic compound (VOC) reasonably available
control technology (RACT) rule for Perchloroethylene Dry Cleaners. In
the final rules section of this Federal Register, the EPA is approving
the State's SIP revision as a direct final rule without prior proposal
because the Agency views this as a noncontroversial revision amendment
and anticipates no adverse comments. A detailed rationale for the
approval is set forth in the direct final rule. If no adverse comments
are received in response to that direct final rule, no further activity
is contemplated in relation to this proposed rule. If EPA receives
adverse comments, the direct final rule will be withdrawn and all
public comments received will be addressed in a subsequent final rule
based on this proposed rule. The EPA will not institute a second
comment period on this document. Any parties interested in commenting
on this document should do so at this time.
DATES: To be considered, comments must be received by July 29, 1996.
ADDRESSES: Written comments on this action should be addressed to Scott
M. Martin at the EPA Regional Office listed below.
Copies of the documents relative to this action are available for
public inspection during normal business hours at the following
locations. The interested persons wanting to examine these documents
should make an appointment with the appropriate office at least 24
hours before the visiting day.
[[Page 33415]]
Air and Radiation Docket and Information Center (Air Docket 6102), U.S.
Environmental Protection Agency, 401 M Street, SW, Washington, DC
20460.
Environmental Protection Agency, Region 4, Air Programs Branch, 345
Courtland Street, NE, Atlanta, Georgia 30365.
Air Protection Branch, Georgia Environmental Protection Division,
Georgia Department of Natural Resources, 4244 International Parkway,
Suite 120, Atlanta, Georgia 30354.
FOR FURTHER INFORMATION CONTACT: Scott M. Martin, Regulatory Planning
and Development Section, Air Programs Branch, Air, Pesticides & Toxics
Management Division, Region 4 Environmental Protection Agency, 345
Courtland Street, NE, Atlanta, Georgia 30365. The telephone number is
404/347-3555, X4216. Reference file GA-30-3-9615.
SUPPLEMENTARY INFORMATION: For additional information see the direct
final rule which is published in the rules section of this Federal
Register.
Dated: April 19, 1996.
A. Stanley Meiburg,
Acting Regional Administrator.
[FR Doc. 96-16342 Filed 6-26-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-16330 Control of Emissions of Air Pollution from Highway Heavy-Duty Engines
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33421-33469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16330]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 86
[AMS-FRL-5526-9]
Control of Emissions of Air Pollution from Highway Heavy-Duty
Engines
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this action, EPA proposes new emission standards and
related provisions for heavy-duty engines intended for highway
operation, beginning in the 2004 model year. The proposed provisions
represent a large reduction (approximately 50 percent) in emission of
oxides of nitrogen (NOX), as well as reductions in hydrocarbons
(HC) and nitrate particulate matter (PM) from trucks and buses. If the
proposed standards are implemented, the resulting emission reductions
would translate into significant, long-term improvements in air quality
in many areas of the U.S. This would provide much-needed assistance to
a range of states and regions facing ozone and particulate air quality
problems that are causing a range of adverse health effects for their
citizens, especially in terms of respiratory impairment and related
illnesses.
EPA is also proposing several provisions to increase the durability
of emission controls and to provide flexibility for manufacturers in
complying with the stringent new standards. The Agency previously
published an Advance Notice of Proposed Rulemaking relating to this
action and addresses here a number of the comments received on the
Advance Notice. EPA believes the proposed program would result in
significant progress throughout the country in protecting public health
and the environment.
DATES: EPA requests comment on the proposal rulemaking no later than
August 26, 1996.
EPA will hold a public hearing on this proposal on July 25, 1996.
EPA will also hold a public meeting on July 19, 1996, to discuss
the proposed HDE regulations and receive informal public input on them,
and to discuss other potential mobile source controls identified in the
California Ozone State Implementation Plan for the South Coast (the
greater Los Angeles area).
More information about commenting on this action and on the public
hearing and meeting may be found under Public Participation, in Section
II of SUPPLEMENARY INFORMATION.
ADDRESSES: Materials relevant to this proposal including the draft
regulatory text and Regulatory Impact Analysis (RIA) are contained in
Public Docket A-95-27, located at room M-1500, Waterside Mall (ground
floor), U.S. Environmental Protection Agency, 401 M Street, S.W.,
Washington, DC 20460. The docket may be inspected from 8:00 a.m. until
5:30 p.m., Monday through Friday. A reasonable fee may be charged by
EPA for copying docket materials.
Comments on this proposal should be sent to Public Docket A-95-27
at the above address. EPA requests that a copy of comments also be sent
to Chris Lieske, U.S. EPA, Engine Programs and Compliance Division,
2565 Plymouth Road, Ann Arbor, MI 48105.
The hearing on this proposal will be held at the Marriott Hotel and
[[Page 33422]]
Conference Center, 1275 South Huron Street, Ypsilanti, MI, (313) 487-
2000, from 9:00 am until all testimony has been presented.
The public meeting to discuss the proposed HDE regulations will be
held Downtown Los Angeles Hyatt Regency, 711 South Hope Street, Los
Angeles, California. The public meeting will be conducted in two
sessions beginning at 2:00 p.m. and 7:00 p.m., with a dinner recess
before the 7:00 p.m. sessions.
This proposal, the draft regulatory text, and the draft Regulatory
Impact Analysis (RIA) are available electronically and can be obtained
on the Technology Transfer Network (TTN), which is an electronic
bulletin board system (BBS) operated by EPA's Office of Air Quality
Planning and Standards and via the internet. Details on how to access
TTNBBS and the internet are included in Section XIII of SUPPLEMENTARY
INFORMATION.
FOR FURTHER INFORMATION CONTACT: Chris Lieske, U.S. EPA, Engine
Programs and Compliance Division, (313) 668-4584.
SUPPLEMENTARY INFORMATION:
I. Introduction
Air pollution continues to represent a serious threat to the health
and well-being of millions of Americans and a large burden to the U.S.
economy. This threat exists despite the fact that, over the past two
decades, great progress has been made at the local, state and national
levels in controlling emissions from many sources of air pollution. As
a result of this progress, many individual emission sources, both
stationary and mobile, pollute at only a fraction of their precontrol
rates. However, continued industrial growth and expansion of motor
vehicle usage threaten to reverse these past achievements. Today, more
than five years after passage of major amendments to the Clean Air Act
(CAA or the Act), many states are still finding it difficult to meet
the ozone and PM National Ambient Air Quality Standards (NAAQSs) by the
deadlines established in the Act.\1\ Furthermore, other states which
are approaching or have reached attainment of the ozone and PM NAAQSs
will likely see those gains lost if current trends persist.
---------------------------------------------------------------------------
\1\ See 42 U.S.C. 7401 et seq.
---------------------------------------------------------------------------
In recent years, significant efforts have been made on both a
national and state level to reduce air quality problems associated with
ground-level ozone, with a focus on its main precursors, oxides of
nitrogen (NOX) and volatile organic compounds (VOCs).\2\ In
addition, airborne particulate matter (PM) has been a major air quality
concern in many regions. As discussed below, NOX, ozone, and PM
have all been linked to a range of serious respiratory health problems
and a variety of adverse environmental effects.
---------------------------------------------------------------------------
\2\ VOCs consist mostly of hydrocarbons (HC).
---------------------------------------------------------------------------
NOX control is now seen as a critical strategy to control
ozone levels, which remain unacceptably high in many areas across the
country. For many years, control of VOCs was the main strategy employed
in efforts to reduce ground-level ozone. VOC reductions were deemed
more cost effective (on a per-ton basis) and more readily achievable
than NOX reductions. In addition, it was generally believed that
greater ozone benefits could be achieved through VOC reductions. More
recently, it has become clear that NOX controls are often an
effective strategy for reducing ozone where its levels are high over a
large region (as in the Midwest and Northeast). As a result, attention
has turned to controlling NOX emissions as a key to improving air
quality in many areas of the country.
Current projections show total NOX emissions decreasing
slightly during the next few years as stationary and mobile source
control programs promulgated under the 1990 CAA amendments are phased
in. However, the downward trends in NOX pollution will begin to
reverse and NOX emission inventories will begin to rise by the
early or middle part of the next decade due to growth in stationary and
mobile source activity. In this timeframe, emissions from mobile
sources will account for about half of all NOX emissions and
heavy-duty vehicles are projected to represent about one quarter of
mobile source NOX emissions. In most areas, a significant increase
in ground-level ozone is expected to accompany the rise in NOX
emissions. Levels of PM are also expected to rise, both because of the
expected increase in numbers of PM sources and because NOX is
transformed in the atmosphere into fine nitrate particles that account
for a substantial fraction of the airborne particulate in some areas of
the country (a process called ``secondary particulate formation'').
Given these expected trends and the absence of new emission control
initiatives, the Agency believes that some of the nation's hard-won air
quality improvements will begin to be seriously threatened early in the
next decade.
Over the past decade, ambient air measurements and computer
modeling studies have repeatedly demonstrated that ozone is a regional-
scale issue, not just a local issue, in part because ozone and its
precursors, NOX and VOC, are often transported across large
distances. Thus, there is a role for all levels of government to
address these issues. EPA's state and local partners generally agree
that only with new initiatives at the regional and national level can
long-term clean air goals be achieved.
The states have jurisdiction to implement a variety of stationary
source emission controls. In most regions of the country, states are
implementing significant stationary source NOX controls (as well
as stationary source VOC controls) for controlling acid rain, ozone, or
both. In many areas, however, these controls will not be sufficient to
reach and maintain the ozone standard without significant additional
NOX reductions from mobile sources. Generally, the Clean Air Act
specifies that standards for controlling NOX, HC, and PM emissions
from new motor vehicles must be established at the federal level.3
Thus, the states look to the national mobile source emission control
program as a complement to their efforts to meet air quality goals. The
concept of common emission standards for mobile sources across the
nation is strongly supported by manufacturers, which often face serious
production inefficiencies when different requirements apply to engines
or vehicles sold in different states or areas.
---------------------------------------------------------------------------
\3\ The CAA limits the role states may play in regulating
emissions from new motor vehicles. California is permitted to
establish emission control standards for new motor vehicles, and
other states may adopt California's programs (Sections 209 and 177
of the Act).
---------------------------------------------------------------------------
Motor vehicle emission control programs have a history of
technological success that, in the past, has largely offset the
pressure from constantly growing numbers of vehicles and miles traveled
in the U.S. The per-vehicle rate of emissions from new passenger cars
and light trucks has been reduced to very low levels. As a result,
increasing attention is now focused on heavy-duty trucks (ranging from
large pickups to tractor-trailers), buses, and nonroad equipment.
Since the 1970s, manufacturers of heavy-duty engines for highway
use have developed new technological approaches in response to periodic
increases in the stringency of emission standards.4 However, the
technological characteristics of heavy-duty engines, particularly
diesel engines, have so far prevented achievement of emission levels
comparable to today's light-duty
[[Page 33423]]
gasoline vehicles. While diesel engines provide advantages in terms of
fuel efficiency, reliability, and durability, controlling NOX
emissions is a greater challenge for diesel engines than for gasoline
engines. Similarly, control of PM emissions, which are very low for
gasoline engines, represents a substantial challenge for diesel
engines. Part of this challenge is that most traditional NOX
control approaches tend to increase PM, and vice versa.
---------------------------------------------------------------------------
\4\ Highway heavy-duty engines, sometimes referred to as highway
HDEs in this proposal, are used in heavy-duty vehicles, which EPA
defines as highway vehicles with a gross vehicle weight rating over
8,500 pounds.
---------------------------------------------------------------------------
Despite these technological challenges, there is substantial
evidence of the ability for heavy-duty highway engines to achieve
significant additional emission reductions. In their successful efforts
to reach lower NOX and PM levels over the past 20 years, heavy-
duty highway diesel engine manufacturers have identified new
technologies and approaches that offer promise for significant new
reductions. New technological options are available to manufacturers of
heavy-duty gasoline engines as well. The emerging technological
potential for much cleaner heavy-duty vehicles is discussed further in
Section IV of this proposal and in the associated Regulatory Impact
Analysis (RIA).
Recognizing the need for additional NOX and PM control
measures to address air quality concerns in several parts of the
country and the growing contribution of the heavy-duty engine sector to
ozone and PM problems, EPA issued an Advance Notice of Proposed
Rulemaking (ANPRM) on August 31, 1995. In the ANPRM, the Agency sought
early comment on the general framework of a program to reduce emissions
from the heavy-duty engine category. The Agency has been pleased that a
broad range of interested parties have responded to the ANPRM with
their comments. To the extent possible, EPA has considered and
addressed these comments in the preparation of this Notice of Proposed
Rulemaking (NPRM). EPA continues to encourage comment on all aspects of
the proposed program; where ANPRM commenters may believe that this
action fails to address their comments, EPA encourages them to resubmit
those comments in the context of this formal proposal.
This preamble is organized as follows: Section II.A. summarizes the
public health and environmental concerns from ozone, PM and their
precursors; Section II.B. discusses the connection of these emissions
to air quality trends and the regional nature of the ozone and PM
problems; Section II.C. presents trends in overall nationwide NOX,
VOC, and PM emissions; Section II.D. presents the current and projected
future contribution of heavy-duty vehicles to overall emissions;
Section II.E. summarizes the overall rationale for the action being
proposed; Section III. then describes in detail the standards and other
provisions being proposed as well as background on the regulation of
highway heavy-duty engines; Section IV. summarizes the technological
feasibility of the proposed program; Section V. reviews the results of
EPA's economic and environmental analyses; Section VI. discusses the
potential role of several incentive-based programs; and Section VII.
provides information about the formal public comment process, including
a public hearing. The actual proposed regulatory language is available
in the public docket and electronically (see ADDRESSES above and
Section XIII. for further information).
II. Need for New NOX and VOC Emission Control
A. Health and Environmental Impacts of Ambient NOX and VOC: Ozone,
Particulate Matter, and Other Effects
Oxides of nitrogen (NOX) comprise a family of highly reactive
gaseous compounds that contribute to air pollution in both urban and
rural environments. NOX emissions are produced during the
combustion of fuels at high temperatures. The primary sources of
atmospheric NOX include both stationary sources (such as power
plants and industrial boilers), highway sources (such as light-duty and
heavy-duty vehicles) and nonroad sources (such as construction and
agricultural equipment). Ambient levels of NOX can be directly
harmful to human health and the environment. More importantly from an
overall health and welfare perspective, NOX contributes to the
production of secondary chemical products that in turn cause additional
health and welfare effects. Prominent among these are ozone and
secondary PM formation. Each of these phenomena is briefly discussed in
this proposal and in more detail in the Regulatory Impact Analysis.
Much of the evaluation of the health and environmental effects
related to NOX found in this section and in the Regulatory Impact
Analysis (RIA) were also discussed in the August 31, 1995 ANPRM.5
EPA encourages comment on the Agency beliefs expressed in this proposal
and in the RIA.
---------------------------------------------------------------------------
\5\ Information cited in this section and other related
information on health and environmental effects related to NOX
and VOC are available from the Regulatory Impact Analysis and other
documents found in Docket A-95-27.
---------------------------------------------------------------------------
1. Direct Health Effects of NOX
The component of NOX that is of most concern from a health
standpoint is nitrogen dioxide, NO2. EPA has set a primary
(health-related) NAAQS for NO2 of 100 micrograms per cubic meter,
or 0.053 parts per million. Direct exposure to NO2 can reduce
breathing efficiency and increase lung and airway irritation in healthy
people, as well as in the elderly and in people with pre-existing
pulmonary conditions. Exposure to NO2 at or near the level of the
ambient standard appears to increase symptoms of respiratory illness,
lung congestion, wheeze, and increased bronchitis in children.6
---------------------------------------------------------------------------
\6\ Air Quality Criteria Document for Oxides of Nitrogen, EPA-
600/8-91/049aF-cF, August 1993 (NTIS #: PB92-17-6361/REB, -6379/REB,
-6387/REB).
---------------------------------------------------------------------------
2. Indirect Health and Welfare Effects of NOX and VOC
In addition to the direct effects of NOX, the chemical
transformation products of NOX also contribute to adverse health
and environmental impacts. These secondary impacts of NOX include
ground-level ozone, nitrate particulate matter, acid deposition,
eutrophication (plant overgrowth) of coastal waters, and transformation
of other pollutants into more dangerous chemical forms. Each of these
is discussed below and in the Regulatory Impact Analysis. Also,
volatile organic compounds (VOCs), composed of a very large number of
different hydrocarbons (HC) and other organic compounds, are primary
precursors to ozone. The health and environmental effects of these
compounds as a class are generally considered in terms of their effect
on ozone and are discussed below and in the RIA. Health or other
effects of individual toxic compounds are not separately addressed in
this proposal.
a. Ozone
NOX and VOCs are primary precursors to ground level ozone
(O3). As discussed later in this proposal, ozone tends to be a
regional phenomenon in which elevated levels of ozone can develop over
wide areas.
Ozone is a highly reactive chemical compound that can affect both
biological tissues and man-made materials. Ozone exposure causes a
range of human pulmonary and respiratory health effects. While ozone's
effects on the pulmonary function of sensitive individuals or
populations (e.g., asthmatics) are of primary concern, evidence
indicates that high ambient levels of ozone can cause respiratory
symptoms in healthy adults and
[[Page 33424]]
children as well. For example, exposure to ozone for several hours at
moderate concentrations, especially during outdoor work and exercise,
has been found to decrease lung function, increase airway inflammation,
increase sensitivity to other irritants, and impair lung defenses
against infections in otherwise healthy adults and children. Other
symptoms include chest pain, coughing, and shortness of breath.7
---------------------------------------------------------------------------
\7\ Air Quality Criteria Document for Ozone and Related
Photochemical Oxidants (External Review Draft), EPA/600/P-93/004aF-
cF, 1996.
---------------------------------------------------------------------------
Recent studies focusing on chronic lung effects are also being
evaluated as part of EPA's review of the current ozone NAAQS. Repeated
exposures in laboratory animals suggest a cumulative impact,
potentially causing permanent structural changes to respiratory
tissues.8 Extrapolation of these results to humans raises concern
that individuals who have been exposed to ambient air containing high
levels of ozone each summer of their lives may experience a reduced
quality of life in their later years.9
---------------------------------------------------------------------------
\8\ Gross, K.B., White, H.J. (1987) ``Functional and pathologic
consequences of a 52-week exposure to 0.5 PPM ozone followed by a
clean air recovery period,'' Lung 165:283-295.; Huang, Y, Chang, L.-
Y, Miller, F.J., Crapo, J.D. (1988) ``Lung injury caused by ambient
levels of ozone,'' J. Aerosol Med. 1:180-183; Tyler, W.S., Tyler,
N.K., Last, J.A., Gillespie, M.J., Barstow, T.J. (1988) ``Comparison
of daily and seasonal exposures of young monkeys to ozone,''
Toxicology 50:131-144.
\9\ See, for example, Euler, G.L.; Abbey, D.E.; Hodgkin, J.E.;
Magie, A.R. (1988) ``COPD symptom effects of long-term cumulative
exposure to ambient levels of total oxidants and nitrogen dioxide in
California Seventh-Day Adventist residents,'' Arch. Environ. Health
43:279-285.
---------------------------------------------------------------------------
As described in more detail in the RIA, the presence of elevated
levels of ozone is of concern in rural areas as well. Because of its
high chemical reactivity, ozone causes injury to vegetation. This
injury has been observed at ozone levels above and also below the
current ozone NAAQS; EPA in is the process of reconsidering the
appropriate level of the ozone NAAQS in light of such evidence.
Although the action proposed is not being proposed for the purpose of
reducing crop damage from ozone, it is of interest to note that
estimates based on experimental studies of the major commercial crops
in the U.S. suggest that ozone may be responsible for significant
agricultural crop yield losses. In addition, ozone causes noticeable
leaf injury in many crops, which reduces their marketability and value.
Finally, there is evidence that exposure to ambient levels of ozone
existing in many parts of the country may be responsible for forest and
ecosystem damage. Such damage may be exhibited as leaf damage, reduced
growth rate, and increased susceptibility to insects, disease, and
other environmental stresses.
b. Nitrate Particulate Matter
The conversion of NOX into fine particulate matter (such as
ammonium nitrate) is of significant human health and environmental
concern. In general, air pollutants collectively called particulate
matter (PM) are divided into primary and secondary sources. Primary
sources include dust, dirt, soot, smoke, and liquid droplets directly
emitted into the air by sources such as factories, power plants, cars,
trucks, woodstoves/fireplaces, construction activity, forest fires,
agricultural activities such as tillage, and natural windblown dust.
Particles formed secondarily in the atmosphere by condensation or the
transformation of emitted gases such as SO2, NOX, and VOCs
are also considered particulate matter. Ambient PM is related to
several adverse health and environmental effects.
At the present time, data is not available to precisely partition
PM-10 into its primary and secondary PM components. Most of the well
developed nationwide PM-10 inventories are based only on primary
sources, but inventories for some PM-10 nonattainment areas have
identified the primary and secondary PM. From the available data, it is
clear that the roles of primary and secondary PM vary geographically.
For example, ammonium nitrate is a significant portion of the PM-10
inventory in cities in the western states (e.g., Denver, Salt Lake
City, Los Angeles) and a smaller portion of total PM in cities in the
eastern states (e.g., Philadelphia, New York). As discussed in the RIA,
EPA estimates that the NOX to Nitrate conversion rate varies from
near zero to about 20 percent, with a U.S. average in the order of
about 5 percent. While there is not data available on this at the
present time, it is reasonable to assume that NOX emissions from
heavy-duty engines are converted to nitrate at the same rate as
NOX from other sources.
The existing NAAQS for particulate matter were set in 1987. The
primary standards, intended to protect human health, are an average
concentration of 150 micrograms per cubic meter (g/m3)
over a 24-hour period and an average concentration of 50 g/
m3 annually. PM-10 was selected as the indicator for particle
pollution based on lung deposition studies. PM-10 includes all
particles in the size range of 10 micrometers or less. Particles
smaller than 2.5 micrometers are capable of penetrating deeper into the
lungs and air sacs. The secondary standards, intended to protect
against damage to the environment, were set identical to the primary
standards.
Since the last review of the PM-10 NAAQS in 1987, many
epidemiological studies of PM-10 exposure at levels below the existing
24-hour and annual standards have associated higher levels of particle
pollution with increased occurrence of illness and death (e.g.,
increased hospital admissions, aggravation of bronchitis and asthma,
and premature deaths). Based on studies of human populations exposed to
high concentrations of particles and on laboratory studies of animals
and humans, there are major human health concerns associated with PM.
These include deleterious effects on breathing and the respiratory
system, aggravation of existing respiratory and cardiovascular disease,
alterations in the body's defense mechanisms against foreign materials,
direct and indirect damage to lung tissue resulting in fibrosis,
carcinogenesis, and premature death. The major subgroups of the
population that appear to be most sensitive to the effects of
particulate matter include individuals with emphysema-like conditions
or cardiovascular diseases, chronic obstructive pulmonary disease,
those with influenza, asthmatics, the elderly, and children. PM-10 also
soils and damages materials, and fine particles are a major cause of
visibility impairment in the United States.10
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\10\ Air Quality Criteria for Particulate Matter (External
Review Draft), EPA-600/AP-95/001a-a, April 1995.
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All particles in the atmosphere scatter light and, hence, reduce
visibility. However, light is scattered most efficiently by particles
with a diameter of 0.5-1.0 micrometers. Secondary particles such as
nitrates are in this size range. As discussed in the RIA, in locations
such as the western U.S., where the ambient levels of SO2 tend to
be low, EPA believes nitrate particles are major contributors to
visibility attenuation.
c. Other Secondary Effects of NOX
NOX is a major contributor to acid deposition. The damage
caused by acid deposition continues to be documented and includes
acidification of surface waters and soil, reduction in fish
populations, damage to forests and associated wildlife, soil
degradation, damage to materials, monuments, buildings, etc., and
reduced visibility.11
[[Page 33425]]
Effects of acid deposition are most pronounced during springtime
snowmelts, when ``pulses'' of highly acidic water, often containing
high concentrations of toxic aluminum, enter lakes and streams. In
addition, nitrogen compounds deposited on ecosystems can transport
acids already contained in the soils and thus contribute to the
acidification of those ecosystems. Although one commenter on the ANPRM,
API, challenged the importance of NOX control in reducing acid
deposition, EPA believes that geographically broad controls like those
proposed in this action represent a cost-effective method of reducing
overall levels of deposited acid.12
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\11\ ``Acid Deposition Standard Feasibility Study, A Report to
Congress,'' prepared for the U.S. Environmental Protection Agency by
the Cadmus Group, Inc., under Contract Number 68-D2-0168, February
1995.
\12\ More information about EPA's position on the relationship
between NOX and acid deposition may be found as item II-A-13 in
Docket A-95-28, titled Draft Report: Adverse Effects of Nitrogen
Oxides and Benefits of Reductions.
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Another secondary effect of NOX emissions is their role in the
overgrowth of algae and other plants and oxygen depletion
(eutrophication) in coastal estuaries in the eastern part of the
country, including the Chesapeake Bay, as well as other estuaries and
coastal waters.13 Airborne nitrogen compounds act as fertilizers
for plant growth, contributing an estimated 25 percent of nitrogen
loading in some coastal waters. In waters where nitrogen compounds are
the limiting factor, eutrophication is resulting in the reduction or
loss of commercially valuable aquatic/marine species as well as
diminution of water-related recreational activities. EPA addressed this
effect on estuaries in the ANPRM and received no comments counter to
the Agency's assessment; comment on this issue is encouraged.
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\13\ Deposition of Air Pollutants Into the Great Waters: First
Report to Congress, EPA-453/r-93-055, May 1994.
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EPA encourages comment on all aspects of its review of the human
health and environmental impacts of ozone, NOX, and PM (especially
secondary nitrate PM), both in this preamble and in the Regulatory
Impact Analysis.
B. Need for NOX and VOC Control To Address Ozone and PM Issues
1. Regional NOX Control as a Strategy for Addressing Regional
Ozone Problems
The precursors to ozone and ozone itself are transported long
distances under some commonly occurring meteorological conditions.
Specifically, concentrations of ozone and its precursors in a region
and the transport of ozone and precursor pollutants into, out of, and
within a region are very significant factors in the accumulation of
ozone in any given area. Regional-scale transport, as it is discussed
in this proposal, may occur within a state or across one or more state
boundaries. Local source NOX and VOC controls are key parts of the
overall attainment strategy for nonattainment areas. However, the
ability of an area to achieve ozone attainment and thereby reduce
ozone-related health and environmental effects is often heavily
influenced by the ozone and precursor emission levels of upwind areas.
Thus, for many of these areas, EPA believes that attainment of the
ozone NAAQS will require control programs much broader than strictly
locally focused controls to take into account the effect of emissions
and ozone far beyond the boundaries of any individual nonattainment
area.
EPA therefore believes that effective ozone control requires an
integrated strategy that combines cost-effective reductions in
emissions from both mobile and stationary sources. EPA's current
initiatives, including the national highway heavy-duty engine standards
proposed in this action, are components of the Agency's integrated
ozone reduction strategy.
By the time the 1990 amendments to the Clean Air Act were passed,
the understanding that many areas face regional-scale ozone problems
was well established. Before 1990, the Act required states to address
the contribution of their pollution to other areas' attainment of the
ozone standard. Then, in the 1990 amendments, Congress included
additional provisions for states to address regional ozone transport in
their efforts to reach attainment by the statutory deadlines (the
Northeast Ozone Transport Region and Commission resulted from these
provisions). Since 1990, the understanding of regional transport of
ozone precursors and ozone itself has continued to expand.
The problem of regional transport of ozone and its precursors is
widely recognized by the states. In response to concerns about this
problem raised by state environmental commissioners comprising the
Environmental Council of the States (ECOS), EPA has worked closely with
states in the Ozone Transport Assessment Group (OTAG) to develop
various recommended control measures intended to address the regional
nature of ozone. Similarly, state and local air administrators, under
the auspices of STAPPA and ALAPCO, recently passed a unanimous
resolution endorsing national NOX emission regulations.14
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\14\ See comments from STAPPA/ALAPCO in Docket A-95-27.
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As the understanding of the photochemical phenomena related to
ozone has developed, NOX control options have received increasing
attention. Especially in addressing regional-scale ozone problems,
control of NOX has emerged as the primary strategy. VOC control,
by comparison, is seen as most effective in addressing localized ozone
peak concentrations found in or near major urban areas. As discussed
further below, EPA has conducted modeling studies in recent years
covering the eastern half of the U.S., which have reinforced the
understanding that regional-scale control of NOX emissions will be
essential to reducing the levels of transported ozone in large areas of
the Northeast, Southeast, and Midwest. EPA believes that ozone problems
in California also represent regional problems that would be
susceptible to regional NOX control. Thus, the extent of local
controls that will be needed to attain and maintain the ozone NAAQS in
and near seriously polluted cities is sensitive both to the amount of
ozone and precursors transported into the local area and to the
specific photochemistry of the area. In some cases (e.g., portions of
the Northeast Corridor, the Lake Michigan area, Atlanta, and
California) preliminary local modeling performed by the states
indicates that it will likely not be feasible to find sufficient local
control measures for individual nonattainment areas unless transport
into the areas is reduced in some manner. EPA has carefully considered
this important relationship between local and regional NOX
controls for individual areas and regions and for the country as a
whole, as summarized in the next sections. EPA requests comment on
these issues as well as general comments on the need for regional-scale
NOX controls.
a. Action by States and EPA To Achieve CAA Air Quality Goals
Title I of the 1990 Clean Air Act amendments (Sections 181-185(b),
generally) established an aggressive strategy for ozone nonattainment
areas to come into compliance with the ozone NAAQS. (The case of
attainment of the PM NAAQS is discussed in section B.3. below.) The
Act's strategy provides the framework for action by states and EPA for
national, regional, and local controls. Under these provisions, states
are expected to submit State Implementation Plans (SIPs)
[[Page 33426]]
demonstrating how each nonattainment area will reach attainment of the
ozone NAAQS. Based on the degree that ozone concentrations in an area
exceed the standard, the Act spells out specific requirements that
states must incorporate into their attainment plans and sets specific
dates by which nonattainment areas must reach attainment.
For nonattainment areas designated as serious, severe, or extreme,
state attainment demonstrations involve the use of photochemical grid
modeling (e.g., Urban Airshed Modeling, or UAM) for each nonattainment
area. Although these attainment demonstrations were due November 15,
1994, the magnitude of this modeling task, especially for areas that
are significantly affected by transport of ozone and precursors
generated outside of the nonattainment area, has delayed many states in
submitting complete modeling results.
Recognizing these challenges, EPA recently issued guidance on ozone
demonstrations, based on a two-phase approach for the submittal of
ozone SIP attainment demonstrations.15 Under Phase I, the state is
required to conduct limited UAM modeling and submit a plan implementing
a set of specific local control measures to achieve major reductions in
ozone precursors. Phase II involves a two-year process during which
EPA, the states, regional associations, and other interested parties
can improve emission inventories and modeling and identify regional
measures that may be needed to supplement the local controls of Phase
I. These improved analyses are then to be considered by states in
identifying additional local control measures that may be needed to
attain the NAAQS by the statutory dates. Currently, under Phase I of
the process, states are submitting plans and EPA is taking action to
approve or disapprove them.
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\15\ Memorandum from Mary D. Nichols, Assistant Administrator
for Air and Radiation, to EPA Regional Administrators, re Ozone
Attainment Demonstrations, March 2, 1995.
---------------------------------------------------------------------------
As part of these Phase I submittals, some states have indicated
that on the basis of preliminary information, locally based stationary
source NOX controls in those nonattainment areas would not be
helpful--or, in a few cases, would be detrimental--to attainment of the
ozone NAAQS. These states have petitioned EPA under Section 182(f) of
the Act for exemptions from local NOX stationary source controls
they would otherwise be required to implement under Reasonably
Available Control Technology (RACT) and New Source Review (NSR)
regulations. In general, Section 182(f) provides that waivers must be
granted if states show that reducing NOX within a nonattainment
area would not contribute to attainment of the ozone NAAQS within the
same nonattainment area.\16\ This section of the Act was added in 1990
in recognition of the fact that NOX reductions within some
nonattainment areas can increase ozone concentrations.
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\16\ ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--
Revised Process and Criteria,'' EPA Memo from John S. Seitz,
Director, OAQPS, to Regional Air Directors, February 8, 1995.
---------------------------------------------------------------------------
Section 182(f) of the Act also requires EPA to limit the assessment
of state petitions to the effect that NOX reductions within a
nonattainment area are likely to have on that local area's ability to
meet the NAAQS (i.e., this section of the Act does not permit an
assessment of pollutant transport into and out of the area). However,
in their modeling supporting their overall attainment demonstrations
under Phase II, states will need to project the levels of ozone and
precursors that are transported into the area (these assumptions are
called ``boundary conditions''). In many areas, the boundary conditions
used in Phase II modeling will need to assume that significant
reductions in ozone and NOX will be accomplished upwind. Thus, in
Phase II of the current process, it will be necessary for states and
EPA to consider the impacts of NOX controls at both the local and
regional levels in assessing how attainment can be achieved. As
described below, in most cases, EPA believes that broad, regional ozone
and NOX control in upwind areas will be necessary for Phase II
demonstrations even where Phase I modeling results currently indicate
that local NOX controls may be unnecessary or detrimental.
b. Local NOX Exemptions' Relation to Regional NOX Control
Needs
The state petitions for exemption from local RACT and NSR
requirements so far granted by EPA fall into three categories: (1) EPA
approved four state petitions for areas (Dallas and El Paso, TX,
Birmingham, AL, and northern Maine) for which Phase I modeling shows
that the areas will attain the ozone NAAQS without additional NOX
controls (there is no analysis for these areas showing NOX
controls are either beneficial or detrimental); (2) EPA granted
exemptions for five areas (Baton Rouge, LA, Beaumont, TX, Houston, TX,
the Lake Michigan area, and Phoenix, AZ) after Phase I modeling showed
that local NOX controls could worsen peak ozone concentrations in
the nonattainment areas; (3) EPA approved ten other petitions based on
monitoring data that shows the areas attained the ozone NAAQS without
additional NOX controls (there is no analysis for these areas
showing NOX controls are either beneficial or detrimental). It is
important to note that only five exemptions that have been granted
assert that NOX controls would be detrimental to attainment plans.
It is very important to view EPA's granting of exemptions from
local NOX controls in some areas under Phase I of the attainment
process in the broader context of the ultimate Phase II determinations.
Although EPA believes that it is reasonable to initiate new control
programs to address regional ozone problems on the strength of
information already available (see Section II.E. below), a better
overall picture of regional and local air quality phenomena for each
area will exist once Phase II demonstrations are completed. Some
commenters on the ANPRM have argued that EPA's granting of local
NOX exemptions for some areas during Phase I of the process should
be interpreted as a conclusion by the Agency that no further NOX
controls--local, regional, or national--will be necessary for these
areas to reach and maintain attainment or that such controls would be
harmful. API commented that EPA ``has failed to reconcile [the] two
incongruous policies,'' referring to the initiation of new regionally
based controls in a period when local NOX exemptions are being
granted in some areas. Similarly, the National Petroleum Refiners
Association (NPRA) stated that they view such simultaneous action to be
``contradictory and arbitrary.'' For several reasons, EPA believes that
such characterizations fail to recognize the limited role of local
NOX exemptions within the broader Phase II attainment
demonstration process.
First, because most of the NOX waiver petitions contain no
modeling analyses and many of those that contain modeling analyses are
being supplemented with improved Phase II modeling, EPA's approval of
each NOX exemption has been granted on a contingent basis.\17\
That is, a monitoring-based exemption lasts for only as long as the
area's monitoring data continue to demonstrate attainment. Thus, if a
violation is monitored (prior to the area being redesignated as being
in attainment) the exemption would be revoked and the
[[Page 33427]]
requirement to adopt NOX controls would again apply. Similarly,
any modeling-based exemption may need to be withdrawn if updated
modeling analyses for Phase II reach a different conclusion than the
Phase I modeling on which the exemption was based.\18\
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\17\ ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--
Revised Process and Criteria,'' EPA Memo from John S. Seitz,
Director, OAQPS, to Regional Air Directors, May 27, 1994.
\18\ NOX Supplement to the General Preamble, 57 FR 55628
(Nov. 25, 1992).
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Second, as discussed above, Section 182(f) of the Act does not
permit EPA to consider regional-scale NOX issues when acting on
state petitions for exemptions from local NOX controls. Because
NOX has been shown to be effective in reducing regionally
transported ozone, the broader modeling under Phase II is expected to
show that many areas will need regional NOX controls to counter
expected growth and maintain or reach attainment. Where this occurs, it
might also lead to withdrawal of exemptions from local NOX
controls.
Third, EPA has separate authority under the CAA (Section
110(a)(2)(D)) to require a state to reduce emissions from sources where
there is evidence showing that transport of such emissions would
contribute significantly to nonattainment or interfere with maintenance
of attainment in other states. For example, local NOX controls may
need to be reinstated if Phase II modeling shows that additional
reductions in that area are needed for attainment and maintenance in
downwind areas, superseding any NOX exemption that may have been
granted under Phase I. If this need arises, Section 110(a)(2)(D) would
provide EPA the authority to require such additional reductions.
EPA therefore believes that decisions about initiating new NOX
control programs that have a regional-scale effect are appropriately
made based on the best understanding available at that time of the
broad attainment needs of all areas. As is discussed below for several
regions of the country, there is strong evidence that regional-scale
controls will be needed to achieve and maintain attainment. As a part
of the Phase II assessments, the impact of and need for NOX
control and the continuation or withdrawal of local NOX exemptions
would be taken fully into account. Thus, in assessing EPA's overall
NOX policy, it is important to understand the limited and perhaps
temporary nature of exemptions from NOX controls in some areas
within the context of the anticipated implementation of broader,
regional NOX control strategies upon completion of the Phase II
modeling.
An important issue that states and EPA will consider during the
Phase II process is the interaction between prospective regional
control programs and local air quality conditions. For nonattainment
areas that are granted local NOX exemptions based on the lack of
need for additional NOX controls (this covers the great majority
of current and pending exemptions, as shown above), introducing
regional controls that have an effect both inside and outside the
nonattainment area is generally not expected to harm air quality within
the area. In the few areas where Phase I modeling indicates that
reduction of NOX in the area could increase ozone in some
locations, a balancing of all relevant factors will be necessary if
Phase II modeling reinforces that a significant potential problem
exists. For example, if ozone and NOX transported into the area
would be significantly reduced by regional-scale controls, the absolute
level of ozone within the area would drop, changing the photochemistry
of the area and potentially offsetting any localized detriment to air
quality that might still be introduced by the regional controls (e.g.,
cleaner trucks within the area).
In its comments on the ANPRM, API referred to recent modeling
studies performed by the Modeling Ozone Cooperative, which API says
challenge EPA's earlier conclusions about the need for NOX control
in the Northeast. EPA is aware of and is reviewing the results of these
modeling studies. Based on EPA's evaluation of these studies to date,
the Agency finds that these studies in fact support EPA's previous
conclusions that broad regional-scale controls will be necessary for
the Northeast and other areas to attain and maintain the ozone NAAQS.
As API observes, these studies also predict that NOX reductions
may increase ozone levels in several areas. API also cites modeling
performed by the Lake Michigan Air Directors Consortium (LADCO), which
appears to predict similar results for the Lake Michigan area. As
described below, the LADCO studies do however, suggest that reductions
in regional ozone at the boundary of their modeling domain will likely
play a key role in determining whether the NAAQS can be attained with
local VOC-oriented control measures.
EPA is concerned about these results and is interested in
additional modeling to further explore the degree to which NOX
control programs may increase ozone in some areas. Questions not
answered by current modeling include (1) how the results change if
additional stationary and mobile source NOX and VOC control
programs are assumed to be implemented by the time the heavy-duty
engine emission standards proposed in this action would be in place and
(2) whether urban-scale modeling of higher resolution can shed more
light on how widespread potential areas of increased ozone might be.
EPA expects that on balance it will continue to be preferable to
achieve regional-scale NOX and ozone reductions whenever possible,
even where current modeling indicates that increases in ozone may occur
in parts of some areas. EPA requests comments on this general
assessment, as well as on the discussions of individual regions below;
comments including additional data and modeling results that challenge
or reinforce EPA's views will be particularly valuable.
2. Role of Regional-Scale NOX Control in Addressing Ozone Problems
in Several Regions of the U.S.
EPA believes that the best data and modeling available show that
NOX in several large geographic areas of the country will continue
to contribute greatly to ozone problems in nonattainment areas well
into the future. Together, these areas account for about 87 percent of
nationwide NOX emissions from heavy-duty vehicles (see Chapter 7
of the RIA). Several of these regions are discussed individually below.
Where there are existing or pending exemptions from local NOX
controls in the region, their relationship to regional-scale NOX
controls is also discussed.
a. Eastern United States
There is a growing body of evidence that reducing regional ozone
levels holds the key to the ability of a number of the most seriously
polluted nonattainment areas in the Eastern United States, in both the
Southeast and the Northeast, to attain and maintain the ozone NAAQS.
Regional Oxidant Modeling (ROM) studies conducted by EPA (called the
ROMNET and Matrix studies) reinforce that reducing NOX emissions
in large geographical regions is the most effective approach for
reducing ozone levels in those large regions.19 At the same time,
these studies, as well as ongoing UAM modeling by states, suggest that
reductions in VOC emissions may be
[[Page 33428]]
key to reducing locally generated peak ozone concentrations.20
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\19\ See Regional Ozone Modeling for Northeast Transport
(ROMNET), EPA Doc. EPA-450/4-91-002a (June 1991), and Chu, S.H.,
E.L. Meyer, W.M. Cox, R.D. Scheffe, ``The Response of Regional Ozone
to VOC and NOX Emissions Reductions: An Analysis for the
Eastern United States Based on Regional Oxidant Modeling,''
Proceedings of U.S. EPA/AWMA International Specialty Conference on
Tropospheric Ozone: Nonattainment and Design Value Issues, AWMA TR-
23, 1993.
\20\ Because of the significant role that NOX plays in
atmospheric chemistry, additional regional NOX control can also
be very helpful in addressing the problems of year-round NOX
deposition in the Chesapeake Bay and other nitrogen-limited lakes
and estuaries and acid deposition and visibility degradation in the
eastern U.S. (as well as parts of the West).
---------------------------------------------------------------------------
In its analysis supporting the approval of a Low Emission Vehicle
program in the mid-Atlantic and Northeast states comprising the Ozone
Transport Region (OTR), EPA reviewed existing work and performed new
analyses to evaluate in detail the degree to which NOX controls
are needed.21 22 These studies showed that NOX emissions must
be reduced by 50 to 75 percent from 1990 levels throughout the OTR.
These studies showed that VOC emissions must also be reduced by 50 to
75 percent in and near the Northeast urban corridor. The studies also
concluded that transport of ozone and precursors from upwind areas both
inside and outside the OTR contributes significantly to ozone
predictions in much of the OTR.
---------------------------------------------------------------------------
\21\ The Northeast Ozone Transport Region (OTR) is comprised of
the states of Maine, New Hampshire, Vermont, Massachusetts, Rhode
Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware,
Maryland, and the Consolidated Metropolitan Statistical Area that
includes the District of Columbia and northern Virginia.
\22\ Environmental Protection Agency, Low Emission Vehicle
Program for Northeast Ozone Transport Region; Final Rule, 60 FR
48673, January 24, 1995.
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More recently, three studies have become available confirming the
conclusions of the earlier studies. In one of these, the Agency
performed new ROM analyses evaluating the eastern third of the U.S. and
southern Canada.23 Taken together, these studies strongly support
the view that NOX emissions must be reduced in the range of 50 to
75 percent throughout the OTR and that VOC emissions must be reduced by
the same amount in and near the Northeast urban corridor to reach and
maintain attainment.
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\23\ Environmental Protection Agency, ``Summary of EPA Regional
Oxidant Model Analyses of Various Regional Ozone Control
Strategies,'' November 28, 1994; Kuruville, John et al., ``Modeling
Analyses of Ozone Problem in the Northeast,'' prepared for EPA, EPA
Document No. EPA-230-R-94-108, 1994; Cox, William M. and Chu, Shao-
Hung, ``Meteorologically Adjusted Ozone Trends in Urban Areas: A
Probabilistic Approach,'' Atmospheric Environment, Vol. 27B, No. 4,
pp 425-434, 1993.
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Among the Northeast states, only Maine, based on unique air
trajectory patterns, has sought an exemption from local NOX
control; this exemption is granted for the northern part of the state.
b. The Southeast
A recent Southern Oxidant Study report describes the results of
research showing that, in the South, relatively high concentrations of
ozone are measured in both rural and urban areas.24 These
pervasive levels of ozone, while for the most part not in excess of the
current ozone NAAQS, form a background into which individual urban
plumes are interspersed. Preliminary modeling analyses performed by the
State of Georgia Department of Natural Resources suggests that it will
be very difficult to meet the NAAQS in Atlanta during episodes similar
to those modeled episodes, given the high background levels of ozone
that appear to prevail in the South. Further analyses of monitored data
by Southern Oxidant Study investigators suggest that the background
ozone levels are likely to be more responsive to reductions in NOX
emissions than in VOC emissions. There are no petitions at this time
for local NOX exemptions in this region.
---------------------------------------------------------------------------
\24\ ``The State of the Southern Oxidant Study (SOS): Policy-
Relevant Findings in Ozone Pollution Research,'' 1988-1994. North
Carolina State University, April 1995. See this reference for all
statements in this paragraph.
---------------------------------------------------------------------------
c. The Lake Michigan Area
Modeling studies performed to date for the states surrounding Lake
Michigan (Wisconsin, Illinois, Indiana, and Michigan) under Phase I of
their attainment demonstrations clearly indicate that reducing ozone
and precursors transported into the nonattainment areas would have a
significant effect on the number and stringency of local control
measures needed to meet the ozone NAAQS.\25\ These studies suggest that
without such region-wide reductions, the necessary degree of local
control will be very difficult to achieve, even with very stringent
local controls. The EPA Matrix study referenced above reinforces that
regional NOX control will be effective in reducing ozone across
the Midwest region. Taken together, the information available to date
suggests that additional reductions in regional NOX emissions will
probably be necessary in meeting the NAAQS in the Chicago/Gary/
Milwaukee area and downwind (including western Michigan), even though
currently available modeling shows that there may be a detrimental
effect from applying NOX controls locally in and near the major
nonattainment areas, in the absence of regional controls.
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\25\ Lake Michigan Ozone Study; Lake Michigan Ozone Control
Program: Project Report, December 1995.
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EPA has granted an exemption from local NOX controls for
several areas in the Lake Michigan region based on Phase I modeling.
Phase II modeling is underway by these states, which the Agency is
hopeful will clarify the conditions under which NOX controls might
cause an increase in ozone in the future, the magnitude of such an
increase, and the parts of the nonattainment areas in this region in
which this may occur.
d. Eastern Texas
There has been only limited modeling work focusing on the air
quality characteristics of the eastern Texas region to date. The State
of Texas has requested and been granted exemptions for the Houston and
Beaumont/Port Arthur nonattainment areas, based on Phase I modeling
that predicted that additional local NOX controls could worsen the
ozone problem. New modeling is underway by the state, but there is not
yet enough data to draw conclusions about the potential effect of
transport of ozone and its precursors on these areas. This uncertainty
has led the state to request that the exemptions from local NOX
controls in these areas be granted on a temporary basis while more
sophisticated modeling is conducted.
e. California
The State of California has submitted their ozone SIP to EPA for
approval, relying on both NOX and VOC reductions for most
California nonattainment areas, comprising most of the populated
portion of the state, to demonstrate compliance with the NAAQS.
Specifically, the revised SIP projects that the following NOX
reductions are as follows: South Coast, 59 percent; Sacramento, 40
percent; Ventura, 51 percent; San Diego, 26 percent; and San Joaquin
Valley, 49 percent. For VOC, the required reductions will be the
following: South Coast, 79 percent; Sacramento, 38 percent; Ventura, 48
percent; San Diego, 26 percent; and San Joaquin Valley, 40 percent.
EPA has granted exemptions from local NOX controls within
three California nonattainment areas; EPA believes that these actions
do not affect the broader need for regional NOX controls in large
parts of the state for ozone and PM NAAQS attainment and maintenance.
3. Secondary PM Formation as a Regional Issue
Measurements of ambient PM in some western U.S. urban areas that
are having difficulty meeting the current NAAQS for PM-10 have
indicated that secondary PM is a very important component of the
problem. Nitrates
[[Page 33429]]
(e.g., ammonium nitrate) are a primary constituent of this secondary
PM. For example, on days when PM-10 is high in Denver, about 25 percent
of the measured particulate is ammonium nitrate. In the Provo/Salt Lake
City area, secondary PM accounts for approximately 50 percent of the
measured PM, with nitrates being an important component of the
secondary particulate. Secondary nitrate PM levels as high as 40
percent of the 24-hour PM-10 NAAQS standard have been measured in the
Los Angeles Basin and concentrations of nitrate PM about one third of
the NAAQS have been measured in the San Joaquin Valley.\26\
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\26\ Summary of Local-Scale Source Characterization Studies,
EPA-230-F-95-002, July, 1994.
---------------------------------------------------------------------------
NOX is a critical reactant in the complex chemical reactions
which eventually result in the formation of atmospheric nitrates. Thus,
control of NOX emissions from heavy-duty vehicles will have a
positive effect in reducing atmospheric ammonium nitrate. Because the
atmospheric chemistry of secondary PM formation has common attributes
to that of ozone, secondary PM also tends to be a regional, rather than
a strictly local phenomenon. For this reason, EPA believes that, as is
the case for ozone, regional NOX controls can be very effective in
reducing secondary PM over a significant area. For example,
California's revised SIP concludes that secondary formation of nitrate
particulate (primarily ammonium nitrate) contributes to the particulate
problem in the South Coast Air Basin and the San Joaquin Valley. The
Agency requests comment on the role of secondary particulate in PM-10
nonattainment in specific areas and the effect of regional NOX
controls on such emission; comments that include additional data will
be particularly valuable.
The sources that contribute to PM levels can vary significantly
from area to area. In many areas in the western U.S., re-entrained
fugitive dust emissions dominate the overall PM emissions inventory. In
large urban areas, however, direct PM emissions from heavy-duty diesel
vehicles, as well as the secondary PM from NOX produced by all
heavy-duty vehicles, are believed to contribute significantly to
elevated PM levels.
As can be seen from the discussion above, NOX emissions have a
number of different fates in the atmosphere. In some situations, such
as the formation of atmospheric ozone, NOX is used as a catalyst
but not consumed. A single NOX molecule can potentially be
involved in many photochemical reactions producing several ozone
molecules. In other cases, such as the formation of nitrate particulate
and acid precipitation, NOX is consumed. All NOX eventually
leaves the atmosphere in dry gas, particulate deposition, or in wet
deposition. NOX has a mean residence time in the atmosphere on the
order of several days.
It is clear that heavy-duty vehicle NOX emissions have a role
in the formation of ozone, nitrate particulates, and acid
precipitation. The relative partitioning varies across the country
depending on factors such as geography, meteorology, and the
concentration of other atmospheric pollutants. This preamble and the
RIA contain information and analyses describing the positive impact of
this proposal on ozone, PM, and other environmental effects, which EPA
believes form a strong basis for this proposal. EPA is conducting
additional studies to further refine our understanding of the role of
NOX in the formation of ozone and nitrate PM. EPA requests comment
and data regarding the relative partitioning of NOX emissions.
C. National Emission Trends Related to Ozone and PM
1. National NOX and VOC Emissions Trends
Figure 1 displays projected total NOX emissions over the time
period 1990 to 2020, including a breakdown between stationary and
mobile source components over the same period.\27\ Figure 2 presents
similar data for VOC emissions for the period 1990 to 2010 (later-year
projections for VOC are under development).\28\ As the figures show, a
similar pattern is projected for both of these ozone precursor
emissions. Initially, the projections indicate that national
inventories will decrease over the next few years as a result of
continued implementation of finalized CAA stationary and mobile source
NOX control programs. After the year 2000, however, when
implementation of these CAA programs is largely completed and the
pressure of growth continues, these downward trends are expected to
reverse, resulting in rising national VOC and NOX emissions.
---------------------------------------------------------------------------
\27\ A discussion of the data used for projecting emissions from
various sources is found in the Regulatory Impact Analysis.
\28\ The data in these and the succeeding figures in this
proposal are discussed in the RIA, and take into account the
expected effects of various CAA control programs that have been
promulgated at the time of the modeling. These include Tier I
tailpipe standards, new evaporative emission test procedures,
enhanced inspection and maintenance requirements, reformulated
gasoline, oxygenated fuels, and California LEV (Low Emission
Vehicle) requirements. Nonroad NOX emission projections also
reflect the future effects of existing nonroad emission regulations.
The potential effects of contemplated National LEV requirements or
other programs are not reflected in the data. In these figures,
nonroad emission data includes emissions from a broad range of
nonroad sources including locomotives, aircraft, and marine vessels.
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[[Page 33432]]
In its comments on the ANPRM, API observed that monitoring data
from some areas show progress in reducing ozone. EPA agrees that this
progress appears to be occurring and the Agency believes that this
progress may continue for the next few years in many areas as current
NOX and VOC programs are implemented. As shown in Figures 1 and 2
above, however, EPA believes that, in the absence of significant new
control efforts, the current downward trends in ozone precursor
emissions will be reversed in the middle of the next decade. The Agency
also believes that the projected increase in emissions will again
increase ozone levels in urban areas. EPA continues to examine this
issue and welcomes new modeling analyses that relate NOX and VOC
emission trends to ozone levels.
2. PM Air Quality Issues and Emission Trends
The overwhelming proportion of PM-10 emissions is created by wind
erosion, accidental fires, fugitive dust emissions (from road surfaces,
agricultural tilling, construction sites, etc.), and other
miscellaneous sources. As much as 85 percent of PM-10 in nonattainment
areas can be composed of these ``crustal'' and miscellaneous materials.
Since these sources are not readily amenable to regulatory standards
and controls, it is appropriate to focus on the ``controllable''
portion of the particulate pollution problem when considering the need
for PM controls. The result is shown in Figure 3, which displays
national trends in PM-10 levels from stationary and mobile sources,
including secondary nitrate PM, projected for the twenty-year period
1990 to 2010. Similar to the pattern discussed above for VOC and
NOX emissions, the figure shows that total PM from these sources
will decline slightly as the beneficial effects of the 1990 CAA
Amendments continue to be felt. However, in the absence of additional
controls, including NOX controls, mobile source and industrial
source PM emissions are expected to rise after 2000.
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[[Page 33434]]
Currently, there are 82 PM-10 nonattainment areas across the U.S.
As discussed in section II.B.3. above, in some areas of the West,
nitrate particulate represents between 15 and 40 percent of total
particulate matter. The level of nitrate PM is a function of the
availability of NOX. It is appropriate to expect that the relative
proportions of nitrate particulate caused by stationary and mobile
sources are similar to the relative contributions of NOX by these
source categories. Thus, based on the NOX projections of Figure 1,
which EPA believes are generally typical of NOX projections in the
West, EPA estimates that about half of total nitrate PM is caused by
mobile sources, or about one tenth of total PM-10 in the western part
of the country. In the eastern part of the country, peak fine
particulate matter levels occur in the summer, primarily because
photochemical processes involving SO2 and NOX driven by
strong sunshine accelerate the formation of sulfate and nitrate
particulate matter. Thus, reducing NOX over a broad area is one
strategy for reducing the net fine particle formation in the East. EPA
requests comment, including applicable data whenever possible, on its
assessment of the relationship of NOX to ambient nitrate PM.
D. Contribution of Heavy-Duty Vehicles to Mobile Source Emissions
Heavy-duty vehicles represent about 12 percent of nationwide
NOX emissions and are also an important source of VOC (as a result
of HC emissions) and PM throughout the country. This section reviews
EPA's current estimates of the contribution of heavy-duty vehicles to
the nation's ozone, PM, and NOX air pollution problems now and
into the future. The projections presented here incorporate the
emission reductions from all national mobile source emission control
programs for which final regulations were in place at the time of the
modeling and are discussed further in the RIA.
1. National Mobile Source NOX Emissions Trends
Figure 4 shows the total mobile source NOX inventory by
emission source (light-duty vehicles, heavy-duty vehicles, and nonroad
engines) projected over the next 25 years. For light- and heavy-duty
vehicles, the figure shows a decline in emissions over the next decade
as current programs phase in. The figure also shows, however, that this
current downward trend is projected to end, resulting in a return to
current NOX levels in the absence of further controls. Nonroad
emissions are projected to rise throughout the period.
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[[Page 33435]]
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[[Page 33436]]
2. National Mobile Source VOC Emissions Trends
Figure 5 shows the total national mobile source VOC inventory by
emission source. As with the NOX emission projections in Figure 4,
this figure shows that light-duty vehicle emissions can be expected to
decline for some years, but then begin rising in the 2005 time frame.
VOC emissions from heavy-duty vehicles and nonroad engines are
projected to rise gradually throughout this period.
[[Page 33437]]
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[[Page 33438]]
3. National Mobile Source PM Emissions Trends
EPA's latest projected trends for directly emitted mobile source
emissions of PM-10 are shown in Figure 6. The figure shows that over
the next 15 years the contribution of heavy-duty vehicles and other
highway sources to PM-10 pollution are expected to decrease
significantly and then remain relatively constant well into the next
decade.
[[Page 33439]]
[GRAPHIC] [TIFF OMITTED] TP27JN96.028
[[Page 33440]]
The emission data on which Figure 6 is based do not include
secondary nitrate PM-10 produced by the transformation of NOX in
the atmosphere. EPA believes that for those areas where secondary PM
formed from NOX is a problem, the proportions of total secondary
PM that may be attributed to different emission source categories
mirror the proportions of total NOX emissions from those sources
in those areas. Thus, based on the trends for NOX emissions shown
in Figures 1 and 4 above and assuming that the availability of ammonia
in the atmosphere remains roughly constant, the contribution of heavy-
duty vehicles to secondary PM problems can be expected to decline
slightly in the next few years and then to begin to increase again,
likely reaching and exceeding current levels after about 2020. Also
based on Figures 1 and 4, EPA believes that on average the proportion
of total nitrate PM that may be attributed to heavy-duty vehicles is in
the same range as the proportion of total NOX contributed by these
vehicles, or roughly 10 percent.
As discussed earlier in this proposal, EPA has not completed its
assessment of the relative importance of fine PM to health and welfare
concerns as compared with PM-10. As a result, EPA has not yet developed
specific projections showing the contribution of heavy-duty vehicles to
total fine particulate emissions. However, since nearly all mobile
source related PM, both directly emitted PM and secondary nitrate PM
formed from NOX emissions, falls in the fine particulate category,
it follows that the relative contribution of heavy-duty vehicles to
total fine particulate is greater than their contribution to total PM-
10.
E. Conclusions
1. The Rationale for Controlling Heavy-Duty Vehicle Emissions
EPA believes that immediate proposal of new emission standards for
highway heavy-duty engines is appropriate. The decision to issue this
NPRM is based on thorough consideration of a range of relevant factors,
as described above. Section II.A. presented the serious effects to
human health and the environment of elevated levels of ozone and other
chemical products of NOX emissions, including secondary PM . That
section describes a range of serious respiratory health effects that
have been closely connected to exposure to ozone levels exceeding the
NAAQS, which exist in many areas of the country. In light of the many
years of research by many parties into the health effects of ozone, the
Agency believes that a clear picture has emerged that, not only those
with existing respiratory conditions, but also healthy adults and
children are in danger of experiencing medical problems and a reduced
quality of life when exposed to elevated levels of ozone. Also
discussed were the variety of health concerns that have been associated
with exposure to PM at levels above the current NAAQS. Beyond these and
other serious health concerns, Section II.A. also discussed major
impacts on vegetation, crops, coastal estuaries, visibility, and other
effects that result from the transformation of NOX into ozone,
acid deposition, and nitrate PM formed from NOX. The current NAAQS
levels reflect the need to address exposure to ozone and PM wherever
the NAAQS standards are exceeded.
Section II.B. discussed EPA's belief that the widespread exposure
of people to elevated ozone levels will continue and worsen in the
absence of major regional-scale reductions in
FR Doc. 96-16330 Control of Emissions of Air Pollution from Highway Heavy-Duty Engines
NOX. This section
discussed the regional characteristic of the ozone problem and how
various large areas of the country are projected to require regional-
scale NOX controls to reach and maintain attainment of the ozone
standard. EPA believes this remains true even where local NOX
control waivers must be granted under the CAA. This section also noted
that regional-scale control of NOX would be beneficial in reducing
the formation of secondary PM in some areas of the western U.S. and
would thereby assist these areas in reaching and attaining the PM
NAAQS.
Section II.B. also presented projections of emissions over the next
20 to 30 years to help assess the likelihood of continued air quality
problems in the future. In general, EPA's most recently developed
emission inventories show that national levels of ozone precursors will
tend to drop slightly, but only temporarily, after which they will
return to current levels. The link of these projected future emissions
to the formation of ozone was reinforced by recent air quality modeling
projecting continued ozone problems in major areas of the country in
the absence of new controls. The information assembled in this section
leads EPA to believe that a strong need exists for new regional-scale
NOX control programs over large areas of the country if the
negative trends are to be arrested and reversed. Similarly, the data on
PM suggests that secondary PM reductions will be helpful in reversing a
national trend of increasing PM emissions, especially in the western
states.
Section II.C. presented national mobile source emission inventories
over the next 20 to 30 years, divided into the key mobile source
categories. These presentations showed that heavy-duty vehicles
contribute significantly to mobile source NOX , VOC, and PM
emissions and to the overall trends in mobile source emissions into the
future. In its comments on the ANPRM, API gave several reasons why
projections of future emission inventories may be in error and
questioned the future contribution of heavy-duty vehicle emissions.
Although EPA believes that the projections presented in this proposal
can be improved and will continue to take actions to improve them, the
Agency believes that they represent the highest quality estimates
available today. As such, they clearly indicate that heavy-duty
vehicles will remain significant contributors to these emissions well
into the future.
After consideration of all the available information, including
comments received on the ANPRM, EPA believes that heavy-duty vehicles
contribute significantly to air pollution, which has a serious impact
on health and the environment. The Agency believes that this body of
information on balance supports taking action to revise heavy-duty
engine emission standards, which will reduce NOX, HC, and
secondary PM from this segment of mobile sources.
2. Appropriateness of a National Heavy-Duty Vehicle Program
EPA further believes that the mobile source emission control
program proposed in this action is most appropriately national in
scope, for several reasons. First, as summarized above, the regional
character of both ozone and secondary PM formation leads EPA to believe
that major new NOX controls over large regions of the country are
needed to achieve the regional-scale ozone and PM reduction many areas
require. Control of NOX from heavy-duty vehicles and other mobile
sources are effective approaches to such regional control since the
resulting control covers a wide area. Second, heavy-duty vehicles, like
other mobile sources, represent an emissions source that itself crosses
boundaries of nonattainment areas, states, and regions. A mobile source
control program that covers only certain parts of the country has the
disadvantage of allowing high-emitting vehicles to travel regularly
into areas with more stringent requirements, compromising the
effectiveness of the program. Finally, the structure and marketing
patterns of the engine and vehicle manufacturing industries would make
it impractical and inefficient for a
[[Page 33441]]
patchwork of different emission standards to be enacted in various
parts of the country. Rather, for engine manufacturers to achieve
economies of scale and to concentrate research and development
resources most effectively, EPA believes it is most practical to
establish a single set of emission requirements applying to engines in
trucks and buses used anywhere in the country. A key reason why EPA,
CARB, and engine manufacturers agreed to a Statement of Principles was
the potential for nationally harmonized requirements for heavy-duty
vehicles.
3. Issues of Timing
EPA also believes that for the anticipated benefits of new highway
heavy-duty engine emission standards to be available when they are
needed, it is best to finalize such a program in the near future. There
are several reasons for and positive consequences of expeditious
promulgation of new emission requirements for heavy-duty engines. The
primary reason to begin the process now is that the current emission
and air quality projections discussed above project a need in many
areas of the country for significant additional emission reductions in
the post-2000 period to reach and maintain attainment.
In addition, the highway heavy-duty engine manufacturers have
communicated to EPA that to meet the stringent standards proposed in
this action for model year 2004 and later, they need to have the
precise emission requirements affecting them in place and begin work
toward those goals very soon. The industry's perspective is based on
its expectation that the standards proposed here would represent a very
significant technological challenge requiring large investments by the
members of the industry. EPA's technology assessment is consistent with
the industry view. If new standards are established by approximately
the end of 1996, about two years will be available before the proposed
1999 technology review for manufacturers to marshall appropriate
resources to achieve significant technological progress. Then, if such
progress is confirmed at that time, about four years will remain for
additional resources to be assembled and the new technologies to be
developed and incorporated into 2004 model year engines. Based on the
Agency's technology assessment as of the time of this proposal, EPA
agrees that it is best to set the process in motion now to achieve the
full benefits of cleaner heavy-duty vehicles beginning in 2004.
Another compelling reason to initiate the process of enacting new
heavy-duty engine emission requirements soon is that the Agency is
proposing to encourage voluntary marketing of cleaner engines,
especially engines that incorporate new technologies, earlier than 2004
(see Section III.B. below for proposed changes to the Averaging,
Banking, and Trading program). An expeditious completion of the
rulemaking process would encourage manufacturers to consider such
options in the earliest possible model year.
State air quality planners will also benefit if the program
proposed in this action can be formally established soon. States must
soon finalize ozone SIPs demonstrating attainment in the years ahead,
and expeditious EPA action on additional heavy-duty vehicle emission
reductions will allow states to know whether to incorporate expected
reductions from heavy-duty vehicle controls into their SIPs. At the
same time, any significant delay in promulgation might also require a
delay in the year of implementation past 2004, postponing the full
benefit of the program as an air quality strategy. For this and the
other reasons given in this section, EPA plans to finalize the proposed
requirements as soon as possible should the Agency reach a final
determination that such a program is warranted.
III. Proposed Program for Reducing Highway HDE Emissions
A. Background on Highway HDE Standards
Under EPA's classification system, vehicles with a gross vehicle
weight rating (GVWR) over 8,500 pounds are considered heavy-duty
vehicles. (The State of California classifies the lighter end of EPA's
heavy-duty class as ``medium-duty vehicles.'') Heavy-duty engines
(HDEs) are used in a wide range of heavy-duty vehicle categories, from
small utility vans to large trucks. Because one type of HDE may be used
in many different applications, EPA emission standards for heavy-duty
vehicles are based on the emissions performance of the engine (and any
associated aftertreatment devices) separate from the vehicle chassis.
Testing of an HDE consists of exercising it over a prescribed duty
cycle of engine speeds and loads using an engine dynamometer.
Highway HDEs are categorized into diesel and otto-cycle
(predominantly gasoline-fueled) engines with each, in some cases,
having different standards and program requirements. EPA has further
subdivided heavy-duty diesel engines (HDDEs) into three
subclassifications or ``primary intended service classes''; light,
medium, and heavy HDDEs. HDDEs are categorized into one of the three
subclasses depending on the GVWR of the vehicles for which they are
intended, the usage of the vehicles, the engine horsepower rating, and
other factors 29. The subclassifications allow EPA to more
effectively set requirements that are appropriate for the wide range of
sizes and uses of HDDEs. With one exception, emission standards are the
same for HDDE in all of the subclasses but other programmatic
requirements differ as appropriate. Engines used in ``urban buses''
(large transit buses)30, which fall mostly in the heavy HDDE
subclass, have somewhat different standards and program requirements.
The standards and program requirements for the various categories and
types of engines are discussed below and in following sections, as
appropriate.
---------------------------------------------------------------------------
\29\ 40 CFR Part 86.090-2.
\30\ 40 CFR Part 86.093-2.
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Emissions from HDEs are measured in grams of pollutant per brake
horsepower-hour (g/bhp-hr) or, in more recent regulations, in grams per
kilowatt hour (g/kw-hr). These units for emission rates recognize that
the primary purpose of HDEs is to perform work and that there is a
large variation in work output among the engines used in heavy-duty
applications. This system allows EPA to apply the same standards to a
very wide range of engines.
Emission standards have been in place for highway diesel and
gasoline-fueled HDEs since the early 1970s. The first regulations
focused on control of emissions of smoke. Subsequent regulations
broadened emission control requirements to include gaseous and
particulate emissions. The 1990 amendments to the Clean Air Act
required EPA to set more stringent standards for NOX emissions
from all heavy-duty highway HDEs and for PM from urban buses. 42 U.S.C.
7521(a)(3), 7521(f), and 7554(b).
The current exhaust emission standards for highway heavy-duty
diesel and gasoline engines are presented in Table 1. Standards for
urban buses, which specify more stringent PM levels than those applying
to other HDEs, are displayed separately in the table.
[[Page 33442]]
Table 1.--Highway Heavy-Duty Emission Standards
----------------------------------------------------------------------------------------------------------------
Diesel
Year HC (g/bhp- CO (g/bhp- NOX (g/bhp- particulate
hr) hr) hr) (g/bhp-hr)
----------------------------------------------------------------------------------------------------------------
Diesel:
1991-93................................................. 1.3 15.5 5.0 0.25
1994-97................................................. 1.3 15.5 5.0 0.10
1998.................................................... 1.3 15.5 4.0 0.10
Urban Buses:
1991-92................................................. 1.3 15.5 5.0 0.25
1993.................................................... 1.3 15.5 5.0 0.10
1994-95................................................. 1.3 15.5 5.0 0.07
1996-97................................................. 1.3 15.5 5.0 *0.05
1998.................................................... 1.3 15.5 4.0 *0.05
Otto-cycle HC
(g/bhp-hr) CO
(g/bhp-hr) NOX
(g/bhp-hr) Evaporative
HC
(g/test)
1991-97:
(A)..................................................... 1.1 14.4 5.0 3.0
(B)..................................................... 1.9 37.1 5.0 4.0
1998 (A)................................................ 1.1 14.4 4.0 3.0
(B)..................................................... 1.9 37.1 4.0 4.0
----------------------------------------------------------------------------------------------------------------
Note:
``(A)'' denotes the standard for engines in trucks 14,000 lbs. Gross Vehicle Weight Rating (GVWR).
``(B)'' denotes the standard for engines in trucks 14,000 lbs. GVWR.
*.07 g/bhp-hr in-use.
This table does not contain all applicable standards. A complete set of standards may be found in 40 CFR Part
86.
Under section 202(a)(3), emission standards for highway HDEs are
set at the ``greatest degree of emission reduction achievable through
the application of technology which the Administrator determines will
be available for the model year to which such standards apply, giving
appropriate consideration to cost, energy, and safety factors
associated with the application of such technology'' (42 U.S.C.
7521(a)(3)(A)). In addition, section 202(a)(3) provides that highway
HDE manufacturers will have four model years of lead time before any
new emission standards may be implemented (42 U.S.C. 7521(a)(3)(C)).
The Act also provides that standards for HDEs apply for at least three
model years to provide stability to any heavy-duty standards. Id.
Finally, the Act precludes new NOX emission standards for highway
HDEs before the model year 2004. 42 U.S.C. 7521(b)(1)(C).
B. Description of Today's Proposal
In this action, EPA proposes a comprehensive program to address the
significant contribution of highway HDEs to ambient pollutant
concentrations and the resultant air quality problems around the
country. The proposed program consists of stringent new emission
standards, changes to maintain the durability of HDE emissions in use,
and changes to the current Averaging, Banking, and Trading regulations
to encourage the early introduction of cleaner engines and new
technology.
1. Emission Standards
a. Standards Proposed in Today's Action. EPA proposes new emission
standards for model years 2004 and later. These standards are in the
form of combined non-methane hydrocarbons plus nitrogen oxides (NMHC +
NOX) and are presented in units of g/bhp-hr. They would apply to
otto and diesel cycle engines fueled by gasoline, diesel, methanol, and
gaseous fuels and their blends. Manufacturers would have the choice of
certifying their engines to either of two optional sets of standards:
2.4 g/bhp-hr NMHC + NOX
or
2.5 g/bhp-hr NMHC + NOX with a limit of 0.5 g/bhp-hr on NMHC
EPA proposes that all other emission standards and other requirements
applying to model year 1998 and later model years remain unchanged.
For the most part, EPA expects that either of these standards will
result in the essentially the same NOX and NMHC emission rates in-
use. As is discussed elsewhere in the proposal and in the supporting
RIA, EPA expects that the proposed standards will generally result in
NMHC levels of about 0.4 g/bhp-hr and NOX levels of about 2.0 g/
bhp-hr. Most, but not all, HDEs now have HC certification levels of 0.5
g/bhp-hr or less. The standards will result in modest NMHC reductions
for the HDE class taken as a whole and will serve as a cap against
increases in NMHC emissions as manufacturers implement NOX control
strategies. The expected NOX levels would result in reductions of
50 percent as compared to the 1998 standard. For administrative
simplicity, EPA would prefer only one standard and based on current HC
certification levels the 2.4 g/bhp-hr standard seems most appropriate.
However, the manufacturers would prefer the flexibility of the
alternate standard and EPA sees no environmental harm from offering
this option. EPA asks comment on whether two standards are appropriate
and why.
The form of the proposed standards differs in some aspects from the
current and 1998 model year standards for HDEs presented in Table 1.
First, EPA is proposing a combined standard (NMHC+NOX) instead of
separate standards. EPA is using this approach because for in-cylinder
control strategies there is a tradeoff between HC and NOX control.
Thus, expressing the requirements as a combined standard provides the
manufacturers some small amount of additional flexibility. Further, EPA
sees no environmental harm from providing this flexibility. While there
is not a direct one to one trade-off in every area of the country, both
pollutants are generally considered key ingredients in the formation of
ozone. Thus a little more control of one pollutant at the expense of
the other should provide essentially the same air quality benefits as
if the engines were meeting separate standards for NOX and NMHC at
comparable levels (nominally 2.0 g/bhp-hr NOX and 0.4 g/bhp-hr
NMHC). Second, EPA is proposing an NMHC standard instead of a total HC
[[Page 33443]]
standard. This approach is being proposed primarily because methane is
largely unreactive in the formation of ozone and thus its control would
not help to achieve the ozone air quality objectives of this proposal.
This is not intended to suggest that the control of methane is not
valuable in the context of other environmental objectives EPA may
consider in the future, but methane emissions from these engines are
only a small fraction of their total HC and thus foregoing control at
this time is reasonable. Both the use of an NMHC standard and the use
of a combined standard is also consistent with the current California
LEV program requirements for medium-duty vehicles and the requirements
for HDEs prescribed in section 245 of the 1990 amendments to the Clean
Air Act.
The proposed standards (rooted in the California Federal
Implementation Plan and identified in the SOP) represent a reduction of
more than 50 percent in NOX and NMHC/HC over current requirements.
Reductions of this magnitude are a significant challenge, especially
for diesel HDEs, and will require a major research and development
effort to achieve. At this time there is not one firm set of
technologies to be applied to all diesel HDEs to achieve the proposed
standards. Diesel HDEs will need to consider approaches from a number
of different technological strategies and control hardware which have
been identified and assessed in a few laboratory programs and then
apply their choices to their 2004 models. In many cases these
strategies and hardware have not been used on production diesel engines
and there are substantial development challenges ahead to apply this
technology cost effectively with due consideration to impacts on
operating and maintenance costs as well as engine durability.
Regulatory enhancements such as the proposed revisions to the
Averaging, Banking, and Trading program (as discussed below) will also
help to enhance overall feasibility of the standards for all engine
models. As is discussed elsewhere in proposal and in the supporting
RIA, EPA believes the proposed standards while very challenging are
technically feasible and otherwise appropriate in the context of
section 202(a)(3). With about eight years remaining before the 2004
model year, manufacturers have an unprecedented amount of leadtime to
fully assess, develop, and optimize the various control approaches and
to integrate them into their 2004 model year products in a manner which
minimizes engine costs and fuel impacts and does not raise safety
concerns. Indeed the widespread support of the HDE industry for the SOP
tends to support EPA's conclusion.
While there are promising technologies and aftertreatment control
strategies which otto cycle (gasoline) HDEs may employ to achieve the
proposed standards, these still require development if they are to be
applied to all different otto-cycle engine models and the standards are
to be met in use. EPA believes it will be easier technologically for
otto-cycle (gasoline) HDEs to achieve the proposed standards but
proposes the same standards for otto and diesel cycle HDEs for two
reasons. First, work is required to apply these technologies/
aftertreatment control strategies to all otto cycle engines. EPA
expects that much of this progress will be made in response to the 1998
HDE NOX standard and others in response to market competitive
pressures. Nonetheless, EPA still expects that some models will need to
develop and employ technology/aftertreatment control upgrades to meet a
2.4 g/bhp-hr NMHC + NOX standard. This may especially be the case
for the few otto-cycle HDE families which may not employ closed loop
control, fuel injection systems with catalysts before 2004. Second,
because otto and diesel cycle HDEs compete in the market place, there
is a degree to which for market equity reasons it is appropriate to
apply standards of equivalent stringency to both classes of engines.
This approach reduces the possibility that emission standards could
have disruptive effect on the HDE market. Both EPA and the California
Air Resources Board have set HC and NOX standards of equivalent
stringency for otto-cycle and diesel HDEs in the past.
b. 1999 Rulemaking Review
EPA proposes to conduct a special review in 1999 to reassess the
appropriateness of the standards under the CAA including the need for
and the technological and economic feasibility of the standards at that
time. Before making a final decision in this review regarding the
appropriateness of these standards under the CAA, EPA intends to issue
a proposal regarding this issue and offer an opportunity for public
comment on whether the standards continue to be technologically
feasible for implementation in 2004 and consistent with the CAA.
Following the close of the comment period, EPA would issue a final
agency decision under section 307 of the CAA.
If in 1999 EPA finds the standards to not be feasible for model
year 2004 or otherwise not in accordance with the Act, EPA will propose
adjusted standards which do not exceed the following:
2.9 g/bhp-hr NMHC + NOX
or
3.0 g/bhp-hr NMHC + NOX with a limit of 0.6 g/bhp-hr on NMHC.
However, if EPA determines that the feasibility of the standards
requires diesel fuel changes and EPA does not engage in rulemaking to
require such changes, EPA will propose adjusted standards which do not
exceed the following:
3.4 g/bhp-hr NMHC + NOX
or
3.5 g/bhp-hr NMHC + NOX with a limit of 0.7 g/bhp-hr on NMHC.
The standards finalized in the rulemaking initiated by today's
proposal would stay in effect unless revised by this subsequent
rulemaking procedure. EPA has included language in the proposed
regulatory text regarding the 1999 review.
Over the next several years EPA will be actively engaged in
programs to evaluate technology (engine/fuel quality) interactions/
developments and progress toward meeting the proposed standards through
in-house programs and coordination with the involved industries. To aid
in this process EPA has established a working group under its Mobile
Sources Technical Advisory Sub-Committee to the CAA Advisory Committee
to solicit technical advice and input from engine, fuel, and related
experts from around the country. If as a result of this evaluation, EPA
reaches the view that the available information is sufficient to
indicate that the feasibility of the standards may depend on
modifications to diesel fuel, any potential for diesel fuel changes
could then be considered within the context of the 1999 Review. EPA
recognizes that any consideration of potential fuel diesel
modifications must be appropriate under section 211(c) of the CAA
(including considerations of cost, cost effectiveness, and other
relevant cost considerations), and is especially sensitive to the
substantial leadtime requirements that may be associated with fuel
modifications.
Based on the information presented in the RIA and in section IV of
this proposal, EPA believes the proposed standards are technologically
feasible and otherwise appropriate under the CAA. Nonetheless,
especially for diesel engines, it is clear that a significant amount of
research and development will be needed to comply. The alternate
standards discussed above are designed to serve as a backstop in the
event that
[[Page 33444]]
the 1999 review leads to the conclusion that a revision is appropriate.
Based on the technical analysis in the RIA, these levels represent
upper limits for these potential revisions. If during the course of the
review EPA concludes that a revision is appropriate, a rulemaking will
be conducted to determine the appropriate level for the model year 2004
and later standards.
c. Other Issues Related to HDE Emission Standards. Several
commenters to the ANPRM expressed concern with the levels of the
emission standards EPA is proposing today. Representatives of
environmental organizations and several states argued that EPA should
propose more stringent standards for one or more pollutants. While EPA
believes at this time that today's proposed program represents the best
combination of standards that are achievable given our current
understanding of technological constraints, as explained below, and the
other criteria set forth in CAA section 202(a)(3), EPA remains open to
additional information and will consider finalizing more stringent
standards in this action or proposing more stringent standards by
separate action if such standards are warranted.
In comments the Agency has received thus far, commenters generally
address potential standards for NOX and PM separately and somewhat
independently. These comments urge the Agency to propose an NMHC +
NOX standard low enough to assure that NOX levels of 2.0 g/
bhp-hr are reached by all diesels, expressing concern that a 2.4 or 2.5
g/bhp-hr NMHC + NOX standard will actually translate into 2.2-2.3
g/bhp-hr NOX, not the 2.0 g/bhp-hr level applied in the California
Federal Implementation Plan (FIP) to model year 2002 engines. These
commenters also suggest that a PM standard of 0.05 g/bhp-hr be
proposed, equal to the level which currently applies to urban buses.
The Agency believes that because of the close interaction among
NOX, NMHC, and PM emissions from diesel engines, decisions about
proposed emission standards cannot be made independently from one
another. As described below in section IV, EPA believes that reaching
all the standards proposed today simultaneously will require a very
large technological effort on the part of diesel HDE manufacturers.
Based on the information available today, the Agency believes that the
scale of the effort which will be required is such that if NOX,
NMHC, or PM standards lower than those proposed here were to be
required, the feasibility of implementing the program for the 2004
model year would be threatened. That is, while manufacturers may be
able to achieve lower emission levels for some engine models, at this
time EPA does not believe that this would be feasible, on average, for
the full line of engines manufacturers will likely be offering in 2004.
(The technological assessment on which EPA based a 2.0 g/bhp-hr
NOX emission standard in the California Federal Implementation
Plans assumed that only engines sold in California, not all engines
nationally, would be affected.) Regarding a specific comment that a
combined NOX + NMHC standard allows NOX emissions
significantly higher than the 2.0 g/bhp-hr NOX goal, the Agency
accepts the intention of the engine industry to reach levels very close
to 2.0 g/bhp-hr. This also seems likely from a technical perspective
since at best modest NMHC reductions can be achieved over current
levels. By combining the NOX standard with NMHC, EPA proposes to
allow a small degree of flexibility to manufacturers which succeed in
achieving very low NMHC levels in conjunction with the proposed
NOX and PM standards. However, the Agency does not expect that the
opportunity to take advantage of that flexibility will be frequently
used and expects that on average in-use NOX levels would be
approximately 2 g/BHP-hr.
As is the case for NMHC, for many in-cylinder control strategies
there is a trade-off between NOX and PM emission rates. In-
cylinder techniques which reduce NOX may increase PM and vice-
versa. For HDDEs, EPA expects that most manufacturers will rely on in-
cylinder NOX control techniques as opposed to aftertreatment
devices. Some of these techniques are likely to put upward pressure on
PM levels, and thus will require special optimization to ensure that PM
levels are not increased. A simultaneous reduction in the PM standard
could have an adverse effect on the feasibility of the NMHC + NOX
standard. Nonetheless, EPA recognizes the need for and value of
additional reductions in PM emission rates and asks for comments on
this matter.
EPA encourages further, detailed comment on the appropriateness of
the proposed levels for NMHC + NOX and PM in light of the
technological interactions of their formation and control. EPA will
consider finalizing standards different than those proposed today to
the degree that comments and analysis support such action. However, the
interactions among the pollutants would require a reassessment of all
pollutants if a more stringent standard is to be considered for any one
pollutant.
One commenter requested that EPA propose voluntary low emission
standards for NOX and PM which would apply between 1998 and 2003
at levels below the 4.0 g/bhp-hr NOX and 0.10 g/bhp-hr PM which
would be required in 2004. The ultimate purchasers of HDEs certified to
meet the voluntary low emission standards would be able to market the
emission credits generated. EPA asks for comment on the need for and
desirability of lower voluntary NOX and PM standards as a means to
encourage technological innovation and the value of such a program
given that manufacturers can already elect to certify to lower
standards (family emission limits) under the Averaging, Banking, and
Trading (A,B,&T) program. These extra emission reductions from these
HDEs could be sold for marketable credits provided there is not double
counting between the A,B,&T program and a user program.
Commenters also raised the issue of whether standards for otto-
cycle HDEs (gasoline-fueled) should be different, and more stringent,
than those for diesel-cycle HDEs. As commenters observe, the
technological challenge of achieving lower NOX levels
simultaneously with low NMHC levels has been less for otto- than
diesel-cycle HDEs in the past and current data suggests this may be the
case for the proposed 2004 standards. In 1996 there were seven otto-
cycle HDE families that certified to the existing standards with
combined NMHC+NOX levels below the level of the proposed
NMHC+NOX standard. However, of these seven, only about half had
actual test data to demonstrate emission levels which could allow them
to certify to the level of the proposed standards. Durability test data
on others indicates that they would be unable to meet a 2.4 g/BHP-hr
NMHC+NOX standard at the end of their useful life period.
Lower certification levels for some families does not necessarily
lead to the conclusion that levels significantly less than the proposed
standards are achievable by all families in the near term. Indeed, the
industry has raised concern that even if the level of the proposed
standard can be achieved on laboratory prototypes in the near term,
some engine models will require additional work to gain the additional
emission reductions needed to account for the effects of production and
test variability and the deterioration in the efficiency of emission
controls in use. Industry has suggested that a prototype engine
emission rate about 1 g/BHP-hr less than the proposed standard is
needed to be assured of compliance by production engines.
[[Page 33445]]
Nonetheless, the recent engine and emission control system
improvements and the resultant reduction in the NMHC+NOX emission
levels of many of the current otto-cycle families clearly indicate that
the proposed standards are feasible by the 2004 model year. Some
concern has been expressed that the proposed standard may be more
difficult for otto-cycle engines used in heavier vehicles (>14,000 lbs
GVWR). If not formulated properly, the efficiency of their catalysts
may be reduced by heat stress which occurs during the longer periods of
high load operation which are characteristic of some of these vehicles.
However, the fact that otto-cycle HDEs with these lower emission rates
are used in vehicles of all weight classes suggests that vehicle design
and use patterns do not govern the feasibility of low NOX catalyst
technology. EPA believes that any technological feasibility concerns
for otto-cycle HDE families required to meet the proposed standard can
be resolved within the next eight years.
Given the relatively low NMHC+NOX certification levels of some
current otto-cycle engines and the available leadtime, EPA requests
comment on setting the NMHC+NOX standard for otto-cycle engines in
the range of 1.5-2.0 g/BHP-hr. In addition to comments on technological
feasibility, EPA requests comment on the appropriateness of a lower
standard in the context of emission inventory benefits, environmental
need, costs of compliance (purchase and operating), energy impact,
safety, and market equity concerns. Comments regarding market equity
should address how different levels of NMHC+NOX standards for
otto- and diesel-cycle engines would affect the market relationship
between these technologies. EPA also requests comment on whether
implementing a separate standard for otto-cycle engines (which are
largely gasoline-fueled engines) would be an appropriate change from
the historical ``fuel neutral'' nature of EPA's emission standards for
NMHC and NOX emissions from HDEs, and whether such a change could
adversely affect the development of and use of clean alternative fuels.
EPA also requests comment on another alternative approach for otto-
cycle engines. Under this approach, manufacturers could voluntarily
elect to certify these engines to the proposed standard significantly
earlier (i.e., model year 1999, 2000, or 2001 instead of 2004) as an
alternative to meeting the more stringent standard discussed above
(1.5-2.0 g/bhp-hr) in 2004. In this concept, the more stringent 2004
standard for otto-cycle engines either would not apply or would apply
to a model year after 2004 to a manufacturer that elected to meet the
proposed standard early. This approach would have the benefit of
providing early emission reductions and, to the extent that
manufacturers choose the proposed standard early, would help reduce the
potential market equity impacts mentioned above since the same standard
would apply to both otto- and diesel-cycle engines. While EPA may not
impose on highway heavy-duty engines NOX standards more stringent
than 4.0 g/bhp-hr for any model year before 2004 (CAA sections
202(b)(1)(C) and (a)(3)(B)(ii)), EPA believes it retains authority to
offer manufacturers the voluntary option of complying with a NOX
plus NMHC standard of 2.4 g/bhp-hr beginning before model year 2004.
EPA requests comment on the appropriateness of finalizing this concept.
Should a commenter favor this concept, they should specify the version
they prefer (i.e., implementation date of the 2.4 g/BHP-hr standard or
implementation date and numerical value of a later more stringent
standard. EPA seeks comment on the technical feasibility and
appropriateness in the context of environmental need, costs of
compliance, energy impact, safety and market equity for the option
supported. The public docket contains a memo further discussing each of
the alternative approaches to otto-cycle HDE standards as laid out
above.
Finally, several commenters encouraged EPA to reconsider the role
of alternative fuel technologies in reaching low emission levels. EPA
believes HDE technologies using alternative fuels can reach or exceed
the emission standards proposed today. For this reason, EPA has for
many years supported, and continues to support, expanded use of
optimized alternative fuel engines. The Agency is pleased that
development of HDEs which use alternative fuels is continuing and that
some of these engines have been marketed, usually for specialized
purposes. However, it does not appear that a major shift in the market
toward alternative fuel HDEs is underway, and EPA does not believe at
this time that the HDE manufacturing industry is in a position to shift
a significant amount of its production toward non-petroleum fuels by
the year 2004. Thus, EPA believes it is likely that petroleum-fueled
HDEs will continue to dominate the HDE industry well into the next
century, and the Agency does not believe that EPA action that could
theoretically force a faster shift toward alternative fuel technologies
(e.g., extremely low emission requirements for all engines) would be
effective in the absence of a strong market demand for such engines.
Therefore, the Agency believes that it is appropriate to base new
proposed HDE emission standards on the projected capabilities of
petroleum-fueled engines rather than on the current or projected
capabilities of alternative fuel engine technologies. If the stringent
standards proposed today, while achievable by petroleum-fueled engines,
are indeed relatively easy for some alternative fueled engines to meet,
the result may be the introduction of alternative fueled HDEs that are
both acceptable to the market and priced competitively. From the
Agency's perspective, such a market-based promotion of alternative fuel
technologies would be a positive result of today's proposed action.
d. Non-conformance Penalties. Section 206(g) of the Clean Air Act
requires EPA to allow an HDE manufacturer to receive a certificate of
compliance for an engine family which exceeds the applicable standard
(but does not exceed an upper limit) if the manufacturer pays a non-
conformance penalty established by EPA through rulemaking. The NCP
program established through rulemaking is codified in Subpart L of 40
CFR 86. EPA plans to address provisions related to NCPs for the
proposed 2004 model year standards in conjunction with the 1999 review
discussed above.
2. In-use Emissions Control Elements
a. Introduction. Historically, EPA has viewed in-use emissions
deterioration as a problem associated more with gasoline engines than
with diesel engines. For NOX emissions, EPA has tended to be less
concerned with diesel engine emissions deterioration because diesels
are currently equipped with fewer aftertreatment or other emission
control devices susceptible to in-use degradation. Diesel engine
emissions standards have historically been met mainly through overall
improvements to the engine and fuel system. These improvements have
resulted in improved performance, fuel economy, and durability as well.
As described below in Section IV. A., as standards are reduced
diesel HDE manufacturers will likely continue to strive to meet the
standards through engine, air intake, and fuel systems redesign.
However, they may find it necessary to introduce new technologies, such
as exhaust gas recirculation (EGR), which function solely to reduce
emissions. Long-term emissions performance becomes a
[[Page 33446]]
greater concern with the addition of such emissions control
technologies. The controls may not function as long as the engines and
there may be little incentive for vehicle owners to conduct the repairs
on these items needed to ensure emissions control during the very long
life of the engines. This is of particular concern because the heavy-
duty engine market has demanded longer-lasting engines, and
manufacturers have been successful in increasing engine life. It is
EPA's understanding that some current large engines accumulate in
excess of 500,000 miles before being rebuilt and are used for several
hundred thousand more miles after rebuild. Thus, failure of emissions
controls early in the engine's life could offset a significant portion
of the expected benefit associated with the more stringent standards
proposed today.
As described below, EPA is proposing revisions to its current
regulations regarding in-use emissions control including changes to
useful life, emissions related maintenance and warranty provisions.
These changes are intended as updates to current requirements which
will further encourage engine manufacturers to use emissions controls
that will have a high degree of durability, and that perform well in
use without an unreasonable degree of owner involvement. EPA is also
proposing other basic provisions to help encourage the maintenance and
repair of emissions controls after the regulatory useful life is
reached, and especially during engine rebuild. The proposals would be
effective beginning with 2004 model year engines. EPA believes that the
industry is fully capable of responding to the challenge of achieving
the benefits of low emissions standards, not just in the early years of
engine life, but throughout the time that the engine is in-use. EPA
requests detailed comments, with as much supporting rationale as
possible, on all of the following proposals.
b. Revisions to Current Regulations
To help ensure the durability of new emissions related technology
used to meet the new standards, EPA is proposing revisions to its
current regulations in the areas of ``useful life'', ``emissions
related maintenance'', and ``emission defect and performance
warranties''.
i. Useful life
As provided in section 202 of the Clean Air Act, EPA specifies the
``useful life'' periods for the various heavy-duty engine types. The
regulatory useful life is the period of time or operation during which
manufacturers are liable for emissions compliance. Manufacturers are
responsible for making sure their engines meet emissions standards not
just at the time of certification and production but also for the
regulatory useful life of the engines. EPA has the authority to test
engines selected from the production line and from the in-use fleet to
determine compliance with this requirement. EPA can require
manufacturers to recall and repair engines in an engine family if
testing of properly maintained and used engines or other information
indicates that a substantial number of engines in the engine family do
not meet emissions standards during the useful life. EPA's ongoing
programs for production-line auditing (Selective Enforcement Auditing)
and in-use recall are two primary EPA enforcement mechanisms for engine
emissions standards. The statutory authority for these programs is
found in Sections 206 and 207 of the Clean Air Act.
Currently for heavy-duty on-highway engines, the useful life is
generally defined as eight years or 110,000 miles for light heavy-duty
diesel engines (HDDEs) and gasoline heavy-duty engines, eight years or
185,000 miles for medium HDDEs, and eight years or 290,000 miles for
heavy HDDEs, whichever comes first.31 These mileage values were
originally chosen to roughly correspond to the prevailing average
engine lives before retirement (for smaller engines) or major engine
rebuilds (for larger engines). Since the middle 1980s, manufacturers
have increased very significantly the mechanical durability of heavy-
duty diesel engines, allowing the engines to go many more miles before
rebuild. Also, the annual vehicle miles travelled (VMT) for newer line-
haul trucks has increased which results in the trucks reaching the end
of their defined useful life more quickly. It is not uncommon for line
haul trucks to reach their current maximum useful life of 290,000 miles
well before the years useful life interval.
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\31\ 40 CFR 86.096-2. The Clean Air Act Amendments of 1990
specify a minimum useful life years limit of ten years for heavy-
duty engines with respect to any standard that first becomes
applicable after the 1990 amendments were enacted. 42 U.S.C. 7521
(d)(2). Standards adopted after the Amendments such as the urban bus
particulate standard and the 1998 and later model year NOX
standard have a useful life years limit of ten years (e.g., 40 CFR
86.098-2). Standards adopted before the Clean Air Act Amendments of
1990 have a useful life years limit of eight years.
---------------------------------------------------------------------------
The first part of the following discussion concerns the mileage
portion of the useful life. The years useful life interval is much less
critical because it is not generally the limiting interval. EPA is
proposing to make the years portion consistent at ten years for all
heavy-duty engines and standards beginning with the 2004 model year.
The discussion of the years interval proposal follows the proposals and
discussion regarding mileage.
The engines of greatest concern to EPA are those in the heavy
heavy-duty diesel engine category because they, for the most part, are
the engines that tend to reach the end of the useful life quickly and
then continue to accumulate many more miles than the current useful
life before needing to be rebuilt. Published warranty information
indicates that the major engine components of heavy HDDEs are warranted
for 500,000 miles in most cases and extended base engine coverage is
often available for up to 5 years/500,000 miles. Since the repair or
replacement of some of the components covered by the warranties due to
wear is fundamental to rebuilding, the warranties are one good
indication that some engines greatly exceed EPA's current useful life
miles limit of 290,000 miles. Also, it is commonly accepted in the
trucking industry that, with sound maintenance practices, today's heavy
HDDEs last much longer than 290,000 miles before rebuild.32
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\32\ Comments of American Trucking Association, Inc., October
17, 1995, Docket A-95-27, II-D-40.
---------------------------------------------------------------------------
Although EPA could perhaps justify proposing an increase of the
heavy HDDE useful life requirement to 500,000 miles or more based on
how long engines are lasting today before rebuild, EPA believes that a
somewhat lower value is appropriate. Engine manufacturers have stated
that they will be challenged to meet the proposed new standards and an
extremely long useful life could affect the feasibility of the 2004
standards. EPA acknowledges that the length of the useful life can
affect the feasibility of the standards. EPA believes that the program
goal of ensuring durable emissions control designs would be achieved
through a 50 percent increase in the useful life up to 435,000 miles.
This value represents a meaningful increase in the useful life without
potentially compromising the feasibility or cost effectiveness of the
2004 standards. Additionally, other programs, as described below, can
help ensure emissions controls continue to operate properly after the
end of the useful life. The end of the useful life does not necessarily
mean the end of good in-use emissions performance.
Not all heavy HDDEs are used in line-haul trucks which accumulate
miles very quickly. A small minority of heavy
[[Page 33447]]
HDDEs are used in urban (transit) buses and other urban vehicles that
accumulate miles much more slowly. For example, urban buses average
about 13 miles per hour (including idle time) 33 and about 40,000
miles per year.34 For urban vehicles such as urban buses, a useful
life of 435,000 miles would be excessive because of their slow mileage
accumulation rates. EPA has addressed such concerns in other
regulations by adopting an hours limit that is equivalent to a miles
limit which is set to reflect typical operation of heavy-duty engines.
Vehicles that accumulate mileage more slowly than typical for heavy-
duty vehicles would reach the hours interval before the mileage
interval. In keeping with this approach, EPA proposes to add an hours
limit of 13,000 hours to the useful life for heavy HDDEs. The 13,000
hours limit is based on other hours and miles equivalents used in
existing EPA regulations regarding heavy-duty engines.35
---------------------------------------------------------------------------
\33\ ``National Transit Summaries and Trends For the 1993
National Transit Database Section 15 Report'', Federal Transit
Administration, May 1995.
\34\ ``Data Tables For the National Transit Database Section 15
Report Year'', Federal Transit Administration, December 1994.
\35\ 40 CFR 86.094-25 (b)(4) contains several hours and miles
equivalents for HDDEs all of which are based on the ratio of one
hour to 33.3 miles of operation.
---------------------------------------------------------------------------
EPA, however, is concerned that the hours interval being proposed
could, in effect, relax the useful life from its current level, as
would be the case in instances when vehicles would reach 13,000 hours
before reaching 290,000 miles. Given the average speed for urban buses
of 13 miles per hour, this would be likely to occur frequently. To
ensure that the addition of an hours limit does not result in a useful
life less than the current useful life in any instance, EPA proposes
not to allow the hours limit to be effective until after an engine
reaches 290,000 miles. In summary, EPA proposes a useful life for heavy
HDDEs of 435,000 miles, 13,000 hours, or ten years, whichever occurs
first, but in no case less than 290,000 miles.
EPA requests comments on two alternative approaches to adopting an
hours limit of 13,000 hours. The first option is to not have an hours
interval and retain the useful life mileage interval of 290,000 miles
for urban bus engines with an increase of the mileage interval to
435,000 miles for all other heavy HDDEs. This would simplify
regulations but could disadvantage engine manufacturers where engines
are used in slow moving urban vehicles other than urban buses, such as
solid waste haulers. The second option is to set the hours interval to
be equivalent to the number of hours it takes an urban bus, on average,
to accumulate 290,000 miles. Using the 13 miles per hour estimate from
above, the hours interval would be 22,300 hours. With this second
option, EPA also requests comments on whether or not a minimum useful
life of 290,000 miles is appropriate. These two alternatives may work
well for urban buses but may not be as appropriate for other urban
heavy-duty vehicles.
Currently the years component of the useful life is eight years for
some standards and ten years for others depending on whether the
standards were adopted before or after the Clean Air Act Amendments of
1990. Standards promulgated after the Clean Air Act Amendments, such as
the 1998 4.0 g/bhp-hr NOX standard, are required to have a useful
life years limit of 10 years. EPA proposes to make the useful life
years limits consistent for all pollutants and for all heavy-duty
engines by raising the years component of the useful life so that it is
ten years in all cases. The change affects the carbon monoxide and
particulate matter standards (except the urban bus particulate
standards which are already at ten years). EPA regards this change as a
simplification of the regulations with very little or no impact on the
stringency of the standards because EPA believes that vehicles will
reach the mileage limits before the years limits in almost all cases.
EPA requests comments on the appropriateness of the useful life
proposals described above. In particular, EPA seeks comments on the
appropriateness of the 435,000 mileage limit, the appropriateness of
treating engines used in urban vehicles differently from other heavy
HDDEs, and the appropriateness of the proposed 13,000 hour limit.
ii. Emissions-Related Maintenance
The frequency of emission-related maintenance actions that
manufacturers require owners to perform as a condition of their
emissions warranties is another issue that affects the actual in-use
emission performance of engines. If such required maintenance is more
than the vehicle owner is likely to perform due to cost or
inconvenience, then in-use emissions deterioration can result.
Therefore, EPA currently imposes limits on the frequency of maintenance
that can be required of HDE owners for emissions related items. These
limits also apply to the engine manufacturer during engine
certification and durability testing. The requirements currently apply
for the useful life of the engine. Table 2 summarizes current
regulations regarding the mileage interval limitations for the
maintenance manufacturers may specify on certain emissions-related
items for heavy-duty diesel engines (HDDEs). Engine manufacturers
cannot require maintenance to be performed any more often than is noted
in the table but may specify longer periods. The intervals are in miles
or hours, whichever occurs first.
Table 2.--Current Intervals for Emission-related Maintenance \1\
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
50,000 miles or 1,500 hours 100,000 miles or 150,000 miles or None listed.
for all heavy duty diesel 3,000 hours for 4,500 hours for
engines (HDDEs). Light HDDEs. Medium and Heavy
HDDEs.
EGR systems including all Turbocharger......... Turbocharger......... Catalytic converter.\2\
related filters and control
valves \2\.
PCV valve \2\................. Fuel injectors....... Fuel injectors.......
Fuel injector tip cleaning.... Electronic engine Electronic engine
control unit, control unit,
sensors, and sensors, and
actuators \2\. actuators \2\.
Particulate trap \2\. Particulate trap \2\.
----------------------------------------------------------------------------------------------------------------
\1\ Source 40 CFR 86.094-25.
\2\ Critical emissions-related components.
Table 2 notes components that EPA considers ``critical emissions-
related components'' and EPA has additional requirements for these
components (see 40 CFR 86.094-25 (b) (6)). Specifically, manufacturers
must show that
[[Page 33448]]
maintenance which the manufacturer requires for a critical emission-
related component has a reasonable likelihood of being performed by the
operator in use. The engine manufacturer has a variety of options for
making such a demonstration such as showing that component degradation
will also cause vehicle performance to degrade or by using visual
displays to notify the driver that maintenance is needed.
EPA believes that revising the maintenance intervals for certain
technologies is appropriate in order to adequately cover the
technologies which manufacturers may use to meet the proposed 2004 and
later model year standards. The new standards may prompt the use of EGR
on heavy-duty diesel engines and an increased interval for EGR valves
and tubing will help ensure adequate system durability. Similarly, EPA
believes that catalytic converters should be added to the list of
emission-related components for HDDEs for which a minimum interval is
specified, also to ensure adequate durability. Except for the recent
use of catalytic converters for particulate control, neither technology
has been used significantly for HDDEs in the past. Accordingly, EPA
proposes for EGR valves and tubing and catalytic converters that
manufacturers specify maintenance no more often than the intervals
shown in Table 2 for other technologies; 100,000 miles or 3,000 hours,
whichever occurs first, for light HDDEs and 150,000 miles or 4,500
hours for medium and heavy HDDEs. For EGR system filters and coolers,
EPA proposes that the maintenance interval would remain 50,000 miles/
1,500 hours due to manufacturer concerns that a longer interval for
these components may not be feasible.
In addition, there is the possibility that new technologies not
listed in Table 2 could be used to meet the proposed standards.
Therefore, EPA proposes to apply the same maintenance intervals as
listed above for most components, 100,000 miles or 3,000 hours,
whichever occurs first, for light HDDEs and 150,000 miles or 4,500
hours for medium and heavy HDDE, to any additional add-on emissions-
related components that manufacturers introduce in the future. EPA
proposes to define add-on emission-related components for this purpose
as components whose sole or primary purpose is to reduce emissions or
whose failure will significantly degrade emissions control and whose
function is not integral to the design or performance of the engine.
EPA would also consider such components critical emission-related
components for purposes of 40 CFR 86.094-25(b)(6). EPA believes that
this proposal is necessary to provide the same minimum level of
durability for all emissions-related components (except EGR filters and
coolers) used to meet the standards. The minimum requirement will also
be helpful in the development of future technologies as it will provide
a clear minimum design target for technology development.
Maintenance requirements for gasoline-fueled heavy-duty engines and
light heavy-duty diesel engines are currently the same for EGR and
several other components due to the similarity in their duty cycles.
EPA believes that it is appropriate for the maintenance intervals for
EGR for light heavy-duty diesel engines and heavy-duty gasoline engine
to remain consistent with each other given this similarity. Therefore,
for otto-cycle (i.e., gasoline-fueled) heavy-duty engines, EPA proposes
that the maintenance interval for EGR valves and tubing be increased to
100,000 miles or 3,000 hours from the current 50,000 mile or 1,500 hour
interval. Because gasoline-fueled engines emit less particulate (which
can cause deterioration of the EGR system) than do diesel engines, EPA
does not believe that the change represents a particular challenge for
gasoline-fueled engines.
EPA requests comments on the proposed changes to the maintenance
intervals described above including comments on the length of the
intervals and the technologies for which intervals are being proposed.
Also, EPA requests comment on the definition of ``add-on emission-
related component'' offered here.
iii. Emissions Defect and Performance Warranties
Emissions warranties are provided by manufacturers as required
under Section 207 of the Clean Air Act. The performance warranty
provides that if a properly maintained vehicle or engine fails to
conform to EPA emissions requirements at anytime during the warranty
period, and such nonconformity causes the owner to have to bear a
penalty or other sanction, then the engine manufacturer is responsible
for remedying the nonconformity at its own cost.\36\ The defect
warranty provides that manufacturers are responsible for defects in
materials and workmanship which cause an engine not to conform with
applicable regulations. EPA currently requires that the emission defect
and emission performance warranties for heavy-duty gasoline engines and
light HDDEs last 5 years/50,000 miles and for medium and heavy HDDEs
last 5 years/100,000 miles, whichever occurs first, but in no case may
the warranty period be less than the manufacturer's basic mechanical
warranty period for the engine family.\37\
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\36\ While EPA is proposing to revise the performance warranty
period as discussed below, in accordance with Section 207(i) of the
Clean Air Act, EPA has not prescribed regulations under Section
207(b)(2) of the Act which require heavy-duty engine manufacturers
to provide performance warranties.
\37\ Useful life definition paragraph (6), 40 CFR Part 86.096-2.
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EPA proposes to clarify that the period of the warranty is to be in
no case less than the basic mechanical warranty period that the
manufacturer provides to the purchaser with the engine rather than the
general warranty period for the engine family. It is common for
manufacturers to provide negotiated mechanical warranties that are
longer than the published base warranties for the engine family. EPA
believes that this modification is appropriate because negotiated
warranties are prevalent and therefore the published warranty is not
reflective of the true mechanical warranty period in many cases. EPA
requests comments on this proposal.
c. Maintenance and Repair of Emissions Controls After the End of the
Useful Life
As discussed above, EPA regulates maintenance and repairs of
emissions control components that manufacturers may specify during the
useful life of the engines. However, these provisions will not ensure
emissions control for the full operating life of all heavy-duty
engines. Large diesel engines have an extremely long life that is
extended through rebuilding. If the vehicle owner and engine rebuilder
were to not properly maintain or repair emissions control components,
the controls could degrade and cause an unacceptable increase in
emissions. Because there may be no effect on engine performance, the
degraded components may otherwise go unnoticed for a significant
portion of the total life of the engine. Since HDEs are typically
rebuilt, EPA also believes it is appropriate to take steps to ensure
that emissions-related components used to meet the new standards
receive all needed maintenance and repair beyond the useful life
period. The proposals described below fall into two categories:
manufacturer requirements and engine rebuilding requirements. The
proposals are intended to help enhance the focus on emissions-related
components and the Agency does not believe that the proposals will
result in significant costs above those that would be incurred for
[[Page 33449]]
the proper maintenance/repair of emissions-related components. As with
the related provisions proposed above, EPA believes that these basic
provisions are necessary beginning with the 2004 model year because new
add-on emissions-related components which may require occasional
maintenance and repair may be used to meet the 2004 and later model
year standards.
i. Provisions Affecting Manufacturers
Manufacturers currently provide owners with comprehensive service/
maintenance manuals covering the maintenance necessary to keep engines
operating properly. If a manufacturer required maintenance on any
emissions-related components during the useful life, as described above
in 2.b.ii. of this section, maintenance procedures would be detailed in
this manual. EPA proposes to require that manufacturers, in addition,
include in the manual maintenance needed for emissions related
components after the end of the regulatory useful life, including
mileage/hours intervals and procedures to determine whether maintenance
or repair is needed. The recommended practices must also include
instructions for accessing and responding to any emissions-related
diagnostic codes that may be stored in on-board monitoring systems. The
recommended maintenance practices would be based on engineering
analysis or other sound technical rationale. In the event that an
emission-related component is designed not to need maintenance during
the full life of the vehicle, the manual would need to contain at a
minimum a description of the component noting its purpose and a
statement that the component is expected to last the life of the
vehicle without maintenance or repair. In addition, manufacturers would
be required to highlight in the manual any rebuild provisions adopted
by the Agency, as described in 2.c.ii. below, to ensure that owners and
rebuilders are aware of the requirements.
As described above in 2.b.ii. of this section, manufacturers must
ensure that critical emissions-related scheduled maintenance has a
reasonable likelihood of being performed in-use. Manufacturers may
elect to provide such assurance by using some form of on-board driver
notification when maintenance is needed on a critical emission related
component.\38\ The signal may be triggered either based on mileage
intervals or component failure. It is currently considered a violation
of the Clean Air Act's prohibition on tampering (Section 203(a)(3)) to
disable or reset the signal without also performing the indicated
maintenance procedure.\39\
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\38\ 40 CFR 86.094-25(b)(6)(ii)(C)
\39\ 40 CFR 86.094-25(b)(6)(iii)
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EPA proposes to require that manufacturers electing to use such
signal systems to ensure that critical emissions-related maintenance
has a reasonable likelihood of being performed must design the systems
so that they do not cease to function at or beyond the end of the
regulatory useful life. For example, if the signal is designed to be
actuated based on mileage intervals, it would have to be designed to
continue to signal the driver at the same intervals after the end of
the useful life. EPA does not propose, however, to hold the
manufacturer responsible or liable for recall due to signal failure in
instances where the signal fails to function as designed beyond the end
of the useful life. Manufacturer recall liability is limited to
failures during the regulatory useful life under Section 207 of the
Clean Air Act. (The manufacturer is also not responsible for repairs
when the signal does function after the end of the useful life unless
such repairs are covered by the emission warranty provided as described
above in 2.b.ii.)
EPA believes these proposals will help ensure that information
necessary to care for critical emission related components through the
engines' entire life on the road will be widely available to owners,
rebuilders and others maintaining and repairing heavy-duty engines. EPA
requests comments on the proposals.
ii. Provisions Pertaining to Engine Rebuilding Practices
EPA has two concerns regarding the rebuilding of 2004 and later
model year engines, both related to new emissions related components
that may be added to the engine to meet the new standards. First, EPA
is concerned that during engine rebuilding, there may not be an
incentive to check and repair emissions controls that do not affect
engine performance. Second, EPA is concerned that there may be an
incentive to rebuild engines to a pre-2004 model year configuration due
to real or perceived performance penalties associated with 2004 and
later model year technologies. Such practices would likely result in a
loss of emissions control.
EPA currently does not have regulations concerning engine
rebuilding practices for heavy-duty engines other than requirements for
engines used in 1993 and earlier model year urban buses.\40\ Clean Air
Act Section 202(a)(3)(D) directed EPA to study heavy-duty engine
rebuild practices and the impact rebuilding has on engine emissions.
Based on the study and other information, EPA may prescribe
requirements to control rebuilding practices (whether or not the engine
is past its useful life), which in the Administrator's judgement cause,
or contribute to, air pollution which may reasonably be anticipated to
endanger public health or welfare taking costs into account. 42 U.S.C.
7521 (a)(3)(D). EPA conducted a study of engine rebuilding and
determined that current-technology engines, when rebuilt, generally
emit at levels near or below the certification standards that applied
to the engine when new and that regulations to control rebuild
practices did not appear to be warranted at that time.\41\
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\40\ 40 CFR Part 85, Subpart O, Urban Bus Rebuild Requirements.
\41\ ``Heavy-duty Engine Rebuilding Practices,'' EPA Final
Report by Tom Stricker and Karl Simon, March 21, 1995.
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In the ANPRM, EPA requested comments on establishing rebuild
requirements to promote continued in-use compliance for 2004 and later
model year engines. The Automotive Engine Rebuilders Association (AERA)
and other related associations stated in their comments on the ANPRM
that it is extremely unlikely that engine rebuilders would rebuild to
non-original specifications because such a product would not be
acceptable to the purchaser.\42\ AERA further commented that a rebuild
program where the rebuilder would be required to conduct certification
testing and be held liable for emissions performance in-use would be
unreasonable for the many rebuilders that are small businesses. AERA
commented that, given what is known about the rebuilding industry, EPA
has no basis for rebuild regulations.
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\42\ EPA Docket A-95-27, Docket II-D-41.
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EPA does not believe that a major program placing substantial new
requirements on the rebuilding industry needs to be proposed at this
time to adequately address the Agency's concerns described above, based
on comments received and EPA's findings regarding current industry
practices. Therefore, EPA does not propose regulations at this time
under the authority of Clean Air Act Section 202(a)(3)(D). However, EPA
does believe that establishing basic regulatory provisions regarding
engine rebuilding under Section 203 of the Clean Air Act (``Prohibited
Acts'') would help the rebuilding industry understand what is needed to
ensure that rebuilt 2004 and
[[Page 33450]]
later model year engines closely approximate original emissions
performance when they are rebuilt.
Clean Air Act Section 203(a)(3) states that it is prohibited for
``any person to remove or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine'' in
compliance with regulations, either before or after its sale and
delivery to the ultimate purchaser. 42 U.S.C. 7522 (a)(3)(A). EPA
commonly refers to violations of this provision of the Clean Air Act as
tampering. Engine rebuilding practices are currently addressed in
general terms under EPA policies est
FR Doc. 96-16330 Control of Emissions of Air Pollution from Highway Heavy-Duty Engines
ablished under Clean Air Act
Section 203(a)(3) regarding tampering. The Agency has established a
policy that when switching heavy-duty engines the new engine must be
``identical to a certified configuration of a heavy-duty engine of the
same or newer model year''.\43\ EPA has also established policies
regarding the use of aftermarket parts during rebuild.\44\
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\43\ Engine Switching Fact Sheet, April 2, 1991. Docket A-95-27,
II-B-6.
\44\ ``Interim Tampering Enforcement Policy'', Mobile Source
Enforcement Memorandum No. 1A., June 25, 1974. Docket A-95-27, II-B-
5.
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EPA is proposing to codify these policies as they apply to
rebuilding and to propose new measures. The Agency believes that
rebuilding is currently a time when emissions control is restored,
along with the engine itself, and that the proposed provisions
described below will help ensure that this continues for the 2004 and
later model year engines. Currently, the engine and all emissions
related components are treated as a package for purposes of engine
certification and other programs and EPA believes it is important to
maintain this view at time of engine rebuild. The provisions proposed
below would specify what minimum action is necessary at time of rebuild
under Clean Air Act Section 203(a)(3) to ensure continued emissions
control.\45\ These provisions reflect what EPA believes will be common
practice for rebuilding engines, but also will help to focus attention
on new emission-related components used to meet the 2004 standards.
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\45\ Note that other actions not specified may also be
prohibited under Clean Air Act Section 203.
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EPA proposes that parties involved in the process of rebuilding or
remanufacturing engines (which may include the removal of the engine,
rebuilding, assembly, reinstallation and other acts associated with
engine rebuilding) must follow the provisions described below to avoid
tampering with the engine and its emissions controls.
(1) During engine rebuilding, parties involved must have a
reasonable technical basis for knowing that the rebuilt engine is
equivalent, from an emissions standpoint, to a certified configuration
(i.e., tolerances, calibrations, specifications) of the same or newer
model year as the engine being rebuilt. A reasonable basis would exist
if:
(a) Parts used when rebuilding an engine, whether the part is new,
used, or rebuilt, is such that a person familiar with the design and
function of motor vehicle engines would reasonably believe that the
part performs the same function with respect to emissions control as
the original part, and (b) Any parameter adjustment or design element
change is made only (i) in accordance with the original engine
manufacturer's instructions or (ii) where data or other reasonable
technical basis exists that such parameter adjustment or design element
change, when performed on the engine or similar engines, is not
expected to adversely affect in-use emissions.
(2) A replacement engine must be of (or rebuilt to) a configuration
of the same or later model year as the original engine. Thus, in
addition, under the proposed regulations a party supplying a rebuilt
engine would be prohibited from supplying a replacement engine that is
not rebuilt to a configuration of the same or later model year as the
trade-in engine.
(3) At the time of rebuild, emissions-related codes or signals from
on-board monitoring systems may not be erased or reset without
diagnosing and responding appropriately to the diagnostic codes,
regardless of whether the systems are installed to satisfy EPA
requirements under 40 CFR 86.094-25 or for other reasons and regardless
of form or interface. Diagnostic systems must be free of all such codes
when the rebuilt engines are returned to service. Further, such signals
may not be rendered inoperative during the rebuilding process.
(4) When conducting an in-frame rebuild or the installation of a
rebuilt engine, all emissions-related components not otherwise
addressed by the above provisions must be checked and cleaned,
repaired, or replaced where necessary, following manufacturer
recommended practices.
EPA proposes that any person or entity engaged in the process, in
whole or in part, of rebuilding engines who fails to comply with the
above provisions may be liable for tampering in violation of CAA
Section 203(a)(3). Parties would be responsible for the activities over
which they have control and as such there may be more than one
responsible party for a single engine in cases where different parties
perform different tasks during the engine rebuilding process (e.g.,
engine rebuild, full engine assembly, installation). EPA is proposing
no certification, recordkeeping, or other requirements of the rebuilder
or engine owner and there would be no in-use emissions requirements.
Because the above proposal represents what EPA believes would be
sound rebuilding practices for 2004 and later model year engines, EPA
does not believe that there are costs associated with the above
proposed requirements. Items 1 and 2 of the proposal closely reflect
established EPA policy regarding tampering (discussed above). Any
changes to rebuild practices will be due to the industry adjusting to
the use of new technologies. EPA believes that any added cost to the
rebuilding of the engines will be due to the technology used to meet
the standards and not due to the rebuilding provisions being proposed.
Additionally, EPA continues to have the authority to regulate
rebuilding if future studies or other information were to provide the
basis for such regulations. EPA views the proposal above as
preventative, in that it will help ensure that the rebuild industry is
aware of the new technologies and that rebuilding of engines with 2004
and later technology will not impact emissions negatively. EPA requests
comments on all aspects of the above proposal.
To ensure that engine rebuilders and others involved in engine
rebuilding are complying with the requirements and to maintain a level
playing field between those who follow the rules and those who do not,
EPA's enforcement office intends to take action against violations of
the rebuild provisions. EPA is concerned, however, that proving
violations will be difficult without some form of records available for
inspection.
EPA is considering the adoption of minor recordkeeping requirements
which EPA believes would be in line with customary business practices.
The Agency would then be able to inspect such records to determine
compliance with the rebuild provisions. The records would be required
to be kept by persons involved in the process of heavy-duty engine
rebuilding or remanufacturing and would have to include the mileage
and/or hours at time of rebuild and a list of the work performed on the
engine and related emission control systems including a list of
replacement parts used, engine parameter adjustments, design element
changes, emissions related codes and signals that are
[[Page 33451]]
responded to and reset and the response to the signals and codes, and
work performed as described in item (4) of the rebuild provisions
above. If it is customary practice to keep records for groups of
engines where the engines are being rebuilt or remanufactured to an
identical configuration, such recordkeeping practices would satisfy
these requirements. EPA would require such records to be kept for two
years after the engine is rebuilt.
EPA's intention with such record keeping requirements would be to
make basic records available to the Agency such that enforcement
officials would be able to understand what work was performed on an
engine during the rebuild process. EPA believes that those in the
rebuilding industry already keep detailed records on work performed on
engines as part of good business practices and therefore, EPA believes
that the above recordkeeping requirements would impose no additional
burden on affected businesses. Moreover, EPA has always had the
authority to request such records pursuant to section 208 of the Clean
Air Act and the above requirements would only standardize the records
available for EPA inspection. EPA requests comments on the above record
keeping requirements.
d. State Inspection/Maintenance Programs
Many states are currently in various stages of planning or
implementing inspection/maintenance (I/M) programs for trucks. The
programs are mostly focused on identifying trucks with high smoke
emissions, which usually result from tampering or poor maintenance, and
requiring their repair. EPA has received requests from several sources
including the American Trucking Association, the Engine Manufacturers
Association, and state organizations to become involved in the
development of truck I/M programs, with the hope that state programs
can be standardized under EPA guidance. Currently, programs may differ
widely from state-to-state causing a variety of problems for the
parties affected.
In response, EPA has begun an effort in this area with the goal of
developing a guidance document that states can use to establish
programs. EPA intends to address issues regarding testing procedures
and standards or pass/fail cut points for heavy-duty engine I/M
programs in coordination with interested parties. Although the guidance
document would not preclude states from designing programs differently,
it should help decrease program differences from state-to-state.
3. Revised Averaging, Banking, and Trading Provisions
Today's proposal makes changes to the heavy-duty engine averaging,
banking and trading (ABT) provisions. They are intended to enhance the
flexibility offered to manufacturers in meeting the stringent standards
being proposed and to encourage the early introduction of cleaner
engines, thus securing emissions benefits earlier than would otherwise
be the case. Further, the proposed ABT changes also allow EPA to
propose more stringent emission standards than it otherwise might,
since the flexibility provided by ABT lowers the costs to manufacturers
and makes it easier to meet the technical challenges of lower
standards.
Under a modified program proposed to be available to manufacturers
between 1998 and 2006 inclusive, credits could be earned without the
current ABT credit discounting or limited life provisions. These
credits could be used beginning in model year 2004 to ease the impact
of the new standards in their initial years of applicability. With the
exception of a minor adjustment in how credit exchanges are conducted
between families, other provisions of the existing ABT program would
remain essentially unchanged, including prohibitions on cross subclass
and cross combustion cycle ABT. A further description of the proposed
changes, including provisions designed to safeguard against any
potential adverse air quality impacts, is provided later in this
section.
a. Overview of the Current Averaging, Banking and Trading Program
The proposed changes come in the context of the existing ABT
program, the bulk of which was adopted in 1990. The existing program
includes otto and diesel cycle HDEs fueled by petroleum (gasoline and
diesel), gaseous fuels, and methanol (see 55 FR 30584, July 28, 1990
and 59 FR 43472, September 21, 1994), and is available for meeting
applicable NOX and particulate matter (PM) standards. The three
aspects of ABT: averaging, banking and trading, are briefly described
in the following paragraphs.
Within a given manufacturer's product line, averaging allows
certification of one or more engine families at levels above the
applicable emission standard (but below a set upper limit), provided
their increased emissions are offset by those from one or more families
certified below the same emission standard, such that the average
emissions from all the manufacturer's families (weighted by horsepower
and production) are at or below the level of the emission standard.
Averaging results are calculated for each specific model year. The
mechanism by which this is accomplished is certification of the engine
family to a ``family emission limit'' (FEL) set by the manufacturer,
which may be above or below the standard (an FEL above the standard may
not exceed a prescribed upper limit specified in the ABT regulations).
Once an engine family is certified to an FEL, that FEL becomes the
enforceable limit used to determine compliance during assembly line and
in-use compliance testing.
The second element of the current ABT program is banking. Banking
gives the manufacturer generating the credits in one model year the
option to defer their use until a later model year for averaging or
trading. Under the current program, credits are discounted by 20
percent when banked and have a three year life. EPA believes banking
promotes the development and early introduction of advanced emission
control technology, which provides emission reduction benefits to the
environment sooner than would otherwise occur. An incentive for early
introduction arises because the banked credits can subsequently be used
by the manufacturer to ease the compliance burden of new, more
stringent, standards. For the same reasons, banking can promote the
introduction and use of clean alternative-fueled engines.
The final element of the ABT program is trading. Since averaging is
limited to a given manufacturer's own product line, the manufacturer
must have two or more engine families within a given averaging set to
participate in the program. This could limit the opportunities for
smaller HDE manufacturers with more limited product lines to optimize
their costs. Trading resolves this concern by allowing credit exchanges
between manufacturers. Thus, averaging benefits can be extended to
manufacturers who might not otherwise be able to participate due to
their limited product lines. Trading can also be advantageous to larger
manufacturers because extending the effective averaging set through
trading can allow for overall optimization of cost across
manufacturers.
Due to manufacturer equity and environmental impact concerns there
are some limitations on credit exchanges in the existing ABT program.
First, for diesel cycle engines, NOX and PM credit exchanges are
prohibited across the various subclasses (LHDDE,
[[Page 33452]]
MHDDE, HHDDE). Second, no credit exchanges are permitted between
diesel-cycle and otto-cycle engines. Finally, cross fuel credit
exchanges are permitted only within engines of the same basic
combustion cycle and subclass. Details on these credit exchange
restrictions, including the reasons for their existence, are discussed
in the previously cited Federal Register notices.
b. Description of Proposed ABT Program Changes
As noted at the outset of this section, EPA is proposing two
principal changes to the existing ABT program designed to temporarily
remove the discounting and limited life of credits generated under
current provisions. Behind these changes is the recognition that the
proposed standards represent a major technological challenge to the
industry. ABT provisions can ease the need to bring all engines into
compliance in MY 2004 by allowing accumulated credits to be used, for
example, to temporarily offset emissions from some particularly
difficult to control engine line. Thus, the Agency can adopt new
standards without the need to show that they can be met by all engines
when first implemented. While the current ABT provisions were designed
with these same general goals in mind, EPA believes that the nature of
the challenge presented by today's proposed standards justifies efforts
to increase the flexibility of the ABT program. The Agency wishes to
maximize the flexibility and incentives for early introduction of
technology which ABT offers. This will help insure that the proposed
new standards will, in fact, be attainable for the manufacturers, and
will be met at the lowest cost. It is also the case that the Agency has
gained experience with the operation of its ABT program which gives it
more confidence in being able to successfully modify the program in the
face of this need.
The proposal being made today would establish a second, parallel,
ABT program targeted specifically at helping manufacturers meet the
proposed more stringent standards in MY 2004 through 2006, the first
three model years to which the new standards would apply. Credits could
be earned under this program beginning in 1998 and would not be
discounted, nor would they expire after 3 years as do current ABT
credits. These credits could only be used to comply with the 2004
standards. If a manufacturer wished to apply them to its compliance
program for earlier model years they could be transferred into the
original ABT program, but would at the same time become subject to the
20 percent discount and three year life of the original program. EPA is
also proposing that this alternate program would be in effect only for
the years immediately surrounding the transition to the new standards.
The ability to generate credits under the proposed new program would be
eliminated in 2007 (the current ABT program would be available for 2007
and later model years). EPA thinks the need for unlimited life and no
credit discounting to enhance the technological feasibility of the
standards would be greatly diminished after the first three years of
the model year 2004 standards. EPA believes it is appropriate to remove
the discounting and limited life restrictions in the modified ABT
program and still keep them in the current ABT program because these
modifications have been considered in developing the proposed
standards, but not prior standards subject to the ABT program. The
Agency seeks comment on what expiration date, if any, would be
appropriate for the proposed program modifications and why.
As in the current ABT program, only NOX and PM credits could
be earned under the modified program. NMHC credits would not be
included because of the potential for windfall credit generation from
the very low NMHC levels of many current engines. NOX-only credit
generation also allows the credits to be transferred back to the
current program if deemed necessary by the manufacturer. The NOX
credits would be applied against the NOX + NMHC standards
beginning in 2004 (but not the NMHC cap associated with the 2.5 g/bhp-
hr optional standard).
EPA proposes that the upper limits for engine families certified
above the 2004 standard and using offsetting ABT credits would be 4.5
g/bhp-hr, NOX + NMHC and 0.25 g/bhp-hr for PM. The 0.25 g/bhp-hr
upper limit proposed here for PM is a reduction from the 0.60 g/bhp-hr
which now applies. EPA believes a reduction in this value is
appropriate even though the stringency of the PM standard is not being
changed. Unless other factors dictate, normal practice has been to set
the upper limit for FELs at the level of the previous standard. An
exception to this practice was made in 1990 when the full current ABT
program was promulgated. At that time engines were only meeting a 0.60
g/bhp-hr PM standard, and it was not clear that a 0.25 g/bhp-hr upper
limit would provide adequate flexibility for 1994 and later model
years. At that time the PM standard was set to drop from 0.60 g/bhp-hr
to 0.25 g/bhp-hr in 1991. The 0.25 g/bhp-hr standard was to be in place
for only three model years (1991-1993) before dropping to 0.10 g/bhp-hr
and as part of their compliance strategy some manufacturers indicated
plans to use credits to meet the 0.25 g/bhp-hr standard and desired
that flexibility to continue after the standard dropped to 0.10 g/bhp-
hr. By 2004, the 0.10 g/bhp-hr standard will have been in place for ten
years, and the need for flexibility to certify above 0.25 g/bhp-hr
should have disappeared by that time. In fact, in 1996 only three
diesel engine families out of about 90 certified above the 0.25 g/bhp-
hr level.
One of the potential problems with ABT programs is the possibility
that manufacturers will reduce their compliance margins relative to the
standards, or associated FELs, in order to maximize the generation of
credits for low emitting engines and minimize the need for credit use
for high emitting engines. Compliance margins are used to protect
against unexpected failure of emission standards due to the variability
inherent in both producing and emission testing of engines. To avoid
having engines exceed their FEL, the manufacturer includes a safety
factor and certifies with emission levels somewhat below the FEL. As
the manufacturer reduces these compliance margins, it increases its
odds of experiencing an unexpected failure of the FEL, either during
assembly line testing or in-use. However, the ability to generate and
use credits encourages the manufacturer to set its FELs as low as
possible. To the extent that a manufacturer reduces its compliance
margins under the proposed new ABT provisions, there is a risk that
such a manufacturer's engines would not meet the FELs.
The Agency is unsure to what extent such ``margin shaving'' might
occur as a result of the modified ABT program being proposed today.
However, to protect against such a possibility, EPA is proposing to
require a minimum margin in order to participate in the modified ABT
program. Based on current certification data, compliance margins vary
from essentially zero to about 18 percent, with the average being about
10 percent. To help ensure that a manufacturer's engines do in fact
meet their FELs without unduly constraining how margins are used,
today's proposal requires a minimum margin of at least five percent to
participate in the modified ABT program. Even though some manufacturers
have higher margins, EPA believes that a five percent value provides
reasonable protection against margin shaving. The larger margins found
in some engine families may exist for other reasons. To
[[Page 33453]]
provide reasonable flexibility, it is also proposed that manufacturers
be permitted to use a margin of less than five percent if they have
test data which demonstrates that a lower margin is sufficient.
Comments are requested on the validity of the Agency's concern as well
as on the proposed use of a minimum required margin. Commenters
supporting this approach should also comment on the appropriate size of
the margin.
Since the useful life for heavy heavy-duty diesels (HHDDEs) is
being proposed to increase in 2004 along with the change in emission
standards, the question arises of how to determine appropriate credits
under the modified ABT program for those HHDDEs engines being certified
to the shorter useful life provisions prior to 2004. In-use emissions
generally increase, or ``deteriorate,'' with increasing mileage. Thus,
if those engines had been certified to the longer useful life, they
normally would have had to account for more deterioration than for the
shorter life. This would have produced a higher FEL, and less credit,
than would the shorter life.
For NOX, dealing with the issue of the amount of credits is
fairly straightforward. NOX emissions from HHDDEs show little
deterioration, and in some cases can actually decline with age.
Therefore, the Agency believes an appropriate adjustment for useful
life can be made by simply extending the NOX deterioration factor
used in certifying the engine family to the proposed 435,000 mile life.
This should give a conservative estimate of likely deterioration over
the longer life period. Under this approach the extension would be
performed only for the purposes of calculating credits for the modified
ABT program, and would not impose added certification durability
requirements or extended recall testing limits as the useful life (and
corresponding obligation to comply with the emission standards) would
not be extended. If a manufacturer felt that a projection of its
deterioration factor was inappropriate, it could exercise the existing
option under 40 CFR 86.090-21(f) to petition the administrator for a
longer useful life for its engine, and determine a new deterioration
factor for that new useful life.
Under the approach just described for extending NOX
deterioration factors, the manufacturer incurs no added liability for
the mileage extension from 290,000 miles to 435,000 miles. The above
approach seems appropriate to the Agency for purposes of quantifying
the amount of credits given the transitional nature of the useful life
issue and the general stability and predictability of NOX
emissions. However, in various credit and trading programs EPA has set
policy that credit generation should be based on an enforceable
obligation to achieve the expected emission reductions. See, e.g.,
Interim Guidelines on the Generation of Mobile Source Emission
Reduction Credits, 58 FR 11134 (February 23, 1993). If deemed
appropriate, this could be accomplished by requiring the manufacturer
to certify using the same extended NOX deterioration factor it
used for credit calculations. This would establish in-use liability for
the extended mileage period. If this were done, it would apply only for
the NOX standard. EPA believes this extended useful life could be
accomplished without imposing additional certification burdens or
requirements, given the current flexibility in certification
regulations and the expected deterioration associated with NOX
emissions over time. EPA invites comments on this alternate approach as
well as the proposal to calculate the amount of NOX credits
without extending the useful life. Comments should address which of
these approaches should be adopted in the final rule.
In the case of particulate matter (PM) emissions, the Agency has
much less confidence in the reliability of projections from the current
290,000 mile life. In this case there is a greater possibility of
unexpected changes in emissions later in the engine life which would
not be consistently captured with such an approach. Therefore, EPA is
proposing to allow credits to be generated only for the applicable
engine family's certified useful life period. In most cases this would
be 290,000 miles. However, as with NOX, if a manufacturer wished
to generate credits for a longer period, it could petition the
Administrator under the provisions of 40 CFR 86.090-21(f) for a longer
useful life for its engine. It would then be able to generate credits
for that entire useful life period.
Finally, it should be noted that EPA is proposing to revise the
technique used to calculate credit exchange (generation and use)
amounts. In the current ABT system, credits are generated based on the
lowest horsepower configuration in a family and credit use is
calculated based on the highest horsepower configuration. Credit
generation is calculated based on the configuration which generates the
least benefit within the family while credit use is based on the
configuration which requires the most credits to comply. In some cases
this can result in large offsets (i.e., credits are generated at the
lowest rate and credits required at the highest rate). Based on EPA's
experience with ABT programs, we find this offset to be unnecessary.
Over the past five years the ABT program has been implemented smoothly,
leaving less need for the safeguards this provision brought to the
original program. Furthermore, this provision tends to introduce a
penalty for credit generating engines, thus reducing the incentive to
introduce clean technology. Therefore, EPA proposes to base such
calculations on sales-weighted average horsepower values within each
family. EPA believes use of an average horsepower for generating and
using engines is sufficient to ensure no environmental loss from the
credit transaction.
EPA received comments on the ANPRM requesting clarification on
whether or not, and if so, how credits from engines certified below the
applicable standard can be used by entities other than the engine
manufacturers (e.g., engine purchasers). EPA believes that in some
circumstances this could well be appropriate and consistent with the
intent of the ABT regulations. EPA asks comment on what revisions or
clarifications may be needed to the ABT program to facilitate this
possibility. For example, EPA is interested in comment on how we can
assure that credits not be counted by both the engine manufacturer and
the vehicle/engine user (double counted).
The interim modifications to relax the credit discounting and
lifetime restrictions for model years 1998-2006 are being included
primarily to assist in compliance with the proposed standards beginning
in 2004. As was discussed earlier in this section, the technological
challenge of meeting the proposed standards is much less for otto-cycle
engines as compared to diesel cycle engines. In fact many models
already have certification levels near or below the level of the
proposed standard. While the revised ABT program could provide an
incentive to produce even cleaner otto-cycle engines before 2004, EPA
is concerned that the discount and lifetime revisions would provide
``windfall credits'' to the otto-cycle industry. A similar concern does
not exist for diesel cycle engines, because their current NMHC+NOX
emission rates are well above the level of the proposed standard. EPA
asks comment on this issue including whether or not and why these two
program changes should be extended to otto-cycle engines or just the
current A, B,& T program should be available.
[[Page 33454]]
In its comments on the ANPRM submitted on behalf of a consortium of
environmental groups, NRDC raised several objections to the possible
ABT program changes discussed in that document and in the SOP. Among
these, NRDC opposed removal of the discounting and limited life
provisions of the current program. NRDC argued that these changes could
lead to unnecessary delays in compliance with the proposed new
standards and could result in increased emissions. Commenting
specifically on the removal of discounting, NRDC argued that in the
absence of discounting, the public ``relinquishes all of the benefits
of unanticipated advances in technology.'' The Agency does not agree
with these comments. As described above, existence of the ABT program
allows the Agency to propose and finalize a standard that might not be
otherwise appropriate under the CAA, since ABT reduces the cost and
improves the technological feasibility of achieving the standard.
Furthermore, the generation of credits means that emission reductions
have been realized earlier than required by the standards, which EPA
believes is a benefit to the public. The fact that the use of credits
would allow some specific engine families to delay compliance with the
proposed new standards has no inherent air quality impact since the
credits represent offsetting emission reductions below the applicable
standard from other engines. EPA encourages further comment on the
appropriateness of the Agency's proposal to impose no discount or life
limit on credits generated and used under the modified ABT program.
In their comments NRDC also opposed expansion of the trading
provisions to include cross-cycle, cross sub-class or cross-source
trading. None of those changes are included in today's proposal.
Comments are invited on the appropriateness of EPA at some later date
proposing to allow cross-cycle, cross-cycle with the same fuel, cross-
subclass or cross-category (e.g., highway and non-road) credit
exchanges as part of the modified ABT program.
In their comments on the ANPRM, NRDC stated that only engines
meeting the proposed standards early should be able to get the benefits
of the temporary changes to discount and lifetime provisions. EPA
explored this concept, but for two reasons chose not to include it in
the NPRM. First, such a restriction would reduce the value of ABT
programs in assisting transition to the 2004 standards. A manufacturer
would have no incentive to introduce improved technology early unless
the engine made it all the way to the level of the proposed standards.
Second, since early additional emission reductions have equal value
whether the engine is above or below the proposed standards it would be
inconsistent with air quality goals to create a disincentive for early
additional emission reductions. However, this view is premised on the
design criterion discussed above, i.e., no cross-cycle credit
exchanges. If cross-cycle exchanges are permitted without some form of
a trigger level for eligibility, an unusual situation could be created
where gasoline-fueled otto cycle engines could generate credits for use
by petroleum-fueled diesel cycle engines. This in turn would create a
disincentive for technology innovation for diesels which is one of the
key goals for the ABT program.
Readers are encouraged to review the draft regulations for a fuller
understanding of how the proposed ABT program would operate. The Agency
solicits comments on all aspects of the ABT changes being proposed,
including comments on the benefit of these changes to manufacturers in
meeting the proposed emission standards and any potential air quality
impacts which might be associated with them.
IV. Technological Feasibility
This section discusses the emission control technologies that EPA
believes would be available for engine manufacturers to meet the
proposed 2004 standards. Included in this discussion are estimates of
emission reductions associated with these technologies and their
potential to impact performance. Because of the significant differences
between the operation, emissions, and likely control strategies for
diesel and gasoline heavy-duty engines, each engine type will be
treated separately. Further information on the basic characteristics of
diesel and gasoline heavy-duty engines may be found in Docket A-95-
27.46
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\46\ Memo from Tad Wysor (EPA) to Air Docket A-95-27, ``Summary
of Heavy-Duty Engine Emission Control Technologies,'' II-B-4, August
24, 1995.
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Following is a summary of the key technologies discussed in the
Regulatory Impact Analysis (RIA). For more detail on the emission
control technology described in this section, see Chapter 4 of the RIA.
This chapter of the RIA also describes many of the technologies that
are still under development that could allow heavy-duty highway engines
to meet or exceed the reduced emission standards proposed in this
action. Several technologies described in the RIA are not included in
this section because EPA believes they are less likely to be used by
engine manufacturers in 2004 than those strategies, techniques, and
technologies described here.47
---------------------------------------------------------------------------
\47\ The technological feasibility of meeting the proposed
standards using alternative fuels is discussed in Chapter 4 of the
RIA.
---------------------------------------------------------------------------
The following discussion of technologies includes a wide range of
alternatives from which manufacturers may choose to comply with the
proposed emission standards. Not all of these technologies will be
needed to reduce NOX or HC emissions to comply with the proposed
emission standards. Manufacturers may develop and use technologies to
improve fuel economy or performance or to control particulate emissions
at a lower cost. The analysis of economic impacts in Section V.B.
reflects this by assessing the incremental cost of adopting a limited
package of technological changes to heavy-duty engines.
As will be discussed further below, EPA believes that the goals set
by this proposal are challenging but feasible. They clearly represent
major reductions compared to current engine emission levels. At the
same time, heavy-duty engine technology is in a period of rapid
development, and EPA does not see any reason to expect that such
development will be slowed in the foreseeable future. Published work
shows that research engines are already beginning to approach the
levels required by the new standards. There are certainly many
significant technical challenges to translating research work into
acceptable products for the marketplace. However, the emission targets
are set in the framework of a long lead time, substantially longer than
has been the case in many previous heavy-duty engine rules. Also,
except for the use of EGR on heavy-duty diesel engines, each of the
technologies anticipated for complying with the proposed emission
standards, as described below, have already been applied to and proven
on recent model year heavy-duty engines. Thus, on balance, the Agency
believes that the proposed standards are feasible for the heavy-duty
industry.
Through comments on the ANPRM, some concern has been expressed to
EPA that lower standards may be more appropriate for heavy-duty
engines. One suggestion was that heavy-duty diesel engines should be
required to meet a 0.05 g/bhp-hr PM standard since urban buses are now
held to this level. In addition, commenters recommended that separate,
lower HC plus NOX and CO standards should be set into place for
heavy-duty gasoline engines. Based on the information discussed further
[[Page 33455]]
below and in the RIA, EPA believes that the proposed standards
represent the lowest levels consistent with the constraints of section
202 (a)(3)(A)(i) of the Clean Air Act. That section requires EPA to
establish the ``greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available for the model year to which such standards
apply, giving appropriate consideration to cost, energy, and safety
factors associated with the application of such technology.''
Given the uncertainty associated with the long lead time, this
analysis would be re-evaluated in the proposed 1999 review of the
feasibility of the standards discussed in section III.B above. EPA
requests comment on the availability and effectiveness of emission
control technologies that may be applied to heavy-duty on-highway
engines to meet the proposed standards. EPA also requests specific
comment on the appropriateness of a separate, lower standard for heavy-
duty gasoline engines.
A. Diesel Engines
Highway heavy-duty diesel engine manufacturers have historically
been very successful in lowering both NOX and PM levels to meet
EPA emission standards. EPA standards have required a reduction in
NOX emissions of over 50 percent and PM reduction of over 80
percent largely within the past 5 years. Engine manufacturers have been
able to achieve the majority of these reductions using changes in
engine hardware with minimal reliance on exhaust aftertreatment
devices. Today's heavy-duty diesel engines are also well below the
standards for HC and CO. Over this same period, engine manufacturers
have been able to provide their customers with increased power,
improved fuel economy and improved engine durability.
Indications are that HC, NOX and PM control technologies have
not yet reached their full potential. A broad range of current
published research, referenced in the RIA, shows that HC + NOX
levels of 2.5 g/bhp-hr with a PM level of 0.10 are already being
approached in laboratory diesel engines. One example, discussed in the
RIA, is a turbocharged and aftercooled engine that uses optimized swirl
and cooled EGR to achieve emission levels of 2.0 g/bhp-hr HC + NOX
and 0.13 g/bhp-hr PM (average of three operating modes). Engine
manufacturers and other companies have conducted extensive research
that is still confidential or is not yet published for other reasons.
EPA believes that the unpublished work in the field of diesel engine
emission control represents progress in research and development that
goes well beyond that described in the published literature. The Agency
recognizes that such results do not, of themselves, demonstrate the
feasibility of reaching such levels in production engines. However, as
discussed below, EPA believes that for the 2004 time frame,
technologies will be optimized to meetand in some cases possibly
exceedfuture emission-control targets.
Under the proposal, the engine manufacturers will have an effective
leadtime of eight years. This is twice that available in previous
heavy-duty engine rules. This long leadtime is valuable to heavy-duty
diesel engine manufacturers for several reasons. Due to the stringency
of the proposed standards, it is likely that manufacturers will need to
make fundamental changes in engine technology. History has shown that
emissions can be reduced more cost-effectively when the engine
manufacturers are given a reasonable amount of time for research and
development (R&D). The relatively long lead time available for this
rule provides adequate time for a strong, orderly, and comprehensive
R&D program which focuses not only on emission reduction, but also on
addressing fuel consumption, durability and maintenance concerns. EPA
anticipates that heavy-duty diesel engine manufacturers would focus
primarily on NOX control strategies to meet the proposed 2004
standards rather than NMHC control. EPA also expects that manufacturers
will focus on in-cylinder control strategies as opposed to
aftertreatment approaches. Combustion optimization through improved air
and fuel controls are expected to be at the center of the strategy for
reducing NOX emissions (and HC where possible), while holding the
line on PM emission rates. Such strategies also hold promise for
positive impacts on fuel consumption. Combustion optimization can be
achieved through a combination of strategies related to combustion
chamber design improvements, upgrades in fuel system controls, and
modifications of intake air distribution approaches and
characteristics. The R&D associated with the assessment and
optimization of such strategies and the application of the results of
this work to the various heavy-duty diesel engine models will need to
be conducted during the available leadtime.
Individual technologies may have different effects on NOX, PM,
and HC emissions, though manufacturers can balance these to produce an
engine that effectively controls all emissions. NOX emissions are
controlled primarily by lowering peak combustion chamber temperatures.
However, simply lowering combustion temperatures can lead to an
increase in PM or HC formation because PM and HC are more likely to
form at lower temperatures. NOX control strategies such as
retarding fuel injection timing by themselves are limited because they
cause an increase in PM or HC. Engine manufacturers have had to devise
more sophisticated emission control strategies that allow them to
simultaneously control NOX, and PM, and HC. Manufacturers have
used a variety of technologies, often balancing their effects and
optimizing among them to comply with the emission standards. EPA
therefore believes that manufacturers will need some, but certainly not
all, of the technologies that are primarily for controlling PM or HC
emissions to meet the standards proposed in this action.
Combustion chamber design is a key area for improvements to reduce
emissions and increase performance. Manufacturers are continuously
working to improve the combustion chamber geometries of their engines
to maximize efficiency and reduce emissions. Design variables include
such things as the shape of the combustion chamber, the location of the
fuel injector, valve timing, and air intake geometry. Efforts to
redesign the shape of the combustion chamber and the location of the
fuel injector have been directed primarily at optimizing the relative
motion of the air and injected fuel. Increasing the turbulence of the
intake air (such as through inducing swirl) can reduce NOX and PM
emissions from diesel engines by improving the mixing of air and fuel
in the combustion chamber. Increasing the compression ratio of the
engine will generally reduce fuel consumption and PM, but tends to
increase NOX emissions. Moving from 2 to 4 valves per cylinder can
be used to improve engine breathing and will allow the fuel injector to
be placed in the center of the cylinder bore, improving combustion.
Finally, higher precision in the bore honing and the matching of the
piston and rings can reduce the amount of oil that passes from the
crankcase into the cylinder. This will result in a reduction in PM.
Emission control and diesel engine performance may also be improved
through advances in fuel injector design. Design variables for fuel
injectors include injection pressure, spray pattern, and control of the
rate of fuel injection over the course of the injection event. The
combination of
[[Page 33456]]
reduced droplet size and improved mixing leads to decreased HC and PM.
This improved fuel injection can simultaneously lower NOX
emissions by reducing the time between the initial injection and
ensuing ignition of the fuel, which minimizes the level of premixed
combustion.
Varying the rate at which fuel is injected into the cylinder is
another strategy that may be used to reduce HC, NOX, and PM
emissions. This ``rate shaping'' is especially effective when combined
with electronic controls. A low rate pilot injection may be used at the
beginning of combustion to shorten the ignition delay, therefore
shortening the pre-mixed burning phase of combustion, which is most
conducive to NOX formation. At low loads, improved fuel injection
can reduce NOX, the soluble organic fraction of PM, and fuel
consumption, with some possible penalty in smoke. One experimental
study, referenced in the RIA, showed that rate shaping and fuel
injection parameters could be used to achieve 3.5 g/bhp-hr NOX and
0.10 g/bhp-hr PM from a diesel engine operating at 75 percent load,
without the use of EGR (HC levels were not reported).
Engine manufacturers may reduce emissions from their engines
through optimization of charge air pressures and response rates for all
types of engine operation (speed and load). Charge air compression is
used in almost all current heavy-duty diesel engines. For four-stroke
diesels, turbocharging is the most common method of increasing boost
air pressure into the cylinder. With an increase of air moved into the
cylinder, more fuel may be injected resulting in higher power. One
limitation of a turbocharger is that it has an inertial lag time
associated with its response to changing operating conditions. As a
result, during transient operation, too little intake air compression
may occur at the beginning of an acceleration, while an excessive boost
may remain at the start of the next steady-state operation. In
addition, a given turbocharger optimized for high loads may have
compromised efficiency at low loads. A variable geometry turbocharger
may be used to increase the boost response rate and provide appropriate
air/fuel ratios for varying loads and speeds. This control of the air/
fuel ratio can often lead to decreased emissions. In one study,
referenced in the RIA, electronic controls combined with a variable
geometry turbocharger achieved a 37 percent reduction in HC and a 34
percent reduction in NOX without an increase in PM over a portion
of the HD-FTP.
Exhaust gas recirculation (EGR) is probably the most important in-
cylinder diesel engine control technology for obtaining significant
NOX reductions to meet the 2004 proposed standard. Under this
approach, a portion of the exhaust gas is routed back into the intake
manifold. This has the effect of reducing peak temperatures, and thus
reducing NOX formation in the cylinder. This strategy will be
focused on low and medium load conditions due to possible PM and fuel
consumption increases at high loads. EPA expects that the effectiveness
of the EGR system will be optimized and its potential adverse affects
minimized by integrating its control into the overall electronic
controls used for other engine systems. One method for controlling the
PM emissions attributed to EGR, which may be used on some designs, is
to cool the exhaust gas recirculated to the intake manifold. By cooling
the recirculated gas, more exhaust gas can be added to the intake
charge without reducing the supply of fresh air into the cylinder.
Another concern associated with EGR is that, by being recirculated, the
particulate or other contaminants in the exhaust may find its way into
the oil and degrade the oil's performance, resulting in a durability
concern. This durability concern may be alleviated by keeping the EGR
fraction of the intake charge below 10 or 15 percent, modifying
lubricating oil additive packages, improving oil filtration, and/or
more frequent oil changes. In the worst case, some manufacturers may
consider some form of an in-line particulate removal device such as a
filter in the stream of recirculated exhaust gas.
Engine manufacturers have started to use oxidation catalysts in
some cases where engines have needed help meeting particulate
standards. Efforts are also being made to develop a durable and cost
effective NOX reduction catalyst that will operate on the lean
exhaust which is produced by diesel engines. However, due to projected
engine design improvements, EPA expects the engine manufacturers to
focus on meeting the proposed standard without the use of
aftertreatment. Alternatives to aftertreatment are generally preferable
because of high costs, space requirements, backpressure effects, and
possible durability concerns (with respect to long life of diesel
engines) associated with aftertreatment devices.
In summary, EPA believes that combustion optimization through
strategies such as air and fuel control and EGR would be the primary
NOX control strategy for meeting the proposed standards. However,
as NOX emissions are reduced through engine controls, there is
often a tradeoff resulting in an increase in PM emissions. Strategies
that would be expected to be used to control PM emissions include
further optimization of combustion chamber geometry, advances in fuel
injection, fuel rate shaping, and advances in turbocharger design.
These PM control technologies may also be used to increase power from
the engine and reduce fuel consumption. EPA believes that manufacturers
would make use of the PM control technologies, regardless of further
emission control, to achieve benefits in power and fuel consumption.
All of the technologies described in this section have been applied to
and proven in on-highway diesel engine applications. Further, all of
the technologies, with the exception of EGR, have been proven in heavy-
duty diesel applications. Even EGR is used on at least one 1996 light
heavy-duty diesel engine model. By combining these strategies in
various ways, EPA believes it is technologically feasible to meet the
proposed standards for model year 2004. Together these strategies
should allow heavy-duty diesel engines to achieve the proposed NOX
+ NMHC reductions without increasing PM or other emissions.
Most of the results discussed above are based on research using
conventional on-highway diesel fuel. Another parameter which affects
emissions from diesel engines is the composition of the fuel being
used. While much can be said about the effect of current fuels on
current engines, the degree of sensitivity of future, low emitting,
engines to fuel parameters is not as well understood. The Agency's
current view is that fuel changes could reduce the amount of emission
control necessary for the engine, but fuel changes are probably not
necessary to meet the proposed standards. However, this remains an area
of uncertainty and is one of the issues which would be addressed
further in the proposed 1999 review of the feasibility of the standard,
as discussed in section III.B above.
B. Gasoline Engines
Gasoline engine manufacturers are producing heavy-duty engines that
exceed the level of emission control required by current standards.
Some 1996 model year heavy-duty gasoline engine families have certified
emission levels below the standards proposed for 2004. Thus, the Agency
believes that complying with the proposed standards will be fairly
straightforward for gasoline engines. EPA requests
[[Page 33457]]
comment on the appropriateness and effectiveness of the technologies
described below.
Current heavy-duty gasoline engine emission levels are achieved
mainly through the use of EGR and either air-assisted oxidation
catalysts or three-way catalysts. Many of these engines have used open-
loop engine controls and electronic fuel injection for years. However,
the three-way catalysts require precise control of the exhaust air-fuel
ratio for maximum performance. By including a feedback loop in the
control system, the precision of the air-fuel ratio in the exhaust is
greatly increased, especially during transient operation. Therefore,
EPA believes that, through the use of closed-loop electronic control
and the upgrades to system management available with that approach,
manufacturers can significantly improve their emission-control
capability. These reductions may be further assisted by improvements in
fuel injection technology or EGR.
Improving fuel injection has been proven to be an effective and
durable strategy for controlling emissions and reducing fuel
consumption from gasoline engines. Improved fuel injection will result
in better fuel atomization and a more homogeneous charge with less
cylinder-to-cylinder and cycle-to-cycle variation of the air-fuel
ratio. These engine performance benefits will increase as technology
advances allow fuel to be injected with better atomization. Increased
atomization of fuel promotes more rapid evaporation by increasing the
surface area to mass ratio of the injected fuel. This results in a more
homogeneous charge to the combustion chamber and more complete
combustion. EPA believes that multi-port fuel injection will be used in
most, if not all, applications under the proposed standards because of
its proven effectiveness. Because of the performance and fuel
consumption improvements associated with multi-port fuel injection, it
is likely that most engine models would incorporate this technology by
2004 anyway.
Exhaust gas recirculation is currently used on heavy-duty gasoline
engines as a NOX control strategy. Recirculated gases reduce the
peak flame temperature, thus reducing NOX. Because the
recirculated gases limit the amount of oxygen available for combustion,
there can be some penalty in fuel economy if too much gas is
recirculated. One method of increasing the engine's tolerance for EGR
is to stratify the recirculated gases in the cylinder. This
stratification allows high amounts of dilution near the spark plug for
NOX reduction while making undiluted air available to the
crevices, oil films, and deposit areas so that HC emissions may be
reduced. Stratification may be induced radially or laterally through
control of air and mixture motion determined by the geometry of the
inlet ports. One study of this strategy is referenced in the RIA.
EPA believes that the most promising overall emission control
strategy for heavy-duty gasoline engines is the combination of a three-
way catalyst and closed loop electronic control of the air-fuel ratio.
Control of the air-fuel ratio is important because the three-way
catalyst is only effective if the air-fuel ratio is at a narrow band
near stoichiometry. For example, for an 80 percent conversion
efficiency of HC, CO, and NOX with a typical three-way catalyst,
the air-fuel ratio must be maintained within a fraction of one percent
of stoichiometry. During transient operation, this minimal variation
cannot be maintained with open-loop control. For closed-loop control,
the air-fuel ratio in the exhaust is measured by an oxygen sensor and
used in a feedback loop. The throttle position, fuel injection, and
spark timing can then be adjusted for given operating conditions to
result in the proper air-fuel ratio in the exhaust. In addition,
electronic control can be used to adjust the air-fuel ratio and spark
timing to adapt to lower engine temperatures, therefore controlling HC
emissions during cold start operation.
A three-way catalyst may be a single converter or have two
converters in series. A converter is constructed of a substrate,
washcoat, and catalytic material. The substrate may be metallic or
ceramic with a flow-through design similar to a honeycomb. A high
surface area coating, or washcoat, is used to provide a suitable
surface for the catalytic material. Under high temperatures, the
catalytic material will increase the rate of chemical reaction of the
exhaust gas constituents. In a typical three-way catalyst design with
two converters, the first converter will be a reduction catalyst which
converts NOX to nitrogen and water. Palladium is often used as the
NOX reduction catalytic material with rhodium added to control
ammonia formation. Ammonia, which may be converted back to NOX in
the second converter, can also be controlled through the use of tight
air-fuel ratio control. The second converter is an oxidation catalyst
and typically uses platinum and rhodium to convert HC and CO to
CO2 and water. Three-way catalytic converters using a single
monolith generally use one or more of the metals mentioned above
(platinum, rhodium, and palladium) to catalyze the desired reactions.
These designs may be preferable since less materials are used and less
space is required.
In summary, EPA believes that gasoline engine manufacturers, to the
extent they need to make improvements, can meet the proposed standards
by refining those technologies already employed on their engines. The
use of more powerful electronics to better control combustion and
aftertreatment will likely be the most important focus of technology
upgrades enabling manufacturers to reduce emissions. EPA therefore
believes it is technologically feasible for heavy-duty gasoline engines
to meet the proposed standards for model year 2004.
C. Safety and Energy
One of the factors considered by EPA in assessing the feasibility
of its proposed standards is safety. Section 202(a)(3) of the Clean Air
Act requires that EPA set emission standards for heavy-duty engines
that reflect the ``greatest degree of emission reduction achievable
through the application of technology which the Administrator
determines will be available for the model year to which such standards
apply, giving appropriate consideration to cost, energy, and safety
factors associated with the application of such technology.'' \48\ EPA
has considered the safety implications of the standards in today's
proposal. In the course of this consideration, the Agency has consulted
with the Department of Transportation, to make use of that Department's
expertise in assessing vehicle safety.
---------------------------------------------------------------------------
\48\ 42 U.S.C. 7521(a)(3)(A)(i).
---------------------------------------------------------------------------
EPA does not believe that there are any significant safety concerns
associated with the technologies described in this section. In general,
they all represent the progressive development of technology already in
use. Except for the use of EGR on heavy-duty diesel engines, all of the
technologies anticipated for use in 2004 have already been applied to
and proven on recent model year heavy-duty engines. As for the use of
EGR, EPA is not aware of any safety problems where EGR has been used on
light-duty diesel vehicles or on heavy-duty gasoline engines. EPA sees
no reason why the use of EGR on heavy-duty diesels would create any new
safety problems. EPA welcomes comment on any safety issues that
commenters believe might be associated with today's proposal.
EPA believes that there will not be significant energy concerns
associated
[[Page 33458]]
with the control strategies which would be available to meet the
proposed standards. EPA expects that manufacturers will focus on
maintaining or decreasing the fuel consumption of their engines in the
development of engines that will meet the proposed standards. For
heavy-duty diesel engines, many of the technologies that would likely
be used to control PM emissions would also be used to offset the
negative effects of EGR on fuel economy. For heavy-duty gasoline
engines, the combination of fuel injection advances and closed-loop
control used to control emissions could actually result in a fuel
economy benefit.
V. Impacts of Proposed Program
A. Environmental Impacts
1. Heavy-Duty NOX Emissions Impacts
The NOX inventories used for this rulemaking were based on a
detailed analysis of NOX emissions that was prepared for EPA by
E.H. Pechan and Associates, as described in Section II. To calculate
the impact of this proposal, it is necessary to estimate average
NOX and average NMHC emission levels resulting from the combined
NOX + NMHC standard. The NOX emission level was determined by
analyzing the relative cost effectiveness of NOX and NMHC
emissions reduction technologies; NOX-reduction technologies are
expected to be much more cost-effective than NMHC-reduction
technologies, which are only practical for a small number of engine
families that have relatively high NMHC emissions. As a result, NMHC
emissions are expected to be only slightly less than current levels,
(see following section for additional discussion), and NOX
emissions are expected to be reduced to below 2.0 g/BHP-hr to provide a
sufficient compliance margin. Thus, the effect of the combined
standards on NOX was modeled as being equivalent to a 2.0 g/BHP-hr
NOX-only standard. Full details of the air quality impacts can be
found in the RIA. The following paragraphs summarize the key results.
The public is encouraged to read the full analysis, and to comment on
all aspects of the work.
Figure 7 shows projections of total NOX emissions, with and
without the proposed controls, for the entire nation. The emissions are
projected to decline over the next several years, due to the
implementation of previously promulgated controls, but then begin to
increase due to growth in the number of vehicles and other sources. By
the year 2020, without additional control, total national NOX
emissions are projected to actually exceed current levels. Even with
the implementation of the proposed standards, total NOX emissions
are expected to grow in the future. Figure 8, which presents the
projections of NOX emissions from heavy-duty engines, with and
without the proposed controls, shows that the proposed standards are
expected to prevent the contribution of heavy-duty engines from
increasing before the year 2020.
BILLING CODE 6560-50-P
[[Page 33459]]
[GRAPHIC] [TIFF OMITTED] TP27JN96.029
[[Page 33460]]
[GRAPHIC] [TIFF OMITTED] TP27JN96.030
BILLING CODE 6560-50-C
[[Page 33461]]
The estimates of the total NOX reductions are shown in Table
3. Almost half of the reductions would occur in nonattainment areas,
and nearly 90 percent of the reductions would occur in regions where
NOX emissions are reasonably expected to have a significant effect
on nonattainment areas.49
---------------------------------------------------------------------------
\49\ These regions include all counties in ozone nonattainment,
as well as all counties in attainment in: California, Texas, all
states east of the Mississippi River, and all states on the western
border of the Mississippi River.
Table 3.--Estimated National NOX Emissions Reductions From Proposed
Standards for Heavy-Duty Engines
[Thousand Tons per Year]
------------------------------------------------------------------------
Diesel Gasoline Total
Year emissions emissions emissions
reductions reductions reductions
------------------------------------------------------------------------
2005................................ 106 12 118
2010................................ 518 59 577
2015................................ 832 102 934
2020................................ 1,066 149 1,215
------------------------------------------------------------------------
2. Heavy-Duty NMHC Emissions Impacts
Estimates of the impact of this action on NMHC emissions were
developed by assuming that the combined NMHC plus NOX standards
are equivalent to that of 0.4 g/BHP-hr NMHC-only standards; this
discussion briefly summarizes the detailed analysis in the RIA. This is
consistent with the previous assumption that the combined standards are
equivalent to that of 2.0 g/BHP-hr NOX-only standards It was also
assumed that, without the proposed NMHC control, average NMHC emissions
from 2004 and later model year heavy-duty engines would be the same as
1994 model year heavy-duty engines (based on certification data), since
there are no new PM or HC standards after 1994. Using these
assumptions, the expected exhaust NMHC reductions for 2004 and later
model year engines would be 9 percent for diesels and 24 percent for
gasoline. The effect of these reductions on nationwide emissions was
modeled using MOBILE5a, using the VMT estimates from Pechan. The
results are shown in Table 4. The reason why these reductions are small
relative to the decrease in the numerical level of the standards is
that many heavy-duty engines are currently being certified well below
their applicable hydrocarbon standards. As is discussed in the RIA,
however, the lowering of the NOX standard in 1998 may cause some
increases in NMHC emissions from diesel engines (even if the emissions
remained below the current HC standard), such that the actual benefit
of this standard may be greater. Moreover, it is worth noting that the
inclusion of NMHC emissions in the proposed standards also serves to
prevent increases in NMHC emissions that may otherwise have occurred as
a result of lowering the NOX standard, given the tradeoff between
NOX reductions and HC/PM reductions that is often observed with
diesel engines.
Table 4.--Estimated National NMHC Emissions Reductions From Proposed
Standards for Heavy-Duty Engines
[Thousand Tons per Year]
------------------------------------------------------------------------
Diesel Gasoline Total
Year emissions emissions emissions
reductions reductions reductions
------------------------------------------------------------------------
2005................................ 2.2 0.5 2.7
2010................................ 6.8 2.9 9.7
2015................................ 12.1 5.2 17.3
2020................................ 16.4 8.4 24.8
------------------------------------------------------------------------
3. Particulate Emissions Impacts
The action being proposed should not have any effect on direct
particulate emissions from heavy-duty engines, since it does not change
the particulate standard. Manufacturers are expected to continue to
produce engines with particulate levels slightly below the standard.
The NOX reductions discussed above, however, are expected to
reduce the concentrations of secondary nitrate particulates. As
discussed previously, NOX can react with ammonia in the atmosphere
to form ammonium nitrate particulates. In some areas in the western
states, ammonium nitrate particulates can represent more than one
quarter of the fine particulate in the air. The California Air
Resources Board has preliminarily estimated that, in California, there
are typically 4 to 19 (with an average of about 7) tons of nitrate
particulate in the air for every 100 tons of NOX in the
air.50 Unfortunately, such information is not available for the
rest of the nation. As was described in the RIA, the national average
for the years of interest was estimated as 4.3:100, assuming that the
ratio would be 7.0 for the western part of the nation, and 3.5 for the
eastern part. This estimate was used to determine the equivalent fine
particulate emissions reductions caused by the NOX emissions
reductions, as is shown in Table 5. Future year estimates are
extrapolations based on the NOX reduction estimates for those
years. The Agency recognizes the limited precision of these estimates,
and requests comments on the potential for developing better estimates
of the expected relationship between NOX emissions and nitrate
particulate formation during and after the year 2004.
---------------------------------------------------------------------------
\50\ ``Conversion Factors for Secondary Formation of PM Nitrate
from NOX Emissions for California'', Draft, June 6, 1996, Leon
J. Dolislager, Nehzat Motallebi, Bart E. Croes, California Air
Resources Board.
Table 5.--Estimated Equivalent National Particulate Emissions Reductions
From Proposed Standards for Heavy-Duty Engines
[Thousand Tons per Year]
------------------------------------------------------------------------
Equivalent
Total NOX particulate
Year emissions emissions
reductions reductions
------------------------------------------------------------------------
2005........................................... 118 5
2010........................................... 577 25
2015........................................... 934 40
2020........................................... 1215 52
------------------------------------------------------------------------
4. Effect on Ozone
The effect of these NOX emissions reductions on ozone
concentrations is expected to vary geographically. In general, when
fully phased-in, the effect of this action in most nonattainment areas
should be a reduction in ozone concentrations on the order of a few
percent. It should be noted, however, that the potential exists for a
few localized areas to actually experience slight increases in ozone
concentrations as a result of NOX emissions reductions. The Agency
is attempting to develop a more precise analysis of the effect of these
reductions on ozone, including an analysis of the extent to which
potential localized ozone increases could be mitigated through other
emissions control programs.
5. Other Effects
Reducing NOX emissions has a positive effect on visibility,
since both NO2 and nitrate particulates absorb visible light. As
noted in the RIA, NO2 and nitrate particulates can be responsible
for 20 to 40 percent of the visible haze in some urban areas. The
effect of this action on visibility should be small but potentially
significant, given that it is expected to reduce overall NOX
emissions by several percent. For example, the proposed controls are
expected to result in about 5 percent less total NOX in the year
2020, and therefore would be expected
[[Page 33462]]
to result in a decrease in haze of about 1 percent in an area where
NO2 and nitrate particulates cause 20 percent of the haze.
NO2 and nitrate particulates also contribute to decreased
visibility in scenic rural areas in southern California, so these areas
would similarly benefit from reduced NOX emissions.
The standards being proposed here are also expected to provide
benefits with respect to nitrogen deposition. The 1.2 million-ton per
year reduction in NOX emissions expected in 2020 as a result of
this action is greater than the 400,000-ton per year reduction expected
from Phase I of the Agency's acid rain NOX control rule (59 FR
13538), which was considered to be a significant step toward
controlling the ecological damage caused by acid deposition. This
action should also lead to a reduction in the nitrogen loading of
estuaries. This is significant since high nitrogen loadings can lead to
eutrophication of the estuary, which causes disruption in the
ecological balance. The effect should be most significant in areas
heavily affected by atmospheric NOX emissions. One such estuary is
Chesapeake Bay, where as much as 40 percent of the nitrogen loading may
be caused by atmospheric deposition. In addition to these benefits, the
NOX reductions from the proposed new engine standards are expected
to have beneficial impacts with respect to crop and forest damage.
B. Economic Impact and Cost-Effectiveness
This rulemaking does not follow the normal pattern of allowing four
years following the conclusion of the rule before requiring production
of the new low-emitting engines. The engine manufacturers, by signing
the Statement of Principles, have committed themselves to challenging,
long-term design targets. This provides manufacturers fully eight years
to allocate resources and conduct planning for a very thorough long-
term R&D program. Manufacturers have expressed a confidence that
several years of research will provide them opportunity to develop a
complying engine that they can market with full confidence.
The above
FR Doc. 96-16330 Control of Emissions of Air Pollution from Highway Heavy-Duty Engines
presentation of the range of technologies shows a good
deal of promise for controlling emissions, but also makes clear that
much effort remains to optimize the technologies for maximum emission-
control effectiveness with minimum negative impacts on engine
performance, durability, and fuel consumption. On the other hand, it
has become clear that manufacturers have a great potential to advance
beyond the current state of understanding by identifying aspects of the
key technologies that contribute most to hardware or operational costs
or other drawbacks and pursuing improvements, simplifications, or
alternatives to limit those burdens. To reflect this improvement and
long-term cost saving potential, the cost analysis includes an
estimated $230 million (net present value in 1996) in R&D outlays for
heavy-duty engine emission control over several years. The cost
analysis accordingly presumes extensive improvements on the current
state of technology from these future developments. The 1999 technology
review provides a check on EPA's projected costs. EPA will revisit the
analysis of the full life-cycle costs as part of the 1999 technology
review. EPA and manufacturers will at that time confirm whether or not
technology development is progressing as needed to meet the proposed
emission standards.
In assessing the economic impact of changing the emission
standards, EPA has made a best estimate of the combination of
technologies that an engine manufacturer might use to meet the proposed
standards at an acceptable cost. Full details of EPA's cost and cost-
effectiveness analyses, including information not presented here, can
be found in the Regulatory Impact Analysis in the public docket. The
Agency invites comments on all aspects of these analyses.
Estimated cost increases are broken into purchase price and total
life-cycle costs. The incremental purchase price for new engines is
comprised of variable costs (for hardware and assembly time) and fixed
costs (for R&D, retooling, and certification). Total life-cycle costs
factor in an additional estimate for operating costs attributable to
any increased maintenance or fuel consumption. Cost estimates based on
these projected technology packages represent an expected incremental
cost of engines in the 2004 model year. Costs in subsequent years would
be reduced by several factors, as described below. Separate projected
costs were derived for engines used in three service classes of heavy-
duty diesel engines. Cost estimates are presented for all gasoline
heavy-duty vehicles as a single group. All costs are presented in 1996
dollars. Life-cycle costs have been discounted to the year of sale.
Diesel engine costs are considered first, followed by gasoline engines.
1. Costs for Diesel Engines
The following discussion provides a description and estimated costs
for those technologies EPA believes will be needed to comply with the
proposed emission standards. It is difficult to make a distinction
between technologies that are needed to reduce NOX emissions for
compliance with 2004 model year standards and those technologies that
offer other benefits for improved fuel economy and engine performance
or for better control of particulate emissions. EPA believes that
manufacturers, in the absence of 2004 model year standards, would
continue research on and eventually deploy numerous technological
upgrades to improve engine performance or more cost-effectively control
emissions. EPA therefore believes that a small set of technologies
represent the primary changes manufacturers must make to meet the
proposed 2004 model year standards. Other technologies applied to
heavy-duty engines, before or after implementation of new emission
standards, will make relatively minor positive contributions to
controlling NOX emissions and are therefore considered secondary
improvements for this analysis. In this category are design changes
such as improved oil control, variable-geometry turbochargers,
optimized catalyst designs, and variable-valve timing. Lean NOX
catalysts are also considered here to be secondary technologies, not
because NOX control is an incidental benefit, but rather because
it appears unlikely that they will be part of 2004 model year
technology packages. Modifications to fuel injection systems will also
continue independently of new standards, though some further
development with a focus on reducing NOX emissions would be
evaluated.
Several technological improvements are projected for complying with
the proposed 2004 model year emission standards. Selecting this package
of technologies requires extensive engineering judgment. The fact that
manufacturers have nearly a full decade before implementation of the
proposed standards virtually ensures that the technologies used to
comply with the proposed emission standards will develop significantly
before reaching production. This ongoing development will lead to
reduced costs in three ways. First, research will lead to enhanced
effectiveness for individual technologies, allowing manufacturers to
use simpler packages of emission control technologies than we would
predict given the current state of development. Similarly, the
continuing effort to improve the emission control technologies will
include innovations that allow lower-cost production. Finally,
manufacturers will focus research efforts on any drawbacks, such as
increased fuel consumption or
[[Page 33463]]
maintenance costs, in an effort to minimize or overcome any potential
negative effects.
A combination of primary technology upgrades are anticipated for
the 2004 model year. Achieving very low NOX emissions will require
basic research on reducing in-cylinder NOX and HC. Modifications
to basic engine design features can be used to improve intake air
characteristics and distribution during combustion. Manufacturers are
also expected to utilize upgraded electronics and advanced fuel-
injection techniques and hardware to modify various fuel injection
parameters, including injection pressure, further rate shaping and some
split injection. EPA also expects that many engines will incorporate
light-load EGR.
If not developed and implemented properly, EGR has the potential to
increase operating costs, either by increasing fuel consumption or
requiring additional maintenance to avoid accelerated engine or
component wear. While it is possible to develop scenarios and estimate
the impact on operating costs of current diesel EGR concepts, this is
of minimal value due to the expected continuing development of these
technologies. Nevertheless, EPA has assessed the potential for
increased operating costs, as described below, first for EGR-related
maintenance, then for fuel economy. EPA understands that manufacturers
will make a great effort to minimize any potential new maintenance
burden for the end user, investing in research to design an engine
acceptable to users. The cost to address the durability concern is
therefore included not as a maintenance item, but as a fixed cost. The
analysis includes a separate maintenance cost for EGR systems--EPA
expects engine rebuilding will include preventive maintenance to clean
or replace EGR components.
With respect to fuel economy, several of the secondary technologies
described below may lead to cost savings, while EGR has the potential
to incur a fuel economy penalty. As with potential new maintenance cost
burdens, EPA believes manufacturers will focus their research efforts
on overcoming any negative impact on fuel economy caused by EGR. In any
case, it is not clear at this stage of development that the set of
changes resulting from the proposed emission standards will have any
net negative impact on fuel economy; additional fuel costs are
therefore not included in the cost analysis.
Meeting the proposed NOX+NMHC standard will somewhat increase
the challenge to control particulate emissions. Manufacturers might use
a number of different technologies to maintain control of particulate
emissions; however, EPA believes that the fuel system improvements
described above will be sufficient to prevent any potential
particulate-emission increase. In fact, manufacturers are attempting to
lessen the cost of meeting current particulate emission standards over
the next several years by decreasing their reliance on catalysts. This
underscores EPA's belief that 2004 model year engines will be able to
control particulate emissions without major technological innovation.
The costs of these new technologies for meeting the proposed
standards are itemized in the Regulatory Impact Analysis and summarized
in Table 6. For light heavy-duty vehicles, the incremental cost of a
new 2004 model year engine is estimated to be $185, with no additional
operating costs. For medium heavy duty vehicles the new engine purchase
price is estimated to increase by $327, with total life-cycle costs of
$371. Similarly, for heavy heavy-duty engines, initial purchase price
is expected to increase by $403, while total life-cycle cost estimates
reach $499.
For the long term, EPA has identified various factors that would
cause cost impacts to decrease over time. First, the analysis
incorporates the expectation that manufacturers will apply ongoing
research to making emission controls more effective and less costly
over time. This expectation is similar to manufacturers' stated goal of
decreasing their reliance on catalysts to meet emission standards in
the future. Research in the costs of manufacturing has consistently
shown that as manufacturers gain experience in production, they are
able to apply innovations to simplify machining and assembly
operations, use lower cost materials, and reduce the number or
complexity of component parts.\51\ The analysis incorporates the
effects of this learning curve by projecting that the variable costs of
producing the low-emitting engines decreases by 20 percent starting
with the third year of production (2006 model year) and by reducing
variable costs again by 20 percent starting with the sixth year of
production. Finally, since fixed costs are assumed to be recovered over
a five-year period, these costs disappear from the analysis after the
first five model years. Table 6 lists the projected schedule of costs
for each category of vehicle over time.
Table 6.--Projected Diesel Engine Costs
[1995 dollars discounted to year of sale]
----------------------------------------------------------------------------------------------------------------
Life-cycle
Vehicle class Model year Purchase operating Total life-
price cost cycle cost
----------------------------------------------------------------------------------------------------------------
Light heavy-duty.......................... 2004......................... 185 0 185
2009 and later............... 68 0 68
Medium heavy-duty......................... 2004......................... 327 44 371
2009 and later............... 101 44 145
Heavy heavy-duty.......................... 2004......................... 403 96 499
2009 and later............... 148 96 243
----------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\51\ ``Learning Curves in Manufacturing,'' Linda Argote and
Dennis Epple, Science, February 23, 1990, Vol. 247, pp. 920-924.
---------------------------------------------------------------------------
2. Costs for Gasoline Engines
The cost analysis for gasoline engines follows the same methodology
as for diesel engines, though with significantly less complexity due to
the expectation that the technological development needed to meet the
proposed standards will not be so far-reaching as for diesel engines.
The same kinds of costs are considered for gasoline engines. Because
the technologies require changes to existing technologies without
affecting the assembly time, no increase in assembly costs are
anticipated. Also, the improvements to gasoline engine technologies
will not affect fuel economy or in-use maintenance; therefore, no
incremental fuel or maintenance costs are anticipated.
Gasoline engines and vehicles need a much different set of changes
to meet the proposed emission standards than do diesel engines. Much of
the very extensive development work done for
[[Page 33464]]
passenger cars can, with appropriate adaptations, be applied to heavy-
duty engines. The technology projections for heavy-duty gasoline
engines therefore depend in part on the experience with light-duty
trucks, as well as on the current view of technology developments for
the heavy-duty applications themselves.
More sophisticated control of EGR flow rates over the various
operating modes may allow more aggressive use of EGR to better control
NOX emissions. Ongoing developments show that three-way catalysts
can be made with modified washcoats and configured in the vehicle in
ways that significantly improve their effectiveness at controlling both
NOX and HC emissions. Some basic engine modifications may also be
needed to fine-tune emission control and operating performance.
Since no operating costs for fuel economy or maintenance are
expected for gasoline engines, all the costs translate into an
increased purchase price of the engine or vehicle. The 2004 model year
cost estimate for an average heavy-duty gasoline vehicle is $162. Costs
can be reduced with continuing production experience, as described for
diesel engines; variable costs are reduced by 20 percent only one time
though, because the changes to gasoline engines are considered to be of
a smaller magnitude. The resulting cost calculation for 2009 and later
model year heavy-duty gasoline vehicles is $101 (Table 7).
Table 7.--Projected Gasoline Engine Costs
[1995 dollars discounted to year of sale]
------------------------------------------------------------------------
Life- Total
Purchase cycle life-
Model year price operating cycle
cost cost
------------------------------------------------------------------------
2004................................... 162 0 162
2009 and later......................... 101 0 101
------------------------------------------------------------------------
3. Aggregate Costs to Society
The above analysis develops per-vehicle cost estimates for each
vehicle class. Using current data for the size and characteristics of
the heavy-duty vehicle fleet and making projections for the future,
these costs can be used to estimate the total cost to the nation for
the proposed emission standards in any year. The result of this
analysis is a projected total cost starting at $300 million in 2004.
Per-vehicle costs savings over time reduce projected costs to a minimum
value of $136 million in 2009, after which the growth in truck
population leads to increasing costs that reach $186 million in 2020.
Total costs for these years are presented by vehicle class in Table 8.
The calculated total costs represent a combined estimate of fixed costs
as they are allocated over fleet sales, variable costs assessed at the
point of sale, and operating costs as they are incurred in each
calendar year.
Table 8.--Estimated Annual Costs for Improved Heavy-Duty Vehicles
[millions of dollars]
------------------------------------------------------------------------
Category 2004 2009 2020
------------------------------------------------------------------------
Light Heavy-Duty Diesel................ 51 23 26
Medium Heavy-Duty Diesel............... 71 22 34
Heavy Heavy-Duty Diesel................ 97 37 62
Gasoline............................... 81 55 64
------------
Total.................................. 300 136 186
------------------------------------------------------------------------
As described in Section X below, EPA expects that complying with
the proposed emission standards will not result in a significant impact
on a substantial number of small entities.
4. Cost-effectiveness
EPA has estimated the per-vehicle cost-effectiveness (i.e., the
cost per ton of emission reduction) of the proposed NOX plus NMHC
standard over the typical lifetime of heavy-duty diesel and heavy-duty
gasoline vehicles. The RIA contains a more detailed discussion of the
cost-effectiveness analyses. EPA requests comments on all aspects of
the cost-effectiveness analyses, including, for example, the
appropriateness of the scope of benefits and costs which EPA
considered.
EPA has examined the cost-effectiveness by two different
methodologies. The first methodology yields a nationwide cost-
effectiveness in which the total cost of compliance is divided by the
nationwide emission benefits. The second methodology yields a regional
ozone strategy cost-effectiveness in which the total cost of compliance
is divided by the emission benefits attributable to the regions that
impact ozone levels in ozone nonattainment areas.52 EPA requests
comments on the methodologies used to determine cost-effectiveness in
this analysis.
---------------------------------------------------------------------------
\52\ The RIA contains a detailed description of areas included
in the regional control strategy.
---------------------------------------------------------------------------
In addition to the benefits of reducing ozone within and
transported into urban ozone nonattainment areas, the NOX
reductions from the proposed new engine standards are expected to have
beneficial impacts with respect to crop damage, secondary particulate,
acid deposition, eutrophication, visibility, and forests, as described
above. Due to the difficulty in estimating the monetary value of these
societal benefits, the cost-effectiveness analysis does not assign any
numerical value to these additional benefits. It should be emphasized
that the Agency believes that the actual monetary value of the multiple
environmental and public health benefits produced by the large NOX
reductions under this proposal is likely to be much higher than the
estimated regulatory costs. To the extent possible, EPA plans to take
into consideration the value of these additional benefits in analyzing
the cost-effectiveness of the standards for the final rulemaking. EPA
requests comment on including these benefits in an estimate of the
cost-effectiveness of the proposed standards.
As described above in the cost section, the cost of complying with
the proposed standards will vary by model year. Therefore, the cost-
effectiveness will also vary from model year to model year. For
comparison purposes, the discounted costs, emission reductions and
cost-effectiveness of the proposed standards are shown in Table 9 for
the same model years discussed above in the cost section. The cost-
effectiveness results contained in Table 9 present the range in cost-
effectiveness resulting from the two cost-effectiveness scenarios
described above.
[[Page 33465]]
Table 9.--Discounted Per-Vehicle Costs, Emission Reductions and Cost-Effectiveness of the Proposed NOX and NMHC
Standards
----------------------------------------------------------------------------------------------------------------
Discounted lifetime Discounted
Discounted reductions (tons) cost-
Vehicle class Model year lifecycle -------------------------- effectiveness
cost NOX NMH ($/ton)
----------------------------------------------------------------------------------------------------------------
Heavy-duty diesel vehicles.................. 2004 $333 1.321 0.019 $200-$300
2009+ 143 ........... ........... 100
Heavy-duty gasoline vehicles................ 2004 162 0.190 0.011 800-900
2009+ 101 ........... ........... 500-600
----------------------------------------------------------------------------------------------------------------
VI. Potential for Use of Additional Incentive-based Approaches
When considering how to achieve the greatest emission reductions
possible, a broad variety of options must be evaluated. On one end of
the continuum are mandatory standards, which generally provide the
strongest mechanism to produce cleaner engines. At the other end of the
continuum are voluntary programs, where engine manufacturers and users
are not required to make or use cleaner engines, but are strongly
encouraged to do so. The proposed actions described in Section IV above
include elements of both mandatory programs (emissions standards and
durability-related requirements), as well as voluntary provisions
(enhancements to the averaging banking and trading program). Voluntary
programs can also be used to allow manufacturers and users maximum
flexibility in finding the most cost effective ways to adopt new
standards.
In the following sections, EPA describes additional voluntary
programs that might facilitate the introduction of cleaner heavy-duty
engines. These are voluntary labeling (``green star'') programs, and
emission reduction credit generation under various state-run credit
programs (including scrappage buy-back and open market trading). While
EPA is not proposing these programs in today's NPRM, EPA is soliciting
comments on their applicability and potential usefulness.
A. Voluntary Labeling
One type of economic incentive program is environmental labeling,
or ``green'' labeling. While ``green'' labeling is very closely linked
to environmental marketing, it most often involves setting voluntary
standards and encouraging industry to adopt them based on their
intrinsic value to the common good, as well as individual companies. In
a voluntary labeling program benefits can be direct or indirect. Some
voluntary labeling programs may confer direct economic benefits
(savings), for example, in the form of reduced energy costs. An example
of this is EPA's Green Lights and Energy Star programs. Other voluntary
labeling programs may confer only indirect benefits on companies that
offset emission control costs by providing some other intangible
benefit, such as positive publicity, public goodwill, or improved
efficiency.
Although EPA is not proposing a voluntary environmental labeling
program in this document, EPA is requesting comments on a three-
component labeling concept called the Green Star Engines Program. The
program would seek to identify cleaner engines and classify products
that could be marketed as ``green.'' This would provide positive
publicity and, potentially, economic incentives. These, in turn, could
help encourage engine manufacturers to market cleaner engines and
encourage truckers and other users to purchase those cleaner engines.
The first part of the program would focus on identifying engines
that meet the emission standards contained in today's proposal earlier
than required. The second would also focus on early compliance, but
with intermediate standards which are between pre-2004 levels and those
being proposed today. The third part of the program would concentrate
on identifying engines that can meet or exceed the emissions standard
with the use of alternative fuels. Engine manufacturers benefit from
the public good will created as they demonstrate a commitment to work
cooperatively with other stakeholders to improve air quality. In
addition, producers of alternative fuels would have additional
opportunities to enter the transportation energy market.
As described further below, engines falling under any of the three
parts of the program would be identified with an appropriate engine
label. Trucks equipped with such engines would also be labeled. In the
case of the truck labels, it might be desirable to include a commitment
to advanced maintenance practices on the part of the truck owner as a
condition of displaying the label. EPA envisions that this could be a
cooperative program between the federal or state government and truck
owners/operators. Participants would sign a letter of commitment to
establish specified maintenance programs and maintenance technician
training programs. They would then be recognized as members of the
program and provided with labels to affix to their trucks. The
supervising agency, either EPA or some other entity, would be
responsible for ascertaining that truck owner/operators have the
systems in place to comply with the maintenance requirements. Also, the
commitment would have to be renewed periodically to insure that the
relevant trucks are performing as required.
EPA solicits comment as to the practicality and potential
effectiveness of all aspects of this program, as well as whether and
how the three aspects of the program could be used simultaneously, as
further discussed below.
EPA anticipates that a broad range of interested stakeholders would
wish to participate in the Green Star Programs described in more detail
below. Interested stakeholders would participate as either a Partner or
Supporter. A Partner would be defined as an individual or entity that
either manufactures or uses the Green Star Product and thus has a
greater stake in the program outcome. A Supporter would assist in
making the program successful through public education efforts and by
providing positive publicity.
1. Green Star Engine Program: Early Compliance with Certification
Standards
The first labeling program about which EPA is requesting comment
would identify those heavy-duty engines which meet the federal heavy-
duty certification standards prior to the required implementation date.
All such engines would be identified with the Green Star Engine Label.
Trucks that are equipped with Green Star engines would also be
identified with the Green Star Engine Label.
[[Page 33466]]
The identification of heavy-duty engines, trucks, and equipment
that meet a more protective standard would serve to visually inform
users, states, interested parties, and the general public of the
specific heavy-duty engines, and consequently the trucks and other
heavy-duty equipment, which meet more protective emission standards.
For example, heavy-duty engines which meet the 1998 NOX standard
before 1998 could be labeled with a Green Star Engine label, until
those standards become mandatory. After those standards are mandatory,
but prior to the implementation to the 2004 heavy-duty standard, heavy-
duty engines that meet the 2004 standards could be labeled with the
Green Star Engine label. This program would be intended to encourage
the early introduction of cleaner heavy-duty engines, the idea being
that early users would draw some publicity benefits from using these
engines. Engine manufacturers would benefit from being able to use the
Green Star Engine label as a sales tool. Comments are invited on
whether EPA should propose the early compliance labeling program, and
if it should, how the program should be structured.
2. Green Star Engine: Intermediate Standards Program
Engines which might meet a more stringent intermediate standard
than what would be required by regulation could be identified with the
Green Star Engine intermediate label. The intermediate label would
identify engines (and trucks equipped with those engines) as cleaner
than the current standard but not as clean as the future standard. For
example, such an engine might meet a 2.5-3.0 g/bhp-hr NOX standard
between 1998 and 2004 or meet a 1-1.5 gram NOX standard after
2004. For the 2004 case, it may be desirable to have a somewhat higher
cut point initially, and then lower it over time. Engines certified to
meet an intermediate standard would be demonstrating more advanced
technology options than other engines.
The Agency would expect that advantages similar to the early
certification program would accrue for any potential participants. Of
course, the intermediate standards component of the Green Star Engine
labeling program would not accrue the same level of potential air
quality benefit as the early certification component described above
because the emission standards would not be as stringent. EPA requests
comments on the feasibility of developing an intermediate standard
labeling program. Commenters supporting a proposal are also asked to
comment on the appropriateness of using a 3g/bhp-hr NOX level as a
cut-point for the 1998 to 2004 time period, as well as an appropriate
cut point, or points, for 2004 and later.
3. Green Star Alternative Fuel Engines
Under this component of the program, all engines which meet or
exceed the 1998 or 2004 standards by using alternative fuels would be
identified with a Green Star Alternative fuel engine label. Trucks
using those engines would also be labeled. The primary purpose would be
to encourage the use of alternative fuels by identifying the engines/
trucks which meet or exceed the proposed emission standards by
utilizing alternative fuels (such as CNG, methanol, or LPG) as their
energy source. The use of alternative fuels can bring additional
benefits, such as reduced green house gas emissions, not available with
conventional fuels. Alternative fuels could be included in the labeling
program in conjunction with either of the other two components of the
Green Star Engine program. EPA requests that comments be submitted
regarding the usefulness and practicality of an alternative fuel engine
labeling program. The Agency also asks that comments be submitted on
the logistical aspects of a labeling program for such an approach.
B. Emission Reduction Credit Programs
A third type of economic incentive program involves generating and
trading emission reduction credits. This type of incentive could be
used by those states that have adopted economic incentive programs in
their State Implementation Plan, and would be subject to the details of
those programs. Where they are available, these programs could provide
an incentive for engine manufacturers and truck operators to undertake
emission reduction efforts beyond those required since states may allow
such emission sources to generate and sell emission reduction credits
to other entities such as stationary sources. Alternatively, the
generator of the credits could retain them for use or sale in the
future. The purchaser of the credits would typically use the credits to
offset their own emission reduction requirements and therefore the
credits may not of themselves reduce overall emissions. Another option
available in credit programs is for the purchaser to retire the credits
to benefit the environment instead of using them to offset emission
reduction requirements. Retiring credits would result in an overall
reduction in emissions. Credits programs could lower the overall cost
of emission reductions by allowing for more cost effective emissions
controls to be used on some emissions sources instead of less cost
effective controls on other sources. Additionally, credits programs may
encourage technology advances that may have broad applications, which
could help lower overall emissions in the future.
There are two important credit trading programs of this kind: the
Economic Incentive Program (EIP) and the proposed Open Market Trading
Rule (OMTR) (60 FR 39668, August 3, 1995). Generally, the EIP is more
stringent than the proposed OMTR in that it requires state approval for
trades before they occur. However, these programs are similar in that
they require credits to be surplus (beyond required emissions
reductions), quantifiable, and enforceable.
Because credits must be surplus, engines generating credits for use
in EPA's averaging, banking, and trading (ABT) program cannot also
generate marketable emission reduction credits, based on those same
emission reductions, to be used in the credit trading programs. That
is, a truck operator cannot generate emission reduction credits based
on the difference between the emissions level of the engine and the
standard if that engine is generating credits for use by the
manufacturer in the ABT program. EPA believes that some manufacturers
may choose to pass credit ownership to purchasers of clean engines
rather than using the credits themselves under the ABT program. EPA
believes that in some circumstances this could well be appropriate and
consistent with the intent of the ABT regulations. Further discussion
is provided in section III.B.3. above.
Depending on the state program, truck operators may be able to
generate credits in ways other than purchasing cleaner-than-required
engines. For example, credits might be able to be generated through
operational changes, maintenance changes, or changes in activity
levels. Credits might also be earned through buy-back programs,
commonly known as scrappage programs. Buy-back programs typically
involve giving financial incentives to vehicle owners in exchange for
the voluntary scrapping of their older-technology, higher-emitting
engines or vehicles. Buy-back programs might also be used for helping
an area achieve an air quality goal rather than to generate emission
reduction credits to be sold in an emission trading program (for
example, in the proposed Open Market Trading Rule). Typically, any
credits earned in buy-back programs are earned
[[Page 33467]]
by those purchasing and retiring the old vehicles or engines. As long
as the emission benefits that result can be reliably quantified and
meet the requirements of the relevant state credit program, such
activities could be used to generate emission reduction credits.
VII. Public Participation
As mentioned above, EPA issued an Advance Notice of Proposed
Rulemaking (ANPRM) announcing EPA's intent to formally propose
regulatory action relating to HDE emissions, including today's action
on highway HDEs. During the development of the ANPRM and after its
publication, EPA received a wide range of early comments on the basic
framework of such a program. By the time of the close of the comment
period, the Agency had received more than 60 communications relating to
this program and the ANPRM. These comments have been very valuable in
developing today's proposal, and the Agency looks forward to additional
comment as the formal rulemaking process now begins.
As described in part in the discussions above, comments ranged from
those strongly opposing new highway HDE emission standards like those
proposed today to those strongly supportive of such new standards or of
standards even more stringent. Commenters offered widely varying
rationales for their suggestions, including the availability or
nonavailability of cost effective engine technology or the degree of
need for new NOX and PM control. To the extent possible, EPA has
considered each of the comments relevant to highway HDE emissions and
has accommodated them in this proposal. (Comments relating to other
potential parts of an overall program that are not proposed today,
including regulations affecting fuels or nonroad engines, are under
consideration by the Agency as it contemplates what action it may
pursue in these areas in the future.) To the extent commenters on the
ANPRM believe EPA failed to address their ANPRM comments adequately in
this proposal, they should offer them again as comments to this NPRM
for consideration in this rulemaking.
A. Comments and the Public Docket
EPA today opens a formal comment period for this NPRM and will
accept comments through August 26, 1996. The Agency encourages all
parties that have an interest in the program proposed today to offer
comment on all aspects of this action. Throughout this proposal are
requests for specific comment on various topics. Of particular interest
to the Agency are detailed comments in the following areas: The air
quality need for national or regional NOX, PM, and VOC control;
the need for control of emissions from highway HDEs; EPA's proposed
approaches to encouraging durability and revising the Averaging,
Banking, and Trading program; the technological feasibility of the
proposed standards; EPA's projections of the environmental and economic
impacts of the proposed program; and non-regulatory methods of
encouraging early compliance or cleaner-than-required engines.
The most useful comments are those supported by appropriate and
detailed rationales, data, and analyses. The Agency also encourages
commenters that disagree with the proposed program to suggest and
analyze alternate approaches to meeting the air quality goals of this
proposed program. All comments, with the exception of proprietary
information, should be directed to the EPA Air Docket Section, Docket
No. A-95-27 before the date specified above.
Commenters who wish to submit proprietary information for
consideration should clearly separate such information from other
comments by (1) labeling proprietary information ``Confidential
Business Information'' and (2) sending proprietary information directly
to the contact person listed (see FOR FURTHER INFORMATION CONTACT) and
not to the public docket. This will help ensure that proprietary
information is not inadvertently placed in the docket. If a commenter
wants EPA to use a submission of confidential information as part of
the basis for the final rule, then a nonconfidential version of the
document that summarizes the key data or information should be sent to
the docket.
Information covered by a claim of confidentiality will be disclosed
by EPA only to the extent allowed and in accordance with the procedures
set forth in 40 CFR part 2. If no claim of confidentiality accompanies
the submission when it is received by EPA, it will be made available to
the public without further notice to the commenter.
B. Public Hearing
The Agency will hold a public hearing as noted in the DATES section
above. Any person desiring to present testimony at the public hearing
is asked to notify the contact person listed above at least five
business days prior to the date of the hearing. This notification
should include an estimate of the time required for the presentation of
the testimony and any need for audio/visual equipment. EPA suggests
that sufficient copies of the statement or material to be presented be
available to the audience. In addition, it is helpful if the contact
person receives a copy of the testimony or material prior to the
hearing.
The hearing will be conducted informally, and technical rules of
evidence will not apply. A sign-up sheet will be available at the
hearing for scheduling the order of testimony. A written transcript of
the hearing will be prepared. The official record of the hearing will
be kept open for 30 days after the hearing to allow submittal of
supplementary information.
In addition to the public hearing, EPA will hold a public meeting
in Los Angeles to discuss the proposed EPA regulations for HDEs, and
receive informal public input on them. Other potential mobile source
controls identified in the California Ozone State Implementation Plan
for the South Coast (the greater Los Angeles area) will also be
discussed.\53\ Further details on the public meeting may be found in
the DATES section at the beginning of this document. Because this
public meeting is intended to be an informal exchange of information, a
transcript of the meeting will not be prepared and members of the
public who wish to present comments at the Los Angeles meeting should
be aware that, in order to be considered for the final promulgation,
their comments must also be made either in writing to the rulemaking
docket or at the public hearing.
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\53\ The 1994 California Ozone SIP includes both the proposed
national HDE measure and 3 proposed State measures for HDEs. The
California Ozone SIP also includes other national mobile source
measures for nonroad engines, ships, aircraft, and pleasure craft as
components of the attainment demonstration for the South Coast
nonattainment area. For further details on the California Ozone SIP,
see 61 FR 10920-10962 (March 18, 1996).
---------------------------------------------------------------------------
VIII. Statutory Authority
Section 202(a)(3) authorizes EPA to establish emissions standards
for new heavy-duty motor vehicle engines. See 42 U.S.C. 7521(a)(3).
These standards are to reflect the greatest reduction achievable
through the application of technology which the Administrator
determines will be available, giving appropriate consideration to cost,
energy, and safety factors associated with the application of such
technology. This provision also establishes the lead time and stability
requirements for these standards, and in addition authorizes EPA to
establish requirements to control rebuilding practices for heavy-duty
engines. Pursuant to Sections 202(a)(1) and 202(d), these emissions
standards
[[Page 33468]]
apply for the useful life period established by the Agency. See 42
U.S.C. 7521(a)(1), 7521(d). EPA's authority to issue a certificate of
conformity upon payment of a non-compliance penalty established by
regulations is found in Section 206(g) of the Act. See 42.U.S.C.
7525(g). Other provisions of Title II of the Act, along with Section
301, are additional authority for the measures proposed in this action.
IX. Administrative Designation and Regulatory Analysis
Under Executive Order 12866 (58 FR 51735 (Oct. 4, 1993)), the
Agency must determine whether this regulatory action is ``significant''
and therefore subject to OMB review and the requirements of the
Executive Order. The order defines ``significant regulatory action'' as
any regulatory action 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.
Pursuant to the terms of Executive Order 12866, EPA has determined
that this proposal is a ``significant regulatory action'' because the
proposed standards and other regulatory provisions, if implemented,
would have an annual effect on the economy in excess of $100 million. A
Regulatory Impact Analysis has been prepared and is available in the
docket associated with this rulemaking. This action was submitted to
the Office of Management and Budget (OMB) for review as required by
Executive Order 12866. Any written comments from OMB and any EPA
response to OMB comments are in the public docket for this proposal.
X. Impact on Small Entities and Compliance With Regulatory Flexibility
Act
The Regulatory Flexibility Act of 1980 requires federal agencies to
identify potentially adverse impacts of federal regulations upon small
entities. In instances where significant impacts are possible on a
substantial number of these entities, agencies are required to perform
a Regulatory Flexibility Analysis.
EPA certifies that the new emission standards and other related
provisions proposed in this action will not have a significant impact
on a substantial number of small entities, since none of the engine
manufacturers affected by these regulations is a small business entity.
This action also proposes provisions clarifying what would and
would not be considered a prohibited act (tampering) under CAA Section
203 during the heavy-duty engine rebuilding process. Small businesses
are integral to the heavy-duty engine rebuilding industry as noted in
comments provided by the Automotive Engine Rebuilders
Association.54 However, EPA does not believe that the proposals
related to engine rebuilding will have a significant impact on a
substantial number of these small entities. EPA is proposing to define
how a broad existing requirement (CAA Section 203) applies specifically
to the process of rebuilding engines, but EPA is not creating a new
program. Second, during the development of the proposal EPA consulted
with the Engine Manufacturers Association, the Automotive Engine
Rebuilders Association, and the Production Engine Rebuilders
Association, associations which together represent a substantial
portion of the engine rebuilding and related businesses. These
organizations did not raise concerns that the proposal may have a
significant impact on small businesses. EPA requests comments on the
proposals regarding engine rebuilding, any significant effect that the
proposals would have on small businesses, and the reasons why such
effects might occur.
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\54\ EPA Docket A-95-27, II-D-41.
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XI. Compliance With Paperwork Reduction Act
The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An
Information Collection Request (ICR) document has been prepared by EPA
(ICR No. 783.35) and a copy may be obtained from Sandy Farmer,
Regulatory Information Division' U.S. Environmental Protection Agency
(2136); 401 M St., SW., Washington, DC 20460 or by calling (202) 260-
2740.
The information we propose to collect includes certification
results, durability, maintenance, and averaging, banking and trading
information. This information will be used to ensure compliance with
and enforce the provisions in this rule. Section 208 (a) of the CAA
requires that manufacturers provide information the Administrator may
reasonably require to determine compliance with the regulations,
therefore submission of the information is mandatory. EPA will consider
confidential all information which meets the requirements of Sec. 208
(c) of the CAA.
EPA estimates the average first year hours burden per response to
be 4,670, the proposed frequency of response to be annual, and the
estimated number of likely respondents to be twenty. EPA estimates the
aggregate first year hours burden to be 93,410. EPA estimates the
annual first year cost to be $5,603,280, including the annualized
capital and start-up costs. Subsequent year burdens are estimated to be
one-tenth of the first year estimates due to the practice of engine
family carry-over from model year-to-model year. Burden means the total
time, effort, or financial resources expended by persons to generate,
maintain, retain, or disclose or provide information to or for a
Federal agency. This includes the time needed to review instructions;
develop, acquire, install, and utilize technology and systems for the
purposes of collecting, validating, and verifying information,
processing and maintaining information, and disclosing and providing
information; adjust the existing ways to comply with any previously
applicable instructions and requirements; train personnel to be able to
respond to a collection of information; and transmit or otherwise
disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.
Comments are requested on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the
Director, OPPE Regulatory Information Division; U.S. Environmental
Protection Agency (2136); 401 M St., S.W.; Washington, DC 20460; and to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 17th St., NW., Washington, DC 20503, marked
``Attention: Desk Officer for EPA.''
[[Page 33469]]
Include the ICR number in any correspondence. Since OMB is required to
make a decision concerning the ICR between 30 and 60 days after June
27, 1996, a comment to OMB is best assured of having its full effect if
OMB receives it by July 29, 1996. The final rule will respond to any
OMB or public comments on the information collection requirements
contained in this proposal.
XII. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to state, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more for
any one year. Before promulgating an EPA rule for which a written
statement is needed, section 205 of the UMRA generally requires EPA to
identify and consider a reasonable number of regulatory alternatives
and adopt the least costly, most cost effective, or least burdensome
alternative that achieves the objectives of the rule. The provisions of
section 205 do not apply when they are inconsistent with applicable
law. Moreover, section 205 allows EPA to adopt an alternative other
than the least costly, most cost effective, or least burdensome
alternative if the Administrator publishes with the final rule an
explanation of why that alternative was not adopted. Before EPA
establishes any regulatory requirements that may significantly or
uniquely affect small governments, including tribal governments, it
must have developed under section 203 of the UMRA a small government
agency plan. The plan must provide for notifying potentially affected
small governments, enabling officials of affected small governments to
have meaningful and timely input in the development of EPA regulatory
proposals with significant federal intergovernmental mandates, and
informing, educating, and advising small governments on compliance with
the regulatory requirements.
Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments. The rule imposes no enforceable duties on any of these
governmental entities. Nothing in the proposed program would
significantly or uniquely affect small governments. EPA has determined
that this rule contains federal mandates that may result in
expenditures of $100 million or more in any one year for the private
sector. EPA believes that the proposed program represents the least
costly, most cost-effective approach to achieving the air quality goals
of the proposed rule. EPA has performed the required analyses under
Executive Order 12866 which contains identical analytical requirements.
The reader is directed to section IX, Administrative Designation and
Regulatory Analysis, for further information regarding these analyses.
XIII. Copies of Rulemaking Documents
The preamble, draft regulatory language and draft Regulatory Impact
Analysis (RIA) are available in the public docket as described under
ADDRESSES above and is also available electronically on the Technology
Transfer Network (TTN), which is an electronic bulletin board system
(BBS) operated by EPA's Office of Air Quality Planning and Standards
and via the internet. The service is free of charge, except for the
cost of the phone call.
A. Technology Transfer Network (TTN)
Users are able to access and download TTN files on their first call
using a personal computer and modem per the following information.
TTN BBS: 919-541-5742 (1200-14400 bps, no parity, 8 data bits, 1 stop
bit) Voice Helpline: 919-541-5384
Also accessible via Internet: TELNET ttnbbs.rtpnc.epa.gov Off-line:
Mondays from 8:00 AM to 12:00 Noon ET
A user who has not called TTN previously will first be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following menu choices from the Top Menu to access information on this
rulemaking.
GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
OMS--Mobile Sources Information
Rulemaking & Reporting
<5> Heavy-duty/Diesel
<1> File area #1...Heavy-duty Truck and Bus Standards
At this point, the system will list all available files in the
chosen category in reverse chronological order with brief descriptions.
To download a file, select a transfer protocol that is supported by the
terminal software on your own computer, then set your own software to
receive the file using that same protocol.
If unfamiliar with handling compressed (i.e. ZIP'ed) files, go to
the TTN top menu, System Utilities (Command: 1) for information and the
necessary program to download in order to unZIP the files of interest
after downloading to your computer. After getting the files you want
onto your computer, you can quit the TTN BBS with the oodbye
command.
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.
B. Internet
Rulemaking documents may be found on the internet as follow:
World Wide Web
http://www.epa.gov/omswww
FTP
ftp://ftp.epa.gov Then CD to the /pub/gopher/OMS/ directory
Gopher
gopher://gopher.epa.gov:70/11/Offices/Air/OMS
Alternatively, go to the main EPA gopher, and follow the menus:
gopher.epa.gov
EPA Offices and Regions
Office of Air and Radiation
Office of Mobile Sources
List of Subjects in 40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Air pollution control, Motor vehicles, Motor vehicles pollution,
Reporting and recordkeeping requirements, Research.
Dated: June 19, 1996.
Carol M. Browner,
Administrator.
[FR Doc. 96-16330 Filed 6-26-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-16147 Program for Qualifying DOD, Motor Common Carriers of Perishable Subsistence and Bulk Fuel
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33409-33414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16147]
=======================================================================
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DEPARTMENT OF DEFENSE
Department of the Army
32 CFR Part 619
Program for Qualifying DOD, Motor Common Carriers of Perishable
Subsistence and Bulk Fuel
AGENCY: Military Traffic Management Command, DOD.
ACTION: Proposed rule.
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SUMMARY: This action revises the qualifications standards to the basic
agreement between the Military Traffic Management Command and Motor
Common Carriers for Approval to Transport General Commodities for and
on behalf of U.S. Department of Defense. This action also updates the
basic agreement between the Military Traffic Management Command and
Motor Common Carriers for Governing the Transportation of Hazardous
Material other than Class A and B Explosives for and on Behalf of the
U.S. Department of Defense. The proposal to amend those qualifications,
where appropriate, are submitted to be consistent with the program
qualifications for DOD Motor Common Carriers of Perishable Subsistence
and Bulk Fuel.
DATES: Comments must be received by July 29, 1996.
ADDRESSES: Headquarters, Military Traffic Management Command, ATTN:
MTOP-Q, 5611 Columbia Pike, Falls Church, Virginia 22041-5050.
FOR FURTHER INFORMATION CONTACT:
Mr. Rick Wirtz at (703) 681-6393; Headquarters, Military Traffic
Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls Church,
Virginia 22041-5050.
SUPPLEMENTARY INFORMATION: Basic information on the Carrier
Qualification Program was previously published in the Federal Register,
53 FR 17970, 54 FR 17070, 54 FR 27667, 55 FR 7361, 55 FR 52976, 56 FR
45895, and 57 FR 11376.
Executive Order 12219
This proposed rule was reviewed under Executive Order 12219 and the
Secretary of the Army has classified this action as non major. The
effect of the rule on the economy will be less than $100 million.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act of 1980 and the Secretary of the Army has
certified that this action does not have a significant impact on a
substantial number of small entities. The objective of the program is
to ensure that DOD obtains safe, dependable and reliable transportation
services. The requirements are not designed to preclude participation
by small business. Rather, they are part of a mechanism designed to
ensure that the traffic offered to small businesses does not exceed
their capabilities. The program's reporting and record keeping
requirements are essentially administrative in nature and do not demand
significant expenditures of resources such as personnel, computer
equipment, or software. No professional or technical training is
necessary to comply with these requirements. Alternatives to facilitate
entry of small businesses have been identified and implemented.
Paperwork Reduction Act
This rule has been approved by the Office of Management and Budget
as required under the requirements of the Paperwork Reduction Act of
1980 (44 U.S.C. 3507).
List of Subjects in 32 CFR Part 619
Common carriers, Freight, Motor vehicle, Safety, Shipping, and
Trucks.
Accordingly, Title 32, Part 619, of the Code of Federal Regulations
is amended by the following changes:
PART 619 [AMENDED]
1. The authority citation for part 619 continues to read as
follows:
Authority: 49 U.S.C. 1801-1813, 2503, 2505, and 2509.
2. In Sec. 619.4, the Insurance--Public liability and cargo text is
amended by revising paragraphs (b), introductory text, (b) (3) and (4)
as follows:
Sec. 619.4 Insurance--public liability and cargo.
* * * * *
(b) Cargo. Motor common carriers, surface freight forwarders,
shipper agents and air freight forwarders must have their insurance
company provide a certificate of insurance form. The deductible portion
will be shown on the certificate. The insurance underwriter must have a
policyholder's rating in the Best's Insurance Guide, listed in the
Fiscal Service Treasury Department Circular 570, Listing of Surety
Companies or specifically approved by HQMTMC. DOD's minimum cargo
insurance requirements are listed below.
* * * * *
(3) Perishables carriers--$10,000 per shipment.
(4) Bulk Fuel carriers--$10,000 per shipment.
* * * * *
3. Appendix A to Part 619 is revised to read as follows:
Appendix A to Part 619--Basic Agreement Between the Military Traffic
Management Command and Motor Common Carriers for Approval To Transport
General Commodities for and on Behalf of U.S. Department of Defense.
1. The undersigned, who is duly authorized and empowered to act
on behalf of ____________ (Name of Company, Typed or Legibly
Printed), hereinafter called the carrier, as a prerequisite for
approval to transport general commodities for the account of the
Department of Defense (DOD) and the Military Traffic Management
Command (MTMC), hereinafter called the Government, agree to comply
with all additional requirements, terms and conditions as set forth
in this Agreement. This Agreement governs the transportation of all
DOD general commodity freight administered by the Carrier
Qualification Division, MTMC (except used household goods).
Noncompliance by the carrier with any provision of this Agreement
may result in MTMC taking action against the carrier under the
Carrier Performance Program, governed by MTMC Regulation 15-1, and
revoking approval to participate in this traffic. If the carrier's
approval is revoked, the carrier may be disqualified from further
participation in any DOD Freight Traffic.
2. Approval and Revocation. a. Carrier understands that its
initial approval and
[[Page 33410]]
retention of approval are contingent upon establishing and
maintaining, to MTMC's satisfaction, sufficient resources to support
its propose scope of operations and services. Sufficient resources
include equipment, personnel facilities, and finances to handle
traffic anticipated by DOD/MTMC under the carrier's proposed scope
of operations in accordance with the service requirements of the
shipper.
b. The carrier understands that MTMC may revoke approval at any
time upon discovery of grounds for ineligibility or
disqualification. The carrier further understands that it is not
authorized to submit tenders for shipments requiring a
Transportation Protective Service (TPS) until it has served DOD in
an approved status for 12 continuous months. Prior to being allowed
to handle shipments which require a TPS or classes A & B explosives,
the carrier must first meet any additional requirements in effect at
the time.
c. In addition to the initial evaluation, the carrier agrees
that it will cooperate with MTMC follow-up evaluations at any time
subsequent to signing this Agreement to confirm continued
eligibility.
d. The carrier certifies that neither the owners, company,
corporate officials, nor any affiliation or subsidiary thereof are
currently debarred or suspended, disqualified by a MTMC General
Freight Board, or placed in non-use by MTMC from doing business with
DOD.
3. Lawful Performance.
a. Carrier agrees to comply with all applicable Federal, State,
municipal, and other local laws and regulations governing the safe,
proper, and lawful operation of motor vehicles, to include Title 49
Code of Federal Regulations (CFR) 386-397. Intrastate carriers are
required to comply with all applicable state or federal regulations,
whichever are more stringent.
b. No fines, charges, or assessments for overload vehicles or
other violations of applicable laws and regulations will be passed
to or be paid by any agency of the Federal Government.
4. Operating Authority. Carrier agrees to maintain valid motor
common carrier operating certificates for its scope of operations.
Any carrier found to be involved in brokerage, as defined by the
Interstate Commerce Commission (ICC), of DOD freight traffic will
have its approval revoked.
5. Insurance. a. Minimum public liability insurance requirements
are prescribed in title 49 of the Code of Federal Regulations (CFR)
5387.9. Carrier agrees to ensure that the ICC is provided proof of
their public liability insurance, in the form of a BMC 91 or 91-X,
or MCS 90, in accordance with sections 29 and 30 of the Motor
Carrier Act of 1980. Further, the motor carrier agrees to provide
MTMC with a certificate of insurance form. The certificate holder
block of the form will indicate that MTMC, 5611 Columbia Pike, Falls
Church, Virginia 22041-5050, ATTN: MTOP-QQ, will be notified in
writing, 30 days in advance of any change or cancellation. The
deductible portion will be shown on the certificate. The insurance
underwriter must have a policy holder's rating of ``Excellent'' or
better in the Best's Key Rating Guide.
(1) The carrier agrees to also file with MTMC proof of: $750,000
per vehicle for property (excluding hazardous) and $1,000,000 per
vehicle for oil, hazardous wastes, hazardous materials and hazardous
substances defined in 49 Code of Federal Regulations (CFR) 171.8 and
listed in 49 CFR 172.101.
(2) Public liability insurance Intrastate Carriers--Public
liability insurance shall be that as required by the state, except
that for deregulated states, public liability shall be the same as
that required of interstate carriers.
(3) Cargo insurance. Cargo insurance in the minimum $150,000 for
loss and damages of government freight per vehicle and/or $20,000
per vehicle and/or $20,000 per vehicle transported (e.g. automobile
transporters or vehicles in haulaway service) must be maintained.
Perishable carriers will maintain, as a minimum, cargo insurance in
the amount of $10,000 per shipment and bulk petroleum carriers will
maintain $10,000 per shipment.
b. The insurance, carrier in the name of the carrier, will be in
force at all times while this Agreement is in effect or until such
time as the carrier cancels all tenders. The carrier agrees to
ensure that the policies include a provision requiring the insurer
to notify MTMC prior to any performance of service for the carrier.
Charges, renewals, and cancellation notices must also be sent to
MTMC, 5611 Columbia Pike, Falls Church, Virginia 22041-5050, ATTN:
MTOP-QQ. This requirement applies to both interstate and intrastate
carriers. Carrier's insurance policy(s) must cover all equipment
used to transport DOD freight.
6. Performance Bond. a. Carrier agrees to provide MTMC with a
Performance Bond. The bond secures performance and fulfillment of
the carrier obligation to deliver DOD freight to destination. It
will cover DOD re-procurement costs as a result of carrier default,
abandoned shipments, or bankruptcy. The bond will not be utilized
for operational problems such as late pick up or delivery, excessive
transit time, refusals, no shows, improper/inadequate equipment or
claims for lost or damaged cargo. The bond must be issued by a
surety company listed in the Fiscal Service Treasury Department
Circular No. 570. The bond must be completed on the form provided by
MTMC. The bond will be continuous until canceled. MTMC will be
notified in writing 30 days in advance of any change or
cancellation. A letter of intent by the surety company is required
with the initial application package. Upon MTMC approval, the
carrier agrees to submit the Performance Bond before the Tender of
Service will be accepted.
b. The sum of the bond will be determined as follows:
(1) Carriers having done business in their own name with DOD for
3 years or more will be required to submit a Performance Bond in the
amount of 2.5% of their total DOD revenue, taken from the Freight
Information Systems Report (FINS), for the previous 12 months, not
to exceed $100,000 and not less than $25,000.
(2) New carriers and those carriers having done business in
their own name with the DOD for less than 3 years will be required
to submit a Performance Bond based on areas of service they offer.
Areas of service will be computed as both origins and destinations
served. 1 state (including intrastate)--$25,000; 2 to 3 states--
$50,000; 4 or more states--$100,000.
(3) Once a carrier has been doing business with the DOD for 3
years, their bond requirement will change from area of service to
percent revenue.
c. Bulk fuel carriers and Perishable carriers will be required
to submit a $25,000 Performance Bond.
d. Local drayage and commercial zone carriers are exempt from
the bond requirement.
e. If carrier has secured the Performance Bond as a result of
qualifying under Ammunition and Explosive, Classes A and B program
or hazardous materials, other than ammunition and explosives,
Classes A and B program no additional Performance Bond is required.
7. Safety. a. Carrier will not have an ``unsatisfactory'' safety
rating with the Federal Highway Administration, Department of
Transportation, and, if it is an intrastate motor carrier, with the
appropriate state agency. The carrier further agrees to permit
unannounced safety inspections of its facilities, terminals,
equipment, employees, and procedures by DOD civilian, military
personnel, or DOD contract employees. The inspection may include in-
transit surveillance of vehicles and drivers. The carrier agrees to
provide evidence that fulfills the requirement set forth in 49 Code
of Federal Regulations parts 390 through 396. Inspection of carrier
equipment, drivers' records, route plans and inspection reports will
be permitted during both the pickup and delivery of shipments and in
coordination with local police or other authorities while in
transit. Carrier also agrees to allow inspection of carrier records
and individual driver qualification files. When requested, carrier
agrees to provide adequate evidence of an active driver safety,
security training and evaluation program. Upon request, the
information to permit MTMC to verify or inspect carrier and driver
records.
b. The carrier agrees to have in place a company-wide safety
management program. Carrier safety program will comply with
applicable Federal, State, and local statutes or requirements.
Safety programs at the company-wide level may be subject to
evaluation by DOD representatives.
c. The carrier agrees to notify, within 24 hours, the consignor
and consignee named by the Government Bill of Lading (GBL) or
Commercial Bill of Lading (CBL) of cargo loss, damage, or unusual
delay. Information reported will include origin/destination, GBL/CBL
number, shipping paper and other pertinent accident details. When
requested, carrier agrees to furnish MTMC a copy of accident reports
submitted to the Department of Transportation on Form MCS 50-T
(Property).
8. Drivers Requirement. a. The carrier agrees to ensure that any
driver used by the carrier to transport DOD freight possesses a
valid commercial driver's license (in compliance with Federal
Commercial Motor
[[Page 33411]]
Vehicle Safety Act of 1986) issued by his or her state of domicile.
Drivers must have a minimum 1 year of driving experience driving
equipment similar to that used to transport DOD freight, or have
proof of graduation from an accredited trade truck motor driving
school, operating the aforementioned equipment.
b. The carrier agrees to further ensure that driver carry a
company picture identification card to verify affiliation with the
carrier named on the Government Bill of Lading.
9. Equipment. The carrier is prohibited from using trip-leased
equipment or drivers, except upon prior approval from MTMC. Leases
of less than 30 days are considered trip-leases. In order to trip-
lease, a carrier must apply for approval under MTMC's trip-lease
program. In order to trip-lease, a carrier must apply for approval
under MTMC's trip-lease program.
10. Shipment. The carrier agrees to provide, at no additional
cost to the government, the status of any shipment within 24 hours
after an inquiry is made. Further, the carrier agrees to not divulge
any information to unauthorized persons concerning the nature and
movement of any DOD shipment.
11. Documentation. a. The carrier agrees to accept GBLs and CBLs
on which freight charges will be paid by the Government, and be
bound by all terms stated on the SF 1103, Government Bill of Lading,
regardless of the type of bill of lading tendered.
b. The carrier agrees to comply with the documentation prelodge
procedures in effect at Military Ocean Terminals or the
installation, when cargo is consigned for further movement overseas.
(Prelodging is the submission of advance shipment documents which
identifies the shipment to the Military Ocean Terminal prior to
delivery of the cargo at the terminal.) Instructions will be
provided by the consignor to furnish certain data at least 24 hours
in advance of cargo delivery to the terminal.
12. Loss of Damage. The carrier agrees to be liable for loss or
damage to cargo in accordance with the provisions of 49 U.S.C. 11707
(the Carmack Amendment to the Interstate Commerce Act). Carrier
agrees to promptly settle uncontested claims for loss or damage.
13. Standard Tender of Service. a. The carrier agrees to comply
with the preparation and filing instructions in applicable freight
traffic rules publications issued by MTMC. Carrier understands that
MTMC will reject tenders not in compliance with these instructions.
b. Carrier agrees to provide a street address where the company
office is located in lieu of a post office box number. Carrier
agrees to provide the address prior to or in conjunction with
submission of any tenders or other rate schedules. The carrier
agrees to also advise MTMC of any change in address prior to the
effective date of the change. Failure to do so is grounds to
discontinue use of the carriers.
c. Carrier understands that tenders inadvertently accepted and
distributed for use and not in compliance with this agreement, the
provisions contained in the Standard Tender of Freight Services (MT
Form 364-R), or the applicable MTMC Freight Traffic Rules
Publication, and supplements thereof, will be subject to immediate
removal or non-use until corrections are made. The issuing carrier
tender will be placed in an inactive status.
14. Rates. a. Carrier agrees to transport Government shipments
at the lowest tender rate specifically applicable to the department
or agency involved.
b. Carrier agrees to publish guaranteed through rates for at
least 30 days. These rates must be filed with MTMC, HQ, Eastern
Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must
publish all rates, charges, and accessorial services on a MTMC
approved form, and must comply with the tender preparation
instructions. (Only services annotated with a charge in the tender
will be paid by the shipper.)
15. Carrier Performance. Carrier agrees that carrier's
equipment, performance, and standards of service will conform with
its obligations under Federal, State and local law and regulation as
well as with the guidelines found in the Defense Traffic Management
Regulation (DTMR) and this Agreement. The carrier fully understands
its obligation to remain current in its knowledge of service
standards. The carrier accepts the government's right to revoke
approval, declare ineligible, non-use, or disqualify the carrier for
unsatisfactory service for any operating deficiency, noncompliance
with terms of this Agreement or terms of any negotiated agreements,
tariffs, tenders, bills of lading or similar arrangements
determining the relationship of the parties, or for the publications
or assessment of unreasonable rates, charges, rules, descriptions
classifications, practices, or other unreasonable provisions of
tariffs/tenders. Rules governing the Carrier Performance Program are
found in MTMC Regulation 15-1, and Army Regulation 55-355, DTMR. If
a carrier is removed or disqualified for 6 months or more, it will
have to be re-qualified.
16. General Provisions. The carrier agrees to possess a valid
Standard Carrier Alpha Code (SCAC). When a company holding the
appropriate authority has operating divisions each with its own
unique SCAC, each such division is required to execute a separate
agreement with MTMC governing the transportation of protected
commodities.
17. Terms of the Agreement. a. The terms of this Agreement will
be applicable to each shipment.
b. This agreement shall be effective from the date of approval
by MTMC, until terminated. Termination is effective upon receipt of
written notice by either party.
c. Nothing in this Agreement will be construed as a guarantee by
the Government of any particular volume of traffic.
d. The carrier agrees to immediately notify MTMC of any changes
in ownership, in affiliations, executive officers, and/or board
members, and carrier name. Carrier understands that failure to
notify MTMC shall be grounds for immediate revocation of the
carrier's approval and their participation in the movement of DOD
freight.
18. Additional Specialized Requirements. The terms of this
Agreement will not prevent different or additional requirements with
respect to negotiated agreements or added requirements for other
types of service and/or commodities.
19. Inquiries. Inquiries may be referred to: Commander, Military
Traffic Management Command, ATTN: MTOP-QQ, 5611 Columbia Pike, Falls
Church, VA 22041-5050.
20. Carrier Acknowledgment and Acceptance. The certifying
carrier official agrees to ensure that the appropriate company
officials and employees are familiar with the requirements, terms,
and conditions of this Agreement and are in full compliance with the
applicable provisions herein. Any information found to be falsely
represented in the Motor Carrier Qualification Form, the attachments
or during the qualification procedures, to include additional
requirements of this Agreement, shall be grounds for automatic
revocation of this Agreement and immediate non-use of the carrier,
the affiliated companies, divisions and entities.
I,---------------------------------------------------------------------
(Typed Name and Title of Carrier Official) verify under penalty of
perjury under the laws of the United States of America, that the
information contained in the carrier qualification application
packet and this Agreement is true, correct and complete. If
representing a company or organization, I certify that I am
qualified and authorized to offer this information. I know that
willful misstatements or omissions of material facts constitute
Federal criminal violations punishable under 18 U.S.C. 1001 by up to
5 years imprisonment and fines up to $10,000 for each offense, or
punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or
imprisonment up to 5 years for each offense. Further I understand
the requirements of this Agreement and on behalf of
----------------------------------------------------------------------
(Typed Name of Carrier and MC Number) agree to comply with the terms
and conditions contained herein. Signature of Carrier Official and
Title
----------------------------------------------------------------------
Date
----------------------------------------------------------------------
Carrier Address
----------------------------------------------------------------------
Telephone number
----------------------------------------------------------------------
24 hr Emergency Number
(________, ________) Interstate Operating Authority Certificate
Number--MC
----------------------------------------------------------------------
Intrastate Operating Authority
4. Appendix C to part 619 is revised as follows:
Appendix C to Part 619--Agreement Between the Military Traffic
Management Command and Motor Common Carriers Governing the
Transportation of Hazardous Material Other Than Class A and B
Explosives for and on Behalf of the U.S. Department of Defense.
1. I, the undersigned, who is duly authorized and empowered to
act on behalf
[[Page 33412]]
of ________________________________________, hereinafter called the
carrier to transport hazardous materials, (other than class A and B
explosives), as defined in 49 Code of Federal Regulations (CFR)
172.3. Hazardous commodities in bulk include, but not limited to,
such items as gasoline, kerosene, lubricating oil, turbine fuel and
fuel oil, for the account for the DOD and the Military Traffic
Management Command (MTMC), hereinafter called the Government, agrees
to comply with all additional requirements, terms and conditions as
set forth in this Agreement. If the carrier wishes to participate in
DOD traffic, which requires a protective service, the carrier must
also be a party to and in full compliance with requirements
contained in the Agreement governing shipments which required a
Transportation Protective Service (TPS). Noncompliance by the
carrier with any provision of this or any other Agreement it is a
party to will be sufficient grounds for immediate revocation of the
carrier's approval to participate in the movement of hazardous
materials. This carrier may also be subject to further action under
the carrier Performance Program, governed by MTMC Regulation 15-1,
which could result in nationwide disqualification on all DOD freight
shipments.
2. Approval and Revocation. a. Carrier understands that its
initial approval and retention of approval are contingent upon
establishing and maintaining to MTMC's satisfaction, sufficient
resources to support its proposed scope of operations and services.
Sufficient resources include equipment, personnel, facilities, and
finances to handle traffic anticipated by DOD/MTMC under the
carrier's proposed scope of operations in accordance with the
service requirements of the shipper.
b. The carrier understands that MTMC may revoke approval at any
time upon discovery of grounds for ineligibility or
disqualification. The carrier further understands that it is not
authorized to submit tenders for shipments requiring a TPS until it
has served DOD in an approved status for 12 continuous months. Prior
to being allowed to handle shipments which require a TPS or class A
and B explosives, the carrier must first meet any additional
requirements in effect at that time.
c. In addition to the initial evaluation, the carrier agrees
that it will cooperate with MTMC follow-up evaluations at any time
subsequent to signing this agreement to confirm continued
eligibility.
d. The carrier certifies that neither the owners, company,
corporate officials, nor any affiliation or subsidiary thereof are
currently debarred or suspended, disqualified by a MTMC General
Freight Board, or placed in non-use by MTMC from doing business with
DOD.
3. Lawful Performance. a. Carrier agrees to comply with all
applicable Federal, State, municipal, and other local law and
regulations governing the safe, proper, and lawful operation of
motor vehicles, to include Title 49 Code of Federal Regulations
(CFR) 177 and 386 through 397. Provisions for exempt intricate
operations as defined in 49 CFR will not apply to the transpiration
of explosives for the DOD. Intrastate carries are required to comply
with all applicable state or federal regulations, whichever are more
stringent.
b. No fines, charges, or assessments for overloaded vehicles or
other violations of applicable laws and regulations will be passed
to or be paid by any agency of the Federal Government.
4. Operating Authority. Carrier agrees to maintain valid Motor
Common Carrier operating certificates for its scope of operations
which is not restricted against the handling and transport of
hazardous materials or ammunition and explosives, class A and B. Any
carrier found to be involved in brokerage, as defined by the
Interstate Commerce Commission (ICC), of DOD freight traffic will
have its approval revoked.
5. Insurance. a. Minimum public liability insurance requirements
are prescribed in title 49 of the Code of Federal Regulations (CFR)
387.9. Carrier agrees to ensure that the ICC is provided proof of
their public liability insurance, in the form of a BMC 91 or 91-X,
or MCS 90, in accordance with sections 29 and 30 of the Motor
Carrier Act of 1980. Further, the Motor carrier agrees to provide
MTMC with a certificate of insurance form. The certificate holder
block of the form will indicate that MTMC, ATTN: MTOP-QQ, will be
notified in writing, 30 days in advance of any change or
cancellation. The deductible portion will be shown on the
certificate. The insurance underwriter must have a policy holder's
rating in the Best's Insurance Guide, listed in the Fiscal Service
Treasury Department Circular 570, Listing of surety companies.
b. The carrier agrees to also file with MTMC proof of:
(1) Interstate Public Liability. Carrier will ensure that its
insurance company(s) file with MTMC proof of public liability and
property damage insurance for the transportation of hazardous
commodities in the minimum and amounts prescribed in 49 CFR 387.9.
(2) Intrastate Public Liability. Carrier will ensure that its
insurance company(s) file with MTMC proof of insurance which meets
the estate requirements for public liability and property damage for
the transportation of hazardous materials.
(3) Cargo Insurance. Carrier will also file with MTMC proof of
$150,000 per incident minimum cargo insurance for loss and bulk fuel
which is set at $10,000.
c. The insurance, carried in the name of the carrier, will be in
force at all times while this Agreement is in effect or until such
time as the carrier cancels all tenders. The carrier agrees to
ensure that the policies include a provision requiring the insurer
to notify MTMC prior to any performance of service by the carrier.
Changes, renewals, and cancellation notices must be also sent to:
MTMC, ATTN: MTOP-QQ. This requirement applies to both interstate and
intrastate carriers. Carrier's insurance policy(s) must cover all
equipment used to transport DOD freight.
6. Performance Bond. a. Carrier agrees to provide MTMC with a
Performance Bond. The bond secures performance and fulfillment of
the carrier obligation to deliver DOD freight to destination. It
will cover DOD reprocurement costs as a result of carrier default,
abandoned shipments, or bankruptcy by the carrier. The bond will not
be utilized for operational problems such as late pick up or
delivery, excessive transit time, refusals, no shows, improper/
inadequate equipment or claims for lost or damaged cargo. The bond
must be issued by a surety company listed in the Fiscal Service
Treasury Department Circular No. 570. The bond must be completed on
the form provided by MTMC. The bond will be continuous until
canceled. MTMC will be notified in writing, 30 days in advance of
any change or cancellation. A letter of intent, by the surety
company, is required with the initial application package. Upon MTMC
approval, the carrier agrees to submit the performance bond before
the Tender of Service will be accepted.
b. The sum of the bond will be determined as follows:
(1) Carriers having done business in their own name with DOD for
3 years or more will be required to submit a Performance Bond in the
amount of 2.5% of their total DOD revenue, taken from the Freight
Information Systems Report (FINS), for the previous 12-months, not
to exceed $100,000 and not less than $10,000.
(2) New carriers and those carriers having done business in
their own name with the DOD for less than 3 years will be required
to submit a Performance Bond based on areas of service they offer.
Areas of service will be computed as both origins and destinations
served.
1 state (including intrastate)--$10,000;
2 to 3 states--$50,000; and
4 or more states--$100,000.
(3) Once a carrier has been doing business with the DOD for 3
years, their bond requirement will change from areas of service to
percent revenue.
c. Bulk fuel carriers will be required to submit a $10,000
performance bond.
d. Local drayage and commercial zone carriers are exempt from
the bond requirement.
e. If carrier has secured the performance bond as a result of
qualifying under the general commodity program or class A and B
program, no additional performance bond is required.
7. Safety and Security. a. A ``unsatisfactory'' safety rating
with the Federal Highway Administration, Department of
Transportation, and/or with the appropriate state agency or
commission in the case of intrastate. Safety ratings which are
``unsatisfactory,'' ``unconditional,'' ``insufficient information,''
or ``not rated'' will not be accepted. The carrier agrees to permit
unannounced safety inspections of its facilities, terminals,
equipment, employees, and procedures by DOD civilian, military
personnel, or DOD contract employees, inspection. Inspection of
carrier equipment, drivers' records, route plans and inspection
reports will be permitted during both the pickup and delivery of
shipments and in coordination with local police or other authorities
while in transit. Carrier also agrees to allow inspection of carrier
records
[[Page 33413]]
and individual driver qualification files. When requested, carrier
agrees to provide adequate evidence of an active driver safety,
security training and evaluation program. Carrier agrees to furnish,
on request, driver's Social Security Numbers to verify their
security clearances and allow for inspection of carrier/driver
records.
b. The carrier agrees to have in place a company-wide safety and
security management program which includes specific on-going safety
and security programs for each terminal location. Individual
terminal programs will encompass planning and execution of safety
and security in routine operations, to include emergency responders
and planners, and with the local police and fire authority. Carrier
programs will incorporate compliance with all applicable Federal,
State and local statutes or requirements. Conformance with other
safety standards, such as NFPA Code 498, will be accomplished as
much as possible, with compensating measures for deviations. Safety
and security programs at the company wide or terminal level may be
subject to evaluation by a DOD representative.
c. The carrier agrees to notify, within a reasonable period of
time, the consignor and consignee names by the Government Bill of
Lading (GBL) of cargo loss, damage, or unusual delay. Carrier also
agrees to notify the consignor or consignee named on the GBL
immediately by telephone of an accident, incident or significant
delay. The information to be reported will include origin/
destination, GBL number, shipping paper information, time and place
of occurrence and other pertinent accident details. Carriers agrees
to notify the MTMC area command annotated on the GBL and the Defense
Logistics Agency (DLA), within one half (\1/2\) hour after
notification of the consignor and consignee, and provide status
updates as required. The MTMC HOTLINE and AOC telephone numbers are
as follows:
--Eastern Area: (800) 524-0331; New Jersey only: (800) 624-1361
--Western Area: (800) 331-1822; California only: (800) 348-4639
--DLA: (800) 851-8061
When requested, carrier agrees to furnish MTMC a copy of accident
reports submitted to Department of Transportation on Form MCS 50-T
(Property) or MCS 50-B (Passengers) when DOD classes A and B
explosives movements are involved.
d. Carrier agrees to provide the driver(s) transporting
protected commodities an emergency telephone number (indicated on
the last page of this Agreement) which, when used at any time (24-
hours a day, 7 days a week), will reach a qualified carrier
representative who will be able to provide information and
assistance. MTMC will be immediately notified if this telephone
number is changed. Carrier also agrees to equip the vehicle
transporting the material with communications equipment (citizens
band radio, mobile phone, etc.) capable of being used to obtain
assistance in an emergency.
e. Carriers approved to transport DOD hazardous materials
requiring TPS agree that no driver disqualified under 49 CFR 391.15
will be permitted to operate any vehicle transporting such
commodities.
f. Carriers approved to transport DOD hazardous materials agree
to ensure that drivers of a motor vehicle transporting such drivers
of motor vehicle transporting such commodities must undergo a
physical examination and must be certified physically qualified to
drive a commercial motor vehicle in accordance with 49 CFR 391.43.
Carrier also agrees to have driver screening programs in place to
ensure that the provisions of this paragraph are met.
8. Drivers Requirement. a. Driver agrees to ensure that the
driver(s) employed to transport hazardous commodities driving
experience (using similar equipment prior to transporting hazardous
commodities, and that its drivers are trained and competent in the
movement of these commodities to include an understanding of the
following: 49 CFR part 397, instructions on procedures to be
followed in the event of a delay, nature of the materials being
transported, precautions to be taken in an emergency; written route
plans; and shipping paper entries. The carrier will certify that the
driver is trained and competent in the movement of hazardous
commodities, and proof of certification must be carrier in the
vehicle of the unit transporting these commodities.
b. The carrier agrees to further ensure that driver(s) carry a
valid commercial motor vehicle operator's license issued by his/her
state of domicile, a certificate of physical examination issued
during the preceding 24 months, and an employee record card, or
similar document, one of which must contain the driver's photograph.
The driver(s) must be 21 years of age. The driver(s) must carry a
company picture identification to verify affiliation with the
carrier named on the GBL.
9. Equipment. a. Trip leased equipment, with or without drivers,
will not be used to transport hazardous materials for the account of
the DOD. Exceptions for the use of intermittent or occasional
drivers in 49 CFR 391.63 will not apply to any DOD movement. Any
equipment, with or without drivers, leased to augment carrier-owned
equipment will be on a not less than 90-day noncancellable basis.
b. A copy of the equipment lease agreement must be carried in
the vehicle of the unit transporting these commodities. (Facsimile,
Xerox, or otherwise reproduced copies are not acceptable.)
Interchange agreements which originate at origin will be considered
trip leases and will not be accepted. The lease must be complete at
time of pick up and should require no further information to be
completed by the driver. Failure to comply with this requirement or
attempted abuse of this requirement could result in the carrier's
participation in this type traffic to be immediately revoked and up
to a nationwide disqualification on all DOD freight shipments should
further action under the Carrier Performance Program be deem
appropriate.
c. Carriers approved to transport DOD hazardous material
requiring TPS agree to comply with all equipment requirements
contained in paragraph 8 of the Agreement Between the Military
Traffic Management Command and Motor Carriers Governing the
Transportation of Shipments Which Require a Transportation
Protective Service for and on behalf of the U.S. Department of
Defense.
10. Shipment. a. Carrier is responsible for shipments from
origin to ultimate destination. The carrier also remains responsible
for shipments placed in a safe haven or refuge location. Carrier
agrees not to disclose any information to unauthorized persons
concerning the nature, kind, quantity, destination, consignee or
routing of any hazardous material shipment tendered to it. The
carrier further agrees to provide, at no additional cost to the
Government, the status of any shipment within 24-hours after an
inquiry is made.
b. Carrier agrees to ensure that shipper-provided placards are
displayed in accordance with the general requirements found in 49
CFR 172.504 for the transportation of hazardous materials. The
carrier further agrees to conform to the requirements found in 49
CFR 177.825 pertaining to the transportation of radioactive
materials for which placarding is required. Carrier also agrees to
route all other shipments of hazardous commodities in accordance
with the provisions of 49 CFR 397.9.
c. When requested by the shipper for reasons of security,
carrier agrees to cover the shipment with a carrier-provided
tarpaulin. Protective tarping is an accessorial service.
d. Carriers approved to transport DOD hazardous materials
requiring TPS agree to comply with all shipment requirements
contained in paragraph 9 of the Agreement Between the Military
Traffic Management Command and Motor Common Carriers Governing the
Transportation of Shipments Which Require a Transportation
Protective Service (TPS) for and on behalf of the U.S. Department of
Defense.
11. Documentation. a. The carrier agrees to accept GBLs on which
freight charges will be paid by the Government, and bound by all
terms stated on the Standard Form (SF)-1103, GBL, regardless of the
type of bill of lading tendered.
b. The carrier will comply with the documentation prelodge
procedures in effect at Military Ocean Terminals or the
installation, when cargo is consigned for further movement overseas.
(Prelodging is the submission of advance shipment documents which
identifies the shipment to the Military Ocean Terminal prior to
delivery of the cargo at the terminal.) Instructions will be
provided by the consignor to furnish certain data at least 24-hours
in advance of cargo delivery to the terminal.
12. Loss or Damage. The carrier agrees to be liable for loss or
damage to cargo in accordance with the provisions of 49 U.S.C. 11707
(the Carmack Amendment to the Interstate Commerce Act.) Carrier
agrees to promptly settle uncontested claims for loss or damage.
13. Standard Tender of Service. a. The carrier agrees to comply
with the preparation and filing instructions in applicable freight
traffic rules publications issued by MTMC. Carrier understands that
MTMC will reject tenders not in compliance with these instructions.
b. Carrier agrees to provide a street address where the company
office is located in lieu of post office box number. Carrier agrees
to provide the address prior to or in conjunction
[[Page 33414]]
with submission of any tenders or other rate schedules. The carrier
agrees to also advise MTMC of any change in address prior to the
effective date of the change. Failure to do so is grounds to
discontinue use of the carriers.
c. Carrier understands that tenders inadvertently accepted and
distributed for use and not in compliance with this agreement, the
provisions contained in the Standard Tender of Freight Services (MT
Form 364-R), or the application MNC Freight Traffic Rules
Publication, and supplements thereof, will be subject to immediate
removal or non-use until corrections are made. The issuing carrier
will be advised when tenders are removed under these circumstances.
14. Rates. a. Carrier agrees to transport shipments at the
lowest tender rate specifically applicable to the department or
agency involved.
b. The carrier's rates must be on file with MTMC, HQ Eastern
Area, ATTN: MTE-IN, Bayonne, New Jersey 07002-5302. The carrier must
publish all rates, charges, and accessorial services on a
``Department of Defense Standard Tender of Freight Services'' MT
Form 364-R and must comply with the tender preparation instructions.
(Only services annotated with a charge in the tender will be paid by
the shipper.)
15. Carrier Performance. Carrier agrees that carrier's
equipment, performance and status of service will conform with its
obligations under Federal, State and local law and regulation as
well as with the guidelines found in the Defense Traffic Management
Regulation (DTMR) and this Agreement. The carrier fully understands
its obligation to remain current in its knowledge of service
standards. The carrier accepts the Government's right to revoke
approval, declare ineligible, non-use, or disqualify the carrier for
unsatisfactory service for any operating deficiency, noncompliance
with the terms of this Agreement or terms of any negotiated
agreements, tariffs, tenders, bills of lading or similar
arrangements determining the relationship of the parties, or for the
publication of unreasonable rates, charges, rules, descriptions,
classifications, practices, or other unreasonable provisions of
tariffs/tenders. Rules governing the Carrier Performance Program are
found in MTMC Regulation 15-1, and Army Regulations 55-355 DTMR. If
a carrier is removed or disqualified for 6 months or more, it will
have to be re-qualified.
16. General Provisions. The carrier must possess a valid
Standard Carrier Alpha Code (SCAC). When a company holding the
appropriate authority has operating divisions, each with its own
unique SCAC, each such division is required to execute a separate
agreement with MTMC governing the transportation of protected
commodities.
17. Terms of the Agreement. a. The terms of this Agreement will
be applicable to each shipment.
b. This agreement shall be effective from the date of approval
by MTMC, until terminated. Termination is effective upon receipt of
written notice by either party.
c. Nothing in this Agreement will be construed as a guarantee,
by the Government, of any particular volume of traffic.
d. The carrier agrees to immediately notify MTMC of any changes
in ownership, in affiliations, executive officers, and/or board
members, and carrier name. Carrier understands that failure to
notify MTMC shall be grounds for immediate revocation of the
carrier's approval and their participation in the movement of DOD
freight.
18. Additional Specialized Requirements. The terms of this
Agreement will not prevent different or additional requirements with
respect to negotiated agreements or added requirements for other
types of service and/or commodities.
19. Inquiries. Inquiries may be referred to: Commander, MTMC,
Attn: MTOP-QQ, Falls Church, Virginia 22041-5050.
20. Carrier Acknowledgment and Acceptance. The certifying
carrier official agrees to ensure that the appropriate company
officials and employees are familiar with the requirements, terms
and conditions of this Agreement and are in full compliance with the
applicable provisions herein. Any information found to be falsely
represented in the Motor Carrier Qualification Form, the attachments
or during the qualification procedures, to include additional
requirements of this Agreement, shall be grounds for automatic
revocation of this Agreement and immediate non-use of the carrier,
the affiliated companies, division and entities, I,
________________________________________, verify under penalty of
perjury under the laws of the United States of America, that the
information contained in the carrier qualification application
packet and this Agreement is true, correct and complete. If
representing a company or organization, I certify that I am
qualified and authorized to offer this information. I know that
willful misstatements or omissions of material facts constitute
Federal criminal violations punishable under 18 U.S.C. 1001 by up to
5 years imprisonment and fines up to $10,000 for each offense, or
punishable as perjury under 18 U.S.C. 1621 by fines up to $2,000 or
imprisonment up to 5 years for each offense. Further, I understand
the requirements of this Agreement and on behalf of:
________________________________________ (Typed Name of Carrier and
MC Number) agree to comply with the terms and conditions contained
herein.
----------------------------------------------------------------------
(Signature of Carrier Official and Title)
Signature of Agent Official and Title:
----------------------------------------------------------------------
----------------------------------------------------------------------
Date:------------------------------------------------------------------
Address:---------------------------------------------------------------
Telephone Number: (________________)-----------------------------------
24-Hr Emergency Number:------------------------------------------------
(________________)
Interstate Operating Authority Certificate Number--MC:-----------------
Intrastate Operating Authority:----------------------------------------
Certificate Number(s) Include:-----------------------------------------
Issuing State--For Example:--------------------------------------------
PA--#12345
Military Traffic Management Command Acknowledgment/Acceptance
Signature and Title:
----------------------------------------------------------------------
Date Approved:---------------------------------------------------------
Gregory D. Showalter,
Army Federal Register Liaison Officer.
[FR Doc. 96-16147 Filed 6-26-96; 8:45 am]
BILLING CODE 3710-08-M
Complete official Federal Register PDF
FR Doc. 96-16012 Standards of Performance for New Stationary Sources for Nonmetallic Mineral Processing Plants; Amendments
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33415-33421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16012]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 60
[AD-FRL-5525-5]
RIN 2060-AG33
Standards of Performance for New Stationary Sources for
Nonmetallic Mineral Processing Plants; Amendments
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This action proposes revisions and clarifications to several
provisions of the standards of performance for nonmetallic mineral
processing plants, which were promulgated in the Federal Register on
August 1, 1985 (50 FR 31328). On January 26, 1995, the National Stone
Association petitioned EPA to review the existing standards. These
revisions are in keeping with President Clinton's Regulatory
Reinvention Initiative. The intended effect of this action is to reduce
the costs of emission testing and reporting and recordkeeping. The
affected industries and numerical emission limits remain unchanged
except for individual, enclosed storage bins.
A public hearing will be held, if requested, to provide interested
persons an opportunity for oral presentation of data, views, or
arguments concerning the proposed revised standards.
DATES: Comments. Comments must be received on or before August 26,
1996.
Public Hearing. If anyone contacts EPA requesting to speak at a
public hearing by July 23, 1996, a public hearing will be held on
August 5, 1996 beginning at 10 a.m. Persons interested in attending the
hearing should call Ms. Cathy Coats at (919) 541-5422 to verify that a
hearing will be held.
Request to Speak at Hearing. Persons wishing to present oral
testimony must contact EPA by July 23, 1996 (contact Ms. Cathy Coats at
(919) 541-5422.)
ADDRESSES: Comments. Comments should be submitted (in duplicate if
possible) to: The Air and Radiation Docket and Information Center (MC-
6102), ATTN: Docket No. A-95-46, U.S. Environmental Protection Agency,
401 M Street, SW, Washington, DC 20460.
Commenters wishing to submit proprietary information for
consideration should clearly distinguish such information from other
comments, and clearly label it ``Confidential Business Information.''
Submissions containing such proprietary information should be sent
directly to the following address, and not to the public docket, to
ensure that proprietary information is not inadvertently placed in the
docket: Attention: Mr. William Neuffer, c/o Ms. Melva Toomer, U.S. EPA
Confidential Business Information Manager, OAQPS/MD-13; Research
Triangle Park, North Carolina 27711. Information covered by such a
claim of confidentiality will be disclosed by the EPA only to the
extent allowed and by the procedures set forth in 40 CFR Part 2. If no
claim of confidentiality accompanies a submission when it is received
by the EPA, the submission may be made available to the public without
further notice to the commenter.
Docket. Docket No. A-95-46, containing supporting information used
in developing the proposed revisions is available for public inspection
and copying between 8:00 a.m. and 4:00 p.m., Monday through Friday, at
the Air and Radiation Docket and Information Center (MC-6102), U.S.
Environmental Protection Agency, 401 M Street, SW, Washington, DC
20460; telephone (202) 260-7548, fax (202) 260-4000. A reasonable fee
may be charged for copying.
FOR FURTHER INFORMATION CONTACT: Mr. William Neuffer at (919) 541-5435,
Emission Standards Division (MD-13), U.S. EPA, Research Triangle Park,
North Carolina 27711.
SUPPLEMENTARY INFORMATION:
Regulated Entities
Entities potentially regulated by EPA's final action on this
proposed rule are new, modified, or reconstructed affected facilities
in nonmetallic mineral processing plants. These categories and entities
include:
------------------------------------------------------------------------
Category Examples
------------------------------------------------------------------------
Industry.......................... Crushed and broken stone, sand and
gravel, clay, rock salt, gypsum,
sodium compounds, pumice,
gilsonite, talc and pyrophyllite,
boron, barite, fluorospar,
feldspar, diatomite, perlite,
vermiculite, mica, kyanite
processing plants
------------------------------------------------------------------------
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by final
action on this proposal. This table lists the types of entities that
EPA is now aware could potentially be regulated by final action on this
proposal. Other types of entities not listed in the table could also be
regulated. To determine whether your facility is regulated by final
action on this proposal, you should carefully examine the applicability
criteria in Sec. 60.670 of the rule. If you have questions regarding
the applicability of this action to a particular entity, consult the
person listed in the preceding FOR FURTHER INFORMATION CONTACT section.
The information presented in this preamble is organized as follows:
I. Background
II. Summary and Rationale for Proposed Revisions to NSPS
III. Administrative Requirements
A. Public Hearing
B. Docket
C. Clean Air Act Procedural Requirements
D. Office of Management and Budget Reviews
1. Paperwork Reduction Act
2. Executive Order 12866
3. Unfunded Mandates Act of 1995
E. Regulatory Flexibility Act Compliance
I. Background.
Standards of performance for nonmetallic mineral processing plants
were promulgated in the Federal Register on August 1, 1985 (50 FR
31328). These standards implement section 111 of the Clean Air Act and
require all new, modified, and reconstructed nonmetallic mineral
processing plants to achieve emission levels that reflect the best
demonstrated system of continuous emission
[[Page 33416]]
reduction, considering costs, nonair quality health, and environmental
and energy impacts.
The promulgated standards apply to new, modified, and reconstructed
facilities at plants that process any of the following 18 nonmetallic
minerals: crushed and broken stone, sand and gravel, clay, rock salt,
gypsum, sodium compounds, pumice, gilsonite, talc and pyrophyllite,
boron, barite, fluorospar, feldspar, diatomite, perlite, vermiculite,
mica, and kyanite. The affected facilities are each crusher, grinding
mill, screening operation, bucket elevator, belt conveyor, bagging
operation, storage bin, and enclosed truck or railcar loading station.
On January 26, 1995, the National Stone Association (NSA)
petitioned the EPA, pursuant to the Clean Air Act and the
Administrative Procedures Act, to review the existing NSPS for
nonmetallic mineral processing plants (40 CFR part 60, subpart OOO). In
its petition, NSA and its member companies requested the EPA to review
and consider revising, in particular, the provisions in the NSPS that
pertain to the test methods and procedures. Also, NSA requested that
several of the recordkeeping and reporting requirements be reduced or
eliminated.
II. Summary and Rationale for Proposed Revisions to NSPS
A. Summary of Proposed Revisions
As a result of the EPA's review of concerns raised by NSA and its
member companies and discussions with State and Local air pollution
control agencies, the Administrator has concluded that several
revisions to the NSPS are warranted. The following is a brief summary
of the proposed revisions to the NSPS, followed by a discussion of the
basis for the proposed revisions.
1. Section 60.670, Applicability and designation of affected
facility, is being revised:
a. To clarify that facilities located in underground mines are not
subject to the NSPS;
b. To exempt wet screening operations from all requirements of the
NSPS, except the recordkeeping and reporting requirements in
Sec. 60.676(g).
c. To clarify within subpart OOO which General Provisions (40 CFR
Part 60, subpart A) requirements apply to owners and operators of
affected facilities subject to the NSPS. A table has been included to
clarify the applicable General Provisions requirements.
2. Section 60.671, Definitions, is being revised to add a
definition of ``wet screening operation.''
3. Section 60.672, Standard for particulate matter, is being
revised:
a. To state the particulate matter standard for an individual,
enclosed storage bin ducted to a single control device.
b. To clarify that affected facilities are subject to a standard
for stack emissions of particulate matter and a stack opacity standard.
4. Section 60.675, Test methods and procedures, is being revised:
a. To reduce the duration of Method 9 observations of fugitive
emissions for compliance for any affected facility from 3 hours (30 6-
minute averages) to 1 hour (10 6-minute averages) if there are no
individual readings greater than 10% opacity and there are no more than
3 individual readings of 10% opacity during the 1 hour test period.
b. To allow the use of Method 9, in lieu of Method 5, for
determining compliance for fabric filter collectors controlling
particulate matter emissions from an individual, enclosed storage bin
ducted to a baghouse that only controls emissions from this bin. For
compliance purposes, the duration of the Method 9 observations for any
baghouse controlling an individual, enclosed storage bin will be 1 hour
(10 6-minute averages).
c. To reduce the General Provisions (section 60.8(d)) notification
requirement from 30 days to 7 days prior notice of any rescheduled
performance test if there is a delay in conducting any previously
scheduled performance test for which 30 days notice has been supplied
under this NSPS.
5. Section 60.676, Reporting and recordkeeping, is being revised:
a. To delete the requirement to report ``like-for-like
replacements'' of equipment to the Director, Emission Standards
Division (section 60.676(b)).
b. To waive the requirement in the General Provisions (section
60.7(a)(2)) for notification of the anticipated date of initial startup
of an affected facility.
c. To allow a single notification of the actual date of initial
startup of a combination of affected facilities in a production line
that begin initial startup simultaneously, in lieu of multiple
notifications of the actual date of initial startup of individual
affected facilities. The notification must include a description of
each affected facility, equipment manufacturer, and serial number, if
available.
B. Rationale for Proposed Revisions to NSPS
1. Applicability
a. As a result of past inquiries from some plant owners and
operators as to whether crushers or any other equipment used in
nonmetallic mineral processing that are located in underground mines
are subject to the NSPS, the EPA is clarifying its intent by adding
language to the regulation to state that this NSPS does not apply to
facilities located in underground mines. Emissions from crushers or
other facilities in underground mines are vented in the general mine
exhaust and cannot be distinguished from emissions from drilling and
blasting operations which are not covered by the standards. Therefore,
the EPA is clarifying its intent that crushers and other facilities
located in underground mines not be regulated under the NSPS
(Sec. 60.670(a)).
b. The EPA is also proposing a revision to Sec. 60.670(a), which
states that the provisions of the NSPS do not apply, except for one-
time recordkeeping and reporting, to wet screening operations and
associated belt conveyors downstream of the wet screening operation in
the production line up to, but not including, the next crusher,
grinding mill or dry screening operation in the production line of a
nonmetallic minerals processing plant. For further clarification, ``wet
screening operation'' is being defined in the regulation as ``a
screening facility designed and operated at all times to remove
unwanted material from the product by a washing process whereby the
product is completely saturated with water.'' There is no potential for
air emissions from either screening or conveying operations in the wet/
wash end of a processing plant unless a crusher, grinding mill or dry
screeening operation is included in the process. Therefore, wet
screening operations are not subject to the provisions of Secs. 60.672,
60.674, and 60.675 under this regulation (subpart OOO) or the General
Provisions (subpart A). The only requirement for wet screening
operations is a one-time recordkeeping and reporting requirement under
section 60.676(g) of the NSPS.
It is possible, however, that a screening facility/operation may be
operated as wet screening at one location where a washing process is
used to remove unwanted material from the product; later, at the same
location or after movement to another location, it may no longer
operate as wet screening. In these cases, where it ceases operating as
a wet screen, applicability of all the provisions of this regulation
would be triggered and the screening operation would become an affected
facility subject to all of the requirements of this regulation and the
General Provisions (Subpart A). For tracking purposes, a one-time
[[Page 33417]]
recordkeeping and reporting requirement for wet screening operations
has been added to the NSPS (Sec. 60.676(g)).
c. The NSA and its member companies requested clarification of the
applicable General Provisions (40 CFR part 60, subpart A) requirements
for owners and operators of affected facilities subject to this NSPS
(Subpart OOO). They stated that many of their members were unaware that
the General Provisions (40 CFR part 60, subpart A) existed or applied
in addition to this NSPS. Therefore, in an effort to facilitate an
awareness and a better understanding of the General Provisions
requirements and implementation of those requirements, the EPA is
adding a table to the regulation (subpart OOO) that specifies the
provisions of subpart A that apply and those that do not apply to
owners and operators of affected facilities subject to Subpart OOO.
2. Standard for Particulate Matter
In the past, there have been several requests for clarification of
Sec. 60.672(a) of the regulation regarding whether owners or operators
of affected facilities are subject to both a standard for stack
emissions of particulate matter and a stack opacity standard. The
preamble for the promulgated rule clearly states that affected
facilities are subject to both the stack emission limit and stack
opacity standard (50 FR 31329-first column; August 1, 1985). Therefore,
the word ``or'' at the end of paragraph (a)(1) in Sec. 60.672 has been
deleted to remove any ambiquity in the requirements.
3. Test Methods and Procedures
a. One of the concerns of the NSA and its member companies was the
duration of Method 9 testing (3 hours for each fugitive-type emission
source) for fugitive emissions from affected facilities such as
crushers and belt conveyor transfer points, in situations when almost
all 15-second observations are observed to be 0 percent opacity. They
asserted that usually no emissions were observed from these affected
facilities (when properly maintained and operated) during the Method 9
observations, and therefore they did not believe that 3 hours of
observations were justified or necessary for determining compliance.
Due to the large number of these affected facilities at nonmetallic
mineral processing plants, the amount of time and the cost for Method 9
observations from these sources were considered by NSA to be very
burdensome.
The General Provisions (Sec. 60.11(b)) require 3 hours (30 6-minute
averages) of Method 9 observations for determining compliance for
fugitive emission sources. However, after review and evaluation of data
submitted by the industry, the EPA has decided to reduce the Method 9
testing duration for observing fugitive emissions from any affected
facility subject to this NSPS from 3 hours (30 6-minute averages) to 1
hour (10 6-minute averages) if there are no individual readings greater
than 10% opacity and there are no more than 3 individual readings of
10% opacity during this first hour.
The data submitted to the EPA by industry for review was compiled
from several hundred visible emission tests conducted by the industry
for each type of affected facility subject to the NSPS. The majority
(52 percent) of the visible emission tests were conducted for belt
conveyor transfer points. The data included opacity readings from 58
different 3 hour tests. For the first hour, the test results showed
that 51 of the 58 3-hour tests had no individual readings of 10 percent
or greater. Only 3 belt conveyor transfer points had individual
readings greater than 10%. Only 5 belt conveyor transfer points had
more than 3 individual readings of 10%. The most obvious result
obtained from the tests was the consistency of the readings from hour
to hour. Readings during the first hour of testing were in line with
readings taken during hours 2 and 3. If a problem existed at a transfer
point or other fugitive emission source, it would be evident during the
first hour of testing. Therefore, for these reasons, EPA believes that
1 hour (10 6-minute averages) of Method 9 observations is sufficient
for any affected facility to show compliance with the fugitive emission
standard if there are no individual readings greater than 10% opacity
and there are no more than 3 individual readings of 10% opacity during
the first hour.
b. Also of concern to NSA and its members is the requirement in the
NSPS for Method 5 testing of fabric filter collectors (baghouses)
controlling particulate matter emissions from individual, enclosed
storage bins ducted to a single baghouse. They requested that
individual, enclosed storage bin emissions be exempted from Method 5
testing because the baghouse outlet is not amenable to Method 5 testing
due to the intermittent nature of individual storage bin operations and
the small air flow rates.
Information supplied by NSA indicates that Method 5 testing cannot
be performed for baghouses that only control emissions from individual,
enclosed storage bins unless the emissions are combined with emissions
from other storage bins or other affected facilities in order to
determine compliance. Therefore, the EPA is proposing to exempt a
baghouse that only controls emissions from an individual, enclosed
storage bin from Method 5 stack emission testing. Compliance for an
individual, enclosed storage bin ducted to a single baghouse will be
determined by Method 9 (Sec. 60.672(f)). For compliance purposes, one
hour (10 6-minute averages) of Method 9 observations will be required
for each individual, enclosed storage bin. Multiple storage bins with
combined stack emissions controlled by a baghouse are subject to Method
5 testing and concurrent Method 9 testing as required under
Sec. 60.672(g).
c. The General Provisions (Sec. 60.8(d)) require 30 days prior
notice of any performance test, ``* * * except as specified under other
subparts * * *.'' In cases where a performance test must be
rescheduled, due to operational problems, etc., it is not always
reasonable or necessary to provide 30 days prior notice to EPA or the
State of the new date of the performance test. Based on conversations
with personnel who are affected by the notification of the new date of
the performance test (i.e., personnel at EPA Regional Offices and State
agencies), the EPA has determined that after the initial 30-day
notification, then notice provided 7 days prior to a rescheduled test
is sufficient time to provide the Regional, State or Local agencies the
opportunity to have an observer present. Therefore, Sec. 60.675 has
been revised to reflect this allowance.
4. Reporting and Recordkeeping
a. Under the promulgated standards, the replacement of an existing
facility with a new facility of equal or smaller size and having the
same function (like-for-like replacement) is exempt from compliance
with the emission limits of the NSPS (Sec. 60.670(d)(1)). In order to
qualify for this exemption, an owner or operator replacing an existing
facility with a new facility of equal or smaller size must report this
to the EPA Regional Offices and to the States (if the particular State
has been delegated NSPS authority). This information and additional
information is also required to be reported to the Director of the
Emission Standards Division of EPA in order to assess the frequency and
characteristics of such replacements.
The EPA has reviewed this requirement and has determined that the
report to the Director of the Emission Standards Division is no longer
needed for like-for-like replacements. Therefore, in an effort to
streamline the reporting requirements of
[[Page 33418]]
this NSPS, this requirement in Sec. 60.676(b) has been deleted.
However, the information requested under Sec. 60.676(a) is still
required to be reported to EPA Regional Offices, and State or local
agencies if they have received NSPS delegation authority.
b. The EPA has also reviewed the General Provisions requirement
(Sec. 60.4(a)) for owners and operators of affected facilities to send
copies of all requests, reports, applications, submittals and other
communications to the appropriate EPA Regional Office in cases where
the State has been delegated authority to enforce the NSPS. In these
cases, some EPA Regional Offices will consider waiver of this
requirement for affected facilities subject to this subpart on a plant-
by-plant basis. The method for accomplishing this reporting reduction
on a plant-by-plant basis would be through the Operating Permit for the
individual plant. Thus, some plants have an option available to them
for further reporting reductions.
c. The General Provisions (Sec. 60.7(a)(2)) also require a
notification of the anticipated date of initial startup for new
affected facilities. After reviewing this requirement, the EPA has
determined that this notification can be waived for owners and
operators of affected facilities subject to this NSPS without affecting
the enforcement of this regulation. Due to the large number of plants
being regulated under this regulation, the deletion of this reporting
requirement under this subpart is being made for purposes of
streamlining and further reduction of the reporting burden on both
large and small plant owners or operators.
d. The General Provisions [section 60.7(a)(3)] require a
notification of the actual date of initial startup for each affected
facility within the plant. The NSA and its member companies requested
the EPA to review this requirement as it pertains to owners and
operators of the nonmetallic minerals processing NSPS. They cited the
examples of the addition of several new affected facilities being added
to a production line or the addition of a whole new production line,
and they requested whether, for notification purposes only, a single
notification of the actual date of initial startup could be submitted
for all of these affected facilities, in lieu of several separate
notifications.
After a review of this situation, the EPA has determined, for
notification purposes only, that a single notification of the actual
date of initial startup of a combination of affected facilities in a
production line that begin initial startup simultaneously would be
acceptable. The notification must include a description of each
affected facility, equipment manufacturer, and serial number of the
equipment, if available, for future compliance purposes. A single
notification for multiple affected facilities starting production at
the same time would have no adverse impact on enforcement of the
standards. Therefore, in an effort to further reduce the reporting and
recordkeeping requirements of this regulation, section 60.676 has been
revised to reflect this allowance.
This revision would also benefit the EPA and State and local
agencies in terms of reducing staff review time for numerous single
notifications of the actual date of initial startup.
III. Administrative Requirements
A. Public Hearing
A public hearing will be held, if requested, to discuss the
proposed revisions to the standards in accordance with Section
307(d)(5) of the Clean Air Act. Persons wishing to make oral
presentations on the proposed revisions should contact the EPA (see
ADDRESSES). If a public hearing is requested and held, EPA will ask
clarifying questions during the oral presentation but will not respond
to the presentations or comments. To provide an opportunity for all who
may wish to speak, oral presentations will be limited to 15 minutes
each. Any member of the public may file a written statement on or
before August 26, 1996. Written statements should be addressed to the
Air and Radiation Docket and Information Center (see ADDRESSES) and
refer to Docket No. A-95-46. Written statements and supporting
information will be considered with equivalent weight as any oral
statement and supporting information subsequently presented at a public
hearing, if held. A verbatim transcript of the hearing and written
statements will be placed in the docket and be available for public
inspection and copying, or mailed upon request, at the Air and
Radiation Docket and Information Center (see ADDRESSES).
B. Docket
The docket is an organized and complete file of all the information
considered by the EPA in the development of this proposed rulemaking.
The principal purposes of the docket are: (1) To allow interested
parties to identify and locate documents so that they can effectively
participate in the rulemaking process and (2) to serve as the official
record in case of judicial review (except for interagency review
materials (section 307(d)(7)(A) of the Act)).
C. Clean Air Act Procedural Requirements
1. Administrator Listing--Under Section 111 of the Act,
establishment of standards of performance for nonmetallic mineral
processing plants was preceded by the Administrator's determination (40
CFR 60.16, 44 FR 49222, dated August 21, 1979) that these sources
contribute significantly to air pollution which may reasonably be
anticipated to endanger public health or welfare.
2. External Participation--In accordance with section 117 of the
Act, publication of the proposed revisions to the NSPS was preceded by
consultation with a national trade association composed of 570 member
companies and several States. The Administrator welcomes comments on
today's proposed revisions to the NSPS.
3. Economic Impact Assessment--Section 317 of the Act requires the
Administrator to prepare an economic impact assessment for any new
source standard of performance promulgated under Section 111(b) of the
Act. Today's proposed rulemaking is for clarifications and minor
revisions to the applicability, definitions, test methods and
procedures, and reporting and recordkeeping sections of the regulation.
No additional controls or other costs are being incurred as a result of
these revisions. The proposed revisions would result in a cost savings
for the industry (reduction of certain testing and recordkeeping and
reporting requirements) and the EPA and State/Local agencies (reduction
in staff time needed to review fewer reports). Therefore, no economic
impact assessment for the proposed revisions to the standards was
conducted.
D. Office of Management and Budget Reviews
1. Paperwork Reduction Act
As required by the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et
seq., an ``information collection request'' (ICR) document has been
prepared by the EPA (ICR No. ________) to reflect the revised/reduced
information requirements of the proposed revised regulation and a copy
may be obtained from Sandy Farmer, OPPE Regulatory Information Division
(2136), U.S. Environmental Protection Agency, 401 M St., S.W.,
Washington, DC 20460, or by calling (202) 260-2740.
Under the existing NSPS, the industry recordkeeping and reporting
burden and costs for an owner or operator of a new
[[Page 33419]]
nonmetallic mineral processing plant was estimated at 820 hours and
$27,100 for the first year of operation. The vast majority of the
estimated hours (670) were attributed to required Method 5 and Method 9
performance testing of affected facilities. Under the proposed revised
NSPS, a 1-hour Method 9 test is allowed in lieu of the Method 5 test
for individual, enclosed storage bins. In addition, the duration of
Method 9 tests for most fugitive emission sources and individual,
enclosed storage bin emission sources has been reduced from 3 hours to
1 hour. Also, plant owners or operators are allowed to submit one
notification of actual startup for several affected facilities in a
production line that begin operation the same day, in lieu of multiple
notifications for each affected facility. The proposed revised NSPS is
also waiving the General Provisions requirement to submit a
notification of anticipated startup for each affected facility.
Therefore, the revised annual estimated industry recordkeeping and
reporting burden and costs for an owner or operator of a new
nonmetallic mineral processing plant are 480 hours and $15,800, the
majority of which is due to performance testing. This represents an
estimated reduction in the average emission testing, recordkeeping and
reporting burden of 340 hours and $11,300 for a new plant in the first
year. This collection of information is estimated to have an average
annual government recordkeeping and reporting burden of 320 hours over
the first 3 years. Burden means the total time, effort, or financial
resources expended by persons to generate, maintain, retain or disclose
or provide information to or for a Federal agency. This includes the
time needed to review instructions; develop, acquire, install, and
utilize technology and systems for the purposes of collecting,
validating, and verifying information, processing and maintaining
information, and disclosing and providing information; adjust the
existing ways to comply with any previously applicable instructions and
requirements; train personnel to be able to respond to a collection of
information; search data sources; complete and review the collection of
information; and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR ch. 15.
Comments are requested on the reductions discussed in this
preamble. Send comments on the ICR to the Director, OPPE Regulatory
Information Division (2136), U.S. Environmental Protection Agency, 401
M St., SW., Washington, DC 20460. Include the ICR number in any
correspondence. The final rule will respond to any public comments on
the reduced information collection requirements contained in this
proposal.
2. Executive Order 12866 Review
Under Executive Order 12866 [58 FR 51735 (October 4, 1993)], the
EPA must determine whether the proposed regulatory action is
``significant'' and therefore subject to the Office of Management and
Budget (OMB) review and the requirements of this Executive Order to
prepare a regulatory impact analysis (RIA). 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 in 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.
Pursuant to the terms of Executive Order 12866, it has been
determined that the proposed revisions to the standards are ``not
significant'' because none of the above criteria are triggered by the
proposed revisions. The proposed revisions would decrease the cost of
complying with the revised standards.
3. Unfunded Mandates Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under Section 202 of the UMRA, the
EPA generally must prepare a written statement including a cost-benefit
analysis for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year.
The EPA has determined that today's action, which proposes
revisions and clarifications to the existing regulation, decreases the
cost of compliance with this proposed revised regulation. Therefore,
the requirements of the Unfunded Mandates Act do not apply to this
proposed action.
E. Regulatory Flexibility Act Compliance
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
requires Federal agencies to give special consideration to the impact
of regulations on small entities, which are small businesses, small
organizations, and small governments. The major purpose of the RFA is
to keep paperwork and regulatory requirements from getting out of
proportion to the scale of the entities being regulated, without
compromising the objectives of, in this case, the Act.
If a regulation is likely to have a significant economic impact on
a substantial number of small entities, the EPA may give special
consideration to those small entities when analyzing regulatory
alternatives and drafting the regulation. The impact of this regulation
upon small businesses was analyzed as part of the economic impact
analysis performed for the proposed standards for the nonmetallic
minerals processing plants (48 FR 39566, August 31, 1983). As a result
of this analysis, plants operating at small capacities were exempted
from the requirements of the standards. Today's proposed revisions to
the standards do not affect these exempted small plants; that is, they
continue to be exempted from the standards. In addition, the main
thrust of the proposed revisions to the standards is a reduction of the
reporting and recordkeeping requirements for owners and operators of
all affected facilities.
Pursuant to the provisions of 5 U.S.C. 605(b), I hereby certify
that this proposed rule will not have a significant economic impact on
a substantial number of small entities because the impact of the
proposed rule is not significant.
List of Subjects in 40 CFR Part 60
Environmental protection, Air pollution control, Nonmetallic
mineral processing plants, Reporting and recordkeeping requirements,
Intergovernmental relations.
Dated: June 17, 1996.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, it is proposed to amend 40
CFR part 60, subpart OOO as follows:
[[Page 33420]]
PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES
1. The authority citation for part 60 continues to read as follows:
Authority: 42 U.S.C. 7401, 7411, 7414, 7416, 7429 and 7601.
2. It is proposed to amend 60.670 by revising paragraphs (a) and
(d)(2), and adding paragraph (f) to read as follows:
Sec. 60.670 Applicability and designation of affected facility.
(a) Except as provided in paragraphs (b), (c), and (d) of this
section, the provisions of this subpart are applicable to the following
affected facilities in fixed or portable nonmetallic mineral processing
plants: each crusher, grinding mill, screening operation, bucket
elevator, belt conveyor, bagging operation, storage bin, enclosed truck
or railcar loading station. All facilities located in underground mines
are exempted from the provisions of this subpart. Except as required in
Sec. 60.676(g), the provisions of this subpart do not apply to wet
screening operations and associated conveyors downstream of the wet
screening operation in the production line up to, but not including,
the next crusher, grinding mill, or dry screening operation.
* * * * *
(d) * * *
(2) An owner or operator complying with this paragraph shall submit
the information required in Sec. 60.676(a).
* * * * *
(f) Table 1 of this subpart specifies the provisions of subpart A
that apply and those that do not apply to owners and operators of
affected facilities subject to this subpart.
2a. It is proposed to add Table 1 to Subpart OOO to read as
follows:
Table 1.--Applicability of Subpart A to Subpart OOO
------------------------------------------------------------------------
Applies to
Subpart A reference subpart OOO? Comment
------------------------------------------------------------------------
60.1 Applicability........... Yes.
60.2 Definitions............. Yes.
60.3 Units and abbreviations. Yes.
60.4 Address--(a)............ Yes.
(b)..................... Yes.
60.5 Deter. of construction Yes.
or modification.
60.6 Review of plans......... Yes.
60.7 Notification and Yes Except in (a)(2),
recordkeeping. report of
anticipated date of
initial startup is
not required
[60.676(g)].
60.8 Performance tests....... Yes. Except in (d), after
30 days notice for
an initially
scheduled perf.
test, any
rescheduled perf.
test requires 7 days
notice, not 30 days
[60.675(g)].
60.9 Availability of Yes.
information.
60.10 State authority........ Yes.
60.11 Compliance with Yes Except in (b), under
standards and maintenance certain conditions
requirements. [sec. 60.675 (c)(4)
and (c)(5)], Method
9 observation may be
reduced from 3 hrs.
to 1 hr.
60.12 Circumvention.......... Yes.
60.13 Monitoring requirements Yes.
60.14 Modification........... Yes.
60.15 Reconstruction......... Yes.
60.16 Priority list.......... Yes.
60.17 Incorporations by Yes.
reference.
60.18 General control device No Flares will not be
requirements. used to comply with
the emission limits.
60.19 General notification Yes.
and reporting requirements.
------------------------------------------------------------------------
3. It is proposed to amend Sec. 60.671 by adding in alphabetical
order the definition of Wet screening operation to read as follows:
Sec. 60.671 Definitions.
* * * * *
Wet screening operation means a screening facility designed and
operated at all times to remove unwanted material from the product by a
washing process whereby the product is completely saturated with water.
* * * * *
4. It is proposed to amend Sec. 60.672 by removing the word ``or''
after paragraph (a)(1), by revising paragraphs (b) and (c), and by
adding paragraphs (f) and (g) to read as follows:
Sec. 60.672 Standard for particulate matter.
(a) * * *
(1) Contain particulate matter in excess of 0.05 g/dscm.
(2) * * *
(b) On and after the sixtieth day after achieving the maximum
production rate at which the affected facility will be operated, but
not later than 180 days after initial startup as required under
Sec. 60.11, no owner or operator subject to the provisions of this
subpart shall cause to be discharged into the atmosphere from any
transfer point on belt conveyors or from any other affected facility
any fugitive emissions which exhibit greater than 10 percent opacity,
except as provided in paragraphs (c), (d), (e), (f), and (g) of this
section.
(c) On and after the sixtieth day after achieving the maximum
production rate at which the affected facility will be operated, but
not later than 180 days after initial startup as required under
Sec. 60.11, no owner or operator shall cause to be discharged into the
atmosphere from any crusher, at which a capture system is not used,
fugitive emissions which exhibit greater than 15 percent opacity.
* * * * *
(f) On and after the sixtieth day after achieving the maximum
production rate at which the affected facility will be operated, but
not later than 180 days after initial startup as required under
Sec. 60.11, no owner or operator shall cause to be discharged into the
atmosphere from any baghouse that only
[[Page 33421]]
controls emissions from an individual enclosed storage bin, stack
emissions which exhibit greater than 7 percent opacity.
(g) Owners or operators of multiple storage bins with combined
stack emissions shall comply with the emission limits in paragraph (a)
of this section.
5. It is proposed to amend Sec. 60.675 by revising paragraph (d)
and adding paragraph (g) to read as follows:
Sec. 60.675 Test methods and procedures.
* * * * *
(d) When determining compliance with the fugitive emissions
standard for any affected facility described under Sec. 60.672(b) and
where there are no individual readings greater than 10% opacity and
where there are no more than 3 readings of 10% opacity for the first
hour of testing of this affected facility and the opacity of stack
emissions from any baghouse that only controls emissions from an
individual, enclosed storage bin under Sec. 60.672(f), using Method 9,
the duration of the Method 9 observations shall be 1 hour (10 6-minute
averages).
* * * * *
(g) If, after 30 days notice for an initially scheduled performance
test, there is a delay (due to operational problems, etc.) in
conducting any rescheduled performance test required in this section,
the owner or operator of an affected facility shall submit to the
Administrator at least 7 days prior notice of any rescheduled
performance test.
6. Section 60.676 is amended by removing and reserving paragraph
(b), revising paragraph (f), redesignating paragraph (g) as paragraph
(j) and revising newly designated (j), and adding new paragraphs (g),
(h), and (i) to read as follows:
Sec. 60.676 Reporting and recordkeeping.
* * * * *
(b) [reserved]
* * * * *
(f) The owner or operator of any affected facility shall submit
written reports of the results of all performance tests conducted to
demonstrate compliance with the standards set forth in Sec. 60.672,
including reports of opacity observations made using Method 9 to
demonstrate compliance with Sec. 60.672 (b), (c), and (f), and reports
of observations using Method 22 to demonstrate compliance with
Sec. 60.672(e).
(g) The owner or operator of any wet screening operation and
associated conveyor shall keep a record describing the location of
these operations and shall submit an initial report describing the
location of these operations within 30 days. If, subsequent to the
initial report, any screening operation ceases to operate as wet
screening, the owner or operator shall submit a report of this change
and shall immediately comply with all of the requirements of the
regulation for an affected facility. These reports shall be submitted
within 30 days following such change.
(h) The Subpart A requirement under Sec. 60.7(a)(2) for
notification of the anticipated date of initial startup of an affected
facility shall be waived for owners or operators of affected facilities
regulated under this subpart.
(i) A notification of the actual date of initial startup of each
affected facility shall be submitted to the Administrator. For a
combination of affected facilities in a production line that begin
actual initial startup on the same day, a single notification of
startup may be submitted by the owner or operator to the Administrator.
The notification shall be postmarked within 15 days after such date and
shall include a description of each affected facility, equipment
manufacturer, and serial number of the equipment, if available.
(j) The requirements of this section remain in force until and
unless the Agency, in delegating enforcement authority to a State under
section 111 of the Act, approves reporting requirements or an
alternative means of compliance surveillance adopted by such States. In
that event, affected facilities within the State will be relieved of
the obligation to comply with the reporting requirements of this
section, provided that they comply with requirements established by the
State.
[FR Doc. 96-16012 Filed 6-26-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-15828 Regulations Under Section 382 of the Internal Revenue Code of 1986; Application of Section 382 in Short Taxable Years and With Respect to Controlled Groups
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33391-33393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15828]
=======================================================================
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[CO-26-96]
RIN 1545-AU33
Regulations Under Section 382 of the Internal Revenue Code of
1986; Application of Section 382 in Short Taxable Years and With
Respect to Controlled Groups
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Withdrawal of prior proposed rule, notice of proposed
rulemaking by cross-reference to temporary regulations, and notice of
public hearing.
-----------------------------------------------------------------------
SUMMARY: On January 29, 1991, proposed rules under section 382 of the
Internal Revenue Code of 1986 (relating to limitations on net operating
loss carryforwards and certain built-in losses following an ownership
change) were filed with the Office of the Federal Register (CO-77-90;
see 56 FR 4183; 1991-1 C.B. 749). The January, 1991, proposed rules are
withdrawn and these proposed rules are issued in their place.
In the Rules and Regulations section of this issue of the Federal
Register, the IRS is issuing temporary regulations relating to the
application of section 382 in short taxable years and with respect to
controlled groups. These regulations comply with the statutory
direction under section 382(m) to prescribe such regulations.
Additional rules amend certain aspects of Sec. 1.382-2T relating
principally to the separate tracking of the stock ownership of loss
corporations that cease to exist following a merger or similar
transactions.
The text of those temporary regulations also serves as the text of
these proposed regulations. This document also provides a notice of
public hearing on these proposed regulations.
DATES: Written comments must be received by September 25, 1996.
Outlines of topics to be discussed at the
[[Page 33392]]
public hearing scheduled for Thursday, October 17, 1996, at 10 a.m.
must be received by Thursday, September 26, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (CO-26-96), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (CO-26-96), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. The public hearing will be held in the NYU Classroom,
Room 2615, Internal Revenue Building, 1111 Constitution Avenue NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, David B.
Friedel, (202) 622-7550; concerning submissions and the hearing,
Evangelista Lee, (202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been reviewed and approved by the Office of Management
and Budget in accordance with the Paperwork Reduction Act (44 U.S.C.
3507) under the control number 1545-1434. Proposed Sec. 1.382-8(h)
requires a response from certain corporations that are members of
controlled groups. The IRS requires this information to assure
compliance with section 382(m)(5) so that the value of a loss
corporation that is a member of a controlled group is not taken into
account more than once in computing a section 382 limitation.
Comments concerning the collection of information should be sent to
the Office of Management and Budget, Attn: Desk Officer for the
Department of Treasury, Office of Information and Regulatory Affairs,
Washington, DC, 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, T:FP. Washington, DC, 20224.
Comments on the collection of information should be received by August
26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
Proposed Sec. 1.382-8(h) provides that the loss corporation must
file a statement signed by it and any other member of the controlled
group that elects to restore value to it indicating relevant
information regarding the election. The likely respondents and/or
recordkeepers are corporations that are members of certain controlled
groups. Responses to this collection of information are required to
obtain a benefit (relating to the restoration of value for section 382
purposes).
Books or records relating to this collection of information must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 875 hours. The estimated
annual burden per respondent varies from ten to thirty minutes,
depending on individual circumstances, with an estimated average of
fifteen minutes. Estimated number of respondents: 21,000. Estimated
frequency of responses: once every six years.
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26 CFR
Part 1) under section 382 of the Internal Revenue Code of 1986. Among
other changes, those regulations add temporary regulations Secs. 1.382-
5T and 1.382-8T, and amend Sec. 1.382-2T(f). The final regulations that
are proposed to be based on these proposed regulations would be added
to part 1 of title 26 of the Code of Federal Regulations. Those final
regulations would provide rules relating to limitations on net
operating loss carryforwards and certain built-in losses following an
ownership change under section 382.
For the text of these new temporary regulations, see TD 8679. The
preamble to the temporary regulations explains the regulations.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for Thursday, October 17, 1996,
at 10 a.m. in the NYU Classroom, Room 2615, Internal Revenue Building,
1111 Constitution Avenue NW., Washington, DC. Because of access
restrictions, visitors will not be admitted beyond the building lobby
more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments by September 25, 1996 and submit an outline of
the topics to be discussed and the time to be devoted to each topic
(signed original and eight (8) copies) by Thursday, September 26, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information: The principal author of the temporary
regulations is David B. Friedel of the Office of Assistant Chief
Counsel (Corporate), IRS. Other personnel from the IRS and Treasury
participated in their development.
Withdrawal of Notice of Proposed Rulemaking
Accordingly, under the authority of 26 U.S.C. 7805, the notice of
proposed rulemaking that was published on January 29, 1991 (56 FR 4183)
is withdrawn.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by
revising the entry for Sec. 1.382-2T and adding citations for
Secs. 1.382-5 and 1.382-8 in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
[[Page 33393]]
Section 1.382-2T also issued under 26 U.S.C. 382(g)(4)(C), (i),
(k)(1) and (6), (l)(3), (m), and 26 U.S.C. 383.* * *
Section 1.382-5 also issued under 26 U.S.C. 382(m).* * *
Section 1.382-8 also issued under 26 U.S.C. 382(m).* * *
Par. 2. Section 1.382-1 is amended by revising the entry for
Sec. 1.382-2(a)(1)(iv), and adding Secs. 1.382-5 and 1.382-8 to read as
follows:
Sec. 1.382-1 Table of contents.
* * * * *
Sec. 1.382-2 General rules for ownership change.
(a) * * *
(1) * * *
(iv) End of separate accounting for losses and credits of
distributor or transferor loss corporation.
* * * * *
Sec. 1.382-5 Section 382 limitation.
(a) Scope.
(b) Computation of value.
(c) Short taxable year.
(d) Successive ownership changes and absorption of a section 382
limitation.
(1) In general.
(2) Recognized built-in gains and losses.
(3) Effective date.
(e) Controlled groups.
(f) Effective date.
* * * * *
Sec. 1.382-8 Controlled groups.
(a) Introduction.
(b) Controlled group loss and controlled group with respect to a
controlled group loss.
(c) Computation of value.
(1) Reduction in value.
(2) Restoration of value.
(3) Reduction in value by the amount restored.
(4) Appropriate adjustments.
(5) Certain reductions in the value of members of a controlled
group.
(d) No double reduction.
(e) Definitions and nomenclature.
(1) Definitions in Sec. 1.382-2T.
(2) Controlled group.
(3) Component member.
(4) Predecessors and successors.
(f) Coordination between consolidated groups and controlled
groups.
(g) Examples.
(h) Time and manner of filing election to restore.
(1) Statement required.
(2) Revocation of election.
(3) Filing by component member.
(i) [Reserved]
(j) Effective date.
(1) In general.
(2) Transition rule.
(3) Corporations that are not members on January 29, 1991.
(4) Amended returns.
Par. 3. Section 1.382-2 is amended as follows:
Sec. 1.382-2 General rules for ownership change.
[The text of the proposed amendments to paragraphs (e)(2)(iv),
(f)(1)(i), (ii) and (iii), (f)(4), (f)(5), and (f)(18)(i) is the same
as the text of the amendments to paragraphs (e)(2)(iv), (f)(1)(i), (ii)
and (iii), (f)(4), (f)(5), and (f)(18)(i) of Sec. 1.382-2T, published
elsewhere in this issue of the Federal Register.]
Par. 4. Sections 1.382-5 and 1.382-8 are added to read as follows:
[The text of these proposed sections is the same as the text of
Secs. 1.382-5T and 1.382-8T published elsewhere in this issue of the
Federal Register.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-15828 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-U
Complete official Federal Register PDF
FR Doc. 96-15827 Regulations Under Section 1502 of the Internal Revenue Code of 1986; Limitations on Net Operating Loss Carryforwards and Certain Built-in Losses and Credits Following an Ownership Change of a Consolidated Group
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33395-33396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15827]
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DEPARTMENT OF THE TREASURY
26 CFR Part 1
[CO-25-96]
RIN 1545-AU32
Regulations Under Section 1502 of the Internal Revenue Code of
1986; Limitations on Net Operating Loss Carryforwards and Certain
Built-in Losses and Credits Following an Ownership Change of a
Consolidated Group
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Withdrawal of prior proposed rule, notice of proposed
rulemaking by cross-reference to temporary regulations, and notice of
public hearing.
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SUMMARY: On February 4, 1991, proposed rules under section 1502 were
published in the Federal Register (CO-132-87; see 56 FR 4194; 1991-1
C.B. 728). A public hearing was held on April 8, 1991. The IRS and
Treasury published Notice 91-27 (1991-2 C.B. 629) to advise of intended
modifications to the proposed regulations. The February, 1991, proposed
rules are withdrawn and these proposed regulations are issued in their
place.
In the Rules and Regulations section of this issue of the Federal
Register, the IRS is issuing temporary regulations regarding the
operation of sections 382 and 383 of the Internal Revenue Code of 1986
(relating to limitations on net operating loss carryforwards and
certain built-in losses and credits following an ownership change) with
respect to consolidated groups. The text of those temporary regulations
also serves as the text of these proposed regulations. This document
also provides a notice of public hearing on these proposed regulations.
DATES: Written comments must be received by September 25, 1996.
Outlines of topics to be discussed at the public hearing scheduled for
Thursday, October 17, 1996, at 10 a.m. must be received by Thursday,
September 26, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (CO-25-96), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (CO-25-96), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. The public hearing will be held in the NYU Classroom,
Room 2615, Internal Revenue Building, 1111 Constitution Avenue NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, David B.
Friedel, (202) 622-7550; concerning submissions and the hearing,
Evangelista Lee, (202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been reviewed and approved by the Office of Management
and Budget in accordance with the Paperwork Reduction Act (44 U.S.C.
3507) under the control number 1545-1218. The collection requires a
response from certain consolidated groups. The IRS requires the
information described in Proposed Sec. 1.1502-95(e) to assure that a
section 382 limitation is properly determined in cases of corporations
that cease to be members of a group.
Comments concerning the collection of information should be sent to
the Office of Management and Budget, Attn: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC, 20503, with copies to the Internal Revenue
Service, Attn: IRS Reports Clearance Officer, T:FP. Washington, DC,
20224. Comments on the collection of information should be received by
August 26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collection of information is in Proposed Sec. 1.1502-95(e).
That section permits an election with respect to the apportionment of a
group section 382 limitation to a departing member. A statement
evidencing the apportionment must be filed by the group and the
departing member indicating relevant information regarding the
apportionment. The likely respondents and/or recordkeepers are
corporations that are members of certain consolidated groups. Responses
to this collection of information are required to obtain a benefit
(relating to the section 382 limitation applicable to the departing
member(s)).
Books or records relating to this collection of information must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 380 hours. The estimated
annual burden per respondent varies from ten to thirty minutes,
depending on individual circumstances, with an estimated average of
fifteen minutes. Estimated number of respondents: 9,125. Estimated
frequency of responses: once every six years.
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26 CFR
Part 1) under section 1502, relating to limitations on net operating
loss carryforwards and certain built-in losses and credits following an
ownership change with respect to consolidated groups. The final
regulations that are proposed to be based on these proposed regulations
would be added to part 1 of title 26 of the Code of Federal
Regulations. Those final regulations would provide rules relating to
limitations on net operating loss carryforwards and certain built-in
losses following an ownership change.
For the text of these new temporary regulations, see TD 8678. The
preamble to the temporary regulations explains the regulations.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It is hereby certified that
these regulations do not have a significant economic impact on a
substantial number of small entities. This certification is based on
the fact that these regulations will primarily affect affiliated groups
of corporations that have elected to file consolidated returns, which
tend to be larger businesses. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is
not required. Pursuant to section 7805(f) of the Internal Revenue Code,
this notice of proposed rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small
[[Page 33396]]
Business Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for Thursday, October 17, 1996,
at 10 a.m. in the NYU Classroom, Room 2615, Internal Revenue Building,
1111 Constitution Avenue NW., Washington, DC. Because of access
restrictions, visitors will not be admitted beyond the building lobby
more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments by September 25, 1996 and submit an outline of
the topics to be discussed and the time to be devoted to each topic
(signed original and eight (8) copies) by Thursday, September 26, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting information: The principal author of the temporary
regulations is David B. Friedel of the Office of Assistant Chief
Counsel (Corporate), IRS. Other personnel from the IRS and Treasury
participated in their development.
Withdrawal of Notice of Proposed Rulemaking
Accordingly, under the authority of 26 U.S.C. 7805, the notice of
proposed rulemaking that was published on February 4, 1991 (56 FR 4194)
is withdrawn.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602 are proposed to be amended as
follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1502-91 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-92 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-93 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-94 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-95 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-96 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-98 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502.
Section 1.1502-99 also issued under 26 U.S.C. 382(m) and 26
U.S.C. 1502. * * *
Par. 2. Sections 1.1502-90 through 1.1502-99 are added to read as
follows:
Sec. 1.1502-90 Table of contents.
Sec. 1.1502-91 Application of section 382 with respect to a
consolidated group.
Sec. 1.1502-92 Ownership change of a loan group of a loss subgroup.
Sec. 1.1502-93 Consolidated section 382 limitation (or subgroup
section 382 limitation).
Sec. 1.1502-94 Coordination with section 382 and the regulations
thereunder when a corporation becomes a member of a consolidated
group.
Sec. 1.1502-95 Rules on ceasing to be a member of a consolidated
group (or loss subgroup).
Sec. 1.1502-96 Miscellaneous rules.
Sec. 1.1502-97 Special rules under section 382 for members under
the jurisdiction of a court in a title 11 or similar case.
[Reserved]
Sec. 1.1502-98 Coordination with section 383.
Sec. 1.1502-99 Effective dates.
[The text of the above proposed sections is the same as the text of
Secs. 1.1502-90T through 1.1502-99T published elsewhere in this issue
of the Federal Register.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-15827 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-U
Complete official Federal Register PDF
FR Doc. 96-15826 Consolidated ReturnsLimitations on the Use of Certain Losses and Deductions
[Federal Register Volume 61, Number 125 (Thursday, June 27, 1996)]
[Proposed Rules]
[Pages 33393-33395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15826]
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DEPARTMENT OF THE TREASURY
26 CFR Part 1
[CO-24-96]
RIN 1545-AU31
Consolidated Returns--Limitations on the Use of Certain Losses
and Deductions
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Withdrawal of prior proposed rule, notice of proposed
rulemaking by cross-reference to temporary regulations, and notice of
public hearing.
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SUMMARY: On January 29, 1991, proposed rules under section 1502 were
filed with the Office of the Federal Register (CO-78-90; see 56 FR
4228; 1991-1 C.B. 757). A public hearing was held on April 8, 1991. The
IRS and Treasury published Notice 91-27 (1991-2 C.B. 629) to advise of
intended modifications to the proposed regulations. The January, 1991,
proposed rules are withdrawn, and these proposed rules are issued in
their place.
In the Rules and Regulations section of this issue of the Federal
Register, the IRS is issuing temporary regulations relating to the
carryover and carryback of losses to consolidated and separate return
years. The text of those temporary regulations also serves as the text
of these proposed regulations. This document also provides a notice of
public hearing on these proposed regulations.
DATES: Written comments must be received by September 25, 1996.
Outlines of topics to be discussed at the public hearing scheduled for
Thursday, October 17, 1996, at 10 a.m. must be received by Thursday,
September 26, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (CO-24-96), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (CO-24-96), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. The public hearing will be held in the NYU Classroom,
Room 2615, Internal Revenue Building, 1111 Constitution Avenue NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, David B.
Friedel, (202) 622-7550; concerning submissions and the hearing,
Evangelista Lee, (202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been reviewed and approved by the Office of Management
and Budget in accordance with the Paperwork Reduction Act (44 U.S.C.
3507) under the control number 1545-1237. Section 1.1502-21(b)(3)
requires a response from certain consolidated groups. The IRS requires
the information to assure that an election to relinquish a carryback
period is properly documented.
Comments concerning the collection of information should be sent to
the Office of Management and Budget, Attn: Desk Officer for the
Department of Treasury, Office of Information and Regulatory Affairs,
Washington, DC, 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, T:FP. Washington, DC, 20224.
Comments on the collection of information should be received by August
26, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collection of information is in Proposed Sec. 1.1502-21(b)(3).
That section permits an election to relinquish a carryback period with
respect to a consolidated net operating loss. The common parent of the
group files the statement evidencing the election with the income tax
return of the group. This information is required by the IRS to assure
that an election to relinquish a carryback period is properly
documented. The likely respondents
[[Page 33394]]
and/or recordkeepers are certain consolidated groups of corporations.
Responses to this collection of information are required to obtain a
benefit (relating to the carryover of losses which would otherwise be
carried back).
Books or records relating to this collection of information must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 1,000 hours. The estimated
annual burden per respondent varies from five to thirty minutes,
depending on individual circumstances, with an estimated average of ten
minutes. Estimated number of respondents: 6,000. Estimated annual
frequency of responses: 1.
Background
Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26 CFR
par. 1) relating to deductions and losses of members. The temporary
amendments concern the method for computing the limitations with
respect to separate return limitation year (SRLY) losses. They also
concern the rules relating to carryover and carryback of losses to
consolidated and separate return years and to the built-in deductions
rules. The final regulations that are proposed to be based on these
proposed regulations would be added to part 1 of title 26 of the Code
of Federal Regulations. Those final regulations would provide rules for
computing the limitations with respect to separate return limitation
year (SRLY) losses. They also concern the rules relating to carryover
and carryback of losses to consolidated and separate return years and
to the built-in deductions rules.
For the text of these new temporary regulations, see TD 8677. The
preamble to the temporary regulations explains the regulations.
Proposed Effective Date
For dates of application and special transition rules, see the
discussion of Effective Dates under SUPPLEMENTARY INFORMATION relating
to the temporary regulations, published elsewhere in this issue of the
Federal Register.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It is hereby certified that
these regulations do not have a significant economic impact on a
substantial number of small entities. This certification is based on
the fact that these regulations will primarily affect affiliated groups
of corporations that have elected to file consolidated returns, which
tend to be larger businesses. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is
not required. Pursuant to section 7805(f) of the Internal Revenue Code,
this notice of proposed rulemaking will be submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for Monday, September 16, 1996,
at 10 a.m. in the NYU Classroom, Room 2615, Internal Revenue Building,
1111 Constitution Avenue NW., Washington, DC. Because of access
restrictions, visitors will not be admitted beyond the building lobby
more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments by September 25, 1996 and submit an outline of
the topics to be discussed and the time to be devoted to each topic
(signed original and eight (8) copies) by Thursday, September 26, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these regulations is David B. Friedel,
Office of Assistant Chief Counsel (Corporate), IRS. However, other
personnel from the IRS and Treasury Department participated in their
development.
Withdrawal of Notice of Proposed Rulemaking
Accordingly, under the authority of 26 U.S.C. 7805, the notice of
proposed rulemaking that was published on January 29, 1991 (56 FR 4228)
is withdrawn.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for Part 1 is amended in part
by adding citations in numerical order to read as follows:
Authority: 26 U.S.C. 7805
* * * * *
Section 1.1502-15 also issued under 26 U.S.C. 1502.
* * * * *
Section 1.1502-21 also issued under 26 U.S.C. 1502.
Section 1.1502-22 also issued under 26 U.S.C. 1502.
Section 1.1502-23 also issued under 26 U.S.C. 1502.
Section 1.1502-79 also issued under 26 U.S.C. 1502.
Section 1.1502-15A also issued under 26 U.S.C. 1502.
Section 1.1502-21A also issued under 26 U.S.C. 1502.
Section 1.1502-22A also issued under 26 U.S.C. 1502.
Section 1.1502-23A also issued under 26 U.S.C. 1502.
Section 1.1502-41A also issued under 26 U.S.C. 1502.
Section 1.1502-79A also issued under 26 U.S.C. 1502.
* * * * *
Par. 2. Section 1.1502-15 is added to read as follows:
Sec. 1.1502-15 SRLY limitation on built-in losses.
[The text of this proposed section is the same as the text of
Sec. 1.1502-15T published elsewhere in this issue of the Federal
Register.]
Par. 3. Section 1.1502-21 is added to read as follows:
Sec. 1.1502-21 Net operating losses.
[The text of this proposed section is the same as the text of
Sec. 1.1502-21T published elsewhere in this issue of the Federal
Register.]
Par. 4. Section 1.1502-22 is added to read as follows:
Sec. 1.1502-22 Consolidated capital gain and loss.
[The text of this proposed section is the same as the text of
Sec. 1.1502-22T published elsewhere in this issue of the Federal
Register.]
[[Page 33395]]
Par. 5. Section 1.1502-23 is added to read as follows:
Sec. 1.1502-23 Consolidated net section 1231 gain or loss.
[The text of this proposed section is the same as the text of
Sec. 1.1502-23T published elsewhere in this issue of the Federal
Register.]
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-15826 Filed 6-26-96; 8:45 am]
BILLING CODE 4830-01-U
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