Proposed Rule To Implement the 8-Hour Ozone National Ambient Air Quality Standard

[Federal Register: June 2, 2003 (Volume 68, Number 105)]
[Proposed Rules]
[Page 32801-32870]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn03-35]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 51
[FRL-7504-2]
RIN: 2060-AJ99

Proposed Rule To Implement the 8-Hour Ozone National Ambient Air
Quality Standard

AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rulemaking.

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SUMMARY: In this document, EPA is proposing two discrete frameworks to
implement the 8-hour ozone national ambient air quality standard (NAAQS
or standard). We are proposing this rule so that States may know which
statutory requirements apply for purposes of developing State
implementation plans (SIPs) under the Clean Air Act (CAA) to implement
the 8-hour ozone NAAQS. The intended effect of the rule is to provide
certainty to States regarding their planning obligations such that
States may begin SIP development upon designation and classification
for the 8-hour standard. Following are the principles that guided us in
the development of these frameworks to implement the 8-hour ozone
standard: To protect public health, provide incentives for expeditious
attainment of the 8-hour ozone standard and avoid incentives for delay;
to provide reasonable but expeditious attainment deadlines; to have a
basic, straightforward structure that can be communicated easily; to
provide flexibility to States and EPA on implementation approaches and
control measures while ensuring that the implementation strategy is
supported by the CAA; to emphasize national and regional measures to
help areas come into attainment and, where possible, reduce the need
for those local controls that are more expensive than national and
regional measures; and to provide a smooth transition from
implementation of the 1-hour ozone NAAQS to implementation of the 8-
hour ozone NAAQS. In addition, we intend to clarify the role of Tribes
in implementing the 8-hour ozone NAAQS.
The two frameworks we are proposing are based on two different
classification options, which affect the requirements that would apply
to individual nonattainment areas. We prefer classification option 2
because it provides more flexibility to States and Tribes as they
address their unique air quality problems. This is likely to allow some
areas to attain the standard at a lower cost. However, we are also
soliciting comments on option 1, in part because it is less complex and
may be easier to communicate, as well as on other ways to classify
nonattainment areas.
This proposed rulemaking does not propose to establish attainment/
nonattainment designations nor does it address the principles that will
be considered in the designation process; we have already issued
guidance on the principles that States should consider in making
designation recommendations, and we will issue further guidance
separate from this rulemaking if appropriate. Finally, we are not
taking comment at this time on appropriate tests under the 8-hour
standard for demonstrating conformity of Federal actions to SIPs. We
intend to conduct a separate rulemaking on this issue prior to
designating areas under the 8-hour ozone standard.
In this proposal, we do not yet propose regulatory text, primarily
because a number of options are being proposed for many of the
implementation elements, and we believe it would be better to obtain
public comment on the options conceptually first. After we receive and
consider comment on the proposed options, but before publishing a final
rule, we will issue proposed regulatory text.

DATES: Comments must be received on or before August 1, 2003. We have
scheduled public hearings on this proposal for June 17, 2003, June 19,
2003, and June 27, 2003.

ADDRESSES: All comments should be submitted to Docket #OAR
2003-0079. When mailing documents, comments, or requests to the EPA
Docket Center through the U.S. Postal Service, please use the following
address: U.S. Environmental Protection Agency, EPA West (Air Docket),
1200 Pennsylvania Avenue, NW., Room: B108; Mail Code: 6102T,
Washington, DC 20460. To mail comments or documents through a courier
service, the mailing address is: EPA Docket Center (Air Docket), U.S.
Environmental Protection Agency, 1301 Constitution Avenue, NW., Room:
B108; Mail Code: 6102T, Washington, DC 20460. The normal business hours
are 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal
holidays. Comments can be submitted to the address above, by fax (202)
566-1741, or by e-mail to A-and-R-Docket@epa.gov. The voice telephone
number is (202) 566-1742. In addition, we have placed a variety of
materials regarding implementation options on the Web site:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr. While this Web site is
not an exact duplicate of the Air Docket, we have placed materials that
we have generated and materials that have been submitted in an electronic
format on the Web site. We request that comments be submitted by e-mail
to facilitate expeditious distribution within EPA and placement on the
Web site.
The public hearings will be held from 8:30 a.m. to 5 p.m. at the
following locations: Marriott Dallas/Ft. Worth Airport North, 8440
Freeport Parkway, Irving, Texas, 75063, on June 17, 2003; Palace Hotel,
2 New Montgomery Street, San Francisco, California 94105, on June 19,
2003; and Holiday Inn Select Old Town Alexandria, 480 King Street,
Alexandria, Virginia 22314, on June 27, 2003. Persons wishing to speak
at the public hearings should contact: Ms. Barbara Bauer, E. H. Pechan,
at phone number (919) 493-3144 ext. 188 or by e-mail at
barbara.bauer@pechan.com. Oral testimony may be limited to 3 to 5
minutes depending on the number of people who sign up to speak.
Commenters may also supplement their oral testimony with written
comments. The hearing will be limited to the subject matter of the
proposal, the scope of which is discussed below. The public hearing
schedule, including lists of speakers, will be posted on EPA's Web site
at http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr. A verbatim transcript
of the hearing and written statements will be made available for
copying during normal working hours at the Office of Air and Radiation
Docket and Information Center at the above address listed for
inspection of documents.

FOR FURTHER INFORMATION CONTACT: Mr. John Silvasi, Office of Air
Quality Planning and Standards, U.S. Environmental Protection Agency,
Mail Code C539-02, Research Triangle Park, NC 27711, phone number (919)
541-5666 or by e-mail at: silvasi.john@epa.gov or Ms. Denise Gerth,
Office of Air Quality Planning and Standards, U.S. Environmental
Protection Agency, Mail Code C539-02, Research Triangle Park, NC 27711,
phone number (919) 541-5550 or by e-mail at: gerth.denise@epa.gov.

SUPPLEMENTARY INFORMATION: This notice uses a number of acronyms and
terms that are defined when first used. A list appears in appendix D
for convenience.
In a number of places, this document refers to time periods (e.g.,
so many years) after designation or after the designation date. By
this, we mean the effective date of designation by EPA.

[[Page 32803]]

Outline

I. What is the 8-hour ozone problem and EPA's strategy for
addressing it?
A. What is the ozone standard and the health problem?
B. What is the geographic extent of the 8-hour ozone problem?
C. What is EPA's overall strategy for reducing ozone pollution?
1. The SIP system
2. National rule
D. What is the relationship between the SIP system proposed and
the proposed Clear Skies legislation?
II. What is the background on the 8-hour ozone standard?
A. What is the legal background?
B. What technical work influenced EPA's implementation approach?
III. How did EPA obtain stakeholder input for this effort?
IV. What is EPA's schedule for issuing an 8-hour ozone
implementation rule?
V. In short, what does this proposed rulemaking contain?
A. Classification of areas
B. Attainment deadlines
C. Transition from the 1-hour to the 8-hour standard
D. Mandatory measures
E. Consequences of failure to attain
F. Interstate transport
G. Modeling and attainment demonstration
H. Reasonable Further Progress (RFP)
1. Requirement for 15 percent VOC reductions for moderate and
above areas during the first 6 years after the base year
2. Base year
I. Reasonably available control measures/Reasonably available
control technology (RACM/RACT)
J. Conformity
K. New Source Review
VI. What are EPA's proposed frameworks for implementing the 8-hour
ozone standard?
A. How will EPA reconcile subparts 1 and 2? How will EPA
classify nonattainment areas for the 8-hour standard? What
attainment dates would apply?
1. Statutory framework and Supreme Court decision
2. EPA's development of options
3. Options for classification
4. Under classification option 2, how would EPA classify subpart
1 areas?
5. Rationale for regulating all ``gap'' areas under subpart 1
only
6. Proposed incentive feature
7. Other options EPA considered
8. Implications for the options
9. Other considerations
B. How will EPA treat attainment dates and other dates including
SIP submittal dates for the 8-hour ozone standard?
1. Background
2. How will EPA address the provision regarding 1-year
extensions?
3. How do attainment dates apply to Indian country?
4. How will EPA establish attainment dates for areas classified
as marginal under the ``incentive'' feature proposed under the
classification section or areas covered under subpart 1 with a
requested attainment date of 3 years or less after the designation
date?
C. How will EPA implement the transition from the 1-hour to the
8-hour standard in a way to ensure continued momentum in States'
efforts toward cleaner air?
1. Background
2. When will EPA revoke the 1-hour standard?
3. What obligations should continue to apply as an area begins
to implement the 8-hour ozone NAAQS and what obligations should no
longer apply?
4. Does the requirement for continued implementation of the
obligations addressed above expire at some point?
5. How will EPA ensure that the public knows which areas must
continue provisions under the 1-hour SIPs if EPA revokes the 1-hour
standard?
D. Should prescribed requirements of subpart 2 apply in all 8-
hour nonattainment areas classified under subpart 2, or is there
flexibility in application in certain narrowly defined
circumstances?
1. Background
2. Approach being proposed
3. Other approaches considered
E. What is the required timeframe for obtaining emissions
reductions to ensure attainment by the attainment date?
F. How will EPA address long-range transport of ground-level
ozone and its precursors when implementing the 8-hour ozone
standard?
1. Background
2. EPA's anticipated approach
3. Other concerns about transport
4. Other options considered
G. How will EPA address transport of ground-level ozone and its
precursors for rural nonattainment areas, multi-State nonattainment
areas, areas affected by intrastate transport, and international
transport?
1. Rural transport nonattainment areas
2. Multi-state nonattainment areas
3. Intrastate transport
4. International transport
5. Additional ways of addressing transport
6. State-Tribal transport
H. How will EPA address requirements for modeling and attainment
demonstration SIPs when implementing the 8-hour ozone standard?
1. Multi-pollutant assessments (one-atmosphere modeling)
2. Areas with early attainment dates
3. Areas with later attainment dates
4. Modeling guidance
5. Mid-Course review
I. What requirements for RFP should apply under the 8-hour ozone
standard?
1. Background
2. Proposed features in general
3. For subpart 2 areas, should the initial 15 percent RFP
requirement be limited to VOC emissions?
4. What baseline year should be required for the emission
inventory for the RFP requirement?
5. Should moderate areas be subject to prescribed additional RFP
requirements prior to their attainment date?
6. What is the timing of the submission of the ROP plan?
7. How should CAA restrictions on creditable measures be
interpreted? Which national measures should count as generating
emissions reductions credit toward RFP requirements?
8. For areas covered by subpart 1 instead of subpart 2, how
should the RFP requirement be structured?
9. How should the RFP requirements be implemented for areas
designated for the 8-hour ozone standard that entirely or in part
encompass an area that was designated nonattainment for the 1-hour
ozone standard?
10. Will EPA's ``Clean Data Policy'' continue to apply under the
8-hour standard for RFP?
11. How will RFP be addressed in Tribal areas?
12. How will RFP targets be calculated?
J. Are contingency measures required in the event of failure to
meet a milestone or attain the 8-hour ozone NAAQS?
1. Background
2. Proposal
K. What requirements should apply for RACM and RACT for 8-hour
ozone nonattainment areas?
1. Background
2. Proposed approach for RACT in general for areas covered under
subpart 2
3. Proposed approach for RACT in general for areas covered under
subpart 1
4. Proposed approach for previous source-specific major source
RACT determinations
5. Proposed approach for NO_X RACT determinations in
areas affected by the NO_X SIP Call
6. Proposed approach for NO_X as an ozone precursor
7. Proposed approach for RACM
8. Proposed submission date for RACT and RACM requirements
L. How will the section 182(f) NO_X provisions be
handled under the 8-hour ozone standard?
M. What aspects of transportation conformity and the 8-hour
ozone standard are addressed in this proposal?
1. What is transportation conformity?
2. Why is EPA discussing transportation conformity in this
proposed rulemaking?
3. Are any changes being made to transportation conformity in
this proposed rulemaking?
4. When does transportation conformity apply to 8-hour ozone
nonattainment areas?
5. How does the 1-year grace period apply in metropolitan areas?
6. How does the 1-year grace period apply in ``donut'' areas?
7. How does the 1-year grace period apply in isolated rural
areas?
8. Does conformity apply for the 1-hour ozone standard once the
1-hour ozone standard is revoked?
9. What are EPA's plans for amending the conformity rule to
address the 8-hour ozone standard?
10. What impact will the implementation of the 8-hour ozone
standard have on a State's Transportation Conformity SIP?
11. What other parts of this proposal could affect
transportation conformity determinations?

[[Page 32804]]

N. What requirements for General Conformity should apply to the
8-hour ozone standard?
1. What is the purpose of the General Conformity regulations?
2. How is the General Conformity program currently structured?
3. Who runs the General Conformity program?
4. How does an agency demonstrate conformity?
5. General Conformity regulation revisions for the 8-hour ozone
standard
6. How does the 1-year grace period apply to General Conformity
determinations?
O. How should the NSR Program be implemented under the 8-hour
ozone NAAQS?
1. Background
2. Nonattainment NSR under the 8-hour ozone standard
3. Under what circumstances is a transitional program needed
during the interim period?
4. Elements of the Appendix S transitional program
5. Will a State be required to assure that the increased
emissions from a new major source do not cause or contribute to a
violation in a nearby nonattainment area before it issues a
preconstruction permit under Appendix S?
6. What happens at the end of the interim period?
7. What is the legal basis for providing this transitional
program?
8. How should the NSR requirements be implemented for new 8-hour
ozone areas that encompass the old 1-hour ozone nonattainment areas
after EPA revokes the 1-hour ozone standard?
9. NSR option to encourage development patterns that reduce
overall emissions--Clean Air Development Communities
10. Tribal concerns
P. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for
ozone, PM_2.5, and regional haze?
1. Could an area's 8-hour ozone strategy affect its
PM_2.5 and/or regional haze strategy?
2. What guidance has EPA provided regarding ozone,
PM_2.5 and regional haze interaction?
3. What is EPA proposing?
Q. What emission inventory requirements should apply under the
8-hour ozone NAAQS?
R. What guidance should be provided that is specific to Tribes?
S. What are the requirements for Ozone Transport Regions (OTRs)
under the 8-hour ozone standard?
T. Are there any additional requirements related to enforcement
and compliance?
U. What requirements should apply to emergency episodes?
V. What ambient monitoring requirements will apply under the 8-
hour ozone NAAQS?
W. When will EPA require 8-hour attainment demonstration SIP
submissions?
1. Background
2. Option being proposed
VII. Proposal of integrated frameworks using various options
VIII. Other Considerations
A. Will EPA be contemplating incentives for areas that want to
take early action for reducing ozone under the 8-hour standard?
1. What are the Ozone Flex Guidelines for the 1-hour ozone
NAAQS?
2. What is the ``Early Action Compact'' for implementing the 8-
hour ozone NAAQS?
3. What is EPA's response to the Texas ``Early Action Compact?''
4. Did EPA consider other options for incentives for areas that
take early actions for reducing ozone?
5. What is the difference between the early action compact
program and the transitional NSR program?
B. Clarification of how transition from 1-hour to 8-hour
standard will work for early action compact areas, for conformity,
and for NSR and PSD.
C. How will EPA's proposal affect funding under the Congestion
Mitigation and Air Quality Improvement (CMAQ) Program?
D. Are there any environmental impact differences between the
two major classification options being proposed?
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
X. Appendices
Appendix A--Comparison of Subpart 1 & 2 Requirements
Appendix B--``Applicable Requirements'' under Subpart 2
Appendix C--Comparison of Transitional NSR and Early Action
Compact Programs
Appendix D--Glossary of Terms and Acronyms
Appendix E--Application of Conformity, New Source Review and
Prevention of Significant Deterioration under Various Transition
Cases

I. What Is the 8-Hour Ozone Problem and EPA's Strategy for Addressing
it?

A. What Is the Ozone Standard and the Health Problem?

Ground-level ozone pollution is formed by the reaction of volatile
organic compounds (VOC) and nitrogen oxides (NO_X) in the
atmosphere in the presence of sunlight. These two pollutants, often
referred to as ozone precursors, are emitted by many types of pollution
sources, including on-road and off-road motor vehicles and engines,
power plants and industrial facilities, and smaller ``area'' sources.
In 1979, we promulgated the 0.12 ppm, 1-hour ozone standard, (44 FR
8202, February 8, 1979). On July 18, 1997, we promulgated a revised
standard of 0.08 ppm, measured over an 8-hour period (i.e., the 8-hour
standard). In general, the 8-hour standard is more protective of public
health and more stringent than the 1-hour standard, and there are more
areas that do not meet the 8-hour standard than there are areas that do
not meet the 1-hour standard. At the time that we promulgated the
revised 8-hour standard, we also promulgated a rule providing for the
phase-out of the 1-hour standard, (62 FR 38856 (codified at 50.9(b)).
That rule provided that the 1-hour standard would no longer apply to an
area once we determined that the area had attained the 1-hour
standard.\1\
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\1\ Due to the continued litigation over the 8-hour standard,
EPA revised 40 CFR 50.9(b) in July 2000, to limit its authority to
revoke the 1-hour standard until such time as the 8-hour standard
became fully enforceable and no longer subject to legal challenge.
(65 FR 45182, July 20, 2000).
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Ozone can irritate the respiratory system, causing coughing, throat
irritation, and/or uncomfortable sensation in the chest. Ozone can
reduce lung function and make it more difficult to breathe deeply, and
breathing may become more rapid and shallow than normal, thereby
limiting a person's normal activity. Ozone also can aggravate asthma,
leading to more asthma attacks that require a doctor's attention and/or
the use of additional medication. In addition, ozone can inflame and
damage the lining of the lungs, which may lead to permanent changes in
lung tissue, irreversible reductions in lung function, and a lower
quality of life if the inflammation occurs repeatedly over a long time
period (months, years, a lifetime). People who are particularly
susceptible to the effects of ozone include children and adults who are
active outdoors, people with respiratory disease, such as asthma, and
people with unusual sensitivity to ozone.
More detailed information on health effects of ozone can be found
at the following Web site: http://www.epa.gov/ttn/naaqs/standards/ozone/
s_o3_index.html.
The focus of today's proposed rule is implementation of the revised
8-hour ozone air quality standard issued by EPA in 1997, including the
transition from implementation of the 1-hour

[[Page 32805]]

standard to implementation of the 8-hour standard.

B. What Is the Geographic Extent of the 8-hour Ozone Problem?

Although the nation as a whole has made significant progress since
1970 in reducing ground-level ozone pollution (sometimes called
``smog''), ozone remains a significant public health concern. At
present, unhealthy ozone levels--exceeding the 8-hour standard--occur
over wide geographic areas including most of the nation's major
population centers. These areas include much of the eastern half of the
United States and large areas of California.
The geographic extent of the 8-hour ozone problem is expected to
shrink between now and 2020 due to existing regulatory requirements. We
estimate that existing control measures (e.g., Federal motor vehicle
standards, EPA's regional NO_X rule known as the
NO_X SIP Call, and local measures already adopted under the
CAA) will dramatically reduce the number of areas \2\ not attaining the
8-hour ozone standard--from 122 in 2000 (using data from 1998, 1999,
and 2000), to 51 in 2007, to 30 in 2010 and 13 in 2020. See Table 1
below.
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\2\ See discussion below on how EPA has developed hypothetical
nonattainment areas for purposes of analysis of this proposed
rulemaking and options. Modeling analyses for projections to 2007
are found in: U.S. Environmental Protection Agency, Office of Air
and Radiation, Technical Support Document for the Heavy-Duty Engine
and Vehicle Standards and Highway Diesel Fuel Sulfur Control
Requirements: Air Quality Modeling Analyses. EPA420-R-00-028.
December 2000. Located at: http://www.epa.gov/otaq/regs/hd2007/frm/
r00028.pdf.
Information on the modeling analyses for projections to 2010 and
2020 are found in ``Technical Addendum: Methodologies for the
Benefit Analysis of the Clear Skies Initiative.'' September 2002.
This can be found at the following Web site: http://www.epa.gov/
clearskies/Tech_adden.PDF. Results are summarized in ``Human Health
and Environmental Benefits Achieved by the Clear Skies Initiative.''
July 1, 2002. http://www.epa.gov/clearskies/CSIhealth_env_benefits7-01
.ppt.
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The total population living in areas that we have hypothesized may
be designated nonattainment is also projected to decline over time--
from 178 million in 2000, to 143 million in 2007, to 116 million in
2010, to 82 million in 2020. However, the number of people living in
areas with excessive ozone levels remains high for the foreseeable
future because existing control programs alone will not eliminate
unhealthy ozone levels in some of the nation's largest population
centers.
Based on information in EPA's Trends Report issued in 2002,\3\ over
the past 20 years, national ambient ozone levels decreased 18 percent
based on 1-hour data and 11 percent based on 8-hour data. Between 1982
and 2001, emissions of VOCs decreased 16 percent. During that same time
period, emissions of NO_X increased 9 percent. For the period
1982 to 2001, the downward trend in 1-hour ozone levels seen nationally
is reflected in every broad geographic area in the country. The
Northeast and West exhibited the most substantial improvement over the
last 20 years, while the South and North Central regions experienced
the least rapid progress in lowering ozone concentrations. Similar to
the 1-hour ozone trends, all regions experienced improvements in 8-hour
ozone levels between 1982 and 2001 except the North Central region,
which showed little change during this period.
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\3\ Latest Findings on National Air Quality--2001 Status and
Trends. U.S. EPA; Office of Air Quality Planning and Standards;
Emissions, Monitoring and Analysis Division; Research Triangle Park,
NC. September 2002. EPA 454/K-02-001. Found at: http://www.epa.gov/
airtrends/ozone.html.

Table 1.--8-Hour Ozone Hypothetical Nonattainment Areas and Population
[Projected by modeling]
------------------------------------------------------------------------
2000 2007 2010 2020
------------------------------------------------------------------------
Number of areas--base case 122 51 30 13
(without Clear Skies Act
controls)..................
Number of areas with Clear 122 51 24 12
Skies Act controls.........
Population (millions)--base 178 143 116 82.4
case (without Clear Skies
Act controls)..............
Population (millions)--with 178 143 103 82.1
Clear Skies Act controls...
------------------------------------------------------------------------
Note: The number of areas \1\ projected to each future year is based on
modeled projections without consideration of application of new
emission control measures that would be required under the SIP process
for areas designated nonattainment for the 8-hour NAAQS.
\1\ See discussion below on how we have developed hypothetical
nonattainment areas for purposes of analysis of this proposed
rulemaking and options.

C. What Is EPA's Overall Strategy for Reducing Ozone Pollution?

Our overall strategy for achieving the 8-hour ozone standard is
based on the structure outlined in the CAA. The CAA gives both the
States and EPA important roles in implementing national air quality
standards.
States have primary responsibility for developing and implementing
SIPs that contain local and in-State measures needed to achieve the air
quality standards in each area. We assist States by providing technical
assistance and guidance, including guidance on control measures. In
addition, we set national emissions limits for sources such as motor
vehicles. Where upwind sources contribute to downwind problems in other
States, we can also ensure that the upwind States address these
contributing emissions or regulate them federally, where a State fails
to act to address them.
We intend to work closely with States and Tribes to use an
appropriate combination of national, regional and local pollution
reduction measures to meet the standard expeditiously and in a cost-
effective manner.
1. The SIP System
States use the SIP process to identify the emissions sources that
contribute to the nonattainment problem in a particular area, and to
select the emissions reductions measures most appropriate for that
area, considering costs and a variety of local factors. Under the CAA,
SIPs must ensure that areas reach attainment as expeditiously as
practicable. However, other programs, such as Federal controls, also
provide reductions, and States may rely on those reductions when
developing their attainment plans.
The SIP system for nonattainment areas is an important component of
the CAA's overall strategy for meeting the 8-hour ozone standard, but
it is not the only component. As noted below, the CAA also requires or
anticipates the use of national rules that will reduce emissions and
help achieve cleaner air.
2. National Rules
For the States to be successful in developing local plans showing
attainment of standards, EPA must do its part to control the sources
that are

[[Page 32806]]

more effectively and efficiently controlled at the national level and
to ensure that interstate transport is addressed through SIPs or other
means. We already have issued key national and regional control
requirements for motor vehicles, power plants and other sources that
will enable many areas to meet the 8-hour standard in the near term.
Current emissions standards for new cars, trucks and buses are
reducing motor vehicle emissions of VOCs (sometimes referred to as
hydrocarbons) and NO_X as older vehicles are retired. Other
rules are reducing emissions from several categories of non-road
engines. EPA's Tier 2 motor vehicle emission standards, together with
the associated sulfur in gasoline requirements, will provide additional
benefits nationally within the time period of many 8-hour ozone
nonattainment areas' anticipated attainment dates (65 FR 6698, February
10, 2000). Also, we published the heavy duty diesel rule on January 18,
2001 (66 FR 5002), which will contribute to reductions needed to meet
the 8-hour ozone standard in areas with later attainment dates.
In the eastern U.S., dramatic reductions in NO_X
emissions from power plants and large industrial sources will occur by
May 2004 under our rules to reduce interstate transport of ozone
pollution in the East. These rules are the NO_X SIP Call,
published October 27, 1998 (63 FR 57356), and the Section 126 Rule,
published January 18, 2000 (65 FR 2674).
Also, under the requirements of section 183(e) of the CAA, we are
contemplating either Federal rules or control techniques guidelines
(CTGs) for controlling VOCs from 15 additional categories of consumer
and commercial products. The CTGs assist States in determining required
controls for facilities in nonattainment areas. The 15 categories are
in addition to 6 CTGs already published under this provision of the CAA
(consumer products, architectural coatings, automobile refinishing
coatings, aerospace coatings, wood furniture coatings, and shipbuilding
and ship repair coatings). These additional rules or CTGs are expected
to be completed over the next few years.
Control measures targeting hazardous air pollutants (HAPs) also
result in control of VOCs and, in some cases, NO_X. Under
section 112 of the CAA, EPA was required to identify and list
categories of industrial facilities that emit significant quantities of
one or more of 188 HAPs and establish maximum achievable control
technology (MACT) standards for each category of sources. Because most
of the organic HAPs are also VOCs, in many cases, control of organic
HAP emissions also achieves reductions in VOC emissions.
Rules for most of the listed MACT categories have been promulgated.
Although many of the earlier promulgated rules have already resulted in
emissions reductions of VOCs, the more recent rules will not begin
achieving reductions until the compliance date, which is generally 3
years following promulgation. Therefore, the amount of reductions
achieved through control of HAPs that are VOCs will continue to grow
over the next several years.
We see the potential for significant further emissions reductions
from power plants and non-road engines at the national level. The
Administration has proposed nationwide legislation, the ``Clear Skies
Act'' (CSA), to reduce power plant emissions of NO_X
nationwide, as well as sulfur dioxide and mercury. We are also
proposing a national rule that would significantly reduce
NO_X emissions from non-road diesel-powered equipment. These
non-road sources constitute an important fraction of the NO_X
emissions inventory.

D. What Is the Relationship Between the SIP System Proposed and the
Proposed Clear Skies Legislation?

A basic issue for implementation of the 8-hour ozone standard is
how to treat areas projected to attain the standard based on existing
controls. We believe that an appropriate balance should be struck
between two goals: Avoiding requirements for unnecessary additional
controls that increase cost, and ensuring expeditious attainment to
protect public health.
Today's proposal contains options that strive to balance these two
goals under the authority of current law. The proposal contains two
options for classifying areas under the 8-hour ozone standard. Both
options contain features to ensure that areas projected to attain
compliance in the near term based on existing requirements are not
subject to additional prescribed control obligations. Of course, these
areas would be subject to the same requirements that apply to all areas
designated nonattainment, such as new source review (NSR) and
conformity. However, we are considering options for providing for more
flexible implementation of these requirements, as described elsewhere
in this proposed rulemaking, and are actually proposing an option
related to NSR in this proposed rulemaking.
The proposed Clear Skies legislation takes a different approach to
requirements for areas projected to attain through controls that are
already mandated. The proposed CSA includes a provision that would
create a new designation of ``transitional'' for areas that are
projected to attain compliance by 2015 based on existing controls, or
with the aid of additional SIP controls approved by December 31, 2004.
The proposed CSA provides that areas designated transitional would be
subject to the requirements of the prevention of significant
deterioration (PSD) program for new sources, which applies in
attainment areas. Because ``transitional'' would be the designation for
such areas, they would not be required to adopt additional control
measures that would be required for areas designated nonattainment, nor
would they be subject to conformity provisions. The provision includes
a mid-course check to ensure that the area remains on-track toward
attainment. In case of failure to attain by 2015, the area would be re-
designated as a nonattainment area and would be subject to the
nonattainment area requirements. We expect that most areas currently
exceeding the 8-hour ozone standard could qualify for this designation,
in many cases, without further local controls.
However, because the Clear Skies legislation has not been enacted,
we have not considered it in this proposed rulemaking. Should the Clear
Skies legislation be enacted into law, we would conduct further
rulemaking on implementation of the 8-hour ozone standard under such
law, if necessary.

II. What Is the Background on the 8-Hour Ozone Standard?

A. What Is the Legal Background?

On July 18, 1997, we revised the ozone NAAQS (62 FR 38856) by
promulgating an ozone standard of 0.08 parts per million (ppm) as
measured over an 8-hour period. At that time, we indicated that we
believed that the 8-hour ozone NAAQS should be implemented under the
less detailed requirements of subpart 1 of part D of title I of the CAA
rather than the more detailed requirements of subpart 2. Various
industry groups and States challenged EPA's final rule promulgating the
8-hour ozone NAAQS in the U.S. Court of Appeals for the District of
Columbia Circuit.\4\ In May

[[Page 32807]]

1999, the Appeals Court remanded the ozone standard to EPA on the basis
that our interpretation of its authority under the standard-setting
provisions of the CAA resulted in an unconstitutional delegation of
authority. American Trucking Assns., Inc. v. EPA, 175 F.3d 1027, 1034-
1040 (ATA I) aff'd, 195 F.3d 4 (D.C. Cir., 1999) (ATA II). In addition,
the Court held that the CAA clearly provided for implementation of a
revised ozone standard under subpart 2, not subpart 1. Id. at 1048-
1050.\5\ We sought review of these two issues in the U.S. Supreme
Court. In February 2001, the Supreme Court held that EPA's action in
setting the NAAQS was not an unconstitutional delegation of authority.
Whitman v. American Trucking Assoc., 121 S.Ct. 903, 911-914 (2001)
(Whitman). In addition, the Supreme Court held that the D.C. Circuit
incorrectly determined that the CAA was clear in requiring
implementation only under subpart 2, but determined that our
implementation approach, which did not provide a role for subpart 2 in
implementing the 8-hour NAAQS, was unreasonable. Id. at 916-919.
Specifically, the Court noted we could not ignore the provisions of
subpart 2 that ``eliminate[]
regulatory discretion'' allowed by subpart
1. Id. at 918. The Court also identified several portions of the CAA's
classification scheme under subpart 2 that are ``ill-fitted'' to the
revised standard and remanded the implementation strategy to EPA to
develop a reasonable approach for implementation. Id. Because the D.C.
Circuit had not addressed all of the issues raised in the underlying
case, the court remanded the case to the D.C. Circuit for disposition
of those issues. Id. at 919. On March 26, 2002, the D.C. Circuit Court
rejected all remaining challenges to the ozone and fine particle
(PM_2.5) standards. American Trucking Assoc. v. EPA, 283 F.3d
355 (D.C. Cir. 2002) (ATA III). With that ruling, EPA began to move
forward with programs to protect Americans from the wide variety of
health problems that these air pollutants can cause, such as
respiratory illnesses and premature death.
---------------------------------------------------------------------------

\4\ On July 18, 1997, we also promulgated a revised particulate
matter (PM) standard (62 FR 38652). Litigation on the PM standard
paralleled the litigation on the ozone standard and the court issued
one opinion addressing both challenges. However, issues regarding
implementation of the revised PM NAAQS were not litigated.
\5\ The Court addressed a number of other issues, which are not
relevant here.
---------------------------------------------------------------------------

The implementation rule proposed herein will provide specific
requirements for State, local, and Tribal air pollution control
agencies to address as they prepare implementation plans to attain and
maintain the 8-hour NAAQS. Each State with an area that is not
attaining the 8-hour ozone NAAQS will have to develop--as part of its
SIP--emission limits and other requirements to attain the NAAQS within
the timeframes set forth in the CAA.\6\ Tribes with jurisdiction over
Tribal lands that are not attaining the 8-hour ozone standard could
voluntarily submit a Tribal implementation plan (TIP) but would not be
required to do so. However, in cases where a TIP is not submitted, EPA,
working with the Tribes, would have the responsibility for planning in
those areas.
---------------------------------------------------------------------------

\6\ The CAA requires EPA to set ambient air quality standards
and requires States to submit SIPs to implement those standards.
---------------------------------------------------------------------------

B. What Technical Work Influenced EPA's Implementation Approach?

In developing our original approach for implementation of the 8-
hour standard, we considered input from a variety of technical
information sources and experts. We originally described the technical
information of the physical processes that produce ozone, fine
particles, and regional haze and relied on that in developing a
proposed implementation approach. See ``Implementation of New or
Revised Ozone and Particulate Matter (PM) National Ambient Air Quality
Standards (NAAQS) and Regional Haze Regulations; Proposed Rule''
(December 13, 1996, 61 FR 65764). We also participated with States in
the eastern United States in the Ozone Transport Assessment Group
(OTAG), which documented that long-distance transport of nitrogen
oxides across much of the OTAG study area contributed to high levels of
ozone. For background on OTAG and the results from the study, see the
following Web site: http://www.epa.gov/ttn/naaqs/ozone/rto/otag/
index.html.
That OTAG process resulted in a report to EPA with the conclusions
that included the following:

--Regional NO_X reductions are effective in producing
ozone benefits; the more NO_X reduced, the greater the
benefit.
--Ozone benefits are greatest where emissions reductions are made;
benefits decrease with distance.
--Elevated and low-level NO_X reductions are both
effective.
--Volatile organic compound controls are effective in reducing
ozone locally and are most advantageous to urban nonattainment areas.
--Air quality data indicate that ozone is pervasive, that ozone is
transported, and that ozone aloft is carried over and transported from
one day to the next.

As a result of these recommendations, EPA called for SIP revisions
from 22 States and the District of Columbia and established Statewide
budgets on NO_X emissions that those jurisdictions would have
to meet by 2007. Stationary source emissions reductions to meet the
budgets were required to be implemented by May 2004.\7\ The purpose of
the rule was to address long-range transport by eliminating the
significant contribution that each State's NO_X emissions
made to both 1-hour and 8-hour ozone nonattainment problems in downwind
areas. The call for SIP revisions was challenged by a number of States,
industry and interest groups but was largely upheld by the court and
has remained a viable means for obtaining significant NO_X
emissions reductions.
---------------------------------------------------------------------------

\7\ The EPA's NO_X SIP Call mandated reductions by May
2003. However, the Court's stay of the rule pending litigation
resulted in a 1-year delay to May 2004.
---------------------------------------------------------------------------

The OTAG report also recognized that VOC emissions reductions do
not play much of a role in long-range transport, and concluded that VOC
reductions are effective in reducing ozone locally and are most
advantageous to urban nonattainment areas.
Under the Federal Advisory Committee Act (FACA), we also formed a
Subcommittee for Development of Ozone, Particulate Matter and Regional
Haze Implementation Programs that provided recommendations and ideas to
assist us in developing implementation approaches for these programs.
We have incorporated ideas from the FACA process for a number of SIP
elements, particularly those related to transport of ozone, the process
for demonstrating attainment of the ozone standard, and requirements
for ensuring reasonable further progress. Further information on the
FACA process and its reports is found at the following Web site:
http://www.epa.gov/ttn/faca/.
As noted above, we have also promulgated national rules that reduce
VOC and NO_X emissions (ozone precursors) from mobile and
stationary sources, which also help address ozone nonattainment
problems. A number of commenters recommended that we set additional
national standards for more source categories such that States and
Tribes do not have to control these sources locally. They suggest that
such standards would eliminate the inconsistent regulation that occurs
when each nonattainment area chooses how to regulate sources within its
jurisdiction. We continue to review source categories for possible
Federal measure development.
This technical backdrop led us to be guided by the principle of
emphasizing national and regional measures to help areas come into
attainment and, where possible, reducing the need for those

[[Page 32808]]

local controls that are more expensive than national and regional
measures. However, as noted below, national and regional measures alone
are not anticipated to bring all areas into attainment. Thus, some
areas will need to adopt local controls through the SIP process.

III. How Did EPA Obtain Stakeholder Input for This Effort?

We initiated a process to obtain stakeholder feedback on options
the Agency developed for implementation of the 8-hour ozone NAAQS. We
held three public meetings in addition to a number of conference calls
and meetings with State, local and Tribal governments, environmental
groups and industry representatives. (The lists of the organizations
with whom we had discussions are in the docket, in addition to meeting
and conference call summaries.) The purpose of the meetings and
conference calls was to obtain stakeholder feedback regarding the
options that we had developed as well as to listen to any new or
different ideas that stakeholders were interested in presenting.
We received comments in response to the meetings and conference
calls. The comments from the public meetings addressed a number of
issues related to the implementation approach.
In addition to comments received at the public meetings, we
received a number of written comments on how to implement the 8-hour
ozone NAAQS. We have considered these comments in the implementation
approach proposed below.

IV. What Is EPA's Schedule for Issuing an 8-Hour Ozone Implementation
Rule?

We plan to issue a final rule on an implementation approach by the
end of 2003. While there is not a CAA deadline for promulgating a
strategy to implement the 8-hour ozone NAAQS, the CAA does establish a
deadline for EPA to promulgate designations of nonattainment areas
under section 107 of the CAA.\8\ We have entered into a consent decree
that requires us to promulgate designations by April 15, 2004.\9\
---------------------------------------------------------------------------

\8\ Section 107(d) of the CAA sets forth a schedule for
designations following the promulgation of a new or revised NAAQS.
The Transportation Equity Act for the Twenty-first Century (TEA-21)
revised the deadline to publish nonattainment designations to
provide an additional year (to July 2000), but HR3645 (EPA's
appropriation bill in 2000) restricted EPA's authority to spend
money to designate areas until June 2001 or the date of the Supreme
Court ruling on the standard, whichever came first.
\9\ American Lung Association v. EPA (D.D.C. No. 1:02CV02239).
---------------------------------------------------------------------------

The nonattainment designation for an area starts the process
whereby a State must develop a SIP that demonstrates how the air
quality standard will be attained by the attainment dates required in
the CAA. We plan to have an implementation strategy in place prior to
designating areas for the 8-hour ozone standard. This will enable areas
that are designated nonattainment for the 8-hour ozone standard to
understand the obligations that attach to nonattainment designations
and associated classifications.

V. In Short, What Does This Proposed Rulemaking Contain?

This summary is intended to give an overview of our proposed rule.
It should not be relied on for the details of the actual proposal. The
proposed rule described in Section VI. below should be consulted
directly. The order in which issues are described in this summary does
not match exactly the order these issues are discussed in the actual
proposal.

A. Classification of Areas

Under the CAA, an ozone nonattainment area's classification
determines the minimum measures that must be included in the area's SIP
for meeting the 8-hour standard and the maximum time period allowed for
the area to meet the standard. We are proposing two options for
classifying areas.
Under option 1, all areas would be classified under subpart 2
according to 8-hour ozone levels. As a result, all areas would be
classified as marginal, moderate, serious, or severe or extreme (based
on the most recent air quality data, no areas would fall in the
``extreme'' classification), and would be subject to control
requirements specified in the CAA for each classification.
Under option 2, more than half the nonattainment areas would likely
be regulated under subpart 1. All of these would be areas meeting the
1-hour ozone standard. The rest of the areas--those exceeding, and a
few that may be meeting the 1-hour standard--would be classified under
subpart 2 in the same manner as option 1.
We are also proposing an ``incentive feature'' that would allow
areas to qualify for a lower classification under subpart 2 than their
air quality would dictate if they demonstrate they will attain by the
earlier attainment date of a lower classification. For example, an area
that would be classified ``moderate'' could qualify for a ``marginal''
classification by showing it will attain within 3 years of designation.
The ``incentive feature'' is proposed for use in conjunction with
either classification option.

B. Attainment Deadlines

We are proposing that for areas classified under subpart 2, the
periods for attainment (running from the date of designation/
classification) would be 3 years for marginal areas, 6 years for
moderate areas, 9 years for serious areas, and 15 years for severe-15
areas, and 17 years for severe-17 areas.
If classification option 2 were selected, some areas would be
classified under subpart 1. Attainment dates for these areas would be
no later than 5 years after designation, although they could be
extended up to 10 years after designation depending on the severity of
the area's air pollution and the availability and feasibility of
pollution control measures.
For all areas, the CAA requires each plan to be designed to meet
the standard as expeditiously as practicable, regardless of the maximum
statutory period specified for attainment.

C. How Will EPA Implement the Transition From the 1-Hour to the 8-Hour
Standard in a Way To Ensure Continued Momentum in States' Efforts
Toward Cleaner Air?

This section discusses which obligations would remain in effect for
areas that were designated nonattainment under the 1-hour ozone NAAQS
on or after November 15, 1990, as areas begin to implement the 8-hour
standard. It also proposes two alternatives for revoking the 1-hour
ozone standard: revocation in whole and revocation in part.
1. Areas designated nonattainment under the 8-hour standard. We are
proposing that all areas designated nonattainment for the 8-hour ozone
NAAQS remain subject to certain obligations that applied by virtue of
the area's classification for the 1-hour standard where the area's 1-
hour classification was higher than the area's classification for the
8-hour standard. These obligations include major source thresholds,
inspection and maintenance (I/M) programs and fuel programs. However,
these obligations would not apply to portions of an 8-hour ozone
nonattainment area that was not a part of a 1-hour ozone nonattainment
area. We believe that Congress intended these requirements to continue
to apply to areas as they move forward to address an ozone NAAQS. We
are soliciting comment whether areas that have not yet met the
attainment demonstration obligation for the 1-hour standard

[[Page 32809]]

should remain obligated to submit a 1-hour ozone attainment
demonstration.
2. Areas designated attainment under the 8-hour standard. Since
attainment areas are subject to PSD, not nonattainment NSR, we propose
that these areas would not remain subject to the nonattainment NSR
offset and major source thresholds that might otherwise apply due to
their classification for the 1-hour standard. However, we are proposing
that control obligations that applied based on an area's 1-hour
classification would remain. We are proposing that these areas are
obligated to submit a maintenance plan under section 110(a)(1).
Consistent with EPA's ``Clean Data Policy,'' we are proposing that
these areas not be required to meet outstanding attainment
demonstration and rate-of-progress (ROP) requirements, so long as they
remain in attainment. However, if the area violates the 8-hour standard
and does not have an approved maintenance plan for the 8-hour standard
under section 110(a)(1), those obligations will once again apply. We
are proposing that these areas would need contingency measures in their
section 110(a)(1) maintenance plans. However, unlike contingency
measures under section 175A, these contingency measures need not
include an obligation to implement all control obligations in the
previously approved SIP. For all areas designated attainment for the 8-
hour ozone NAAQS the requirement to demonstrate conformity to the 1-
hour standard would no longer apply once the 1-hour standard is revoked
or determined not to apply for that purpose.
3. Concerning the NO_X SIP Call. We are proposing that
States must continue to adhere to the emission budgets established by
the NO_X SIP Call after the 1-hour standard is revoked in
whole or in part. Similarly, we are not proposing to revoke or modify
the section 126 regulation.
4. Obligations under part D of title I of the CAA that would not
continue to apply. We are proposing that areas would not be obligated
to continue to demonstrate conformity for the 1-hour standard once the
1-year grace period for application of conformity for the 8-hour
standard has elapsed. We are also proposing that we would no longer
make findings of failure to attain the 1-hour standard and, therefore,
also would not reclassify areas to a higher classification for the 1-
hour standard based on a failure to meet the 1-hour standard.
5. How long would the obligations discussed under the 1-hour
standard last? We are proposing that these measures would not expire.
However, we are proposing two options for when the State may relegate
these measures to contingency measures: Option 1. When the area
achieves the level of the 1-hour ozone standard (even if the area has
not yet attained the 8-hour standard). Option 2. When the area attains
the 8-hour standard and is designated attainment (regardless of when,
if ever, the area attains the 1-hour standard).
6. Mechanism to effect the transition from the 1-hour to the 8-hour
standard. We are proposing 2 mechanisms. For both of these mechanisms,
we are proposing that the revocation of the 1-hour standard would occur
1 year following designations for the 8-hour NAAQS. Option 1: Complete
revocation of the 1-hour standard. Option 2: Partial revocation of 1-
hour standard.

D. Mandatory Measures

We believe that the CAA is clear that once an area is classified
under subpart 1 or subpart 2, the area's State implementation plan must
contain the measures enumerated in the CAA for its classification.
However, today's proposal contains several features intended to provide
States with flexibility on the measures included in SIPs for 8-hour
areas. In addition, we are proposing to consider case-by-case waivers
if the applicant can show, consistent with case law on this issue, that
implementing a requirement in a particular area would cause ``absurd
results.''

E. Consequences of Failure To Attain

The consequences of failure to attain the standard on time are
specified by the CAA. If an area classified under subpart 2 fails to
meet the standard by its deadline, the CAA requires that the area be
bumped up to a higher classification and adopt a revised plan
containing the additional measures specified by the CAA for that
classification. If an area classified under subpart 1 fails to meet the
standard by its deadline, the area would be required to adopt a new
plan demonstrating attainment, including any requirement mandated by
the Administrator.

F. Interstate Transport

EPA recognizes that ozone and ozone precursors are often
transported across State boundaries, and that interstate transport can
make it difficult--or impossible--for some States to meet their
attainment deadlines solely by regulating sources within their own
boundaries. To address this concern, the Agency recently adopted two
rules (the NO_X SIP Call and the Section 126 Rule) to reduce
interstate ozone transport in the eastern U.S. These rules were
developed based on the level of reductions needed to address transport
for both the 1-hour and 8-hour standards. For both rules, the
compliance date for achieving the required emissions reductions is May
31, 2004. Thus, unlike in the past, States affected by transport can
develop their local ozone implementation plans with the knowledge that
the issue of interstate transport has already been addressed ``up
front.''
The President recently proposed legislation known as the Clear
Skies Act that, among other things, would further reduce interstate
transport of ozone and NO_X (an ozone precursor) from the
power sector through a cap-and-trade program similar to the acid rain
program. These reductions are beyond the levels required under the
NO_X SIP Call and the Section 126 Rule. The Clear Skies
reductions would enable several additional areas to meet the 8-hour
standard without imposing any additional local controls. A number of
other areas would find it easier to meet the 8-hour standard because of
the additional reductions in power plant emissions that would be
required under Clear Skies. However, the Agency has not made a
determination that such reductions are warranted under the transport
provisions of the CAA. In order to evaluate this issue, the Agency
intends to investigate the extent, severity and sources of interstate
ozone transport that will exist after the existing transport rules are
implemented in 2004.

G. Modeling and Attainment Demonstration

An attainment demonstration SIP includes technical analyses to
locate and regulate sources of emissions that are contributing to
violations within nonattainment areas. Section 182(a) does not require
marginal areas, which have an attainment date only 3 years following
designation to perform any photochemical grid modeling. We are
proposing to allow areas with attainment dates within 3 years after
designation--regardless of whether they are covered under subpart 1 or
2--to rely on existing modeling. Areas with later attainment dates
(more than 3 years after designation) would be required to do an
attainment demonstration SIP. Modeling developed to support Federal or
local controls may be used if the application of that modeling is
consistent with our modeling guidance.

H. Reasonable Further Progress (RFP)

There are several issues related to the Act's RFP requirements.

[[Page 32810]]

1. Requirement for 15 Percent VOC Reductions for Moderate and Above
Areas During the First 6 Years After the Base Year
We are proposing two ways to implement the 15 percent requirements
for moderate-and-above areas to meet numerical emissions reductions
milestones (also known as rate-of-progress, or ROP, requirements).
Under the first option, all such areas would be required to reduce
baseline VOC emissions by 15 percent over the first 6 years after a
baseline year.
Under the second option, areas that previously reduced VOC
emissions by 15 percent as part of implementing the 1-hour standard
would be viewed as having already met the requirement. Moderate areas
meeting this criterion would comply with the general subpart 1
requirement to demonstrate ``reasonable further progress'' toward
meeting the standard. Serious-and-above areas meeting the criterion
would be required to achieve an 18 percent reduction in VOC and/or
NO_X over the first 6 years and 9 percent over subsequent 3-
year periods until the area's attainment date.
2. Base Year
We are proposing 2002 as the baseline year, and that the 6-year
period for reductions would run from January 1, 2003 until December 31,
2008. We propose that States be allowed credit toward meeting the ROP
requirements for all emissions reductions that occur after the 2002
base year--including reductions from all post-1990 Federal or other
measures (except those specifically excluded under section 182(b)(1))
of the CAA. We have also recently issued a memorandum that sets forth
2002 as the baseline year for planning purposes.
We are also proposing options for other RFP issues, including:
? The timing of ROP reductions relative to attainment date
for moderate areas.
? Timing of submission of ROP plan.
? CAA requirements for creditability of control measures.
? Subpart 1 RFP.
? Cases where 8-hr NA area encompasses and is larger than
current 1-hr NA area.

I. RACM/RACT

In the event classification option 2 is selected, we are proposing
an interpretation of the requirements for reasonably available control
measures (RACM) and reasonably available control technology (RACT) for
areas covered by subpart 1.
For RACT, for areas with 8-hour ozone levels that would place them
in a moderate or above classification under subpart 2, we are proposing
two options. Under the first option, these areas would be required to
meet the traditional technology-based RACT control requirement that are
applicable to moderate and above areas under subpart 2. Under the
second option, if the area is able to demonstrate attainment of the
standard as expeditiously as practicable with emission control measures
in the SIP, then RACT will be met, and additional measures would not be
required as being reasonably available.
For subpart 1 areas with 8-hour ozone levels that would place them
in a marginal classification if classified under subpart 2, the RACT
requirement would be similar to that for marginal areas covered under
subpart 2. This RACT approach also would be available to areas that
qualified for marginal status via the incentive feature.
The RACT requirements for areas under subpart 1 would have to be
submitted within 2 years after an area's nonattainment designation.
We are proposing that the State does not need to perform a RACT
analysis for sources subject to the State's emission cap-and-trade
program where we have approved the cap-and-trade program as meeting the
NO_X SIP Call requirements and it does not need to submit a
new NO_X RACT SIP for those sources.
We propose to formally recognize NO_X, as well as VOC, as
an ozone precursor, so that RACT for NO_X would be required
for areas classified under either subpart 1 or subpart 2 for the same
kinds of sources covered under the 1-hour ozone standard.
For RACM, we propose to continue with the same interpretation that
we have used for implementing the 1-hour ozone standard. To show that
all RACM have been included in the plan, the State must show that there
are no additional measures that are technically and economically
feasible that will advance the attainment date.

J. Conformity

No changes to the transportation conformity rule are proposed in
this rulemaking. Transportation conformity is discussed in this
proposal for informational purposes. By statute, transportation
conformity applies to 8-hour nonattainment areas 1 year after the
effective date of an area's designation. Our proposal to revoke the 1-
hour standard 1 year after 8-hour ozone area designations means that
transportation conformity requirements under the 1-hour standard would
end at the same time 8-hour transportation conformity requirements
begin. We are proposing that conformity would not apply in 1-hour ozone
standard maintenance areas after we revoke the 1-hour ozone standard.
For the general conformity program, which ensures that federal
actions will not interfere with an area's air quality plan, we are not
proposing to revise its General Conformity Regulations in this
rulemaking. We plan to retain the existing de minimis emissions levels
for actions exempt from the rule. Our proposal to revoke the 1-hour
standard one year after 8-hour ozone area designations means that
general conformity requirements under the 1-hour standard would end at
the same time 8-hour general conformity requirements begin. We are
proposing that general conformity would not apply in 1-hour ozone
standard maintenance areas after we revoke the 1-hour ozone standard.

K. New Source Review

We are proposing three options for NSR, which could be implemented
in conjunction with each other:
1. A ``status quo'' NSR program under which subpart 1 areas would
be covered by subpart 1 NSR, while subpart 2 areas would be covered by
subpart 2 NSR.
2. A more flexible ``Transitional'' NSR program for areas that
submit early SIPs and that attain early. This program would be
available to areas covered under subpart 1 and that are attaining the
1-hour ozone standard.
3. A ``Clean Air Development Community'' program that would allow a
more flexible NSR program for areas that manage growth in emissions-
producing activities.

VI. What Are EPA's Proposed Frameworks for Implementing the 8-Hour
Ozone Standard?

As noted above, we originally intended to implement the 8-hour
ozone standard under subpart 1 of part D, title I of the CAA. This
would have allowed areas more flexibility to determine whether to
regulate NO_X, VOC or both to address ozone nonattainment.
As also noted above, however, the Supreme Court determined that an
approach that did not provide for classifying areas under subpart 2--
and thus subjecting those areas to the subpart 2 control requirements--
in implementing the 8-hour standard was unreasonable. In structuring a
proposed implementation rule, we have tried to stay as close as
possible to the principles noted above, particularly with regard to
seeking flexible ways for States to address their 8-hour ozone

[[Page 32811]]

problems by avoiding measures that may be unreasonable for an area. We
have spent a large amount of time investigating possible legal theories
and policy options to find flexibility within the statute, as
interpreted by the Supreme Court. We have also had the benefit of ideas
and recommendations from many interested stakeholders, who also have
spent much time developing their own theories and ideas. Based on these
efforts, we believe that we have developed options for an
implementation program that are workable under the constraints of the
CAA. Nonetheless, we recognize that those constraints will still
require a number of areas to adopt certain control measures that may
not be as effective as others in achieving the 8-hour ozone standard.
We are soliciting any further ideas for addressing this situation.
To describe our proposed frameworks for implementing the 8-hour
ozone standard, it is necessary to examine all the components or
elements of the process used to implement the standard. Therefore, the
issues and options that we are proposing that deal with the aspects of
preparing SIPs for the standard are presented below individually.
Following that, we present two possible alternative frameworks that
blend one or more options from each of the elements to illustrate how
they may work in conjunction with each other. We are soliciting comment
on the options presented for the individual elements, and also on how
the options can be grouped into a consolidated implementation
framework.
The proposal below describes only those options or approaches we
are proposing. We considered a number of other options and approaches
for the elements discussed below. These other options that were
considered but are not being proposed are described in a separate
document available in the docket.\10\
---------------------------------------------------------------------------

\10\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

A. How Will EPA Reconcile Subparts 1 and 2? How Will EPA Classify
Nonattainment Areas for the 8-hour Standard? What Attainment Dates
Would Apply?

1. Statutory Framework and Supreme Court Decision
The CAA contains two sets of requirements--subpart 1 and subpart
2--that establish requirements for State plans implementing the
national ozone air quality standards in nonattainment areas. (Both are
found in title I, part D.) Subpart 1 contains general requirements for
SIPs for nonattainment areas for any pollutant--including ozone--
governed by a NAAQS. Subpart 2 provides more specific requirements for
ozone nonattainment SIPs.
Throughout this proposed rulemaking, we repeatedly discuss whether
an area is subject to the planning requirements of subpart 1 or subpart
2. This language is convenient shorthand for purposes of this proposal.
Actually, if an area is subject to subpart 2 requirements, it is also
subject to subpart 1 requirements. In some cases, subpart 1 and subpart
2 requirements are inconsistent or overlap. To the extent that subpart
2 addresses a specific planning obligation, the provisions in subpart 2
control. For example, under section 182(b), moderate areas are subject
to 15 percent ROP requirements rather than the more general RFP
requirements of section 172(c)(2). However, moderate areas remain
subject to the contingency measure requirement of section 172(c)(9), as
that requirement is not addressed for moderate areas in subpart 2. \11\
---------------------------------------------------------------------------

\11\ State Implementation Plans; General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990;
Proposed Rule.'' April 16, 1992 (57 FR 13498 at 13501 and 13510).
---------------------------------------------------------------------------

When we published the 8-hour ozone standard on July 18, 1997, we
indicated that we anticipated that States would implement that standard
under the less prescriptive subpart 1 requirements. More specifically,
we provided that areas designated nonattainment for the 1-hour ozone
standard would remain subject to the subpart 2 planning requirements
for purposes of the 1-hour standard until such time as they met that
standard. But those areas and all other areas would only be subject to
subpart 1 for purposes of planning for the 8-hour ozone standard.
As noted above, in February 2001, the Supreme Court ruled that the
statute was ambiguous as to the relationship of subparts 1 and 2 for
purposes of implementing the 8-hour NAAQS. However, the Court also
ruled that our implementation approach, which provided no role for
subpart 2 in implementing the 8-hour NAAQS, was unreasonable. Id.
Specifically, with respect to classifying areas, the Supreme Court
stated:

[D]oes subpart 2 provide for classifying nonattainment ozone
areas under the revised standard? It unquestionably does.

Whitman, 121 S.Ct. at 917.
However, despite recognizing that subpart 2 does provide
classifications applicable for the 8-hour standard, the Supreme Court
also recognized that the subpart 2 classification scheme, specified in
section 181, did not entirely fit with the revised 8-hour standard and
left it to EPA to develop a reasonable resolution of the roles of
subparts 1 and 2 in implementing a revised ozone standard. Id. at 482-
486.
In particular, the Court noted three portions of section 181--the
classification provision in subpart 2--that it indicated were ``ill-
fitted to implementation of the revised standard.''
? First, the Court recognized that 1-hour design values used
for establishing the classifications in Table 1 in section 181 ``would
produce at best an inexact estimate of the new 8-hour averages * * *''
121 S.Ct. at 918.
? Second, the Court recognized that the design values in
Table 1 start at the level of the 1-hour NAAQS--0.12 ppm. The Court
noted that ``to the extent the new ozone standard is stricter than the
old one, * * * the classification system of Subpart 2 contains a gap,
because it fails to classify areas whose ozone levels are greater than
the new standard (and thus nonattaining) but less than the
approximation of the old standard codified by Table 1.'' Id.
? Third, the Court recognized that ``Subpart 2's method for
calculating attainment dates--which is simply to count forward a
certain number of years from November 15, 1990 * * * seems to make no
sense for areas that are first classified under a new standard after
November 15, 1990.'' More specifically, the Court recognized that
attainment dates for marginal (1993), moderate (1996), and serious
(1999) areas had passed. Id. at 483-484.
2. EPA's Development of Options
In light of the Supreme Court's ruling, we examined the statute to
determine the manner in which the subpart 2 classifications should
apply for purposes of the 8-hour ozone NAAQS. We paid particular
attention to the three portions of section 181 that the Supreme Court
noted were ill-fitted for implementation of the revised 8-hour
standard. We examined those provisions in light of the legislative
history and the overall structure of the CAA to determine what Congress
intended for purposes of implementing a revised, more stringent ozone
standard. We believe that we need to take a narrow reading consistent
with what we believe Congress intended. Consistent with those
principles, we developed several options.

[[Page 32812]]

3. Options for Classification
We are proposing two options for comment. We prefer classification
option 2 because it provides more flexibility to States and Tribes as
they address their unique air quality problems. This is likely to allow
some areas to attain the standard at a lower cost. However, we are also
soliciting comments on option 1, in part, because it is less complex
and may be easier to communicate, in addition to any other ideas on how
to classify nonattainment areas.
a. Option 1. Under the first option, we would classify 8-hour ozone
nonattainment areas according to the severity of their ozone pollution
based on 8-hour ozone levels.
Under this option, all 8-hour nonattainment areas would be
classified under subpart 2 as marginal, moderate, serious, severe-15,
severe-17, or extreme. The CAA gives areas in higher classifications--
which are those with more serious ozone pollution problems--longer time
periods for attaining the standard, but also requires these areas to
meet a longer list of requirements than areas in lower classifications.
A key feature of this option is the use of 8-hour ozone design
values in determining the severity of an area's 8-hour ozone problem.
However, the subpart 2 classification table (Table 1 of CAA section
181) is based on 1-hour ozone design values (because it was designed
for implementation of the standard in effect in 1990--the 1-hour ozone
standard). Therefore, this option would require us to adapt the subpart
2 classification scheme. Specifically, we would adopt by regulation a
modified version of the subpart 2 classification table that contains 8-
hour design value thresholds for each classification, rather than the
statutory 1-hour ozone design value thresholds. Using 8-hour design
values for classifying areas for the 8-hour standard would reflect the
magnitude of the 8-hour ozone problem more accurately than would the 1-
hour design values in Table 1.
We are proposing to translate the classification thresholds in
Table 1 of section 181 from 1-hour values to 8-hour values in the
following manner: Determine the percentage by which each classification
threshold in Table 1 of section 181 exceeds the 1-hour ozone standard
and set the 8-hour threshold value at the same percentage above the 8-
hour ozone standard. For example, the threshold separating marginal and
moderate areas in Table 1 is 15 percent above the 1-hour standard, so
we would set the 8-hour moderate area lower threshold value at 15
percent above the 8-hour standard.
An examination of the percentages derived indicated that Congress
set the classification thresholds at certain percentages or fractions
above the level of the standard.\12\ These are the percentages above
the standard that we used and applied to the level of the 8-hour
standard to yield new threshold levels for the 8-hour standard. Table 2
of this proposed rulemaking below depicts how the translation would be
done and the results.
---------------------------------------------------------------------------

\12\ The upper thresholds of the marginal, moderate, serious,
severe-15, and severe-17 classifications are precise percentages or
fractions above the level of the standard, namely 15.000 percent
(\3/20\ths more than the standard), 33.333 percent (one-third more
than the standard), 50.000 percent (one-half more than the
standard), 58.333 percent (\7/12\ths more than the standard) and
133.333 percent (one and one-third more than the standard).
---------------------------------------------------------------------------

There are other ways of performing the translation as described
further below, some of which have been suggested in public comment, but
we believe that the translation described here is most consistent with
the apparent intent of Congress in establishing the thresholds in the
classification system in section 181.
As mentioned above, under this option all 8-hour nonattainment
areas would be classified under subpart 2 and receive attainment dates
consistent with their classification. Elsewhere in this proposed rule,
we discuss how it would interpret the attainment dates in Table 1 of
section 181 for purposes of areas classified under subpart 2 for the 8-
hour standard. Areas that do not attain by their attainment date would
be reclassified to a higher classification and be given a later
attainment date and would be subject to the measures of the higher
classification (section 181(b)(2)).

Table 2.--Table 1 of Subpart 2 1-Hour Ozone Classification Table
[Translation to 8-Hour Design Values]
----------------------------------------------------------------------------------------------------------------
Translated 8-
CAA design Percent above hour design
Area class value 1-hour ozone value
thresholds 1- NAAQS thresholds ppm
hour ozone ppm ozone
----------------------------------------------------------------------------------------------------------------
Marginal.............................. from.................... 0.121 0.833 \1\ 0.085
up to................... 0.138 15.000 0.092
Moderate.............................. from.................... 0.138 15.000 0.092
up to................... 0.160 33.333 0.107
Serious............................... from.................... 0.160 33.333 0.107
up to................... 0.180 50.000 0.120
Severe-15............................. from.................... 0.180 50.000 0.120
up to................... 0.190 58.333 0.127
Severe-17............................. from.................... 0.190 58.333 0.127
up to................... 0.280 133.333 0.187
Extreme............................... equal to or above....... 0.280 133.333 0.187
----------------------------------------------------------------------------------------------------------------
\1\ The percentages used were calculated based on the level of the 1-hour standard as it appears in 40 CFR 51.9,
viz., 0.12 ppm. The percentages were applied to the 8-hour standard as it appears in 40 CFR 51.10, viz., 0.08
ppm. Our guidance uses a rounding convention for 1-hour air quality data such that values less than 0.125
round down to 0.12 and therefore represent attainment; values of 0.125 up to and including 0.129 round up to
0.13, and therefore indicate nonattainment. An exact translation of the 0.121 1-hour threshold would have
produced 0.081 ppm as the corresponding 8-hour threshold; however, since any value less than 0.085 ppm would
indicate an area is attaining the 8-hour ozone standard, the table's lowest value reflects the lowest value
representing nonattainment, viz., 0.085 ppm.

b. Option 2--2-step approach. We are proposing a second option (our
preferred option) under which some areas would implement the 8-hour
standard under subpart 1, and other areas would implement the 8-hour

[[Page 32813]]

standard under subpart 2. This option relies on language in the Supreme
Court decision, which is described in detail below.
In brief, the option that we are proposing would work as follows:
? First, we would determine which 8-hour areas must be
classified under subpart 2. These would be areas with ozone levels that
exceed the 1-hour ozone design values that Congress specified in Table
1 of section 181. For the remaining areas, we would have discretion to
place them under subpart 1 or subpart 2.
? Second, we would classify all areas. Subpart 2 areas would
be classified in the same manner described above under option 1.
Options for classifying subpart 1 areas are described below.
(i) Legal framework for 2-step approach. Under this approach, we
first determine the universe of areas that must be subject to the
provisions of subpart 2 and the universe of areas that fall into a
``gap'' in subpart 2's classification scheme. Then, we proceed to
determine how to classify the areas.
(ii) Legal framework--Step 1--Which subpart applies for an area?
With respect to the first step, the Supreme Court noted that ``to the
extent that the new ozone standard is stricter than the old one, * * *
the classification system of Subpart 2 contains a gap, because it fails
to classify areas whose ozone levels are greater than the new standard
* * * but less than the approximation of the old standard codified by
Table 1 [in section 181(a)].'' 121 S.Ct. at 918. Thus, for those areas
with a 1-hour ozone design value above the level identified in Table 1
(i.e., 0.121 ppm), Table 1 ``specifies'' a classification for the area.
For those areas, we would not have authority to establish
classifications under subpart 1 because section 172(a)(1)(C) prohibits
the use of the classification authority in section 172(a)(1)(A) for
those areas.\13\ However, for areas with 1-hour ozone design values
below 0.121 ppm, Table 1 does not specify a classification, and those
areas fall into a gap in the statute. Thus, we must reasonably
determine whether such areas should be subject to the planning
obligations of subpart 1 or subpart 2. This issue is discussed more
fully below under ``Rationale for regulating all ``gap'' areas under
subpart 1 only.''
---------------------------------------------------------------------------

\13\ Section 172(a)(1)(C) provides that the provisions of
section 172(a) ``shall not apply with respect to nonattainment areas
for which classifications are specifically provided'' in other
sections of part D. Similarly, section 172(a)(2)(D) provides that
the attainment date provisions in section 172(a)(2) do not apply
``to nonattainment areas for which attainment dates are specifically
provided'' elsewhere in part D.
---------------------------------------------------------------------------

In summary, under the first step of this approach, we examine each
nonattainment area's most recent 1-hour design value at the time of
designation under the 8-hour NAAQS to determine whether the area must
be subject to the classification under subpart 2. If an area's 1-hour
design value is 0.121 or higher, then it must be subject to a subpart 2
classification. If its 1-hour design value is lower than 0.121, it
falls into a gap and we must determine a reasonable implementation
scheme--either subpart 1 or subpart 2--for such area.
(iii) Legal framework---Step 2--How should areas be classified
under subparts 1 and 2? Under step 2 of this approach, we must
determine how to classify areas subject to the classification
provisions of subpart 2. For those areas subject to the classification
provisions of subpart 2, we believe that it is most reasonable to use
the area's 8-hour design value to determine the appropriate
classification. This would be done in the same manner as option 1,
proposed above, in which the Table 1 threshold design values are
converted from 1-hour values to 8-hour values.
Another option would have been to apply Table 1 as it is written.
Some might argue that this approach is better because it is consistent
with the design value EPA would use under this option to determine
whether Congress mandated that the area be subject to subpart 2. We do
not believe that Congress would have intended the use of 1-hour design
values for determining the classification `` and therefore the control
obligations and attainment dates--of 8-hour areas. While we believe it
is reasonable to use the 1-hour design values as a barometer of
Congress' intent as to which areas should be subject to the more
prescriptive requirements of subpart 2, we do not believe it makes
sense to use the 1-hour values to establish each area's classification
under that subpart. The area's classification identifies the specific
control requirements applicable to each area within that classification
and the period of time the area has to attain. As enacted, the Table
provides that areas having a more significant ozone pollution problem
for the 1-hour standard and thus a higher classification are subject to
more stringent controls and have a longer period to attain. Because of
the different form and averaging times of the 1-hour and 8-hour
standards, areas with significant 1-hour problems may not have as
significant an 8-hour problem and vice versa. Using the 1-hour design
values to classify areas, therefore, could result in areas with less
significant ozone problems being subject to stricter planning
obligations (and later attainment dates) than those with a more
significant problem. Thus, we believe it is more consistent with
Congressional intent to use 8-hour design values as the means for
specifying the stringency of controls needed to attain the 8-hour ozone
standard and the associated attainment dates. We also believe that this
is consistent with the Supreme Court decision, in which the Court
recognized that the ``1-hour averages'' in Table 1 ``produce at best an
inexact estimate of the new 8-hour averages.'' See 121 S.Ct. at 918.
As discussed in the following section, for areas that EPA
determines would be subject only to subpart 1, section 172(a)(1)(A)
grants EPA discretion to develop a classification scheme.
4. Under Classification Option 2, How Would EPA Classify Subpart 1
Areas?
a. Background. As noted above, classification option 2 above could
result in a number of areas not being classified under subpart 2.
Section 172(a)(1)(A) grants EPA discretion to establish a
classification system for areas covered under subpart 1 but does not
mandate classifications. Section 172(a)(1)(A) provides that

on or after [the date of designation], the Administrator may
classify the area for the purpose of applying an attainment date
pursuant to paragraph (2), and for other purposes. In determining
the appropriate classification, if any, for a nonattainment area,
the Administrator may consider such factors as the severity of
nonattainment in such area and the availability and feasibility of
the pollution control measures that the Administrator believes may
be necessary to provide for attainment of such standard in such
area.

Prior to the Supreme Court's remand of our implementation approach,
we had proposed that all 8-hour ozone nonattainment areas be subject
only to subpart 1 for purposes of the 8-hour standard, and that areas
would be classified as traditional, transitional, or international
transport. These classifications were described in our November 17,
1998 draft implementation guidance.\14\
---------------------------------------------------------------------------

\14\ Proposed Implementation Guidance for the Revised Ozone and
Particulate Matter (PM) National Ambient Air Quality Standards
(NAAQS) and the Regional Haze Program. November 17, 1998. Found at:
http://www.epa.gov/ttn/oarpg/t1pgm.html.
---------------------------------------------------------------------------

Because we are no longer considering an option where all areas
would be

[[Page 32814]]

classified under subpart 1, we have determined the classification
scheme it proposed earlier is not appropriate. We are now proposing, as
described below, two new options for classifying subpart 1 areas for
the 8-hour standard.
b. Options for classifying subpart 1 areas (i) Option 1--no
classifications. Under this option, subpart 1 areas would not have
different classifications. When submitting an attainment demonstration,
each area would need to establish an attainment date consistent with
section 172(a)(2)(A), i.e., demonstrating attainment as expeditiously
as practicable, but no later than 5 years after designation or 10 years
after designation if the severity of the area's air pollution and the
availability and feasibility of pollution control measures indicate
more time is needed.
(ii) Option 2--create an overwhelming interstate transport
classification. This option could be implemented in addition to option
1 (no classifications) for areas that qualify; in other words, we would
not classify areas that do not qualify for this transport
classification. Under this option, an area could be classified as a
``Transport Area'' upon submission of a SIP that demonstrates, using
modeling, that the nonattainment problem in the area is due to
``overwhelming transport'' emissions.
We are proposing that for subpart 1 areas to qualify for an
overwhelming transport classification, the area would have to meet the
same criteria as specified for rural transport areas under section
182(h) (of subpart 2). This section restricts treatment as a rural
transport area to an area that does not include, and is not adjacent
to, any part of a Metropolitan Statistical Area or, where one exists, a
Consolidated Metropolitan Statistical Area (as defined by the United
States Bureau of the Census). The area may be treated as a rural
transport area if we find that sources of VOC (and, where we determine
relevant, NO_X) emissions within the area do not make a
significant contribution to the ozone concentrations measured in the
area or in other areas.\15\ Since this classification would only apply
to subpart 1 areas, areas classified under subpart 2 would not qualify
for this classification.
---------------------------------------------------------------------------

\15\ EPA's guidance on such determinations appears in ``Criteria
for Assessing the Role of Transport of Ozone/Precursors in Ozone
Nonattainment Areas,'' May 1991. U.S. Environmental Protection
Agency, Office of Air Quality Planning and Standards, Technical
Support Division, Research Triangle Park, NC 27711. Available at:
http://www.epa.gov/scram001/tt25.htm. Look for zip file name
UAMIVGUIDE. Unzip to access file name UAMCRIT.
---------------------------------------------------------------------------

The following are features of this option:
? The area would be treated similar to areas classified
marginal under subpart 2 for purposes of emission control requirements.
? Less restrictive NSR and conformity requirements could be
proposed for the area. If we include the transport classification
option in the final implementation rule, we would consider proposing a
separate rulemaking on the details of NSR and conformity requirements.
? The area would receive an attainment date that is
consistent with section 172(a)(2)(A), but that takes into consideration
the following:
? The attainment date of upwind nonattainment areas that
contribute to the downwind area's problem; and
? The implementation schedule for upwind area controls,
regardless of their geographic scope (e.g., national, regional,
statewide, local).
This option would partially address Tribal concerns about
designations where a Tribal area designated nonattainment does not
contribute significantly to its own problem. This is one of the key
issues for the Tribes who seek to have economic growth from new sources
within their jurisdiction but that have difficulty obtaining emission
reduction offsets from sources located either inside or outside Tribal
areas.
Interstate, intrastate, and international transport are also
discussed elsewhere in this proposed rulemaking.
5. Rationale for Regulating All ``Gap'' Areas Under Subpart 1 Only
This section is aimed solely at providing a rationale for why all
gap areas should be placed under the subpart 1 regulatory framework
rather than the subpart 2 regulatory framework. Issues regarding what
specific requirements should apply to subpart 1 areas are addressed in
later sections of this preamble.
In developing classification option 2, we explored a number of
options regarding how to interpret the relationship of subpart 1 and
subpart 2 for areas with 1-hour design values less than 0.121. These
areas are referred to below as ``gap'' areas because their 1-hour
design value falls below the lowest value in the subpart 2
classification table and thus Congress did not dictate whether subpart
2 or subpart 1 applies. The options we explored ranged from placing all
of these areas into the subpart 2 classification scheme to placing none
of these areas into the subpart 2 classification scheme. We are
proposing the latter approach--that all areas that fall into the gap
should be subject only to the planning obligations of subpart 1. When
faced with a similar issue following enactment of the CAA Amendments of
1990, we determined that areas that Congress did not mandate fall into
the classification scheme of subpart 2 should be subject to only the
planning obligations of subpart 1.\16\
---------------------------------------------------------------------------

\16\ These areas included: (a) The transitional areas under
section 185A (areas that were designated as an ozone nonattainment
area as of the date of enactment of the CAA Amendments of 1990 but
that did not violate the 1-hour ozone NAAQS between January 1, 1987,
and December 31, 1989); (b) nonattainment areas that had incomplete
(or no) recent attaining data and therefore could not be designated
attainment; and (c) areas that were violating the 1-hour ozone
standard by virtue of their expected number of exceedances, but
whose design values were lower than the threshold for which an area
can be classified under Table 1 of subpart 2 (submarginal areas).
See 57 FR 13498 at 13524 col. 3 et seq. (April 16, 1992).
---------------------------------------------------------------------------

For classification option 2, we believe it is appropriate to
continue that interpretation of the CAA for 8-hour ozone areas, despite
the fact that a significant number of areas designated nonattainment
for the 8-hour NAAQS will fall into this group. Congress enacted
subpart 2 with the understanding that all areas (except marginal areas,
for which no new controls were required) would have to employ
additional local controls to meet the 1-hour ozone standard in a timely
fashion. Since then, many control measures have been implemented, our
understanding of the importance of interstate pollution transport has
improved, and we have promulgated interstate NO_X transport
rules. Regional modeling by EPA indicates that the majority of
potential 8-hour nonattainment areas that fall into the gap will attain
the 8-hour standard by 2007 based on reductions from the NO_X
SIP Call, the Federal Motor Vehicle Emissions Control Program, and
other existing Federal and State control measures, without further
local controls.
Of the 76 hypothetical areas that would fall into the gap (and
would thus be covered under subpart 1 under classification option 2),
27 would have been classified as moderate if classified under option 1
based on their 8-hour design values. Eighteen of these 27 areas are
projected to attain by 2007 through existing regional or national
measures. If these areas were to be classified as moderate (under
classification option 1), these areas would nonetheless be required to
implement statutorily specified controls for moderate areas. Using our
discretion to regulate gap areas under subpart 1 is one way (the
proposed incentive feature, discussed below in this section on
classifications, is another way) to avoid requiring unnecessary new
local controls in areas

[[Page 32815]]

already projected to meet the standard in the near term.
The other 49 gap areas could be regulated either under subpart 1
(under option 2) or as marginal areas if classified by 8-hour design
value under subpart 2 (under option 1). These areas already are meeting
the 1-hour standard and are close to meeting the 8-hour standard.
Because control requirements for marginal areas are similar to those
for subpart 1 areas, and because most of these areas are projected to
attain within 3 years, the difference in regulatory category may make
no practical difference for many of these areas. A potential rationale
for placing these areas under subpart 1 is to provide States and EPA
with greater discretion to handle implementation difficulties that
might arise in some of these areas. For example, a gap area might fail
to attain within the maximum attainment date for marginal areas (3
years after designation) because of pollution transport from an upwind
nonattainment area with a later attainment deadline. In that event,
subpart 2 calls for the area to be reclassified as moderate and for the
area to implement additional local controls specified for moderate
areas. For areas under subpart 1, however, we could provide additional
time for the area to attain while the upwind sources implemented
required controls if this were determined to be a more effective or
more appropriate solution. Although regional modeling projections
indicate that the NO_X SIP Call will bring most gap areas
into attainment by 2007, some States have voiced concern to us that
interstate or intrastate pollution transport may affect future 8-hour
areas with near-term attainment deadlines. Subpart 1 would provide
States and EPA with more flexibility on the remedy in any such cases.
Although we believe that there are reasons to place gap areas in
subpart 1, and have the legal authority to do so, we are not suggesting
that subpart 2 is unreasonable for any area that would be subject to
subpart 2 under either classification option. Also, our analysis here
should not be taken as inconsistent with its proposal under
classification option 1, whereby all 8-hour ozone nonattainment areas
would be subject to the subpart 2 planning obligations. That simpler
option, in conjunction with the incentive feature for classifications
(if ultimately adopted), described below in this section on
classification, could provide similar flexibility on control measures
for most (though not quite all) areas. In addition, we are proposing
ways in which to build some flexibility into some of the mandated VOC
control obligations in subpart 2, in areas where it would make sense to
provide such flexibility. A final observation is that Congress did
recognize some benefit in prescribing measures for areas because of
past failure to attain under less prescriptive provisions of the CAA.
Placing all gap areas in subpart 1 would result in over half of the
hypothetical nonattainment areas being covered by subpart 1. To be
fair, this option might appear to result in some areas being placed in
subpart 1 even though they have 8-hour ozone design values as high or
higher than some areas that fall under Table 1 in section 181 and thus
are covered under subpart 2. As explained above, we believe the most
effective way to deal with that issue is not to exercise our discretion
and make those areas subject to subpart 2. Rather, we can use our
discretion under subpart 1 to determine how to define the controls
required under subpart 1 for such areas in order to assure the most
equitable, yet effective, means for these areas to attain the 8-hour
ozone NAAQS. For example, in the section of this proposed rulemaking
addressing RFP under subpart 1, we explore an option of defining RFP in
the same manner as it is defined under subpart 2. EPA is open to
suggestions as to how to make the subpart 1 planning process that would
apply to these areas effective and also equitable in light of the
subpart 2 planning obligations to which areas with a similar 8-hour
ozone problem may be subject.
6. Proposed Incentive Feature
In addition to the two basic classification options being proposed
above, we are also proposing an early attainment incentive feature that
could be applicable to either of the options proposed above. Under this
feature, for areas classified under subpart 2, we would classify an
area at a lower classification than it would receive based on its
design value, if a modeled demonstration indicates the area will attain
by an attainment date that is consistent with the lower classification.
For instance, if a subpart 2 area has an 8-hour ozone design value of
0.094 ppm, it would ordinarily be classified as moderate, with an
attainment date 6 years after the area's designation as nonattainment
for the 8-hour standard. If modeling acceptable to EPA demonstrates
that this area will attain within 3 years after designation, the area
would be eligible for classification as a marginal area, since marginal
areas would have a maximum attainment date of 3 years after their
nonattainment designation date. (See our proposal on attainment dates
elsewhere in this proposed rulemaking.)
The lower classification would provide additional flexibility to
the area in that it would avoid the mandatory control requirements of
the higher classification. Appendix A of this proposal provides a
comparison of requirements under subparts 1 and 2.
In granting a lower classification to an 8-hour ozone nonattainment
area based on this option, we propose to take into account the extent
to which the area significantly contributes to downwind nonattainment
or interferes with maintenance under section 110(a)(2)(D) of the CAA.
We solicit comment on possible mechanisms for assessing this
contribution for purposes of granting the lower classification, and
possible tests for whether to grant or deny the lower classification.
In addition to soliciting comment on this proposed incentive
feature itself, we are soliciting comment on whether such modeled
demonstration would have to be made prior to the initial classification
of areas, or whether it could be submitted after we have already
classified the area initially at the higher classification, in which
case we would have to revise the classification downward at a
subsequent time.
We also solicit comment on whether EPA, prior to initial
classifications, should use EPA regional-scale modeling (rather than
urban-scale modeling) to make determinations of which areas would
receive a lower classification. Under this suboption, an area would
qualify for the lower classification if EPA's regional modeling
indicated that, based on emissions reductions from existing national
and regional programs, the area would attain the 8-hour standard by the
attainment deadline for the next lower classification. In requesting
comment on this suboption, EPA notes that regional-scale modeling alone
is not considered sufficient for an approvable attainment
demonstration. We request comment on whether regional-scale modeling
would nonetheless be adequate for purposes of lowering an area's
classification. (Under this approach, if regional modeling did not
provide grounds for the lower classification, States would need to
perform local attainment demonstrations to take advantage of the
incentive feature.)
It should be noted that an option was presented and discussed at
the public meetings similar to this incentive feature in conjunction
with the option that would have classified all areas based on their 8-
hour design values but also relied on modeled results to adjust the
classification. The option received

[[Page 32816]]

criticism from a wide variety of commenters, who argued that modeling
could be applied inappropriately in classifying areas. We nonetheless
believe it is appropriate to propose this feature to alleviate some of
the other concerns that many commenters raised about the mandatory
measures required under the higher classifications of subpart 2.
Furthermore, we believe this option is justified by the intent of the
CAA, in which an area's classification is generally linked to the
amount of time the area is anticipated to need to attain the NAAQS. We
recognize that the CAA was not originally structured to allow lower
classifications based on an area being projected to attain earlier.
However, under the Supreme Court ruling that required that we interpret
the law regarding subpart 2's application to the 8-hour ozone standard,
we believe it may reasonably give areas that are projected to attain
the 8-hour ozone standard by an earlier date a classification that is
consistent with that attainment date.
7. Other Options EPA Considered
We considered many other options for classification and for the
translation of the classification table in the CAA. These options are
discussed in a separate document available in the docket.\17\ These
other possible ways of translating the classification table, in our
opinion, do not have the same degree of consonance with the intent of
Congress when it enacted subpart 2 as those we are proposing. We are
therefore not proposing them.
---------------------------------------------------------------------------

\17\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

8. Implications for the Options
To evaluate the potential impact of the various classification
options, we developed a set of 122 hypothetical nonattainment areas
based on the counties that have monitors measuring violations of the 8-
hour ozone standard for the 3-year period of 1998-2000. Our inclusion
and grouping of counties into hypothetical nonattainment areas was done
only for illustrative purposes and does not have any implications for
the location, number or boundaries of nonattainment areas that may
ultimately be evaluated and recommended by States and Tribes or
designated by EPA. The final designations would be affected by factors
contained in EPA's guidance on boundaries of nonattainment areas (which
is, as noted earlier, not a topic of discussion or comment for this
notice of proposed rulemaking). As noted earlier, Table 3 illustrates a
possible classification grouping of nonattainment areas based on
counties with monitors based on the options proposed above. The list of
these areas and the information we used in assessing the consequences
of our proposal are available in the docket.\18\
---------------------------------------------------------------------------

\18\ Background Information Document, Hypothetical Nonattainment
Areas for Purposes of Understanding the EPA Proposed Rule for
Implementing the 8-hour Ozone National Ambient Air Quality Standard.
Illustrative Analysis Based on 1998-2000 Data. U.S. Environmental
Protection Agency, Office of Air and Radiation, Office of Air
Quality Planning and Standards, Draft, April 2003. Available at:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr/.

Table 3.--Proposed Classification Options Counts of Hypothetical Nonattainment Areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subpart 2 Subpart 1
---------------------------------------------------------------------------------------
Extreme Severe-17 Severe-15 Serious Moderate Marginal Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Option 1 (8-hour design value).................................. 0 1 1 6 53 61 0 122
Option 1 (8-hour design value)-with incentive feature*.......... 0 1 1 6 30 84 0 122
Option 2 (2-step approach--areas < 0.121 ppm = subpart 1)....... 0 1 1 6 26 12 76 122
Option 2 (2-step approach--areas < 0.121 ppm = subpart 1)-with 0 1 1 6 21 17 76 122
incentive feature \1\..........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Areas that would be moderate using their 8-hour design value but that are projected to attain by 2007 would be classified marginal.

9. Other Considerations
In addition to the overall classification options being proposed,
it should be noted that subpart 2 also provides that classifications
may be adjusted upward or downward for an area if the area's design
value is within 5 percent of another classification. This provision
(section 181(a)(4)) reads:

If an area classified under [Table 1]
would have been classified
in another category if the design value in the area were 5 percent
greater or 5 percent less than the level on which such
classification was based, the Administrator may, in the
Administrator's discretion, within 90 days after the initial
classification, * * * adjust the classification to place the area in
such other category. In making such adjustment, the Administrator
may consider the number of exceedances of the national primary
ambient air quality standard for ozone in the area, the level of
pollution transport between the area and other affected areas,
including both intrastate and interstate transport, and the mix of
sources and air pollutants in the area.

Thus, for example, if a downwind area is subjected to a subpart 2
classification and there is evidence that the area will not benefit
significantly from local controls mandated by subpart 2 for the area's
classification and can attain within the time period specified for the
next lower classification, the area may obtain some relief based on the
5 percent rule in the CAA, if applicable.
This provision does not establish a mechanism for removing areas
from the subpart 2 classification scheme.

B. How Will EPA Treat Attainment Dates and Other Dates Including SIP
Submittal Dates for the 8-Hour Ozone Standard?

1. Background
Under subpart 2 of the CAA, maximum attainment dates and most SIP
submittal dates are fixed as a function of a nonattainment area's
classification under Table 1. The CAA provides that an area's
attainment date must be ``as expeditious as practicable but no later
than'' the date prescribed in Table 1 for that area's classification.
The statutory dates are specified as a number of years (e.g., 6 years)
from the date of enactment of the CAA Amendments, which was November
15, 1990. Because these dates are a set number of years after enactment
of the CAA Amendments, one might initially

[[Page 32817]]

conclude that the subpart 2 classifications, with their associated
attainment dates, should not apply for the 8-hour standard. The Supreme
Court, however, rejected a conclusion that the subpart 2
classifications do not apply, although it noted that the attainment
dates ``seem[ ]
to make no sense'' for areas classified under a new
standard after November 15, 1990. 121 S.Ct. at 918.
We believe that applying the attainment dates as expressly provided
under Table 1 would produce absurd results. For example, a strict
application of Table 1 would result in areas classified as marginal for
the 8-hour NAAQS as having an attainment date of November 15, 1993 and
areas classified as moderate as having an attainment date of November
15, 1996. Since these dates have long passed, it makes no sense to
establish them as the applicable dates.
Many provisions of the CAA, however, indicate what Congress' intent
was in setting attainment dates. For example, section 181(b), provides
that for areas designated attainment or unclassifiable for ozone
immediately following enactment of the 1990 CAA Amendments and
subsequently redesignated to nonattainment, the attainment date would
run from the date the area is classified under subpart 2.\19\ Thus, if
an area designated as attainment for the 1-hour ozone standard in 1990
were redesignated to nonattainment for the 1-hour ozone standard in
January 2002 and classified as moderate, the area's attainment date
would be 6 years following January 2002, i.e., January 2008. Similarly,
section 172(a)(2) provides for attainment dates to be calculated from
the time the area is designated nonattainment. We believe that Congress
would have intended for areas designated nonattainment and classified
under subpart 2 for the 8-hour standard to have attainment periods
consistent with those in Table 1 (e.g., 3 years for a marginal area, 6
years for a moderate area, etc.), but running from the date the area is
designated and classified for purposes of the 8-hour NAAQS. We are
proposing for areas classified under subpart 2, the period for
attainment (running from date of designation/classification) would be:
---------------------------------------------------------------------------

\19\ Section 181(b) provides that ``any absolute, fixed date
applicable in connection with any such requirement is extended by
operation of law by a period equal to the length of time between the
date of the enactment of the CAAA of 1990 and the date the area is
classified under this paragraph.'' Under section 181(b), the date of
classification is the same as the date of redesignation to
nonattainment.
---------------------------------------------------------------------------

? Marginal--3 years.
? Moderate--6 years.
? Serious--9 years.
? Severe--15 or 17 years.
? Extreme--20 years (no areas currently expected to be in
this category for the 8-hour ozone standard).
Note that the CAA requires each area to demonstrate attainment as
expeditiously as practicable, regardless of maximum statutory periods.
Most SIP submittal dates in subpart 2 run for a fixed period from
the date of enactment of the 1990 CAA, which was also the date of
designation and classification by operation of law for most subpart 2
areas. Under section 181(b)(1), the statute provides that any fixed
dates will be extended by operation of law to a period equal to the
length of time between that date of enactment and the date an area is
subsequently designated and classified. Thus, unless EPA has reason to
create a different time period, either as explained specifically below
or in any subsequent specific rulemaking applicable to a particular
subpart 2 requirement, subpart 2 SIP submittals will be due as a
general matter by the same period of time after designation and
classification under the 8-hour standard as provided in subpart 2 for
areas designated and classified at the time of enactment of the 1990
CAA.
For areas classified under subpart 1, attainment dates would be set
under section 172(a)(2)(A), which provides that the SIP must
demonstrate attainment as expeditiously as practicable, but no later
than 5 years after designation or 10 years after designation if the
severity of the area's air pollution and the availability and
feasibility of pollution control measures indicate more time is needed.
Note that in determining whether an area actually attains the NAAQS
at the time of the attainment date, EPA would use the ambient air
quality data for the three ozone seasons prior to the attainment date.
As an example, if the effective date of the nonattainment designations
is May 15, 2004, the maximum attainment date for an area classified
marginal would be May 15, 2007. In this example, EPA would consider the
8-hour ozone data for the three previous ozone seasons--2004, 2005 and
2006.
2. How Will EPA Address the Provision Regarding 1-Year Extensions?
Both subpart 1 and subpart 2 provide for two brief attainment date
extensions for areas in limited circumstances where they do not attain
by their attainment date. Section 172(a)(2)(C) (under subpart 1)
provides for EPA to extend the attainment date for 1 year if the State
has complied with all requirements and commitments pertaining to the
area in the applicable implementation plan, and no more than a minimal
number of exceedances of the relevant NAAQS has occurred in the area in
the attainment year. No more than two 1-year extensions may be issued
under this subparagraph for a single nonattainment area. Section
181(a)(5) (under subpart 2) contains a similar provision, but instead
of allowing a ``minimal'' number of exceedances, it provides for only
one exceedance of the standard in the year preceding the extension
year. This reflects the form of the 1-hour ozone standard, which is
exceedance-based. The 8-hour ozone standard, however, is not an
exceedance form of standard, but rather a concentration-based
standard.\20\ We have issued guidance on the portion of these two
provisions relating to the State's compliance with all requirements and
commitments pertaining to the area in the applicable implementation
plan.\21\ However, for purposes of section 181(a)(5), we need to
determine a reasonable interpretation in light of the fact that the
statute, as written, does not fit the form of the 8-hour standard.
Because Congress has addressed this issue elsewhere in the statute, we
believe it is reasonable to adopt that formulation. Therefore, we would
apply the same test under subparts 1 and 2 for determining whether to
grant a 1-year extension, i.e., whether there was a minimal number of
exceedances. For both subparts, we propose to interpret this to mean
for the 8-hour standard, the area would be eligible for the first of
the 1-year extensions under the 8-hour standard if, for the attainment
year, the area's 4th highest daily 8-hour average is 0.084

[[Page 32818]]

ppm or less. An area that has received the first of the 1-year
extensions under the 8-hour standard would be eligible for the second
extension if the area's 4th highest daily 8-hour value, averaged over
both the original attainment year and the first extension year, is
0.084 ppm or less.
---------------------------------------------------------------------------

\20\ See 40 CFR 50.9(a); the 1-hour standard for ozone ``* * *
is attained when the expected number of days per calendar year with
maximum hourly average concentrations above 0.12 parts per million
(235 [mu]g/m3) is equal to or less than 1 in order for
the area to be considered attaining the standard, as determined by
Appendix H to this part.'' Thus, the 1-hour standard is an
``exceedance'' based standard, since the number of exceedances of
the standard (yearly average over 3 years under appendix H) must be
equal to or less than 1. In contrast, see 40 CFR 50.10(b); the 8-
hour standard for ozone is ``* * * met at an ambient air quality
monitoring site when the average of the annual fourth-highest daily
maximum 8-hour average ozone concentration is less than or equal to
0.08 ppm, as determined in accordance with Appendix I to this
part.'' Thus, this is a concentration-based standard, because
meeting the standard is determined by calculating the concentration,
not the number of exceedances as under the 1-hour standard.
\21\ Memorandum of February 3, 1994, from D. Kent Berry re:
``Procedures for Processing Bump Ups and Extension Requests for
Marginal Ozone Nonattainment Areas.'' U.S. Environmental Protection
Agency, Research Triangle Park, North Carolina.
---------------------------------------------------------------------------

3. How Do Attainment Dates Apply to Indian Country?
As discussed elsewhere in this proposed rulemaking, the Tribal
Authority Rule (TAR), 40 CFR 49.9 provides that Tribes should not be
treated in a manner similar to States with regard to schedules,
including the attainment dates. However, the TAR also requires EPA to
develop Federal implementation plans (FIPs) where necessary and
appropriate. (40 CFR 49.11). Because we believe that public health
considerations are of primary concern, the attainment dates for primary
NAAQS should be met. Therefore, EPA, in consultation with the Tribes,
will work to ensure that the standards are addressed as soon as
possible, considering the needs of the Tribes, and ensure that
attainment in other jurisdictions is not adversely affected.
4. How Will EPA Establish Attainment Dates for Areas Classified as
Marginal Under the ``Incentive'' Feature Proposed Under the
Classification Section or Areas Covered Under Subpart 1 With a
Requested Attainment Date of 3 Years or Less After the Designation
Date?
EPA would ordinarily have established attainment dates for areas
through a review of the SIP and whether attainment is as expeditious as
practicable but no later than the date prescribed in the CAA. Elsewhere
in this proposal, we are providing that marginal areas (under subpart
2) and areas under subpart 1 with an attainment date within 3 years
after designation would not actually have to submit an attainment
demonstration within 3 years after designation. Therefore, we must
establish another procedure for establishing the attainment dates for
these areas. We are proposing the following procedure.
a. Areas that are classified marginal based solely on their 8-hour
ozone design value. For these areas, we are proposing that the CAA
attainment date under Table 1 of section 181 would be the area's
attainment date (namely, 3 years after designation).
b. Areas that are classified marginal based on the proposed
incentive feature proposed elsewhere and areas covered under subpart 1
with a requested attainment date of 3 years or less after the
designation date. These are areas that are projected through modeling
to attain within 3 years following designation. For these areas, we are
proposing that these States must submit a SIP--within 1 year after
designation--that provides documentation (viz., concerning the modeling
and analyses that the area is relying on to support its claim) that the
area will attain within 3 years following designation. Such a SIP
submission must undergo the normal public hearing and comment
procedures as for any SIP submission.

C. How Will EPA Implement the Transition From the 1-Hour to the 8-Hour
Standard in a way To Ensure Continued Momentum in States' Efforts
Toward Cleaner Air?

As areas are designated for the 8-hour ozone NAAQS, we must address
how those areas will transition from current implementation of the 1-
hour standard to implementation of the 8-hour standard. In addressing
this issue, we considered a number of factors, including the existing
``anti-backsliding'' provisions of the CAA, Congress' intent, as
evidenced in the statute, to ensure continued progress toward
attainment of the ozone standard, and the Supreme Court's
interpretation of the CAA and Congressional intent. In subsection 1 of
this section, we provide background information on the transition
process we set forth in 1997 (and subsequently amended through
regulation) and we summarize the statutory anti-backsliding provisions
and the Congressional intent in enacting these provisions and subpart 2
of the CAA. In subsection 2, we identify two proposed options to effect
the transition from implementation of the 1-hour standard to the 8-hour
standard that concern the revocation of the 1-hour standard in whole or
revocation of the 1-hour standard in part. In subsection 3, we
indicate--in light of the CAA provisions and Congressional intent--
which requirements that applied for purposes of the 1-hour standard
should continue to apply to areas after they are designated for the 8-
hour standard. Next, in subsection 4, we consider whether there is a
point at which the States should no longer be required to implement
those obligations EPA determines continue to apply after areas are
designated for the 8-hour standard. Finally, in subsection 5, we
indicate how it will ensure through regulation that the public knows
which ``1-hour'' obligations remain in place and for which areas.
1. Background
a. Background on EPA's current regulation for governing the
transition. At the time we promulgated the 8-hour ozone NAAQS in July
1997, we issued a rule (40 CFR 50.9(b)) providing that the 1-hour
standard would no longer apply to an area once we determined that the
area had attained the 1-hour NAAQS. (62 FR 38856, July 18, 1997). This
process became known as ``revocation'' of the 1-hour NAAQS. We
interpreted that provision to mean that once the 1-hour standard was
revoked, the area's 1-hour ozone designation no longer applied. Due to
the ongoing litigation concerning the 8-hour ozone NAAQS and our
implementation strategy for that standard, we subsequently modified 40
CFR 50.9(b) in part to provide that ``after the 8-hour standard has
become fully enforceable under part D of title I of the CAA and subject
to no further legal challenge, the 1-hour standards set forth in this
section will no longer apply to an area once we determine that the area
has air quality meeting the 1-hour standard.'' (65 FR 45181, July 20,
2000).\22\ Thus, currently, three criteria would need to be met before
we could revoke the 1-hour standard for an area: (1) The 8-hour
standard would need to be fully enforceable, (2) all legal challenges
to the 8-hour ozone NAAQS would need to be resolved; and (3) we would
need to determine that an area had attained the 1-hour standard.
---------------------------------------------------------------------------

\22\ On December 27, 2002 (67 FR 79460), EPA proposed to stay
the applicability of its authority to revoke the 1-hour standard
pending rulemaking to consider whether to modify the approach for
transitioning to the 8-hour standard.
---------------------------------------------------------------------------

In this section, we are proposing to revise 40 CFR 50.9(b) to
reflect more appropriately the implementation strategy that we develop
pursuant to this proposal. At the time that we initially promulgated 40
CFR 50.9(b), we contemplated that areas would not be subject to the
planning obligations of subpart 2 for purposes of implementing the
revised 8-hour ozone NAAQS. Furthermore, we stated that ``as a matter
of law,'' areas should continue to be subject to the planning
obligations of subpart 2 for purposes of implementing the 1-hour
standard until such time as they attained the 1-hour ozone NAAQS. Thus,
we contemplated that the 1-hour NAAQS--and the associated designation
and classification under subpart 2 for an area, including any mandated
control obligations--would continue to apply until the area attained
that standard. At that time, the area would be subject only to the
planning obligations of subpart 1. In light of the

[[Page 32819]]

Supreme Court's ruling that we cannot ignore subpart 2 for purposes of
implementing a revised ozone NAAQS, we believe it is appropriate to
reconsider how to transition from the 1-hour NAAQS to the 8-hour NAAQS
in light of the statutory structure of the CAA, as amended in 1990.
Our principal objectives for the mechanism that would ensure a
smooth transition to implementation of the 8-hour standard are to
ensure (1) that there will be no degradation of air quality, (2) that
areas continue to make progress toward ozone attainment, and (3)
consistency with the intent of Congress when it originally established
the implementation structure for ozone in subpart 2 of the CAA.
We believe the several alternative approaches proposed below are
more consistent with the implementation path we are proposing in light
of the Supreme Court's remand. These alternatives would more
effectively continue the momentum towards cleaner air than would have
been accomplished under the current 40 CFR 50.9(b) structure while
allowing 8-hour ozone nonattainment areas to more readily focus on
their 8-hour ozone standard SIP obligations.
b. Background on the CAA's anti-backsliding provisions. The CAA
contains a number of provisions that indicate that Congress did not
intend to allow States to alter or remove provisions from
implementation plans if the plan revision would jeopardize the air
quality protection provided in the approved plan. Section 110(l)
provides that EPA may not approve a SIP revision if it interferes with
any applicable requirement concerning attainment and ROP or any other
applicable requirement of the CAA. Congress created a tougher test for
areas that might want to relax control requirements that were in SIPs
prior to the CAA Amendments of 1990. Section 193 of the CAA prohibits
modification of a control requirement in effect or required to be
adopted as of November 15, 1990 (i.e., enactment of the 1990 CAA
Amendments), unless such a modification would ensure equivalent or
greater emissions reductions.
We also believe that Congress set an additional statutory bar for
1-hour ozone areas that were designated nonattainment and classified at
the time of the 1990 CAA Amendments. For these areas, Congress
classified the areas ``as a matter of law'' and provided that even upon
redesignation to attainment, such areas could not remove from the SIP
control measures specified in subpart 2 (``applicable requirements''),
but could shift them to contingency measures that would be implemented
to ``promptly correct any violation of the standard.''
For these reasons, we believe that although Congress gave EPA the
power to revise the existing ozone standard, Congress did not open the
door for States to remove SIP-approved measures or to avoid control
obligations with which they have not yet complied.
One other provision, though not directly applicable, sheds light on
Congress' intent. In 1990, Congress enacted section 172(e), which
applies when EPA revises a NAAQS and makes it less stringent. This
provision specifies that in those circumstances, States cannot relax
control obligations that apply in nonattainment area SIPs or avoid
adopting those that they have not yet adopted.\23\ Because Congress
specifically mandated that such control measures need to be adopted or
retained even when EPA relaxes a standard, we believe that Congress did
not intend to permit States to remove control measures when EPA revises
a standard to make it more stringent, as in the case of the 8-hour
standard.
---------------------------------------------------------------------------

\23\ Specifically, section 172(e) requires EPA to promulgate
regulations providing for controls that ``are not less stringent
than the controls applicable to areas designated nonattainment''
before relaxation of the standard.
---------------------------------------------------------------------------

We also note that in finding EPA's subpart 1-only implementation
approach unlawful, the Supreme Court voiced concern that EPA not render
subpart 2 ``abruptly obsolete'' because ``Subpart 2 obviously was
enacted to govern implementation for some time. * * * A plan reaching
so far into the future was not enacted to be abandoned the next time
EPA reviewed the ozone standard--which Congress knew could happen at
any time, since technical staff papers already had been completed in
1989.'' In response to the decision, we are now proposing (as noted
above in the discussion on classifications) to use subpart 2 in
implementing the 8-hour standard. However, the classification systems
we are proposing today would result in the majority of ozone
nonattainment areas that are currently classified for the 1-hour
standard being placed in a lower classification for the 8-hour
standard. Our proposed anti-backsliding approaches, discussed below,
would not render obsolete the congressionally-specified control measure
requirements of subpart 2 for 1-hour ozone nonattainment areas at a
time when those areas have not yet met either of the health-based ozone
standards.
2. When Will EPA Revoke the 1-Hour Standard?
We are proposing to revoke the 1-hour standard either in part or in
whole 1 year following designations for the 8-hour NAAQS. As discussed
below, we are proposing two different legal mechanisms for achieving
the revocation. Under either approach, however, the same stipulations
continue to apply to areas currently or formerly designated
nonattainment for the 1-hour standard.
The deciding factor supporting the schedule for the revocation in
our proposal is to ensure areas do not have to perform conformity
analyses for both the 1-hour and 8-hour standards at the same time. As
background, areas designated nonattainment for the first time for a new
standard (e.g., the 8-hour ozone standard) have a 1-year grace period
before conformity applies for that standard (i.e., a 1-year grace
period before conformity applies for the 8-hour ozone standard). This
1-year grace period before conformity is required for the 8-hour
standard applies to all areas designated nonattainment for the 8-hour
standard, regardless of their 1-hour NAAQS designation status. Thus,
under either of the mechanisms described below, we are proposing that
conformity for the 1-hour standard no longer apply 1 year following the
effective date of the 8-hour designation (i.e., when the standard is
revoked in whole or in part). However, conformity obligations for the
1-hour ozone standard would remain applicable during the grace period
and would not be affected by the designation of areas for the 8-hour
standard. Our intentions regarding conformity--as well as a more
complete discussion of transportation conformity appear elsewhere in
this proposal.
(i) Option 1: Revocation in whole of the 1-hour standard. Under
this option, which is our preferred option, EPA would revoke the 1-hour
standard and the associated designations and classifications 1 year
following the effective date of the designations for the 8-hour NAAQS.
The complete revocation of the 1-hour standard would occur in late
spring of 2005 on the effective date of the 8-hour NAAQS designations,
which will be issued by April 15, 2004. In order to address the anti-
backsliding issues discussed in section 3, below, EPA would promulgate
regulations specifying those requirements that would continue to apply
after the revocation of the 1-hour standard. The regulations would also
specify the geographic areas in which those obligations continue to
apply, since areas designated nonattainment

[[Page 32820]]

for the 8-hour standard may include counties that were not designated
nonattainment for the 1-hour standard. The anti-backsliding regulations
would apply only to the portion of the 8-hour nonattainment area that
was designated nonattainment for the 1-hour standard.
(ii) Option 2: Partial revocation of 1-hour standard. Under this
mechanism, EPA would retain the 1-hour standard and its associated
designations and classifications for limited purposes (viz., those
discussed and proposed below in section 3) until the area meets the 1-
hour standard. For many areas, this is likely to extend well beyond May
2005, the date of likely revocation under option 1.\24\ For all
remaining purposes, EPA would revoke the 1-hour standard and the
associated designations and classifications 1 year after the effective
date of designations for the 8-hour standard. As noted above, we
believe that Congress initially intended the State's obligations under
subpart 2 to continue to apply ``as a matter of law,'' and the 1-hour
designations and classifications--established for the circumstances
present when the requirements were enacted--are the mechanism Congress
identified for triggering the applicability of these requirements.
Under this theory, Congress would have intended the standard to remain
in place for purposes of control measures and NSR requirements, as
discussed above.
---------------------------------------------------------------------------

\24\ A number of commenters in the pre-proposal phase
recommended an approach premised on retention of the standard. See,
e.g., Letter of December 5, 2002 from Michael P. Kenny, Executive
Director, California Air Resources Board, to Jeffrey R. Holmstead,
EPA Assistant Administrator for Air and Radiation. Available at:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr/.
---------------------------------------------------------------------------

While the partial retention of the standard itself and the
associated designations and classifications would be the mechanism used
to retain the specified obligations, we would need to promulgate
regulations similar to those described in option 1 to ensure that it is
clear for which purposes the standard is being retained.
(iii) Request for comment. Both of these options would achieve the
same result--ensuring the continued applicability of certain control
requirements in subpart 2 and ensuring continued improvement in air
quality, while shifting the focus from modeling and other planning
requirements for the 1-hour standard to analyses for the 8-hour
standard. We solicit comment on which mechanism is preferable for
accomplishing the overriding objective of preventing backsliding from
statutory and SIP requirements while achieving a smooth transition to
implementation of the new standard. In addition, EPA also solicits
comment on whether to retain the limit in current 40 CFR 50.9(b) that
the 1-hour standard will not be revoked for any area until the 8-hour
standard is no longer subject to legal challenge.
(iv) Other possible approaches for the transition from the 1-hour
to the 8-hour standard.
EPA considered other approaches for the timing of the revocation of
the 1-hour ozone standard; these are discussed in a separate document
available in the docket.\25\
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\25\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
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3. What Obligations Should Continue To Apply as an Area Begins To
Implement the 8-Hour Ozone NAAQS and What Obligations Should no Longer
Apply?
In this section, we consider what obligations from subpart 2
relative to the 1-hour ozone standard should continue to apply to areas
after they have been designated for the 8-hour standard. We are
proposing that the continuity of particular obligations should vary
depending on the attainment status of an area for both the 1-hour and
8-hour standard. We first discuss those obligations that we propose
should continue to apply to an area that is designated nonattainment
for the 8-hour NAAQS, and that was designated nonattainment for the 1-
hour ozone standard on or after November 15, 1990. Second, we discuss
those obligations that should continue to apply to an area that is
designated attainment for the 8-hour NAAQS, and that was designated
nonattainment for the 1-hour standard on or after November 15, 1990.
(This section addresses only the continued application of requirements
that applied by virtue of an area having been designated nonattainment
for the 1-hour standard at some point following enactment of the CAA
Amendments of 1990. It does not address areas that have been designated
attainment for the 1-hour standard at all times since November 15,
1990, because they would not have any continuing obligations under
subpart 2 for purposes of the 1-hour standard.) Finally, we address
States' continued obligations with respect to the NO_X SIP
Call. We address this issue separately since this obligation applies
statewide and without respect to the designation status of areas within
the State.
In general, the types of obligations that apply to areas by virtue
of their 1-hour classification can be broken into three groups: control
obligations; measures to address growth in new sources; and planning
obligations. Control measures include specific emission reduction
obligations such as NO_X RACT, I/M, and fuel programs, which
are mandated in subpart 2. Measures to address growth are NSR (required
under subpart 1 and subpart 2) and conformity (required by subpart 1).
Planning obligations consist of attainment and maintenance
demonstrations and RFP plans. For purposes of clarifying what we are
proposing with respect to control measures, we also discuss in this
section ``discretionary'' control measures that are not specified in
subpart 2. Generally, these are control measures or other obligations
the State selected and adopted into the SIP for purposes of attainment,
ROP or any other goal to benefit air quality, but which are not
specifically mandated by subpart 2.
a. What obligations should continue to apply for an area that is
designated nonattainment for the 8-hour NAAQS and that was designated
nonattainment for the 1-hour ozone NAAQS on or after November 15, 1990?
We believe that Congress intended each area that was classified for the
1-hour ozone NAAQS under subpart 2 to adopt the specified control
obligations in subpart 2 for the area's 1-hour classification. We
interpret the mandated obligations in subpart 2 for purposes of an
area's 1-hour ozone classification to remain applicable to such areas
by virtue of the area's classification ``as a matter of law'' in 1990.
(Appendix B of this proposed rulemaking contains a list of the subpart
2 requirements that remain applicable.) The three types of obligations
described above (control obligations, measures to address growth in new
sources, and planning obligations) are discussed separately below.
(i) Control measures. We are proposing that all areas designated
nonattainment for the 8-hour ozone NAAQS remain subject to control
measures that applied by virtue of the area's classification for the 1-
hour standard. To the extent the area has met the obligation and the
control measure is a part of the approved SIP, the State could not
modify or remove that measure except to the extent that it could modify
or remove that measure for purposes of the 1-hour standard and subject
to a demonstration under section 110(l) that modification or removal
would not interfere with attainment or maintenance of the 8-hour ozone

[[Page 32821]]

NAAQS.\26\ For control measures that the State has not yet adopted, the
State remains obligated to adopt and submit such controls. And, once
adopted into the approved SIP, the State could not modify or remove
that measure except to the extent that it could modify or remove that
measure for purposes of the 1-hour standard and subject to a
demonstration under section 110(l) that modification or removal would
not interfere with attainment or maintenance of the 8-hour ozone NAAQS.
This obligation would apply only to the part of the 8-hour ozone
nonattainment area that was designated nonattainment for the 1-hour
ozone NAAQS.
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\26\ In addition, for a revision to an obligation that was in
effect prior to November 15, 1990, section 193 prohibits a SIP
revision without a showing that it would result in equivalent or
greater emission reductions. For purposes of avoiding repetition, we
do not mention section 193 in each of the examples discussed in this
section. However, States remain obligated to make the section 193
demonstration for any revision to a requirement that applied prior
to November 15, 1990.
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To illustrate what we are proposing, we provide the following
example, which will also be used in the next section discussing
discretionary control measures. Assume an area is classified as
marginal for the 8-hour ozone NAAQS and was classified as serious for
the 1-hour ozone NAAQS at the time of the 8-hour designations. Also
assume RACT for a particular source category is considered an 80
percent reduction in uncontrolled emissions of VOCs at all major
sources. In its 1-hour SIP, the State chose to require emissions
reductions of 90 percent and the RACT requirement applied to all major
stationary sources, which for a serious area includes all sources that
emit greater than 50 tons/year VOCs. After designation for the 8-hour
standard, the State wants to modify this RACT requirement to require
only 80 percent reduction in emissions and to limit the requirement to
sources that emit 100 tons/year of VOCs. Because the State could not
have modified the RACT obligation to apply only to sources emitting 100
tons/year or more of VOCs for purposes of the 1-hour standard, the
State could not change the source cut-off from 50 tons/year for
purposes of the 8-hour standard. The 50 tons/year major source
threshold would continue to be an ``applicable requirement'' for the
part of the area that was designated nonattainment for the 1-hour
NAAQS. The State, however, could apply RACT only to sources that emit
100 tons/year or more for any portion of the area that was not a part
of the 1-hour serious nonattainment area. While the 80 percent control
level would be considered mandatory, the 90 percent control level was
not mandated by the CAA and thus is considered a ``discretionary
control measure.'' We address below how modification of a discretionary
control measure would be treated under this proposal.
The same principle would hold true for control measures in a
maintenance plan for an area that was designated nonattainment for the
1-hour standard at or after November 15, 1990 and that was subsequently
redesignated to attainment under the 1-hour ozone standard.\27\ Subpart
2 control measures (including those that had been shifted to
contingency measures) could not be removed from the SIP and could be
modified only to the extent that they could have been modified if the
1-hour standard remained in effect for the area. If the State had
previously shifted a mandated subpart 2 control measure to its
contingency plan, we would not require that the area begin to implement
that measure as part of its 8-hour implementation plan, if the measure
was not required under its classification under the 8-hour standard.
However, the measure would need to remain as a contingency measure for
the area and could not be removed from the SIP.
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\27\ A maintenance plan, which is a SIP revision required under
sections 107(d)(3)(E) and 175A as a prerequisite for redesignating a
nonattainment area to attainment, must provide for maintenance of
the NAAQS for 10 years after redesignation and must contain
contingency measures to promptly correct any violation of the
standard that occurs after redesignation. Contingency measures must
provide for implementation of all measures that were contained in
the SIP for the area before redesignation of the area as an
attainment area.
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(ii) Discretionary control measures. Many approved SIPs contain
control measures that are not specified under subpart 2 for the area,
but that the State chose to adopt as part of the demonstration of
attainment or part of the ROP requirement for the 1-hour NAAQS. For
these kinds of measures, we are proposing that no additional burden be
placed on the State. For purposes of the 1-hour standard, States may
currently revise or remove those requirements so long as they make a
demonstration consistent with section 110(l) that such removal or
modification would not interfere with attainment of or progress toward
the 1-hour ozone NAAQS (or any other applicable requirement of the
CAA). Under the CAA, for purposes of the 8-hour standard, the same
obligation would apply except the State would need to make the
demonstration with respect to the 8-hour standard instead of the 1-hour
standard.
In the example above, if a State wants to revise the control level
for certain sources from 90 percent control to 80 percent control, the
State may do so because subpart 2 mandated RACT in this example is an
80 percent level of control rather than a 90 percent control level. The
90 percent control level thus was ``discretionary.'' We are proposing
that no additional burden, beyond the statutory section 110(l) test, be
placed on the State to alter this requirement. Thus, to revise the
control level, the State would need to demonstrate, consistent with
section 110(l), that the lower control level of 80 percent would not
interfere with attainment of the 8-hour standard or RFP for the 8-hour
standard (or any other applicable requirement of the CAA).
A number of SIPs contain enforceable commitments to adopt
additional discretionary emission reduction control measures in the
future. The State remains obligated to these commitments to the same
extent as if they were adopted measures. The only way a State may
modify or remove such a commitment is through a demonstration under
section 110(l).
(iii) Measures to address growth. For 1-hour nonattainment NSR
requirements in place at the time an area is designated nonattainment
for the 8-hour standard, we are proposing that the major source
applicability cut-offs and offset ratios continue to apply to the
extent the area has a higher classification for the 1-hour standard
than for the 8-hour standard. We see no rationale under the CAA--given
the Congressional intent for areas ``classified by operation of law''--
why the existing NSR requirements should not remain ``applicable
requirements'' for the portion of the 8-hour nonattainment area that
was classified higher for the 1-hour standard. However, if an area has
been redesignated to attainment for the 1-hour standard as of the date
of designation for the 8-hour standard, and is thus no longer
implementing the nonattainment NSR program for its previous 1-hour
ozone classification, it would not need to revert back to the program
it had for purposes of the 1-hour standard. For example, if an area is
classified moderate under the 8-hour standard, but was classified
severe under the 1-hour standard at the time of the 8-hour
designations, the portion of the 8-hour nonattainment area that was
classified severe for the 1-hour standard would remain subject to an
offset ratio of 1.3:1 and a major source threshold of 25 tons/year. The
remaining portions of the 8-hour area would be subject to the offset
ratio for moderate areas (1.15:1)

[[Page 32822]]

and the moderate area major source threshold (100 tons/year). If the
severe 1-hour area had been redesignated to attainment prior to the
time of the 8-hour designations and was subject to PSD rather than NSR,
however, the entire designated area for the 8-hour standard would be
subject to the offset ratio and major source threshold for a moderate
area.
(iv) Planning SIPs. Most areas that are nonattainment under the 1-
hour standard have already adopted attainment and ROP plans. However,
there are a few areas that remain obligated to submit attainment or ROP
SIPs. We have outlined our proposal for addressing ROP elsewhere in
this proposed rulemaking and will not repeat those options in detail
here. In general, however, we are proposing that States are still
obligated to address separately ROP that does not overlap with ROP
obligations for the 8-hour NAAQS. Where the ROP obligations overlap,
the area need not separately address ROP for the 1-hour standard. For
ROP already adopted into the SIP, we are proposing that the State may
remove or revise control measures needed to meet the ROP milestone if
such control measures were ``discretionary,'' as discussed above. But,
a State could not revise or remove control measures if they would
interfere with meeting the ROP goals. In other words, the CAA-mandated
ROP emission reduction targets that applied for the 1-hour standard
would still have to be met, but discretionary measures adopted to meet
those targets could be modified, if the State makes the necessary
showing under section 110(l).
With respect to attainment demonstrations, we are soliciting
comment on the interpretation we should take for the two scenarios we
believe exist. The first scenario would be a State that does not have a
fully approved attainment demonstration under the 1-hour standard
because it has failed to act in a timely manner. The second scenario is
an area subject to an obligation to submit an attainment demonstration
under the 1-hour standard in the future. In general, since attainment
demonstrations are planning SIPs, and States must now be planning to
attain the 8-hour NAAQS, one might argue that Congress could not have
intended areas to continue to plan to meet a standard that EPA no
longer considers to be adequately protective of public health. This is
especially true when to do so would divert resources from planning to
meet the 8-hour standard. In contrast, one could argue that allowing
areas to bypass planning obligations under the 1-hour standard will
delay attainment of health protection since States have more time to
submit attainment plans under the 8-hour standard than under the 1-hour
standard.\28\
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\28\ For instance, an area with a past-due obligation to revise
its SIP to develop a new attainment demonstration for the 1-hour
standard could possibly submit such a revision within the next year
or so (2004-2005), with emissions reductions beginning to occur
likely within 1 or 2 years (by 2006-2007). If this area were now
only required to address the 8-hour standard, it would not have to
submit a new attainment demonstration until 2007, as proposed
elsewhere in this proposed rule, with emissions reductions occurring
from that demonstration likely a year or more after 2007, which is
several years after the time period possible by fulfilling the
existing obligation.
---------------------------------------------------------------------------

There are some cases where a State does not have a fully-approved
attainment demonstration because it has failed to act in a timely
manner. To lift that obligation from those areas simply because EPA had
adopted a more stringent NAAQS could result in a more preferential
treatment of those areas over areas that did adopt fully-approvable
attainment demonstrations with the requisite controls. For example, if
an area has adopted controls to demonstrate attainment of the 1-hour
standard, it may not remove those controls from its SIP without a
demonstration that those controls would not interfere with attainment
or progress toward the 8-hour standard (or any other applicable
requirement of the CAA). Such an area likely would have more stringent
control obligations in place than the area without a fully-approved
attainment SIP and would have a high hurdle to removing or altering
those controls. In contrast, the area without a fully-approved
attainment demonstration would likely make slower progress toward
attaining the 8-hour NAAQS (at least in the short-term) because it does
not have all necessary measures in its approved SIP and--without a
clear requirement to the contrary--would be under no pressure to have
those measures in its SIP until its attainment demonstration for the 8-
hour NAAQS is due.
For the following examples of actual situations, we are soliciting
comment on whether to retain the obligation to develop a 1-hour
attainment demonstration or to determine that the requirement no longer
applies. In addition, we are soliciting comment on two alternatives
that might address some of the inequities, while not subjecting States
to the more complicated planning associated with developing two
separate attainment demonstrations (one under the 1-hour standard and
another under the 8-hour standard). Under the first alternative
approach, areas that are subject to an obligation to submit a new or
revised attainment demonstration would instead be required to submit a
SIP revision that would obtain an advance increment of emissions
reductions toward attainment of the 8-hour ozone standard within a
specified, short-term timeframe. For example, we could require these
areas to submit within 1 year of promulgation of the implementation
rule a plan revision that requires a specific percentage of emissions
reductions (e.g., 5 percent or 10 percent) from the baseline emissions
for the 8-hour NAAQS. In addition, we could require that the measures
be implemented in the near term, e.g., no more than 2 years after the
required submission date. Under the second alternative, areas with an
outstanding obligation to submit a 1-hour attainment demonstration
would be required to submit their 8-hour ozone attainment demonstration
early in lieu of being required to submit a 1-hour attainment
demonstration. Submittal of an early 8-hour attainment demonstration
would likely prevent the inequity of areas avoiding emissions
reductions in the short term, as described in the preceding footnote.
? Example 1: An area has not met in part or in full a past-
due obligation to submit a 1-hour attainment demonstration required
because EPA reclassified the area to a higher classification after it
failed to attain the 1-hour standard by its attainment date.
? Example 2: An area is subject to an obligation to submit an
attainment demonstration in the future, as is the case where EPA
applied its attainment date extension policy rather than reclassifying
an area that failed to meet its attainment date and EPA has
subsequently reclassified the area or soon will do so, because of the
courts' rejection of the extension policy.
(v) Other obligations. A number of areas have SIPs that contain
commitments to review their progress toward attaining the 1-hour NAAQS
(in some cases, these are called ``mid-course reviews''). These SIP-
approved commitments are enforceable, and EPA and the States can use
these mid-course reviews to ensure that progress is being made
consistent with the analysis in the area's 1-hour attainment
demonstration. The State remains obligated to honor these commitments.
b. What obligations continue to apply for areas that are designated
attainment under the 8-hour standard and that were designated
nonattainment for the 1-hour standard on or after November 15, 1990?

[[Page 32823]]

(i) Obligations related to NSR. Areas that are in attainment for
the 8-hour ozone NAAQS would not be subject to nonattainment NSR for
the 8-hour standard. We believe it makes little sense to require
nonattainment NSR to continue simply because these areas were
previously designated nonattainment for the 1-hour standard. Thus, we
propose that these areas would be subject to PSD and would not be
subject to the nonattainment NSR offset and major source thresholds
that applied under their classification for the 1-hour standard.
(ii) Obligations related to planning obligations other than
maintenance plans. With respect to SIP planning obligations (ROP plans
and attainment demonstrations), we are proposing that the SIP planning
requirements that applied for purposes of the 1-hour standard would not
continue to apply to these areas as long as they continue to maintain
the 8-hour NAAQS. Thus, even if these areas have failed to meet ROP or
attainment plan obligations for the 1-hour standard, they would not be
required to meet them for so long as they remain in attainment with the
8-hour standard. (As discussed below, however, we are proposing that
such areas develop a maintenance plan under section 110(a)(1).) This
approach is consistent with EPA's ``Clean Data Policy'' \29\ under the
1-hour standard, which provides for these planning obligations to be
stayed once an area attains the standard, but only for so long as an
area remains in attainment of the 1-hour standard. If such an area
violates the 8-hour NAAQS-prior to having an approved maintenance plan
in effect (as proposed below to be required for these areas)--those
obligations would once again apply in the same manner that they apply
in areas designated nonattainment for the 8-hour ozone NAAQS.
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\29\ Memorandum of May 10, 1995, ``RFP, Attainment
Demonstration, and Related Requirements for Ozone Nonattainment
Areas Meeting the Ozone National Ambient Air Quality Standard,''
from John S. Seitz, Director, Office of Air Quality Planning and
Standards. Available at: http://www.epa.gov/ttn/oarpg/t1/memoranda/
clean15.pdf.
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(iii) Obligations related to control measures and maintenance
plans. The issue of what obligation remains with respect to ``non-
discretionary'' control measures approved into the SIP or required
under the CAA is more difficult. Our approach for these is based on the
CAA's requirements for maintenance plans. (Consistent with our proposal
for discretionary control measures in areas designated nonattainment
for the 8-hour NAAQS, we would permit areas to modify discretionary
measures for areas designated attainment for the 8-hour NAAQS so long
as section 110(l) is met.)
If EPA determined that these areas \30\ were required to develop
maintenance plans pursuant to section 175A, then they would need to
keep (or to adopt and then keep) those control measures in the SIP,
though they could shift them to contingency measures. Some commenters
urged us to require all areas previously designated nonattainment for
the 1-hour NAAQS to retain (where the area had been redesignated to
attainment) or develop (where the area was still designated
nonattainment for the 1-hour NAAQS at the time of 8-hour designations)
a section 175A maintenance plan. However, we do not believe that a
section 175A maintenance plan is mandated or is necessary for areas
initially designated attainment for the 8-hour NAAQS.
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\30\ Areas that are designated attainment under the 8-hour
standard and that were designated nonattainment for the 1-hour
standard on or after November 15, 1990.
---------------------------------------------------------------------------

Section 175A maintenance plans are required for areas that were
designated nonattainment for a NAAQS and then subsequently redesignated
to attainment for that NAAQS. The areas addressed in this section have
never been designated nonattainment for the 8-hour ozone NAAQS.
Moreover, they have a maintenance obligation that already applies:
Section 110(a)(1) requires areas to demonstrate how they will attain
and maintain a new or revised NAAQS.\31\ Therefore, we do not believe
that Congress mandated that such areas be subject to the section 175A
maintenance plan obligation for the 8-hour NAAQS, nor do we believe it
is necessary to interpret that provision to apply.
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\31\ Based on ambient ozone data for the period 1998 to 2000 for
the hypothetical nonattainment areas, we identified approximately 20
areas that are currently designated nonattainment under the 1-hour
standard but that will likely be designated attainment under the 8-
hour standard).
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For an area that was never redesignated to attainment for the 1-
hour standard and never had a section 175A maintenance plan, we are
proposing that if the area wants to revise any part of its current 1-
hour SIP, the area must first adopt and submit a maintenance plan
consistent with section 110(a)(1). Moreover, even if the State elects
not to revise its existing SIP, we are proposing that the area submit a
section 110(a)(1) maintenance plan within 3 years of designation as
attainment for the 8-hour NAAQS. We believe that the maintenance plan
should provide for continued maintenance of the 8-hour standard for 10
years following designation for the 8-hour NAAQS and should include
contingency measures. Unlike section 175A, section 110(a)(1) does not
address contingency measures and thus does not specify that mandated
controls in the existing SIP must be shifted to contingency measures if
modified or removed. We are proposing that if the State adopts
sufficient contingency measures, and if it makes a demonstration
consistent with section 110(1), it can modify or remove control
measures in the approved SIP.
We are also proposing that areas with approved 1-hour section 175A
maintenance plans will be able to modify those maintenance plans
consistent with their obligation to have a maintenance plan for the 8-
hour NAAQS under section 110(a)(1). For these areas, we are proposing
that the following obligations could be removed from the SIP if the
State demonstrates that the area will maintain the 8-hour standard
consistent with section 110(a)(1) for a period of 10 years following
designation for the 8-hour NAAQS:
? the obligation to submit a maintenance plan for the 1-hour
standard 8 years after approval of their initial 1-hour maintenance
plan;
? the requirement to implement contingency measures upon a
violation of the 1-hour ozone standard; however, such areas would need
contingency measures as part of a maintenance SIP for the 8-hour NAAQS
and States could elect to modify the existing contingency measure
trigger so that it is based on a violation or exceedance of the 8-hour
standard.
(iv) Obligations related to conformity. For all areas designated
attainment for the 8-hour ozone NAAQS, the requirement to demonstrate
conformity to the 1-hour standard would no longer apply once the 1-hour
standard is revoked in whole or determined not to apply for that
purpose under a partial revocation of the 1-hour standard (as proposed
below). Under section 176 of the CAA, conformity applies to areas
designated nonattainment or subject to the requirement to develop a
maintenance plan pursuant to section 175A. Areas designated attainment
for the 8-hour standard would no longer be subject to the obligation to
demonstrate conformity to the 1-hour emissions budgets in an approved
attainment or ROP SIP or an approved section 175A maintenance plan for
the 1-hour standard. The reason for this is that, under the options
proposed below, they would either no longer be designated nonattainment
for the 1-hour standard or the nonattainment designation would

[[Page 32824]]

no longer apply for purposes of conformity, and the area would no
longer be required to develop a maintenance plan under section 175A for
purposes of the 1-hour standard.
c. What happens with respect to the NO_X SIP Call?
Section 110(a)(2)(D) of the CAA establishes requirements for States
to address the problem of transport. It requires a SIP to prohibit the
State's sources from emitting air pollutants in amounts that will
contribute significantly to nonattainment, or interfere with
maintenance, in one or more downwind States. As noted above in section
I of this proposal, in 1998, EPA called on 22 States and the District
of Columbia (``States'') to reduce emissions of NO_X
consistent with budgets set for each State. (63 FR 57356, October 27,
1998). Furthermore, EPA granted petitions under section 126 and thus
directly regulated certain sources of NO_X emissions in many
of the States covered by the NO_X SIP Call. (65 FR 2674,
January 18, 2000). Below, we refer to these collectively as the
``NO_X transport rules.''
The NO_X transport rules were designed to prevent upwind
NO_X emissions from contributing to nonattainment in a
downwind area for both the 1-hour and 8-hour ozone NAAQS. EPA, however,
stayed the 8-hour basis for the NO_X transport rules in
response to the extensive and extended litigation (described above)
that occurred concerning the establishment of the 8-hour ozone
standard. We intend to take rulemaking action to lift the stay of the
8-hour basis for these rules.
We believe it important to ensure that the transition to the 8-hour
standard does not have the effect of jeopardizing the controls required
to be in place under the NO_X transport rules. Regardless of
whether EPA lifts the stay of the 8-hour basis for these rules, the
controls required have substantial benefits for reductions of both 1-
hour and 8-hour ozone levels. We believe that relaxing such controls
would be contrary to the principles we identified above for an
effective transition. Consequently, we are proposing that States must
continue to adhere to the emission budgets established by the
NO_X SIP Call after the 1-hour standard is revoked in whole
or in part, as proposed below. Similarly, we are not proposing to
revoke or modify its section 126 regulation.
However, States retain the authority to revise the control
obligations they have established for specific sources or source
categories, if they continue to meet their SIP Call budgets. In
addition, consistent with section 110(l), the States would need to
demonstrate that the modification in control obligations would not
interfere with attainment of or progress toward the 8-hour NAAQS or
with any other applicable requirement of the CAA.
d. What additional obligations under part D of title I of the CAA
would not continue to apply after the 1-hour standard is revoked in
whole or in part?
As discussed elsewhere in this proposal, we are proposing that
areas would not be obligated to continue to demonstrate conformity for
the 1-hour standard once the 1-year grace period for application of
conformity for the 8-hour standard has elapsed.
In addition, EPA would not take certain actions with respect to the
1-hour ozone NAAQS. First, we are proposing that we would no longer
make findings of failure to attain the 1-hour standard and, therefore,
would not reclassify areas to a higher classification for the 1-hour
standard based on a failure to meet the 1-hour standard. We believe
that areas should focus their resources on attainment of the 8-hour
standard and that it would be counterproductive to establish new
obligations for States with respect to the 1-hour standard after they
have begun planning for the 8-hour standard. (Moreover, we note that
the attainment dates for marginal, moderate and serious areas have
passed and the CAA does not provide for reclassification of severe
areas in the absence of a request by the State.) EPA must ensure that
areas are continuing to make progress toward cleaner air. If EPA
determines that a State is not adequately implementing an approved SIP
and achieving air quality reductions in a timely manner, EPA may enter
into an informal process to ensure the State takes any necessary action
\32\ or, alternatively, may take more formal action such as making a
finding of failure to implement the SIP or issuing a SIP Call to
require action. As noted above, many areas have SIPs that contain
commitments to review their progress toward attaining the 1-hour NAAQS
(``mid-course review''). These SIP-approved commitments are
enforceable, and EPA and the States can use these mid-course reviews to
ensure that progress is being made consistent with the analysis in the
area's 1-hour attainment demonstration.
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\32\ For instance, upon discussion between EPA and States, some
States have in the past voluntarily agreed to revise their SIPs when
it appears that the SIP is inadequate to attain or maintain the
NAAQS.
---------------------------------------------------------------------------

4. Does the Requirement for Continued Implementation of the Obligations
Addressed Above Expire at Some Point?
The SIP obligations under the 1-hour standard for an area's
classification under the 1-hour standard would not expire after the 1-
hour standard is revoked in whole or in part. However, for those
mandatory requirements that continue to apply to an area due to the
area's classification for the 1-hour NAAQS, we are proposing two
options for when the State may move the mandatory measures to a
maintenance plan in the SIP and treat them as contingency measures:
a. Option 1. When the area achieves the level of the 1-hour ozone
standard (even if the area has not yet attained the 8-hour standard).
The rationale for this option is that Congress intended an area to
continue to implement these obligations until it attained the 1-hour
standard, at which time the area would be able to discontinue
implementation upon a showing of continued maintenance. However, in
such a case, the area could not remove the measures from the SIP;
rather, it could shift such measures to contingency measures.
b. Option 2. When the area attains the 8-hour standard and is
designated attainment (regardless of when, if ever, the area attains
the 1-hour standard). The rationale for this option is that the 8-hour
standard is the standard that EPA has determined will protect public
health and the environment. Once an area demonstrates it has met and
can maintain the health protective standard, it would be appropriate to
remove or modify those controls.
It should be noted that either of these two options could apply for
either of the transition options, discussed in section 2, above.
It should also be noted that the SIP obligations would include not
only requirements in the 1-hour nonattainment area but also for the SIP
in general, including the SIP requirements to address the
NO_X SIP Call. We are proposing under the anti-backsliding
provision in section 110(l) to require that the SIP retain the
NO_X SIP Call controls that have already been approved. In
the absence of appropriate regional scale modeling that would
demonstrate that changing a SIP Call control to a contingency measure
would not interfere with attainment or maintenance in any other State,
the State could not shift SIP Call control strategies to contingency
measures. The State would, of course, also have to submit a
demonstration that the SIP change would not interfere with attainment
or reasonable further

[[Page 32825]]

progress for any air quality standard or other applicable requirement
of the Act.
5. How Will EPA Ensure That the Public Knows Which Areas Must Continue
Provisions Under the 1-Hour SIPs if EPA Revokes the 1-Hour Standard?
EPA would promulgate regulatory provisions identifying the
obligations to which areas remain subject, and identifying the areas.
If EPA ultimately chooses to revoke the 1-hour standard and the
associated designations and classifications shortly after designations
for the 8-hour standard (as proposed below), EPA would ensure that
there are provisions in the Code of Federal Regulations (CFR) that
continue to define the boundaries for those areas. The reason for this
is that boundaries for 8-hour ozone nonattainment areas may not be
coextensive with those for the 1-hour standard, and EPA would need to
make clear which areas or portions of areas must continue to implement
obligations due to their 1-hour classification.

D. Should Prescribed Requirements of Subpart 2 Apply in all 8-Hour
Nonattainment Areas Classified Under Subpart 2, or Is There Flexibility
in Application in Certain Narrowly Defined Circumstances?

1. Background
The 1990 CAA Amendments overhauled the CAA's requirements for ozone
nonattainment areas and, in doing so, specified new mandatory measures
for many areas. The new approach embodied in subpart 2 was to classify
areas according to the severity of their pollution. Areas with more
serious ozone pollution were allowed more time to meet the standard--
but were required to adopt more numerous and stringent measures
depending on their classification. Congressional proponents of this
approach argued that specifying mandatory measures in the statute was
necessary because States and EPA, prior to 1990, had failed to ensure
that SIPs achieve steady reasonable progress in reducing emissions or
to require readily available measures that were cost effective and
needed to meet the standard.
Mandatory subpart 2 requirements for moderate and higher-classified
areas include, for example, specific ROP requirements (including a 15
percent VOC reduction for moderate and above areas), basic I/M
programs, a requirement that sources subject to NSR obtain emissions
offsets at a ratio of 1.15-to-1, and RACT for NO_X sources as
well as VOC sources. Serious and severe areas are subject to additional
measures such as further ROP requirements, applicability of NSR to
smaller sources, enhanced I/M, and applicability of RACT to smaller
sources. (Appendix A presents a summary comparison of measures under
subparts 1 and 2.)
For the proposed 8-hour ozone implementation strategy, EPA has
examined the issue of mandatory measures from both legal and policy
standpoints. EPA's legal view is guided by the Supreme Court decision.
The Court held that Congress drastically limited EPA's discretion on
whether the mandatory requirements of subpart 2 will apply to 8-hour
areas by concluding that the classification scheme of subpart 2 applied
for purposes of a revised ozone NAAQS. ATA I, 175 F3d at 1048-1050.
As discussed elsewhere, the Supreme Court decision states that
subpart 2 provides for classification of areas under the 8-hour
standard. With respect to the requirements of subpart 2, the Supreme
Court stated, ``The principal distinction between Subpart 1 and Subpart
2 is that the latter eliminates regulatory discretion that the former
allowed.'' Whitman 121 S.Ct. at 918. The Court went on to state,
``Whereas Subpart 1 gives EPA considerable discretion to shape
nonattainment programs, Subpart 2 prescribes large parts of them by
law.'' Id. The Court also stated, ``EPA may not construe the statute in
a way that completely nullifies textually applicable provisions meant
to limit its discretion.'' Id. 918-919.
Once an area is classified under subpart 2, the subpart 2
requirements apply. EPA may have some limited ability to change or
limit subpart 2 controls, consistent with the statutory language, but
EPA cannot broadly waive those requirements. For example, EPA may have
some flexibility to modify regulatory requirements for programs such as
NSR (discussed elsewhere in this proposed rulemaking). Furthermore,
subpart 2 provides discretion to EPA in implementing certain provisions
already, such as waivers for stage II vapor recovery, NO_X
RACT and NO_X NSR. In addition, case law may provide EPA with
some flexibility to waive federally applicable requirements on a case-
by-case basis where application of those requirements would produce an
``absurd result.''
With respect to policy considerations, some commenters at public
meetings or in written submissions to EPA have expressed the view that
mandatory measures are needed to ensure actions are taken, but a number
of commenters have raised concerns. These include whether mandated VOC
controls will be appropriate for all areas in the future, and whether
mandatory measures are appropriate in areas projected to attain in the
near term. A number of commenters recommended that EPA allow for
flexibility in implementing the 8-hour ozone standard and not require
mandatory measures, such as local VOC measures, where they would not be
very effective in achieving attainment of the standard. In many cases,
particularly for areas that would be new nonattainment areas under the
8-hour standard, region wide NO_X controls and national
controls on mobile sources are predicted to greatly reduce the areas'
ozone levels and to bring many into attainment without additional local
emission controls.
Although a number of comments were received on the issue of
flexibility, many commenters on this issue took the position that they
would prefer areas to be classified under subpart 1 rather than subpart
2. Some commenters did recommend that EPA make the argument that new
information about the relative benefits of NO_X and VOC
control would lead to allowing more tailored controls for a number of
areas, rather than the one-size-fits-all approach of subpart 2.
However, commenters did not suggest how the CAA could be interpreted to
allow the flexibility they were advocating for the mandatory
requirements of subpart 2. Other commenters argued that the subpart 2
measures are mandatory under the CAA for areas classified under subpart
2 and that the CAA does not provide flexibility to waive those
requirements.
Regarding the VOC/NO_X issue, we observe that scientific
understanding of ozone pollution and the impact of control strategies
has improved over time. Prior to 1990, the main focus of ozone control
strategies was VOC control. Since then, scientific studies have more
clearly recognized the role of NO_X, biogenic emissions, and
transport of ozone and NO_X in ozone nonattainment. In
response, EPA's ozone strategy for the 1-hour standard evolved to put
greater emphasis on controlling NO_X in addition to VOC and
to require control of NO_X emissions that contribute to
interstate ozone problems.
We recognize that the relative effectiveness of VOC and
NO_X controls will vary from area to area, depending
significantly upon VOC/NO_X ratios in the atmosphere. Current
scientific information shows that VOC reductions will reduce ozone in
urban areas and in other areas where there is excess NO_X
available for reaction. Ozone levels in areas that are less urban and
have lower NO_X emissions, or that have high biogenic VOC
levels, may be more sensitive to NO_X control and less

[[Page 32826]]

sensitive to VOC control. Because ozone formation is greatly affected
by meteorological conditions and source/receptor orientation, ozone
formation may be limited by either VOC or NO_X concentrations
at different times and locations within the same area.
In order to support the approach proposed below, we solicit
relevant technical information on this issue from States and others.
2. Approach Being Proposed
In line with the legal interpretation above, we are proposing that
subpart 2 requirements would apply to each area classified under
subpart 2 consistent with the area's classification. However, today's
proposal contains several features intended to provide States with
flexibility on the measures required to be included in SIPs for 8-hour
areas.
First, as explained in the section on classifications above,
proposed classification option 2 would result in a number of areas
being classified under subpart 1 rather than under subpart 2. Second,
for both classification options, we are proposing an incentive feature
that would allow areas to qualify for a lower classification with fewer
mandatory requirements if the area could show it will meet the standard
by the deadline for the lower classification. This would, for example,
allow any area projected to attain by 2007 based on existing Federal
measures and any State or local measures approved into the SIP to be
classified as marginal and to avoid subpart 2 mandatory measures--some
of which may be significant--that apply to higher classifications.
Under either of our proposed classification frameworks, a majority
of potential 8-hour areas would not be subject to significant subpart 2
mandatory measures because they would be classified marginal or lower.
Based on our analysis of hypothetical nonattainment areas, there would
be fewer than 10 potential 8-hour nonattainment areas classified
``serious'' or above, and these areas already are implementing
requirements applicable to serious or above areas for the 1-hour
standard. Therefore, the main impact of subpart 2 mandatory measures in
8-hour implementation would be on (1) areas that are classified as
moderate, and did not have to meet moderate or above requirements for
the 1-hour standard, (2) areas classified as moderate or above that
would be subject to ROP requirements for the 8-hour NAAQS, and (3) new
counties or areas included as part of a serious or higher classified
nonattainment area.
As a third flexibility mechanism, we are proposing to consider
allowing case-by-case waivers when sufficient evidence is presented
that application of a specific requirement in a particular area would
cause absurd results. Evidence of an absurd result might, for example,
include a modeled demonstration that future VOC reductions required
under subpart 2 for a particular area would actually cause ozone to
increase more than a de minimis amount and therefore increase the
amount of NO_X emissions reductions needed for the attainment
demonstration. Such a showing would also have to account for the
potential benefits of the mandated controls in downwind areas in
determining whether on the whole the application of the subpart 2
measure would produce an absurd result.
We believe that absurd results will happen only rarely in those
cases where application of the requirement in that area would thwart
the intent of Congress in enacting the relevant provisions of the CAA.
In such cases, EPA may be able to provide limited relief to the area,
but only to the degree needed to protect Congressional intent. For
example, we believe that the purpose of the 15 percent VOC ROP
requirement is to ensure that areas make progress cleaning up their air
and moving toward their goal of attainment in the first 6 years
following the emissions baseline year. If an area could demonstrate
that reductions in VOC would provide no progress toward attaining the
standard, EPA may be allowed to interpret the statute to allow for
reduction in NO_X emissions instead. EPA could not, however,
simply waive the requirement for the area to meet the ROP goals of the
CAA. Moreover, it would not be sufficient for the area to show that VOC
reductions would be less beneficial than NO_X reductions.
While one might contend that such a result is not the most logical
result, it is not absurd. The above example is a simplistic example--
application of the absurd results test in any specific situation would
likely be more complex. In any specific situation, we would need to
consider all of the facts in light of various statutory provisions. For
example, we would need to consider that another goal of the SIP
provisions in the CAA is to mitigate transport of ozone (and ozone
precursors). Therefore, in determining whether there is an ``absurd
result,'' we would not only need to consider the implications for the
specific area asserting an absurd result, but also the effects on
downwind areas.
A State attempting an absurd results demonstration would have to
work very closely with EPA to ensure that the demonstration passes the
highest standards of technical credibility. If we had information that
the agency believes supports an absurd results showing, we would make
that information available to the State. The State would, of course,
have to subject this demonstration to the same public process carried
out for the SIP submission itself prior to submission to EPA of the SIP
containing the demonstration. In no way would this waiver exempt an
area from the requirement to demonstrate attainment by the attainment
date or to demonstrate RFP toward attainment consistent with the area's
classification. We would have to review the State's demonstration as to
whether the result is ``absurd'' in light of the particular statutory
requirement at issue and within the context of the statute as a whole.
Simply because a State may demonstrate an absurd result for purposes of
meeting one statutory provision, such as the requirement for a 15
percent VOC reduction within 6 years after a base year, this does not
imply that some other provision of the CAA that requires VOC reductions
is automatically considered ``absurd.''
3. Other Approaches Considered
We considered a number of other options for allowing additional
flexibility for subpart 2 requirements. These other options that were
considered but are not being proposed are described in a separate
document available in the docket.\33\
---------------------------------------------------------------------------

\33\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

E. What Is the Required Timeframe for Obtaining Emissions Reductions To
Ensure Attainment by the Attainment Date?

Section 172(c)(2) of the CAA requires that emissions reductions
needed for attainment be phased in such that RFP toward attainment is
achieved. For areas classified as moderate under subpart 2, their
attainment date would be as expeditiously as practicable but no later
than 6 years after the date of classification. Their ROP requirement
would be at least a 15 percent VOC emissions reduction from the base
year to be achieved no later than 6 years after the base year. However,
if the area needed more than 15 percent VOC reductions in order to
demonstrate attainment, then any additional reductions would also have
to be achieved by the beginning of the ozone season prior to the area's
attainment date.

[[Page 32827]]

States should be aware of the consequences of failing to implement
the control measures necessary for attainment sufficiently far in
advance of the attainment date. For areas covered under subpart 2,
section 181(a)(5) of the CAA does allow for up to two 1-year attainment
date extensions in certain circumstances. We are proposing how those
extension provisions would be implemented elsewhere in this proposal
under the discussion of attainment dates. To obtain the first of the 1-
year extensions, the CAA basically requires that the area be meeting
the level of the standard in the attainment year itself, even if the
area has not actually attained considering the most recent 3 years of
data. Thus, the States should ensure that the emissions reductions be
implemented to ensure that ozone levels for the ozone season preceding
the attainment date are below the level of the standard. If an area
does not meet the eligibility requirements for a 1-year extension (as
proposed elsewhere in this rulemaking) in the attainment year, then the
area would not be eligible for an attainment date extension, and EPA
would have an obligation to reclassify the area to a higher
classification (``bump-up''). A marginal area with an attainment date 3
years after its nonattainment designation that fails to attain would be
subject to bump-up to at least moderate, and would then have to prepare
a plan to attain within 3 years afterward (6 years after their
nonattainment designation).
There is further discussion of this situation as it relates to the
1-hour ozone standard in the General Preamble of April 16, 1992 (57 FR
13498, 13506); this discussion may have some applicability to the 8-
hour standard.
Areas covered under subpart 1 are also able to obtain up to two 1-
year extensions of the attainment date (see section 172(a)(2)(C)).
There is no provision for bump-up in classification similar to that
under subpart 2. However, if an area fails to attain, section 179 of
the CAA provides that EPA publish a finding that the area failed to
attain. The State then must submit within 1 year after that publication
a revision to the SIP that provides for attainment within the time
provided under section 179. Section 179 also provides that the SIP
revision must also include any additional measures that EPA may
prescribe.
Elsewhere in this notice of proposed rulemaking, we also refer to
requiring that emission reductions needed for attainment need to be
implemented by the attainment date. By this, we mean that they must be
implemented by the beginning of the ozone season prior to the
attainment date. In other words, if the attainment date is April 15,
2010, the reductions would need to be implemented by the beginning of
the ozone season in the previous year (2009). Ozone seasons are defined
in 40 CFR Part 58, Appendix D; for many States, the ozone season starts
March 1 or April 1.

F. How Will EPA Address Long-Range Transport of Ground-Level Ozone and
Its Precursors When Implementing the 8-Hour Ozone Standard?

1. Background
Although much progress has been made over the last decade to
improve air quality, many States contain areas that have not yet
attained the 1-hour ozone standard and/or that are violating the 8-hour
ozone standard. Some of these areas are significantly affected by
interstate ozone transport from upwind areas. Wind currents can
transport ozone and NO_X, a primary precursor to ozone, long
distances, affecting multiple States downwind of a source area. EPA
recognizes that this type of interstate transport can make it
difficult--or impossible--for some States to meet their attainment
deadlines solely by regulating sources within their own boundaries. The
1990 Amendments to the CAA reflect Congress' awareness that ozone is a
regional, and not solely a local problem. Section 110(a)(2)(D) provides
an important tool for addressing the problem of transport. It provides
that a SIP must contain adequate provisions to prohibit sources in a
State from emitting air pollutants in amounts that contribute
significantly to nonattainment, or interfere with maintenance, in one
or more downwind States. Section 110(k)(5) authorizes EPA to find that
a SIP is substantially inadequate to meet any CAA requirement,
including the requirements of section 110(a)(2)(d). If EPA makes such a
finding, it must require the State to submit, within a specified
period, a SIP revision to correct the inadequacy. The CAA further
addresses interstate transport of pollution in section 126, which
authorizes any State to petition EPA for a finding designed to protect
the State from significant upwind sources of air pollutants from other
States.
In the past several years, EPA has conducted two rulemakings to
control interstate ozone transport in the eastern U.S. In 1998, EPA
issued the NO_X SIP Call, which requires certain States in
the eastern U.S. to meet statewide NO_X emissions budgets (63
FR 57356, October 27, 1998.) State programs to implement the rule have
focused on reducing emissions from electric power generators and large
industrial emitters. In addition, in response to petitions submitted by
several northeastern States under section 126, EPA issued a separate
rule (usually known as the Section 126 Rule) to establish Federal
control requirements for certain electric power generators and
industrial boilers and turbines in upwind States (64 FR 28250, May 25,
1999 and 65 FR 2674, January 18, 2000). For both rules, the compliance
date for achieving the required NO_X reductions is May 31,
2004. These two transport rules overlap considerably, with the
NO_X SIP Call being the broader action affecting more States.
All the States affected by the Section 126 Rule are covered by the
NO_X SIP Call. Therefore, EPA coordinated the two rulemakings
and established a mechanism under which the Section 126 Rule would be
withdrawn for sources in a State where EPA has approved a SIP meeting
the NO_X SIP Call.\34\
---------------------------------------------------------------------------

\34\ As a result of court actions, certain circumstances upon
which the Section 126 Rule withdrawal provision was based have
changed. The compliance dates for the Section 126 Rule and the
NO_X SIP Call have been delayed and the NO_X SIP
Call has been divided into two phases. The EPA recently issued a
proposed rulemaking to update the withdrawal provision so that it
will operate appropriately under these new circumstances (68 FR
16644, April 4, 2003).
---------------------------------------------------------------------------

In both the NO_X SIP Call and the Section 126 Rule, EPA
made determinations of whether upwind sources are significantly
contributing to downwind nonattainment problems under both the 1-hour
and 8-hour ozone standards. In the final SIP Call rule, EPA determined
that the same level of reductions was needed to address transport for
both the 1-hour and 8-hour standards.\35\ Thus, unlike in the past,
States affected by transport can develop their new ozone implementation
plans with the knowledge that the issue of interstate transport has
already been addressed up front. This approach will provide these
States with certainty that they will benefit from substantial emissions
reductions from upwind sources and give them significantly improved
boundary conditions that they

[[Page 32828]]

can rely on as they work to identify additional emission reductions
they will need to include in a local area's attainment SIP.
---------------------------------------------------------------------------

\35\ The Agency stayed the 8-hour basis for both rules in
response to the extensive and extended litigation that occurred
concerning the establishment of the 8-hour ozone standard. (65 FR
56245, September 18, 2000 and 65 FR 2674, January 18, 2000).
Recently, however, the Administrator signed a final rule on the UV-B
issue and reaffirmed the 8-hour ozone standard (68 FR 614, January
6, 2003), which was remanded to EPA in ATA I, 175 F.3d 1027. Having
now reaffirmed the 8-hour standard, the Agency plans to take action
in the near future to reinstate the 8-hour bases for both the
NO_X SIP Call and the Section 126 Rule. Such action would
provide the initial basis for dealing with ozone transport as part
of the implementation of the 8-hour standard.
---------------------------------------------------------------------------

2. EPA's Anticipated Approach
In providing their views to EPA on the 8-hour ozone implementation
rule, the Ozone Transport Commission (OTC) and other State commenters
have argued that the NO_X SIP Call and the Section 126 Rule
are not fully adequate. In their view, additional steps are needed to
reduce interstate transport of ozone and NO_X to assist
downwind areas in meeting the 8-hour ozone standard. In particular,
these commenters have expressed continued concern about upwind
emissions from power plants and other major sources and transported
pollution from upwind cities.
As described above, EPA has already taken two actions to address
the issue of interstate transport for purposes of the 8-hour standard.
The NO_X SIP Call and the Section 126 Rule require that
States within the SIP Call make significant emissions reductions from
power plants and other major sources that contribute to ozone
nonattainment in downwind areas. For both rules, the compliance date
for achieving the required emissions reductions is May 31, 2004.
EPA intends to investigate the extent, severity and sources of
interstate ozone transport that will exist after the NO_X SIP
Call and the Section 126 Rule are implemented in 2004. The Agency
believes that it may be appropriate to consider the need to reduce
interstate transport that contributes to unhealthy levels of
PM_2.5 in downwind nonattainment areas when looking at any
additional requirements for reducing the transport of ozone or ozone
precursors.
As noted above, the President recently proposed the CSA that, among
other things, would achieve significant reductions--beyond those
required under the SIP Call and the Section 126 Rule--in the regional
transport of ozone and ozone precursors. Detailed modeling by EPA for
the year 2010 shows that the 2008 Phase I NO_X limits in the
CSA would reduce maximum 8-hour ozone levels in many parts of the
eastern U.S., including a number of areas likely to be designated
nonattainment for the 8-hour standard. The modeling results are
available on the Web at http://www.epa.gov/clearskies.
The Clear Skies reductions would enable several additional areas to
meet the 8-hour standard without imposing any additional local
controls. A number of other areas would find it easier to meet the 8-
hour standard because of the additional reductions in power plant
emissions that would be required under Clear Skies. However, the Agency
has not made a determination that such reductions are warranted under
the transport provisions of the CAA. As noted above, in order to
evaluate this issue, the Agency intends to investigate the extent,
severity and sources of interstate ozone transport that will exist
after the existing transport rules are implemented in 2004.
The Agency welcomes input from States and other interested parties
as to how to deal with ozone transport effectively and equitably and on
the technical and other issues that will have to be confronted as part
of an evaluation of what further steps should be taken beyond the
existing NO_X SIP Call to deal with ozone transport.
3. Other Concerns About Transport
EPA realizes that, whatever measures may be taken in the future,
attainment demonstrations for some areas would continue to be
complicated by the effects of ozone and transport from upwind sources
and other nonattainment areas in cases where upwind source controls are
scheduled for implementation after the downwind area's attainment date
(e.g., 2007 attainment date).
Downwind areas could be in one of two situations. In the first
situation, an area might be receiving such high levels of transported
ozone or ozone precursors that even if it totally eliminated its own
emissions, the incoming ozone and precursors would be sufficient to
continue to cause violations of the standard beyond the applicable
attainment date. In the second situation, the area might be able to
achieve additional local reductions sufficient to demonstrate
attainment. In this second case, the question arises as to whether it
is equitable to require those reductions or to allow more time for the
reductions in the ``upwind'' area to take place.\36\
---------------------------------------------------------------------------

\36\ The CAA's requirement for RACM in section 172(c)(1) does
require the SIP to include RACM; EPA has noted in policy elsewhere
that a measure is RACM if it is technologically and economically
feasible and if it would advance the attainment date. Thus, if there
are measures available in the nonattainment area that would advance
the attainment date--even if attainment is likely at a later date
due to upwind emissions reductions that occur later--then the CAA
requires such measures to be in the SIP.
---------------------------------------------------------------------------

EPA solicits comment on how to address this issue. EPA believes
that a subpart 1 area could be granted a later attainment date if
warranted considering transport. For areas classified under subpart 2,
the statute provides no express relief for these situations. The area
does have the option of requesting to be classified to the next higher
classification. Thus, where the demonstration of attainment is
complicated by transport between two areas of different
classifications, the State is still responsible for developing and
submitting demonstrations which show that the standard will be attained
by the applicable date. In other words, the State must provide for
sufficient emissions reductions on a schedule that will ensure
attainment in its area.
One approach would be for States to work together in a
collaborative process to perform the necessary analyses to identify
appropriate controls that provide for attainment throughout the multi-
State area. EPA believes that the wording in sections 172(c)(1) and
182(b)(1)(A)(i) requires the State to develop a plan providing such
emissions reductions. States working together in a collaborative
process could perform a comprehensive assessment of the impacts of all
control measures being implemented in both the local and upwind areas.
The analysis may show the extent to which the downwind area is
dependent on upwind strategies while fully meeting its own requirements
associated with its classification. Upwind areas may provide a
comprehensive assessment of the impacts of all control measures being
implemented on the downwind areas.
4. Other Options Considered
We considered a number of other options and approaches for
addressing transport. The other options that were considered but are
not being proposed are described in a separate document available in
the docket.\37\
---------------------------------------------------------------------------

\37\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

G. How Will EPA Address Transport of Ground-level Ozone and its
Precursors for Rural Nonattainment Areas, Multi-State Nonattainment
Areas, Areas Affected by Intrastate Transport, and International
Transport?

1. Rural Transport Nonattainment Areas
Section 182(h) recognizes that the ozone problem in a rural
transport area is almost entirely attributable to emissions from upwind
areas. Therefore, the only requirements for the rural area are the
minimal requirements specified for areas expected to attain within 3
years of designation, the assumption being that the controls in

[[Page 32829]]

the upwind area will solve the remaining nonattainment problem in the
rural transport area as well. In these cases, the timing for attainment
will depend on the schedule for adoption and implementation of control
measures in the upwind areas.
2. Multi-State Nonattainment Areas
Section 182(j)(2) for multi-State nonattainment areas (i.e.,
portions of the nonattainment area lie in two or more States)
recognizes that one State may not be able to demonstrate attainment for
the portion of the nonattainment area within its borders if other
States containing the remaining portions of the nonattainment area do
not adopt and submit the necessary attainment plan for their portions
of the nonattainment area. In such cases, even though the area as a
whole would not be able to demonstrate attainment, the sanction
provisions of section 179 shall not apply in the portion of the
nonattainment area located in a State that submitted an attainment
plan.
Section 182(j) defines a multi-State ozone nonattainment area as an
ozone nonattainment area, portions of which lie in two or more States.
Section 182(j)(1)(A) and (B) set certain requirements for such areas.
First, each State in which a multi-State ozone nonattainment area lies,
must take all reasonable steps to coordinate the implementation of the
required revisions to SIPs for the given nonattainment area [section
182(j)(1)(A)]. Next, section 182(j)(1)(B) requires the States to use
photochemical grid modeling or any other equally effective analytical
method approved by EPA for demonstrating attainment. EPA is prevented
by section 182(j) from approving any SIP revision submitted under that
section if a State has failed to meet the above requirements.
Pursuant to section 182(j)(1)(A), States that include portions of a
multi-State ozone nonattainment area are required to develop a joint
work plan as evidence of early cooperation and integration. The work
plan should include a schedule for developing the emissions
inventories, and the attainment demonstration for the entire multi-
State area. Each State within a multi-State ozone nonattainment area is
responsible for meeting all the requirements relevant to the given
area. Care should be taken to coordinate strategies and assumptions in
a modeled area with those in other, nearby modeled areas in order to
ensure that consistent, plausible strategies are developed.
3. Intrastate Transport
Several State air agency representatives have voiced a concern
about intrastate transport of ozone and precursor emissions and have
asked EPA to address this concern. One State, for instance, notes that
it has upwind areas that are affecting downwind areas and in some cases
may be preventing a downwind area from attaining the standard by its
statutory date.
We believe that the CAA requires individual States, as an initial
matter, to deal with intrastate transport. We realize that some States
are structured with semi-autonomous local air agencies that are
empowered to address major elements of the SIP process, including
preparation of the attainment demonstration. In those situations, the
CAA provides that the State retain sufficient backstop authority to
ensure all areas within its borders reach attainment, (110(a)(2)(E)). A
State could, of course, recommend designation of nonattainment areas
that are large enough to encompass upwind and downwind areas of the
State and require that the individual jurisdictions work together on an
attainment plan that accounts for transport and results in attainment
by the attainment date for the entire nonattainment area. Or a State
could require the individual agencies to work together in the same
manner as multi-State organizations. In this case, there would be
separate nonattainment areas with independent agencies expected to work
together to address transport among the nonattainment areas. To
facilitate this process, the State could require the agencies to sign a
memorandum of agreement which describes the technical and
administrative approach for performing the modeling analysis and
identifying the appropriate controls measures. Upon a State's request,
we would be willing to provide support for these activities.
We also solicit comments on other ways of addressing intrastate
transport within the context of the CAA provisions.
4. International Transport
a. International transboundary transport. International
transboundary transport of ozone and ozone precursors can contribute to
exceedances of the NAAQS. It is likely that the international transport
of air pollutants will affect the ability of some areas to attain and
maintain the 8-hour ozone NAAQS. As States and EPA implement control
strategies and national emission reduction programs, the impact of high
background levels emanating from outside the U.S. may play a larger
role in future attainment demonstrations. We have developed an
information document on ``International Transboundary Influences and
Meeting the NAAQS,'' which is located in the Docket to this proposed
rulemaking. This document provides information on efforts with Canada
and Mexico to address transboundary air pollution as well as additional
information for intercontinental modeling work currently underway
within EPA.
b. Section 179B and the SIP approval process. Section 179B of the
CAA (International Border Areas), applies to nonattainment areas that
are affected by emissions emanating from outside the United States.
This section requires EPA to approve a SIP for a nonattainment area if:
It meets all of the requirements applicable under the CAA, other than a
requirement that the area demonstrate attainment and maintenance of the
ozone NAAQS by the applicable attainment date; and the affected State
establishes to EPA's satisfaction that the SIP would be adequate to
attain and maintain the ozone NAAQS by the applicable attainment date
but for emissions emanating from outside the United States. Further,
any State that establishes to the satisfaction of EPA that the State
would have attained the 8-hour ozone NAAQS, but for emissions emanating
from outside the U.S., would not be subject to the attainment date
extension provided in section 181(a)(5), the fee provisions of section
185, and the bump-up provisions for failure to attain for 8-hour ozone
NAAQS specified in section 181(b)(2).\38\
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\38\ The statute contains a typographical error referring to
section 181(a)(2) instead of 181(b)(2).
---------------------------------------------------------------------------

In demonstrating that an area could attain the 8-hour ozone NAAQS
but for emissions emanating from outside the U.S., approved EPA
modeling techniques should be used to the best extent practicable. An
emission inventory incorporating vehicle emissions released in the U.S.
by foreign vehicles, i.e., those vehicles registered in the adjacent
foreign country, must be completed by the States before modeling the
U.S. side only and attempting to demonstrate attainment.\39\ We
recognize that adequate data may not be available for mobile and
stationary sources outside the United States. Therefore, modeling, per
EPA's ``modeling

[[Page 32830]]

guidance'' described elsewhere in the section on attainment
demonstrations, may not be possible in all cases. Because very few
areas are likely to be affected by this provision, EPA will determine
on a case-by-case basis whether the State has satisfactorily made the
required demonstration. The State is encouraged to consult with EPA
Regional Office in developing any alternate demonstration methods.
Methods that the State may want to consider include: Using ozone
episodes that do not involve international transport of emissions for
modeling (see guidance document entitled ``Criteria for Assessing Role
of Transported Ozone/Precursors in Ozone Nonattainment Areas''),
running the model with boundary conditions that reflect general
background concentrations on the U.S. side, analyzing monitoring data
if a dense network has been established, and using receptor modeling.
States should confer with the appropriate EPA Regional Office to
establish appropriate technical requirements for these analyses.
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\39\ As noted elsewhere in this notice, the Consolidated
Emissions Reporting Rule (67 FR 39602, June 10, 2002) has
established basic emission inventory requirements for all areas of
the country and generally requires periodic inventories of emissions
that actually occur in the year of the inventory in the U.S. area of
interest. This would include emissions from foreign-registered
vehicles.
---------------------------------------------------------------------------

5. Additional Ways of Addressing Transport
Additional approaches to address transport are discussed in the
section on classifications.
6. State-Tribal Transport
States have an obligation to notify Tribes as well as other States
in advance of any public hearing(s) on their State plans that will
significantly impact such jurisdictions. Under 40 CFR 51.102(6)(i),
States must notify the affected States of hearings on their SIPs; this
requirement extends to Tribes under 301(d) of the CAA and the TAR. (40
CFR Part 49). Therefore, affected Tribes that have achieved ``treatment
as States'' status must be informed of the contents of such plans and
the extent of documentation to support the plans. For example, in the
case where the State models projected emissions and air quality under
the SIP, the Tribes should be made aware of these modeling analyses.
Tribes may wish to determine if the Tribal area has been affected by
upwind pollution and whether projected emissions from the Tribal area
have been considered in the modeling analyses.
Generally, Tribal lands have few major sources, but in many cases,
air quality in Indian country is affected by the transport--both long
range and shorter distance transport--of pollutants. In many cases,
Tribal nonattainment problems caused by upwind sources will not be
solved by long-range transport policies, as the Tribes' geographic
areas are small. Tribes are sovereign entities, and not political
subdivisions of States. Strategies used for intrastate transport are
not always available. Most of the strategies and policies used by
States in dealing with short-range transport are not available to
Tribes, e.g., requiring local governments to work together and
expanding the area to include the upwind sources. Unlike Tribes, States
can generally require local governments to work together, or make the
nonattainment area big enough to cover contributing and affected areas.
We believe that it is also unfair to Tribes to require disproportionate
local regulatory efforts to compensate for upwind emissions. In many
cases, attainment could not be reached even if emissions from the Tribe
were zero.
To address these concerns, we propose to take comment on the
following: EPA will review SIPs for their effectiveness in preventing
significant contributions to nonattainment in downwind Tribal areas
with the same scrutiny it applies to reviewing SIPs with respect to
impacts on downwind States. Where a Tribe has ``treatment in the same
manner as States,'' EPA will support the Tribe in reviewing upwind area
SIPs during the State public comment period.

H. How Will EPA Address Requirements for Modeling and Attainment
Demonstration SIPs When Implementing the 8-Hour Ozone Standard?

An attainment demonstration SIP consists of (1) technical analyses
to locate and identify sources of emissions that are causing violations
of the 8-hour NAAQS within nonattainment areas (i.e., analyses related
to the emissions inventory required for the nonattainment area), (2)
adopted measures with schedules for implementation and other means and
techniques necessary and appropriate for attainment, (3) commitments,
in some cases, to perform a mid-course review, and (4) contingency
measures required under section 172(c)(9) of the CAA that can be
implemented without further action by the State or the Administrator to
cover emissions shortfalls in RFP plans and failures to attain. We are
soliciting public comment on the following guidance. Associated with
the attainment demonstration also are the RFP/ROP plans and the SIP
submission concerning RACM, for which we are proposing rules elsewhere
in this proposal.
1. Multi-Pollutant Assessments (One-Atmosphere Modeling \40\)
---------------------------------------------------------------------------

\40\ Use of models that are capable of simulating transport and
formation of multiple pollutants simultaneously. For example, for
ozone and fine particles, it is critical that the model simulate
photochemistry, which includes interactions among the pollutants and
their precursors.
---------------------------------------------------------------------------

Many factors affecting formation and transport of secondary fine
particles (i.e., PM_2.5 components) are the same as those
affecting formation and transport of ozone. For example, similarities
exist in sources of precursors for ozone and secondary fine particles.
Sources of NO_X may lead to formation of ozone as well as
nitrates which contribute to the formation of secondary fine particles.
Sources of VOC may contribute to ozone formation and may also be
sources or precursors for organic particles. Presence of ozone itself
may be an important factor affecting secondary particle formation. As
ozone builds up, so do hydroxyl (OH) radicals as a result of
equilibrium reactions between ozone, water and OH in the presence of
sunlight. Hydroxyl radicals are instrumental in oxidizing gas phase
SO₂ to sulfuric acid, which is eventually absorbed by liquid
aerosol and converted to particulate sulfate in the presence of
ammonia. Therefore, strategies to reduce ozone can also affect
formation of secondary fine particles which contribute to visibility
impairment.
Therefore, models and data analysis intended to address visibility
impairment need to be capable of simulating transport and formation of
both secondary fine particles and ozone. At a minimum, modeling should
include previously implemented or planned measures to reduce ozone,
secondary fine particles, and visibility impairment. An integrated
assessment of the impact controls have on ozone, secondary fine
particles, and regional haze provides safeguards to ensure ozone
controls will not preclude optimal controls for secondary fine
particles and visibility impairment.
The concept of modeling control impacts on all three programs is
further strengthened by the alignment of the implementation process for
ozone and secondary fine particles. As the dates for attainment
demonstration SIPs begin to coincide, the practicality of using common
data bases and analysis tools for all three programs becomes more
viable and encourages use of shared resources.
States that undertake multi-pollutant assessments as part of their
attainment demonstration would assess the impact of their ozone
attainment strategies on

[[Page 32831]]

secondary fine particles and visibility or perform a consistent
analysis for ozone, secondary fine particles, and visibility. To
facilitate such an effort, we would encourage States to work closely
with established regional haze Regional Planning Organizations (RPOs)
and the jurisdictions responsible for developing PM_2.5
implementation plans. Though the CSA, if enacted as introduced, would
provide substantial improvement in air quality for ozone,
PM_2.5 and visibility, States are encouraged to follow EPA's
lead and perform similar multi-pollutant assessments as part of their
ozone attainment demonstrations, considering the programs that are in
place at the time of the assessment. Multi-pollutant assessments are
discussed elsewhere in this proposed rulemaking.
2. Areas With Early Attainment Dates
Under section 182(a), marginal areas, which have an attainment date
of only 3 years after designation, are not required to perform a
complex modeling analysis using photochemical grid modeling. Areas
covered under either subpart 1 or 2 with ozone concentrations close to
the level of the NAAQS (e.g., within 0.005 ppm), will most likely come
into attainment within 3 years after designation as nonattainment
without any additional local planning as a result of national and/or
regional emission control measures that are scheduled to occur. We have
good reason to believe these areas will come into attainment. Regional
scale modeling for national rules, such as the NO_X SIP Call
and Tier II motor vehicle tailpipe standards, demonstrates major ozone
benefits for the 3-year period of 2004-2006. This period would be
relevant for demonstrating attainment within 3 years of designation,
assuming designations occur in early 2004. Many similar areas
classified as marginal for the 1-hour ozone NAAQS in 1990 came into
attainment within the initial 3-year period. As an additional
safeguard, if attainment demonstration modeling is performed using
multi-State geographic areas, most of these areas with early attainment
dates will be included in the modeling analyses conducted by areas with
later attainment dates. This will provide an opportunity for review of
the impact control programs will have on areas with early attainment
dates.
Experience with the 1-hour ozone attainment demonstrations has
shown that 3 years is not enough time to perform the detailed
photochemical grid modeling needed to develop the demonstration and
complete the regulatory process needed to adopt and implement control
measures sufficiently before the attainment date. It would not be
reasonable to require these areas to expend the amount of resources
needed to perform a complex modeling analysis given how close these
areas are to meeting the level of the NAAQS. Therefore, we propose that
no additional modeled attainment demonstration would be required for
areas with air quality observations close to the level of the standard
as described above and where regional or national modeling exists and
is appropriate for use in the area demonstrates that an area will
attain the 8-hour standard within 3 years after designation. This
proposal would apply for areas covered under either subpart 1 or
subpart 2.
Areas with early attainment dates with air quality observations
that are not close to the level of the NAAQS (as described above) and
regional scale modeling for national rules that demonstrates they will
not be in attainment within 3 years of designation should consider
requesting reclassification to the next higher classification. This
reclassification would provide additional time for developing an
attainment demonstration SIP and adopting and implementing the control
measures needed.
3. Areas With Later Attainment Dates
Areas with later attainment dates (more than 3 years after
designation), regardless of whether they are covered under subpart 1 or
subpart 2, would be required to do an attainment demonstration SIP.
Local, regional and national modeling developed to support Federal or
local controls may be used provided the modeling is consistent with
EPA's modeling guidance, described below. Several States have invested
considerable time and resources in regional 8-hour ozone modeling
projects following this guidance. Since exceedances of the 8-hour ozone
NAAQS are more pervasive than 1-hour ozone exceedances, we encourage
multi-State applications of the modeling guidance. States should work
together and leverage off work under development and resources spent on
these projects. This will be most beneficial in developing attainment
demonstrations to achieve attainment.
4. Modeling Guidance
Section 182 (b)(1)(A) requires ozone nonattainment areas to develop
an attainment demonstration which provides for reductions in VOC and
NO_X emissions ``as necessary to attain the national primary
ambient air quality standard for ozone.'' Section 172(c), requires
areas covered under subpart 1 to demonstrate attainment. As noted
above, if a subpart 1 area has an attainment date beyond 3 years of
designation, we would require the State to develop an attainment
demonstration.
Section 182(c)(2)(A) provides that for serious and higher-
classified areas the ``attainment demonstration must be based on
photochemical grid modeling or any other analytical method determined
by the Administrator, in the Administrator's discretion, to be at least
as effective.'' A photochemical grid model should meet several general
criteria for it to be a candidate for consideration in an attainment
demonstration. Note that, unlike in previous guidance (U.S. EPA, 1991),
we are not recommending a specific model for use in the attainment
demonstration for the 8-hour NAAQS for ozone. At present, there is no
single model which has been extensively tested and shown to be clearly
superior or easier to use than other available models. General criteria
for attainment demonstrations are contained in 40 CFR part 51, appendix
W (i.e., ``EPA's Guideline on Air Quality Models'', 68 FR 18440, April
15, 2003). Appendix W refers to EPA's May 1999 draft ``Guidance on the
Use of Models and Other Analyses in Attainment Demonstrations for the
8-Hour Ozone NAAQS'' for a set of general requirements that an air
quality model should meet to qualify for use in an attainment
demonstration for the 8-hour ozone NAAQS.\41\ Thus, States may choose
from several alternatives. These include having received a scientific
peer review, being applicable to the specific application on a
theoretical basis, and having an adequate database to support its
application. It is also important that past applications indicate model
estimates are not likely to be biased low and that the model is applied
consistently with a protocol on methods and procedures. We plan to
finalize this guidance at the same time the final implementation rule
is published. Comments on this document are solicited as part of this
proposal.
---------------------------------------------------------------------------

\41\ U.S. EPA, (May 1999), Draft Guidance on the Use of Models
and Other Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-99-004, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: DRAFT8HR).
---------------------------------------------------------------------------

The guidance describes how to apply air quality models. The output
from such a model is used to support an attainment demonstration. The
recommended procedure for applying a model includes developing a
conceptual description of the problem to be addressed; developing a
modeling/analysis protocol; selecting an appropriate model to support
the demonstration; selecting appropriate

[[Page 32832]]

meteorological episodes or time periods to model; choosing an
appropriate area to model with appropriate horizontal/vertical
resolution; generating meteorological and air quality inputs to the air
quality model; generating emissions inputs to the air quality model;
evaluating performance of the air quality model; and performing
diagnostic tests. After these steps are completed, the model is used to
simulate effects of candidate control strategies.
The guidance recommends procedures for estimating if a control
strategy to reduce emissions of ozone precursors will lead to
attainment of the 8-hour NAAQS for ozone. It explains what is meant by
a modeled attainment demonstration, a modeled attainment test, a
screening test, and a weight of evidence determination. It also
identifies additional data which, if available, should enhance the
credibility of model results and results of other analyses used in a
weight of evidence determination. States should work closely with the
appropriate U.S. EPA Regional Office(s) in executing each step.
We are planning to make substantial changes to the draft version of
this document. Changes include: (1) The future year of emission
estimates to model, (2) the recommended length of time period to model
(i.e., up to full ozone season), and (3) the use of spatial fields of
ambient concentrations as part of the ``modeled attainment test.'' We
welcome public comments on the guidance at any time and will consider
those comments in any future revision of the document. Comments
submitted on the modeling guidance document should be identified as
such and will not be docketed as part of this rulemaking, nor will a
comment/response summary of these comments be a part of the final 8-
hour ozone implementation rule since they will not affect the rule
itself. The final version of the guidance is scheduled for release by
December 2003 and will be posted on EPA's Web site (http://www.epa.gov/ttn/scram/).
5. Mid-Course Review (MCR)
A MCR provides an opportunity to assess whether a nonattainment
area is or is not making sufficient progress toward attainment of the
8-hour ozone standard, as predicted in its attainment demonstration.
The review utilizes the most recent monitoring and other data to assess
whether the control measures relied on in a SIP's attainment
demonstration have resulted in adequate improvement in air quality. We
believe that a commitment to perform a MCR is a critical element in an
attainment demonstration that employs a long-term projection period and
relies on weight of evidence. Because of the uncertainty in long-term
projections, we believe such attainment demonstrations need to contain
provisions for periodic review of monitoring, emissions, and modeling
data to assess the extent to which refinements to emission control
measures are needed.
A number of States have participated in a consultative process with
EPA, which resulted in the development of the 1-hour MCR guidance.\42\
We are updating the 1-hour MCR policy and technical guidance to include
8-hour metrics and are soliciting comment on appropriate revisions;
final MCR guidance incorporating 8-hour metrics will be available at
the time we issue our final implementation rule. States should consult
with EPA prior to using a methodology other than the one developed
through the public consultative process.
---------------------------------------------------------------------------

\42\ Memorandum of March 28, 2002, from Lydia N. Wegman and J.
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone
Nonattainment Areas that Rely on Weight-of-Evidence for Attainment
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/
guide/policymem33d.pdf.
---------------------------------------------------------------------------

The procedure for performing a MCR contains three basic steps: (1)
Perform an administrative test (e.g., demonstrate whether the
appropriate emission limits were adopted and implemented); (2) analyze
available air quality, meteorology, emissions and modeling data and
document findings; and (3) document conclusions regarding whether
progress toward attainment is being made using a weight of evidence
determination (which may or may not include new modeling analyses).
EPA does not request that States commit in advance to adopt new
control measures as a result of the MCR process. Based on the MCR, if
EPA determines sufficient progress has not been made, EPA would
determine whether additional emissions reductions are necessary from
the State or States in which the nonattainment area is located or
upwind States, or both. EPA would then require the appropriate State or
States to adopt and submit the new measures within a specified period.
We anticipate that these findings would be made as calls for SIP
revisions under section 110(k)(5) and, therefore, the period for
submission of the measures would be no longer than 18 months after the
EPA finding. Thus, States should complete the MCR 3 or more years
before the applicable attainment date to ensure that any additional
controls that may be needed can be adopted in sufficient time to reduce
emissions by the start of the ozone season in the attainment year.

I. What Requirements for RFP Should Apply Under the 8-Hour Ozone
Standard?

1. Background
Section 172(c)(2), which is located in subpart 1 of part D of title
I, requires State plans for nonattainment areas to require RFP. Section
171(1) of the CAA defines RFP to mean ``such annual incremental
reductions in emissions of the relevant air pollutant as are required
by this part [part D of title I]
or may reasonably be required by the
Administrator for the purpose of ensuring attainment of the applicable
[NAAQS]
by the applicable date.''
Subpart 2 of part D of title I provides more specific RFP
requirements for ozone areas classified under section 181. (In general,
we have used the term ``RFP'' as the more generic progress requirement,
whereas it has used the term ``rate of progress'' or ``ROP'' to denote
the specific subpart 2 progress requirements that are defined as
specific percent reductions from a baseline emissions inventory.) In
particular, it specifies the base year emission inventory upon which
ROP is to be planned for and implemented, the increments of emissions
reductions required over specified time periods, and the process for
determining whether the ROP milestones were achieved.
Subpart 2 does not specify ROP requirements for marginal areas.
Section 182(b)(1)(A) mandates a 15 percent VOC emission reduction,
accounting for growth, between 1990 and 1996 for moderate and above
ozone nonattainment areas. Furthermore, section 182(c)(2)(B) of the CAA
requires each serious and above ozone nonattainment area to submit a
SIP revision providing for an actual VOC emission reduction of at least
3 percent per year averaged over each consecutive 3-year period
beginning in 1996 until the area's attainment date (the post-1996 ROP
plan). Section 182(c)(2)(C) of the CAA allows for substitution of
NO_X for VOC emissions reductions in the post-1996 ROP plan.
EPA's policy, the NO_X Substitution Guidance (December 15,
1993; available at http://www.epa.gov/ttn/oarpg/t1pgm.html), addresses
the substitution of NO_X emissions reductions for VOC
emissions reductions. The baseline emission inventory for determining
the required ROP reductions is specified as 1990.
The requirements for RFP under subparts 1 and 2, as described
above, are

[[Page 32833]]

the minimum required for an area. More reductions may be necessary for
attainment within the nonattainment area or where the area contributes
to a downwind area's nonattainment problem. Moreover, an upwind area
that contributes to nonattainment in a downwind area may need more
reductions in a shorter time in order for the downwind area to reach
attainment by its required attainment date.
2. Proposed Features in General
In developing an approach for addressing the RFP requirements for
the 8-hour ozone standard, we propose the following:
--The same baseline year would be used both to address growth (in
emissions, vehicle miles traveled (VMT) or otherwise) and to calculate
the RFP target level.
--Emissions reductions from outside the nonattainment area up to 100 km
for VOC and 200 km for NO_X (and statewide if under a
regional strategy) would be allowed consistent with EPA's existing
December 1997 interim implementation policy for 1-hour ozone NAAQS.\43\
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\43\ Memorandum of December 29, 1997 from Richard D. Wilson to
Regional Administrators, Regions I-X re: ``Guidance for Implementing
the 1-Hour Ozone and Pre-Existing PM₁₀ NAAQS.'' Located
at URL: http://www.epa.gov/ttn/oarpg/t1/memoranda/iig.pdf. The
distances used resulted from FACA discussions cited earlier and
generally represent transport of 1 to 2 days.
---------------------------------------------------------------------------

--For areas classified under subpart 2, the ROP requirements specified
in subpart 2 would apply, namely a 15 percent VOC emission reduction,
accounting for growth, in the first 6 years after the baseline year for
moderate and above ozone nonattainment areas. In addition, for areas
classified as serious and above, the ROP provisions in subpart 2
require a VOC or NO_X emission reduction of at least three
percent per year averaged over each consecutive 3-year period beginning
6 years after the baseline year (specified as under the 1990 CAAA).
Areas classified under subpart 2 as marginal, which are required to
attain 3 years following classification, are subject only to such RFP
as necessary to attain. We believe the periods for RFP under subpart 2
for the 8-hour ozone NAAQS should run from the date of the baseline
year under subpart 2, and would be equivalent to the periods under the
1-hour ozone NAAQS. Thus, the first 15 percent reduction would be
required for the 6-year period starting from the last day (December 31)
of the baseline year and the first 3-year period for the subsequent
three percent per year emission reduction requirement in serious areas
would begin 6 years after the last day (December 31) of the baseline
year. The baseline issue is discussed in section 4 below.
3. For Subpart 2 Areas, Should the Initial 15 Percent RFP Requirement
Be Limited to VOC Emissions?
Currently, for many areas of the country, particularly in the
Eastern U.S. outside major metropolitan areas, there is a greater need
for NO_X reductions rather than VOC reductions. However,
under the prescribed requirements of the CAA, NO_X
substitution is only allowed for the post-1996 ROP requirement (three
percent per year averaged over 3 years), not for the initial 15 percent
ROP requirement. We are proposing 2 options to address this issue.
a. Option 1. Continue to require 15 percent VOC reductions within 6
years after the baseline year for all areas designated moderate and
above for the 8-hour ozone NAAQS. After 6 years, all serious and above
areas would be required to achieve a nine percent reduction in VOC and/
or NO_X emissions every 3 years, i.e., an average of three
percent per year.
b. Option 2. For those areas that have approved 15 percent plans
for their 1-hour ozone SIPs, an additional 15 percent VOC reduction is
not necessary. Areas that are classified as moderate under the 8-hour
standard that have already implemented their 15 percent plans under
their 1-hour ozone SIPs would be considered to have met the statutory
15 percent requirement and would be covered under the more generic RFP
requirements of subpart 1. Subpart 1 RFP requirements are discussed
below. Areas that are classified as serious and above under the 8-hour
standard that have already implemented their 15 percent plans under the
1-hour ozone standard would have to include in their SIPs an additional
RFP plan that would achieve an average of three percent per year of VOC
and/or NO_X over each 3-year period until their attainment
year. We recognize that it would be difficult to submit a plan that
provides for the first nine percent emission reduction within 3 years
after nonattainment designation. Therefore, consistent with what
Congress did under section 182(b)(1), we propose to allow the first ROP
increment to be averaged over 6 years. We propose that an area
classified serious or above submit its ROP plan within 2 years after
designation that provides for 18 percent emissions reductions (VOC and/
or NO_X) over the first 6 years from the baseline year and
then submit within 3 years after designation a ROP plan that provides
nine percent emissions reductions (VOC and/or NO_X) over each
of the next 3-year periods until the area's attainment date.
This option recognizes previous efforts by areas that submitted 15
percent plans as required under the 1-hour ozone NAAQS and provides
flexibility to States to use a mix of NO_X and VOC reductions
to meet the additional ROP/RFP requirements. We believe that the
statute can be interpreted to require the mandatory 15 percent VOC
reduction only once for a given area. Once 15 percent VOC reduction
requirements have been met, an area would actually have to achieve
greater emissions reductions, i.e., an average of three percent per
year, but could choose either VOC or NO_X reductions as
appropriate. We prefer this second option because it provides more
flexibility for the ROP plan to be consistent with the area's needs in
attaining the standard.
c. Other options that EPA considered. We considered other options
for addressing this issue that are not being proposed here; discussion
of them appears in a separate document, available in the docket.\44\
However, we solicit comments on other options and what possible
rationales--legal and scientific--might be used to justify those
options.
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\44\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

4. What Baseline Year Should Be Required for the Emission Inventory for
the RFP Requirement?
The baseline inventory for RFP (under subpart 2) is used as the
starting point for the determination of a target level of emissions for
the future year RFP and as the baseline from which creditable
reductions are determined. We currently anticipate designating
nonattainment areas in 2004. Under the ``Consolidated Emissions
Reporting Rule'' (67 FR 39602, June 10, 2002) revised emissions
inventories are required for the years 2002 and 2005; therefore, we
propose to require use of the 2002 inventory as the baseline inventory
for the RFP requirement. This would be the most recently available
inventory at the time of designation. We recently issued a memorandum
identifying 2002 as the anticipated emission inventory base year for
the SIP planning process to

[[Page 32834]]

address the 8-hour ozone and the PM_2.5 standards.\45\
---------------------------------------------------------------------------

\45\ Memorandum on November 18, 2002, from Lydia Wegman and
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning:
8-hr Ozone, PM_2.5 and Regional Haze Programs.'' This
document is available at the following Web site:
http://www.epa.gov/ttn/oarpg/meta.442.1.2002baseinv.pdf.
---------------------------------------------------------------------------

We considered other options for addressing this issue that are not
being proposed here; discussion of them appears in a separate document,
available in the docket.\46\
---------------------------------------------------------------------------

\46\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

5. Should Moderate Areas Be Subject to Prescribed Additional RFP
Requirements Prior to Their Attainment Date?
For areas initially classified moderate and higher under the 1-hour
ozone standard, the baseline inventory was defined as 1990 in the CAA
Amendments of 1990. Therefore, the 6-year period for the initial 15
percent ROP requirement ended in the same year as the attainment date
for moderate areas, viz., 1996. For areas classified moderate and
higher under the 8-hour ozone standard, however, we are proposing that
the 15 percent ROP target level of emissions would be calculated for
the 6-year period after the 2002 baseline year, i.e., 2003-2008.
Moderate areas would be required to meet an attainment date no later
than 6 years after the area is designated nonattainment for the 8-hour
standard. If the effective date of designation of nonattainment areas
is, for instance, May 15, 2004, the attainment date would be May 15,
2010. This leaves approximately a 1\1/2\ year gap between the end of
the 6-year period for the 15 percent ROP requirement (i.e., December
31, 2008) and the attainment date. If we were to also require moderate
areas to obtain an additional three percent per year reduction beyond
2008 for the 1\1/2\ additional years until 2010, the ROP requirement
would be more than what we believe Congress intended for moderate areas
under subpart 2. Additional three percent per year reductions were only
required for serious and higher classified 1-hour ozone nonattainment
areas. We are proposing that the only specific ROP requirement
applicable for moderate areas is the 15 percent VOC requirement between
the end of 2002 and the end of 2008. However, section 172(c)(2) also
applies, requiring areas to meet RFP generally. Therefore, a moderate
area would also have to provide any additional emissions reductions--
VOC and/or NO_X--needed to provide for attainment by the
area's attainment date. In proposing this approach, we are interpreting
the subpart 1 RFP requirement to mean that the area must achieve
whatever further reduction is needed for attainment in the remaining
period prior to the attainment date (2009 and 2010).
We are proposing that serious and higher classified areas would
need to provide in their SIPs an additional average of three percent
per year emissions reductions over each subsequent 3-year period beyond
the initial 6-year period through the attainment year, consistent with
what Congress specified in section 182(c)(2)(B) of the CAA.
6. What Is the Timing of the Submission of the ROP Plan?
Section 182(b)(1) requires that moderate and higher classified
areas submit their 15 percent ROP plans within 3 years after 1990. For
the attainment dates under the 8-hour ozone standard, we propose
interpreting the CAA's language referring to the date of enactment of
the 1990 CAA Amendments to mean the date of designations for the 8-hour
standard. If we were to require the ROP plans to be submitted within 3
years after their nonattainment designation date (i.e., in 2007 if we
designate in 2004), the plans would have to be implemented within 1
year after submission to ensure the 15 percent emissions reductions are
achieved by the end of the relevant 6-year period (i.e., December
2008). We believe this would likely not be sufficient time to ensure
that the reductions would occur by the required deadline. Therefore, we
propose that the ROP SIP be submitted within 2 years after
nonattainment designation--by 2006. This would provide 2 years for the
State to develop and submit its ROP plan, and another 2 years for the
control measures to be implemented.
7. How Should CAA Restrictions on Creditable Measures Be Interpreted?
Which National Measures Should Count as Generating Emissions Reductions
Credit Toward RFP Requirements?
Section 182(b)(1) contains provisions that limit creditability
toward meeting RFP for certain limited emission reduction measures
required prior to the enactment of the CAA Amendments of 1990. We
believe these specific restrictions should continue to apply for
purposes of the 8-hour NAAQS as written in the CAA. We believe that
Congress intended to prevent areas from taking credit for RFP only for
those specific measures that were already adopted and in place (or
required to be in place) prior to the date of enactment of the CAA
Amendments of 1990 (November 15, 1990). We believe that this same logic
holds true for the RFP requirement as it applies to the 8-hour ozone
standard, namely preventing credit toward the mandatory RFP percent
reductions for continuing reductions from those specific measures cited
in the CAA that were already adopted and in place prior to the date of
enactment of the CAA Amendments of 1990. There is no indication in the
CAA that this exclusion should be changed. Congress mandated many
emissions reductions in the 1990 CAA Amendments with no indication that
they should not be credited to meeting RFP or attainment of any
existing or revised NAAQS. Therefore, we are proposing that all
emissions reductions that occur after the baseline emission inventory
year from all Federal and any other measures (not otherwise identified
in section 182(b)(1)(D)) would be creditable to the RFP requirement.
For example, emissions reductions that occur after the 2002 baseline
emission inventory year that result from the Tier 2 and sulfur in
gasoline rules that were issued by EPA after the CAA Amendments of 1990
are creditable toward the RFP requirement for the 8-hour ozone
standard. Another example of emissions reductions that would be
creditable toward the RFP requirement for the 8-hour ozone standard
would be VOC emissions reductions from certain MACT standards that will
not produce emissions reductions until after the 2002 baseline; these
would include several recently promulgated MACT standards (such as
those covering several surface coating operations) and also MACT
standards that are expected to be promulgated in the summer of 2003.
Reductions that occur prior to the baseline year would be incorporated
into the baseline and could not be credited.
8. For Areas Covered by Subpart 1 Instead of Subpart 2, How Should the
RFP Requirement Be Structured?
As described above, the RFP requirement under subpart 1 is more
general than that under subpart 2, and EPA thus has more flexibility in
determining what RFP means under subpart 1. For instance, the State may
rely on emissions reductions of VOC or NO_X or a combination
of both to meet its RFP requirement. However, we are also mindful of
the need for ensuring equity between areas with similar 8-hour ozone
problems covered under

[[Page 32835]]

subpart 1 and those covered under subpart 2. We are proposing rules for
three kinds of areas: (a) Areas with attainment dates 3 years or less
after designation; (b) Areas with attainment dates between 3 and 6
years after designation; and (c) Areas with attainment dates beyond 6
years after designation. Note that the CAA requires that attainment
dates for areas subject only to subpart 1 be no longer than 10 years
after designation.
a. Areas with attainment dates 3 years or less after designation.
We propose a RFP requirement for these areas similar to that for areas
under subpart 2 that are classified as marginal. Such an area would not
be subject to a separate RFP requirement, but would have to attain the
standard by its attainment date.
b. Areas with attainment dates between 3 to 6 years after
designation. These areas would have attainment dates similar to subpart
2 areas classified as moderate. We propose two options for these areas:
(i) Option 1. This option would require the RFP plan to be
submitted with the attainment demonstration within 3 years after
designation of the nonattainment area. The SIP would have to show that
all emissions reductions needed for attainment would be implemented by
the attainment date. This situation would occur, for example, for an
area with a base year inventory of 2002, designation in 2004, a
required attainment SIP submission date of 2007 and an attainment date
of 2010. Where areas have only 3 years after SIP submission before
attainment, this option recognizes that there may be only a short
amount of time available to achieve any specified emissions reductions
beyond that needed to demonstrate attainment and therefore would not
require a showing that a specified amount of emissions reductions occur
between the time of SIP submission and the attainment date.
(ii) Option 2. This option would require these areas to be treated
in a manner similar to subpart 2 areas classified as moderate. The RFP
SIP would have to provide for a 15 percent emission reduction from the
baseline year within 6 years after the baseline year. The RFP SIP would
have to be submitted within 2 years after designation. However, since
the area is subject only to subpart 1, NO_X emissions
reductions could be substituted for some or all of the 15 percent
reduction requirement, consistent with EPA's NO_X
substitution policy.\47\ Also, we are soliciting comment on whether a
percentage other than 15 percent should be required as the minimum.
Additional measures that would provide the remaining portion of the
emissions reductions needed for attainment would have to be submitted
with the area's attainment demonstration within 3 years after
designation.
---------------------------------------------------------------------------

\47\ NO_X Substitution Guidance. December 15, 1993;
avaialble at http://www.epagov/ttn/oarpg/t1pgm.html.
---------------------------------------------------------------------------

c. Areas with attainment dates beyond 6 years after designation.
These areas are similar in attainment dates to areas classified under
subpart 2 as serious or higher. We are proposing that the RFP plan show
increments of progress from the baseline emission inventory year until
the attainment date. The RFP SIP would first have to provide for a 15
percent emission reduction from the baseline year within 6 years after
the baseline year. The 15 percent RFP SIP would have to be submitted
within 2 years after designation. However, since the area is subject
only to subpart 1, NO_X emissions reductions could be
substituted for some or all of the 15 percent reduction requirement,
consistent with EPA's NO_X substitution policy. Also, we are
soliciting comment on whether a percentage other than 15 percent would
be more appropriate. Then, for each subsequent 3-year period out to the
attainment date, another RFP SIP would have to provide for an
additional increment of progress no less than the amount of emissions
reductions that would be proportional to the time between the end of
the first increment (in 2008) to the attainment date. This second RFP
SIP would have to be submitted at the same time as the attainment
demonstration, namely within 3 years after designation.
9. How Should the RFP Requirements Be Implemented for Areas Designated
for the 8-Hour Ozone Standard That Entirely or in Part Encompass an
Area That Was Designated Nonattainment for the 1-Hour Ozone Standard?
We are proposing the following approach to address this issue.
Develop a new baseline and new ROP/RFP emission reduction targets for
the entire 8-hour standard nonattainment area (the old 1-hour standard
nonattainment area and the newly added portion of the 8-hour standard
nonattainment area). Emissions reductions from measures in the 1-hour
ozone SIP that are achieved after the 8-hour ozone NAAQS baseline year
could count (subject to creditability restrictions as discussed above
in this proposed rulemaking) toward meeting the RFP requirement for the
entire 8-hour area.
This approach would set a ROP target for the entire 8-hour ozone
nonattainment area. The State would have to ensure that the target is
at least as stringent as the 1-hour ROP/RFP target, thus ensuring no
backsliding on the 1-hour NAAQS requirements. Under this approach, the
new ROP/RFP target for the 8-hour standard would replace the previous
1-hour ozone target (while ensuring that, at a minimum, the emissions
reductions required to meet the old target are met). For example, the
1-hour ozone NAAQS nonattainment area may comprise four counties and
have a target level for one future RFP increment of 350 tons/day of VOC
and 300 tons/day of NO_X. The 8-hour ozone nonattainment area
may comprise the initial 1-hour ozone standard nonattainment area and
two more counties. The target for the same increment period for the
entire six county nonattainment area may now be, for instance, 400
tons/day of VOC and 350 tons/day of NO_X (assuming that these
emission reductions were consistent with the attainment demonstration).
We considered another option for this issue. This option, which is
not being proposed, is discussed in a separate document available in
the docket.\48\
---------------------------------------------------------------------------

\48\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC. March 2003.
---------------------------------------------------------------------------

10. Will EPA's ``Clean Data Policy'' Continue to Apply Under the 8-Hour
Standard for RFP?
We issued a clean data waiver policy on May 10, 1995, which allows
EPA to determine that an area has attained the standard and that
certain requirements (e.g., RFP) will not apply so long as the area
remains in attainment. \49\ We propose that this policy would remain
effective under the 8-hour ozone NAAQS.
---------------------------------------------------------------------------

\49\ Memorandum of May 10, 1995, ``RFP, Attainment
Demonstration, and Related Requirements for Ozone Nonattainment
Areas Meeting the Ozone National Ambient Air Quality Standard,''
from John S. Seitz, Director, Office of Air Quality Planning and
Standards. Available at: http://www.epa.gov/ttn/oarpg/t1/memoranda/
clean15.pdf.
---------------------------------------------------------------------------

11. How Will RFP Be Addressed in Tribal Areas?
As mentioned elsewhere in this proposed rulemaking, the TAR
provides the Tribes with the ability to develop TIPs to address the
NAAQS. However, it also provides the Tribes with

[[Page 32836]]

flexibility to develop these plans in a modular way, as long as the
elements of their TIPs are ``severable.'' For example, each TIP
submission must include a demonstration that the Tribe has authority to
develop and run its program, the ability to enforce its rules, and the
capacity and resources to implement the program it adopts. However, the
modular approach provided for Tribes in the TAR allows the TIP to
address a particular problem on the reservation. Therefore, it may
include one or two source-specfic requirements but may not include
provisions for RFP and other SIP requirements. We will review and
approve these TIPs as a step in addressing an overall air quality plan
to achieve health and environmental goals. In addition, a Tribe may
later add other elements to the plan, or EPA may be obligated to step
in to fill air quality gaps. In approving the TIPs, we will ensure that
they will not interfere with the overall air quality plan for an area
when Tribal lands are part of a multi-jurisdictional area.
Because many of the nonattainment areas will include jurisdictions,
including both Tribes and States, it is important for Tribes and States
to work together wherever possible to coordinate their planning
efforts.
12. How Will RFP Targets Be Calculated?
We propose a methodology for the calculation of ROP target levels
of emissions that is based on the method developed for the CAA
Amendments of 1990, while taking into account our interpretation of CAA
restrictions on creditable emissions and our proposal to use the 2002
inventory as the baseline inventory for the ROP requirement. The CAA
Amendments of 1990 specify four types of measures that were not
creditable toward the 15 percent RFP requirement. These were:
(1) Any measure relating to motor vehicle exhaust or evaporative
emissions promulgated by the Administrator by January 1, 1990;
(2) Regulations concerning Reid Vapor Pressure that would go into
effect in 1992;
(3) State regulations submitted to correct deficiencies in existing
VOC RACT regulations or previously required RACT rules;
(4) State regulations submitted to correct deficiencies in I/M
programs.
These four types of measures were all expected to result in a
decrease in emissions between 1990 and 1996. Of these four types of
measures, RACT and I/M program corrections and the 1992 Reid vapor
pressure (RVP) requirements were completely in place by 1996 and
therefore are already accounted for in the 2002 baseline. As a result,
they would produce no additional reductions between 2002 and 2008 or
later milestone years.
However, the pre-1990 Federal Motor Vehicle Control Program (FMVCP)
will continue to provide benefits during the first two decades of the
21st century as remaining vehicles meeting pre-1990 standards leave the
vehicle fleet. Because these benefits are not creditable for ROP
purposes, in order to calculate the target level of emissions for ROP
milestone years (i.e., 2008, 2011, etc.), States must first calculate
the reductions that would occur over these years as a result of the
pre-1990 FMVCP. We propose the following methods to properly account
for the non-creditable reductions when calculating ROP targets for the
2008 and later ROP milestone years.
Method 1: For areas that must meet a 15 percent VOC reduction
requirement by 2008:
(1) Estimate the actual anthropogenic base year VOC inventory in
2002 with all 2002 control programs in place.
(2) Using the same highway vehicle activity inputs used to
calculate the actual 2002 inventory, run MOBILE6 for 2002 and for 2008
with all post-1990 CAA measures turned off. This is accomplished using
the NO CLEAN AIR ACT command as described in the MOBILE6 User's Guide.
Any other local inputs for I/M programs should be set according to the
program that was required to be in place in 1990. Fuel RVP should be
set at 9.0 or 7.8 depending on the RVP required in the local area as a
result of fuel RVP regulations promulgated in June, 1990.
(3) Calculate the difference between 2002 and 2008 VOC emission
factors and multiply by 2002 VMT. The result is the VOC emissions
reductions that will occur between 2002 and 2008 without the benefits
of any post-1990 CAA measures. These are the non-creditable reductions
that occur over this period.
(4) Subtract the non-creditable reductions calculated in step 3
from the actual anthropogenic 2002 inventory estimated in step 1.
(5) Reduce the VOC inventory calculated in step 4 by 15 percent.
The result is the target level of VOC emissions in 2008 in order to
meet the 2008 ROP requirement. The actual projected 2008 inventory with
all control measures in place and including projected 2008 growth in
activity must be at or lower than this target level of emissions.
Method 2: For areas that qualify under option 2 of section 3 above
and must meet an 18 percent VOC emission reduction requirement by 2008
with NO_X substitution allowed, following EPA's
NO_X Substitution Guidance:
(1) Estimate the actual anthropogenic base year inventory in 2002
with all 2002 control programs in place.
(2) Using the same highway vehicle activity inputs used to
calculate the actual 2002 inventory, run MOBILE6 for 2002 and for 2008
with all post-1990 CAA measures turned off. This is accomplished using
the NO CLEAN AIR ACT command as described in the MOBILE6 User's Guide.
Any other local inputs for I/M programs should be set according to the
program that was required to be in place in 1990. Fuel RVP should be
set at 9.0 or 7.8 depending on the RVP required in the local area as a
result of fuel RVP regulations promulgated in June, 1990.
(3) Calculate the difference between 2002 and 2008 VOC emissions
factors and multiply by 2002 VMT. The result is the emissions
reductions that will occur between 2002 and 2008 without the benefits
of any post-1990 CAA measures. These are the non-creditable reductions
that occur over this period.
(4) Subtract the non-creditable reductions calculated in step 3
from the actual anthropogenic 2002 inventory estimated in step 1.
(5) Reduce the inventory calculated in step 4 by 18 percent. The
result is the target level of emissions in 2008 in order to meet the
2008 ROP requirement. The actual projected 2008 inventory with all
control measures in place and including projected 2008 growth in
activity must be at or lower than this target level of emissions.
Method 3: For all areas that must meet an additional reduction VOC
requirement of 9 percent every 3 years after 2008 with NO_X
substitution allowed, following EPA's NO_X Substitution
Guidance. Each subsequent target level of emissions should be
calculated as emissions reductions from the previous target.
(1) Using the same highway vehicle activity inputs used to
calculate the actual 2002 inventory, run MOBILE6 for 2008 (previously
done in step 2 above) and 2011 with all post-1990 CAA measures turned
off. This is accomplished using the NO CLEAN AIR ACT command as
described in the MOBILE6 User's Guide. Any other local inputs for I/M
programs should be set according to the program that was required to be
in place in 1990. Fuel RVP should be set at 9.0 or 7.8 depending on the
RVP required in the

[[Page 32837]]

local area as a result of fuel RVP regulations promulgated in June,
1990.
(2) Calculate the difference between 2008 and 2011 emission factors
and multiply by 2002 VMT. The result is the emissions reductions that
will occur between 2008 and 2011 without the benefits of any post-1990
CAA measures. These are the non-creditable reductions that occur over
this period.
(3) Subtract the non-creditable reductions calculated in step 2
from the 2008 target level of emissions calculated previously.
(4) Reduce the inventory calculated in step 3 by 9 percent. The
result is the target level of emissions in 2011 in order to meet the
2011 ROP requirement. The actual projected 2011 inventory with all
control measures in place and including projected 2011 growth in
activity must be at or lower than this target level of emissions.

J. Are Contingency Measures Required in the Event of Failure To Meet a
Milestone or To Attain the 8-Hour Ozone NAAQS?

1. Background
Under the CAA, nonattainment areas must include in their SIPs
contingency measures consistent with section 172(c)(9). However,
section 182(a) expressly exempts areas classified as marginal from this
obligation. States with ozone nonattainment areas classified as
moderate and above must include contingency measures in their SIPs
consistent with sections 172(c)(9) and 182(c)(9). Contingency measures
are additional controls to be implemented in the event the area fails
to meet a RFP milestone or fails to attain by its attainment date.
These contingency measures must be fully adopted rules or measures
which are ready for implementation quickly upon failure to meet
milestones or attainment. The SIP should contain trigger mechanisms for
the contingency measures, specify a schedule for implementation, and
indicate that the measures will be implemented without significant
further action by the State or EPA. Additional background information
concerning the CAA contingency measure provisions appears in the
General Preamble of April 16, 1992 (57 FR 13510-13512 and 13520); and
Section 9.2 of ``Guidance for Growth Factor, Projections, and Control
Strategies for the 15 percent Rate-of-Progress Plans'' (EPA-452/R-93-
002), March 1993.
The guidance indicates that States should adopt and submit
contingency measures to provide a three percent emission reduction
(beyond what is needed for attainment or the ROP requirement) for
moderate and above ozone areas, which EPA concludes is generally
acceptable to offset emission increases while States are correcting
their SIPs.
Also, EPA guidance suggests that contingency measures that a State
adopted for purposes of the 15 percent ROP requirement may be used as
the contingency measures for any post-1996 3-year requirements for RFP,
provided they have not been triggered and used as contingency measures
for the 15 percent plan. See Section 5.6 of ``Guidance on the Post 1996
Rate-of-Progress Plan (ROP) and Attainment Demonstration'' (corrected
version of February 18, 1994). Furthermore, Federal measures that
result in additional emission reductions beyond those needed for
attainment or ROP in an area could serve as contingency measures for a
failure to attain or meet the ROP requirements. EPA has approved the
use of Federal measures as part of contingency measures in several EPA
actions approving 1-hour ozone SIPs (62 FR 15844, April 3, 1997), (62
FR 66279, December 18, 1997), and (66 FR 30811, June 8, 2001), (66 FR
586 and 66 FR 634, January 3, 2001).
2. Proposal
For the 8-hour ozone standard, we intend to continue to observe our
existing policies regarding contingency measures for areas covered
under subpart 2. Areas that are nonattainment for the 8-hour ozone
standard that have unused adopted contingency measures for the 1-hour
ozone NAAQS may use those measures as appropriate as contingency
measures for the 8-hour ozone NAAQS. For areas covered under subpart 1,
we will provide additional guidance on the contingency measure
requirement, but it is likely that it will be patterned after the
subpart 2 requirement.

K. What Requirements Should Apply for RACM and RACT for 8-Hour Ozone
Nonattainment Areas?

1. Background
Subpart 1 of part D includes general requirements for all
designated nonattainment areas, including a requirement that a
nonattainment plan provide for the implementation of all RACM as
expeditiously as practicable, including such reductions that may be
obtained through RACT. Most areas designated nonattainment for the 1-
hour ozone standard are also subject to the requirements of subpart 2
of part D, including its detailed control measure provisions. Under
subpart 2, RACT requirements for ozone nonattainment areas apply
independent of the emissions reductions needed to attain the standard.
The RACT requirements also apply in attainment areas within the current
ozone transport region (OTR) (or any additional OTR that EPA may
establish under the CAA), regardless of the emissions reductions needed
to attain. The RACT requirement applies to both ozone precursors--
NO_X and VOC. Since 1990, we have issued guidance on the RACT
requirements in subpart 2.\50\ Prior to enactment of the CAA Amendments
of 1990, EPA also issued detailed guidance on RACT for ozone
nonattainment area SIPs.\51\ This guidance continues to be relevant.
---------------------------------------------------------------------------

\50\ 40 CFR part 52, State Implementation Plans; General
Preamble for the Implementation of Title I of the Clean Air Act
Amendments of 1990; Proposed Rule. April 16, 1992. (57 FR 13498); 40
CFR part 52, State Implementation Plans; Nitrogen Oxides Supplement
to the General Preamble; Clean Air Act Amendments of 1990;
Implementation of Title I; Proposed Rule. November 25, 1992. (57 FR
55620).
\51\ ``Issues Relating to VOC Regulation Cutpoints,
Deficiencies, and Deviations--Clarification to Appendix D of
November 24, 1987, Federal Register.'' Ozone/Carbon Monoxide Program
Branch, Air Quality Management Division, Office of Air Quality
Planning and Standards, U.S. Environmental Protection Agency. May
25, 1988; Federal Register of November 24, 1987, Appendix D (52 FR
at 45105).
---------------------------------------------------------------------------

Elsewhere in this proposed rulemaking, we are proposing one option
for classifying 8-hour ozone nonattainment areas in which some areas
would be subject to the requirements of subpart 1. Unlike subpart 2,
which contains detailed requirements regarding the adoption of RACT,
subpart 1 contains only a general provision which requires that SIPs
for nonattainment areas provide for RACM, including RACT. See CAA
section 172(c)(1). Because RACT is a control technology requirement, it
is somewhat independent of the need to demonstrate attainment or RFP.
In the period prior to enactment of the 1990 CAA Amendments, only the
general requirements for RACM and RACT existed, and EPA had issued CTGs
to provide presumptive norms for RACT for VOC controls for States to
follow in adopting RACT for ozone nonattainment areas. In 1990,
Congress institutionalized this requirement for NO_X and VOC
(as ozone precursors) in subpart 2, and emphasized the role of CTGs and
EPA's pre-1990 guidance for ensuring that RACT rules themselves were
adequately structured to ensure they would be effective and
enforceable. For instance, ozone nonattainment areas classified as
marginal or higher that had a previous obligation to submit corrections
to their VOC RACT rules were required to complete and submit

[[Page 32838]]

those corrections within 6 months after the date of classification. See
CAA section 182(a)(2)(A). However, the 1990 CAA Amendments did not
require marginal areas to adopt any RACT rules if they did not have a
pre-1990 obligation to do so. \52\
---------------------------------------------------------------------------

\52\ The exception to this rule is that States in the OTR are
also required for all areas in the State to adopt RACT rules for all
sources covered by a CTG and all other major sources of
NO_x or VOC regardless of their nonattainment
classification. See CAA section 184(b).
---------------------------------------------------------------------------

Also, the amended CAA required EPA to issue CTGs for certain VOC
sources by November 15, 1993. See CAA section 183(a) and (b).
Similarly, the EPA was required to issue alternative control techniques
(ACT) documents for additional categories of VOC and NO_X.
See CAA section 183(c). The ACT documents are intended to help States
in making RACT determinations.
2. Proposed Approach for RACT in General for Areas Covered Under
Subpart 2
We are proposing that the RACT requirement for areas covered under
subpart 2 apply as specified in subpart 2. Thus, areas classified as
marginal that had a pre-1990 obligation for RACT would continue to have
that obligation. Areas classified as moderate and above would be
required to adopt RACT for the categories covered by the CTG's that EPA
has issued and to adopt non-CTG RACT measures for major sources.\53\
---------------------------------------------------------------------------

\53\ Note that under the anti-backsliding provisions proposed
above, any portion of an area classified marginal under the 8-hour
standard that was classified moderate or higher under the 1-hour
standard would also have a continuing RACT requirement from its
classification as moderate or higher.
---------------------------------------------------------------------------

3. Proposed Approach for RACT in General for Areas Covered Only Under
Subpart 1
We are proposing two alternative options for addressing RACT for
areas covered under subpart 1.
a. Option 1: Treatment of RACT similar to subpart 2 areas. Based on
the provisions of the CAA described above and the apparent differences
in treatment regarding RACT between marginal and other areas, we
propose to interpret the CAA in a manner similar to that under subpart
2 by requiring areas covered under subpart 1 to face different RACT
requirements based on the magnitude of the ozone problem. This proposal
has the advantage of minimizing some of the apparent inequities that
might exist under the classification option (discussed elsewhere in
this proposed rulemaking) in which some areas are covered under subpart
1 and others under subpart 2.
(i) Areas similar to marginal areas. Those 8-hour nonattainment
areas covered only under subpart 1 that have an ozone problem that is
similar in degree to that of a marginal area would be subject to the
same RACT requirement as areas classified as marginal under subpart 2.
These areas would be defined as those whose 8-hour ozone design value
at the time of designation/classification would have placed them in the
marginal classification if they had been subject to subpart 2 (i.e.,
areas that have an 8-hour design value of less than 0.092 ppm. (See
elsewhere in this proposed rulemaking under the section concerning
classification.) Similarly, if we adopt the incentive feature proposed
in the classification section, and a subpart 1 area with a design value
of 0.092 ppm or greater can demonstrate that it will attain within 3
years after designation, then it would be subject to the same RACT
requirement as applies to marginal areas under subpart 2. As noted in
the background of this section, the 1990 CAA Amendments did not require
marginal areas (with the exception of those located in the OTR) to
adopt any RACT rules if they did not have a pre-1990 obligation to do
so. Marginal areas that had a pre-1990 obligation for RACT were
required to make any corrections to those rules that we had previously
identified.
(ii) Areas similar to moderate and higher-classified areas. Those
8-hour nonattainment areas covered under subpart 1 that have an ozone
problem that is similar in degree to that of a moderate or higher-
classified area would be subject to the same RACT requirements as those
that apply in subpart 2 for moderate and above areas. These areas would
be defined as those whose 8-hour ozone design value at the time of
designation/classification would have placed them in the moderate or
above classification if they had been subject to subpart 2. As proposed
elsewhere in this proposed rulemaking, this would mean areas that have
an 8-hour design value of 0.092 ppm or greater that are not able to
demonstrate attainment within 3 years after designation.
b. Option 2: Alternative treatment for RACT under subpart 1. This
option is similar to the approach we proposed in our November 17, 1998
draft implementation guidance.\54\ At the time, we stated that we
believed we had authority under subpart 1 to apply an interpretation
for RACT for ozone nonattainment areas for the 8-hour NAAQS that was
similar to the Agency's policy for pollutants other than ozone. Under
that interpretation and this option, for the 8-hour ozone NAAQS, if the
area is able to demonstrate attainment of the standard as expeditiously
as practicable with emission control measures in the SIP, then RACT
will be met, and additional measures would not be required as being
reasonably available.
---------------------------------------------------------------------------

\54\ Proposed Implementation Guidance for the Revised Ozone and
Particulate Matter (PM) National Ambient Air Quality Standards
(NAAQS) and the Regional Haze Program. November 17, 1998. Found at:
http://www.epa.gov/ttn/oarpg/t1pgm.html.
---------------------------------------------------------------------------

c. Ozone transport regions. In addition, all areas of the OTR are
required to adopt NO_X and VOC RACT requirements, regardless
of their attainment classification.\55\ Of course, these areas were
already required to submit RACT rules for purposes of the 1-hour
standard.
---------------------------------------------------------------------------

\55\ See CAA section 184(b).
---------------------------------------------------------------------------

4. Proposed Approach for Previous Source-Specific Major Source RACT
Determinations
Section 182(b)(2)(C) requires SIPs in moderate and higher
classified areas to provide for RACT for major stationary sources of
VOC that are not covered by CTGs. Section 182(f)(1) provided that this
requirement also apply to major sources of NO_X. Many areas
subject to the major source RACT requirement under the 8-hour ozone
standard would have previously addressed the RACT requirement with
respect to the 1-hour ozone standard. This includes the non-CTG major
source VOC RACT requirement and the NO_X major source RACT
requirement. For example, major sources located in States of the OTC
were subject to the NO_X RACT requirement in the mid-1990s.
We believe that, in many cases, a new RACT determination under the 8-
hour standard would call for installation of similar control technology
as the initial RACT determination under the 1-hour standard because the
fundamental control techniques are still applicable. In other cases, a
new RACT analysis could determine that better technology has become
available and some additional emissions reductions are achievable. The
cost per ton of NO_X removed associated with installing a
second round of RACT controls is likely to be high in many cases due to
the relatively small amount of additional NO_X emission
reductions expected. In these cases, the additional costs associated
with the replacement of the existing RACT controls may be an
unnecessary burden, given the small emissions benefit potential. In
contrast, a RACT analysis for uncontrolled

[[Page 32839]]

sources would be much more likely to find that cost-effective controls
are available.
Therefore, in portions of 8-hour ozone nonattainment areas where
major sources or source categories were previously reviewed and
controls subsequently applied to meet the RACT requirement under the 1-
hour standard, we propose that States may choose to accept the initial
RACT analysis as meeting the RACT requirements for the 8-hour program
and need not submit a new RACT SIP. At the time the State submits its
attainment demonstration, it should submit a certification that it
previously met the RACT requirement as part of its SIP revision. We
also propose that a RACT determination would be necessary for major
sources in any portion of the 8-hour nonattainment area that was not
subject to an initial RACT program under the 1-hour standard.
Furthermore, in cases where the initial RACT analysis under the 1-hour
standard for a specific source or source category concluded that no
additional controls were necessary, we propose that a new RACT
determination is required. The new RACT determination is needed to take
into account that newer, cost-effective control measures may have
become available for sources that were not previously regulated. Thus,
the State needs to reassess whether controls should be required. In
addition, any major VOC or NO_X source that exists at the
time of final rulemaking on implementation of the 8-hour ozone standard
but that did not exist during a previous RACT determination must be
subject to a RACT determination as part of the SIP for the 8-hour ozone
standard.
5. Proposed Approach for NO_X RACT Determinations in Areas
Affected by the NO_X SIP Call
All States submitting SIP revisions to meet the NO_X SIP
Call (October 27, 1998, 63 FR 57356) have elected to require large
boilers and turbines to comply with an emissions cap-and-trade program
consistent with EPA's model cap-and-trade rule. As a result, all these
sources are already subject to stringent control requirements. As
described below, these sources collectively achieve more emissions
reductions than would be required by application of RACT requirements
to each source. Therefore, where a nonattainment area is located in a
State with an EPA-approved cap-and-trade program, EPA proposes that
sources subject to the cap-and-trade program already meet the
NO_X RACT requirements.
In previously issued guidance concerning NO_X RACT for
boilers and turbines, EPA indicated that NO_X RACT for
certain types of electricity generating units (EGUs) is equivalent to
the title IV requirements and is the most effective level of combustion
modification reasonably available (NO_X General Preamble at
57 FR 55625). In subsequent guidance, EPA further indicated that
NO_X RACT should generally be expected to achieve
approximately 30-50 percent reduction from uncontrolled levels.\56\
---------------------------------------------------------------------------

\56\ Memorandum of March 16, 1994, from D. Kent Berry re:
``Cost-Effective Nitrogen Oxides (NO_X Reasonably
Available Control Technology (RACT).'' U.S. Environmental Protection
Agency, Research Triangle Park, North Carolina.
---------------------------------------------------------------------------

Large boilers and turbines subject to the NO_x SIP Call
cap-and-trade program are expected to achieve much greater emissions
reductions than these NO_X RACT levels. The NO_X
SIP Call base case assumes EGUs meet the title IV and/or RACT
requirements. In the NO_X SIP Call control case, EGUs are
expected to achieve a 64 percent reduction beyond the base case
requirements (65 FR 11225). Thus, these EGUs are expected to reduce
emissions by far greater amounts than would be required by a RACT
program. Furthermore, the EGU emissions reductions comprise nearly 85
percent of the overall emissions reductions resulting from the
NO_X SIP Call. The non-EGUs subject to the States' cap-and-
trade program are expected to achieve a 60 percent reduction from
uncontrolled levels (63 FR 57402). These non-EGU reductions are clearly
beyond the 30-50 percent expected from a RACT program.
Because the NO_X SIP Call is a market-based program,
there may be a few units that choose to meet those requirements simply
by emissions trading, even though the vast majority of units affected
by the NO_X SIP Call will install controls. In any
nonattainment areas where this is the case, EPA believes that the
overall emission reductions from sources in the NO_X SIP Call
cap-and-trade program will achieve more emissions reductions in the
nonattainment area than would application of RACT to each of those
units.
In summary, the level of emissions reductions required by the
NO_X SIP Call is far greater than the level of reductions
achieved by controls we have determined to be NO_X RACT.
Therefore, EPA believes the sources that comply with the NO_X
SIP Call cap-and-trade program meet NO_X RACT requirements.
Accordingly, EPA proposes that the State need not perform a
NO_X RACT analysis for sources subject to the State's
emission cap-and-trade program where the cap-and-trade program has been
approved by EPA as meeting the NO_X SIP Call requirements and
need not submit a new NO_X RACT SIP for those sources. EPA
invites comment on this approach.
As described in section 4, proposed approach for previous source-
specific major source RACT determinations, States would need to make a
RACT determination for major sources not subject to the cap-and-trade
program. However, in cases where States have adopted controls
consistent with the NO_X SIP Call for cement kilns (i.e., 30
percent reduction), the State may choose to accept the NO_X
SIP Call requirements as meeting the NO_X RACT requirements
for the 8-hour standard and need not submit a new NO_X RACT
SIP for those sources. As part of the NO_X SIP Call, EPA
determined that highly cost-effective controls for cement kilns will
achieve a 30 percent reduction and that many cement plants in the SIP
Call region implemented such controls in State RACT programs (63 FR
57418). In its RACT SIP submission, the State should identify the
cement plants that are subject to NO_X SIP Call controls and
that, therefore, already meet RACT.
In addition, through the NO_X SIP Call or other programs
(e.g., NSR) States may have adopted control measures for specific
NO_X sources that equal or exceed RACT requirements. For
these sources, States may choose to submit, as part of its
NO_X RACT SIP revision, documentation that the previously
adopted control measure meets the RACT requirement, where applicable.
Finally, in developing the NO_X SIP Call, States may have
considered control measures for sources not in the cap-and-trade
program--or may consider additional sources in responding to the second
phase of the NO_X SIP Call. EPA's NO_X RACT
guidance (NO_X General Preamble at 57 FR 55625) encourages
States to develop RACT programs that are based on ``areawide average
emission rates.'' Thus, States can submit a demonstration as part of
their RACT submittal showing that the weighted average emission rate
from sources in the nonattainment area subject to RACT--including
sources reducing emissions to meet the NO_X SIP Call
requirements--meet RACT requirements.
It should also be noted that this proposal in no way limits States'
discretion to require beyond-RACT NO_X reductions from any
source (including NO_X SIP Call sources) in a plan to
demonstrate attainment of the health-based ozone standards. In certain
areas, States may choose to require NO_X controls based on
more advanced

[[Page 32840]]

control technologies to provide for attainment of the ozone standards.
As stated in section 3, above, we are proposing an alternative
option for RACT under subpart 1. In this option, areas that are able to
demonstrate attainment of the 8-hour standard as expeditiously as
practicable with the control measures in their SIP would be considered
as having met RACT.
6. Proposed Approach for NO_X as an Ozone Precursor
In addition to the issue regarding the nature of the RACT rules
that apply under subpart 1, another issue concerns the pollutants
(precursors) to which the RACT rules apply. Although NO_X has
long been recognized as a precursor to ozone \57\ and several national
rules \58\ have been promulgated to control NO_X for purposes
of helping attain the ozone standard, subpart 1 does not specifically
address either NO_X or VOC, but rather RACT in general. We
propose to clarify this by recognizing both NO_X and VOCs as
precursors to ozone and to require NO_X and VOC RACT under
subpart 1. This is consistent with the application of RACT under
subpart 2. Under section 182(f) (in subpart 2), a waiver from
NO_X RACT is possible under certain circumstances (the waiver
provision is discussed elsewhere in this proposed rulemaking) for areas
subject to subpart 2. We are proposing to allow areas subject to
subpart 1, to seek a waiver consistent with the tests set forth in
section 182(f).
---------------------------------------------------------------------------

\57\ For example, the 1991 National Academy of Sciences report
entitled Rethinking the Ozone Problem in Urban and Regional Air
Pollution recommends that ``To substantially reduce O₃
[ozone]
concentrations in many urban, suburban, and rural areas of
the United States, the control of NO_X emissions will
probably be necessary in addition to, or instead of, the control of
VOCs.''
\58\ For example, NO_X SIP Call (published October 27,
1998), Tier 2/Gasoline Sulfur regulations (published on February 10,
2000); and Control of Emissions of Air Pollution from 2004 and Later
Model Year Heavy-duty Highway Engines and Vehicles (published
October 6, 2000).
---------------------------------------------------------------------------

7. Proposed Approach for RACM
We have also issued guidance for implementing the RACM provisions
of the CAA that interprets those provisions to require a demonstration
that the State has adopted all reasonable measures to meet RFP and
attainment as expeditiously as practicable and thus that no additional
measures that are reasonably available will advance the attainment date
or contribute to RFP for the area. \59\ The RACM requirement, which is
set forth in section 172(c)(1) of the CAA, applies to all nonattainment
areas that are required to submit an attainment demonstration, whether
covered under only subpart 1 or also subpart 2.
---------------------------------------------------------------------------

\59\ ``State Implementation Plans; General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990;
Proposed Rule.'' 57 FR 13498 at 13560 (April 16, 1992).
``Guidance on the Reasonably Available Control Measures (RACM)
Requirement and Attainment Demonstration Submissions for Ozone
Nonattainment Areas.'' John S. Seitz, Director, Office of Air
Quality Planning and Standards. November 30, 1999. Web site:
www.epa.gov/ttn/oarpg/t1pgm.html.
Memorandum of December 14, 2000, from John S. Seitz, Director,
Office of Air Quality Planning and Standards, re: ``Additional
Submission on RACM from States with Severe One-Hour Ozone
Nonattainment Area SIPs.''
---------------------------------------------------------------------------

8. Proposed Submission Date for RACT and RACM Requirements
We are proposing that the SIP provisions for RACT for a
nonattainment area--regardless of whether the area is covered under
subpart 1 or subpart 2--be submitted within 2 years after the area's
nonattainment designation; this is consistent with the timing for
submission of RACT rules in section 182(b)(2) for moderate areas.\60\
---------------------------------------------------------------------------

\60\ Section 182(a) provided that marginal areas with pre-1990
RACT obligations had to submit corrections to their RACT rules
within 6 months after classification under the 1990 CAAA. New 8-hour
ozone nonattainment areas that are classified as marginal would not
have this requirement.
---------------------------------------------------------------------------

We are proposing that the SIP provisions for RACM for a
nonattainment area--regardless of whether the area is covered under
subpart 1 or subpart 2--be submitted within 3 years after the area's
nonattainment designation; this is consistent with the timing for
submission of an area's demonstration of attainment.

L. How Will the Section 182(f) NO_X Provisions Be Handled
Under the 8-Hour Ozone Standard?

In subpart 2 of part D, section 182(f) requires States to apply the
same requirements to major stationary sources of NO_X as are
applied to major stationary sources of VOC. The applicable requirements
are RACT and NSR for major stationary sources in certain ozone
nonattainment areas and throughout States in the OTR.\61\ In addition,
section 182(f) specifies circumstances under which these NO_X
requirements would be limited or would not apply (``NO_X
waiver''). Further, areas granted a NO_X waiver under section
182(f) may be exempt from motor vehicle I/M and certain Federal
requirements of general and transportation conformity.\62\ For the same
reasons described in the ``Nitrogen Oxides Supplement to the General
Preamble'' with respect to the 1-hour ozone standard, we propose to
also apply the NO_X requirements and waiver provisions in
section 182(f) for 8-hour ozone nonattainment areas under subpart 2 and
OTRs.\63\
---------------------------------------------------------------------------

\61\ See 57 FR 55622 (``Nitrogen Oxides Supplement to the
General Preamble,'' published November 25, 1992).
\62\ As stated in EPA's I/M (57 FR 52950) and conformity rules
(60 FR 57179 for transportation rules and 58 FR 63214 for general
rules), certain NO_X requirements do not apply where EPA
granted an areawide exemption under section 182(f).
\63\ See 57 FR 55620, ``Nitrogen Oxides Supplement to the
General Preamble,'' published November 25, 1992.
---------------------------------------------------------------------------

Elsewhere in today's proposed rulemaking, we propose to establish
NO_X as a precursor to ozone under subpart 1 and require RACT
and NSR in subpart 1 nonattainment areas for major sources of
NO_X as well as VOC. As noted in the preceding paragraph, we
are also proposing that the NO_X RACT and NSR requirements
apply in certain subpart 2 nonattainment areas and throughout OTRs.
While NO_X emissions are necessary for the formation of ozone
in the lower atmosphere, a local decrease in NO_X emissions
can, in some cases, increase local ozone concentrations. This potential
``NO_X disbenefit'' resulted in Congress including
NO_X waiver provisions in section 182(f) (in subpart 2 of
part D) for areas classified under subpart 2. We believe the
NO_X waiver provisions are a prudent safeguard to avoid
unnecessary emissions reductions and that these safeguards should be
extended to areas classified under subpart 1 that are subject to the
NO_X RACT and NSR provisions. Therefore, we propose to
establish NO_X waiver provisions identical to those in
section 182(f) for areas subject to subpart 1.
In the event that the final rulemaking does not establish
NO_X as a precursor to ozone under subpart 1 and the
NO_X RACT and/or NSR requirements do not apply, a
NO_X waiver provision would be unnecessary with respect to
subpart 1 areas. We propose that the concepts contained in the existing
1-hour ozone guidance \64\ regarding section 182(f) would apply for the
8-hour ozone program under subparts 1 and 2. We would update the
existing guidance to take into account the new ozone and PM standards
and modeling techniques now available. For areas that were previously
granted a NO_X waiver under the 1-hour ozone standard, a re-
approval would be needed to make it clear that the exemption applies,
to allow for public

[[Page 32841]]

comment, to be consistent with the waiver guidance under the 8-hour
standard (once issued), and to account for any new information that may
point to a different conclusion.
---------------------------------------------------------------------------

\64\ The EPA's primary guidance regarding section 182(f) is
contained in the ``Guideline for Determining the Applicability of
Nitrogen Oxide Requirements under Section 182(f),'' issued by John
S. Seitz, Director, Office of Air Quality Planning and Standards, to
the Regional Division Directors, December 16, 1993.
---------------------------------------------------------------------------

M. What Aspects of Transportation Conformity and the 8-Hour Ozone
Standard Are Addressed in This Proposal?

1. What Is Transportation Conformity?
Transportation conformity is required under section 176(c) of the
CAA (42 U.S.C.Sec. 7506(c)) to ensure that federally supported highway
and transit project activities are consistent with (``conform to'') the
purpose of a SIP. Conformity to the purpose of the SIP means that
transportation activities will not cause new air quality violations,
worsen existing violations, or delay timely attainment of the NAAQS.
Transportation conformity applies in nonattainment areas and
maintenance areas. EPA's transportation conformity rule, 40 CFR part
93, establishes the criteria and procedures for determining whether
transportation activities conform to the State air quality plan. It
also establishes criteria and procedures for determining whether
transportation activities conform in areas where no SIP containing
mobile source emissions budgets yet exists.
EPA first published the transportation conformity rule on November
24, 1993 (58 FR 62188) and has amended the rule several times. On
August 15, 1997, a comprehensive set of amendments was published that
clarified and streamlined language from the 1993 transportation
conformity rule (62 FR 43780). These rulemakings, as well as other
relevant conformity materials such as guidance documents, policy
memoranda, and conformity research can be found at EPA's transportation
conformity Web site, at: http://www.epa.gov/otaq/transp.htm (once at
the site, click on ``Transportation Conformity.'')
2. Why Is EPA Discussing Transportation Conformity in This Proposed
Rulemaking?
We are discussing transportation conformity in this proposed
rulemaking in order to provide affected parties with information on
when transportation conformity will be implemented under the 8-hour
ozone standard and how we plan to make the transition from the 1-hour
ozone standard to the 8-hour ozone standard. Affected parties may
include State and local transportation and air quality agencies,
metropolitan planning organizations (MPOs) and the U.S. Department of
Transportation (DOT). To determine whether this discussion affects your
organization, you should carefully examine the applicability
requirements in 40 CFR 93.102 of the transportation conformity rule.
3. Are Any Changes Being Made to Transportation Conformity in This
Proposed Rulemaking?
No, we are not proposing changes to the transportation conformity
rule in this proposed rulemaking. In the future, we plan to conduct a
rulemaking to establish the specific conformity tests that will apply
under the 8-hour standard. We intend to complete that rulemaking prior
to area designations for the 8-hour standard and will provide the
public with the opportunity to comment on the proposed changes. We plan
to propose this rulemaking in the summer of 2003.
4. When Does Transportation Conformity Apply to 8-hour Ozone
Nonattainment Areas?
Transportation conformity applies to 8-hour ozone nonattainment
areas 1 year after the effective date of an area's designation. This 1-
year grace period is found in the CAA at 42 U.S.C. 7506(c)(6).
Specifically, this section of the CAA provides areas, that for the
first time are designated nonattainment for a given air quality
standard, with a 1-year grace period before the conformity regulation
applies with respect to that standard. Since the 8-hour ozone standard
is a different standard from the 1-hour ozone standard, every area that
is designated nonattainment for the 8-hour ozone standard will have a
1-year grace period before conformity applies for the 8-hour standard,
regardless of whether or not it was designated nonattainment or
maintenance for the 1-hour ozone standard.
For more information, please see the proposed and final rulemaking
entitled, ``Transportation Conformity Rule Amendments: Minor Revision
of 18-Month Requirement for Initial SIP Submissions and Addition of
Grace Period for Newly Designated Nonattainment Areas,'' published
October 5, 2001 (66 FR 50954); and August 6, 2002 (67 FR 50808),
respectively for additional discussion of the 1-year grace period for
newly designated areas. (The proposed and final rule can be found on
EPA's transportation conformity Web site mentioned above.)
5. How Does the 1-Year Grace Period Apply in Metropolitan Areas?
Metropolitan areas are those areas that have a MPO designated as
being responsible for transportation planning per 23 U.S.C. 134. In
these areas, the 1-year grace period means that, 1 year after the
effective date of an area's designation as nonattainment for the 8-hour
standard, the area must have a conforming transportation plan and
Transportation Improvement Program in place to fund or approve
transportation projects. If, at the conclusion of the 1-year grace
period, a metropolitan area is not able to make a conformity
determination for its plan and Transportation Improvement Program, the
area will be in what is known as a ``conformity lapse.'' (For the
discussion of which projects can proceed during a conformity lapse,
please see DOT's January 2, 2002 guidance, published February 7, 2002,
at 67 FR 5882; and EPA's May 14, 1999 guidance.\65\ Both of these
documents can be found on EPA's transportation conformity Web site:
http://www.epa.gov/otaq/transp/traqconf.htm.
---------------------------------------------------------------------------

\65\ The EPA's Conformity Guidance on Implementation of March 2,
1999, Conformity Court Decision (EPA 420-F-99-025, May 1999).
---------------------------------------------------------------------------

6. How Does the 1-Year Grace Period Apply in ``Donut'' Areas?
For the purposes of conformity, a donut area is the geographic area
outside a metropolitan planning area boundary, but inside the boundary
of a designated nonattainment/maintenance area. The conformity
requirements for donut areas are generally the same as those for
metropolitan areas, and the MPO would include any projects occurring in
the donut area in its analysis of the metropolitan transportation plan
and TIP. Therefore, the one-year grace period applies to donut areas in
much the same way that it applies to metropolitan areas. That is,
within one year of the effective date of an area's designation, a donut
area's projects must be included in an MPO's conformity determination
for the metropolitan plan and TIP for those projects to be funded or
approved. If, at the conclusion of the one-year grace period, the donut
area's projects have not been included in an MPO's conformity
determination, the entire nonattainment area's conformity would lapse.
7. How Does the 1-Year Grace Period Apply in Isolated Rural Areas?
For the purposes of conformity, a nonattainment or maintenance area
(or portion thereof) is considered to be an isolated rural area if it
does not have a metropolitan transportation plan or Transportation
Improvement Program required under 23 U.S.C. 134, and its projects are
not considered in the emissions analysis of any MPO's

[[Page 32842]]

transportation plan or Transportation Improvement Program. Isolated
rural areas are distinguished from ``donut'' areas which are outside
the metropolitan planning boundary and inside the nonattainment/
maintenance area boundary.
Because isolated rural areas do not have federally required
metropolitan transportation plans and Transportation Improvement
Programs, a conformity determination need only be done in an isolated
rural area when that area has a transportation project or projects that
need approval. Therefore, isolated rural areas also have a 1-year grace
period before conformity applies under the 8-hour ozone standard, but
at the end of that grace period, the area is not required to have made
a conformity determination. An isolated rural area would be required to
make a conformity determination only at the point when a new
transportation project needs approval. This point may occur
significantly after the 1-year grace period has ended. (Conformity
requirements for isolated rural areas can be found at 40 CFR
93.109(g)).
8. Does Conformity Apply for the 1-Hour Ozone Standard Once the 1-Hour
Ozone Standard Is Revoked?
The CAA only requires conformity in areas that are designated
nonattainment or maintenance for a standard. Therefore, conformity will
not apply for purposes of the 1-hour ozone standard after the 1-hour
standard and an area's 1-hour designation are revoked. In other words,
existing 1-hour ozone nonattainment and maintenance areas, including
those that will not be designated nonattainment for the 8-hour ozone
standard, will no longer be required to demonstrate conformity to the
1-hour standard when EPA revokes the standard, 1 year after the
effective date of EPA's 8-hour ozone designations. This interpretation
that conformity would not apply in 1-hour ozone maintenance areas once
the 1-hour standard is revoked is a change from the approach we planned
to take in 1997. Since that time, we have reconsidered whether or not
conformity should continue to apply in maintenance areas. We have
concluded that the better interpretation is that conformity would not
apply in 1-hour maintenance areas once the 1-hour ozone standard is
revoked because maintenance areas are relieved of the obligation under
section 175A of the CAA to have a maintenance plan. Since a maintenance
plan is not required, conformity no longer applies in these areas. A
detailed discussion of our plans for revoking the 1-hour standard and
the associated 1-hour designations may be found elsewhere in today's
proposed rulemaking.
9. What Are EPA's Plans for Amending the Conformity Rule To Address the
8-Hour Ozone Standard?
The conformity rule will need to be amended to address the
implementation of both the 8-hour ozone and PM_2.5 air
quality standards. We plan to address both standards in one revision to
the rule. We anticipate proposing this revision in 2003 and finalizing
the rulemaking prior to EPA's finalization of designations of
nonattainment areas in 2004. This schedule would allow areas to be well
aware of the conformity requirements that will apply to them prior to
the start of the 1-year grace period. The proposal will provide an
opportunity for stakeholders to offer comments and ideas for providing
flexibilities that would be appropriate for some or all nonattainment
areas.
10. What Impact Will the Implementation of the 8-Hour Ozone Standard
Have on a State's Transportation Conformity SIP?
Since we are not now proposing to make specific revisions to our
Transportation Conformity Regulations in this proposal, States should
not need to revise their Transportation Conformity SIPs, unless they
need to do so to ensure the regulations apply in the appropriate areas.
11. What Other Parts of This Proposal Could Affect Transportation
Conformity Determinations?
We believe that transportation conformity stakeholders would be
interested in the proposed Clean Air Development Communities program
found in section O, question 9 of this proposal. Section O discusses
how we propose to implement the NSR, EPA's program that regulates
emissions from stationary sources such as power plants, under the 8-
hour ozone standard. In question 9 of section O, we propose two options
to recognize the air quality benefits that may result from siting new
sources and planning development in a particular manner. Under these
two options, the air quality benefit of location decisions would be
applied to the stationary source sector. Because the benefits of
measures cannot be counted twice, if air quality benefits of location
decisions are applied to the stationary source sector, they could not
also be credited to the transportation sector in a conformity
determination. These options and their implications are discussed in
further detail in section O, question 9. We encourage transportation
conformity stakeholders to review that section carefully and submit any
comments to us.

N. What Requirements for General Conformity Should Apply to the 8-Hour
Ozone Standard?

1. What Is the Purpose of the General Conformity Regulations?
Section 176(c) of the CAA requires that before a Federal entity
takes an action, it must make a determination that the proposed action
will not interfere with the SIP or the State's ability to attain and
maintain the NAAQS. In November 1993, EPA promulgated two sets of
regulations to implement section 176(c). One set, known as the
Transportation Conformity Regulations (described above) deals with
approval and funding of highway and mass transit projects. The other
set, known as the general conformity regulations, deals with all other
Federal activities. Besides ensuring that Federal actions will not
interfere with the SIP, the general conformity program also fosters
communications with State/local air quality agencies, allows for public
participation in the review of air quality impacts from Federal
actions, and allows for air quality review of individual projects. In
1995, Congress limited the application of section 176(c) to
nonattainment and maintenance areas only.
2. How Is the General Conformity Program Currently Structured?
Due to the very broad definition of ``Federal action'' in the
statute and the number of Federal agencies subject to the conformity
requirement, the number of individual conformity decisions could have
been on the order of a thousand or more per day. To avoid creating an
unreasonable administrative burden, EPA established de minimis
emissions levels and exempted certain actions. In addition, the
regulations allow Federal agencies to develop their own list of actions
which are presumed to conform. For non-exempt actions that increase
emissions above the de minimis levels, the Federal agency must
demonstrate that the action will conform with the SIP or will not cause
or contribute to any new violation of any standard in any area;
interfere with provisions in the applicable SIP for maintenance of any
standard; increase the frequency or severity of any existing violation
of any standard; or delay timely attainment of any standard or any
required interim emissions reductions or other milestone. We are
currently reviewing the general

[[Page 32843]]

conformity program and, in a separate action, may revise the
regulations as appropriate, with respect to the 8-hour standard.
3. Who Runs the General Conformity Program?
Each Federal agency is responsible for determining if the action it
takes is subject to the conformity regulations and, if so, whether the
action conforms to the SIP. Each Federal agency's approach to the
conformity evaluation differs depending upon the actions being taken.
Agencies that are permitting or funding actions subject to the
conformity rules generally require the applicant to develop the
technical support for the conformity determination, although some
agencies undertake the complete evaluation themselves.
4. How Does an Agency Demonstrate Conformity?
Depending upon the pollutant and the specific situation, Federal
agencies have several options for demonstrating conformity. For actions
in ozone nonattainment and maintenance areas, the Federal agency can
demonstrate that the project/action is specifically identified and
accounted for in the SIP, obtain documentation from the State that the
emissions are included in the SIP, have the State commit to include the
emissions in the SIP, or mitigate the emissions or offset the emissions
from emissions reductions within the same nonattainment or maintenance
area.
5. General Conformity Regulation Revisions for the 8-Hour Ozone
Standard
a. What de minimis emission levels will be set for ozone
precursors? For the ozone precursors VOC and NO_X, we are
proposing to retain the existing de minimis emission levels. Those
levels were based on the definition of a major stationary source for
the NSR programs as established by sections 182, 183, and 302 of the
CAA. The current de minimis levels are identified in Table 4 below.

Table 4.--De Minimis Emission Levels for VOC and NO_X
------------------------------------------------------------------------
VOC tons/ NO_X tons/
Type of ozone area year year
------------------------------------------------------------------------
Extreme Nonattainment............................. 10 10
Severe Nonattainment.............................. 25 25
Serious Nonattainment............................. 50 50
Moderate and Marginal Nonattainment in the OTR.... 50 100
Other Nonattainment............................... 100 100
Maintenance in OTR................................ 50 100
Other Maintenance................................. 100 100
------------------------------------------------------------------------

Areas covered by subpart 1 are included in the ``Other
Nonattainment'' category listed in Table 4 and would have de minimis
emission levels of 100 tons per year for both VOC and NO_X
emissions.
b. What impact will the implementation of the 8-hour ozone standard
have on a State's general conformity SIP? Since we are not now
proposing to make specific revisions to its general conformity
regulations in this proposal, States should not need to revise their
general conformity SIPs, unless they need to do so to ensure the
regulations apply in the appropriate areas.
c. Are there any other impacts on the SIPs related to general
conformity based on implementation of the 8-hour standard? Currently,
we are reviewing the general conformity regulations and are considering
whether it would be appropriate to revise them in the near future. We
are not proposing any revisions at this time. However, as areas develop
SIPs for the 8-hour ozone standard, we recommend that State and local
air quality agencies work with major facilities which are subject to
the general conformity regulations (e.g., commercial airports and large
military bases) to establish an emission budget for those facilities in
order to facilitate future conformity determinations. Such a budget
could be used by Federal agencies in determining conformity or
identifying mitigation measures.
6. How Does the 1-Year Grace Period Apply to General Conformity
Determinations?
Section 42 U.S.C. 7506(c)(6) applies to both transportation and
general conformity. Therefore, the general conformity requirements
would not apply to actions/projects in newly designated nonattainment
areas until 1 year after the effective date of the designation. As
discussed in section M.4., the 8-hour ozone standard is a new standard
and the grace period applies to all the areas designated nonattainment
for that standard. Actions/projects in areas previously designated
nonattainment or maintenance for the 1-hour ozone standard must
demonstrate conformity for the 1-hour standard until that standard is
revoked in whole or in part. Once the 1-hour ozone standard is revoked
in whole or in part, Federal agencies will be required to conduct
conformity determinations for the 8-hour standard if the project/action
is in an area designated nonattainment for that standard. The general
conformity regulations specify requirements for actions/projects in
areas without an approved SIP. Those requirements would apply to 8-hour
ozone nonattainment areas until the SIP is approved by EPA.

O. How Should the NSR Program be Implemented Under the 8-Hour Ozone
NAAQS?

1. Background
The major NSR program contained in parts C and D of title I of the
CAA is a preconstruction review and permitting program applicable to
new or modified major stationary sources of air pollutants regulated
under the CAA. In nonattainment areas, and throughout the OTR, the
program is implemented under the requirements of part D of Title I of
the CAA, and is referred to as nonattainment NSR. In attainment or
unclassifiable areas outside the OTR, the requirements under part C of
title I of the CAA apply, and the program is called the Prevention of
Significant Deterioration (PSD) program. Collectively, we also commonly
refer to these programs as the major NSR program. These regulations are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24 and part 51, appendix
S.
In attainment/unclassifiable areas outside of the OTR, a new major
source, or a major modification to an existing source, must install
best available control technology (BACT) and conduct an air quality
modeling analysis and an analysis of potential impacts on Class I areas
(see section 162 of the CAA). If the source is located in a
nonattainment area, or anywhere in the OTR, including OTR attainment
areas, it must install technology that meets the lowest achievable
emission rate (LAER), secure emission reductions to offset any
increases in emissions, and perform other analyses.
As of the date areas are designated attainment or nonattainment
under the 8-hour standard, major NSR will apply under the standard. In
areas outside the OTR that will be designated as attainment for the 8-
hour ozone standard, the part C PSD program will apply. As there are
currently PSD programs in place in all areas of the country,
implementation of the new standard should be a straightforward

[[Page 32844]]

matter. (Note that one change we will be codifying is the addition of
NO_X as an ozone precursor. This is discussed in more detail
later in this section).
In areas newly designated as nonattainment for the 8-hour ozone
standard, however, a number of implementation issues will arise, which
we discuss below. Typically, upon designation, nonattainment areas
would be required to implement nonattainment NSR for major sources and
major modifications.\66\ However, in order to reduce the burden for
nonattainment areas meeting certain conditions, we are proposing a
revised set of major NSR requirements under the authority of 40 CFR
Part 51, appendix S, section VI. We are referring to this as the
transitional program, and it is discussed in more detail later in this
section.
---------------------------------------------------------------------------

\66\ Should EPA issue revisions to these regulations, the
revised NSR program would of course apply to new sources and major
modifications.
---------------------------------------------------------------------------

2. Nonattainment NSR Under the 8-Hour Ozone Standard
Some States may already have in place a part D major source program
applicable to newly designated 8-hour ozone nonattainment areas. For
nonattainment areas in States whose SIPs contain a generic requirement
to issue part D major source NSR permits in areas designated as
nonattainment, nonattainment NSR permit requirements will become
automatically effective upon designation (See Figure 1).\67\
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\67\ States with already applicable part D NSR programs may
choose to amend their SIPs to allow them to take advantage of the
transitional option described in this section, provided they meet
the transitional program eligibility criteria.

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[[Page 32845]]
[GRAPHIC]
[TIFF OMITTED]
TP02JN03.000

For a nonattainment area in a State with a SIP that specifically
lists the areas in which part D NSR applies, or in areas which
currently have no nonattainment plan, there will be an interim period
between the designation date and the date that the State amends its SIP
either to list any new nonattainment area(s) or to include a part D
plan. During this interim period, part D NSR requirements are governed
not by section 51.165, but by appendix S to part 51.
a. What does appendix S require for nonattainment areas during the
interim period? In general, appendix S requires new or modified major
sources to meet LAER and obtain sufficient offsetting emissions
reductions to assure that the new major source will not interfere with
the area's progress toward attainment. (Readers should refer to 40 CFR
part 51, appendix S for a complete understanding of these and other

[[Page 32846]]

appendix S permitting requirements.) However, per section VI of
appendix S, we have always recognized the need for flexibility under
certain circumstances, which we address in detail below.
Also, note that EPA does not have a Federal permit program in place
for nonattainment NSR. This creates particular difficulties for the
Tribes, because their programs are not as mature as the State programs.
Therefore, in most locations, EPA, not the Tribes, will need to address
the implementation of appendix S in these areas, until a Tribe develops
a nonattainment NSR program on its own.
b. What is the legal basis for requiring States to issue
nonattainment NSR permits during the interim period? Section
110(a)(2)(c) of the CAA establishes a general duty on States to include
a program in their SIP that regulates the modification and construction
of any stationary source as necessary to assure that NAAQS are
achieved. This general duty, often referred to as ``minor NSR,'' exists
during all periods, including before a State has an approved part D NSR
permit program.
Although section 110(a)(2)(c) does not define specific requirements
States must follow for issuing major source permits during the interim
period between nonattainment designation and EPA approval of a part D
nonattainment NSR SIP (``interim period''), EPA's regulations codified
at 52.24(k) require States to follow EPA's Emission Offset
Interpretative rule codified at 40 CFR part 51, appendix S (hereinafter
referred to as appendix S) during this time.\68\
---------------------------------------------------------------------------

\68\ The actual language at 40 CFR 52.24(k) allows States to
issue permits under appendix S for a maximum period of 18 months
after designation. After this time, if the nonattainment area does
not have an approved Part D NSR permit program, a construction ban
would apply. However, in 1990, Congress altered the provisions of
the construction ban such that it would not apply when a State
lacked an approved part D NSR permit program in the future. We
believe that Congress' removal of the construction ban from the CAA
supersedes the regulatory language at 52.24(k) and EPA has
reinterpreted this language to allow States to issue permits under
appendix S from designation until the SIP is approved even if this
exceeds 18 months. See 1991 guidance memo, ``New Source Review (NSR)
Program Transitional Guidance'', John S. Seitz, March 11, 1991. We
will be revising the language at section 52.24(k) to properly
reflect this interpretation.
---------------------------------------------------------------------------

c. Codification of NO_X as an ozone precursor. Currently,
only VOCs are expressly regulated as ozone precursors under the PSD
regulations. Although appendix S specifically states that a source is
major for ozone if it is major for VOCs, we do not believe this
language is exclusive. The more general portion of the ``major
stationary source'' definition states, ``* * * any stationary source
that emits, or has the potential to emit, 100 tons per year or more of
any pollutant subject to regulation under the Act,'' is considered a
major source. There is similar general language within the definition
of ``major modification.'' The nonattainment provisions of the Act, as
amended in 1990, recognize NO_X as an ozone precursor;
section 182(f) of the CAA established nonattainment requirements for
NO_X. In addition, the definition of air pollutant under
section 302(g) of the CAA includes, ``* * * any precursors to the
formation of any air pollutant * * *'' Thus, where NO_X is
considered a precursor to the formation of ozone, the State would use
appendix S to issue a preconstruction permit to a new major source of
NO_X emissions during the interim period.\69\
---------------------------------------------------------------------------

\69\ Note that new sources or modifications which are major as a
result of NO_X emissions, and are thus subject to
nonattainment NSR for NO_X, would also be considered major
sources of nitrogen dioxide (NO₂), which is also a
criteria pollutant. Since all areas are currently in attainment
under the NO₂ NAAQS, these new NO_X sources
will also need to go through PSD review of NO₂.
---------------------------------------------------------------------------

Notwithstanding the above, in order to be completely clear, we are
proposing to amend both our NSR and PSD regulations to expressly
include NO_X as an ozone precursor in major PSD and major
nonattainment NSR programs. Where relevant for both PSD areas and
transitional NSR areas, States would be required to modify their
existing programs to include NO_X as an ozone precursor.
Elsewhere in today's action, we are proposing to include
NO_X as an ozone precursor for RACT requirements under
subpart 1. Under section 182(f) (in subpart 2), a waiver from
NO_X RACT and nonattainment NSR is possible under certain
circumstances. We are proposing that the section 182(f) waiver
provisions would also apply to areas designated nonattainment under
either subpart 1 or subpart 2. However, the waiver provisions do not
apply in areas where PSD is applicable.
3. Under What Circumstances Is a Transitional Program Needed During the
Interim Period?
We request comment on providing States flexibility regarding major
source nonattainment NSR program requirements in areas that meet
specific conditions. We believe that a more flexible NSR option is
appropriate in areas that are expected to reach 8-hour ozone attainment
early--within 3 years after designation--through, for example, national
or regional programs such as the NO_X SIP Call and the Tier 2
motor vehicle emissions standards. In these areas, we believe that
States should have the flexibility to apply a nonattainment NSR program
that provides some relief from certain requirements.
Several factors warrant a flexible approach for implementing NSR in
areas which qualify for the transitional program. We expect many areas
to attain the new 8-hour standard within 3 years solely through
regional NO_X reductions under the NO_X SIP Call
rule and other currently applicable Federal programs. We intend this
option to be available to any 8-hour ozone nonattainment areas located
outside the NO_X SIP Call area, so long as those
nonattainment areas can meet the 8-hour ozone NAAQS within 3 years
after designation. Some of these areas may be in nonattainment due
largely to transport from upwind sources; but no allowance is made
under major NSR for sources in areas overwhelmed by transport. As we
have construed it, this option would also encourage the early adoption
of attainment plans, which we believe will lead to emissions reductions
and resultant health benefits earlier than would otherwise occur. We
request comment on the transitional program described in this proposed
rulemaking, and in particular welcome information from States regarding
how many new major sources or major modifications they anticipate would
construct in transitional areas during the period between EPA's
approval of a transitional part D nonattainment NSR plan and the State
reaching attainment of the 8-hour NAAQS.
4. Elements of the Appendix S Transitional Program
a. Which nonattainment areas would be eligible for the transitional
program? The appendix S transitional program would only be available to
8-hour ozone nonattainment areas that are subject to NSR under subpart
1, not subpart 2 (see discussion of classifications elsewhere in this
proposal). In addition, in order to be eligible for the transitional
option, by the date EPA publishes the nonattainment designations for
the 8-hour standard (currently expected in 2004) a subpart 1
nonattainment area must: (1) Be attaining the 1-hour ozone standard;
(2) be subject to subpart 1, not subpart 2, of part D; \70\ (3) have
submitted an attainment plan that demonstrates attainment within 3
years after designation; the attainment plan would have to include
control measures under the NO_X SIP Call rule where

[[Page 32847]]

applicable; and (4) have submitted an attainment plan containing any
additional local control measures needed for attainment of the 8-hour
standard. These plans must commit the State to implement, by December
31, 2004, all measures necessary to bring the nonattainment area into
attainment by a 2007 attainment date.\71\ In addition, when a State
submits its attainment plan, it should note that it intends to
implement a program under appendix S, section VI that meets the
requirements for transitional areas discussed below.
---------------------------------------------------------------------------

\70\ Certain nonattainment NSR requirements in subpart 2 of part
D are specifically spelled out in the CAA, and thus cannot be
altered under a transitional program.
\71\ The actual attainment date--as proposed elsewhere in this
proposal--would be 3 years after the nonattainment designation.
---------------------------------------------------------------------------

Note that, under this option, the attainment plan submission timing
(i.e., submission by the date of EPA designation of nonattainment
areas) for transitional areas is about 3 years earlier than is
otherwise required for areas not meeting the 8-hour standard. Note also
that areas would be eligible for this transitional NSR provision even
though we are not establishing a ``transitional'' nonattainment
classification for areas covered under subpart 1. We request comment on
these criteria.
Also, note that while relief from offsets is provided for the NSR
transitional program (see discussion below), those States and Tribes
subject instead to the main body of appendix S will still need to
provide offset provisions.
b. What would be the basic requirements of a transitional
nonattainment NSR program under appendix S, section VI?
i. Major source applicability threshold. Under the general part D
NSR requirements, the applicability threshold for ``major stationary
source'' is defined as 100 tons per year of a nonattainment pollutant;
in some instances under subpart 2 the major source threshold can be as
low as 10 tons per year. In contrast, the major source threshold under
the PSD program is either 100 or 250 tons per year, depending upon the
type of stationary source undergoing review. We propose that,
consistent with the subpart 1 part D NSR requirements, an appendix S,
subpart VI transitional nonattainment programs will use a major source
threshold of 100 tons per year for each ozone precursor.
ii. Emission Control. Another key provision of the part D
nonattainment NSR program is that, in order to be permitted, major new
and modified sources must minimize their emission rate by applying
control technology to achieve LAER, which is generally the most
stringent emission limit contained in a SIP or achieved in practice.
In contrast to LAER, which does not consider costs and other
factors, a BACT analysis requires consideration of energy,
environmental, and economic impacts in determining the maximum degree
of reduction achievable for the proposed new source or modification. In
a BACT analysis, as described in the New Source Review Workshop
Manual,\72\ the most stringent emission limit, including the limit
representing LAER and its associated control technology, must be
considered. If the most stringent limit is rejected as BACT for a
particular case, that decision must be supported by an analysis that
shows that the most stringent limit should not be chosen in light of
the costs or other relevant factors. For example, if the most effective
control technology would impose unacceptably high costs because of
site-specific factors, that technology could be rejected as BACT for
the proposed source. In this way, BACT may be less stringent than LAER.
---------------------------------------------------------------------------

\72\ U.S. EPA Office of Air Quality Planning and Standards, New
Source Review Workshop Manual, Prevention of Significant
Deterioration and Nonattainment Area Permitting, Draft, October
1990. Available at: http://www.epa.gov/ttn/nsr/gen/wkshpman.pdf.
---------------------------------------------------------------------------

We request comment on whether a BACT requirement, consistent with
the BACT approach described in the NSR workshop manual, may be required
in transitional appendix S nonattainment NSR programs in lieu of
requiring LAER. We believe granting this relief is appropriate, given
the minimal difference we would expect between the emissions reductions
achieved from BACT, rather than LAER, for the small number of sources
that may trigger nonattainment NSR in transitional areas, for the few
years the area is nonattainment.
iii. Relief from source-specific offsets requirements. We are
proposing that major sources and major modifications would not be
required to obtain case- and source-specific offsets under the
transitional program. However, despite locating in a nonattainment area
which qualifies for the NSR transitional program, a new major source
may not cause or contribute to the existing violation in the
nonattainment area. If the State determines that the source does not
contribute to the existing violation, then mitigation would not be
required.
There are several circumstances under which it is reasonable to
assume that a new major source locating in a nonattainment area will
not interfere with timely attainment of the standard. First, if the
nonattainment area which qualifies for the NSR transitional option is
participating in the NO_X SIP Call (63 FR 57356; October 27,
1998), we expect that a source locating in the area will not cause or
contribute to the existing violation, so long as the new emissions are
consistent with growth projections. This is because it is assumed that
where new emissions are consistent with growth projections, those new
emissions will not interfere with timely attainment of the standard.
Under the NO_X SIP Call, we modeled emissions for 2007. We
included future growth projections for both VOC and NO_X
emissions, and allocated each State a NO_X budget designed to
control interstate NO_X transport. Because these budgets
include an emission growth factor for VOC and NO_X, we
believe that new major sources may locate in those nonattainment areas
which qualify for the NSR transitional option without interfering with
the area's ability to reach attainment, provided that any new emissions
are within the projected emissions growth factor. We expect States to
develop appropriate emission inventory procedures to assure that any
new emissions are consistent with projected growth in emissions.
Those nonattainment areas which qualify for the NSR transitional
program that are not projected to attain under the NO_X SIP
Call or are not covered by the NO_X SIP Call may also allow
for an increase in new major source emissions if their attainment
demonstration includes an emissions growth factor for major new and
modified sources and demonstrates that, provided emission increases
from new major sources remain below this level, the area will reach
attainment. Again, we expect States to develop appropriate emission
inventory procedures to demonstrate that the new emissions are
consistent with projected growth in emissions.
iv. Other requirements. In addition to the control technology
requirements discussed above, and consistent with current NSR
requirements under appendix S, section IV, condition 2, sources
locating in transitional areas will be required to certify statewide
compliance of all existing major sources under the same ownership or
control. We believe this requirement will not impose a substantial
burden on permit applicants or permitting authorities.
v. Backstop Provisions. Should a nonattainment area under the
appendix S, section VI transitional program fail to meet its SIP
obligations to attain the NAAQS before the end of the interim period,
then it will no longer be eligible for the transitional program. We
request comment on the need for a backstop provision that requires a
State to notify

[[Page 32848]]

us, at the time of such failure, that it is reverting to the
traditional nonattainment requirements under appendix S. We also
request comment on any other findings which should end eligibility for
the transitional program.
5. Will a State Be Required To Assure That the Increased Emissions From
a new Major Source Do Not Cause or Contribute to a Violation in a
Nearby Nonattainment Area Before It Issues a Preconstruction Permit
Under Appendix S?
At the current time, EPA allows the State to presume that a source
locating outside a designated ozone nonattainment area will have no
significant impact on the designated nonattainment area. See section
III of appendix S. However, given the recent advances in the scientific
understanding of ozone formation, we may revise these guidelines in the
near future. In the meantime, under the PSD rules, States may choose to
address the impacts of sources in attainment areas on nearby
nonattainment areas in a more proactive manner; i.e., through PSD
offsets and/or tighter emission controls when the source is shown to
contribute to a violation of the NAAQS.
6. What Happens at the End of the Interim Period?
a. Transitional NSR areas. As noted above, this transitional option
is only intended to apply to certain nonattainment areas that expect to
attain the 8-hour ozone NAAQS within 3 years after designation.
Therefore, we expect these areas to be in attainment on or before an
attainment date in 2007. Accordingly, States must submit, by the
attainment date in 2007, an attainment demonstration with a maintenance
plan. A State may continue implementing transitional NSR under appendix
S, section VI for 6 months following submission of its attainment plan,
or until its attainment plan is approved, whichever is earlier.
b. Traditional NSR areas. If a State has never been or is no longer
operating under a section VI transitional program, it must submit a
part D nonattainment NSR plan within 3 years after designation (in
2007). The State may continue implementing traditional part D
nonattainment requirements under appendix S until we approve its part D
plan.
7. What Is the Legal Basis for Providing This Transitional Program?
As stated earlier, appendix S applies during the period after an
area is designated nonattainment but before a part D nonattainment NSR
plan is due under subparts 1 and 2 of part D. Application of appendix S
during this interim period ensures compliance with the section
110(a)(2)(C) ``minor'' NSR program. However, Congress was ambiguous
regarding what specific requirements States must follow for issuing
major source permits during the interim period described above. Thus,
we have discretion to interpret those regulations in a reasonable
manner. Chevron, U.S.A. v. NRDC, 467 U.S. 837 (1984).
The transitional appendix S approach is reasonable for several
reasons. First, it would be available only for those areas that are
already attaining the 1-hour standard and that will attain the 8-hour
standard within 3 years after designation (before a part D
nonattainment NSR SIP revision is due) through national and regional
planning. These areas appropriately deserve a different approach for
implementing the section 110(a)(2)(C) requirements than areas that are
in nonattainment for the 1-hour standard and thus currently
implementing NSR, or those areas that are not projected to reach
attainment of the 8-hour in the short term.
We believe that the transitional option, as we have constructed it,
would result in a level of emissions reductions that is substantially
similar to the level that would be achieved from traditional NSR for
the small number of sources it will affect in the short period during
which these areas are designated nonattainment. Thus, these
transitional areas would still be implementing a program that regulates
the modification and construction of any stationary source ``as
necessary'' to assure that the NAAQS are achieved as expeditiously as
practicable.
Currently, the language of section VI allows all States to exempt a
new major source from complying with the requirement to install LAER
and obtain offsets if the source will meet all other applicable SIP
requirements and not interfere with the area's ability to meet its
attainment date. However, we plan to revise section VI to remove this
general exemption and apply the transitional approach. This revision is
appropriate because we do not believe that areas not meeting the
transitional approach would be able to ensure that they were
implementing an NSR program ``as necessary'' to ensure the attainment
of the NAAQS without complying with appendix S in general (e.g.,
sections I-V). Note that section VI of appendix S originally applied
only to secondary NAAQS, and we revised section VI to include primary
standards following the 1977 Amendments. The exemption provided by
section VI applied to areas whose attainment dates were shortly after
the CAA was re-authorized in 1977 because these areas had already
submitted their attainment plans to us, and we believed that these
areas would reach attainment without having to impose LAER and offsets
on new major sources.
While nonattainment areas that qualify for the 8-hour ozone
standard NSR transitional option are in a similar situation, areas not
qualifying for the transitional approach are not. In order to qualify
for the NSR transitional option, States will have to submit an
attainment plan by the date of designation for the 8-hour NAAQS in
2004. These plans must commit the State to implement by December 31,
2005, all measures necessary to bring the nonattainment area into
attainment and to meet a 2007 attainment date.\73\ Similar to the
nonattainment areas to which section VI originally applied, we believe
that nonattainment areas which qualify for the NSR transitional option
will be able to meet a 2007 attainment date without imposing LAER and
offsets on new major sources.
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\73\ The actual attainment date--as proposed elsewhere in this
proposed rulemaking--would be 3 years after the effective date of
nonattainment designation, which we anticipate will occur in the
spring of 2004.
---------------------------------------------------------------------------

On its surface, section VI's existing language could be applied in
any nonattainment area during the interim period. For an area that
fails to meet the transitional option requirements, however, we believe
that the area would not be able to show that it will continue to meet
the areas attainment date if it does not apply LAER or obtain offsets.
Thus, we are proposing to revise the language of section VI to apply
only in areas qualifying for the transitional NSR program.
8. How Should the NSR Requirements Be Implemented for New 8-Hour Ozone
Areas that Encompass the Old 1-Hour Ozone Nonattainment Areas After EPA
Revokes the 1-Hour Ozone Standard?
Newly-designated 8-hour ozone areas which include areas which have
never attained the 1-hour standard will have two different sets of
requirements in place until a point in time proposed elsewhere in this
proposed rulemaking under the anti-backsliding provisions. (There are
two options proposed in the anti-backsliding section of this proposal
for that point in time--until either the level of the 1-hour ozone
standard is achieved or the 8-hour ozone standard is attained.) The 1-
hour NSR requirements and higher offset ratios (if applicable) will
remain in place in the area that was designated nonattainment

[[Page 32849]]

for the 1-hour standard until that point in time. The remaining portion
of the newly-designated 8-hour ozone area must comply only with the 8-
hour ozone NSR requirements and offset ratios (if applicable).
9. NSR Option To Encourage Development Patterns That Reduce Overall
Emissions--Clean Air Development Communities
EPA is considering two options to recognize the air quality
benefits which can accrue when areas site new sources and plan
development in a manner that results in overall reduced emissions. EPA
would define a community that changes its development patterns in such
a way that air emissions within the non-attainment area are
demonstrably reduced as a ``Clean Air Development Community'' (CADC).
We propose that areas that qualify as CADCs would obtain certain
flexibilities in implementing CAA programs. We request comments on the
options listed here and encourage commenters to suggest other ways
under the CAA that we could encourage development that will result in
lower emissions.
In the first option, a CADC would have a more flexible NSR program
by: (1) Being subject to subpart 1 NSR as opposed to subpart 2 NSR; (2)
lowering NSR major source thresholds for these areas to make them
similar to the thresholds for PSD areas; and (3) allowing areas that
meet certain development criteria (development zones) to receive NSR
offsets from State offset pools. In the second option, a CADC would be
able to receive a pool of NSR offset credits equal to the reduced
emissions from new development patterns. Credits from the pool could be
provided to any new or modified source in a ``development zone'' as
offsets.
The first goal of a CADC option is that it would give communities a
tool to achieve air quality benefits that can accrue from strategic
location of new sources. The location of new sources (often major job
centers) can affect regional development patterns and air emissions. As
a result, new sources have a dual impact on air quality. The first
impact is from their own direct emissions and the second impact is from
the emissions associated with other sources whose development is
influenced by the new source and any change in travel patterns
(positive or negative) that may result. This option attempts to
recognize the net impact that a new source has on a region, not just
from their own stationary emissions, but also from their associated
stationary, area and mobile source emissions influenced by the location
of the new source. It provides a mechanism to recognize the relative
emissions reductions associated with locating major job centers in
close proximity with transit, commercial/retail destinations, and
workforce housing.
Furthermore, the EPA recognizes that brownfields \74\ are often
prime candidates to realize these locational benefits. Brownfields, as
sites of previous economic activity, frequently enjoy excellent
proximity to a variety of destinations and a range of transportation
infrastructure. Second, given their potentially contaminated state,
manufacturing or other industrial uses are often the appropriate type
of revitalization. The productive re-use of these sites is a priority
for the Agency. This option will provide flexibility within CAA
programs to achieve the dual goals of brownfields revitalization and
reduced air emissions.
---------------------------------------------------------------------------

\74\ Brownfields are generally considered to be abandoned or
underutilized properties (especially industrial and commercial
facilities) where redevelopment or expansion may be complicated by
possible environmental contamination (real or perceived). However, a
brownfield site, as defined by The Small Business Liability Relief
and Brownfields Revitalization Act of January 11, 2002, is any
``real property, the expansion, redevelopment, or reuse of which may
be complicated by the presence or potential presence of a hazardous
substance, pollutant, or contaminant.'' Further information is
available at: http://www.epa.gov/compliance/resources/faqs/cleanup/
brownfields/index.html.
---------------------------------------------------------------------------

The second goal of a CADC program would be that it would allow
communities to use the air benefits of their development practices as
an incentive for locating new sources and their associated economic
growth.
Anthropogenic emissions within a region come from three kinds of
sources: Mobile sources, areas sources, and stationary sources. Thus,
the ability of a region to accommodate new stationary sources is
dependent not only on stationary source emissions but also on mobile
and area source emissions. Localities which choose to engage in
development that reduces emissions from mobile and area sources, with
either of these options, could have the opportunity to turn those
reductions into incentives for siting new economic activity.
It should be noted that an area that decides to become a CADC is,
in effect, transferring to the stationary source sector emission
reductions which normally would remain in the mobile source sector
where they could, for example, be used for conformity determinations.
Areas would have to think through the implications for them of doing
this.
While we have not decided to go forward with either of these
options at this time, we are continuing to examine them and, therefore,
request comment on them. In particular, we request comment and
suggestions on possible legal rationales for supporting these options
which would enable them to be implemented through rulemaking. We are
also very interested in other potential incentives that we could
provide in addition to or instead of those included in this proposal.
(We encourage commenters to focus on those incentives that are within
EPA control.) In addition, we request comment on implementation
barriers, as well as the analytical complexities in the estimation of
emission benefits from changes to development patterns that areas would
need to calculate in order to become a CADC. Public comments will help
us determine how and whether to include either option in the final
rulemaking.
a. What is EPA considering? Option 1: EPA is considering a package
of three kinds of flexibility for areas subject to subpart 2 whose land
use development meets certain criteria. First, we would allow CADC's to
be covered under the NSR program under subpart 1 rather than under
subpart 2 if: (a) They adopt specific land use measures into their SIPs
that reduced air emissions; and, (b) they demonstrate that air quality
would not decrease as a result of using subpart 1 instead of subpart 2.
This demonstration would have to quantify the emissions reductions from
adopted land use measures in their SIPs and show that the decreases
from the land use measures are sufficient to offset any potential
increase in emissions from using subpart 1 instead of subpart 2.
Second, we would lower the NSR major source thresholds for CADC areas
to make them similar to those under the PSD provisions. Third, we would
allow development zones, areas that meet certain development criteria,
to receive NSR offsets from ``pools'' or ``banks'' of offsets
established by the State. (A pool would be created by the State's
taking action or requiring others to take actions that meet the
criteria for NSR offsets. The State would then collect these offsets
and could distribute them to new development that would occur in
specific areas.) We believe that these actions would help steer
development to development zones where fewer regional emissions would
occur than if the development had occurred elsewhere. In addition, the
change in land use patterns may help areas reduce their mobile source
emissions. EPA requests comments on whether an area

[[Page 32850]]

should receive all three incentives or only one or two of them.
Option 2: EPA is also considering a less ambitious program of
incentives that focuses on the development zones. In this option, the
reduced emissions from improved development patterns are used to create
offset pools for use by sources in development zones. We believe that
this would also help steer development toward development zones
providing the same benefits discussed above. The main advantage to a
CADC compared to option 1 is that the offset pool could start with
considerable offset credits and, therefore, the credits would not have
to be created through additional actions. It would also have the
potential of more carefully targeting new development just to the
development zone instead of anywhere in the CADC.
b. What would a CADC be? A CADC would be a ``community'' that
changes its development patterns in such a way that air emissions
within the non-attainment area are demonstrably reduced. A CADC does
not have to be, and in most cases probably would not be, an entire
metropolitan nonattainment area covered by a SIP. A portion of a
nonattainment area could be designated a CADC in those cases where the
land use changes did not result in a sufficient emissions reductions to
allow the entire nonattainment area to qualify. It should be noted,
however, that if a CADC smaller than the entire nonattainment area was
designated, any analysis of the effect of any changes in development
would have to reflect and consider effects on the nonattainment area as
a whole.
c. What would a development zone be? EPA proposes that areas that
meet certain criteria would be considered ``development zones,'' and
new sources in these development zones could receive offsets from State
offset pools. The following is a list of possible criteria that EPA
could use to define those zones. EPA's goal is to help identify zones
which promote environmentally sound development, the preservation of
regionally-or locally-designated open space, and sites which have
adequate, existing infrastructure. Areas would, for example, have to
be:
? Located within an 8-hour ozone nonattainment area.
? Located within an ``urbanized area'' as defined by the U.S.
Census Bureau.\75\
---------------------------------------------------------------------------

\75\ Urbanized area--an area consisting of a central place(s)
and adjacent urban fringe that together have a minimum residential
population of at least 50,000 and generally an overall population
density of at least, 1,000 people per square mile of land area.
http://www.census.gov/geo/www.tiger/glossary.html

? Zoned for industrial use.
? Located within 0.25 miles of rail freight facilities.
? Located within 0.5 mile of fixed rail or express bus
transit service.
? Designated or qualify for designation as a Federal or State
redevelopment zone.
? Enrolled in a State brownfield remediation plan.
? Designated industrial corridor.
? Adopting land use density indicators such as population,
employment, congestion index.
EPA specifically requests comment on these criteria including
whether these criteria are appropriate, and if not, how should they be
changed? We also request comment regarding whether a site must meet all
or just some of the criteria to qualify.
d. Why is EPA proposing these ideas? EPA would like to encourage
land use practices that reduce emissions, and one possible way could be
through NSR program flexibility. EPA recognizes that the way land use
occurs in an area can affect emissions in all sectors, including
stationary, area and mobile sources. For on-road mobile sources, areas
can already include the emissions impacts of their land use choices
within their SIP, as well as in their transportation conformity
determinations. EPA would like to encourage areas to adopt land use
practices that result in fewer emissions from all sectors by allowing
areas to apply the benefits from certain land use measures to the major
stationary source sector and creating special NSR flexibilities for
areas that do so.
e. If areas receive NSR flexibility for adopting land use measures,
can the air quality benefits of land use measures also be applied to
other sectors? As part of any flexibility, EPA wants to ensure that
areas do not count the effects of a land use activity twice. For
example, if areas decide that they want to apply the emissions benefits
that result from certain land use decisions toward NSR, then they
cannot also include the air quality benefits of land use choices in
their motor vehicle emissions budgets in the SIP, or in the area's
transportation conformity determinations. EPA recognizes that this
means that areas will have to decide for themselves how to apply any
emissions benefits of land use activities, and that consultation among
all affected parties must occur. For many communities, this could be a
difficult decision that would require the input of many stakeholders
representing both the mobile and stationary source sectors as well as
the general public.
One possible way for areas to avoid double counting would be for
EPA to give credit only for new measures that are adopted in response
to this proposal. This approach would ensure that the proposal acts as
an incentive to encourage new actions that will reduce emissions. Such
an approach could, however, be seen as unfairly penalizing areas that
have already taken positive actions. EPA requests comment on how best
to balance the issues of ensuring fair treatment for all areas,
preventing double counting, and making this proposal an effective
incentive.
For example, areas would continue to include existing land use
measures in their SIP motor vehicle emissions budgets and in their
conformity determinations, and apply the reductions from newly adopted
land use measures to demonstrate they qualify for the type of
flexibilities proposed here. Quantifying the on-road mobile source air
quality impacts of land use measures occurs in transportation modeling
(discussed below). Therefore, in a SIP submission that includes land
use measures adopted to obtain NSR flexibility, areas would have to
show that their motor vehicle emissions budgets do not also include the
effects of the newly adopted land use measures. EPA also recognizes
that there may be other, potentially easier ways to avoid double
counting and encourages commenters to submit them.
f. How would areas quantify the benefits of land use choices? Areas
would quantify the benefits of land use through their air quality
modeling process in the SIP process. EPA's guidance, ``Improving Air
Quality Through Land Use Activities'' (Improving Air Quality Through
Land Use Activities Report). U.S. Environmental Protection Agency,
Office of Air and Radiation, Office of Transportation and Air Quality.
(EPA420-R-01-001, January 2001). It can be found at: http://www.epa.gov/
otaq/transp/trancont/r01001.pdf) provides information about
how land use measures are modeled and possibly quantified. EPA requests
comment on other potential methods of quantifying the reductions.
Areas should be aware that quantifying the benefits of land use may
not be an easy task. EPA sees two potential difficulties in quantifying
the benefits of land use for application to NSR on which we seek input.
First, as stated above, it may be very complicated for areas to avoid
counting the same air quality benefits twice. One way areas might
reduce the risk of such double counting is to produce two sets of
modeling. One would be based on the

[[Page 32851]]

current situation, the other based on the proposed land use changes
made by the community. The difference between these ``before and after
modeling'' scenarios would show the emission impacts of the land use
changes. We recognize that this modeling is very complex and resource
intensive. Complexities arise because in many areas across the country,
on-road mobile source emissions are estimated using transportation and
emissions models. The locations where people live and work in an area,
are important inputs to the transportation planning and modeling
processes. As such, the long range transportation plan which covers at
least 20 years into the future was developed to reflect the mobility
needs for a specific land use scenario. It has been long recognized
that there is a complicated, dynamic and interrelated relationship
among air quality, transportation and land use planning. Evaluation may
need to be iterative. For example, if land use changes are proposed to
gain air quality benefits, the transportation system may need to be re-
evaluated to insure, that with the new land use scenario, the
transportation system can continue to provide an acceptable level of
transportation service to all members of the community. Therefore, it
may be difficult for areas to precisely quantify the emissions related
to land use choices from this modeling, given the dynamic nature
between land use and transportation. In conducting this sort of
analysis, States should be working closely with MPOs and other
transportation and planning agencies.
The second set of difficulties involves setting the timeframe
before emission benefits can be realized. EPA seeks comment on the
potential difference in the time period over which benefits may be
realized from land use strategies compared to the NSR program. Land use
strategies tend to be long term. Once a particular land use strategy is
adopted, it may take several years before the change results in air
quality benefits. For example, suppose an area decides to change its
zoning regulations to encourage mixed-use development. This strategy
may ultimately result in lower relative emissions because of people
making fewer vehicle trips because housing, employment, and shopping
are located together compared to development patterns that might occur
without the changes to the zoning regulations, and the increase in
density may generate transportation options such as transit service,
bicycling, and walking. However, it may be several years before the
zoning regulations actually change where people and businesses decide
to locate. Of course, it should be noted that flexibilities proposed do
not necessarily mean that new development will occur right away. EPA
requests comment on how to take this issue of timing into account in
our proposal to give program flexibility for adopting land use
measures.
g. How can changes to land development affect air quality? As
metropolitan areas continue to expand in both size and population, how
and where development occurs has significant implications for many
environmental impacts including air quality. For example, establishing
land use strategies to increase population and housing densities, and
support the provision of mixed use development can make transit, and
bicycle and pedestrian facilities more viable options to driving. These
strategies may decrease the amount of motor vehicle emissions that
would occur compared to development patterns if the strategies were not
established.
h. What is the connection between land use and NSR? A major new
source has the potential to be a major economic development generator
for a region that may influence development and travel patterns. For
example, if a large new facility were to locate outside of the
nonattainment area (in many cases this means outside of the area with
existing development, infrastructure and density) it may affect
regional travel patterns. Such a facility that hires hundreds of people
and is located where there are few opportunities to use alternative
modes of transportation (e.g., mass transit or walking to work) may
result in greater amounts of VMT and vehicle trips (``VT'') per
employee than a similar facility accessible by mass transit. For
example, a long-term effect of locating a large facility in an
undeveloped area, particularly one that employs a large number of
people, could be that it ultimately attracts additional development.
For instance, if enough employees are at the site, the nearby area may
attract other service industries (e.g., fast food, drycleaners, and gas
stations). These developments may be low density, auto-dependent, and
single-use, which may generate additional emissions (both area and
mobile sources). The NSR program does not consider or offset these
emissions.
On the other hand, if a hypothetical source chooses to locate in an
area that is already developed, it may generate less VMT and therefore
fewer emissions than one located in an undeveloped area. The source may
be able to take advantage of the existing infrastructure and service,
without the construction of new infrastructure elements (roads, sewer
lines, etc.) that result in their own air emissions and other
environmental impacts. Such location in existing developed areas may
not open up new areas to development, nor encourage sprawl. With this
option, EPA is trying to recognize the indirect impacts of development.
If communities use CADC techniques, they should, compared to
communities that do not use such practices, offset some of the indirect
emissions from new sources. The NSR program only considers the direct
impacts from a development. This option tries to look more broadly at
all the impacts of development. We would reduce the requirements of NSR
and would provide increased program flexibility in exchange for the
reduced emissions from CADC practices.
A strategy that recognizes the relationships between stationary,
area and mobile sources, as well as how these impacts affect total
environmental quality, is one that will most effectively deal with
today's environmental problems. That is why multiple offices in EPA--
the Air Office, the Water Office, the Policy Office and the Brownfields
Office--all have programs encouraging development patterns that reduce
environmental impacts. These programs use a variety of tools:
regulations, information, and partnerships to encourage such
development. It would be consistent with these other Agency efforts to
develop a way to use flexibilities in CAA programs to encourage CADC
practices. It would also be supportive of the many States and
localities that are interested in accounting for the air quality
benefits of their development choices.
i. Are there other environmental impacts that result from land use
choices? Yes, low density development patterns tend to disturb more
land and create more impervious cover over a region (e.g., paved
roads), harming a region's water quality and disrupting habitat.
Because of the close interaction between development and the
achievement of national environmental goals, EPA has long been engaged
in addressing their environmental impacts. The Office of Water seeks to
address the impacts of development through its watershed programs, non-
point source programs, source water protection efforts, the National
Estuary Program, and Total Maximum Daily Load programs. When EPA
reviews projects under the National Environmental Policy Act, it
examines the secondary and cumulative impacts of development generated
by Federal actions. The Brownfields Office, recognizing the

[[Page 32852]]

necessity of engaging the private sector, has sought specifically to
encourage development on brownfields.
j. What are some of the land use strategies measures included in
``Improving Air Quality Through Land Use Activities''? The guidance
includes a number of different activities that may generate on-road
mobile source emissions reductions. A sampling of them includes:
? Grant incentives to build concentrated activity centers:
encouraging pedestrian and transit travel by creating high density
mixed use nodes that can be easily linked by a transit network.
? Change zoning regulations to allow or encourage mixed-use
development; this encourages pedestrian travel by putting compatible
land uses next to each other.
? Build, or require developers to install, pedestrian and
bicycle facilities; and increase the number of sidewalks, paths,
crosswalks, bike lanes, etc., to make walking and bike use safe.
? Transfer unused development capacity in outlying areas to
increase density above existing limits in central areas and near
transit nodes; this moves development away from outlying areas and
toward already developed areas.
? Provide incentives such as reduced parking requirements to
new in-fill development; this takes advantage of existing
infrastructure and discourages driving.
EPA were to go forward with this concept the Guidance would be
formally incorporated by reference.
k. Does the CAA include the concept of increased flexibility in the
NSR program in cases where development is targeted in appropriate
areas? Yes, Section 173(a)(1)(B) replaces the traditional requirement
that a new or modified stationary source in a nonattainment area obtain
offsets with a growth allowance concept in specially designated zones
to which ``economic development should be targeted.'' EPA recognizes,
however, that this proposal differs in many respects from section 173.
l. Does this option mandate any changes to local land use
decisions? No. The CAA, in Section 131, clearly supports the position
that land use decisions are local. This option would simply recognize
that areas that choose to develop in certain patterns are doing more to
improve air quality and that such efforts should be rewarded.
m. How would this option be enforced? Since the CADC measures would
be in the SIP, they could not be changed without EPA approval of a SIP
revision. If measures are changed they must be replaced with other
measures of equal or greater effectiveness, and otherwise meet the
requirements of section 110(l) concerning anti-backsliding. Failure to
do so would mean that either of these options would no longer apply to
the area. EPA understands that it does not have the authority to
control local land use decisions. The choice always rests with the
community, however, it doesn't get the advantages of being a CADC
unless it puts the measures in its SIP. Should it decide to change a
land use measure in the SIP, the issue for EPA would be whether or not
other new measures yield sufficient reductions to allow the area to
remain a CADC. The land use measure itself would be approved. EPA
requests comments on how best to enforce these options.
n. What are the relative advantages of the two options? The first
option provides greater incentive for communities and is, therefore,
more likely to encourage changes to land development policies. The
second option is simpler since it does not make changes to NSR. As a
result, unlike option 1, it does not require communities to estimate
the increased emissions that could result from changing NSR
applicability--which admittedly would be difficult.
o. What are the disadvantages of this proposal? In addition to the
modeling issues discussed above in section f, there are several other
issues associated with providing flexibilities, such as reducing NSR
requirements, for areas that adopt CADC land use measures. It may be
difficult to ensure that the CADC land use measures are implemented by
areas participating in the option. It may also be difficult to design
penalty measures if those land use measures are not implemented by
areas. In addition, if the CADC should fail to achieve its envisioned
land use pattern, how would the MPO model the area for purposes of
conformity. By encouraging growth in established areas, this option may
raise environmental justice concerns and unanticipated costs for low-
income residents. Some States may have difficulties managing and
tracking offset pools. EPA requests comment on all of these issues and
how we can best resolve them.
10. Tribal Concerns
In addition, we expect that some Tribal areas will be designated as
nonattainment because of pollution that is transported from the
surrounding State(s) and will have little control over the ability of
areas under their jurisdiction to attain the air quality standards. In
the event that such an area fails to attain by the attainment date,
additional flexibility for the Tribes will be needed to address the
fairness issues created by transported nonattainment problems. Tribes
have asked that we consider providing offset set-asides in order to
address these issues. We request comment on whether emission offset
set-asides, possibly generated by innovative measures to promote
additional emissions reductions, are an appropriate method to help
level the playing field for the Tribes in order to support economic
development in Tribal areas. In any case, we believe that some
provisions will need to be made for Tribal areas, because they will
have limited ability, if any, to generate offsets on their own. We may
also need to work with States to help provide the Tribes access to
offsets from non-Tribal areas. Also, it is important to recognize that
the NO_X SIP Call does not provide for an emissions budget
for Tribes. Therefore, we are asking for comments on how to provide a
set-aside to provide fair access to development in these areas.

P. How Will EPA Ensure That the 8-Hour Ozone Standard Will Be
Implemented in a Way Which Allows an Optimal Mix of Controls for Ozone,
PM_2.5 and Regional Haze?

1. Could an Area's 8-Hour Ozone Strategy Affect Its PM_2.5
and/or Regional Haze Strategy?
Many of the areas that are violating either the 8-hour ozone or
PM_2.5 NAAQS, may be violating both of these NAAQS. Thus, in
many cases, States will have ozone and PM_2.5 nonattainment
areas with overlapping boundaries. Requirements for regional haze apply
to all areas. Each State is responsible for developing SIP revisions to
meet all the requirements relevant to each nonattainment area for each
pollutant as well as developing a regional haze plan. In some cases,
ozone control measures may also be useful for a PM_2.5
control strategy or a regional haze plan. Similarly, controls for
PM_2.5 may lead to reductions in ozone or regional haze. For
example, considered in isolation, a metropolitan area's ozone strategy
might be based on additional VOC emissions reductions; if the area
needs NO_X reductions for PM_2.5 attainment,
however, an optimal approach might include a more complex ozone
strategy using both NO_X and VOC reductions. We believe
integration of ozone and PM_2.5 attainment planning will
reduce overall costs of meeting multiple air quality goals.
Many of the factors affecting concentrations of ozone also affect

[[Page 32853]]

concentrations of PM_2.5. Emissions of NO_X and/or
VOC will lead to formation of organic particles and the precursors of
particulate nitrate, as well as ozone. The presence of ozone is an
important factor affecting PM_2.5 formation; as ozone builds
up, so do OH radicals which are instrumental in oxidizing gas phase
SO₂ to sulfuric acid. The sulfuric acid may be converted to
sulfate particles, increasing the PM_2.5 concentration.
Further, the local ozone concentrations may be decreased by the
reaction of ozone with nitric oxide; thus, in some large urban areas, a
decrease in local NO_X emissions can result in higher local
ozone concentrations, leading to higher OH radical concentrations and
increases in secondary PM_2.5. Because the precursors for
ozone and PM_2.5 may be transported hundreds of kilometers,
regional scale impacts may also need to be considered.
2. What Guidance Has EPA Provided Regarding Ozone, PM_2.5 and
Regional Haze Interaction?
As described in an earlier section of today's proposed rulemaking,
States must develop ozone attainment demonstrations for many
nonattainment areas. General criteria for attainment demonstrations are
contained in 40 CFR part 51, appendix W (i.e., ``EPA's Guideline on Air
Quality Models''). EPA's May 1999 draft ``Guidance on the Use of Models
and Other Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS'' provides a set of general requirements that an air quality
model should meet to qualify for use in an attainment demonstration for
the 8-hour ozone NAAQS. The draft guidance encourages States to
integrate ozone control strategies with strategies designed later to
attain the NAAQS for PM_2.5 and to meet reasonable progress
goals for regional haze. In addition, the draft guidance presents some
modeling/analysis principles to help States develop data bases and
capabilities for considering joint effects of control strategies for
ozone, PM_2.5 and regional haze. Because emissions and
meteorological conditions vary seasonally, the guidance recommends
assessing the effects of an ozone control strategy on annual
PM_2.5 concentrations by estimating effects on mean
PM_2.5 for each season and using the resulting information to
estimate annual impacts. Emission estimates for VOC, NO_X,
primary PM_2.5 , sulfur dioxide and ammonia will be needed.
In addition, the modeling should separately estimate the effects of the
ozone strategy on the major components of PM_2.5 : mass
associated with sulfates, nitrates, organic carbon, elemental carbon,
and all other species. We believe that this approach is adequate to
ensure that the 8-hour ozone standard will be implemented by States in
a way that allows an optimal mix of controls for ozone,
PM_2.5, and regional haze.
Similarly, EPA's attainment demonstration guidance for
PM_2.5 and regional haze states that models intended to
address secondary PM problems should also be capable of simulating
ozone formation and transport (January 2, 2001, ``Guidance for
Demonstrating Attainment of Air Quality Goals for PM_2.5 and
Regional Haze''). The formation and transport of secondary PM are
closely related to processes that are important in the formation and
transport of ozone. Thus, it makes sense for programs designed to
control ozone to be cognizant of programs to reduce PM_2.5
and improve visibility and vice versa. The PM_2.5 guidance
suggests conducting a ``mid-course review'' of an approved
PM_2.5 plan to review changes in air quality resulting from
implementation of plans to reduce PM_2.5, regional haze, and
ozone. (EPA guidance on mid-course review of attainment demonstrations
is described earlier in today's proposed rulemaking.)
We realize that in some cases development of control plans will be
complicated by the need to assess the impact of the precursors of
ozone, PM_2.5, and regional haze. The question arises whether
such areas may be provided more time to perform the more complicated
analyses such that an effective multi-pollutant strategy may be
developed. However, the statute provides no express relief for these
situations. Thus, the State is still responsible for developing and
submitting demonstrations which show that each standard will be
attained by the applicable date or dates provided.
3. What Is EPA Proposing?
Today, we propose to continue the policy of encouraging each State
with an ozone nonattainment area which overlaps or is nearby a
PM_2.5 nonattainment area to take all reasonable steps to
coordinate the required revisions for these nonattainment areas and
meet reasonable progress goals for regional haze. Specifically, we
encourage States conducting modeling analyses for ozone to separately
estimate effects of a strategy on the following: mass associated with
sulfates, nitrates, organic carbon, elemental carbon, and all other
species.

Q. What Emission Inventory Requirements Should Apply Under the 8-Hour
Ozone NAAQS?

The Consolidated Emissions Reporting Rule (CERR) (67 FR 39602, June
10, 2002) has established basic emission inventory requirements.
Specific SIP-related inventory issues will be detailed in a guidance
document. An important difference between inventories submitted in
response to the CERR and SIP inventories is the issue of approvability.
While it is likely that an inventory submitted under the CERR would be
identical to the inventory submitted as part of a SIP, the SIP
inventory will need to go through public hearing and formal approval by
EPA as a SIP element. This public process can be combined with the
public process the State undertakes for other SIP elements. The
following discussion presents more details on the emission inventory.
Emission inventories are critical for the efforts of State, local,
and Federal agencies to attain and maintain the NAAQS that EPA has
established for criteria pollutants including ozone. Pursuant to its
authority under section 110 of title I of the CAA, EPA has long
required States to submit emission inventories containing information
regarding the emissions of criteria pollutants and their precursors.
EPA codified these requirements in 40 CFR part 51, subpart Q in 1979
and amended them in 1987.
The 1990 CAA Amendments revised many of the provisions of the CAA
related to attainment of the NAAQS and the protection of visibility in
mandatory Class I Federal areas (certain national parks and wilderness
areas). These revisions established new periodic emission inventory
requirements applicable to certain areas that were designated
nonattainment for certain pollutants. In the case of ozone, section
182(a)(3)(A) required that States submit an emission inventory every 3
years for nonattainment areas beginning in 1995 for calendar year 1993.
The inventory must include emissions of VOC, NO_X, and carbon
monoxide (CO) for point, area, mobile (on-road and non-road), and
biogenic sources.
In 1998, EPA promulgated the NO_X SIP Call (Sec. 51.121)
which calls on the affected States and the District of Columbia to
submit SIP revisions providing for NO_X reductions in order
to reduce the amount of ozone and ozone precursors transported across
State borders. As part of that rule, EPA established emissions
reporting

[[Page 32854]]

requirements for States subject to the SIP Call.\76\
---------------------------------------------------------------------------

\76\ Although the United States Court of Appeals has remanded
certain limited issues regarding the NO_X SIP Call to the
Agency, those issues do not include the reporting requirements. See
Michigan v. EPA, 213 F. 3d 663 D.C. Cir. 2000) and Appalachian Power
Co. v. EPA, 251 F. 3d 1026 (D.C. Cir. 2001).
---------------------------------------------------------------------------

In 2002, EPA promulgated the CERR. (67 FR 39602, June 10, 2002).
The CERR consolidates the various emissions reporting requirements that
already exist into one place in the CFR, establishes new reporting
requirements for PM_2.5 and its precursors and establishes
new requirements for the statewide reporting of area source and mobile
source emissions.
The CERR establishes two types of required emission inventories:
? Annual inventories, and
? 3-year cycle inventories.
We anticipate that States will use data obtained through their
current annual source reporting requirements (annual inventories) to
report emissions from larger point sources annually. States will need
to get data from smaller point sources every 3rd year. States may also
take advantage of data from emission statements that are available to
States but not reported to EPA. New nonattainment areas for the 8-hour
standard that are classified under subpart 2 will need to establish an
emission statement program as specified under section 182(a)(3)(B). We
published guidance on emission statements in July 1992 titled,
``Guidance on the Implementation of an Emission Statement Program.'' As
appropriate, States may use the emission statement data to meet their
reporting requirements for point sources. We are interested in States'
comments on their experience with the emission statement program and
how the implementation of the emission statement program can be
improved. States are also required to inventory area and mobile source
emissions on a statewide basis for the 3-year cycle inventory. Mobile
source emissions should be estimated by using the latest emissions
models and planning assumptions available. The latest approved version
of the MOBILE model (MOBILE6 at the time of this proposed rulemaking,
see 67 FR 4254, January 29, 2002) should be used to estimate emissions
from on-road transportation sources, in combination with the latest
available estimates of VMT. EPA has issued a guidance memo titled
``Policy Guidance on the Use of MOBILE6 for SIP Development and
Transportation Conformity'' dated January 18, 2002, that provides
additional information on the use of the MOBILE6 model. The NONROAD
model is currently available in draft form and can be used for initial
estimates of off-road mobile source emissions. We expect that the final
version of the NONROAD model will be released in late 2004, which will
not be in time for States to use it for their 2002 emission
inventories, which are due June 1, 2004. However, by the time EPA's
rulemaking on implementation of the 8-hour ozone standard is final and
States need to begin preparing SIPs, a new draft version of NONROAD
will have been released in connection with a planned proposal in early
2003 regarding regulation of certain non-road engine categories. When
the NONROAD model is final, States may choose to update their 2002
emission inventories using the final NONROAD model. By merging the
information on point sources, area sources and mobile sources into a
comprehensive emission inventory, State and local agencies may do the
following:
? Set a baseline for SIP development,
? Measure their progress in reducing emissions,
? Have a tool they can use to support future trading
programs,
? Answer public requests for information.
Most importantly, States need these inventories to help
nonattainment areas develop and meet SIP requirements to reach the
NAAQS.
In April 1999, we published ``Emissions Inventory Guidance for
Implementation of Ozone and Particulate Matter National Ambient Air
Quality Standards (NAAQS) and Regional Haze Regulations,'' EPA-454/R-
99-006. We will be updating this guidance and are soliciting comment on
several key points to be addressed in the revised document. These
points are:
? Section 182(a)(1) requires that marginal and above ozone
nonattainment areas submit an emission inventory 2 years after
designation as nonattainment in 1990. For nonattainment areas
classified under subpart 2 for the 8-hour ozone standard, we propose to
interpret this to mean that an emission inventory would be required 2
years after designation (i.e., in 2006 if EPA designates areas in
2004). The CERR requires comprehensive triennial emission inventories,
beginning with the 2002 inventory year, regardless of an area's
attainment status. Because these emission inventories will be
available, we propose that the emission inventories required by the
CERR are sufficient to meet the provisions of section 182(a)(1).
? In the past, there have been instances where portions of
Tribal areas have been included in designated nonattainment areas, but
when the baseline emission inventory was prepared, emissions from the
Tribal lands were not included. This has had the effect of preventing
the Tribes from generating emission reductions from existing sources to
develop emission offsets, as well as impairing the ability of the State
to model as accurately as possible. We are encouraging the States and
Tribes to work together to ensure that the information used in
developing the baseline emission inventory is inclusive of all
emissions from the nonattainment area.
? The emission inventory is used as a tracking metric by some
programs such as emission trading, NSR offsets trading and RFP. This
requires that a year is designated as a ``baseline'' year and used as
the reference for the particular program.
An external review draft of the emission inventory guidance titled
``Emission Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS) and
Regional Haze Regulations'' is available at: http://www.epa.gov/ttn/
chief/eiinformation.html. Comments on this document are due at the same
time as comments on this proposed rulemaking. However, the review of
the emission inventory guidance is not part of this proposed
rulemaking. Comments submitted on the emission inventory guidance
should be identified as such and will not be docketed nor will a
comment/response summary of these comments be a part of the final 8-
hour ozone implementation rule. Instructions on how to submit comments
are included with the draft guidance document.

R. What Guidance Should Be Provided That Is Specific to Tribes?

This section summarizes guidance for Tribes offered in various
parts of this proposal. The TAR (40 CFR part 49), which implements
section 301(d) of the CAA, gives Tribes the option of developing TIPs.
Unlike States, Tribes are not required to develop implementation plans.
Specifically, the TAR, adopted in 1998, provides for the Tribes to be
treated in the same manner as a State in implementing sections of the
CAA. EPA determined in the TAR that it was inappropriate to treat
Tribes in a manner similar to a State with regard to specific plan
submittal and implementation deadlines for NAAQS-related requirements,
including, but not limited to, such deadlines in CAA sections
110(a)(1), 172(a)(2), 182, 187, and 191. See 40 CFR 49.4(a). If a Tribe
elects to do a TIP, we will work with the

[[Page 32855]]

Tribe to develop an appropriate schedule which meets the needs of each
Tribe, and which does not interfere with the attainment of the NAAQS in
other jurisdictions. The Tribe developing a TIP can work with the EPA
Regional Office on the appropriateness of applying RFP and other SIP
requirements that may or may not be appropriate for the Tribe's
situation.
The TAR indicates that EPA is ultimately responsible for
implementing CAA programs in Indian country, as necessary and
appropriate, if Tribes choose not to implement those provisions. For
example, an unhealthy air quality situation in Indian country may
require EPA to develop a FIP to reduce emissions from sources on the
reservation. In such a situation, EPA, in consultation with the Tribe
and in consideration of their needs, would work to ensure that the
NAAQS are met as expeditiously as practicable. Likewise, if we
determine that sources in Indian country could interfere with a larger
nonattainment area meeting the NAAQS by its attainment date, we would
develop a FIP for those sources in consultation with the Tribe, as
necessary and appropriate.
The TAR also provides flexibility for the Tribe in the preparation
of a TIP to address the NAAQS. If a Tribe elects to develop a TIP, the
TAR offers flexibility to Tribes to identify and implement--on a Tribe-
by-Tribe, case-by-case basis--only those CAA programs or program
elements needed to address their specific air quality problems. In its
proposed Tribal rule, we described this flexible implementation
approach as the ``modular approach.'' Each Tribe may evaluate the
particular activities, including potential sources of air pollution
within the exterior boundaries of its reservation (or within non-
reservation areas for which it has demonstrated jurisdiction), which
cause or contribute to its air pollution problem. A Tribe may adopt
measures for controlling only those sources or ozone precursor
emissions, as long as the elements of the TIP are ``reasonably
severable'' from the package of elements that can be included in a
whole TIP. A TIP must include regulations designed to solve specific
air quality problems for which the Tribe is seeking EPA approval, as
well as a demonstration that the Tribal air agency has the authority
from the Tribal government to develop and run their program, the
capability to enforce their rules, as well as the resources to
implement the program they adopt. In addition, the Tribe must receive
an ``eligibility determination'' from EPA to be treated in the same
manner as a State and to receive authorization from EPA to run a CAA
program.
We would review and approve, where appropriate, these partial TIPs
as one step of an overall air quality plan to attain the NAAQS. A Tribe
may step in later to add other elements to the plan, or EPA may step in
to fill air quality gaps as necessary and appropriate. In approving a
TIP, we would evaluate whether the plan interferes with the overall air
quality plan for an area when Tribal lands are part of a multi-
jurisdictional area.
Because many of the nonattainment areas will include many
jurisdictions, and in some cases both Tribal and State jurisdictions,
it is important for the Tribes and the States to work together to
coordinate their planning efforts. States need to incorporate Tribal
emissions in their base emission inventories if Indian country is part
of an attainment or nonattainment area. Tribes and States need to
coordinate their planning activities as appropriate to ensure that
neither is adversely affecting attainment of the NAAQS in the area as a
whole.

S. What Are the Requirements for OTRs Under the 8-Hour Ozone Standard?

Section 176A of subpart 1 provides the authority to establish
interstate transport regions where transport of air pollutants from one
or more States contributes significantly to a violation of a NAAQS in
one or more other States. When a transport region is established,
section 176A requires that a transport commission, comprised of
representatives from the States in the transport region, also be
established. The role of the transport commission is to assess the
degree of interstate transport of the pollutant and precursors
throughout the transport region and to evaluate strategies for
mitigating the interstate pollution.
Section 184 of subpart 2 establishes additional provisions for
OTRs. Section 184(a) specifically established an OTR comprising 12
Northeast and Mid-Atlantic States and the District of Columbia in order
to address the longstanding problem of interstate ozone pollution in
that region. The general provisions of section 176A apply to any OTR
established under section 184. To date, the existing OTR is the only
transport region for any pollutant that has been established and is
subject to the section 176A requirements.
Section 184(b) of subpart 2 sets forth specific VOC and
NO_X control requirements to be applied throughout the entire
OTR, in both attainment and nonattainment areas, to reduce interstate
pollution. These additional regional control requirements are part D
NSR (for VOC and NO_X), RACT (for VOC and NO_X),
enhanced vehicle I/M, and Stage II vapor recovery (for vehicle
refueling) or a comparable measure. Some of these requirements
duplicate requirements for ozone nonattainment areas that are
classified under subpart 2.
We believe the clearest legal interpretation of section 184 is that
the current OTR and section 184 control requirements apply for purposes
of the 8-hour standard. We believe that this interpretation would not
result in any new control requirements for any area in the OTR because
these control requirements are not associated with an area's
designation or classification and already apply regionwide under the 1-
hour ozone standard. Rather, these statutory obligations would remain
in place for areas in the existing OTR. If a new OTR is established for
purposes of the 8-hour standard pursuant to section 176A, that area
would also be subject to the provisions and additional control
requirements of section 184.
Because all areas in the existing OTR, including attainment areas,
are subject to part D NSR for NO_X and VOC and a number of
other control measures, areas in the OTR would not be able to take full
advantage of either the transitional option proposed for NSR or the
Agency's existing approach for early reductions, both of which are
discussed elsewhere in this proposed rulemaking.

T. Are There Any Additional Requirements Related to Enforcement and
Compliance?

Section 172(c)(6) requires nonattainment SIPs to ``include
enforceable emission limitations, and such other control measures,
means or techniques * * * as well as schedules and timetables for
compliance, as may be necessary or appropriate to provide for
attainment * * *'' The current guidance, ``Guidance on Preparing
Enforceable Regulations and Compliance Programs for the 15 Percent
Rate-of-Progress Plans (EPA-452/R-93-005, June 1993)'' is relevant to
rules adopted for SIPs under the 8-hour ozone NAAQS and should be
consulted for purposes of developing appropriate nonattainment plan
provisions under section 172(c)(6). This document provides States with
guidance on how to prepare enforceable stationary and mobile source
regulations for their ROP plans. Developing clear, concise, enforceable
rules and establishing strong compliance programs helps to ensure that
the emissions reductions projected for specific control strategies are
actually achieved. The document

[[Page 32856]]

identifies the minimum criteria and the information sources that we
will use to evaluate the enforceability of regulations, and to
determine compliance with Federal guidelines and regulations. States
should follow the guidelines provided in this document as part of their
quality assurance process involved in the development of control
measures for their ROP plans and their attainment demonstrations.

U. What Requirements Should Apply to Emergency Episodes?

Currently, subpart H of 40 CFR part 51 specifies requirements for
SIPs to address emergency air pollution episodes and for preventing air
pollutant levels from reaching levels determined to cause significant
harm to the health of persons. We anticipate proposing a separate
rulemaking in the future to update portions of that rule. This separate
rulemaking may be done in conjunction with revisions to the emergency
episode rules that will address the PM_2.5 NAAQS.

V. What Ambient Monitoring Requirements Will Apply Under the 8-Hour
Ozone NAAQS?

Ozone monitoring data play an important role in designations,
control strategy development, and related implementation activities.
The ambient monitoring requirements are listed in 40 CFR part 58.
We plan to modify these existing ozone monitoring requirements as
part of the National Air Monitoring Strategy. These changes are being
undertaken in a separate rulemaking effort. We plan to propose a
national strategy introducing NCore (national core monitoring sites) as
a replacement for traditional national air monitoring stations/State
and local air monitoring stations (NAMS/SLAMS) monitoring currently
codified at 40 CFR part 58.
Part of the NCore network \77\ would include the existing ozone
monitoring sites that currently support the NAAQS-related activities.
The number and location of the original sites would likely be very
similar to the current network. The regulatory modifications are
expected to include ozone monitoring requirements based upon the
population of an area and its historical/forecasted ozone air quality
values.
---------------------------------------------------------------------------

\77\ A description of the NCore can be found at the following
Web site: http://www.epa.gov/ttnamtil/files/ambient/monitorstrat/sec4.pdf.
---------------------------------------------------------------------------

In addition, we anticipate that we will include a requirement for
measuring multiple air pollutants at select locations. The NCore sites
are expected to include high-sensitivity nitrogen oxide (NO) and total
reactive oxides of nitrogen (NO_y) measurements at locations
across the nation to support the tracking of national emission strategy
efforts such as the NO_X SIP Call and, if created, a statute
codifying the Clear Skies Bill, which addresses NO_X
reductions across the nation.
Each State, local, and Tribal air monitoring agency is being asked
to assess the adequacy of its air pollution monitoring networks,
including those sites that measure ozone. We will work with these
agencies to develop network plans to ensure approval of all network
designs. On a local basis, there will be some relocation, addition and
removal of ozone sites as a result of regional network assessments.
The CAA requires that ozone precursor monitoring be conducted in
any ozone nonattainment area classified as serious, severe, or extreme.
We adopted regulations reflecting the statutory requirements in 40 CFR
part 58 in 1994 as the Photochemical Assessment Monitoring Stations
(PAMS) program. Areas that would be designated under the 8-hour ozone
NAAQS are not directly addressed in 40 CFR part 58 for ozone precursor
monitoring.
The PAMS monitoring will be retained in areas currently designated
as 1-hour ozone serious, severe, and extreme nonattainment areas. The
monitoring strategy regulation revisions will consider the possibility
of reducing some of the sampling schedules. We also intend to promote
the use of individually designed PAMS networks to address the very
specific ozone and ozone precursor data needs in PAMS areas.
The revised regulation will also cover all areas that are
classified as serious or above for the 8-hour NAAQS. Once an area is
bumped up to serious or above, it would be subject to the enhanced
monitoring rule and would be required to develop appropriate PAMS
plans. Where practical, PAMS stations should be incorporated into
multi-pollutant NCORE level 2 sites \78\ that include NO_y,
meteorological and CO (a good indicator of mobile emission
measurements.) Alternative plans are recommended for 8-hour bump-up
areas. This will be reflected in the 40 CFR part 58 changes as well.
---------------------------------------------------------------------------

\78\ A description of the NCore level 2 stations can be found at
the following Web site: http://www.epa.gov/ttnamtil/files/ambient/
monitorstrat/sec4.pfd.
---------------------------------------------------------------------------

W. When Will EPA Require 8-Hour Attainment Demonstration SIP
Submissions?

1. Background
The time for submission of attainment demonstration SIPs is linked
to whether the requirements are specified under subpart 1 or subpart 2.
In general, all areas designated nonattainment are subject to the
planning requirements of subpart 1. However, if the area is subject to
a more specific requirement under subpart 2, the subpart 2 planning
obligation controls. As proposed elsewhere in the discussion concerning
classification options, some, if not all, 8-hour ozone standard
nonattainment areas will be subject to the subpart 2 planning
obligations.
Section 172(b) (in subpart 1) provides that at the time EPA
promulgates the designation of an area as nonattainment with respect to
a NAAQS under section 107(d), the Administrator shall establish a
schedule for submission of a plan that meets the CAA's requirements for
nonattainment areas. This schedule may not extend beyond 3 years after
the date of nonattainment designation.
Under subpart 2 of the CAA, attainment demonstration SIP submission
deadlines for areas designated nonattainment for the 1-hour ozone
standard are linked to the date of enactment of the CAA Amendments,
i.e., from November 15, 1990. This date is also the date by which most
of these areas were designated and classified by operation of law. See
CAA section 107(d)(1)(C) and 181(a). Moreover, in subpart 1, Congress
linked the time for SIP submission to the time of designations. See CAA
section 172(b). Because such dates have long since passed, we believe
that it is reasonable to tie the SIP submittal dates to the date of
nonattainment designations and classifications for the 8-hour standard.
\79\ While the submission date for all SIP requirements in subpart 2
will be tied to the date of nonattainment designations, this section of
the proposed rule discusses the requirement to submit an attainment
demonstration. For purposes of the discussion here, we are assuming
that designations will occur in 2004.
---------------------------------------------------------------------------

\79\ Since we anticipae that areas will be designated and
classified on the same date, we will use the term ``designation'' to
represent the date of designation and classification.
---------------------------------------------------------------------------

Subpart 2 requires attainment demonstration submissions at
different times depending on an area's classification. Section 182(a)
does not require an attainment demonstration for marginal areas.
Section 182(b)(A)(1)

[[Page 32857]]

requires moderate areas to submit an attainment demonstration no later
than 3 years after the date of enactment. Section 183(c)(2) requires
serious (and higher classified) areas to submit an attainment
demonstration no later than 4 years after date of enactment. As
provided above, we propose to interpret these times to run from the
date of an area's nonattainment designation. Despite the fact that the
CAA's provisions for the timing of submission of attainment
demonstration SIPs for subpart 1 areas differs from that of subpart 2
areas, we do not believe it is appropriate or desirable to require
States to submit attainment demonstrations for areas designated
nonattainment under the 8-hour standard at greatly different times. We
recognize that photochemical grid modeling--required by the CAA for
interstate moderate nonattainment areas, as well as serious and higher-
classified areas--will be performed on large enough scales to address
transport and will in most cases encompass a number of nonattainment
areas. These numerous nonattainment areas may differ by classification
(some areas may be intrastate moderate areas, some inter-state moderate
areas, and others serious and above nonattainment areas). Some areas
that may require attainment demonstrations may be subject to subpart 1
while others may be subject to subpart 2. Furthermore, the control
strategies that may be modeled for all the areas in the modeling domain
will likely be modeled simultaneously, especially if all the areas are
located in a single State. Also, we believe that techniques for
photochemical grid modeling, while they were more time-consuming when
the 1990 CAA Amendments were enacted, are now more standardized and
less time-consuming. In light of this, we do not believe it is
reasonable to defer submission of attainment demonstrations beyond 3
years after designation.
The TAR, which implements section 301(d) of the CAA, gives Tribes
the option of developing TIPs. Specifically, the TAR provides for the
Tribes to be treated in the same manner as a State in implementing most
of the CAA. However, in the TAR, EPA determined that it was
inappropriate to treat Tribes in a manner similar to a State with
regard to schedules. Therefore, Tribes are not required to submit a
TIP, nor, if they choose to submit a TIP, are they required to submit a
TIP in the same timeframe as the States. Where a Tribe chooses to
develop a TIP, we will work with them to develop an appropriate
schedule that meets the needs of the Tribe but does not interfere with
timely attainment of the NAAQS on Tribal land or in other
jurisdictions.
2. Option Being Proposed
In light of the above discussion and rationale, we are proposing to
require all nonattainment areas that are required to perform
photochemical grid modeling--regardless of coverage under subpart 1 or
2 or regardless of classification under subpart 2--to submit an
attainment demonstration within 3 years after designation.
We believe this proposal would result in a closer synchronization
of the 8-hour ozone and PM_2.5 attainment demonstration SIP
submittal dates. We discussed the integration of ozone and
PM_2.5 schedules at the three public meetings and numerous
conference calls that were held with stakeholder groups. A majority of
commenters were supportive of integrating the SIP attainment plan
submission schedules for ozone and PM_2.5 because integration
would optimize control strategies, save time and planning resources,
streamline deadlines, and maximize cost effectiveness, among other
benefits.
The PM_2.5 standard is anticipated to be implemented
under subpart 1 of the CAA, which requires a SIP submission by a date
set by EPA, which can be no later than 3 years from designation. Since
we are proposing that all 8-hour ozone nonattainment areas that are
required to perform photochemical grid modeling submit their attainment
demonstration SIPs within 3 years after nonattainment designation, this
would result in a high degree of synchronization and thus allow
comprehensive analyses that would evaluate controls to attain both air
quality standards. As noted above, we are assuming for this proposed
rulemaking that ozone designations will be promulgated in the 2004
timeframe; currently under TEA-21, designations for PM_2.5
would occur beginning in 2004, and must be completed by the end of
2005. Thus, the later-designated PM_2.5 areas would not be
required to submit their attainment demonstration SIPs until after the
ozone SIPs are due. Additional discussion of the benefits of
integrating the planning for both standards appears elsewhere in this
proposed rulemaking.

VII. Proposal of Integrated Frameworks Using Various Options

As noted above, we are presenting two possible integrated
frameworks that comprise an option from each of the above
implementation elements to illustrate how they may work in conjunction
with each other. In addition to soliciting comment on the options
presented for the individual elements, we are also soliciting comment
on how the options can be grouped into an integrated implementation
framework. The following frameworks should be considered illustrative
of possible ways of combining the element options. For final
rulemaking, however, we may develop a consolidated framework that uses
a different combination of the options proposed above, based on
comments received and other information that comes to light during the
public comment period.
We are proposing for comment two integrated frameworks:
? Framework 1--an approach considered similar to traditional
implementation,
? Framework 2--an approach considered more flexible than
traditional implementation.
Table 5 illustrates how element options may be combined to form
these two frameworks. Elements for which we are proposing only one
option would be common to either framework. For elements for which we
are proposing several options, only one option has been selected for
purposes of illustrating the frameworks depicted below.
In addition, there are several proposed elements where options are
presented that only apply to areas that would be covered by subpart 1;
these elements include RACT for subpart 1 areas and the NO_X
waiver requirement as it would apply to subpart 1 areas. These elements
are not shown in Table 5 below, since they are only applicable to
subpart 1 areas.

[[Page 32858]]

Table 5.--8-Hour Ozone NAAQS Implementation Elements/Options Grouped
Into Frameworks for Proposal
[This table only summarizes the options and approaches; the full
description of the approach or option in the proposed rulemaking should
be consulted]
------------------------------------------------------------------------
Implementation element Framework 1 Framework 2
------------------------------------------------------------------------
A. Will subpart 1 or subpart Classify all areas Areas with a 1-hour
2 govern classifications? under subpart 2 design value = 0.121 ppm
values. (Option 1) would be classified
under subpart 2
using 8-hour design
values. Areas with
a 1-hour design
value < 0.121 ppm
would be covered
under subpart 1.
(Option 2)
B. Will areas under subpart N/A................. No classification.
1 be classified? (Option 1)
C. When may the State treat When the area When the area
measures that applied for attains the 8-hour achieves the level
purposes of the 1-hour ozone standard and of the 1-hour
standard as contingency is designated standard.
measures, consistent with attainment.
section 110(l).
D.1. How will the 15 percent All areas classified A moderate area that
VOC ROP requirement apply? as moderate or already achieved a
above for the 8- 15 percent VOC
hour NAAQS must reduction for the 1-
achieve a 15 hour ozone standard
percent reduction would be considered
in VOC emissions to have met the 15
for the first 6 percent requirement
years after the already and may
base year (2002). instead implement
(Option 1) RFP consistent with
section 172(c). An
area classified as
serious or above
that already
achieved a 15
percent VOC
reduction would be
considered to have
met the 15 percent
requirement so it
could choose to
achieve an average
of three percent
per year of VOC or
NO_X reductions for
the 6-year period.
(Option 2)
D.2. What is the baseline All areas would use a 2002 baseline year
year for the emission for preparation of the emissions
inventory used for RFP/ROP? inventory.
D.3. What restrictions on All emissions reductions that occur after
creditable measures for RFP/ the baseline emissions inventory year
ROP under the 8-hour from post-1990 Federal measures and any
standard (subpart 2 areas other measures would be creditable for
only) will apply? ROP/RFP, except those specifically
prohibited in section 182(b)(1)(D).
D.4. What will RFP be for N/A................. a. Areas with
areas classified under attainment dates 3
subpart 1?. years or less after
designation. As
with marginal
areas, those areas
would not be
subject to a
separate RFP
requirement.
b. Areas with
attainment dates
between 3 to 6
years after
designation.
No separate RFP
demonstration
required except RFP
would be met if a
State demonstrates
emissions
reductions needed
for attainment
would be achieved
by the attainment
date. (Option 1)
c. Areas with
attainment dates
beyond 6 years
after designation.
The RFP plan
submission would be
due with the
attainment
demonstration
within 3 years
after designation
and would need to
provide for certain
increments of
reductions from the
baseline emission
year out to the
attainment year,
proportionate to
the time between
the base year and
the attainment
year. (Option 1)
D.5. How would the 8-hour The area would develop new baseline and
ROP requirement fit with new ROP emission reduction targets for
the 1-hour ROP requirement? the 8-hour standard for the entire area
and could drop the 1-hour standard target
for any periods that overlap with an 8-
hour RFP period.
E. What's the RACT N/A................. If the area is able
requirement for areas to demonstrate
covered under subpart 1?. attainment of the
standard as
expeditiously as
practicable with
emission control
measures in the
SIP, then RACT will
be met, and
additional measures
would not be
required as being
reasonably
available. (Option
2)
F. What will be the NSR Status quo approach Three options which
requirement?. for all areas-- could be
areas subject to implemented in
NSR obligations for conjunction with
their 8-hour each other: Status
classifications quo approach for
under subpart 2. all areas (subpart
(Option 1) 1 areas get subpart
1 NSR, subpart 2
areas get subpart 2
NSR) (Option 1);
AND
A more flexible NSR
program (i.e.,
allowing a pool of
offsets, more
flexible technology
control
requirement) for
areas that submit
early SIPs
(``transitional''
NSR program)
(Option 2);

[[Page 32859]]

AND
A CADC program,
which would allow a
more flexible NSR
program for areas
that adopt CADC
provisions. (Option
3)
------------------------------------------------------------------------

VIII. Other Considerations

A. Will EPA Be Contemplating Incentives for Areas That Want To Take
Early Action for Reducing Ozone Under the 8-Hour Standard?

This section discusses the extent to which we are providing
incentives for areas that wish to voluntarily expedite the path to
cleaner air by initiating early planning and control actions for
reducing ground-level ozone prior to EPA's designations for the 8-hour
ozone NAAQS. State, local and Tribal air pollution control agencies
have continued to express a need for added flexibility in implementing
the 8-hour ozone NAAQS, including incentives for taking action sooner
than EPA requires for reducing ground-level ozone. We are encouraging
localities to make decisions that will achieve clean air sooner than
otherwise is mandated by the CAA. Early planning and early
implementation of control measures that improve air quality will likely
accelerate protection of public health. We issued our policy on early
planning on November 14, 2002. We are not proposing action on this
approach in this rulemaking and, therefore, we are not requesting
comment on this issue.
1. What Are the Ozone Flex Guidelines for the 1-Hour Ozone NAAQS?
In June 2001 we announced the ``Ozone Flex Guidelines'' program
(Ozone Flex), which supports and rewards innovative, voluntary, local
strategies to reduce ground-level ozone. Ozone Flex is a framework for
local communities to develop voluntary solutions for areas concerned
about potential future nonattainment of the 1-hour ozone standard.
Ozone Flex is intended to achieve emissions reductions and avoid future
nonattainment problems in those areas designated attainment for the 1-
hour standard. While this program is only available to areas to address
the 1-hour ozone standard, it also recognizes that areas may secure
emissions reductions and public health benefits toward attaining the 8-
hour ozone standard prior to EPA's designation of areas. These
voluntary measures may be creditable to future planning efforts for the
8-hour standard, to the extent allowed by the CAA and EPA guidance or
rules. Any emissions reductions targeted for a period after the base
year would provide ``credit'' for a State, local, or Tribal area in any
future plan. Emission reduction credits toward meeting RFP are
discussed elsewhere in this proposed rulemaking.
2. What Is the ``Early Action Compact'' for Implementing the 8-Hour
Ozone NAAQS?
Following EPA's issuance of the ``Ozone Flex Guidelines'' for
continued attainment of the 1-hour standard, the Texas Commission on
Environmental Quality (TCEQ) encouraged EPA to consider additional
incentives for early planning towards achieving the 8-hour ozone NAAQS.
On March 20, 2002, the TCEQ submitted to EPA the Protocol for Early
Action Compacts Designed to Achieve and Maintain the 8-hour Ozone
Standard (Protocol). The Protocol was designed to achieve emissions
reductions and clean air sooner than would otherwise be required under
the CAA for implementing the 8-hour ozone NAAQS. The TCEQ proposed that
the Protocol would be formalized by ``Early Action Compact'' agreements
(Compacts) primarily developed by local, State and Federal (EPA)
officials. The principles of the Compacts are the following:
? Early planning, implementation, and emissions reductions
leading to expeditious attainment and maintenance of the 8-hour ozone
standard;
? Local control of the measures employed, with broad-based
public input;
? State support to ensure technical integrity of the early
action plan;
? Formal incorporation of the early action plan into the SIP;
? Designation of all areas as attainment or nonattainment in
April 2004, but, for Compact areas, deferral of the effective date of
the nonattainment designation and/or designation requirements so long
as all Compact terms and milestones continue to be met; and
? Safeguards to return areas to traditional SIP attainment
requirements should Compact terms be unfulfilled (e.g., if the area
fails to attain in 2007), with appropriate credit given for reduction
measures already implemented.
Under this approach, an early, voluntary 8-hour air quality plan
would be developed through an Early Action Compact agreement for each
area that approaches or monitors exceedances of the 8-hour standard and
that is designated attainment for the 1-hour ozone standard. This
approach would also apply to maintenance areas for the 1-hour ozone
standard to the extent such areas continue to maintain that standard.
One-hour ozone maintenance areas are areas that were previously
designated nonattainment for the 1-hour ozone standard, but were
redesignated to attainment pursuant to section 107(d)(3)(E) and subject
to the requirements of section 175A of the CAA.
Under a Compact, the local area would commit to develop a SIP based
on recent emission inventories and air quality modeling demonstrating
attainment of the 8-hour standard by 2007. In addition, the area would
identify additional local controls beyond Federal and State
requirements, which would be implemented by 2005. According to the
Protocol, we would recognize the local area's commitment to early,
voluntary action by designating the area nonattainment in April 2004
(at the time of national designations for all areas of the country),
but deferring the effective date of the nonattainment designation for
participating Compact areas that are monitoring a violation of the 8-
hour ozone standard, so long as all terms and milestones of the Compact
continue to be met, including submission of the early action SIP
revision no later than December 31, 2004.\80\ We circulated the
Protocol to

[[Page 32860]]

numerous organizations for review and comment. A copy of the revised
Protocol is available in the docket for this proposed rulemaking.
---------------------------------------------------------------------------

\80\ If a Compact area had air quality meeting the 8-hour
standard for the period on which designations are based, we would
designate the area as attainment without a deferred effective date.
---------------------------------------------------------------------------

3. What is EPA's Response to the Texas ``Early Action Compact?''
In a letter dated June 19, 2002, from Gregg Cooke, Administrator,
Region 6, to Robert Huston, Chairman, TCEQ, EPA endorsed the principles
outlined in the Protocol. The Protocol was subsequently revised on
December 11, 2002, based on comments from EPA. Upon the completion of
Compacts by December 31, 2002 in areas that meet the requirements of
the Protocol (including 1-hour maintenance areas), we intend to honor
the commitments established in these agreements. Any control measures
identified by a Compact area must be submitted to EPA for approval as a
SIP revision.
In a proposed settlement with nine environmental groups, we agreed
to designate areas for the 8-hour ozone standard by April 15, 2004.
This deadline gives States and Tribes ample time to update their
recommendations by April 15, 2003 for nonattainment area boundaries.
EPA lodged the proposed consent decree on November 13, 2002 with the
U.S. District Court for the District of Columbia. Also on November 14,
2002, we issued a guidance memorandum outlining the new designations
schedule, requirements for designating Tribal areas, and discussing the
impact of the designation schedule on areas that are developing early
action compacts. (Memorandum dated November 14, 2002, from Jeffrey R.
Holmstead, Assistant Administrator, to EPA Regional Administrators.)
We have entered into early action compacts with a number of areas
of the country. As a result, we will designate all areas of the country
either attainment or nonattainment in April 2004 (including Compact
areas). At that time, we plan to propose to defer the effective date of
the nonattainment designation for participating Compact areas that are
monitoring a violation of the 8-hour ozone standard, provided all terms
of the agreement continue to be met, including timely completion of all
Compact milestones. However, as the Compacts were signed prior to the
2004 designations process, the Agency cannot prejudge the outcome of
designations. Consequently, States are advised that if EPA determines
that any portion of a compact area should become part of an 8-hour
ozone nonattainment area, that portion would no longer be eligible for
participation in the Early Action Compact, and the effective date of
the nonattainment designation for that portion of the Compact would not
be deferred. Also, as noted above, this proposed rulemaking does not
propose to establish attainment/nonattainment designations, nor does it
address the principles that will be considered in the designation
process, nor does it take comment on the Early Action Compact program.
4. Did EPA Consider Other Options for Incentives for Areas That Take
Early Actions for Reducing Ozone?
We did consider another option, which is discussed in a separate
document available in the docket.\81\
---------------------------------------------------------------------------

\81\ Additional Options Considered for ``Proposed Rule to
Implement the 8-Hour Ozone National Ambient Air Quality Standard.''
U.S. Environmental Protection Agency, Office of Air Quality Planning
and Standards, Research Triangle Park, NC, March 2003.
---------------------------------------------------------------------------

5. What Is the Difference Between the Early Action Compact Program and
the Transitional NSR Program?
Appendix D of this proposed rulemaking contains a table comparing
the two programs. It should be noted that areas that may be initially
eligible for the Early Action Compact but that become ineligible later
may still be eligible for the transitional NSR program.

B. Clarification of How the Transition from 1-Hour to 8-Hour Standard
Will Work for Early Action Compact Areas, for Conformity, and for NSR
and PSD

Appendix E presents a table that describes our interpretation of
the applicability of conformity and traditional NSR and PSD under the
various potential transition scenarios. This table is included for
informational purposes only and does not constitute part of the
proposed rule. It is intended only to inform comment on the proposal
itself. As discussed elsewhere in this preamble, we are proposing
options for how areas will transition from the 1-hour standard to the
8-hour standard. Under one of the options, we would revoke the 1-hour
standard 1 year after the effective date of the 8-hour designations.
For Early Action Compact areas, the nonattainment designation for the
8-hour ozone standard is promulgated, but the effective date of that
designation is deferred as long as the area continues to meet compact
milestones. These milestones are described in the Holmstead memorandum
referenced earlier. Shortly after December 2007 (i.e., by April 2008),
we intend to make a determination of whether the area attained the 8-
hour ozone standard. For all Compact areas, under the transition option
described earlier in this paragraph, we would revoke the 1-hour
standard for these areas 1 year after the effective date of the
designation of attainment or nonattainment for the 8-hour standard.
Therefore, on the 1-year effective date of the determination we make in
April 2008, which will include the designation of Compact areas, the 1-
hour standard would be revoked (in approximately May or June of 2009).

C. How Will EPA's Proposal Affect Funding Under the Congestion
Mitigation and Air Quality Improvement (CMAQ) Program?

Depending on the specific characteristics of a nonattainment area,
revocation of the 1-hour ozone standard will have varying effects on
some Federal transportation program funds apportioned to the States
through a formula established by the TEA-21. The TEA-21 establishes
eligibility for the CMAQ program transportation funds for nonattainment
and maintenance areas, designated under section 107(d) of the CAA (42
U.S.C. 7407(d)), provided the area is, or was, classified in accordance
with CAA sections 181, 186, and 188. Eligibility, in part, establishes
an area's ability to use CMAQ funding. Areas designated nonattainment
after December 31, 1997 are also eligible, but without regard to
classification.
The amount of CMAQ funds available to States for use in
nonattainment and maintenance areas is set at levels authorized by TEA-
21. The funds are apportioned to States through the statutory formula
contained in section 104(b) of title 23. The formula is based on a
State's weighted population, which takes into account the
classifications of ozone and CO nonattainment and maintenance areas,
and the population in such areas. The formula does not account for PM
nonattainment areas.
As we revoke the 1-hour ozone standard under implementation of the
new 8-hour ozone NAAQS, changes regarding the designation and
classification of these nonattainment and maintenance areas, will
change the amount of CMAQ funds apportioned to each State under the
current apportionment formula, and thus available to these areas. Some
States with 1-hour ozone nonattainment and maintenance areas will lose
CMAQ funding while others may gain without a statutory change. The
changes in funding will depend on how much a State's weighted
population changes because of the revocation.

[[Page 32861]]

Furthermore, after revocation any 1-hour ozone nonattainment or
maintenance area that is not also designated nonattainment under the 8-
hour or the existing CO or PM-10 standards will lose the ability to
spend CMAQ funding. Since 1-hour ozone designations will no longer be
in force, the authorized ability to use CMAQ funds under 23 U.S.C.
149(b) will be limited to existing CO and PM-10 nonattainment and
maintenance areas and areas designated after December 31, 1997, such as
those designated under the 8-hour standard.
Finally, nonattainment areas designated under the 8-hour ozone
standard would all be eligible for CMAQ funding, but the formula for
determining the amount of funds apportioned to the States would only
take into account the areas that are classified pursuant to CAA
sections 181, 186, and 188. Areas designated but not classified under
the 8-hour standard would not be included in the apportionment formula,
and States with such areas will not receive any CMAQ funding because of
those areas. As noted elsewhere in this proposal, EPA is requesting
comment on various concepts for classifying nonattainment areas under
the 8-hour standard.
We are aware that apportionment of CMAQ funds is calculated yearly
and varies according to changing population, and severity of air
pollution. The TEA-21 is due for reauthorization in October, 2003, and
adjustments to the CMAQ eligibility criteria and apportionment formula
may be possible. We understand the importance of CMAQ funding to States
and nonattainment areas and are prepared to work with DOT and Congress
to minimize the unintended impact of the 8-hour ozone NAAQS, on those
funds.

D. Are There Any Environmental Impact Differences Between the Two Major
Classification Options Being Proposed?

Both of the major classification options being proposed would
result in attainment by an expeditious attainment date. However, the
EPA analysis of costs of the options notes that they do not necessarily
have the same environmental impact. The subpart 2-only option is more
expensive for some of the 10 areas analyzed in the cost analysis--
largely because subpart 2 ROP requires more emissions reductions, and
it requires these reductions by 2008, 2 years earlier than the
attainment date of 2010 that is assumed for the analysis areas. This
would result in an earlier air quality benefit. We have not performed
air quality modeling to determine the increment of air quality benefit
from the subpart 2-only option compared to the option under which some
areas are covered under subpart 1.

IX. Statutory and Executive Order Reviews

Upon promulgation of the NAAQS, the CAA requires EPA to designate
areas as attaining or not attaining the NAAQS. The CAA then specifies
requirements for areas based on the designation. This proposed rule
fleshes out the statutory requirements that non-attainment areas are
obligated to meet. In some instances, the statute is ambiguous
regarding the statutory obligations that apply--thus we are proposing
various options that we believe are consistent with the ambiguous
language of the statute. One option attempts to provide a flexible and
least-cost approach for States to apply to the sources that States may
choose to regulate. The other option follows a more traditional
statutory interpretation.\82\
---------------------------------------------------------------------------

\82\ U.S. EPA, Cost, Emission Reduction, Energy, and Economic
Impact Assessment of the Proposed Rule Establishing the
Implementation Framework for the 8-hour, 0.08ppm Ozone National
Ambient Air Quality Standard, prepared by the Innovative Strategies
and Economics Group, Office of Air Quality Planning and Standards,
Research Triangle Park, NC, April 24, 2003.
---------------------------------------------------------------------------

A. Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant''
and, therefore, subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.''
Pursuant to the terms of Executive Order 12866, it has been
determined that this rule is a ``significant regulatory action''
because it raises novel legal or policy issues arising out of legal
mandates. As such, this action was submitted to OMB for review. Changes
made in response to OMB suggestions or recommendations will be
documented in the public record.

B. Paperwork Reduction Act

This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act generally requires an Agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedures
Act or any other statute unless the Agency certifies the rule will not
have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations,
and small governmental jurisdictions.
For purposes of assessing the impacts of today's proposed rule on
small entities, small entity is defined as: (1) A small business that
is a small industrial entity as defined in the U.S. Small Business
Administration (SBA) size standards. (See 13 CFR 121.); (2) a
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not
dominant in its field.
After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This
proposed rule will not impose any requirements on small entities.
Rather, this rule interprets the obligations established in the CAA for
States to submit implementation plans in order to attain the 8-hour
ozone NAAQS.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 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,

[[Page 32862]]

and Tribal governments, in the aggregate, or to 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 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 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.
EPA has determined that this rule does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and Tribal governments, in the aggregate, or the private
sector in any 1 year. The estimated administrative burden hour and
costs associated with implementing the 8-hour, 0.08 ppm NAAQS were
developed upon promulgation of the standard and presented in Chapter 10
of U.S. EPA 1997, Regulatory Impact Analyses for the Particulate Matter
and Ozone National Ambient Air Quality Standards, Innovative Strategies
and Economics Group, Office of Air Quality Planning and Standards,
Research Triangle Park, NC, July 16, 1997. The estimated costs
presented there for States in 1990 dollars totaled $0.9 million. The
corresponding estimate in 1997 dollars is $1.1 million. Should the more
traditional classification option be adopted as the implementation
framework, these costs may increase modestly, but would not reach $100
million. Thus, today's rule is not subject to the requirements of
section 202 and 205 of the UMRA.
The CAA imposes the obligation for States to submit SIPs to
implement the 8-hour ozone NAAQS; in this rule, EPA is merely fleshing
out those requirements. However, even if this rule did establish a
requirement for States to submit SIPs, it is questionable whether a
requirement to submit a SIP revision would constitute a Federal mandate
in any case. The obligation for a State to submit a SIP that arises out
of section 110 and part D of the CAA is not legally enforceable by a
court of law, and at most is a condition for continued receipt of
highway funds. Therefore, it is possible to view an action requiring
such a submittal as not creating any enforceable duty within the
meaning of section 421(5)(9a)(I) of UMRA (2 U.S.C. 658(a)(I)). Even if
it did, the duty could be viewed as falling within the exception for a
condition of Federal assistance under section 421(5)(a)(i)(I) of UMRA
(2 U.S.C. 658(5)(a)(i)(I)).
In the proposal, EPA has determined that this proposed rule
contains no regulatory requirements that may significantly or uniquely
affect small governments, including Tribal governments. Nonetheless,
EPA carried out consultations with governmental entities affected by
this rule.

E. Executive Order 13132: Federalism

Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. As described in section D, above
(on UMRA), EPA previously determined the costs to States to implement
the 8-hour ozone NAAQS to be approximately $1 million. While this
proposed rule considers options not addressed at the time the NAAQS
were promulgated, the costs for implementation under these options
would rise only marginally. This rule fleshes out the statutory
obligations of States in implementing the 8-hour ozone NAAQS. Finally,
the CAA establishes the scheme whereby States take the lead in
developing plans to meet the NAAQS. This proposed rule would not modify
the relationship of the States and EPA for purposes of developing
programs to implement the NAAQS. Thus, Executive Order 13132 does not
apply to this proposed rule.
Although section 6 of Executive Order 13132 does not apply to this
rule, EPA actively engaged the States in the development of this
proposed rule. EPA held regular calls with representatives of State and
local air pollution control agencies. EPA also held three public
hearings at which it described the approaches it was considering and
provided an opportunity for States and various other governmental
officials to comment on the options being considered.
In the spirit of Executive Order 13132, and consistent with EPA
policy to promote communications between EPA and State and local
governments, EPA specifically solicits comment on this proposed rule
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (59 FR 22951, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have ``Tribal implications'' as specified in Executive Order 13175.
This proposed rule concerns the implementation of the 8-hour ozone
standard in areas designated nonattainment for that standard. The CAA
provides for States and Tribes to develop plans to regulate emissions
of air pollutants within their jurisdictions. The proposed regulations
flesh out the statutory obligations of States and Tribes that develop
plans to implement the 8-hour ozone NAAQS. The TAR gives Tribes the
opportunity to develop and implement CAA programs such as the 8-hour
ozone NAAQS, but it leaves to the discretion of the Tribe whether to
develop these programs and which programs, or appropriate elements of a
program, they will adopt.
This proposed rule does not have Tribal implications as defined by
Executive Order 13175. It does not have a substantial direct effect on
one or more Indian Tribes, since no Tribe has implemented a CAA program
to attain the 8-hour ozone NAAQS at this time. Furthermore, this
proposed rule does not affect the relationship or

[[Page 32863]]

distribution of power and responsibilities between the Federal
government and Indian Tribes. The CAA and the TAR establish the
relationship of the Federal government and Tribes in developing plans
to attain the NAAQS, and this proposed rule does nothing to modify that
relationship. Because this proposed rule does not have Tribal
implications, Executive Order 13175 does not apply.
Assuming a Tribe is implementing such a plan at this time, while
the proposed rule would have Tribal implications upon that Tribe, it
would not impose substantial direct costs upon it, nor would it preempt
Tribal law. As provided above, EPA has determined that the total costs
for implementing the 8-hour ozone by State, local, and Tribal
governments is approximately $1 million in all areas designated
nonattainment for the standard. The percentage of Tribal land that will
be designated nonattainment for the 8-hour ozone standard is very
small. For Tribes that choose to regulate sources in Indian country,
the costs would be attributed to inspecting regulated facilities and
enforcing adopted regulations.
Although Executive Order 13175 does not apply to this proposed
rule, EPA consulted with Tribal officials in developing this proposed
rule. EPA has encouraged Tribal input at an early stage. EPA supports a
national ``Tribal Designations and Implementation Work Group'' which
provides an open forum for all Tribes to voice concerns to EPA about
the designation and implementation process for the 8-hour ozone
standard. These discussions have given EPA valuable information about
Tribal concerns regarding implementation of the 8-hour ozone NAAQS. The
work group sends issue summaries and suggestions for addressing them to
the newly formed National Tribal Air Association, who in turn will send
them to Tribal leaders. EPA has encouraged Tribes to participate in the
national public meetings held to take comment on early approaches to
the proposed rule. Several Tribes made public comments at the April
2002 public meeting in Tempe, Arizona.
Furthermore, EPA will send individualized letters to all federally
recognized Tribes about this proposal and will give Tribal leaders the
opportunity for consultation. EPA specifically solicits additional
comment on this proposed rule from Tribal officials.

G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks

Executive Order 13045: ``Protection of Children From Environmental
Health and Safety Risks'' (62 FR 19885, April 23, 1997) applies to any
rule that (1) is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe may have
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
The proposed rule is not subject to Executive Order 13045 because
the Agency does not have reason to believe the environmental health
risks or safety risks addressed by this action present a
disproportionate risk to children. Nonetheless, we have evaluated the
environmental health or safety effects of the 8-hour ozone NAAQS on
children. The results of this evaluation are contained in 40 CFR part
50, National Ambient Air Quality Standards for Ozone, Final Rule (62 FR
38855-38896; specifically, 62 FR 38854, 62 FR 38860 and 62 FR 38865).

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

This proposed rule is not a ``significant energy action'' as
defined in Executive Order 13211, ``Actions That Significantly Affect
Energy Supply, Distribution, or Use,'' (66 FR 28355, May 22, 2001)
because it is not likely to have a significant adverse effect on the
supply, distribution, or use of energy.
Information on the methodology and data regarding the assessment of
potential energy impacts is found in Chapter 6 of U.S. EPA 2002, Cost,
Emission Reduction, Energy, and Economic Impact Assessment of the
Proposed Rule Establishing the Implementation Framework for the 8-Hour,
0.08 ppm Ozone National Ambient Air Quality Standard, prepared by the
Innovative Strategies and Economics Group, Office of Air Quality
Planning and Standards, Research Triangle Park, N.C. April 24, 2003.

I. National Technology Transfer Advancement Act

Section 12(d) of the National Technology Transfer Advancement Act
of 1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards (VCS) in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by VCS bodies. The NTTAA directs EPA to provide Congress,
through OMB, explanations when the Agency decides not to use available
and applicable VCS.
This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any VCS.
EPA will encourage the States and Tribes to consider the use of
such standards, where appropriate, in the development of the
implementation plans.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order 12898 requires that each Federal agency make
achieving environmental justice part of its mission by identifying and
addressing, as appropriate, disproportionate high and adverse human
health or environmental effects of its programs, policies, and
activities on minorities and low-income populations.
EPA believes that this proposed rule should not raise any
environmental justice issues. The health and environmental risks
associated with ozone were considered in the establishment of the 8-
hour, 0.08 ppm ozone NAAQS. The level is designed to be protective with
an adequate margin of safety. The proposed rule provides a framework
for improving environmental quality and reducing health risks for areas
that may be designated nonattainment.

List of Subjects in 40 CFR Part 51

Environmental protection, Air pollution control, Intergovernmental
relations, Ozone, Particulate matter, Transportation, Volatile organic
compounds.

Authority: 42 U.S.C. 7408; 42 U.S.C. 7410; 42 U.S.C. 7501-7511f;
42 U.S.C. 7601(a)(1).

Dated: May 14, 2003.
Christine Todd Whitman,
Administrator.

X. Appendices

Note: The following appendices will not appear in the Code of
Federal Regulations.

[[Page 32864]]

Appendix A

Comparison of Subpart 1 & 2 Requirements

This is only an outline of the general requirements of subparts
1 and 2 and should not be relied on for regulatory purposes.

----------------------------------------------------------------------------------------------------------------
Subpart 2
Element Subpart 1 ---------------------------------------------------
Classification Requirement
----------------------------------------------------------------------------------------------------------------
Attainment Dates: For all areas, Up to 5 years after Marginal................ 3 years from CAA
attainment should occur as nonattainment Amendments enactment.
expeditiously as practicable, designation; may extend
but no later than specified up to 10 years based on
timeframe. specified considerations.
Moderate................ 6 years from CAA
Amendments enactment.
Serious................. 9 years from CAA
Amendments enactment.
Severe-15............... 15 years from CAA
Amendments enactment.
Severe-17............... 17 years from CAA
Amendments enactment.
Extreme................. 20 years from CAA
Amendments enactment.
RFP.............................. ``Annual incremental Marginal................ None.
emissions reductions''.
Moderate................ 15% VOC reduction from
baseline within 6 years
of enactment.
Serious................. Moderate req't plus 9%
VOC/NO_X reductions for
years 7-9 after CAA
Amendments enactment.
Severe-15............... Serious req't plus 9%
VOC/NO_X for years 9-15
after CAA Amendments
enactment.
Severe-17............... Serious req't plus 9%
VOC/NO_X for years 9-17
after CAA Amendments
enactment.
Extreme................. Severe req't plus 9% VOC/
NO_X for years 9-20
after CAAA enactment.
Milestone Compliance Not required as such; Marginal/moderate....... No further requirement.
Determination. contingency measures
supposed to be
implemented upon failure
to meet RFP.
Serious & above......... Requires milestone
compliance
demonstration to be
made following
milestone; failing area
must elect one of the
following:
1. bump-up.
2. implement contingency
measures.
3. economic incentive.
Attainment demonstration EPA sets date which can Marginal................ None.
submission. be no later than 3 years
after designation.
Moderate................ Due 3 years after CAA
Amendments enactment.
Serious................. Due 4 years from CAA
Amendments enactment.
Severe.................. Due 4 years from CAA
Amendments enactment.
Extreme................. Due 4 years from CAA
Amendments enactment.
NSR and RACT major source 100 TPY.................. Marginal................ 100 TPY
applicability.
Moderate................ 100 TPY
Serious................. 50 TPY
Severe.................. 25 TPY
Extreme................. 10 TPY
NSR offsets...................... £1 to 1........ Marginal................ 1.1 to 1
Moderate................ 1.15 to 1
Serious................. 1.2 to 1
Severe.................. 1.3 to 1
Extreme................. 1.5 to 1

[[Page 32865]]

NSR permits...................... Permits required......... All..................... Construction permits for
new or modified major
stationary sources pre-
1990 permit program
corrections.
Bump-up to higher classification. NA....................... All except severe & Required to bump-up to
extreme. higher classification
if area doesn't meet
attainment date.
NO_X control for RACT............. No specificity........... Moderate & above; all Requirements under this
areas in OTC. subpart for major
stationary VOC sources
(NSR & RACT) also apply
to all major NO_X
sources, unless EPA
approves NO_X waiver.
NO_X control for NSR.............. No specificity........... Marginal & above........
Emission inventory............... Required in nonattainment All..................... Comprehensive emissions
area; no express inventory within 2
requirement for updates years of enactment;
or emission statements. update every 3 years
(until area attains).
Provision for
submission to State of
annual emissions
statements from VOC and
NO_X stationary sources.
RACM/RACT........................ General requirement for Marginal & above........ Pre-1990 RACT fix-up.
RACM including RACT.
Moderate & above........ RACT for all CTG sources
and all other major
sources.
I/M.............................. Nothing specified........ Marginal................ Pre-1990 corrections to
previously required I&M
programs immediately
upon CAA Amendments
enactment.
Moderate................ Basic I&M.
Serious & above......... Enhanced I&M within 2
years of CAA Amendments
enactment.
Conformity (transportation and Required................. All..................... No additional
general). specificity.
Stage II vapor recovery (VOC).... Not specified............ Moderate & above........ Stage II for gas
stations within 2
years.
Consequences of failure to attain EPA to specify additional Marginal, moderate and Bump-up for failure to
requirements; up to 10 serious. attain.
more years to attain.
Severe and extreme...... Fee system; continued
ROP; possible stricter
NSR major source cut-
offs.
Maintenance...................... Requirement for All..................... No additional
maintenance plans for specificity.
areas redesignated from
nonattainment to
attainment.
Contingency measures............. Required for failure to All..................... Required for failure to
make RFP or attainment. meet ROP milestones or
attain.
Enhanced (ambient) monitoring Not specified............ Marginal and moderate... Not specified.
(PAMS).
Serious & above......... Ambient ozone precursor
monitoring (VOC and
NO_X).
VMT demonstration and Not specified............ Marginal and moderate... Not specified.
transportation control measures
(TCMs) if needed.
Serious & above......... Demonstration of whether
current aggregate
vehicle mileage,
emissions, congestion
levels are consistent
with attainment demo.
Clean fuels program.............. Not specified............ Marginal and moderate... Not specified.
Serious & above......... Certain percentage of
fleet vehicles for 1998
and higher to be clean
vehicles and use
alternative fuels (if
needed).

[[Page 32866]]

Reformulated Gasoline required Not specified............ Marginal, moderate & Not specified.
under section 211(k)(10)(D), serious.
which requires the use of
reformulated gasoline in 9
covered areas, and areas that
are bumped-up to Severe under
section 181(d)).
Severe & above.......... Prohibition of sale of
gas that has not been
reformulated to be less
polluting.
TCMs to offset growth in VMT Not specified............ Marginal, moderate & Not specified.
emissions. serious.
Severe & above.......... Enforceable
transportation control
strategies and TCMs to
offset any emissions
growth due to VMT
growth.
Clean Fuels for Boilers.......... Not specified............ Marginal, moderate, Not specified.
serious & severe.
Extreme areas........... Use of clean fuels or
advanced technology for
certain boilers that
emit more than 25 TPY
of NO_X.
TCMs during heavy traffic hours.. Not specified............ Marginal, moderate, Not specified.
serious & severe.
Extreme areas........... Option to have TCMs
during periods of heavy
traffic that reduce use
of high polluting or
heavy-duty vehicles.
New Technologies................. Not specified............ Marginal, moderate, Not specified.
serious & severe.
Extreme areas........... New or future
technologies for
emissions reductions.
----------------------------------------------------------------------------------------------------------------

Appendix B.--``Applicable Requirements'' Under Subpart 2
------------------------------------------------------------------------
Element Classification Requirement
------------------------------------------------------------------------
RFP......................... Moderate............ 15% VOC reduction
from baseline
within 6 years of
enactment.
Serious............. Moderate req't plus
9% VOC/NO_X
reductions for
years 7-9 after CAA
Amendments
enactment.
Severe-15........... Serious req't plus
9% VOC/NO_X for
years 9-15 after
CAA Amendments
enactment.
Severe-17........... Serious req't plus
9% VOC/NO_X for
years 9-17 after
CAA Amendments
enactment.
Extreme............. Severe req't plus 9%
VOC/NO_X for years 9-
20 after CAA
Amendments
enactment.
Milestone Compliance Serious & above..... Requires milestone
Determination. compliance
demonstration to be
made following
milestone; failing
area must elect one
of the following:
1. bump-up.
2. implement
contingency
measures.
3. economic
incentive.
NSR and RACT major source Marginal............ 100 TPY
applicability.
Moderate............ 100 TPY
Serious............. 50 TPY
Severe.............. 25 TPY
Extreme............. 10 TPY
NSR offsets................. Marginal............ 1.1 to 1
Moderate............ 1.15 to 1
Serious............. 1.2 to 1
Severe.............. 1.3 to 1
Extreme............. 1.5 to 1
NSR permits................. All................. Construction permits
for new or modified
major stationary
sources pre-1990
permit program
corrections.
NO_X control for RACT........ Moderate & above; Requirements under
all areas in OTC. this subpart for
major stationary
VOC sources (NSR &
RACT) also apply to
all major NO_X
sources, unless EPA
approves NO_X
waiver.

[[Page 32867]]

NO_X control for NSR......... Marginal & above.... ....................
RACM/RACT................... Marginal & above.... Pre-1990 RACT fix-
up.
Moderate & above.... RACT for all CTG
sources and all
other major
sources.
I/M......................... Marginal............ Pre-1990 corrections
to previously
required I&M
programs
immediately upon
CAA Amendments
enactment.
Moderate............ Basic I&M.
Serious & above..... Enhanced I&M within
2 years of CAA
Amendments
enactment.
Stage II vapor recovery Moderate & above.... Stage II for gas
(VOC). stations within 2
years.
Maintenance................. All................. No additional
specificity.
Enhanced (ambient) Serious & above..... Ambient ozone
monitoring (PAMS). precursor
monitoring (VOC and
NO_X).
VMT demonstration and Serious & above..... Demonstration of
transportation control whether current
measures (TCMs) if needed. aggregate vehicle
mileage, emissions,
congestion levels
are consistent with
attainment demo.
Clean fuels program......... Serious & above..... Certain percentage
of fleet vehicles
for 1998 and higher
to be clean
vehicles and use
alternative fuels
(if needed).
Reformulated Gasoline*...... Severe & above...... Prohibition of sale
of gas that has not
been reformulated
to be less
polluting.
TCMs to offset growth in VMT Marginal, moderate & Not specified.
emissions. serious.
Severe & above...... Enforceable
transportation
control strategies
and TCMs to offset
any emissions
growth due to VMT
growth
Clean Fuels for Boilers..... Extreme areas....... Use of clean fuels
or advanced
technology for
certain boilers
that emit more than
25 TPY of NO_X.
TCMs during heavy traffic Extreme areas....... Option to have TCMs
hours. during periods of
heavy traffic that
reduce use of high
polluting or heavy-
duty vehicles.
New Technologies............ Extreme areas....... New or future
technologies for
emission
reductions.
------------------------------------------------------------------------
* Required under section 211(k)(10)(D), which requires the use of
reformulated gasoline in 9 covered areas, and areas that are bumped-up
to Severe under section 181(d).

Appendix C.--Comparison of Transitional NSR and Early Action Compact
Programs
------------------------------------------------------------------------
Transitional new 8-hour Early action
Program elements source review (NSR) compact
------------------------------------------------------------------------
Eligibility *............... --Meet 1-hr standard --Must have
--Must be 8-hr monitoring data
nonattainment. meeting 1-hr
--Must be covered standard.
under Subpart 1 **. --Must be designated
attainment for 1-hr
standard.
Initiation Date............. Submit attainment Signed compact by 12/
demonstration by 31/02.
designations date
(4/15/04).
Other Dates................. --All measures must --Submit progress
be implemented by reports every 6
12/31/05. months beginning 6/
--Projected 03.
attainment of 8-hr --Describe planned
standard by April measures by 6/16/
2007. 03.
--Submit local plan
to State by 3/31/
04.
--Submit SIP to
State by 12/31/04.
--Implement all
measures by 12/31/
05.
--Submit progress
report to certify
continued
implementation &
air quality
improvements.
--Area must attain 8-
hr standard by 12/
31/07.
Benefits.................... --BACT instead of --Deferred effective
LAER (cite NSR date of
workshop manual). nonattainment
--No required designation.
emission offsets. --Implies no NSR or
conformity.
--Implementation of
measures earlier
than required by
CAA (early
reductions in
emissions).
Consequences................ If 2007 attainment --Nonattainment
date is missed, designation becomes
State must submit effective soon
by April 2007 a after failure to
Part D NSR plan, meet milestone.
which meets --Nonattainment
requirements under requirements must
sec. 51.165 (i.e., be met (NSR,
traditional conformity, RACT,
nonattainment NSR). etc) if missed
milestone.
------------------------------------------------------------------------
* Areas not eligible for Early Action Compact may still be eligible for
transitional NSR.
** Areas in the Ozone Transport Region are not eligible for transitional
NSR because they are not covered under Subpart 1 for purposes of NSR
applicability.

Appendix D.--Glossary of Terms and Acronyms
------------------------------------------------------------------------

------------------------------------------------------------------------
ACT................................ Alternative control techniques

[[Page 32868]]

BACT............................... Best available control technology
bump-up............................ Reclassify to higher classification
CAA................................ Clean Air Act
CAAA............................... 1990 Clean Air Act Amendments
CADC............................... Clean Air Development Community
CASAC.............................. Clean Air Scientific Advisory
Committee
CERR............................... Consolidated Emissions Reporting
Rule
CFR................................ Code of Federal Regulations
CO................................. Carbon monoxide
Compacts........................... Early Action Compact Agreements
CSA................................ Clear Skies Act
CTGs............................... Control techniques guidelines
DOT................................ Department of Transportation
EPA................................ Environmental Protection Agency
FACA............................... Federal Advisory Committee Act
FIPs............................... Federal implementation plans
FMVCP.............................. Federal Motor Vehicle Control
Program
GAM................................ Generalized additive models
HAPs............................... Hazardous air pollutants
HEI................................ Health Effects Institute
LAER............................... Lowest achievable emission rate
MACT............................... Maximum achievable control
technology
MCR................................ Mid-course review
MPO................................ Metropolitan Planning Organization
NAAQS.............................. National Ambient Air Quality
Standards
NAMS............................... National Air Monitoring Stations
NCore.............................. National Core Monitoring Sites
NMMAPS............................. National Morbidity, Mortality, and
Air Pollution Study
NO_X................................ Nitrogen oxides
NO_y................................ Reactive oxides of nitrogen
NO₂................................ Nitrogen dioxide
NSCR............................... Non-selective catalytic reduction
NSR................................ New source review
NTTAA.............................. National Technology Transfer
Advancement Act of 1995
OH................................. Hydroxyl
OMB................................ Office of Management and Budget
OTAG............................... Ozone Transport Assessment Group
OTC................................ Ozone Transport Commission
OTR................................ Ozone Transport Region
Ozone Flex......................... Ozone Flex Guidelines Program
PAMS............................... Photochemical Assessment Monitoring
Stations
PM................................. Particulate matter
PM_2.5.............................. Fine particle
ppm................................ Parts per million
Protocol........................... Protocol for Early Action Compacts
designed to achieve and maintain
the 8-hour ozone standard
PSD................................ Prevention of significant
deterioration
RACM............................... Reasonably available control
measures
RACT............................... Reasonably available control
technology
RFP................................ Reasonable further progress
ROP................................ Rate of progress
RPOs............................... Regional Planning Organizations
SBA................................ Small Business Administration
SIPs............................... State implementation plans
SLAMS.............................. State and Local Air Monitoring
Stations
TAR................................ Tribal Authority Rule
TCEQ............................... Texas Commission on Environmental
Quality
TCMs............................... Transportation control measures
TEA-21............................. Transportation Equity Act for the
Twenty-first Century
TIP................................ Tribal implementation plan
TSP................................ Total suspended particulates
UMRA............................... Unfunded Mandates Reform Act of
1995
VCS................................ Voluntary consensus standards
VMT................................ Vehicle miles traveled
VOC................................ Volatile organic compound
VT................................. Vehicle trips
------------------------------------------------------------------------

[[Page 32869]]

Appendix E.--Application of Conformity, New Source Review and Prevention of Significant Deterioration under
Various Transition Cases
----------------------------------------------------------------------------------------------------------------
And its 8-hr How would conformity How would traditional \1\
If an area's 1-hr situation is: situation is: apply? NSR/PSD apply?
----------------------------------------------------------------------------------------------------------------
Designated Attainment (never been Designated Attainment Under 1 hr std: Conformity Under 1 hr std: PSD
nonattainment). does not apply. continues to apply until
the 1-hr standard is
revoked.
Under 8 hr std: Conformity Under 8 hr std: PSD
does not apply. applies (Note: PSD
applies as long as area
is attainment for the 8-
hr std.)
Designated Nonattain- Under 1 hr std: Conformity Under 1 hr std: PSD
ment. does not apply. applies until the 1-hr
standard is revoked (but
nonattainment NSR
requirements for 8-hr
std. would tend to
override).
Under 8 hr std: Conformity Under 8-hr std:
applies 1 year after the (1) NSR under 40 CFR
effective date of appendix S applies
designation (2005). before SIP (containing
Sec. 51.165(a) NSR
program) is approved by
EPA.
(2) Nonattainment NSR
under Sec. 51.165
applies after SIP
approval
Early Action Compact Under 1 hr std: Conformity Under 1 hr std: PSD
(EAC). does not apply. continues to apply to
Under 8 hr std: Assuming EAC areas until the 1-hr
all milestones are met, standard is revoked.
conformity would not Under 8 hr std: Assuming
apply through 2007. If all milestones are met,
the area is violating in PSD would apply through
2007, its nonattainment 2007.\2\ If the area is
designation would become violating in 2007, it
effective 4/15/2008, and would become subject to
conformity would apply 1 nonattainment NSR. If
year later (4/15/2009). area is not violating in
If area not violating in 2007, the area would be
2007, the area would be designated attainment,
designated attainment, and PSD continues to
and no conformity would apply
apply.
Designated Nonattainment.......... Designated Attainment Under 1 hr std: Conformity Under 1 hr std:
applies until 1 year Nonattainment NSR
after the effective date applies until it is no
of the area's designation longer an ``applicable
under the 8-hr standard requirement'' (see
(2005). proposal on anti-
backsliding).
Under 8 hr std: Conformity Under 8 hr std: PSD
does not apply. applies.\3\
Designated Under 1 hr std: Conformity Under 1 hr std:
Nonattainment. applies until 1 year Nonattainment NSR
after the effective date continues to apply until
of the area's designation it is no longer an
under the 8-hr standard ``applicable
(2005). requirement'' (see
Under 8 hr std: Conformity proposal on anti-
would apply 1 year after backsliding).
the effective date of the Under 8 hr std: (1)
area's designation (2005). Nonattainment NSR under
appendix S applies until
the nonattainment NSR
SIP (containing Sec.
51.165(a) NSR program)
is approved by EPA;
(2) Nonattainment NSR
applies under Sec.
51.165 after SIP
approval.
(EAC: Not eligible)
Designated attainment with Designated Attainment Under 1 hr std: Conformity Under 1 hr std: PSD
Maintenance Plan. applies until 1 year applies until 1-hr std.
after the effective date is revoked.
of the area's designation Under 8 hr std: PSD
under the 8-hr standard applies.
(2005).
Under 8 hr std: Conformity
does not apply.

[[Page 32870]]

Designated Under 1 hr std: Conformity Under 1 hr std: PSD
Nonattainment. applies until 1 year applies until the 1-hr
after the effective date standard is revoked.
of the area's designation Under 8 hr std:
under the 8-hr standard (1) NSR under 40 CFR
(2005). appendix S applies
Under 8 hr std: Conformity before SIP (containing
would apply 1 year after Sec. 51.165(a) NSR
the effective date of the program) is approved by
area's designation under EPA;
the 8-hr standard (2005). (2) Nonattainment NSR
under Sec. 51.165
applies after SIP
approval.
Early Action Compact. Under 1 hr std: 1-hour Under 1 hr std: PSD
conformity applies until continues to apply until
1 year after the the 1-hr standard is
effective date of the revoked.
area's designation under Under 8 hr std: Assuming
the 8-hr standard (4/15/ all milestones are met,
2009, or earlier if the PSD would apply through
area misses an EAC 2007.\2\ If the area is
milestone). violating in 2007, it
Under 8 hr std: Assuming would become subject to
all milestones are met, nonattainment NSR. If
conformity would not area is not violating in
apply through 2007. If 2007, the area would be
the area is violating in designated attainment,
2007, its nonattainment and PSD continues to
designation would become apply.
effective 4/15/2008 and
conformity would apply 1
year later (4/15/2009).
If area not violating in
2007, the area would be
designated attainment,
and no conformity would
apply.
----------------------------------------------------------------------------------------------------------------
\1\ Traditional NSR is nonattainment NSR under 40 CFR part 51, either Sec. 51.165 or appendix S.
\2\ PSD applies even if the attainment designation under the 8-hr standard is not yet effective.
\3\ Generally, nonattainment NSR requirements would supersede most PSD requirements. However, note that in
specific instances PSD may mandate additional analyses, such as preconstruction monitoring or analysis of
impacts on Class I areas.

[FR Doc. 03-13240 Filed 5-30-03; 8:45 am]
BILLING CODE 6560-50-P

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