Approval and Promulgation of Implementation Plan; Michigan Detroit-Ann Arbor NOINFX Exemption

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MI26-04-6805; FRL-5157-1]

Approval and Promulgation of Implementation Plan; Michigan

Detroit-Ann Arbor NOX Exemption

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency is granting an exemption

to the Detroit-Ann Arbor ozone nonattainment area from applicable

oxides of nitrogen (NOX) requirements found in the Clean Air Act

(Act). Approval of the exemption would apply for various NOX

requirements including adoption and implementation of regulations

addressing general conformity, transportation conformity, inspection

and maintenance, reasonably available control technology, and new

source review. The State of Michigan submitted a NOX exemption

request on November 12, 1993. A subsequent letter dated May 31, 1994

clarified this earlier submittal. This request is based on the fact

that ozone monitoring in the Detroit-Ann Arbor area indicates that the

average number of exceedances of the National Ambient Air Quality

Standard for ozone during the most recent 3-year period, 1991 to 1993,

is fewer than one per year. Given this monitoring data, Michigan

petitioned for an exemption from the NOX requirements based on a

demonstration that additional reductions of NOX would not

contribute to attainment of the ozone standard.

EFFECTIVE DATE: This final rule will be effective April 6, 1995.

ADDRESSES: Written comments should be sent to: Carlton T. Nash, Chief,

Regulation Development Section, Air Toxics and Radiation Branch (AT-

18J), EPA, Region 5, 77 West Jackson Boulevard, Chicago, Illinois

60604-3590.

Copies of the request and the EPA's analysis are available for

inspection at the following address: USEPA, Region 5, Air and Radiation

Division, 77 West Jackson Boulevard, Chicago, Illinois 60604-3590.

(Please telephone Douglas Aburano at (312) 353-6960 before visiting the

Region 5 office.)

FOR FURTHER INFORMATION CONTACT: Douglas Aburano, Air Toxics and

Radiation Branch (AT-18J), EPA, Region 5, Chicago, Illinois 60604,

(312) 353-6960.

SUPPLEMENTARY INFORMATION:

I. Background

On November 12, 1993 the State of Michigan submitted a petition to

the EPA requesting that the Detroit-Ann Arbor ozone nonattainment area

be exempted from the requirement to implement NOX controls

pursuant to section 182(f) of the Act. The exemption request is based

upon monitoring data which demonstrate that the average number of

exceedances of the ozone standard in the Detroit-Ann Arbor area during

the most recent 3-year period, 1991 through 1993, is fewer than one per

year.

On August 10, 1994, EPA published a direct final rulemaking

approving the NOX exemption petition for the Detroit-Ann Arbor

nonattainment area. During the 15 day public comment period, EPA

received joint adverse comments from the Natural Resources Defense

Council, Sierra Club Legal Defense Fund, and the Environmental Defense

Fund and 2 requests for additional time to comment on this rulemaking

from the State of New York and the Citizens Commission for Clean Air in

the Lake Michigan Basin. The EPA published a document announcing the

opening of a second comment period on October 6, 1994. The second

comment period lasted until November 7, 1994. During the second comment

period, the State of New York submitted adverse comments.

II. Public Comment/EPA Response

The following evaluation summarizes each comment received and EPA's

response to the comment. A more detailed discussion of the State

submittal and the rationale for the EPA's action based on the Act and

cited references appear in EPA's technical support documents dated

February 8, 1994 and December 1, 1994.

NRDC Comments

Following is a summary of comments received from the NRDC in a

letter dated August 24, 1994 signed by Sharon Buccino. After each

comment is EPA's response.

NRDC Comment 1: Certain commenters argued that NOX exemptions

are provided for in two separate parts of the Act, 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 Act's conformity

provisions.

EPA 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 Administrative Procedure Act (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 [[Page 12447]] section

302(e) of the Act defines to include States) may petition for NOX

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

determination within 6 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).

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]''1 may petition for a NOX determination ``at any

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

the Act is finalized,2 and gives EPA 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 EPA. The

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

substantially shorter than the timeframe usually required for States to

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

differences strongly suggest that Congress intended the process for

acting on personal petitions to be distinct--and more expeditious--from

the plan-revision process intended under paragraph (1). Thus, EPA

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 EPA to grant

exemptions only when acting on plan revisions.

\1\Section 302(e) of the Act defines the term ``person'' to

include States.

\2\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 EPA by November 15, 1992.

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

exemption would have had to submit their exemption requests for EPA

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 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 Act. For maintenance plans, the Act

does not specify a deadline for submittal of maintenance

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

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, 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 Administrative Procedures Act.

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.

NRDC Comment 2: Some commenters stated that the modeling required

by EPA 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.

EPA Response: This comment is directed towards exemption approvals

based on photochemical grid modeling. This comment does not apply in

the case of Detroit-Ann Arbor because this exemption request is based

on monitoring.

NRDC Comment 3: Three years of ``clean'' data fail to demonstrate

that NOX reductions would not contribute to attainment. EPA's

policy erroneously equates the absence of a violation for one three-

year period with ``attainment.''

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

area should be redesignated to attainment under section 107 of the Act.

The section 107 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 ozone

transport region if EPA 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).

NRDC Comment 4: A waiver of NOX controls is unlawful if such

waiver will impede attainment and maintenance of the ozone standard in

separated downwind areas.

EPA Response: As a result of the comments, EPA reevaluated its

position on this issue and is revising the previously issued guidance.

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).

Modeling analyses are underway in many areas for the purpose of

[[Page 12448]] 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 Guidelines for Determining the Applicability of

Nitrogen Oxides Requirements under section 182(f), 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. 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.

NRDC Comment 5: Comments were received regarding exemption of areas

from the NOX requirements of the conformity rules. They 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, 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.

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

rules4,5 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 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 exemptions were submitted

pursuant to section 182(f)(3), and EPA does not believe it is

appropriate to delay the statutory deadline for acting on these

petitions 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 [[Page 12449]] regulations, and the Agency remains bound by

their existing terms.

\4\``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\``Determining Conformity of General Federal Actions to State

or Federal Implementation Plans; Final Rules,'' November 30, 1993

(58 FR 63214).

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NRDC Comment 6: The Act does not authorize any waiver of the

NOX reduction requirements until conclusive evidence exists that

such reductions are counter-productive.

EPA 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 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, 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 Act provides that the new

NOX requirements shall not apply (or may by 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.

State of New York Comment 1: The State of New York reaffirms its

objection to this proposed rulemaking originally stated in an August

24, 1994 letter. According to the May 27, 1994 memorandum from Mr. John

Seitz and the December 1993 section 182(f) NOX exemption guidance,

the exemption cannot be approved if there is evidence that NOX

exemption would interfere with the attainment of a downwind area.

Section 3.3 of the December 1993 guidance states;

The net air quality benefit test is not specifically limited to

an ozone nonattainment area or ozone transport region and may be

directed at a specific set of sources. Thus, a broad geographic area

should be considered. The area may, in some cases, extend beyond an

ozone nonattainment area or ozone transport region * * * Sufficient

area is needed to allow for completion of the various chemical

transformations of NOX and interaction with other pollutants.

The latest results of the EPA regional oxidant modeling (ROM)

indicate that emissions of NOX from stationary sources west of the

Ozone Transport Region contribute to increased ozone levels in the

northeast, including New York State. These results show that control of

NOX emissions throughout the eastern United States will contribute

to significant reductions in peak ozone levels within the ozone

transport region (OTR).

EPA Response: With respect to the comments regarding the latest ROM

results and downwind impacts in general, EPA refers the commenter to

its previous responses to NRDC Comments 3 and 4.

The State of New York incorrectly cites section 3.3 of EPA's

December 1993 guidance. Section 3.3 applies only to those areas

applying for a NOX exemption under the ``net air quality benefit''

test. The Detroit-Ann Arbor petition is based on the ``contribute to

attainment'' test. The ``contribute to attainment'' test requires that

only the emissions from the immediate nonattainment area be considered

in evaluating the petition (see December 1993 guidance document,

``Guidelines for Determining the Applicability of Nitrogen Oxides

Requirements Under Section 182(f)'', section 4.3). In its petition the

State of Michigan has demonstrated that the average number of

exceedances of the ozone standard in the area during the past 3 years

(1991-1993, the most current monitored years at the time the exemption

request was made) is fewer than one per year which is sufficient to

receive an exemption under this test. In addition, the 1994 ozone

season has passed and no violation of the ozone standard has been

recorded in the area.

State of New York Comment 2: The air quality monitoring data alone

does not support this exemption proposal. This is supported by a July

28, 1994 letter from the Michigan Department of Natural Resources which

states that ``(we) are nearly in violation of the ozone standard at

several monitoring sites, primarily due to the many excursions we had

in June.'' This proposal does not appear to consider this data. In

addition, the data submitted for the period 1991 to 1993 (November 12,

1993 section 182(f) NOX exemption request letter to EPA Region V)

contain the maximum number of exceedances allowed to still be

considered attainment. This does not provide a clear test that

additional [[Page 12450]] reductions would not contribute to

maintenance of attainment.

EPA Response: EPA is required to base its SIP decisions on the

information duly submitted by a State in fulfillment of requirements

imposed by the Act. The basis for granting this exemption is the fact

that the information submitted by the State of Michigan demonstrates

that this area has not experienced a violation of the ozone standard

for the most recent 3 years of monitored data. Consistent with the

established EPA policy, the fact that the area has recorded the maximum

number of exceedances without violating the standard is irrelevant to a

determination regarding whether an area is showing attainment for the

period in question. What is relevant is whether or not the standard was

violated, and the submitted data confirms that it was not. (See 40 CFR

50.9, 40 CFR part 50, appendix H, and Guideline for Interpretation of

Ozone Air Quality Standards, January 1979, EPA-450/4-79-003.) In

addition to the fact that the ozone standard was not violated for the

years 1991-1993, the years upon which this exemption request is based,

monitoring data throughout the 1994 ozone season for the Detroit-Ann

Arbor area continues to show attainment of the ozone standard.

State of New York Comment 3: The State of New York strongly objects

to the guidance developed to allow these exemptions to be processed.

The May 27, 1994 memorandum ``Section 182(f) Nitrogen Oxides (NOX

Exemptions--Revised Process and Criteria'' allows a nonattainment area

to consider only its own air quality monitoring data and does not

require a demonstration that the area does not negatively impact the

attainment status of downwind areas. The guidance memorandum also

allows the nonattainment area to submit the NOX exemption request

without a redesignation or maintenance request. This does not provide

the federal government with the appropriate information to make an

informed judgment on the contribution of NOX to nonattainment.

Finally, this guidance did not undergo State review before issuance.

While not necessarily required, it is EPA's usual practice to allow the

States to have input in the development of guidance.

EPA Response: EPA's guidance regarding both the adequacy of the

demonstration needed to qualify for a NOX exemption and the extent

to which downwind impacts need to be considered was developed in

accordance with what EPA considers to be the best interpretation of the

language in section 182(f) of the Act. For a more detailed discussion

of that interpretation see EPA's responses to NRDC Comments 1 and 4

above. In addition, while it may be true that this guidance did not

undergo State review before issuance, an opportunity for State

participation is provided when such guidance is followed in proposed

rulemaking actions. If a State objects to a proposed action and the

guidance that action is based on, it is free to comment on the proposed

action during the public comment period provided, as indeed, the State

of New York has done here.

State of New York Comment 4: The Detroit-Ann Arbor area has been

designated as moderate ozone nonattainment and as such requires a 15

percent rate-of-progress plan and a modeled attainment demonstration.

It is unclear from the record whether these requirements have been

fulfilled. An exemption request would need this information at a

minimum to determine its validity. Please provide the status of these

State implementation plan revisions.

EPA Response: As described previously in EPA's response to NRDC

Comment 1, EPA action on NOX exemption petitions submitted

pursuant to section 182(f)(3) of the Act can be taken independently of

action on attainment or maintenance demonstration plans or

redesignation requests. Consequently, the issue of whether the State of

Michigan's independent requirements under the Act to submit a 15

percent rate-of-progress plan and an attainment demonstration plan have

been met do not affect EPA's ability to act on the State's exemption

request. (See also EPA's response to NRDC Comment 3, describing the

Agency's policy regarding the use of monitoring data to meet the

``contribute to attainment'' test).

III. Final Action

The comments received were found to warrant no changes from

proposed to final action on this NOX exemption request. Therefore,

EPA is granting the Detroit-Ann Arbor section 182(f) exemption petition

based upon the evidence provided by the State and the State's

compliance with the requirements outlined in the Act and in EPA

guidance. However, it should be noted that this exemption is being

granted on a contingent basis; i.e., the exemption will last for only

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

attainment of the ozone NAAQS.

The EPA's transportation conformity rule6 and EPA's general

conformity rule7 also reference the section 182(f) exemption

process as a means for exempting affected areas from NOX

conformity requirements, and the conformity requirements apply on an

areawide basis. Since this petition for exemption is areawide, as

opposed to source-specific, an approval would also exempt this area

from the NOX conformity requirements of the Act (see John Seitz

May 27, 1994 ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--

Revised Process and Criteria'' memorandum). Additionally, the

Inspection/Maintenance (I/M) Program Final Rule (57 FR 52950) allows

for the omission of the basic I/M NOX requirements if a 182(f)

exemption is granted to an area. Michigan does not currently have--or

need--an enhanced I/M program. If the State did adopt such a program

(because further emissions reductions necessary to address other

portions of the Act could be obtained through an enhanced program), it

would have to be designed to offset NOX increases resulting from

the vehicle repairs due to hydrocarbon (HC) and carbon monoxide (CO)

failures.

\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).

\7\``Determining Conformity of General Federal Actions to State

or Federal Implementation Plans; Final Rule'' November 30, 1993 (58

FR 63214).

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If, subsequent to the NOX waiver being granted, EPA determines

that the area has violated the standard, the section 182(f) exemption,

as of the date of the determination, would no longer apply. EPA would

notify the State that the exemption no longer applies, and would also

provide notice to the public in the Federal Register. If an exemption

is revoked, the State must comply with any applicable NOX

requirements set forth in the Act, such as those for NOX RACT,

NSR, I/M, and conformity. The air quality data relied on for the above

determinations must be consistent with 40 CFR part 58 requirements and

other relevant EPA guidance and recorded in EPA's Aerometric

Information Retrieval System. Additionally, the State must continue to

operate an appropriate air quality monitoring network, in accordance

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

The Federal Register document revoking the NOX exemption would

also establish the schedule for adoption and implementation of those

NOX requirements the area was previously exempt. [[Page 12451]]

On November 12, 1993 the State submitted a redesignation request.

Section 175(A) requires submittal of a maintenance plan for areas that

are redesignating to attainment. This maintenance plan must contain

contingency measures which shall be implemented if a violation of the

ozone standard occurs. Consequently, if the State's redesignation

request is approved, the NOX requirements found in the maintenance

plan for that area would, thereafter, apply as long as the area is

designated attainment for the ozone standard.

This action will become effective on April 6, 1995.

IV. Miscellaneous

A. Applicability to Future SIP Decisions

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future request for revision to any

SIP. The EPA shall consider each request for revision to the SIP in

light of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

B. Executive Order 12866

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 Shapiro, Acting Assistant Administrator for Air

and Radiation. The OMB has exempted this regulatory action from E.O.

12866 review.

C. Regulatory Flexibility

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

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, EPA 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.

This approval does not create any new requirements. Therefore, I

certify that this action does not have a significant impact on any

small entities affected. Moreover, due to the nature of the Federal-

State relationship under the Act, preparation of the regulatory

flexibility analysis would constitute Federal inquiry into the economic

reasonableness of the State action. The Act forbids EPA to base its

actions concerning SIPs on such grounds. Union Electric Co. v. U.S.

E.P.A., 427 U.S. 246, 256-66 (1976).

D. Petitions for Judicial Review

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

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

the appropriate circuit by May 8, 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

Environmental protection, Air pollution control, Oxides of

nitrogen, Incorporation by reference, Intergovernmental relations,

Ozone.

Dated: February 8, 1995.

Norman R. Niedergang,

Acting Regional Administrator.

40 CFR part 52 is amended as follows.

PART 52--[AMENDED]

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

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

Subpart X--Michigan

2. Section 52.1174 is amended by adding paragraph (j) to read as

follows:

Sec. 52.1174 Control strategy: Ozone.

* * * * *

(j) Approval--On November 12, 1993, the Michigan Department of

Natural Resources submitted a petition for exemption from the oxides of

nitrogen requirements of the Clean Air Act for the Detroit-Ann Arbor

ozone nonattainment area. The submittal pertained to the exemption from

the oxides of nitrogen requirements for conformity, inspection and

maintenance, reasonably available control technology, and new source

review. These are required by sections 176(c), 182(b)(4), and 182(f) of

the 1990 amended Clean Air Act, respectively. If a violation of the

ozone standard occurs in the Detroit-Ann Arbor ozone nonattainment

area, the exemption shall no longer apply.

[FR Doc. 95-5444 Filed 3-6-95; 8:45 am]

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