Approval and Promulgation of Implementation Plans; Ohio

Federal RegisterJan 19, 1995

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH71-1-6781, OH72-1-6782; FRL-5140-7]

Approval and Promulgation of Implementation Plans; Ohio

AGENCY: Environmental Protection Agency (USEPA).

ACTION: Final rule.

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SUMMARY: The USEPA is approving, in final, two exemption requests from

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

for the Toledo and Dayton ozone nonattainment areas in Ohio. These

exemption requests, submitted by the State of Ohio, are based upon

three years of ambient air monitoring data which demonstrate that the

National Ambient Air Quality Standard (NAAQS) for ozone has been

attained in each of these areas without additional reductions of

nitrogen oxides (NOX). Section 182(f) of the Act requires States

with areas designated nonattainment of the NAAQS for ozone, and

classified as moderate nonattainment and above, to adopt reasonably

available control technology (RACT) rules for major stationary sources

of NOX, and to provide for nonattainment area new source review

(NSR) for new sources and modifications that are major for NOX.

Section 182(f) provides that these requirements do not apply for areas

outside an ozone transport region if USEPA determines that additional

reductions of NOX would not contribute to attainment of the NAAQS

for ozone in the area.

EFFECTIVE DATE: This action will be effective February 21, 1995.

ADDRESSES: Written comments should be addressed to:

William MacDowell, Chief, Regulation Development Section, Air

Enforcement Branch (AE-17J), U.S. Environmental Protection Agency,

Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

A copy of the exemption requests are available for inspection at

the following location (it is recommended that you contact Richard

Schleyer at (312) 353-5089 before visiting the Region 5 office):

United States Environmental Protection Agency, Region 5, Air

Enforcement Branch, Air and Radiation Division, 77 West Jackson

Boulevard, Chicago, Illinois, 60604.

FOR FURTHER INFORMATION CONTACT: Richard Schleyer, Regulation

Development Section, Air Enforcement Branch (AE-17J), Region 5, United

States Environmental Protection Agency, 77 West Jackson Boulevard,

Chicago, Illinois, 60604, (312) 353-5089.

SUPPLEMENTARY INFORMATION:

I. Background

The air quality planning requirements for the reduction of NOX

emissions are set out in section 182(f) of the Act. Section 182(f) of

the Act requires States with areas designated nonattainment of the

NAAQS for ozone, and classified as moderate nonattainment and above, to

impose the same control requirements for major stationary sources of

NOX as apply to major stationary sources of volatile organic

compounds (VOC). These requirements include the adoption of RACT rules

for major stationary sources and nonattainment area NSR for major new

sources and major modifications. Section 182(f) provides further that

these NOX requirements do not apply for areas outside an ozone

transport region if USEPA determines that additional reductions of

NOX would not contribute to attainment. Also, the NOX-related

general and transportation conformity provisions (see 58 FR 63214 and

58 FR 62188) would not apply in an area that is granted a section

182(f) exemption. In an area that did not implement the section 182(f)

NOX requirements, but did achieve attainment of the ozone

standard, as demonstrated by ambient air monitoring data (consistent

with 40 CFR Part 58 and recorded in the USEPA's--Aerometric Information

Retrieval System (AIRS)), it is clear that the additional NOX

reductions required by section 182(f) would not contribute to

attainment.

II. Criteria for Evaluation of Section 182(f) Exemption Requests

The criteria established for the evaluation of an exemption request

from the section 182(f) requirements are set forth in a memorandum from

John S. Seitz, Director, Office of Air Quality Planning and Standards,

dated May 27, 1994, entitled ``Section 182(f) Nitrogen Oxides

(NOX) Exemptions--Revised Process and Criteria.'' Additional

guidance is provided in a document entitled ``Guideline for Determining

the Applicability of Nitrogen Oxides Requirements Under Section

182(f),'' dated December 1993, from USEPA, Office of Air Quality

Planning and Standards, Air Quality Management Division.

III. State Submittals

On September 20, 1993, and November 8, 1993, the State of Ohio

submitted requests to redesignate the Toledo (Lucas and Wood Counties)

and Dayton (Montgomery, Greene, Miami, and Clark Counties) ozone

nonattainment areas to attainment areas for the NAAQS for ozone. These

redesignation requests are currently under review and will be evaluated

in a separate rulemaking.

Included as part of the redesignation submittals were requests that

the Toledo and Dayton ozone nonattainment areas

[[Page 3761]]

be exempt from the requirements contained in section 182(f) of the Act.

These exemption requests are based upon three years of ambient air

monitoring data (1991-1993) which demonstrate that the NAAQS for ozone

has been attained in each of these areas without additional reductions

of NOX.

IV. Analysis of State Submittals

The USEPA has reviewed the ambient air monitoring data for ozone

(consistent with the requirements contained in 40 CFR part 58 and

recorded in AIRS) submitted by the OEPA in support of these exemption

requests.

For ozone, an area is considered attainment of the NAAQS if there

are no violations, as determined in accordance with 40 CFR Part 50.9,

based on quality assured monitoring data from three complete

consecutive calendar years. A violation of the ozone NAAQS occurs when

the annual average number of expected exceedances is greater than 1.0

at any site in the area at issue. An exceedance occurs when the daily

maximum hourly ozone concentration exceeds 0.124 parts per million

(ppm).

The following ozone exceedances were recorded for the period from

1991 to 1993:

Toledo: Lucas County, 306 N. Yondota (1991)--0.127 ppm and (1993)--

0.126 ppm; average expected exceedances: 0.7. Friendship Park (1993)--

0.136 ppm; average expected exceedances: 0.3.

Dayton: Montgomery County, 2100 Timberlane (1993)--0.125 ppm; average

expected exceedances: 0.3.

Thus, the annual average expected exceedances in a three year

period were less than 1.0 and both areas are meeting the air quality

standard for ozone.

A more detailed summary of the ozone monitoring data for both areas

is provided in the USEPA technical support document dated April 20,

1994.

V. NOX RACT Rules

The State of Ohio submitted adopted NOX RACT rules to USEPA on

July 1, 1994, for the Toledo, Dayton, and Cleveland ozone nonattainment

areas. These rules are currently under review and will be evaluated in

a separate rulemaking. These rules, when approved by USEPA, may be

suspended by the State for the Toledo and Dayton areas upon the final

approval effective date of the Section 182(f) exemption requests

addressed in this Notice.

VI. Inspection and Maintenance (I/M) Programs

The I/M Final Rule (57 FR 52950) requires States to submit to USEPA

a fully adopted I/M program by November 15, 1993. At this time,

however, the preliminary interpretive guidance on basic I/M, is

discussed in the USEPA policy memorandum dated September 17, 1993, from

Michael H. Shapiro, Acting Assistant Administrator for Air and

Radiation, entitled ``State Implementation Plan Requirements for Areas

Submitting Requests for Redesignation to Attainment of the Ozone and

Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) on

or after November 15, 1992,'' (Shapiro Memorandum). The Shapiro

Memorandum provides that, for areas where maintenance plans do not rely

on implementation of a basic I/M program immediately following

redesignation, upon revision to the I/M rule, if a State adopts and

submits as a revision to its SIP the following:

The legislative authority for a basic I/M program;

A provision in the SIP providing that basic I/M be placed

in the contingency measure portion of the maintenance plan upon

redesignation; and

An enforceable schedule and commitment by the Governor or

his/her designee for adoption and implementation of a basic I/M program

upon a specified, appropriate triggering event;

The State would have met the minimum requirements for I/M as they

relate to USEPA's consideration of the State's redesignation request

submitted for a nonattainment area. The USEPA is presently proceeding

to establish this interpretation through regulatory action (see 59 FR

33237).

The State of Ohio is required to adopt a basic I/M program for the

Toledo ozone nonattainment area (encompassing Lucas and Wood Counties).

However, the State has submitted a redesignation request (SIP revision)

to attainment of the NAAQS for ozone for the Toledo area. This SIP

revision includes legislative authority for the adoption of a basic I/M

program; a basic I/M program as a contingency measure in the

maintenance plan upon redesignation; and an enforceable schedule for

the implementation of the basic I/M program upon a specified triggering

event. Under the approach set forth in the Shapiro Memorandum, the

State has met the requirements for an area requesting redesignation

that is required to adopt a basic I/M program.

For the Dayton ozone nonattainment area (encompassing Clark,

Greene, Miami, and Montgomery Counties), the Dayton local area has

opted for an enhanced I/M program. This requires the Dayton area to

comply with all applicable enhanced I/M program requirements. The I/M

Final Rule (57 FR 52950) provides that if the USEPA Administrator

determines that NOX emission reductions are not beneficial in a

given ozone nonattainment area, then NOX emission reductions are

not required of the enhanced I/M program, but the program shall be

designed to offset NOX increases resulting from the repair of

hydrocarbon (HC) and carbon monoxide (CO) failures.\1\

\1\Additional clarification concerning the I/M requirements and

areas with no NOX exemptions is provided in a memorandum from

Mary T. Smith, Acting Director, Office of Mobile Sources, dated

October 14, 1994, entitled ``I/M Requirements in NOX RACT

Exempt Areas.''

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Upon the effective date of this action, the Dayton area shall not

be required to demonstrate compliance with the enhanced I/M performance

standard for NOX. However, the Dayton area shall be required to

demonstrate, using USEPA's Mobile Source Emissions Model, Mobile 5a (or

its successor), that NOX emissions will be no higher than in the

absence of any I/M program.

VII. Withdrawal of the Exemptions

Continuation of the Section 182(f) exemptions granted herein is

contingent upon continued monitoring and continued attainment and

maintenance of the ozone NAAQS in the affected areas. If a violation of

the ozone NAAQS is monitored in the Toledo or Dayton area(s)

(consistent with the requirements contained in 40 CFR part 58 and

recorded in AIRS), USEPA will provide notice to the public in the

Federal Register. A determination that the NOX exemption no longer

applies would mean that the NOX NSR and the NOX-related

general and transportation conformity provisions would immediately be

applicable (see 58 FR 63214 and 58 FR 62188). The NOX RACT

requirements would also be applicable, with a reasonable time provided

as necessary to allow major stationary sources subject to the RACT

requirements to purchase, install and operate the required controls.

The USEPA believes that the State may provide sources a reasonable time

period after the USEPA determination to actually meet the RACT emission

limits. The USEPA expects such time period to be as expeditious as

practicable, but in no case longer than 24 months. If a nonattainment

area is redesignated to attainment of the ozone NAAQS, NOX RACT

shall be implemented as stated in the USEPA-approved maintenance plan.

VIII. Notice of Proposed Rulemaking and Responses to Comments

The USEPA published a notice proposing to approve the exemption

[[Page 3762]]

requests for the Toledo and Dayton nonattainment areas in the July 26,

1994 Federal Register (59 FR 37947). The USEPA received comments

supporting and adverse to this proposed action. Copies of all comments

have been placed in the docket file. The following entities submitted

adverse or supporting comments. Some of the comments addressed similar

points. The USEPA has responded to the adverse comments by issue as set

forth below.

Submitting Entity (Date Received by USEPA)

Citizens Campaign for the Environment (7-27-94); Natural Resources

Defense Council (8-9-94 and 8-24-94); New York State Electric and Gas

Corporation (8-10-94); Northeast States for Coordinated Air Use

Management (8-15-94 and 9-28-94); State of New York Department of

Environmental Conservation (8-16-94 and 10-05-94); Commonwealth of

Pennsylvania Department of Environmental Resources (8-31-94); Southern

Environmental Law Center (10-3-94); Pollution Probe (10-03-94); Ohio

Sierra Club (10-03-94); Conservation Law Foundation (10-03-94); The

Lung Association (Ontario, 10-11-94); Ohio Environmental Protection

Agency (10-26-94); Fuller & Henry (10-26-94); and Individual Residents

from the State of Ohio (various dates between 8/31/94 and 10/13/94).

A summary of the adverse comments and USEPA's responses follows:

Procedural Comments: Several commenters argued that USEPA should

not approve the waiver requests at issue on procedural grounds.

NOX exemptions are provided for in two separate parts of the Act,

section 182(b)(1) and section 182(f). Commenters took the position that

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,'' that

all NOX exemption determinations by USEPA, 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 to

attainment for the ozone NAAQS. 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), in the Act's conformity provisions.

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

the administrative procedure for USEPA action on NOX exemption

requests. The absence of specific guidelines by Congress leaves USEPA

with discretion to establish reasonable procedures, consistent with the

requirements of the Administrative Procedure Act (APA).

Despite the interpretation of the commenters regarding the process

for considering exemption requests under section 182(f), USEPA believes

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

for USEPA to act on NOX exemption requests. The language in

subsection 182(f)(1), which indicates that USEPA should act on NOX

exemptions in conjunction with action on a plan or plan revision, does

not appear in subsection 182(f)(3). While subsection 182(f)(3)

references subsection 182(f)(1), USEPA believes that this reference

encompasses only the substantive tests in paragraph (1) [and, by

extension, paragraph (2)], and not the procedural requirement that

USEPA act on exemptions only when acting on SIPs. Additionally,

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

Act defines to include States) may petition for NOX exemptions

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

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

USEPA 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).

Section 182(f)(1) appears to contemplate that exemption requests

submitted under these paragraphs are limited to States, since States

are the entities authorized under the Act to submit plans or plan

revisions. By contrast, section 182(f)(3) provides that

``person[s]''\2\ may petition for a NOX determination ``at any

time'' after the ozone precursor study required under section 185B of

the Act is finalized,\3\ and gives USEPA a limit of 6 months after

filing to grant or deny such petitions. Since individuals may submit

petitions under paragraph (3) ``at any time'' this must include times

when there is no plan revision from the State pending at USEPA. The

specific timeframe for USEPA action established in paragraph (3) is

substantially shorter than the timeframe usually required for States to

develop and for USEPA to take action on revisions to a SIP. These

differences strongly suggest that Congress intended the process for

acting on petitions under paragraph (3) to be distinct--and more

expeditious--from the plan revision process intended under paragraph

(1). Thus, USEPA believes that paragraph (3)'s reference to paragraph

(1) encompasses only the substantive tests in paragraph (1) (and, by

extension, paragraph (2)), not the requirement in paragraph (1) for

USEPA to grant exemptions only when acting on plan revisions.

\2\Section 302(e) of the Act defines the term ``person'' to

include States.

\3\The final section 185B report was issued July 30, 1993.

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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 USEPA by November 15, 1992.

Thus, in order to avoid sanctions under the Act, areas seeking a

NOX exemption would have needed to submit their exemption request

for USEPA review and rulemaking action several months before November

15, 1992. In contrast, the Act specifies that the attainment

demonstrations are not due until November 1993 or 1994 (and USEPA 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 Act. For maintenance

plans, the Act does not specify a deadline for submittal of maintenance

demonstrations. Clearly, the Act envisions the submittal of, and USEPA

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

attainment or maintenance demonstrations.

The Act requires conformity with regard to federally-supported

NOX generating activities in relevant nonattainment and

maintenance areas. However, USEPA's conformity rules explicitly provide

that these NOX requirements would not apply if USEPA 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, USEPA notes that this issue has

previously been raised in a formal petition for reconsideration of

USEPA'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. Thus the issue is under further consideration, but at this time

the Agency's position is as stated above.

[[Page 3763]]

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

petition determinations be made by USEPA within six months. The USEPA

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

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

believes that the applicable rules governing this issue are those that

appear in USEPA's final conformity regulations, and that USEPA remains

bound by their existing terms.

Modeling Comments: Some commenters stated that the modeling

required by USEPA 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 explain that an area must submit an approvable attainment

plan before USEPA can know whether NOX reductions will aid or

undermine attainment.

USEPA Response: As described in USEPA's December 1993 NOX

exemption guidance,\4\ photochemical grid modeling is generally needed

to document cases where NOX reductions are counterproductive to

net air quality, do not contribute to attainment, do not show a net

ozone benefit, or include excess reductions. The Urban Airshed Model

(UAM) or, in the Ozone Transport Region (OTR), the Regional Oxidant

Model (ROM), are acceptable methods for these purposes. The December

guidance also provides that, under the ``not contribute to attainment

test,'' an area may qualify for a NOX exemption by attaining the

ozone standard, as demonstrated by three years of ambient air

monitoring data. The exemption requests submitted by the State for the

Toledo and Dayton areas are based upon ambient air monitoring data.

Therefore, adverse comments submitted concerning modeling are not

relevant to this action, and are not being further addressed.

\4\``Guideline for Determining the Applicability of Nitrogen

Oxide Requirements under section 182(f),'' from John S. Seitz,

Director, Office of Air Quality Planning and Standards, dated

December 19, 1993.

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Public Hearing Request: Some commenters requested that a public

hearing be held on this action.

USEPA Response: This action is not considered a SIP revision and

therefore the requirement for a public hearing under section 110(a) of

the Act is not applicable.

Environmental Impact Statement (EIS) Request: Some commenters

requested that an EIS be prepared regarding this action.

USEPA Response: All Clean Air Act programs are exempted from the

procedural requirements of the National Environmental Policy Act (NEPA)

under section 7(c)(1) of the Energy Supply and Environmental

Coordination Act, 15 U.S.C. 793(c)(1). Therefore, USEPA is not

preparing an EIS for this action.

SIP Status Request: One commenter requested the status of other SIP

revisions (i.e., the 15% rate-of-progress plan and the redesignation

request) required to be submitted by the State.

USEPA Response: This action only addresses the section 182(f)

exemption requests submitted by the State of Ohio for the Toledo and

Dayton areas and USEPA final action on such requests are not dependent

on final actions on other required SIP submittals, such as the ones

mentioned. Non-related SIP revisions will be dealt with separately.

Toledo Transportation Improvement Program (TIP): One commenter

provided comments on the basis of the determination of the conformity

of the Toledo TIP and analysis of other Ohio TIPs.

USEPA Response: This action only addresses the section 182(f)

exemption requests submitted by the State of Ohio for the Toledo and

Dayton areas. Therefore, the comment is not being further addressed.

Attainment Data Comments: Three years of ``clean'' data fail to

demonstrate that NOX reductions would not contribute to attainment

of the NAAQS for ozone. The USEPA's policy erroneously equates the

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

USEPA Response: The USEPA has separate criteria for determining if

an area should be redesignated to an ozone attainment area under

section 107 of the Act. The section 107 redesignation criteria are more

comprehensive than the Act 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 OTR if

USEPA 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.

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, USEPA believes that

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

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

area. In cases where it is warranted, USEPA's approval of the exemption

is 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).

Downwind Area Comments: Several commenters argued that USEPA's

December 1993 guidance prohibits granting a section 182(f) waiver based

on 3 years of clean data if evidence exists showing that the waiver

would interfere with attainment or maintenance in downwind areas. The

commenters argued that such condition should also apply to waiver

requests based on modeling. Exemptions in Ohio cities, they claim, are

likely to exacerbate ozone nonattainment downwind, and therefore are

not consistent with the Act. If the exemptions are granted, emissions

from new stationary sources and the transportation sector in Ohio,

which are projected to increase, could delay attainment of the ozone

standard in areas in the northeastern United States.

These commenters further claim that USEPA modeling has demonstrated

that Ohio is a significant contributor to atmospheric transport of

ozone precursors to the OTR. Since this modeling indicates that

emissions of NOX from stationary sources west of the OTR

contribute to increased ozone levels in the northeast, they argued that

control of NOX emissions in the OTR and in States west of the OTR

will contribute to significant reductions in peak ozone levels within

the OTR.

USEPA Response: As a result of such comments, USEPA has re-

evaluated its position on this issue and decided to revise the

previously-issued guidance. As described below, USEPA 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 USEPA on a NOX exemption

request for stationary sources under section 182(f). That is, USEPA

action to grant or deny a NOX exemption request under section

182(f) would not shield that area from USEPA action to require NOX

emission reductions, if necessary, under section 110(a)(2)(D).

Modeling analyses are underway in many areas for the purpose of

demonstrating attainment in the 1994

[[Page 3764]]

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 miles upwind. The USEPA 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, USEPA 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 that are located in the area

being modeled, have requested exemptions from NOX requirements

under section 182(f). Some areas requesting an exemption may impact

upon downwind nonattainment areas. The USEPA 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 USEPA determines that ``additional reductions of

(NOX) would not contribute to attainment of the national ambient

air quality standard for ozone in the area.''\5\ As described in

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

that the term ``area'' means the ``nonattainment area,'' and that

USEPA'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.

\5\There are three NOX exemption tests specified in section

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

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

above, and the ``net air quality benefits'' test. The USEPA 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), USEPA 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 USEPA 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, USEPA believes that

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

independently. 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 USEPA in a section 110(a)(2)(D) action. A

section 182(f) exemption request should be independently considered by

USEPA. In some cases, then, USEPA 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. Consistent with

these principles, USEPA is approving these exemption requests under

182(f) of the Act. If evidence appears that NOX emissions in an

upwind area would interfere with attainment or maintenance in a

downwind area, appropriate action shall be taken by the State(s) or, if

necessary, by USEPA under section 110(a)(2)(D).

Scope of Exemption Comments: Comments were received regarding

exemption of areas from the NOX requirements of the conformity

rules. Several commenters argue that the exemptions should 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,

similarly, the maximum allowable amounts of any such NOX emissions

under the general conformity rules. The commenters admit that, in prior

guidance, USEPA 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 USEPA, 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.

USEPA Response: With respect to conformity, USEPA's conformity

rules\6\ provide a NOX waiver if an area receives a section 182(f)

exemption. In rulemaking on ``Conformity; General Preamble for

Exemption From Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June

17, 1994), USEPA reiterated its view that in order to conform,

nonattainment and maintenance areas must demonstrate that both the

transportation plan and the 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,

USEPA 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, USEPA also

intends to require consistency with the attainment demonstration's

NOX motor vehicle emissions budget. However, the exemptions at

issue were submitted pursuant to section 182(f)(3), and USEPA does not

believe it is appropriate to delay action on these petitions,

especially in light of the six-month statutory deadline provided for

such action, until the conformity rule is amended. As noted above, 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

[[Page 3765]]

transportation and general conformity rules. Thus this issue is under

consideration, but at this time the Agency's position remains as

stated. The USEPA, therefore, believes that until the issue is

resolved, 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.

\6\``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); ``Determining

Conformity of General Federal Actions to State or Federal

Implementation Plans; Final Rule,'' November 30, 1993 (58 FR 63214).

---------------------------------------------------------------------------

Conclusive Evidence Comment: The Act does not authorize any waiver

of the NOX reduction requirements until conclusive evidence exists

that such reductions are counter-productive.

USEPA Response: The USEPA does not agree with this comment since it

is contrary to 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. In developing and implementing

its NOX exemption policies, USEPA has sought an approach that

reasonably accords with that 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,

USEPA 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 they 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 a comment discussed above, the command in

subsection 182(f)(1) that USEPA ``shall consider'' the section 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

USEPA 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 USEPA actions granting NOX exemption

requests must await ``conclusive evidence,'' as the commenters argue,

there is also nothing in the Act to prevent USEPA from revisiting an

approved NOX exemption if warranted due to subsequent ambient

monitoring information.

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

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

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

necessary to avoid excess reductions) if the USEPA 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), USEPA believes that

each test provides an independent basis for the granting of a full or

limited NOX exemption. Only the first test listed above is based

on a showing that NOX reductions are ``counter-productive.'' If

even one of the tests is met, the section 182(f) NOX requirements

would not apply or, under the excess reductions provision, a portion of

these requirements would not apply.

Transboundary Pollution Comment: Several commenters noted that the

Canada-U.S. Air Quality Agreement signed by the two countries on March

13, 1991, calls for each Party to notify the other of a proposed

action, activity or project likely to cause significant transboundary

air pollution, and, as appropriate, to take measures to avoid or

mitigate the potential risk.

USEPA Response: The USEPA takes seriously international agreements

entered into by our government. However, USEPA does not believe that

the action of granting a NOX exemption request would likely cause

significant transboundary air pollution. The action to grant or deny

these exemption requests will determine the amount of emission

reductions, but not cause new or additional transboundary air

pollution.

Air Quality Comment: Several commenters stated that the air quality

monitoring data alone does not support this exemption proposal. The air

quality levels are below USEPA's definition of an exceedance of the

ozone NAAQS at 0.125 ppm, but are greater than the ozone NAAQS of 0.120

ppm.

USEPA Response: For the reasons provided below, USEPA does not

agree with the commenter's conclusion. As stated in 40 CFR 50.9, the

ozone ``standard is attained when the expected number of days per

calendar year with maximum hourly average concentrations above 0.12

parts per million (235 g/m3) is equal to or less than 1,

as determined by Appendix H.'' Appendix H references USEPA's

``Guideline for Interpretation of Ozone Air Quality Standards'' (EPA-

450/4-79-003, January 1979), which notes that the stated level of the

standard is taken as defining the number of significant figures to be

used in comparison with the standard. For example, a standard level of

0.12 ppm means that measurements are to be rounded to two decimal

places (0.005 rounds up to 0.01). Thus, 0.125 ppm is the smallest

concentration value in excess of the level of the ozone standard

(please refer to ``Section IV. Analysis of the State Submittal'' in

this notice for monitored ozone concentrations in the Toledo and Dayton

areas). The ambient air monitoring data shows that no violation of the

ozone standard has occurred for the Toledo and Dayton areas during the

1991-1993 ozone seasons.

IX. Final Action

The USEPA is approving the exemption requests for the Toledo and

Dayton ozone nonattainment areas from the section 182(f) NOX

requirements based upon the evidence provided by the State and the

State's compliance with the requirements outlined in the applicable

USEPA guidance. This action exempts the Lucas, Wood, Clark, Greene,

Miami, and Montgomery counties from the requirements to implement

NOX RACT, nonattainment area NSR for new sources and modifications

that are major for NOX, and the NOX-related general and

transportation conformity provisions. Also, the Clark, Greene, Miami,

and Montgomery counties shall not be required to demonstrate compliance

[[Page 3766]]

with the enhanced I/M performance standard for NOX. If a violation

of the ozone NAAQS occurs in the Toledo or Dayton area(s), the

exemption from the requirements of section 182(f) of the Act in the

applicable area(s) shall no longer apply.

X. Procedural Background

Nothing in this action shall be construed as permitting or allowing

or establishing a precedent for any future request for a 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.

This action has been classified as a Table 2 action by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993

memorandum from Michael H. Shapiro, Acting Assistant Administrator for

Air and Radiation. The Office of Management and Budget exempted this

regulatory action from Executive Order 12866 review.

XI. Regulatory Process

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities (5 U.S.C. 603 and 604).

Alternatively, USEPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000. Today's exemptions do not create any new requirements, but

allow suspension of the indicated requirements for the life of the

exemptions. Therefore, because the approval does not impose any new

requirements, I certify that it does not have a significant impact on

any small entities affected.

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by March 20, 1995. Filing a

petition for reconsideration by the Administrator of this final 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

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See Section 307(b)(2)).

List of Subjects in 40 CFR Part 52

Air pollution control, Intergovernmental relations, Nitrogen

oxides, Ozone, Reporting and record keeping requirements, Volatile

organic compounds.

Dated: January 5, 1995.

Valdas V. Adamkus,

Regional Administrator.

Part 52, chapter 1, 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.

Supart KK--Ohio

2. Section 52.1879 is amended by adding new paragraph (f) to read

as follows:

Sec. 52.1879 Review of new sources and modifications.

* * * * *

(f) Approval--USEPA is approving two exemption requests submitted

by the Ohio Environmental Protection Agency on September 20, 1993, and

November 8, 1993, for the Toledo and Dayton ozone nonattainment areas,

respectively, from the requirements contained in Section 182(f) of the

Clean Air Act. This approval exempts the Lucas, Wood, Clark, Greene,

Miami, and Montgomery Counties from the requirements to implement

reasonably available control technology (RACT) for major sources of

nitrogen oxides (NOX), nonattainment area new source review (NSR)

for new sources and modifications that are major for NOX, and the

NOX-related requirements of the general and transportation

conformity provisions. For the Dayton ozone nonattainment area, the

Dayton local area has opted for an enhanced inspection and maintenance

(I/M) programs. Upon final approval of this exemption, the Clark,

Greene, Miami, and Montgomery Counties shall not be required to

demonstrate compliance with the enhanced I/M performance standard for

NOX. If a violation of the ozone NAAQS is monitored in the Toledo

or Dayton area(s), the exemptions from the requirements of Section

182(f) of the Act in the applicable area(s) shall no longer apply.

3. Section 52.1885 is amended by adding new paragraph (r) to read

as follows:

Sec. 52.1885 Control Strategy: Ozone.

* * * * *

(r) Approval--USEPA is approving two exemption requests submitted