Approval and Promulgation of Implementation Plans; Arizona Phoenix Nonattainment Area; PMINF10

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[AZ-036-1-0008; FRL-5632-2]

Approval and Promulgation of Implementation Plans; Arizona--

Phoenix Nonattainment Area; PM10

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: EPA today proposes to restore its approval of portions of the

State implementation plan (SIP) submitted by the State of Arizona for

the purpose of bringing about the attainment in the Phoenix Planning

Area (PPA) of the national ambient air quality standards (NAAQS) for

particulate matter with an aerodynamic diameter less than or equal to a

nominal 10 micrometers (PM10).

In April 1995, EPA approved the State's ``moderate'' area SIP as

satisfying Federal requirements in the Clean Air Act for an approvable

nonattainment area PM10 plan for the PPA. In May 1996, the United

States Court of Appeals for the Ninth Circuit in Ober v. EPA vacated

EPA's approval and directed the Agency to provide an opportunity for

comment on issues related to the reasonably available control measure

(RACM) and reasonable further progress (RFP) demonstrations in the SIP.

The intent of this proposed action is to comply with the Court's

opinion by providing such an opportunity.

DATES: Comments on this proposed action must be received in writing by

December 23, 1996.

ADDRESSES: Comments must be submitted to Frances Wicher, U.S.

Environmental Protection Agency Region 9, 75 Hawthorne Street, San

Francisco, CA 94105. Copies of the State's submittal and other

information are contained in the docket for this rulemaking. The docket

is available for inspection during normal business hours at the above

Region 9 address.

FOR FURTHER INFORMATION CONTACT: Frances Wicher (A-2-1) U. S.

Environmental Protection Agency, Region 9, Air and Toxics Division, 75

Hawthorne Street, San Francisco, CA 94105, (415) 744-1248.

SUPPLEMENTARY INFORMATION:

I. Background

A. Clean Air Act Requirements

On the date of enactment of the 1990 Clean Air Act Amendments,

PM10 areas, including the Phoenix Planning Area (PPA), meeting the

conditions of section 107(d) of the Act were designated nonattainment

by operation of law. Once an area is designated nonattainment, section

188 of the Act outlines the process for classification of the area and

establishes the area's attainment date. In accordance with section

188(a), at the time of designation, all PM10 nonattainment areas

were initially classified as ``moderate'' by operation of law. See 56

FR 11101 (March 15, 1991). A moderate area may subsequently be

reclassified as ``serious'' under section 188(b)(1) of the Clean Air

Act (CAA) if at any time EPA determines that the area cannot

practicably attain the PM10 NAAQS by the applicable attainment

date for moderate areas, December 31, 1994. Moreover, a moderate area

must be reclassified if EPA determines within six months after the

applicable attainment date that, based on actual air quality data, the

area is not in attainment after that date. See section 188(b)(2) of the

CAA.1

The air quality planning requirements for moderate PM10

nonattainment areas are set out in subparts 1 and 4 of Title I of the

Act. EPA has issued a ``General Preamble'' describing EPA's preliminary

views on how the Agency intends to review SIPs and SIP revisions

submitted under Title I of the Act, including those state submittals

containing moderate PM10 nonattainment area SIP provisions. See

generally 57 FR 13498 (April 16, 1992) and 57 FR 18070 (April 28,

1992).

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\1\ On May 10, 1996, EPA published a final reclassification of

the PPA as a serious PM10 nonattainment area based on actual

air quality data. See 61 FR 21372. Having been reclassified, the

area is required to meet the serious area requirements in the CAA,

including a demonstration that the area will attain the PM10

NAAQS as expeditiously as practicable but no later than December 31,

2001. See sections 188(c)(2) and 189(b).

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Those states containing initial moderate PM10 nonattainment

areas were required to submit, among other things, the following

provisions by November 15, 1991:

1. Pursuant to section 189(a)(1)(C) of the CAA, provisions to

assure that reasonably available control measures (RACM) (including

such reductions in emissions from existing sources in the area as may

be obtained through the adoption, at a minimum, of reasonably available

control technology--RACT) shall be implemented no later than December

10, 1993;

2. Pursuant to section 189(a)(1)(B), either a demonstration

(including air quality modeling) that the plan will provide for

attainment as expeditiously as practicable but no later than December

31, 1994 or a demonstration that attainment by that date is

impracticable;

3. Pursuant to section 189(c), for plan revisions demonstrating

attainment, quantitative milestones which are to be achieved every 3

years and which demonstrate reasonable further progress (RFP) toward

attainment by December 31, 1994; 2 and

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\2\ As will be seen below, the PM10 plan for the PPA did

not demonstrate attainment by December 31, 1994, but rather included

the alternative demonstration that attainment by that date is

impracticable. Therefore, section 189(c) does not apply and is not

discussed further in this notice.

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4. Pursuant to sections 172(c)(2) and 171(1), for plan revisions

demonstrating impracticability, such annual incremental reductions in

PM10 emissions as are required by part D of the Act or may

reasonably be required by the Administrator for the purpose of ensuring

attainment of the PM10 NAAQS by the applicable attainment date.

B. EPA Approval of Arizona's Moderate Area PM10 Plan

On July 28, 1994, EPA proposed to approve The State of Arizona's

moderate area PM10 implementation plan revision for the PPA. 59 FR

38402. In its Notice of Proposed Rulemaking (NPRM), EPA proposed to

approve, among other elements in the plan, the State's RFP and RACM

demonstrations as meeting the requirements of sections 172(c)(2),

171(1), 172(c)(1), and 189(a)(1)(C) of the CAA. Based on its

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approval of the RACM demonstration, EPA also proposed to approve, as

meeting the requirements of section 189(a)(1)(B), the State's

demonstration that even with the implementation of all RACM by December

10, 1993, it was impracticable for the PPA to attain the PM10

NAAQS by December 31, 1994.3

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\3\ The reader should refer to both the NPRM, 59 FR 38402, and

the Notice of Final Rulemaking (NFRM), 60 FR 18010 (April 10, 1995),

for EPA's interpretation of the certain moderate area PM10

requirements of the CAA and the Agency's application of these

interpretations to the State's moderate area PM10 plan. Those

notices should also be consulted for the history of the State's

PM10 plan submittals and EPA's actions concerning them.

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During the 30 day public comment period on the NPRM, the Arizona

Center for Law in the Public Interest (ACLPI) submitted lengthy

comments on many aspects of EPA's proposed approval of the State's

moderate area PM10 plan. Among ACLPI's comments was a claim that

the State had failed to submit adequate, or in some instances any,

justifications, as required by the CAA and EPA policy guidance, for

rejecting certain measures as RACM. In preparing a response to this

comment, EPA requested that the State submit additional detail and

elaboration on the State's reasoning regarding its RACM determination.

The State submitted this information in December 1994 after the close

of the public comment period on the NPRM in a document entitled

``Summary of Local Government Commitments to Implement Measures and

Reasoned Justification for Nonimplementation for the MAG 1991

Particulate Plan for PM10 and Select Measures from the Clean Air

Act Section 108(f)'' (MAG Supplementary document). This document is

included in the docket for EPA's final action approving the moderate

area plan. 60 FR 18010.

ACLPI also disputed EPA's proposed approval of the State's moderate

area PM10 plan as meeting the CAA's RFP requirements. ACLPI

claimed that the State failed to demonstrate any incremental progress

in the PPA because under the plan PM10 emissions would actually

increase from the 1989 base year to 1994, the attainment year.4

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\4\ During the Ninth Circuit litigation on EPA's approval of the

plan, discussed in section I.C. of this notice, ACLPI elaborated on

this claim. ACLPI maintained that EPA had erroneously and improperly

recalculated the emission reduction credit assigned by the State to

Maricopa County rule 310 (fugitive dust). ACLPI asserted that EPA

was not entitled to calculate the control effectiveness of the rule

based on the entire nonattainment area (rather than just the urban

portion as the State had done). ACLPI claimed that without EPA's

unwarranted inflation of the credit assigned to the rule, PM10

emissions in the PPA would increase in violation of the CAA's RFP

requirements.

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On April 10, 1995, having considered ACLPI's comments, EPA

published a NFRM in the Federal Register approving the State's moderate

area PM10 SIP for the PPA. 60 FR 18010. In its final action, EPA

approved, among other elements of the plan, the State's RACM and RFP

demonstrations, and the State's demonstration that even with the

implementation of all RACM by December 10, 1993, it was not practicable

for the PPA to attain the PM10 NAAQS by December 31, 1994.

C. Ninth Circuit Litigation

On May 1, 1995, ACLPI filed, on behalf of two Phoenix residents, a

petition for review, Ober v. EPA, No. 95-70352, of EPA's approval of

Arizona's moderate area PM10 plan for the PPA in the United States

Court of Appeals for the Ninth Circuit. On May 14, 1996, the Court

issued its opinion in the Ober case vacating EPA's approval of the

State's plan.5

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\5\ The reader is referred to the text of the opinion for the

Court's disposition of the range of issues raised by ACLPI in its

petition. See 84 F.3d 304 (9th Cir. 1996). Today's notice addresses

only a portion of that disposition.

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As an initial matter, the Court concluded that the State was

required to address in its SIP the moderate area requirements regarding

RFP, RACM and attainment or impracticability for both the 24-hour and

the annual PM10 NAAQS. The Court found that the State's moderate

area SIP improperly addressed the required demonstrations only for the

annual standard.6 The Court then considered EPA's approval of the

following annual standard demonstrations in the plan.

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\6\ In order to remedy the failure of the State to address the

required demonstrations for the 24-hour standard, the Court required

EPA to in turn require the State to submit those demonstrations.

Today's notice, however, addresses only those aspects of the Court's

findings and conclusions with respect to the RACM, RFP and

impracticability demonstrations for the annual standard.

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With regard to EPA's approval of the State's RACM demonstration,

the Court concluded that EPA violated the Administrative Procedure Act

and the CAA by not providing an opportunity for public comment on the

justifications for rejecting certain control measures as RACM that the

State provided to EPA after the close of the public comment period on

the Agency's proposed SIP approval action. See MAG Supplementary

document.

In addition, with regard to EPA's approval of the RFP

demonstration, the Court did not reach the merits of ACLPI's challenge

to EPA's interpretation of RFP for moderate PM10 areas

demonstrating that it was impracticable to attain the PM10 NAAQS

by the statutory deadline. Instead, the Court found that the Agency

improperly substituted its own recalculation of the emission reduction

credit attributed to rule 310 without providing the required

opportunity for public comment.

Having made the above findings, the Court remanded the case to EPA

with instructions to provide an opportunity for public comment on the

post-comment period justifications for rejecting certain control

measures as RACM and on the RFP demonstration.

II. Today's Actions

A. RACM Demonstration

In today's action, EPA is taking comment on the expanded

justifications for rejecting certain control measures as RACM that the

State submitted to EPA in December 1994, following the close of the

public comment period on EPA's July 1994 proposed approval of the

State's moderate area PM10 plan. See MAG Supplementary document.

EPA is today reaffirming its analysis of the RACM demonstration in

the State's moderate area PM10 plan as discussed in the NPRM and

the NFRM for the Agency's approval action, and therefore proposes to

restore its approval of these elements of the State's plan.7

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\7\ EPA intends in a future rulemaking to restore its final

approval of several Maricopa County rules in the moderate area

PM10 plan that were not challenged in the Ninth Circuit, the

approval of which were nevertheless vacated by the Court's opinion.

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B. RFP Demonstration

As stated above, the Ober Court directed EPA to take comment on the

appropriate emission reduction credit attributed to Maricopa County

rule 310 as it relates to the RFP demonstration in the State's moderate

area PM10 plan. In preparing to comply with the Court's directive,

the Agency reviewed both the emission reduction credits originally

assigned by the State to the control measures in the plan, including

rule 310, and EPA's recalculation of those credits as described in the

NFRM. See 60 FR 18018. In that recalculation EPA had assumed the

measures in the plan would yield emission reductions over a greater

geographic area than the State had claimed. EPA has, however, concluded

from its current review that the emission reduction potential of the

measures cited in the NFRM was in error, and that the State's original

calculation was appropriate. EPA's review and conclusions are discussed

in detail in the Technical Support Document (TSD) for this notice.

In conducting the above review, it also came to the Agency's

attention that

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its statements in the NFRM regarding the scope of the emission

reductions required to demonstrate RFP under sections 172(c)(2) and

171(1) of the Act for plans demonstrating impracticability may be

ambiguous. In order to eliminate any confusion that may have resulted

from these statements, EPA is today clarifying its interpretation of

the RFP requirements for such plans.

In response to ACLPI's comment on the NPRM that the plan did not

demonstrate RFP from the 1989 base year to 1994 because emissions

actually increased during that period, EPA in the NFRM noted the 1989

base year inventory and the projected 1994 inventory numbers. EPA then

stated that ``* * * the total 1994 projected inventory after

application of RACM * * * shows, consistent with EPA's guidance on

demonstrating RFP, which is described in greater detail earlier in this

notice [at p. 18013] * * * that the area has indeed made progress in

reducing emissions from the base year total, and thus has demonstrated

it has met the requirements of section 172(c)(2) for the period 1990-

1994.'' 60 FR 18018, col. 2.

Elsewhere in the NFRM, in its general discussion of the issue, the

Agency stated that plans demonstrating impracticability ``should show

that even though the emission reductions achieved through the

implementation of all RACM may not be enough to enable the area to

demonstrate attainment by the moderate area deadline of December 31,

1994, such implementation has resulted in `incremental reductions' in

emissions of PM10 as the RFP definition in section 171(1)

specifies.'' 60 FR 18013, col. 2.

EPA intended in the above NFRM discussions to interpret the RFP

requirement for areas demonstrating impracticability as being met by a

showing that the implementation of all RACM has resulted in incremental

emission reductions below pre-implementation levels.8 That EPA

intended this interpretation is demonstrated by the discussion of the

RFP issue in the Agency's brief in the Ober litigation. See Brief for

Respondents, pp. 7-8 and 42.9

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\8\ EPA did not intend to suggest, as might be inferred from its

response to ACLPI's comment, that a showing in such plans of

emission reductions from 1989 (or 1990) to 1994 would be necessary

to meet the RFP requirements. As stated in the quoted passage from

EPA's response to ACLPI's comment, the Agency simply meant that such

a showing would be consistent with EPA's guidance as set forth at 60

FR 18013. Having concluded that the State's original calculation of

the emission reduction potential of the control measures in the plan

is appropriate, EPA agrees with ACLPI that PM10 emissions

increased from 1989 to 1994. EPA does not, however, agree that

emissions must decrease during that period in order for the plan to

meet the section 172(c)(2) RFP requirement.

\9\ See also Brief for Respondents at pp. 43-44:

What the Act requires is the implementation of RACM by

December 10, 1993. 42 U.S.C. 7513a(a)(1)(C). For that reason * * *

EPA has stated that the incremental reductions compelled for

moderate areas are those that resulted from the implementation of

RACM. 60 Fed. Reg. 18013 * * *. The definition of RFP, 42 U.S.C.

7501(1), does not mandate that EPA require any additional reductions

beyond what RACM itself would achieve.

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EPA believes the interpretation presented in the Agency's Ober

brief is consistent with the statutory term ``reasonable further

progress.'' RFP is defined in section 171(1) as either annual

incremental reductions as are required under part D, or such reductions

as the Administrator may reasonably require ``for the purpose of

ensuring attainment of the [NAAQS] by the applicable date.'' However,

as mentioned above, the PPA did not demonstrate attainment, but instead

demonstrated that it was impracticable to attain the PM10 standard

by the December 31, 1994 moderate area PM10 attainment deadline,

even after implementation of RACM. Once EPA has determined that such an

area has implemented all reasonable control measures that are

available, and that the area still would not timely attain, there are

no further reductions that would be reasonable to require ``for the

purpose of ensuring attainment'' by the moderate area attainment

deadline. Thus, the emissions reductions achieved by such an area

through implementation of all RACM, by definition, would satisfy the

requirement to demonstrate reasonable further progress in the period

before the State must submit the additional measures needed to produce

the net emissions reductions required to bring about attainment.

As discussed in the TSD for this notice, EPA has concluded that the

State's original calculation of the emission reduction potential of the

control measures in its moderate area PM10 plan demonstrates

incremental PM10 emission reductions from the implementation of

all RACM over pre-implementation levels. Therefore, EPA believes that

the State has met the RFP requirements, as clarified in today's notice,

of section 172(c)(2) for plans demonstrating impracticability. As a

result, EPA is today proposing to restore its approval of the RFP

demonstration in the State's moderate area PM10 plan. EPA is also

today reaffirming, with the above clarification, its analysis of the

RFP requirements for moderate area PM10 plans demonstrating

impracticability as discussed in the NFRM at 60 FR 18012-13.

C. Impracticability Demonstration

The Ober Court did not specifically address EPA's approval of the

State's moderate area demonstration that it was impracticable for the

PPA to attain the PM10 NAAQS by the statutory deadline. Nor did

the Court direct EPA to take any action with respect to that

demonstration. Nevertheless, for the reasons discussed below, EPA is

today proposing to restore its approval of the State's moderate area

impracticability demonstration.

As stated previously, the Ninth Circuit vacated EPA's approval of

the State's moderate area PM10 plan in its entirety, including the

State's demonstration that it was impracticable for the PPA to attain

the annual PM10 NAAQS by the end of 1994 even with the

implementation of all RACM. Clearly the validity of EPA's approval of

this impracticability demonstration is dependent on an approved RACM

demonstration. The approvability of the RACM demonstration depends in

turn on the appropriateness of the State's justification for rejecting

certain control measures as RACM. As stated above, EPA is providing an

opportunity for comment on a number of these justifications and

proposing to restore its approval of the RACM demonstration in today's

notice.

EPA believes that because the PPA was reclassified from a moderate

to a serious nonattainment area in 1996, the moderate area attainment

requirements (demonstration of impracticability or attainment by no

later than December 31, 1994) have been superseded by the serious area

attainment requirement (attainment by no later than December 31, 2001)

and are therefore now moot. Having reviewed the CAA's moderate and

serious area PM10 attainment provisions, EPA has concluded that

when a moderate PM10 area has been reclassified after the moderate

area attainment deadline has passed and been replaced with a new

deadline, the moderate area deadline no longer has any logical,

practical or legal significance. Similarly, once such a

reclassification has occurred, the approval status of the SIP

provisions addressing the previous attainment requirements is no longer

of any consequence. Thus, under this interpretation, there would be no

need to restore the Agency's approval of the State's moderate area

impracticability demonstration for the PPA.

However, in addition to the Ninth Circuit's remedy, addressed in

today's notice, for deficiencies related to EPA's approval of the

moderate area RFP and RACM demonstrations for the annual

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PM10 standard, the Court directed EPA to require the State to

address the moderate area attainment requirements for the 24-hour

standard. See footnote 6. By analogy, EPA assumes that the Court

expects that the moderate area attainment requirements for the annual

standard must also be met.

When the Court fashioned its remedy requiring the State to address

the moderate area attainment requirements for the 24-hour standard, it

did so in the context of a pending proposed reclassification of the PPA

to serious.\10\ However, the Court believed that EPA was proposing the

reclassification under section 188(b)(1) of the CAA based on the

State's impracticability demonstration. 304 F.3d at 309. In fact, EPA

had proposed to reclassify the area either under section 188(b)(1) or,

in the alternative, under section 188(b)(2) (after the attainment

deadline based on actual air quality data indicating that the area has

failed to attain the PM10 NAAQS by the statutory deadline). See 60

FR 30046 (June 7, 1995). The area's final reclassification was based on

a finding under section 188(b)(2) that the area had failed to attain

the PM10 NAAQS because of violations of both the annual and 24-

hour standards. See 61 FR 21372.

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\10\ While neither the reclassification nor its effect on

moderate area planning requirements was before the Ober Court, the

Court was aware of the proposed reclassification when the case was

briefed and argued. And it is clear from the opinion that the Court

believed EPA was required to promulgate a final reclassification.

304 F.3d at 309-311. EPA published its final reclassification of the

PPA to a serious nonattainment area on May 10, 1996, four days

before the Ninth Circuit issued its Ober opinion. 61 FR 21372.

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Therefore, EPA believes that, to the extent the Court concluded in

fashioning its remedy that an area must continue to meet the moderate

area attainment requirements after it has been reclassified to serious,

the Court could not have made this judgment based on a consideration of

the legal effect of a final reclassification under section 188(b)(2) on

the area's pre-existing moderate area attainment requirements.

Consequently, EPA believes that it is not precluded by the Court's

decision from concluding that, under these circumstances, the moderate

area attainment requirements for both the annual and 24 hour NAAQS have

been legally superseded by the serious area attainment requirements and

therefore are now moot and need not be addressed after the area's

reclassification.

While EPA could have sought clarification from the Ninth Circuit in

order to apply this conclusion in the context of compliance with the

Court's remedies in Ober, the Agency does not believe that it would

have been in the public interest to do so. Such a review would

necessarily have occurred without benefit of a thorough briefing on the

issue and in the absence of an administrative record. Thus EPA has

chosen to comply with the Court's remedies regarding the moderate area

attainment requirements in spite of the Agency's view that the

reclassification of the PPA based on air quality rendered those

requirements legally ineffective.\11\ The Agency does, however, reserve

its right to assert its interpretation in any challenge to EPA's

implementation of the Court's remedies or in the context of other

reclassifications.

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\11\ Because EPA is not applying this interpretation in today's

rulemaking, it does not constitute final agency action.

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III. Administrative Requirements

A. Executive Order 12866

This action has been classified as a Table 3 action for signature

by the Regional Administrator under the procedures published in the

Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a

July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for

Air and Radiation. The Office of Management and Budget (OMB) has

exempted this regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

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 business, small not-for-profit enterprises and

government entities with jurisdiction over populations of less than

50,000.

SIP approvals under subchapter I, part D of the Clean Air Act, do

not create any new requirements, but simply approve requirements that a

state is already imposing. Therefore, because the federal SIP approval

does not impose any new requirements, the Administrator certifies that

it does not have a significant impact on any small entities affected.

Moreover, due to the nature of the Federal-State relationship under the

CAA, preparation of a flexibility analysis would constitute federal

inquiry into the economic reasonableness of state action. The Clean Air

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 (S.Ct. 1976); 42

U.S.C. 7410(a)(2).

C. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

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

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a federal mandate that may result in estimated

costs to state, local, or tribal governments in the aggregate; or to

the private sector, of $100 million or more. Under section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves that objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by this rule.

EPA has determined that the approval action proposed does not

include a federal mandate that may result in estimate costs of $100

million or more to either state, local, or tribal governments in the

aggregate, or to the private sector. This Federal action approves pre-

existing requirements under state or local law, imposes no new federal

requirements. Accordingly, no additional costs to State, local or

tribal governments, or to the private sector, results from this action.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Particulate

matter, Intergovernmental relations.

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

Dated: September 26, 1996.

Felicia Marcus,

Regional Administrator.

[FR Doc. 96-26574 Filed 10-22-96; 8:45 am]

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