Clean Air Act Section 182(f) NOINFX Exemption Petition; Monterey Bay Ozone Nonattainment Area

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA-82-1-6926; FRL-5195-9]

Clean Air Act Section 182(f) NOX Exemption Petition;

Monterey Bay Ozone Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is finalizing the approval of a petition submitted by

the Monterey Bay Unified Air Pollution Control District (MBUAPCD)

requesting that EPA grant an exemption for the Monterey Bay ozone

nonattainment area (Monterey Bay) from the section 182(f) requirement

to control major stationary sources of oxides of nitrogen (NOX)

emissions. EPA published a proposed action to approve the Monterey Bay

NOX exemption in the Federal Register on December 20, 1994. In

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

1990 (the Act or CAA), the EPA has determined that additional NOX

reductions from major stationary sources in Monterey Bay would not

contribute to attainment of the national ambient air quality standard

(NAAQS) for ozone. The approval of this action exempts Monterey Bay

from implementing the NOX requirements for reasonably available

control technology (RACT), new source review (NSR), and the applicable

general and transportation conformity and inspection and maintenance

(I/M) requirements of the CAA. The EPA is finalizing approval of this

action under provisions of the Act regarding plan requirements for

nonattainment areas.

EFFECTIVE DATE: This action is effective as of April 12, 1995. The

Administrative Procedure Act (APA) 5 U.S.C. 553(d)(1), permits the

effective date of a substantive rule to be less than thirty days after

publication of the rule if the rule ``relieves a restriction''. Since

the approval of the section 182(f) exemption for the Monterey Bay area

is a substantive action that relieves the restrictions associated with

the CAA title I requirements to control NOX emissions, the

NOX exemption approval may be made effective upon signature by the

EPA Administrator.

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

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

business hours. Copies of the submitted petition are available for

inspection at the following locations:

Rulemaking Section (A-5-3), Air and Toxics Division, U.S. Environmental

Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA

94105.

Environmental Protection Agency, Air Docket (6102), 401 ``M'' Street

SW., Washington, DC 20460.

Monterey Bay Unified Air Pollution Control District, Rule Development

Section, 24580 Silver Cloud Court, Monterey, CA 93940.

FOR FURTHER INFORMATION CONTACT: Wendy Colombo, Rulemaking Section, Air

and Toxics Division, U.S. Environmental Protection Agency, Region IX,

75 Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-

1202.

SUPPLEMENTARY INFORMATION:

Background

On December 20, 1994, EPA proposed to approve the Monterey Bay

NOX exemption petition, submitted by the MBUAPCD on April 26,

1994. 59 FR 65523. The exemption petition is based on ambient

monitoring data and demonstrates that additional NOX reductions in

Monterey Bay would not contribute to attainment of the NAAQS for ozone.

A detailed discussion of the background concerning the NOX

requirements and the submitted petition is provided in the notice of

proposed rulemaking (NPRM) cited above.

EPA has evaluated the exemption petition for consistency with the

requirements of the CAA, EPA regulations, and EPA interpretation of

these requirements as expressed in the various EPA policy guidance

documents referenced in the NPRM cited above. EPA believes that the

petition satisfies the applicable EPA requirements and is, therefore,

exempting the Monterey Bay area from implementing the NOX

requirements for RACT, NSR, and the applicable general and

transportation conformity and I/M requirements1 of the CAA.

\1\See ``Scope of Nitrogen Oxides (NOX) Exemptions,'' from

G.T. Helms, Group Leader, Ozone/Carbon Monoxide Programs Branch (MD-

15), to the Air Branch Chiefs, January 12, 1995. ``I/M Requirements

in NOX RACT Exempt Areas'', from Mary T. Smith, Acting

Director, Office of Mobile Sources, to the Air Division Directors,

October 14, 1994.

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The proposal identifies two NOX RACT source categories MBUAPCD

has identified which encompass the major stationary sources of NOX

in the Monterey Bay nonattainment area.

Rules have been developed and submitted for these two categories,

entitled, Rule 431, Emissions From Utility Power Boilers, and Rule 435,

Control of Nitrogen Oxides From Kilns. EPA indicated in the NPRM that

once the final approval of the NOX waiver is granted, MBUAPCD

would then rescind the two NOX rules submitted for inclusion into

the California SIP. This is not the intention of MBUAPCD with respect

to one of these rules. MBUAPCD, in subsequently applying to EPA for

redesignation to attainment of the NAAQS for ozone, has indicated that

the emissions reductions achieved by rule 431 will form part of its

ozone [[Page 20234]] maintenance plan. Although NOX waivers may be

granted for areas demonstrating that NOX reductions do not

contribute to attainment of the ozone standard, areas may choose to

impose NOX restrictions on other bases, such as ozone maintenance,

visibility protection, PM-10 control, acid deposition, or other

environmental protection purposes. MBUAPCD has indicated in its

attainment plan its belief that the reductions achieved from rule 431

are needed for maintenance of the ozone standard. Therefore, rule 431

will not be rescinded, but instead will be evaluated for incorporation

into the California SIP. However, rule 435 contains language within the

rule which will make its applicability void upon final approval of the

NOX waiver.

Response to Public Comments

A 30-day public comment period was provided in 59 FR 65523. EPA

received no comments specifically regarding the Monterey Bay exemption

petition. However, in August 1994, three environmental groups submitted

joint comments on the proposed approvals of NOX exemptions for the

Ohio and Michigan ozone nonattainment areas. The comments address EPA's

policy regarding NOX exemptions in general and apply to all

actions EPA takes regarding section 182(f) NOX exemptions.

Therefore, these comments are addressed below.

Comment: The commenters argued that NOX exemptions are

provided for in two separate parts of the CAA, section 182(b)(1) and

section 182(f). Because the NOX exemption tests in subsections

182(b)(1) and 182(f)(1) include language indicating that action on such

requests should take place ``when [EPA] approves a plan or plan

revision,'' these commenters conclude that all NOX exemption

determinations by the EPA, including exemption actions taken under the

petition process established by subsection 182(f)(3), must occur during

consideration of an approvable attainment or maintenance plan, unless

the area has been redesignated as attainment. These commenters also

argue that even if the petition procedures of subsection 182(f)(3) may

be used to relieve areas of certain NOX requirements, exemptions

from the NOX conformity requirements must follow the process

provided in subsection 182(b)(1), since this is the only provision

explicitly referenced by section 176(c), the CAA's conformity

provisions.

Response: Section 182(f) contains very few details regarding the

administrative procedure for acting on NOX exemption requests. The

absence of specific guidelines by Congress leaves EPA with discretion

to establish reasonable procedures, consistent with the requirements of

the APA.

The EPA disagrees with the commenters regarding the process for

considering exemption requests under section 182(f), and instead

believes that subsections 182(f)(1) and 182(f)(3) provide independent

procedures by which the EPA may act on NOX exemption requests. The

language in subsection 182(f)(1), which indicates that the EPA should

act on NOX exemptions in conjunction with action on a plan or plan

revision, does not appear in subsection 182(f)(3). And, while

subsection 182(f)(3) references subsection 182(f)(1), the EPA believes

that this reference encompasses only the substantive tests in paragraph

(1) [and, by extension, paragraph (2)], not the procedural requirement

that the EPA act on exemptions only when acting on SIPs. Additionally,

paragraph (3) provides that ``person[s]'' (which section 302(e) of the

CAA defines to include States) may petition for NOX exemptions

``at any time,'' and requires the EPA to make its determination within

six months of the petition's submission. These key differences lead EPA

to believe that Congress intended the exemption petition process of

paragraph (3) to be distinct and more expeditious than the longer plan

revision process intended under paragraph (1).

With respect to major stationary sources, section 182(f) requires

States to adopt NOX NSR and RACT rules, unless exempted. These

rules were generally due to be submitted to EPA by November 15, 1992.

Thus, in order to avoid the CAA sanctions, areas seeking a NOX

exemption would have needed to submit their exemption request for EPA

review and rulemaking action several months before November 15, 1992.

In contrast, the CAA specifies that the attainment demonstrations are

not due until November 1993 or 1994 (and EPA may take 12-18 months to

approve or disapprove the demonstration). For marginal ozone

nonattainment areas (subject to NOX NSR), no attainment

demonstration is called for in the CAA. For maintenance plans, the CAA

does not specify a deadline for submittal of maintenance

demonstrations. Clearly, the CAA envisions the submittal of and EPA

action on exemption requests, in some cases, prior to submittal of

attainment or maintenance demonstrations.

The CAA requires conformity to the applicable SIP with regard to

federally-supported NOX generating activities in relevant

nonattainment and maintenance areas. However, EPA's conformity rules

explicitly provide that these NOX requirements would not apply if

EPA grants an exemption under section 182(f). In response to the

comment that section 182(b)(1) should be the appropriate vehicle for

dealing with exemptions from the NOX requirements of the

conformity rule, EPA notes that this issue has previously been raised

in a formal petition for reconsideration of EPA's final transportation

conformity rule and in litigation pending before the U.S. Court of

Appeals for the District of Columbia Circuit on the substance of both

the transportation and general conformity rules. The issue, thus, is

under consideration within EPA, but at this time remains unresolved.

Additionally, subsection 182(f)(3) requires that NOX exemption

petition determinations be made by the EPA within six months. The EPA

has stated in previous guidance that it intends to meet this statutory

deadline as long as doing so is consistent with the APA. The EPA,

therefore, believes that until a resolution of this issue is achieved,

the applicable rules governing this issue are those that appear in

EPA's final conformity regulations, and EPA remains bound by their

existing terms.

Comment: The commenters stated that the modeling required by EPA

guidance is insufficient to establish that NOX reductions would

not contribute to attainment since only one level of NOX control,

i.e., ``substantial'' reductions, is required to be analyzed. They

further explained that an area must submit an approvable attainment

plan before EPA can know whether NOX reductions will aid or

undermine attainment.

Response: The EPA does not believe that this comment is applicable

to the Monterey Bay exemption because the demonstration is based on

three years of ambient monitoring data and not modeling.

Comment: The commenters provided a comment that three years of

``clean'' data fail to demonstrate that NOX reductions would not

contribute to attainment, and that EPA's policy erroneously equates the

absence of a violation for one three-year period with ``attainment.''

Response: The EPA has separate criteria for determining if an area

should be redesignated to attainment under section 107 of the CAA. The

section 107 criteria are more comprehensive than the CAA requires with

respect to NOX exemptions under section 182(f).

Under section 182(f)(1)(A), an exemption from the NOX

requirements may be granted for nonattainment areas outside an ozone

transport region if EPA [[Page 20235]] determines that ``additional

reductions of (NOX) would not contribute to attainment'' of the

ozone NAAQS in those areas. In some cases, an ozone nonattainment area

might attain the ozone standard, as demonstrated by 3 years of adequate

monitoring data, without having implemented the section 182(f) NOX

provisions over that 3-year period. The EPA believes that, in cases

where a nonattainment area is demonstrating attainment with 3

consecutive years of air quality monitoring data without having

implemented the section 182(f) NOX provisions, it is clear that

the section 182(f) test is met since ``additional reductions of

(NOX) would not contribute to attainment'' of the NAAQS in that

area. The EPA's approval of the exemption, if warranted, would be

granted on a contingent basis (i.e., the exemption would last for only

as long as the area's monitoring data continue to demonstrate

attainment).

Comment: Some commenters provided a comment on all section 182(f)

actions that a waiver of NOX controls is unlawful if such a waiver

will impede attainment and maintenance of the ozone standard in

separate downwind areas.

Response: The EPA believes that while this comment may be

applicable to proposed NOX exemption actions in other areas, it is

not applicable to the Monterey Bay exemption action because the EPA is

unaware of, and the comment itself does not specify, any downwind areas

for which NOX transport is of concern.

However, as a result of these comments and comments received

regarding transport in NOX exemption requests for other areas in

the United States, EPA reevaluated its position on this issue and

decided to revise the previously issued guidance.2 As described

below, EPA intends to use its authority under section 110(a)(2)(D) to

require a State to reduce NOX emissions from stationary and/or

mobile sources where there is evidence, such as photochemical grid

modeling, showing that NOX emissions would contribute

significantly to nonattainment in, or interfere with maintenance by,

any other State. This action would be independent of any action taken

by EPA on a NOX exemption request for stationary sources under

section 182(f). That is, EPA action to grant or deny a NOX

exemption request under section 182(f) would not shield that area from

EPA action to require NOX emission reductions, if necessary, under

section 110(a)(2)(D).

\2\See ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--

Revised Process and Criteria'', issued February 8, 1995 by John S.

Seitz, Director of EPA's Office of Air Quality Planning and

Standards.

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Modeling analyses are underway in many areas for the purpose of

demonstrating attainment in the 1994 SIP revisions. Recent modeling

data suggest that certain ozone nonattainment areas may benefit from

reductions in NOX emissions far upwind of the nonattainment area.

For example, the northeast corridor and the Lake Michigan areas are

considering attainment strategies which rely in part on NOX

emission reductions hundreds of kilometers upwind. The EPA is working

with the States and other organizations to design and complete studies

which consider upwind sources and quantify their impacts. As the

studies progress, EPA will continue to work with the States and other

organizations to develop mutually acceptable attainment strategies.

At the same time as these large scale modeling analyses are being

conducted, certain nonattainment areas in the modeling domain have

requested exemptions from NOX requirements under section 182(f).

Some areas requesting an exemption may be upwind of and impact upon

downwind nonattainment areas. EPA intends to address the transport

issue through section 110(a)(2)(D) based on a domain-wide modeling

analysis.

Under section 182(f) of the Act, an exemption from the NOX

requirements may be granted for nonattainment areas outside an ozone

transport region if EPA determines that ``additional reductions of

[NOX] would not contribute to attainment of the national ambient

air quality standard for ozone in the area.''3 As described in

section 4.3 of the December 16, 1993 guidance document, EPA believes

that the term ``area'' means the ``nonattainment area'' and that EPA's

determination is limited to consideration of the effects in a single

nonattainment area due to NOX emissions reductions from sources in

the same nonattainment area.

\3\There are 3 NOX exemption tests specified in section

182(f). Of these, 2 are applicable for areas outside an ozone

transport region; the ``contribute to attainment'' test described

above, and the ``net air quality benefits'' test. EPA must

determine, under the latter test, that the net benefits to air

quality in an area ``are greater in the absence of NOX

reductions'' from relevant sources. Based on the plain language of

section 182(f), EPA believes that each test provides an independent

basis for receiving a full or limited NOX exemption.

Consequently, as stated in section 1.4 of the December 16, 1993 EPA

guidance, ``[w]here any one of the tests is met (even if another

test is failed), the section 182(f) NOX requirements would not

apply or, under the excess reductions provision, a portion of these

requirements would not apply.''

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Section 4.3 of the guidance goes on to encourage, but not require,

States/petitioners to include consideration of the entire modeling

domain, since the effects of an attainment strategy may extend beyond

the designated nonattainment area. Specifically, the guidance

encourages States to ``consider imposition of the NOX requirements

if needed to avoid adverse impacts in downwind areas, either intra- or

inter-State. States need to consider such impacts since they are

ultimately responsible for achieving attainment in all portions of

their State (see generally section 110) and for ensuring that emissions

originating in their State do not contribute significantly to

nonattainment in, or interfere with maintenance by, any other State

[see section 110(a)(2)(D)(i)(I)].''

In contrast, section 4.4 of the guidance states that the section

182(f) demonstration would not be approved if there is evidence, such

as photochemical grid modeling, showing that the NOX exemption

would interfere with attainment or maintenance in downwind areas. The

guidance goes on to explain that section 110(a)(2)(D) [not section

182(f)] prohibits such impacts.

Consistent with the guidance in section 4.3, EPA believes that the

section 110(a)(2)(D) and 182(f) provisions must be considered

independently, and hence, is withdrawing the guidance presently

contained in section 4.4. Thus, if there is evidence that NOX

emissions in an upwind area would interfere with attainment or

maintenance in a downwind area, that action should be separately

addressed by the State(s) or, if necessary, by EPA in a section

110(a)(2)(D) action. In addition, a section 182(f) exemption request

should be independently considered by EPA. In some cases, then, EPA may

grant an exemption from across-the-board NOX RACT controls under

section 182(f) and, in a separate action, require NOX controls

from stationary and/or mobile sources under section 110(a)(2)(D). It

should be noted that the controls required under section 110(a)(2)(D)

may be more or less stringent than RACT, depending upon the

circumstances.

Comment: Comments were received regarding exemption of areas from

the NOX requirements of the conformity rules. The commenters argue

that such exemptions waive only the requirements of section 182(b)(1)

to contribute to specific annual reductions, not the requirement that

conformity SIPs contain information showing the maximum amount of motor

vehicle NOX emissions allowed under the transportation conformity

rules and, [[Page 20236]] similarly, the maximum allowable amounts of

any such NOX emissions under the general conformity rules. The

commenters admit that, in prior guidance, EPA has acknowledged the need

to amend a drafting error in the existing transportation conformity

rules to ensure consistency with motor vehicle emissions budgets for

NOX, but want EPA in actions on NOX exemptions to explicitly

affirm this obligation and to also avoid granting waivers until a

budget controlling future NOX increases is in place.

Response: With respect to conformity, EPA's conformity rules45

provide a NOX waiver if an area receives a section 182(f)

exemption. In its ``Conformity; General Preamble for Exemption From

Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 17, 1994), EPA

reiterated its view that in order to conform, nonattainment and

maintenance areas must demonstrate that the transportation plan and

transportation improvement program (TIP) are consistent with the motor

vehicle emissions budget for NOX even where a conformity NOX

waiver has been granted. Due to a drafting error, that view is not

reflected in the current transportation conformity rules. As the

commenters correctly note, EPA states in the June 17th notice that it

intends to remedy the problem by amending the conformity rule. Although

that notice specifically mentions only requiring consistency with the

approved maintenance plan's NOX motor vehicle emissions budget,

EPA also intends to require consistency with the attainment

demonstration's NOX motor vehicle emissions budget. However, the

exemption for Monterey Bay was submitted pursuant to section 182(f)(3),

and EPA does not believe it is appropriate to delay the statutory

deadline for acting on this petition until the conformity rule is

amended. As noted earlier in response to a previous issue raised by

these commenters, this issue has also been raised in a formal petition

for reconsideration of the Agency's final transportation conformity

rule and in litigation pending before the U.S. Court of Appeals for the

District of Columbia Circuit on the substance of both the

transportation and general conformity rules. This issue, thus, is under

consideration within the Agency, but at this time remains unresolved.

The EPA, therefore, believes that until a resolution of this issue is

achieved, the applicable rules governing this issue are those that

appear in the Agency's final conformity regulations, and the Agency

remains bound by their existing terms.

\4\See ``Criteria and Procedures for Determining Conformity to

State or Federal Implementation Plans of Transportation Plans,

Programs, and Projects Funded or Approved under Title 23 U.S.C. of

the Federal Transit Act,'' November 24, 1993 (58 FR 62188).

\5\See ``Determining Conformity of General Federal Actions to

State or Federal Implementation Plans; Final Rule,'' November 30,

1993 (58 FR 63214).

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Comment: The commenters argue that the CAA does not authorize any

waiver of the NOX reduction requirements until conclusive evidence

exists that such reductions are counter-productive.

Response: EPA does not agree with this comment since it ignores

Congressional intent as evidenced by the plain language of section

182(f), the structure of the Title I ozone subpart as a whole, and

relevant legislative history. By contrast, in developing and

implementing its NOX exemption policies, EPA has sought an

approach that reasonably accords with Congress' intent. Section 182(f),

in addition to imposing control requirements on major stationary

sources of NOX similar to those that apply for such sources of

VOC, also provides for an exemption (or limitation) from application of

these requirements if, under one of several tests, EPA determines that

in certain areas NOX reductions would generally not be beneficial.

In subsection 182(f)(1), Congress explicitly conditioned action on

NOX exemptions on the results of an ozone precursor study required

under section 185B. Because of the possibility that reducing NOX

in a particular area may either not contribute to ozone attainment or

may cause the ozone problem to worsen, Congress included attenuating

language, not just in section 182(f) but throughout the Title I ozone

subpart, to avoid requiring NOX reductions where it would be

nonbeneficial or counterproductive. In describing these various ozone

provisions (including section 182(f)), the House Conference Committee

Report states in pertinent part: ``[T]he Committee included a separate

NOX/VOC study provision in section [185B] to serve as the basis

for the various findings contemplated in the NOX provisions. The

Committee does not intend NOX reduction for reduction's sake, but

rather as a measure scaled to the value of NOX reductions for

achieving attainment in the particular ozone nonattainment area.'' H.R.

Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990). As noted in

response to an earlier comment by these same commenters, the command in

subsection 182(f)(1) that EPA ``shall consider'' the 185B report taken

together with the timeframe the Act provides both for completion of the

report and for acting on NOX exemption petitions clearly

demonstrate that Congress believed the information in the completed

section 185B report would provide a sufficient basis for EPA to act on

NOX exemption requests, even absent the additional information

that would be included in affected areas' attainment or maintenance

demonstrations. However, while there is no specific requirement in the

Act that EPA actions granting NOX exemption requests must await

``conclusive evidence'', as the commenters argue, there is also nothing

in the Act to prevent EPA from revisiting an approved NOX

exemption if warranted due to better ambient information.

In addition, the EPA believes (as described in EPA's December 1993

guidance) that section 182(f)(1) of the CAA provides that the new

NOX requirements shall not apply (or may be limited to the extent

necessary to avoid excess reductions) if the Administrator determines

that any one of the following tests is met:

(1) In any area, the net air quality benefits are greater in the

absence of NOX reductions from the sources concerned;

(2) In nonattainment areas not within an ozone transport region,

additional NOX reductions would not contribute to ozone attainment

in the area; or

(3) In nonattainment areas within an ozone transport region,

additional NOX reductions would not produce net ozone air quality

benefits in the transport region.

Based on the plain language of section 182(f), EPA believes that

each test provides an independent basis for receiving a full or limited

NOX exemption.

Only the first test listed above is based on a showing that

NOX reductions are ``counter-productive.'' If one of the tests is

met (even if another test is failed), the section 182(f) NOX

requirements would not apply or, under the excess reductions provision,

a portion of these requirements would not apply.

EPA Action

EPA is finalizing this action to exempt Monterey Bay from

implementing the NOX requirements for RACT, NSR, the applicable

general and transportation conformity requirements, and I/M.

The EPA believes that all section 182(f) exemptions that are

approved should be approved only on a contingent basis. As described in

the EPA's NOX Supplement to the General Preamble (57 FR 55628,

November 25, 1992) and further guidance issued by

[[Page 20237]] EPA,6 section 182(f) exemptions are granted on a

contingent basis and last for only as long as the area's monitoring

data continue to demonstrate attainment. Monterey Bay is required to

continue to operate an appropriate air quality monitoring network, in

accordance with 40 CFR part 58, to verify the attainment status of the

area.

\6\See ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--

Revised Process and Criteria'', issued by John S. Seitz, Director,

Office of Air Quality Planning and Standards (MD-10), May 27, 1994.

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If, prior to redesignation of the area to attainment, a violation

of the ozone NAAQS is monitored in Monterey Bay (consistent with the

requirements contained in 40 CFR part 58 and recorded in AIRS), the

section 182(f) exemption would no longer apply, as of the date EPA

makes a determination that a violation has occurred. EPA would notify

the area that the exemption no longer applies, and would also provide

notice to the public in the Federal Register. If the exemption is

revoked, the area must comply with any applicable NOX requirements

set forth in the CAA. Thus, a determination that the NOX exemption

no longer applies would mean that the applicable NOX NSR, general

and transportation conformity, and I/M provisions would immediately be

applicable (see 58 FR 63214 and 58 FR 62188) in Monterey Bay.

If Monterey Bay is redesignated to attainment of the ozone NAAQS,

NOX RACT is to be implemented as provided for as contingency

measures in the maintenance plan.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any state implementation plan. Each request for revision to

the state implementation plan shall be considered separately in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

Regulatory Process

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the EPA

must determine whether the regulatory action is ``significant'', and

therefore subject to Office of Management and Budget (OMB) review and

the requirements of the Executive Order. It has been determined that

this action is not a ``significant regulatory action'' under the terms

of Executive Order 12866, and is therefore not subject to OMB review.

Under sections 202, 203, and 205 of the Unfunded Mandates Reform

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

1995, EPA must assess whether various actions undertaken in association

with proposed or final regulations include a Federal mandate that may

result in estimated costs of $100 million or more to the private

sector, or to State, local, or tribal governments in the aggregate.

EPA's final action relieves requirements otherwise imposed under

the CAA and, hence does not impose and Federal intergovernmental

mandate, as defined in section 101 of the Unfunded Mandates Act. This

action also will not impose a mandate that may result in estimated

costs of $100 million or more to either State, local or tribal

governments in the aggregate, or to the private sector.

Under section 307(b)(1) of the CAA, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by May 25, 1995. Filing a petition for

reconsideration by the Administrator of this rule does not affect the

finality of this rule for the purposes of judicial review nor does it

extend the time within which a petition for judicial review may be

filed, and shall not postpone the effectiveness of such a rule. This

action may not be challenged later in proceedings to enforce its

requirements. Section 307(b)(2).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and

recordkeeping requirements, Volatile organic compounds.

Dated: April 12, 1995.

Felicia Marcus,

Regional Administrator.

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

amended as follows:

PART 52--[AMENDED]

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

Authority: 42 U.S.C. 7401-7671q.

Subpart D--California

2. Subpart F is amended by adding Sec. 52.235 to read as follows:

Sec. 52.235 Control strategy for ozone: Oxides of nitrogen.

EPA is approving an exemption request submitted by the Monterey Bay

Unified Air Pollution Control District on April 26, 1994 for the

Monterey Bay ozone nonattainment area from the NOX RACT

requirements contained in section 182(f) of the Clean Air Act. This

approval exempts the area from implementing the oxides of nitrogen

(NOX) requirements for reasonably available control technology

(RACT), new source review (NSR), the related requirements of general

and transportation conformity regulations, and applicable inspection

and maintenance (I/M). The exemption is based on ambient air monitoring

data and lasts for only as long as the area's monitoring efforts

continue to demonstrate attainment without NOX reductions from

major stationary sources.

[FR Doc. 95-10104 Filed 4-24-95; 8:45 am]

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