# Final Rule To Implement the 8-Hour Ozone National Ambient Air Quality Standard-Phase 1

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URL: https://www.frixlaw.com/law-library/documents/fr%3A04-9153

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 30, 2004
- **Citation:** 69 FR 23951

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 50, 51 and 81
[OAR 2003-0079, FRL-7651-7]
RIN 2060-AJ99
Final Rule To Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 1

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

In this document, EPA is taking final action on key elements of the program to implement the 8-hour ozone national ambient air quality standard (NAAQS or standard). This final rule addresses the following topics: classifications for the 8-hour NAAQS; revocation of the 1-hour NAAQS (
i.e.
, when the 1-hour NAAQS will no longer apply); how anti-backsliding principles will ensure continued progress toward attainment of the 8-hour ozone NAAQS; attainment dates; and the timing of emissions reductions needed for attainment. We are issuing this rule so that States and Tribes will know how we plan to classify areas and transition from implementation of the 1-hour NAAQS to implementation of the 8-hour NAAQS. The intended effect of the rule is to provide certainty to States and Tribes regarding classifications for the 8-hour NAAQS and their continued obligations with respect to existing requirements. This document is Phase 1 of the program to implement the 8-hour ozone NAAQS. We plan to issue a second rule, Phase 2, within the next several months which will address the remaining 8-hour implementation issues,
e.g.
, requirements for reasonable further progress (RFP), requirements for modeling and attainment demonstrations, and requirements for reasonably available control measures (RACM) and reasonably available control technology (RACT).

DATES:

Effective Date: This rule is effective on June 15, 2004.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. OAR-2003-0079. All documents in the docket are listed in the EDOCKET index at
http://www.epa.gov/edocket.
Although listed in the index, some information is not publicly available,
i.e.
, Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the EPA Docket Center (Air Docket), EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Office of Air and Radiation Docket and Information Center is (202) 566-1742.

In addition, we have placed a variety of earlier materials regarding implementation of the 8-hour ozone NAAQS on the Web site:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr.

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, fax number (919) 541-0824 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, fax number (919) 54l-0824 or by e-mail at
gerth.denise@epa.gov.

SUPPLEMENTARY INFORMATION:

Outline

I. When Did EPA Propose this Rule?

II. What is EPA's Schedule for Taking Final Action on the Proposal?

III. What is Included in this Rule?

IV. In Short, what does this Final Rule Contain?

A. How will EPA reconcile the classification provisions of subparts 1 and 2? How will EPA classify nonattainment areas for the 8-hour standard?

B. How will EPA treat attainment dates for the 8-Hour ozone standard?

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?

D. What is the required timeframe for obtaining emissions reductions to ensure attainment by the attainment date?

V. EPA's Final Rule.

A. How will EPA reconcile the classification provisions of subparts 1 and 2? How will EPA classify nonattainment areas for the 8-hour NAAQS?

1. Background.

a. Statutory framework and Supreme Court decision.

b. EPA's proposed rule and notice reopening the comment period.

2. Summary of final rule

a. Why did EPA select Option 2?

(i) Why will Option 2 best accomplish the policy goals of EPA?

(ii) How is Option 2 Consistent with the CAA as Interpreted by the Supreme Court?

3. Comments and Responses.

4. Under the final classification approach, how will EPA classify subpart 1 areas?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

5. Will EPA adjust classifications?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

6. Proposed Incentive Feature.

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

B. How will EPA treat attainment dates for the 8-hour ozone NAAQS?

1. Background.

2. Summary of final rule.

3. Comments and Responses.

4. How Will EPA Address the Provision Regarding 1-Year Extensions?

a. Background.

b. Summary of final rule.

c. Comments and Response

C. How will EPA implement the transition from the 1-hour to the 8-hour NAAQS in a way to ensure continued momentum in States' efforts toward cleaner air?

1. When will EPA revoke the 1-hour NAAQS?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses

2. What requirements that applied in an area for the 1-hour NAAQS continue to apply after revocation of the 1-hour NAAQS for that area?

a. Background.

b. Summary of Final Rule.

c. Section 51.905(a)(1): 8-Hour NAAQS Nonattainment/1-Hour NAAQS Nonattainment

(i) Mandatory Control Measures.

(ii) Discretionary control measures.

(iii) Measures to address growth.

(iv) Planning SIPs.

d. Section 51.905(a)(2): 8-Hour NAAQS Nonattainment/1-Hour NAAQS Maintenance

(i) Mandatory Control Measures.

(ii) Discretionary Control measures.

(iii) Measures to address growth.

(iv) Planning SIPs.

e. Section 51.905(a)(3): 8-Hour NAAQS Attainment /1-Hour NAAQS Nonattainment

(i) Mandatory control obligations.

(ii) Discretionary control obligations.

(iii) Measures to address growth.

(iv) Planning SIPs.

(v) Maintenance Plans for the 8-hour NAAQS.

f. Section 51.905(a)(4): 8-Hour NAAQS Attainment/1-Hour NAAQS Maintenance

(i) Obligations in an approved SIP.

(ii) Maintenance plan.

3. For how long do these obligations continue to apply?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

4. Which portions of an area designated for the 8-hour NAAQS remain subject to the 1-hour NAAQS obligations?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

5. What obligations that applied for the 1-hour NAAQS will no longer apply after revocation of the 1-hour NAAQS for an area?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

(i) Comments on June 2, 2003 proposal:

(ii) Comments on draft regulatory text.

6. What is the continued applicability of the NO
X
SIP Call after revocation of the 1-hour NAAQS?

a. Background.

b. Summary of Final Rule.

c. Comments and Responses.

(i) Comments on the June 2, 2003 proposal:

D. What is the required timeframe for obtaining emissions reductions to ensure attainment by the attainment date?

1. Background.

2. Summary of final rule.

3. Comments and Responses

E. Conformity Under the 8-Hour Ozone Standard

F. Comments on Other Issues

1. Designations of nonattainment and attainment areas:

2. Early Action Compacts (EACs):

3. Health and environmental concerns:

4. Clarity and understandability of proposed rule:

5. Regulatory text:

6. Requests for Extension of Comment Periods:

G. Other Considerations

1. What happens if a source is in the process of PSD permitting at the time that the area in which it is located is designated as nonattainment for the 8-hour ozone NAAQS?

H. EPA's Final Action.

VI. 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

K. Congressional Review Act

L. Petitions for Judicial Review

M. Determination Under Section 307(d)

I. When Did EPA Propose This Rule?

On June 2, 2003 (68 FR 32805), we published a proposed rule to implement the 8-hour ozone NAAQS. The proposal addressed a number of implementation issues, including the two core implementation issues addressed in this final rule,
e.g.
, how the Clean Air Act (CAA or Act) classification provisions will apply for the 8-hour ozone NAAQS and the transition from the 1-hour NAAQS to the 8-hour NAAQS, including when the 1-hour NAAQS will be revoked and anti-backsliding principles. We proposed one or more options for each issue addressed in the proposal. In addition, we included two possible frameworks to implement the 8-hour ozone NAAQS. These frameworks were complete implementation strategies comprised of one option for each implementation issue addressed in the proposed rule. The following principles guided us in the development of the underlying

options and the frameworks to implement the 8-hour ozone NAAQS in the proposed rule: to protect public health, provide incentives for expeditious attainment of the 8-hour ozone NAAQS and avoid incentives for delay; to provide reasonable but expeditious attainment deadlines; to establish a basic, straightforward structure that could 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. An additional goal was to clarify the role of Tribes in implementing the 8-hour ozone NAAQS. Section 301(d) of the CAA recognizes that the American Indian Tribal governments are generally the appropriate authority to implement the CAA in Indian country. As discussed in the Tribal Authority Rule (TAR) (63 FR 7262, February 12, 1998, and 59 FR 43960-43961, August 25, 1994), it is appropriate to treat Tribes in the same manner as States. Therefore, when we discuss the role of the State in implementing this rule we are also referring to the Tribes. Please refer to the proposed rule (68 FR 32802, June 2, 2003) for a detailed discussion and background information on the 8-hour ozone problem and EPA's strategy for addressing it, the 8-hour ozone NAAQS and associated litigation, and the stakeholder process for gathering input into this effort, among other topics.

On August 6, 2002 (68 FR 46536), we published a notice of availability of the draft regulatory text for the proposed rule to implement the 8-hour ozone NAAQS. This notice started a 30-day public comment period on the draft regulatory text. In addition, on October 21, 2003 (68 FR 60054), we reopened the public comment period for 15 days to solicit additional comment on alternative approaches for classifying ozone nonattainment areas, based on comments received during the comment period.

II. What Is EPA's Schedule for Taking Final Action on the Proposal?

In our June 2, 2003 proposal, we stated that we planned to issue the final implementation rule in December 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.
1

We have entered into a consent decree that requires us to promulgate designations by April 15, 2004.
2

Our goal was to issue a final implementation rule by the end of 2003 because the States and Tribes indicated a strong interest in having an opportunity to understand the impacts of being designated nonattainment prior to promulgation of designations for the 8-hour NAAQS. Based on the large number of public comments received on our proposal and our need to consider and respond to those comments before taking final action, we were unable to issue a final rule prior to April 15, 2004 that addresses all issues raised in the proposal. This final rule addresses several key components of the proposed rule: how the classification provisions of the CAA will apply for purposes of the 8-hour ozone NAAQS and the transition from the 1-hour NAAQS to the 8-hour NAAQS, including when the 1-hour NAAQS will be revoked, how anti-backsliding principles will ensure continued progress toward attainment of the 8-hour ozone NAAQS, attainment dates, and the timing of emissions reductions needed for attainment.

1
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 promulgate 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 in the litigation challenging the NAAQS, whichever came first.

2
American Lung Association v. EPA (D.D.C. No. 1:02CV02239).

Within the next several months, we plan to issue a second final rule, Phase 2, which will address many of the planning and control obligations under sections 172 and 182 of the CAA that will apply for purposes of implementing the 8-hour ozone NAAQS. These include, among other things, RFP, RACT, attainment demonstrations and maintenance plans, and new source review (NSR). Neither Phase 1 nor Phase 2 will address the appropriate tests under the 8-hour ozone NAAQS for demonstrating conformity of Federal actions to State implementation plans (SIPs). A proposed rule was published on November 5, 2003 (68 FR 62689) addressing transportation conformity requirements applicable in 8-hour ozone nonattainment areas. In addition, EPA is revising its general conformity regulations and plans to issue a proposed rule in the spring of 2004.

III. What Is Included in This Rule?

Today's action, Phase 1 of the implementation rule, focuses on two key implementation issues: (1) Classifying areas for the 8-hour NAAQS and (2) transitioning from the 1-hour to the 8-hour NAAQS, which includes revocation of the 1-hour NAAQS and the anti-backsliding principles that should apply upon revocation.
3

In addition, it addresses several additional, related issues. We believe that classifications and anti-backsliding are key elements of the implementation program that are of primary interest to the States and Tribes prior to the final designations. In addition, because section 182(a) of the CAA provides that classifications will occur “by operation of law” at the time of designation, EPA believes it is critical that the public understands at the time of designations how the classification provisions will apply.

3
We use the term “revocation” as shorthand for a determination under 40 CFR 50.9(b) that the 1-hour NAAQS no longer applies to one or more areas.

IV. In Short, What Does This Final Rule Contain?

This summary is intended to give only a convenient overview of our final rule. It should not be relied on for the details of the actual rule. The final rule (regulatory text) and the discussion of it in the next section below should be consulted directly.

Both the preamble and the rule may use the following terms to discuss four categories of areas for purposes of the anti-backsliding provisions: (1) 8-hour NAAQS Nonattainment/1-hour NAAQS Nonattainment; (2) 8-hour NAAQS Nonattainment/1-hour NAAQS Maintenance; (3) 8-hour NAAQS Attainment/1-hour NAAQS Nonattainment; (4) 8-hour NAAQS Attainment/1-hour NAAQS Maintenance. These categories are, respectively: (1) Areas that remain designated nonattainment for the 1-hour NAAQS at the time of designation as nonattainment for the 8-hour NAAQS; (2) Areas that are maintenance areas for the 1-hour NAAQS at the time of designation as nonattainment for the 8-hour NAAQS; (3) Areas that remain designated nonattainment for the 1-hour NAAQS at the time of designation as attainment for the 8-hour NAAQS; and (4) Areas that are maintenance areas for the 1-hour NAAQS at the time of designation as attainment for the 8-hour NAAQS.

A. How Will EPA Reconcile the Classification Provisions of Subparts 1 and 2? How Will EPA Classify Nonattainment Areas for the 8-Hour Standard?

The final rule incorporates Option 2 of the proposal. Each area with a current 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of subpart 2) will be classified under subpart 2 based on its 8-hour design value. All other areas will be covered under subpart 1 using their 8-hour design values.

In brief, this approach works as follows:

• First, we will determine which 8-hour areas will be covered under subpart 2 and which under subpart 1. Any area with a 1-hour ozone design value (at the time of designation) that meets or exceeds the statutory level of 0.121 ppm that Congress specified in Table 1 of section 181 will be classified under subpart 2 and will be subject to the control obligations associated with its classification.
4

Any area with a 1-hour design value (at the time of designation) that is below the level of 0.121 ppm will be covered under subpart 1 and subject to the control obligations in section 172.

4
In the Phase 2 rule, we will address the control obligations that apply to areas under both subpart 1 and subpart 2.

• Second, subpart 2 areas will be classified as marginal, moderate, serious, severe or extreme based on the area's 8-hour design value (at the time of designation). Since Table 1 is based on 1-hour design values, and application of the Table as written would produce absurd results, we are promulgating a regulation translating the thresholds in Table 1 of section 181 from 1-hour values to 8-hour values.

Under the Final Classification Approach, How Will EPA Classify Subpart 1 Areas?

We are adopting the second option but modified as a result of comments. We are creating an overwhelming transport classification that will be available to subpart 1 areas that demonstrate they are affected by overwhelming transport of ozone and its precursors and demonstrate they meet the definition of a rural transport area in section 182(h). However, areas would not have to demonstrate that transport was due solely to sources from outside the State (interstate transport) as was implied by the June 2, 2003 proposal. All other areas that do not qualify for the overwhelming transport classification would not be classified.

Proposed Incentive Feature

We are not including the proposed incentive feature in the final rule.

B. How Will EPA Treat Attainment Dates for the 8-Hour Ozone Standard?

We are adopting the time periods for attainment that we proposed for areas under both subpart 1 and subpart 2 of the CAA. For areas subject to subpart 2 of the CAA, the maximum period for attainment will run from the effective date of designations and classifications for the 8-hour standard and will be the same periods as provided in Table 1 of section 181(a):

• Marginal—3 years

• Moderate—6 years

• Serious—9 years

• Severe—15 or 17 years

• Extreme—20 years

Consistent with section 172(a)(2)(A), for areas subject to subpart 1 of the CAA, the period for attainment will be no later than 5 years after the effective date of the designation. However, EPA may grant an area an attainment date no later than 10 years after designation, if warranted based on the factors provided in section 172(a)(2)(A).

How Will EPA Address the Provision Regarding 1-Year Extensions?

We are adopting the interpretation that we proposed on June 2, 2003. Under both sections 172(a)(2)(C) and 181(a)(5), an area will 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 ppm or less. The area will 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.

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?

There are two key issues that EPA considered together regarding the transition from the 1-hour standard to the 8-hour standard: (1) When will the 1-hour standard no longer apply (
i.e.
, be “revoked”); and (2) what protections are in place to ensure that, once the 1-hour standard is revoked, air quality will not degrade and that progress toward attainment will continue as areas transition from implementing the 1-hour standard to implementing the 8-hour standard. As in the proposed rule, the second key issue has three components: (1) What requirements that applied based on an area's classification for the 1-hour standard must continue to apply to that area; (2) for how long; and (3) in what area. Below, we set forth our final transition approach in four parts: (1) When will the 1-hour standard no longer apply (
i.e.
, when will it be revoked); (2) what 1-hour obligations should continue to apply once the 1-hour standard is revoked; (3) how long should those requirements continue to apply; and (4) what is the geographic area subject to the requirement.

1. When Will EPA Revoke the 1-Hour Standard?

We are adopting Option 1. We will revoke the 1-hour standard in full, including the associated designations and classifications, 1 year following the effective date of the designations for the 8-hour NAAQS.

2. What Requirements That Applied in an Area for the 1-Hour NAAQS Continue To Apply After Revocation of the 1-Hour NAAQS for That Area?

The approach we are adopting in the final rule is summarized below under the individual sections discussing each category of area and type of control obligation.

a.
Section 51.905(a)(1): 8-Hour NAAQS Nonattainment/1-Hour NAAQS Nonattainment

(i)
Mandatory control measures.
We are adopting the approach we proposed. All areas designated nonattainment for the 8-hour ozone NAAQS and designated nonattainment for the 1-hour ozone NAAQS at the time of designation for the 8-hour NAAQS remain subject to control measures that applied by virtue of the area's classification for the 1-hour standard.

(ii)
Discretionary control measures.
We are adopting the approach we set forth in our proposed rule. A State may revise or remove discretionary control measures (including enforceable commitments) contained in its SIP for the 1-hour standard so long as the State demonstrates consistent with section 110(l) that such removal or modification will not interfere with attainment of or progress toward the 8-hour ozone NAAQS (or any other applicable requirement of the CAA).

(iii)
Measures to address growth.
We are not adopting the approach set forth in our proposed rule. For areas designated nonattainment for the 1-hour NAAQS at the time of designation for the 8-hour NAAQS and that are designated nonattainment for the 8-hour NAAQS, the major source applicability cut-offs and offset ratios for the area's 1-hour classification would not continue to apply after revocation of the 1-hour NAAQS.

(iv)
Planning SIPs.

(A)
Outstanding rate of progress (ROP) Obligation.
We are adopting the approach set forth in our proposed rule for this category of areas. States remain obligated to meet the CAA-mandated ROP emission reduction targets that applied for the 1-hour standard, but discretionary measures adopted to meet those targets may be modified, if the State makes the necessary showing under section 110(l).

(B)
Unmet attainment demonstration obligations.
In the final rule, we are allowing the States to choose among three options that are tailored after the approaches addressed in the proposed rule. Thus, rather than establishing one mandatory approach, we are adopting a rule that will allow States to choose any one of the following three options:

•
Option 1.
Submit a 1-hour attainment demonstration.

•
Option 2.
Submit, no later than 1 year after the effective date of the 8-hour designations, an early five percent increment of progress plan toward the 8-hour standard.

•
Option 3.
Submit an early 8-hour ozone attainment demonstration SIP that ensures that the first segment of RFP is achieved early.

b.
Section 51.905(a)(2): 8-Hour NAAQS Nonattainment/1-Hour NAAQS Maintenance

(i)
Mandatory control measures.
We are adopting the approach we took in the proposal and the draft regulatory text. This category of areas must continue to implement mandatory control requirements (
i.e.
, “applicable requirements”) that have been approved into the SIP. However, since maintenance areas do not have any outstanding obligation to adopt mandatory control obligations for the 1-hour standard, the provision only addresses implementation, not adoption. In addition, this section recognizes that maintenance areas had the flexibility to move mandatory controls to the contingency measures portion of their maintenance plan.

(ii)
Discretionary control measures.
As with discretionary control measures for 8-hour NAAQS nonattainment/1-hour NAAQS nonattainment areas, 1-hour NAAQS nonattainment/1-hour NAAQS maintenance areas will retain the discretion to modify any discretionary control measures upon a demonstration under section 110(l). We are not promulgating regulatory text because sections 110(l) and 193 of the CAA govern such SIP revisions.

(iii)
Measures to address growth.
We are adopting the approach we proposed, but our rationale relies on the final rule's provision that NSR under the 1-hour standard will no longer be a required implementation plan element as of revocation of the 1-hour standard. If an area has been redesignated to attainment for the 1-hour standard as of the effective date of the 8-hour nonattainment designation and is no longer required to implement a nonattainment NSR program, the area will not be required to revert back to the program it had for purposes of the 1-hour ozone standard.

As noted elsewhere, NSR offset ratios and major stationary source applicability provisions under the 1-hour standard are not being defined as “applicable requirements” after the 1-hour standard is revoked.

(iv)
Planning SIPs.
We are adopting the approach taken in the draft regulatory text. In redesignating an area to attainment, EPA must conclude that the area has met all requirements applicable under section 110 and part D. Thus, maintenance areas do not have continuing progress and attainment demonstration requirements.

c.
Section 51.905(a)(3): 8-Hour NAAQS Attainment/1-Hour NAAQS Nonattainment

(i)
Mandatory control obligations.
We are adopting an approach consistent with our proposed rule. We have determined that mandatory control obligations will no longer apply once an area attains the 8-hour standard. Thus, because these areas are attaining the 8-hour standard, the State may request that obligations under applicable requirements be shifted to contingency measures once the 1-hour standard is revoked, consistent with sections 110(l) and 193 of the CAA. However, the State cannot remove the obligations from the SIP.

(ii)
Discretionary control obligations.
8-hour NAAQS attainment/1-hour NAAQS nonattainment areas will retain the discretion to modify any discretionary controls upon a demonstration under section 110(l). However, such controls must remain in the SIP as contingency measures.

(iii)
Measures to address growth.
We are adopting the approach we set forth in our proposed rule for this category of areas. After the 1-hour standard is revoked, the CAA requires such areas to comply with prevention of significant deterioration (PSD), not NSR.

(iv)
Planning SIPs.
We are adopting our proposal with some modification. An area of this category will not be required to develop and submit outstanding attainment demonstration and ROP plans for the 1-hour standard for so long as the area continues to maintain the 8-hour NAAQS. However, if the area violates the 8-hour NAAQS prior to having an approved 8-hour maintenance plan under section 110(a)(1), the area will be required to submit a SIP revision to address outstanding ROP and attainment demonstration plans.

(v)
Maintenance plans for the 8-hour NAAQS.
We are adopting the approach we proposed. Areas that are either 8-hour NAAQS attainment/1-hour NAAQS nonattainment or 8-hour NAAQS attainment /1-hour NAAQS maintenance must adopt and submit a maintenance plan consistent with section 110(a)(1) within 3 years of designation as attainment for the 8-hour NAAQS. 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.

d.
Section 51.905(a)(4): 8-Hour NAAQS Attainment/1-Hour NAAQS Maintenance

In the final rule, we created a section 51.905(a)(4) to apply to this category of areas. It covers obligations in an approved SIP and maintenance plans similar in manner to areas that are attainment for the 8-hour standard and were attainment for the 1-hour standard and had a maintenance plan.

3. For How Long Do These Obligations Continue To Apply?

We are adopting Option 2—control obligations an area is required to retain in the approved SIP for an area's 1-hour classification must continue to be implemented under the SIP until the area attains and is redesignated to attainment for the 8-hour NAAQS. At that time, the State may relegate such controls to the contingency measure portion of the SIP if the State demonstrates in accordance with section 110(l) that doing so will not interfere with maintenance of the 8-hour NAAQS or any other applicable requirement of the CAA. If at the time the area is redesignated to attainment for the 8-hour standard the State has an outstanding obligation to adopt a control requirement under the 1-hour standard, it remains obligated to do so, but may adopt it as a contingency measure.

4. Which Portions of an Area Designated for the 8-Hour NAAQS Remain Subject to the 1-Hour NAAQS Obligations?

The final rule incorporates most aspects of the approach as that contained in the proposal and in the draft regulatory text. The final rule provides that only the portion of the designated area for the 8-hour NAAQS that was designated nonattainment for

the 1-hour NAAQS is required to comply with the planning obligations, except in one circumstance: if the State elects to provide an early increment of progress or an early 8-hour attainment demonstration in lieu of an outstanding 1-hour attainment demonstration (for an 8-hour NAAQS nonattainment/1-hour NAAQS nonattainment area under 51.905(a)(1)(ii)(B) and (C)), the increment of progress or early 8-hour attainment plan must apply for purposes of the entire 8-hour nonattainment area.

The final rule does not follow the approach in the proposal for the maintenance plan requirement for 8-hour attainment areas. The maintenance plans required for these areas must demonstrate maintenance only for the area designated nonattainment for the 1-hour NAAQS at the time of designation of the 8-hour standard.

5. What Obligations That Applied for the 1-hour NAAQS Will No Longer Apply After Revocation of the 1-hour NAAQS for an Area?

We are revising the approach we set forth in our proposed rule. In addition to the obligations noted in our proposal that would no longer apply after the 1-hour NAAQS is revoked, we are also providing clarification regarding the penalty obligations under sections 181(b)(4) and 185 of the CAA that apply in severe and extreme areas that do not attain the 1-hour standard by the applicable attainment date. The final rule also would not retain NSR under the 1-hour NAAQS. The final rule provides that as of the effective date of revocation of the 1-hour standard:

• We will no longer make findings of failure to attain the 1-hour standard and, therefore, (a) we will not reclassify areas to a higher classification for the 1-hour standard based on such a finding, and (b) areas that were classified as severe or extreme for the 1-hour NAAQS are not obligated to impose fees as provided under sections 181(b)(4) and 185 of the CAA under the 1-hour standard.

• Areas will not be obligated to continue to demonstrate conformity for the 1-hour NAAQS as of the effective date of the revocation of the 1-hour NAAQS.

• An area with an approved 1-hour maintenance plan under section 175A of the CAA may modify the maintenance plan to remove obligations related to developing a second 10-year maintenance plan for the 1-hour NAAQS and the obligation to implement contingency measures upon a violation of the 1-hour NAAQS.

• NSR under the 1-hour NAAQS will no longer be a required implementation plan element in areas that are 8-Hour NAAQS nonattainment/1-Hour NAAQS nonattainment. Instead, NSR under the 8-hour NAAQS will apply.

6. What Is the Continued Applicability of the NO
X
SIP Call After Revocation of the 1-hour NAAQS?

We are adopting the approach we set forth in our proposed rule and draft regulatory text. States must continue to adhere to the emission budgets established by the NO
X
transport rules after the 1-hour standard is revoked. States retain the authority to revise control obligations they have established for specific sources or source categories under the NO
X
SIP Call rule so long as the State demonstrates consistent with section 110(l) that such modification will not interfere with attainment of or progress toward meeting the 8-hour NAAQS or any other applicable requirement of the CAA.

D. What Is the Required Timeframe for Obtaining Emissions Reductions to Ensure Attainment by the Attainment Date?

We are adopting the approach we set forth in our proposed rule, namely that emissions reductions needed for attainment must be implemented by the beginning of the ozone season immediately preceding the area's attainment date.

V. EPA's Final Rule

A. How Will EPA Reconcile the Classification Provisions of Subparts 1 and 2? How Will EPA Classify Nonattainment Areas for the 8-hour NAAQS? (Section VI.A. of Proposal;
See
68 FR 32811; Section 51.902 of Draft and Final Rules)

1. Background

a.
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 ozone NAAQS in nonattainment areas. (Both are found in title I, part D.) Subpart 1 contains general, less prescriptive, 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.
5

5
State Implementation Plans; General Preamble for the Implementation of Title of the CAA Amendments of 1990; Proposed Rule.'' April 16, 1992 (57 FR 13498 at 13501 and 13510).

When we promulgated the 8-hour ozone NAAQS on July 18, 1997, we indicated that we anticipated that States would implement the 8-hour NAAQS under the less prescriptive subpart 1 requirements. More specifically, we concluded that the CAA required areas designated nonattainment for the 1-hour ozone NAAQS to remain subject to the subpart 2 requirements for purposes of the 1-hour NAAQS until such time as they met that NAAQS (62 FR 38872). We also stated that those areas and all other areas would be subject only to subpart 1 for purposes of planning for the 8-hour ozone NAAQS. We determined not to immediately revoke the 1-hour NAAQS for all areas but to promulgate a rule (40 CFR 50.9(b)) providing that the 1-hour NAAQS and the associated designation would no longer apply to an area once EPA determined the area had attained the 1-hour NAAQS. Thus, areas that had not yet attained the 1-hour NAAQS retained their designation for that NAAQS and remained subject to the control obligations associated with their classification for the 1-hour NAAQS until they met it.

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.
Whitman
v.
American Trucking Associations,
531 U.S. 457, 481-86 (2001). The Court concluded, however, that the implementation approach set forth in the final NAAQS rule, 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,
531 U.S. at 482.

Despite recognizing that the classification provisions of subpart 2 (section 181(a)) apply for purposes of the 8-hour NAAQS, the Supreme Court also recognized that the subpart 2 classification scheme does not entirely fit with the revised 8-hour NAAQS and left it to EPA to develop a reasonable resolution of the roles of subparts 1 and 2 in classifying areas for and implementing a revised ozone NAAQS.
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.” Id. at 483.

• First, the Court recognized that “using the old 1-hour averages of ozone levels * * * as subpart 2 requires * * * would produce at best an inexact estimate of the new 8-hour averages * * *”
Id.

• Second, the Court recognized that the design values in Table 1 is based on the level of the 1-hour NAAQS (0.12 ppm) and 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.

b.
EPA's proposed rule and notice reopening the comment period.
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 NAAQS. 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 NAAQS.

On June 2, 2003 (68 FR 32802), we issued a proposed rule which identified two options for classifying areas for the 8-hour ozone NAAQS. Under Option 1 (68 FR 32812), we proposed to classify 8-hour ozone nonattainment areas according to the severity of their ozone pollution based on 8-hour design values.
6

Because the subpart 2 classification table is based on 1-hour design values, we proposed to translate the classification thresholds in Table 1 of section 181 to 8-hour design values. Under this option, all 8-hour nonattainment areas would be classified under subpart 2 as marginal, moderate, serious, severe or extreme.

6
The design value of an area is based on the monitor for the area recording the highest ozone levels and indicates whether the area is violating or meeting the ozone NAAQS. For the 1-hour ozone NAAQS, the design value for an area is generally the 4th highest monitored ozone level at the monitor over a 3-year period.
See
40 CFR part 50, appendix H and Memorandum of June 18, 1990 from William G. Laxton re “Ozone and Carbon Monoxide Design Value Calculations.” Available at
http://www.epa.gov/ttn/naaqs/ozone/ozonetech/laxton.htm.
For the 8-hour ozone NAAQS, the design value is the average of each yearly 4th highest reading at a monitor over a 3-year period.
See
40 CFR part 50, appendix I.

Under Option 1, the threshold for the marginal classification would be an 8-hour design value of 0.085 ppm. Each of the 8-hour classification thresholds would be the same percentage above the 8-hour NAAQS as the corresponding statutory 1-hour threshold is above the 1-hour NAAQS. For example, since the statutory 1-hour ozone level for the moderate classification is 15 percent above the 1-hour NAAQS, the 8-hour ozone level for the moderate classification would be 15 percent above the 8-hour NAAQS.

The EPA developed a second option designed to provide States with greater flexibility on the measures included in their plans for meeting the 8-hour NAAQS. Under Option 2 (68 FR 32812), which we indicated was our preferred option, we proposed a two-step system for determining classifications for areas. We proposed as a first step, to divide areas into two groups based on each area's current 1-hour ozone design value. In accordance with the portion of the Supreme Court decision which indicated that there was no gap in the statute for those areas with a 1-hour design value above 0.121 ppm—the lowest level in Table 1 in section 181(a)—we proposed that areas with a current (
i.e.,
determined at the time of designation) 1-hour ozone design value greater than or equal to 0.121 ppm would be classified under subpart 2 for the 8-hour NAAQS. For areas with a 1-hour design value less than 0.121 ppm,
i.e.,
those areas the Court stated fell into the gap, we concluded that we must make a reasonable determination whether they should be covered under subpart 1 or subpart 2. We proposed that all of these areas would be covered under subpart 1. For the areas that did not fall into the gap and which must be classified under subpart 2, we proposed to classify them based on our translation of Table 1 in section 181(a), as described under Option 1.

We received a large number of comments on the classification options that we proposed, including recommendations for other approaches, most of which were variations on the options we proposed. On October 21, 2003 (68 FR 60054), we reopened the comment period on the proposed rule for 15 days to provide the public with an opportunity for additional comment on alternative approaches for classifying areas for the 8-hour ozone NAAQS that were suggested during the comment period. We also included two alternative strategies (Alternatives A and B) for classifying areas that EPA developed by combining ideas suggested by different commenters during the initial comment period.
7

7
The notice also solicited comment on additional issues that would arise if we selected one of the approaches identified in the notice reopening the comment period: (1) Whether we should modify the 5 percent reclassification feature of section 181(a)(4) of the CAA if we change our classification scheme to have a narrower range for each classification; (2) whether we should adopt the suggestion by commenters on the June 2, 2003 proposal that we change the 1-hour ozone threshold to 0.125 ppm rather than 0.121 ppm to determine if an area falls into subpart 1 vs. subpart 2 under classification Option 2; and (3) whether an adjustment other than 50 percent would be more appropriate for narrowing the range of each classification.

Alternatives A and B were designed to place more areas in higher classifications, which would provide areas with more time to attain but would impose additional mandatory control requirements. These alternatives also were designed to avoid or reduce instances in which a subpart 1 area could have higher 8-hour ozone levels than a subpart 2 area.

Alternative A would classify areas solely on the basis of 8-hour design values. The key feature of this alternative was that EPA would create a classification table of 8-hour values starting from an 8-hour design value that, to the extent possible, would be approximately equivalent to the 1-hour design value of 0.121 ppm in Table 1. Thus, the lowest level in the regulatory table was the 8-hour approximation of the 1-hour NAAQS as suggested by commenters,
i.e.,
0.091 ppm. Areas with an 8-hour design value less than 0.091 ppm would be covered under subpart 1. Areas with an 8-hour design value at or above this level would be classified under subpart 2. To place areas in higher classifications, we narrowed the range for each classification to use 50 percent (instead of 100 percent) of the percentages that the classification thresholds were above the 1-hour NAAQS in our proposed June 2003 translation of Table 1. In other words, since the moderate threshold for the 1-hour NAAQS is 15 percent above the 1-hour NAAQS, we would adjust the moderate threshold for purposes of the 8-hour NAAQS to be 7.5 percent above 0.091 ppm (the lowest level in Table 1 for Alternative A).

Alternative B, a modified version of Option 2, retained the first step of Option 2, where we divide the areas based on their current 1-hour design value. As in Option 2, areas with 1-hour design values exceeding the statutory 0.121 ppm level would be regulated under subpart 2. In addition, any “gap” area (
i.e.,
those with a 1-hour design value less than 0.121 ppm) with a moderate-level (or higher) design value would be classified under subpart 2. All

other gap areas would be covered by subpart 1. As with Alternative A, to place subpart 2 areas in higher classifications, we narrowed the range for each classification to 50 percent of the range in Table 1 of section 181. In other words, the moderate threshold would be 7.5 percent above the 8-hour NAAQS (0.085 ppm).

2. Summary of Final Rule

After considering all of the comments that were submitted, we are adopting Option 2. Each area with a current 1-hour design value at or above 0.121 ppm (the lowest 1-hour design value in Table 1 of subpart 2) will be classified under subpart 2 based on its 8-hour design value. All other areas will be covered under subpart 1 using their 8-hour design values.

In brief, this approach works as follows:

• First, we will determine which 8-hour areas will be covered under subpart 2 and which under subpart 1. Any area with a 1-hour ozone design value (at the time of designation) that meets or exceeds the statutory level of 0.121 ppm that Congress specified in Table 1 of section 181 will be classified under subpart 2 and will be subject to the control obligations associated with its classification.
8

Any area with a 1-hour design value (at the time of designation) that is below the level of 0.121 ppm will be covered under subpart 1 and subject to the control obligations in section 172.

8
In the Phase 2 rule, we will address the control and planning obligations that apply to areas under both subpart 1 and subpart 2.

• Second, subpart 2 areas will be classified as marginal, moderate, serious, severe or extreme based on the area's 8-hour design value (at the time of designation). Since Table 1 of section 181 is based on 1-hour design values, and application of the Table as written would produce absurd results, we are promulgating a regulation translating the thresholds in Table 1 of section 181 from 1-hour values to 8-hour values. (
See
Table 1 “Classification for 8-Hour NAAQS for Areas Subject to Section 51.902(a)” in section 51.903.)

• Third, in accordance with section 181(a)(4) and 181(b)(3), the State may request a lower or higher classification.

• Finally, as described in more detail below, section 172(a)(1) provides EPA with discretion whether to classify areas under subpart 1 and we are creating one classification—for qualifying areas affected by overwhelming transport. All other areas covered under subpart 1 will not be classified.

a.
Why did EPA select Option 2?
The EPA carefully considered the many comments we received on classification options and, in fact, sought additional input on alternatives presented and developed pursuant to comments received on the June 2003 proposal. The commenters were deeply divided on the merits of the options. Even after the conclusion of the October 2003 comment period, most commenters still favored Option 2 or Option 1. Only a few favored either Alternative A or Alternative B. Those commenters who suggested alternatives to Option 1 or Option 2 during the initial 60-day comment period did not support Alternatives A and B (which blended several suggestions from the initial comments) and they remained convinced that their suggested approach was the best classification approach.

Because the commenters were strongly divided over the appropriate classification approach, EPA re-examined the various alternatives in light of their consistency with the CAA, as interpreted by the Supreme Court, and their consistency with EPA's stated goals. While EPA believes that Options 1 and 2 and Alternatives A and B are all legally supportable under the CAA, we concluded that Option 2 best fits with the policy goals enunciated by EPA in the proposal and re-affirmed here. Thus, EPA has selected Option 2. We explain below why Option 2 will best accomplish the policy goals of EPA and why we believe it is consistent with the CAA.

(i)
Why will Option 2 best accomplish the policy goals of EPA?
One of EPA's stated goals at proposal was to provide flexibility to States and Tribes on implementation approaches and control measures within the structure of the CAA. As compared with the other alternatives considered, Option 2 places more areas under the more flexible provisions of the CAA (subpart 1), which will provide the States and Tribes with greater discretion in determining the mix of controls needed to expeditiously attain the 8-hour NAAQS. For example, Option 1 would place all areas under subpart 2, which mandates a number of specific control measures, thus limiting the States and Tribes ability to consider whether there are more effective and less costly ways to achieve the same level of emission reductions.
9

For example, an area might be able to achieve greater air quality improvement at less cost from local NO
X
reductions than from local volatile organic compounds (VOC) reductions of 15 percent mandated for certain subpart 2 areas. This will enable some areas to meet the 8-hour NAAQS at less cost than under the other classification options because the States and Tribes will have greater flexibility in determining which control requirements to adopt to meet the NAAQS. Because areas are required to attain the NAAQS as expeditiously as practicable under both subpart 1 and subpart 2, Option 2 should not result in longer attainment periods than Option 1, with the exception of areas significantly affected by transported pollution (discussed below).

9
Similarly, Alternatives A and B would result in fewer areas being placed under subpart 1. (
See
68 FR 60060, Table 2. October 21, 2003).

Additionally, placing some areas in subpart 1 provides States and EPA with greater flexibility to determine appropriate controls for areas that would have difficulty attaining the 8-hour NAAQS due to interstate pollution transport. In the 13 years since the CAA Amendments of 1990 were enacted (at which time, Congress created subpart 2), we have learned much about the long-range transport of ozone and the importance of employing regional controls in addition to local controls. Subpart 2 does not allow EPA and the States to consider transported pollution in determining the feasibility and benefits of mandated controls or in determining the appropriate attainment date for an area. Because of our increased understanding of transported pollution since Congress enacted the more restrictive provisions of subpart 2, we believe it makes sense to adopt an approach that does not shift “gap” areas into subpart 2. In other words, where Congress has not explicitly mandated that areas are subject to subpart 2, we don't believe it makes sense to adopt an approach that would shift some or all of those “gap” areas to subpart 2, which provides significantly less flexibility for bringing areas affected by transported pollution into attainment. (We discuss in more detail the flexibility provided by subpart 1 and how it better allows consideration of the current scientific knowledge regarding ozone formation and transport in the section below discussing why we place all of the “gap” areas in subpart 1.)

The EPA recognizes that the flexibility of Option 2 comes with some added complexity. One of EPA's stated goals was to establish an approach that is easy to understand. While Option 1 (classifying all areas under subpart 2) is simpler, we believe our goals regarding flexibility outweigh the simplicity of Option 1.

Another of EPA's stated aims at proposal was to ensure expeditious but reasonable attainment dates for the 8-hour NAAQS. The EPA believes that Option 2 is consistent with this

principle. Compared to Alternatives A and B, Option 2 will place more areas in lower classifications with shorter maximum attainment dates, encouraging expeditious attainment. While some commenters believed that maximum attainment dates under Option 2 would not allow enough time for some areas to meet the NAAQS, we believe that Option 2 provides sufficient time for most areas and that to the extent some areas may have difficulty, the CAA provides an avenue for relief, which is discussed below.

Based on information concerning the hypothetical nonattainment areas,
10

11

we are confident that under Option 2 most areas currently exceeding the 8-hour NAAQS will be able to meet the NAAQS within the time limits provided for their classification, taking into consideration projected improvements in air quality under current programs and the potential for adoption of further national, regional and local measures.

10
Revised: 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 in Relation to Re-Opened Comment Period—Illustrative Analysis Based on 2000-2002 Data. U.S. Environmental Protection Agency, Office of Air and Radiation, Office of Air Quality Planning and Standards. Draft. October 2003. Available at:
http://www.epa.gov/ttn/naaqs/ozone,o3imp8hr/.

11
Qualitative Assessment of Alternative Coverage and Classification Options. First Addendum to “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 Innovative Strategies and Economics Group, Air Quality Strategies and Standards Division, Office of Air Quality Planning and Standards, Office of Air and Radiation, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina. April 8, 2004.

EPA notes that there are uncertainties at this time about the time periods needed for attainment, especially for the limited number of areas needing substantial emissions reductions to attain. For example, it is difficult to determine in advance of State development of attainment plans when such an area will be able to attain the NAAQS. These plans are based on high-resolution local air quality modeling, refined emissions inventories and detailed analyses of the impacts and costs of potential local control measures.

Another factor is that new methods of achieving cost effective emissions reductions are continuing to be developed. Our repeated experience over the past three decades is that market forces stimulated by the CAA have repeatedly led to technological advances and learning through experience, making it possible over time to achieve greater emissions reductions at lower costs than originally anticipated.
12

12
For instance, the cost of selective catalytic reduction (SCR) catalyst (for control of NO
X
) has gone from $11,000—$14,000/cubic meter in 1998 to $3,500—$5,500/cubic meter currently. Advancements in low NO
X
burner (LNB) technology and staged combustion have resulted in sharp NO
X
reductions at much lower costs. New burner technologies have lowered NO
X
emissions reductions by as much as 50 percent from previous designs. Costs have decreased from $25-38/kW in 1993 to about $15/kW in 2003. Memorandum of October 10, 2003 from Jim Staudt, Andover Technology Partners, Re: Prime Contract 68-W-03-028; Subcontract Agreement 23BL00114; ATP Contract #:C-03-007.

Other uncertainties reflect use of the most recent three years of air quality data for the actual designations and classifications, and use of more refined and area-specific modeling methodologies for projecting future ozone concentrations.

Regarding the use of later air quality data, we have interpreted the CAA's requirements under section 181 such that we must classify nonattainment areas that are covered under subpart 2 based on the most recent ozone design values, which are based on three years of data. Because of year-to-year variations in meteorology, this “snapshot in time” may not be representative of the normal magnitude of problems that a number of areas face.

Regarding modeling methodologies, national/regional modeling may indicate that a number of moderate areas may face difficulty attaining the standard by the maximum attainment date required for an area's classification. However, when a State using photochemical grid modeling predicts concentrations that are above the NAAQS after application of SIP controls, an optional weight of evidence determination which incorporates, but is not limited to, other analyses, such as air quality and emissions trends, may be used to address uncertainty inherent in the application of photochemical grid models. (Issues related to implementation of the standard—including issues on the attainment demonstration and modeling—will be addressed in the second phase of rulemaking.)

We are aware that some 8-hour nonattainment areas in the Eastern U.S. that are classified moderate using 2001-2003 air quality data will have difficulty attaining the NAAQS by the attainment date of 2010 (6 years after designation). We encourage States to request reclassification upward where the State finds that an area may need more time to attain than their classification would permit. In addition, EPA will consider bumping up areas subject to the five percent provision of section 181(a)(4) of the CAA on our own initiative where there is evidence that an area is unlikely to attain within the period allowed by their classification. The rulemaking that sets forth designations and classifications for the 8-hour standard discusses criteria we would use if we take this action.

If a State finds during the attainment planning process that feasible controls are not available and an area may need more time to attain the 8-hour NAAQS than their classification would permit, the statute provides a remedy. A State can receive more time to attain by voluntarily submitting a request to EPA for a higher classification. Section 181(b)(3) of the CAA directs EPA to grant a State's request for a higher classification and to publish notice of the request and EPA's approval. Although the area would have to meet the additional requirements for the higher classification, the same would be true if the area had been initially classified higher, under a system that placed more areas in higher classifications. Voluntary reclassification may be an attractive option if the State is unable to develop a plan that demonstrates an area will attain within the time period for its assigned classification. Some commenters were concerned that it may be difficult to develop support for a voluntary reclassification among interested parties. However, we believe such dialogue will lead the State to undertake a thorough analysis and balancing of how expeditiously the area can attain the NAAQS and the cost of the measures needed for attainment as these issues will be foremost in the stakeholders' minds.

The EPA prefers Option 2 rather than the alternatives that place more areas into higher classifications because in addition to providing a longer maximum timeframe in which to attain, the higher classifications impose additional statutorily-mandated requirements. While the additional requirements might be appropriate for areas that truly need the longer period to attain, it is likely that a number of areas that do not need a longer period to attain would also be placed in a higher classification under these alternatives. For example, several areas that would be covered by subpart 1 under Option 2, and which EPA projects are likely to attain the 8-hour levels NAAQS within 3 years based on existing programs, would be classified

as moderate areas under Alternative B.
13

In those areas, the additional moderate-area control requirements are unlikely to be needed for expeditious attainment.

The EPA believes that under any of the classification approaches that were considered there will be areas that are “misclassified”—
i.e.
, the classification will not reflect the time the area needs to attain and the level of controls needed. The statute does not allow EPA to reclassify an area to a lower classification, except as provided in section 181(a)(4) regarding an initial 5 percent adjustment. It does, however, as described above, provide continuing authority for areas to be reclassified to a higher classification. For that reason, EPA believes the better approach is to use a scheme that may classify areas too low and areas that need more time to attain can use the voluntary reclassification provision of the CAA to obtain the appropriate classification.

13
Revised: 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 in Relation to Re-Opened Comment Period—Illustrative Analysis Based on 2000-2002 Data. U.S. Environmental Protection Agency, Office of Air and Radiation, Office of Air Quality Planning and Standards. Draft. October 2003. Available at:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr/.

(ii)
How is Option 2 consistent with the CAA as Interpreted by the Supreme Court?
The legal framework for Option 2 is described in detail in the June 2, 2003 proposed rule (68 FR 32813). In short, EPA relies on the Supreme Court's recognition that there is a gap in the statute with respect to areas “whose ozone levels are greater than the new standard (and thus not attaining) but less than the approximation of the old standard codified by Table 1.” Thus, for areas with a 1-hour design value above the level codified in Table 1, EPA interprets the Supreme Court as determining that the CAA mandates that they be classified under subpart 2. For all other areas, the Court indicates there is a gap and EPA must determine a reasonable approach for classifying these areas. Option 2 is consistent with the CAA as interpreted by the Supreme Court because it places all areas with a 1-hour design value of 0.121 ppm or greater in subpart 2 and, for the reasons provided below, EPA's decision to classify all “gap” areas under subpart 1 is reasonable.

As we noted in the June 2, 2003 proposal (68 FR 32814), 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.
14

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. This decision is reasonable because subpart 2 was developed by Congress 13 years ago and our scientific understanding of the causes of ozone pollution and the transport of ozone and its precursors has significantly advanced. In addition, subpart 1 was developed at the time that the 1-hour NAAQS was the NAAQS of concern. At that time, many areas had a long-term ozone problem that they had been unable to solve under the more flexible pre-1990 provisions of the CAA. The 8-hour NAAQS is different in many ways from the 1-hour NAAQS. Moreover, the areas that will be subject to subpart 1 are primarily areas that have not had the long-term pollution problem that Congress was concerned about when it created subpart 2.

14
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 NAAQS 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).

Congress enacted subpart 2 with the understanding that all areas (except marginal areas, for which few, if any, controls for existing sources were required) would have to employ additional local controls to meet the 1-hour ozone NAAQS in a timely fashion. Since then, many local, regional and national 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 to address transported pollution (the NO
X
SIP call, October 27, 1998, 63 FR 53756). Today, regional modeling by EPA indicates that the majority of potential 8-hour nonattainment areas that fall into the gap will attain the 8-hour NAAQS 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.

Some gap areas would be classified as moderate areas if placed under subpart 2. The EPA regional modeling shows that many of these are projected to attain by 2007 through existing regional or national measures. (The proposal provides estimates of the numbers of areas,
see
68 FR 32814, col. 3).
15

If these areas were to be classified as moderate, they would be required to implement statutorily specified controls for moderate areas. We believe it is reasonable to adopt an approach that would not mandate new local controls in areas projected to meet the NAAQS within 3 years through emissions reductions required by existing programs.

15
See also: 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/.

Some commenters contended that placing these areas in subpart 1 created an “equity” problem because other areas with a similar 8-hour ozone design value would be placed under subpart 2. The EPA considered this issue when it reopened the comment period and set forth alternatives that would have placed areas with similar 8-hour design values in the same classification. While in one light such a situation may be perceived as inequitable, EPA believes that this is generally not the case. As an initial matter, EPA notes that the areas that fall under subpart 2 are areas with higher ozone 1-hour peak concentrations—
i.e.
, areas with levels above the 1-hour NAAQS.
16

Thus, the areas classified under subpart 1 do not have the same type of ozone problem as those classified under subpart 2 and the same control programs may not be needed for both types of areas. We note that the areas that will be classified under subpart 2 are the type of area that Congress considered at the time that it developed subpart 2 and it is more likely that subpart 2 will provide benefits for these areas. We also note that in the proposed rule, we proposed several ways to make the obligations under subpart 1 similar to those under subpart 2 for areas with a similar ozone problem. Thus, there are other means to address any inequities; EPA will

consider equity and other factors in deciding control requirements for subpart 1 areas in Phase 2.

16
For instance, the range of 1-hour ozone design values of the hypothetical subpart 1 areas is from 0.101 ppm to 0.120 ppm, with an average of 0.111 ppm. The range of 1-hour design values of subpart 2 areas is from 0.122 ppm to 0.175 ppm with an average of 0.133 ppm. See docket document OAR-2003-0079-0573 (REVISED: Background Information Document, Hypothetical Nonattainment Areas for Purposes of Understanding the EPA Proposed Rule for Implementing the 8-hour Ozone NAAQS in Relation to Re-Opened Comment Period) for the data used for these statistics.

Most of the gap areas would be classified as marginal if classified under subpart 2 by 8-hour design value.
17

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 distinction in regulatory category may make no practical difference for many of these areas. However, placing these areas under subpart 1 provides States and EPA with greater discretion to handle implementation difficulties that might arise in some of these areas. For example, a gap area might be unable 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 would call 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 that interstate or intrastate pollution transport may make timely attainment difficult for some 8-hour areas with near-term attainment deadlines (
e.g.,
2007). Subpart 1 would provide States and EPA with more flexibility on the remedy in any such cases, while still requiring that subpart 1 areas adopt all reasonably available control measures to attain as expeditiously as practicable.
18

Some may perceive the placement of gap areas in subpart 1 (based on their 1-hour design values) as inequitable compared to placing other areas that have similar 8-hour design values in subpart 2 (based on their 1-hour design values). We do not believe, however, that it makes sense to limit our authority by placing gap areas in subpart 2 even though they may have 8-hour design values similar to areas that will be classified under subpart 2.

17
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/.

18
Concern about transport is supported by EPA's modeling for the Interstate Air Quality Rule (69 FR 4566, January 30, 2004); EPA has proposed to find that in the absence of further controls, 25 States would significantly contribute to downwind nonattainment in other States in 2010, even after the NO
X
SIP Call has been in full effect. As a result, EPA has proposed to require the 25 States to reduce their emissions of NO
X
to reduce interstate transport, with the reductions to be achieved by 2010 and 2015.

An advantage of Alternatives A and B was that they avoided or reduced equity concerns raised by some commenters with Option 2. Regardless, we believe that equity considerations should not override other considerations in determining how to best help areas attain the 8-hour NAAQS. Congress mandated that areas with 1-hour ozone levels above the level 0.121 ppm be classified under subpart 2. However, Congress did not specifically address the areas that fall into the “gap.” Where Congress has left to EPA's discretion how to classify areas, we believe that factors we have considered above
19

outweigh any desire for “equity.”

19
These include trying to meet the following objectives as discussed above: (a) Providing flexibility in determining the most effective control; (b) achieving attainment at costs lower than those for strategies with prescribed measures; (c) providing flexibility in addressing nonattainment areas that are have difficulty attaining due to transport; and (d) ensuring expeditious but reasonable attainment dates.

Additionally, we note that since 1990 we have learned that NO
X
control is more important for many areas than was recognized at the time of the 1990 CAA Amendments. Some mandatory measures in subpart 2, such as the 15 percent VOC reduction required for certain areas, focus on VOC reductions. In some areas it will be more effective and less costly to reduce ozone through a strategy that places more emphasis on NO
X
than VOC, and a 15 percent VOC reduction may not be part of an optimal strategy. Subpart 1 would allow such areas greater flexibility on choice of controls.

In summary, Option 2 meets the policy goals EPA specified in the proposal—most importantly, providing flexibility, and encouraging expeditious attainment of the NAAQS—and is consistent with the Supreme Court's ruling. Commenters were divided on the merits of different classification approaches and no single option appealed to a large majority of stakeholders. On balance, EPA determined that Option 2 was preferable to the other options identified. Thus, EPA is adopting Option 2.

3. Comments and Responses

This preamble briefly summarizes major comments on each portion of the Phase 1 rule and generally provides a brief response to those comments. The response to comment (RTC) document presents a more complete description of comments received and a more complete response to those comments.

Comment:
The commenters were split on whether they preferred Option 1, under which all areas are classified under subpart 2 of the CAA, or Option 2, under which 8-hour nonattainment areas with 1-hour ozone design values of 0.121 ppm or greater at the time of designation are classified under subpart 2 and all other 8-hour nonattainment areas are classified under subpart 1. Those who supported Option 2, indicated it made better policy sense, was more flexible and more appropriate than Option 1, cost less, was better integrated with other regulations, provided more reasonable attainment dates, and was more consistent with the Supreme Court decision. A number of commenters supported Option 2, but recommended variations of that approach. These commenters raised one (or both) of two concerns with the approach recommended by EPA: (1) Since most of the areas fall into the lower classifications with short-term attainment dates, it does not provide sufficient time for many areas to attain; and (2) since some areas classified under subpart 1 will have a more severe 8-hour ozone problem than some areas classified under subpart 2, Option 2 is or may be perceived as inequitable. In addition, several commenters recommended options different than either of the options proposed by EPA.

Those who favored Option 1 argued that it was more consistent with the Supreme Court's decision and the CAA, that Subpart 2 was more likely to produce progress and faster attainment, was more consistent with Subpart 2 of the CAA, was more equitable and fair, and that Subpart 1 had other problems that made it less desirable.

Some commenters claimed both Options 1 and 2 were flawed, based on concerns about transport and concerns related to the Supreme Court decision. We received comments on the translation of Section 181's Table 1. These comments addressed the concerns such as: the proposed translation could result in attainment deadlines which are unrealistic and unachievable; it would be more logical and more consistent with the nature of the standard being implemented—the 8-hour standard—for EPA to translate the Table 1 thresholds into approximate 8-hour equivalents; and the starting threshold should be different from what EPA proposed. Some commenters

offered other alternatives for the translation and/or the starting threshold.

There were several specific comments related to the draft regulatory text.

Our rationale for adopting Option 2 as the final classification approach is presented above. Below is a brief synopsis of the response to major comments.

Response to Comments Supporting Option 2:
We generally agree with these comments and the final rule incorporates Option 2.

Response to Comments that Supported Option 2, But Recommending Variations That Would Provide More Time for Attainment:
Based on our projections of future air quality based on regional modeling and experience with ozone control in the past, we believe that States may find during the attainment planning process that a limited number of areas may need more time to attain the 8-hour NAAQS than their classification would permit. However, the statute provides a remedy for this situation. A State can receive more time to attain by voluntarily submitting a request to EPA for a higher classification—including the classification they had under the 1-hour NAAQS. The CAA (Section 181(b)(3)) directs EPA to grant a State's request, and to publish notice of the request and EPA's approval. Although the area would have to meet the additional requirements for the higher classification, the same would be true if the area had been initially classified higher, under a classification system that placed more areas in higher classifications. The EPA recognizes that voluntary reclassification is a legitimate option under the CAA, and may be an attractive option if the State is unable to develop a plan that demonstrates an area will attain within the time period for its assigned classification. As noted in the October 21, 2003 notice reopening the comment period, we considered other classification approaches, including those suggested by commenters and EPA's Alternatives A and B, which would provide more areas with later attainment dates by placing more areas in higher classifications. However, EPA found that alternatives that provided more time to the areas with the worst ozone problems also provided higher classifications, accompanied by additional statutorily-mandated requirements, for areas that EPA believes may attain by the 2007 ozone season based on projected emissions reductions from existing programs. Under these approaches, these areas would be subject to controls that may not be necessary for attainment. The EPA believes it is more appropriate to use the statutory mechanism for a voluntary bump up for areas classified “too low” than to mandate controls for areas based on a classification that is “too high.”

Response to Comments that Noted that Option 2 May Be Perceived as Inequitable:
A number of other commenters dismissed the characterization of Option 2 as being inequitable. The EPA's response to the equity issue is discussed above.

Response to Comments that Recommended Options Different than the Options Proposed by EPA:
Certain commenters suggested that areas still not meeting the 1-hour NAAQS should continue to implement the 1-hour NAAQS under subpart 2, but once the NAAQS is attained (or all mandated controls were implemented) the area would implement the 8-hour NAAQS under subpart 1. All areas attaining the 1-hour NAAQS would begin implementing the 8-hour NAAQS under subpart 1.

As explained more fully in the response to comments (RTC) document, EPA does not believe this approach is consistent with the CAA or the Supreme Court's decision on implementation of a revised ozone NAAQS. The issue before the Court was whether the classification provisions of subpart 2 apply for purposes of implementing the revised 8-hour ozone NAAQS. The Court unequivocally stated that those provisions do apply for purposes of implementing the 8-hour ozone NAAQS. 531 U.S. 482-84. We believe that any option that does not provide a role for the subpart 2 classification structure in implementing the 8-hour NAAQS is not consistent with the Court's interpretation of the CAA.

Commenters suggested several other options, some of which were described in our notice reopening the public comment period. Under one of these options, we would reduce the range for the subpart 2 classifications, which would have classified more subpart 2 areas in higher classifications, thereby extending the maximum period for attainment. We have addressed the problems associated with that kind of classification structure above. Under another of these options, the classification structure would have relied solely on 8-hour ozone design values. This approach was a variant of Option 2 in which all areas with 8-hour design value of less than a value that is equivalent to the 1-hour value of 0.121 ppm would be covered by subpart 1. This variant of Option 2 has the effect of moving source areas from Subpart 1 to Subpart 2 and at the same time placing more Subpart 2 areas in lower classification categories. The Subpart 2 areas placed in these lower classification categories would be subject to fewer mandatory requirements. However, EPA believes that this approach would increase the number of areas for which the initial classification would not provide sufficient time to attain.

The EPA's assessment of these and other options is included in the RTC document.

Response to Comments that Favored Option 1 and Argued that it was More Consistent with the Court Decision and the CAA:
We believe Option 2 is a reasonable method for addressing the gaps that the Supreme Court recognized in the CAA. Option 2 provides more flexibility than Option 1 to States and Tribes to design strategies to meet the 8-hour ozone NAAQS in the most effective and least costly way considering local circumstances, while requiring and providing incentives for expeditious attainment of the health-based NAAQS. Since Option 1 would require all 8-hour nonattainment areas to be covered under subpart 2 with its set of prescriptive control measures, it would generally cost more but would not require attainment any more expeditiously than Option 2. Both subpart 1 and 2 require attainment dates “as expeditious as practicable” regardless of the maximum attainment dates specified in the CAA.

We believe that Option 2 is consistent both with the CAA and the Supreme Court's decision in
Whitman
as described above and in the June 2, 2003 proposed rule (68 FR 32813). In short, EPA relies on the Supreme Court's recognition that there is a gap in the statute with respect to areas “whose ozone levels are greater than the new standard (and thus not attaining) but less than the approximation of the old standard codified by Table 1.” Thus, for areas with a 1-hour design value above the level codified in Table 1, EPA interprets the Supreme Court as determining that the CAA mandates that they be classified under subpart 2. For all other areas, the Court indicates there is a gap and EPA must determine a reasonable approach. For the policy reasons specified above, in the RTC and in the preamble to the proposed rule (68 FR 32814-15), EPA believes it is reasonable to address these “gap” areas under subpart 1.

Response to Comments Asserting that EPA does not have Authority to Modify Table 1 to Reflect 8-Hour Ozone Values:
We disagree with those commenters who claim EPA does not have authority to modify Table 1 in section 181(a) to

reflect 8-hour design values. We acknowledge that EPA is applying the statute other than in the way it is written. We believe we have authority to do so because to apply it as written would produce absurd results. In enacting the classification structure in subpart 2, Congress linked the severity of an area's air quality problem with the time needed to attain and the stringency of the controls that an area would be required to adopt. Thus, areas with a more significant air quality problem were granted more time to attain the NAAQS, but were also subject to more stringent controls. If we applied Table 1, as written, for purposes of the 8-hour NAAQS, the classification scheme would not be related to the severity of the area's 8-hour ozone problem.

If 1-hour values were used to classify 8-hour nonattainment areas based solely on Table 1 as presented in section 181 of the CAA, there would be 2 serious areas, 9 moderate areas, and 26 marginal areas.
20

Unlike other areas, marginal areas (as explained elsewhere) are not subject to the requirement for attainment plans to ensure that they identify and adopt the controls necessary for attainment by their attainment date. Based on EPA's modeling projections of future ozone levels and past experience working with states on ozone SIPs, EPA believes it is clear that most of the areas that would be marginal if classified by 1-hour design value would fail to attain the 8-hour standard without additional local controls by the spring 2007 attainment date for marginal areas. These include major cities with elevated 8-hour ozone levels such as Chicago and Dallas-Fort Worth. In fact, over a quarter of these areas that would be marginal if classified by 1-hour design values were not projected to attain the 8-hour NAAQS without additional local controls even by 2010. The projection that many of these areas would not attain by 2010 without additional controls is further evidence they would not attain in 2007 without further controls. Thus, for many areas, classifying by 1-hour design value would not reflect the severity of their 8-hour ozone problem or the time needed to attain.

20
Based on data from: Revised: 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 in Relation to Re-Opened Comment Period—Illustrative Analysis Based on 2000-2002 Data. U.S. Environmental Protection Agency, Office of Air and Radiation, Office of Air Quality Planning and Standards. Draft. October 2003. Available at:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr/
.

An additional problem is that the practical effect of placing many areas that cannot attain by 2007 into the marginal classification would be to delay development of plans for improving air quality to meet the 8-hour standard. This would be inconsistent with Congress's intent, reflected in the requirements of the Act, that areas attain air quality standards as expeditiously as practicable. Rather, Congress intended classifications to approximate the attainment needs of areas. In this circumstance, it is appropriate for EPA to make, by way of regulation, a limited modification to Table 1 to reflect Congressional intent.

We recognize that even under the approach adopted by EPA, some of the same anomalies will be created. For example, some areas may need more time to attain than provided by the area's initial classification. However, these anomalies are more limited because the classifications more appropriately recognize an area's 8-hour ozone problem. As noted above in our discussion on the basis for selecting Option 2, we believe the statutory mechanisms such as voluntary bump ups can address these inequities in the limited situations in which they arise. In comparison, if 1-hour values were used to classify 8-hour nonattainment areas based solely on Table 1 as presented in section 181 of the CAA, there would only be 2 serious areas, 9 moderate areas, and 26 marginal areas. This is a much different distribution than using Option 2, in which there would be more areas in the higher classifications (1 severe-17, 4 serious, 21 moderate) and far fewer (11) marginal areas. And, under the adopted approach, the distribution under subpart 2 is based on the area's 8-hour design value not its 1-hour design value.
21

21
Based on data from: Revised: 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 in Relation to Re-Opened Comment Period—Illustrative Analysis Based on 2000-2002 Data. U.S. Environmental Protection Agency, Office of Air and Radiation, Office of Air Quality Planning and Standards. Draft. October 2003. Available at:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr/
.

Response to Comments Favoring Option 1 Arguing that Subpart 2 was more Likely to Produce Progress and Faster Attainment:
Other commenters raised concerns that because subpart 1 is less prescriptive than subpart 2 and potentially allows later attainment dates for the less polluted areas, areas will not in fact attain the 8-hour NAAQS as quickly under subpart 1 as they would be required to do under subpart 2. As evidence, these commenters point to the past failure of areas to attain the ozone NAAQS prior to the enactment of subpart 2 in 1990. We disagree.

Subpart 1 and subpart 2 both require areas to attain the 8-hour ozone NAAQS as expeditiously as practicable. Thus, the intention of the CAA is that regardless of whether an area is covered under subpart 1 or subpart 2, it must achieve clean air on the same schedule—
i.e.
, as expeditiously as practicable. In addition, CAA section 172(c)(1) requires that a SIP for a nonattainment area “* * * shall provide for implementation of all reasonably available control measures [“RACM”] as expeditiously as practicable * * * and shall provide for attainment of the [NAAQS].” In reviewing SIPs for approvability under subpart 1, we will evaluate whether the emission control measures in the SIP and the timing of implementation comports with the RACM and attainment provisions to ensure all RACM are adopted and implemented as expeditiously as practicable and that the attainment date is as expeditious as practicable. Subpart 1 sets an initial outside attainment date of 5 years following designation for the 8-hour NAAQS.

Subpart 2 sets the earliest outside attainment date as 3 years following designation
22

for marginal areas. Under subpart 2, marginal areas are not required to submit attainment demonstrations and, for all practical purposes, are not required to adopt additional local controls for existing sources.
23

Thus, in general, Congress anticipated that these areas would come into attainment within 3 years without significant additional local controls. We believe that most areas covered under subpart 1 with air quality problems similar to marginal areas will in fact come into attainment with the 8-hour

NAAQS on a similar timeframe as areas classified as marginal (
i.e.
, 3 years following designation).
24

In fact, we believe the prospects for near-term attainment based on existing programs are more favorable now than they were in 1990 because national and regional control programs already in place will achieve substantial reductions in NO
X
and VOC emissions prior to May 2007. These include the regional NO
X
SIP Call, which mandates interstate transport controls for certain States by May 31, 2004 (63 FR 53756, October 27, 1998); progressively more stringent emissions standards for new cars and light-duty trucks issued since 1990, most recently the Tier 2 motor vehicle emission standards, and associated sulfur-in-gasoline requirements (65 FR 6698, February 10, 2000); and the heavy duty diesel rule (66 FR 5002, January 18, 2001).

22
As provided below, in the section regarding attainment dates for the 8-hour ozone NAAQS, subpart 2 actually specifies that the attainment period runs from the date of the 1990 CAA Amendments rather than the date of designation. However, as we explain in the attainment date section, for purposes of 8-hour NAAQS, we believe Congress intended those dates to run from the date of designation.

23
The only control obligations mandated for marginal areas are that they fix flaws in their RACT rules and their I/M programs that existed at the time of the 1990 CAA Amendments. Areas designated nonattainment for the 1-hour NAAQS, which were the areas with the pre-90 RACT and I/M obligations, have already made these corrections. It is unlikely that any areas designated nonattainment for the 8-hour NAAQS will not have already made these corrections if they have such programs in place.

24

See
68 FR 32814.

For areas covered under subpart 1 with an air quality problem similar to subpart 2 moderate areas, the presumptive maximum attainment date will be 1 year earlier—
i.e.
, 5 years following designation rather than 6 years. To receive a later attainment date, section 172(a)(2)(A) requires such areas to demonstrate more time is needed based on the severity of nonattainment and the availability and feasibility of pollution control measures. As to the first factor—severity of nonattainment—EPA believes that it would be difficult to justify providing a period longer than 6 years since similar areas classified under subpart 2 would not have a longer time to attain. Thus, such an area would need to demonstrate that the availability and feasibility of control measures (including those mandated under subpart 2) would justify an extension longer than 6 years. A similar analysis would apply if an area with an even more significant air quality problem were covered under subpart 1. For this reason, we do not believe that public health concerns support classifying all areas with similar air quality under subpart 2.

4. Under the Final Classification Approach, How Will EPA Classify Subpart 1 Areas? (Section VI.A.4. of Proposal; 68 FR 32813; Section 51.904 of Draft and Final Rules)

a.
Background.
Section 172(a)(1) provides that EPA has the discretion to classify areas subject to subpart 1. We proposed two options with respect to classifications for areas subject only to subpart 1 (68 FR 32813). First, we proposed to create no classifications. Second, we proposed to create one classification—an interstate overwhelming transport classification for areas that submit a modeled attainment demonstration showing the area's nonattainment problem is due to overwhelming transport and that meet the definition of a rural transport area under section 182(h) of the CAA. As we noted in the June 2, 2003 proposal, 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.

b.
Summary of final rule.
We are adopting the second option but modified as a result of comments. We are creating an overwhelming transport classification that will be available to subpart 1 areas that demonstrate they are affected by overwhelming transport of ozone and its precursors and demonstrate they meet the definition of a rural transport area in section 182(h). However, areas would not have to demonstrate that transport was due solely to sources from outside the State (interstate transport) as was implied by the June 2, 2003 proposal. All other areas that do not qualify for the overwhelming transport classification would not be classified. In addition, an area may consider the effects of international transport of ozone and precursors in determining if the area is affected by overwhelming transport.

An overwhelming transport classification will accomplish several purposes. One purpose is to communicate to the public the need for an attainment date to account for the control timetable for upwind areas whose emissions are overwhelmingly contributing to the area's nonattainment problem. An area will be classified as an “Overwhelming Transport Area” upon full approval of an attainment demonstration SIP that demonstrates, using EPA-approved modeling, that the nonattainment problem in the area is due to “overwhelming transport,” as set forth in guidance. The area must also meet that part of the definition of a rural transport area in section 182(h) that requires that an area not be in or adjacent to a Consolidated Metropolitan Statistical Area (CMSA).

In approving an attainment date for the area, EPA will consider: (1) The attainment date of the upwind nonattainment area or areas that contribute to the downwind area's problem; and (2) the implementation schedule for upwind area controls, regardless of their geographic scope (
e.g.
, national, regional, statewide, local).

In the June 2003 proposal, we proposed that such areas would be subject to requirements similar to those that apply to areas classified as marginal under subpart 2. We are considering the comments we received on the issue of applicable requirements for these subpart 1 areas and will address this issue after we issue guidance on assessment of overwhelming transport.

In addition, the proposed rule also indicated that we could consider more flexibility for conformity for such areas. In our proposed transportation conformity rule published on November 5, 2003 (68 FR 62690), we did not propose any specific conformity flexibility for areas affected by ozone transport. However, many of the proposed options, including the types of emissions tests used in conformity, would be available to areas affected by transport, as well as other types of 8-hour ozone areas. In addition, the existing transportation conformity rule already provides flexibility in such things as transportation modeling requirements for smaller areas with less severe local air quality problems. Also, EPA intends to propose in a few months more flexible NSR provisions that would apply in such areas.

We believe the overwhelming transport classification for areas covered under subpart 1 is consistent with the CAA and is reasonable. We believe that the classification should be restricted to rural areas because these areas will generally not have significant sources of emissions to control and therefore are not likely to contribute much to their own nonattainment problem. There are exceptions, of course, such as rural areas with large sources such as power plants, but such areas would also need to meet the other criteria for the classification, such as not contributing significantly to nonattainment in other areas.

In determining an attainment date for areas classified as “transport,” we would apply the criteria in section 172(a)(2)(A). The second criterion in section 172(a)(2)(A)—the availability

and feasibility of control measures—will allow EPA to consider the effects of transported pollution in setting an appropriate attainment date for these areas of no later than 10 years following designation.

We recognize that there may be areas affected by transport that don't meet the definition of rural transport. However, in determining attainment dates for areas under section 172(a)(2)(A), we can consider the availability and feasibility of control measures; thus, areas that do not meet the definition of a rural transport area should be able to adopt an attainment date that reflects the time period for reductions in upwind areas that are contributing to nonattainment.

The EPA decided not to exercise its discretion to create additional classifications for subpart 1 areas. We do not believe another classification is necessary for expeditious attainment of the 8-hour NAAQS for these other subpart 1 areas.

The final rule (section 51.904(a)) provides for a subpart 1 area to be classified as an overwhelming transport area if it meets the criteria as specified for rural transport areas under section 182(h) of the CAA and overwhelming transport guidance that we will issue in the future. Although EPA's June 2, 2003 notice referenced an EPA guidance document as the criteria for determining the contribution of sources in one or more other areas are an overwhelming cause of an area being designated nonattainment, we believe that guidance needs to be updated. Thus, we are retracting our previous guidance and will issue revised guidance. We plan to address control requirements applicable to these areas in Phase 2.

c. Comments and Responses

Comment:
Most of the commenters who commented on classifications for subpart 1 areas objected to the requirement that to receive an overwhelming transport area classification an area must demonstrate that it is a rural transport area. Many of these commenters pointed out that there are a number of areas that do not meet that definition and that do not generate a significant portion of emissions that contribute to the area's nonattainment problem. Some also stated that the CAA does not mandate this as a criterion and thus the test was unduly restrictive. These commenters asked that the availability of the overwhelming transport classification be based only on whether an area is a victim of overwhelming transport.

Response:
The CAA does not mandate that an area be considered rural in order to receive an overwhelming transport classification under subpart 1. However, we believe that areas that are not rural, even if they are affected to a significant degree by transport, in general contribute at least some degree to their own and likely to other areas' nonattainment problems. The final rule, therefore, is as proposed—the overwhelming transport classification is only available to areas that meet the criteria for rural transport areas under section 182(h) of the CAA.

Comment:
One commenter suggested EPA provide increased flexibility for areas that would be classified as nonattainment, primarily for reasons related to transport. A special category for transport areas, should be created for areas that are in attainment of the 1-hour standard but, if not for the impact of transport, would not be in violation of the new 8-hour standard. The regulatory requirements for transport area should be minimal and required compliance dates should extend out at least as long as the upwind states.

Response:
We note that 8-hour ozone nonattainment areas covered under subpart 1 generally will be close to attaining the 1-hour standard. We believe the criteria used to determine overwhelming transport will invariably result in a situation where an area subject to overwhelming transport would be in attainment of the standard but for transport. Subpart 1 provides a maximum of 10 years from the effective date of nonattainment designation for attainment. We note, however, that if such an area believes that it would need an attainment date longer than 10 years, it could request to be reclassified under subpart 2 to a classification with a longer attainment date. The area would, of course, have to meet the requirements of its subpart 2 classification (either its requested classification or the rural transport classification if it so qualifies).

5. Will EPA Adjust Classifications? (Section VI.A.9. of Proposal; 68 FR 32816; Section 51.903(b) and (c) of Final Rule)

a.
Background.
Under sections 181(a)(4) and 181(b)(3), an ozone nonattainment area may be reclassified to the next higher or lower classification. Section 181(a)(4) of the CAA states:

If an area 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.

Section 181(b)(3) requires the Administrator to grant the request of any State to reclassify a nonattainment area in the State to a higher classification.

b.
Summary of final rule.
We are adopting the approach we included in the proposal. For areas subject to subpart 2, section 181(a)(4) of the CAA 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. If, for example, an area is subject 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. In addition, section 181(b)(3) requires the Administrator to grant the request of any State to reclassify a nonattainment area in the State to a higher classification.

Section 51.903 was revised from the initial draft regulatory text language to add the reclassification provisions in section 181(a)(4) and 181(b)(3).

c. Comments and Responses

Comment:
Several commenters supported the use of provisions in section 181(a)(4) to allow adjustment of a classification. Comments indicated that this approach could result in cost savings in cases where the increased controls of the higher classification would not be needed for attainment. One commenter noted that the Administrator should consider several factors in making the adjustment under section 181(a)(4), including the number of exceedances of the NAAQS and complexity of the problem. The commenter requested that EPA explain how the Administrator would make this decision and the process that will be used. Another commenter recommended that the actual test of compliance with the provisions of section 181(a)(4) should include allowance for meteorological fluctuation in order to avoid States having to meet an average design value well below the NAAQS before deemed in compliance.

Response:
The EPA's guidance on the 5 percent bump down provision in section 181(a)(4) is contained in the November 6, 1991
Federal Register
(56 FR 56698) which established the initial

designations and classifications. In a separate
Federal Register
notice, EPA will invite States to submit bump down requests. The EPA will describe the criteria (including any changes from the 1991 criteria) for approval of 5 percent bump downs in that notice and will provide at least a 30-day period for States to submit their requests. Section 181(a)(4) authorizes the Administrator to adjust a classification within 90 days after the initial classification. The EPA continues to believe, as provided in the June 2, 2003 proposal, that section 181(a)(4) does not provide a basis for an area to move from subpart 2 to subpart 1.

6. Proposed Incentive Feature (Section VI.A.6. of Proposal; See 68 FR 32815; 51.903(b) of Draft Rule)

a.
Background.
In the proposed rule (68 FR 32815), we sought comment on a classification feature that would allow areas classified under subpart 2 to qualify for a lower classification upon a demonstration the area would attain the 8-hour NAAQS by the earlier attainment date of a lower classification. For example, an area that would be classified “moderate” based on its 8-hour design value would qualify for a “marginal” classification by demonstrating it would attain the 8-hour NAAQS within 3 years of designation.

b.
Summary of final rule.
We are not including the proposed incentive feature in the final rule. We received numerous adverse comments on the idea, raising both legal and policy issues. Because we agree as a policy matter that we should not adopt the incentive feature, we do not reach the legal issue of whether the statute grants such authority. Our basis for this decision is provided more fully in the RTC document, portions of which are excerpted below. In short, we believe that only a few areas would have benefitted from this proposal considering the flexibility already available under classification Option 2, and we believe that the difficulties in developing and implementing such an approach outweigh any benefits. In particular, commenters on the June 2, 2003 proposal were concerned that we did not identify the type of modeling that areas could rely on to take advantage of this option. While we had not identified in the June 2, 2003 proposal the type of modeling that could be used, we had referenced our current modeling guidance in the draft regulatory text which was published on August 6, 2003. Additionally, we believe it would be very difficult for an area to have completed the necessary modeling and for us to approve such a SIP submission much in advance of the attainment date for a marginal area. Further, if the area did not meet that attainment date, it would need to begin the modeling process over again almost immediately. We now believe that it makes more sense for the area to prepare the modeling required for its higher classification and, if the area attains the NAAQS earlier than the attainment date for its classification, our Clean Data Policy
25

will provide relief from RFP requirements.

25
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.

c. Comments and Responses

Comment:
About half the commenters that addressed this issue opposed the incentive feature. These comments originated mainly from environmental organizations and some State and local air pollution control agencies and organizations. Many of these commenters questioned the legal basis for such a feature and also believed modeling is too inaccurate or unreliable to be used for classification purposes. They believed that monitoring data should be the sole basis for classifications. The other comments received on this issue supported the incentive feature. These comments originated mainly from industrial representatives and organizations, as well as several State and local air agencies and transportation agencies and organizations.

Response:
Our analysis indicates that the incentive feature would not have helped very many areas. Of 21 hypothetical nonattainment areas classified as moderate (based on 2000-2002 air quality data), our modeling projects that only 3 would have qualified without first adopting further controls. No serious or higher classified area would have qualified without further controls. Very few areas would even receive a classification higher than moderate. In addition, even if we adopted this approach, we do not believe there would have been enough time for areas seeking a marginal classification to submit a plan with local controls that demonstrate attainment by a Spring attainment date in 2007 and implement the controls by the Spring of 2006. In addition, we would have to develop guidance for the demonstration. Furthermore, although many commenters supported having the feature, many other commenters objected to the feature on a number of grounds. Because of the difficulties involved in administering such a program, the unfavorable timing, and the anticipated low number of areas that could benefit from the feature, we are not incorporating the feature in the final rule.

A number of commenters who opposed the feature contended that the approach was not supported by the CAA. Since we are not adopting the feature in the final rule on policy grounds, we do not address the legal issues here.

B. How Will EPA Treat Attainment Dates for the 8-Hour Ozone NAAQS? (Section VI.B. of Proposal; See 68 FR 32816; 51.903 and 51.904 Draft and Final Rules)

1. Background

Under Subpart 2 of the CAA, maximum attainment 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 provided in Table 1 for that area's classification. The statutory dates are specified as a set number of years from the date of enactment of the CAA Amendments of 1990. Since a strict application of Table 1 would produce absurd results for most areas (
i.e.
, areas classified as marginal would have a November 15, 1993 attainment date, moderate areas would have a November 15, 1996 attainment date, etc.), we are promulgating a targeted revision of Table 1 to reflect attainment dates consistent with Congressional intent.

While the attainment dates in Table 1 are expressly linked to the date of enactment of the CAA Amendments of 1990, this is also the date on which most areas were designated and classified as a matter of law. In addition, as explained in the preamble to the proposed rule (68 FR 32817), other provisions of the CAA specify that the date for attainment shall run from the date of designation and/or classification as a matter of law for an area. Consistent with this, we proposed that the starting point for the set timeframes for attainment would be the date an area is designated and classified for purposes of the 8-hour NAAQS.
26

Thus, for example, an area classified as marginal for the 8-hour NAAQS would have up

to 3 years from designation to meet that NAAQS and a moderate area would have up to 6 years from designation to attain.

26
As explained in our proposed rule, areas will be classified as a matter of law at the same time they are designated; thus, we simply refer to “designation” rather than designation and classification.

For areas covered under subpart 1, attainment dates are 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, with up to 10 years after designation permitted if the severity of the area's air pollution and the availability and feasibility of pollution control measures indicate more time is needed. In the draft regulatory text, we provided that EPA would establish the attainment date for an area at the time we approve the area's attainment demonstration.

2. Summary of Final Rule

We are adopting the time periods for attainment that we proposed for areas under both subpart 1 and subpart 2 of the CAA. For areas subject to subpart 2 of the CAA, the maximum period for attainment will run from the effective date of designations and classifications for the 8-hour NAAQS and will be the same periods as provided in Table 1 of section 181(a):

• Marginal—3 years,

• Moderate—6 years,

• Serious—9 years,

• Severe—15 or 17 years, and

• Extreme—20 years.

We are adopting this approach because applying the table, as written, would produce absurd results. For the reasons above and discussed in the preamble to the proposed rule, we believe it is consistent with Congressional intent to begin the time periods for attainment specified in Table 1 in section 181(a) at the time of designation and classification.

Consistent with section 172(a)(2)(A), for areas subject to subpart 1 of the CAA, the period for attainment will be no later than 5 years after the effective date of the designation. However, EPA may grant an area an attainment date no later than 10 years after designation, if warranted based on the factors provided in section 172(a)(2)(A). The EPA will establish an attainment date for each subpart 1 area at the time we approve an attainment demonstration for the area.

3. Comments and Response

Comment:
Several commenters reiterated the CAA's requirement that areas attain the NAAQS as “expeditiously as practicable.” They felt that the attainment deadlines in the proposed rule would impede the progress that areas have made and would subject the general public to years of unhealthy air quality. One commenter suggested that EPA create enforceable short-term compliance dates to assure citizens of downwind States that upwind States are meeting their longer-term compliance deadlines. Other commenters felt that the attainment dates under both subpart 1 and 2 that were proposed did not provide enough time for areas to attain for a number of reasons, such as: areas would not be able to take credit for emissions reductions from Federal measures, the slow turnover of mobile source fleets would not achieve the needed mobile source reductions in the timeframes proposed, EPA's Clear Skies modeling shows that a number of areas in the mid-Atlantic and northeast will not come into attainment before the middle of the next decade, it would not be feasible to have stationary and mobile source controls in place 3 years before the attainment dates for purposes of monitoring, etc. However, a number of commenters agreed with EPA's proposal to establish attainment dates that correspond to the timeframes established under subpart 2 of the CAA from the date of 8-hour nonattainment designations. In addition, one commenter stated that the proposal did not clearly address how attainment dates for subpart 1 areas would be set. Finally, several commenters recommended that EPA change the attainment dates to November or December of the attainment year rather than in April so areas can use the ozone season air quality data from the attainment year to demonstrate attainment.

Response:
As stated in our June 2, 2003 proposal, under subpart 2 of the CAA, maximum attainment 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 dates were specified as the number of

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A04-9153. Public record. Not legal advice.