Interim Implementation Policy on New or Revised Ozone and Particulate Matter (PM) National Ambient Air Quality Standards (NAAQS)

SUMMARY: This document is to propose a policy regarding interim

implementation requirements for ozone and PM air pollution control

during the time period following promulgation of new or revised NAAQS.

Elsewhere in today's Federal Register, EPA is proposing these NAAQS.

The policy as proposed is intended to ensure momentum is maintained by

the States in the current program while moving toward developing their

plans for implementing the new NAAQS. An explanation and structure of

the Federal Advisory Committee Act (FACA) Subcommittee for Ozone, PM

and Regional Haze Implementation Programs (Subcommittee) is provided

under SUPPLEMENTARY INFORMATION.

DATES: Written comments on this proposal must be received by February

18, 1997.

ADDRESSES: Comments. Comments on this proposal should be submitted (in

duplicate if possible) to the Air and Radiation Docket and Information

Center, 401 M Street, SW, Washington, DC 20460, Attention Docket Number

A-95-38. Docket. The public docket for this action is available for

public inspection and copying between 8:00 a.m. and 5:30 p.m., Monday

through Friday, at the Air and Radiation Docket and Information Center

(6102), Attention Docket A-95-38, South Conference Center, Room 4, 401

M Street, SW, Washington, DC 20460. A reasonable fee for copying may be

charged.

FOR FURTHER INFORMATION CONTACT: For general FACA Subcommittee

questions and comments, contact Ms. Denise Gerth, U.S. EPA, MD-15,

Research Triangle Park, NC 27711, telephone (919) 541-5550. For

specific questions and comments on the NPP, contact Ms. Sharon

Reinders, U.S. EPA, MD-15, Research Triangle Park, NC 27711, telephone

(919) 541-5284.

SUPPLEMENTARY INFORMATION: The following communications and outreach

mechanisms have been established:

Overview information--A World Wide Web (WWW) site has been

developed for overview information on the NAAQS and the ozone, PM, and

regional haze (RH) FACA process. The Uniform Resource Location (URL)

for the home page of the web site is http://www.epa.gov/oar/faca/.

Detailed and technical information--Available on the O3/PM/RH

Bulletin Board on the Office of Air Quality Planning and Standards

(OAQPS) Technology Transfer Network (TTN), which is a collection of

electronic bulletin board systems operated by OAQPS containing

information about a wide variety of air pollution topics. The O3/PM/RH

Bulletin Board contains separate areas for each of the FACA

Subcommittee's five work groups and includes meeting materials, issue

papers, as well as general areas with information about the process,

participants, etc. The TTN can be accessed by any of the following

three methods:

--By modem: the dial-in number is (919) 541-5742. Communications

software should be set with the following parameters: 8 Data Bits, No

Parity, 1 Stop Bit (8-N-1) 14,400 bps (or less).

--Full Duplex.

--ANSI or VT-100 Terminal Emulation.

The TTN is available on the WWW site at the following URL: http://

ttnwww.rtpnc.epa.gov/html/ozpmrh/facahome.htm. The TTN can also be

accessed on the Internet using File Transfer Protocol (FTP); the FTP

address is ttnftp.rtpnc.epa.gov. The TTN Helpline is (919) 541-5384.

Table of Contents

Purpose and Objectives

A. FACA Subcommittee

B. Basis for the Interim Implementation Policy

C. Interim Policy

1. Effective Dates

2. Designations, Redesignations and Classifications

a. Ozone

b. PM-10

3. Program Requirements

a. Progress Requirements for Serious and above Ozone Areas

b. Attainment Demonstrations

(1) Ozone

(2) PM-10

c. July 1996 Findings Issued by EPA--Ozone

d. New Requirements for Marginal and Moderate Areas--Ozone

e. Planning and Control Requirements--PM-10

f. Substitutions

(1) Ozone

(2) PM-10

g. OTR, OTC, PAMS

h. Conformity

i. New Source Review

Purpose and Objectives

This notice proposes an interim implementation policy associated

with the potential revision of the ozone and PM NAAQS. The interim

implementation policy is the guidance that EPA will use to continue to

implement the ozone and PM-10 nonattainment programs. The ozone and PM

NAAQS are proposed elsewhere in today's Federal Register. The EPA

intends to propose a regional haze program in mid-1997. Although EPA is

undertaking a notice and comment process regarding the interim

implementation policy, the interim implementation policy would

nevertheless be a policy to be implemented through subsequent

rulemaking actions, e.g., findings or other actions regarding SIP

submittals from the States. Thus, the interim implementation policy

would represent EPA's preliminary views on these issues and, while it

may include various statements that States must take certain actions,

these statements are made pursuant to EPA's preliminary

interpretations, and thus do not bind the States and public as a matter

of law. Only after EPA has made its interpretations final through

rulemaking will they be binding on the States and public as a matter of

law. Such rulemaking will follow the requirements of the Administrative

Procedure Act, 5 U.S.C. section 553(b) and (c), and in some cases may

rely on the ``good cause'' exception in 5 U.S.C. section 553(b)(B).

In advance of these actions, the EPA published an advance notice of

proposed rulemaking (ANPR) entitled, ``National Ambient Air Quality

Standards for Ozone and Particulate Matter,'' on June 12, 1996 (61 FR

29719) which announced the EPA's plans to propose decisions on whether

to retain or revise the ozone and PM NAAQS. That ANPR also described

the FACA Subcommittee process established under the Clean Air Act

Advisory Committee (CAAAC) to provide advice and recommendations to the

EPA on developing new, integrated approaches for implementing potential

revised NAAQS for ozone and PM, as well as a new regional haze

reduction program. The Subcommittee is composed of representatives from

State, local and tribal organizations, environmental groups, industry

and trade groups (including small business representatives),

consultants, academic/

[[Page 65753]]

scientific communities, and Federal agencies. The organization of the

Subcommittee includes a Coordination Group and four work groups: (1)

Base Programs Analyses and Policies Work Group, (2) National and

Regional Strategies Work Group, (3) Science and Technical Support Work

Group, and (4) Communications and Outreach Work Group. Through this

process, EPA is engaging in communications with segments of society

that may be affected by the implementation of NAAQS and the regional

haze program.

Elsewhere in today's Federal Register, the EPA is also publishing

an ANPR entitled, ``Implementation of New or Revised Ozone and

Particulate Matter (PM) National Ambient Air Quality Standards (NAAQS)

and Regional Haze Regulations,'' which outlines policy and technical

implementation issues and principles, and questions for issues

associated with the potential revision of the ozone and PM NAAQS and

the development of a regional haze program.

These notices are intended to invite stakeholders to participate in

the implementation development process, to assure that their concerns

will be addressed and their options assessed, and, ultimately, to

increase the effectiveness of the NAAQS implementation strategies and

regional haze reduction program that is established.

A. FACA Subcommittee Recommendations

The Subcommittee has provided advice and recommendations for

consideration by CAAAC on implementation of specific programs covering

the transition time period after new or revised NAAQS are promulgated.

The EPA is taking the advice and recommendations that the Subcommittee

recommended for consideration by the CAAAC into consideration in this

proposal. Where the Subcommittee reached broad agreement in their

recommendations, EPA is accepting the recommendations. In other

situations where the Subcommittee may not have reached broad agreement,

EPA is modifying the recommendations. Where no specific recommendations

were made, EPA is following the general philosophy that is invoked by

the other recommendations. The recommendations and advice of the FACA

Subcommittee provide the foundation of today's proposal.

The EPA solicits comment on each element contained in this proposal

and seeks additional suggestions on approaches to increase flexibility

during the interim period to improve both air quality and pollution

reduction strategies with a change in the NAAQS. Consistent with long-

standing EPA policy, States have the ability to propose case-by-case

modifications to their plans which could make equivalent or improved

environmental progress. The EPA will review and rulemake on these

through the normal SIP revision process. Consistent with this, EPA

solicits comment on whether, and how, to allow flexibility to control

programs during the timeframe of the IIP to allow additional

substitutions and/or modifications to existing control programs.

Additionally, EPA seeks comment on the relevant criteria, such as air

quality impact, emission reductions, risk and population exposure,

cost-effectiveness, and transport impacts, it should employ during the

evaluation of such SIP revisions. The reader is directed to the interim

policy portion of this notice for further details.

Recognizing the merit of market-based solutions to pollution

control, in 1994, EPA issued the economic incentive program (EIP) rule,

which provides rules and guidance for establishing economic incentive

programs. The EIP remains available to be used in coordination with

this policy as part of the States' plans to reduce pollution and

achieve the new NAAQS.

B. Basis for the Interim Implementation Policy

The EPA interprets the relevant portions of the Clean Air Act (Act)

to provide that the general planning requirements of part A of title I

and the basic nonattainment planning requirements of subpart 1 of part

D of title I govern the implementation of a new or revised NAAQS. The

detailed provisions of subparts 2 and 4 of part D that currently apply

to ozone and PM-10 (particles with an aerodynamic diameter less than or

equal to a nominal 10 micrometers) nonattainment planning would not

apply directly to the implementation of a new ozone NAAQS or a new fine

particle NAAQS, but would continue to apply during the interim period

after promulgation of a new or revised NAAQS to the extent they are

retained under a no-backsliding principle and to the extent they are

needed to comply with the general obligations of subpart 1. The

provisions of subpart 4, however, would apply to the implementation of

a new or revised PM-10 NAAQS. Furthermore, with regard to a no-

backsliding principle, section 110(l) provides that EPA may not approve

revisions to SIP's that interfere with requirements to attain or make

reasonable further progress (RFP) or with any other applicable

requirements of the Act.

The basis for the view that the specific requirements of subparts 2

and 4 do not apply directly in the case of the implementation of a new

or revised ozone NAAQS, or in the implementation of a fine particle

NAAQS, lies in the language and structure of those subparts, which are

clearly and explicitly tied to the 1-hour ozone NAAQS in existence at

the time of the enactment of the 1990 Amendments to the Act in the case

of subpart 2, and to a PM-10 NAAQS in the case of subpart 4. The

provisions of subpart 1, however, apply to the implementation of any

NAAQS, including revisions to NAAQS in effect at the time of the 1990

Amendments. For example, the current ozone classification scheme of

subpart 2, which forms the basis for the control requirements and

attainment dates for nonattainment areas, is explicitly linked with the

1-hour NAAQS while section 172(a)(1) explicitly authorizes that EPA may

establish a new classification system with respect to a revision of a

NAAQS. Subpart 4 expressly applies only to PM-10. Thus, as subparts 2

and 4 are limited in direct applicability to the 1-hour ozone NAAQS and

PM-10 NAAQS respectively, only subpart 1 directly applies to

implementation of new or revised ozone NAAQS or a fine particle NAAQS

in nonattainment areas. Because the provisions of subpart 4 are not

linked to a specific PM-10 NAAQS (in contrast to subpart 2's linkage to

one specific ozone NAAQS), the provisions of subpart 4 would apply to

the implementation of a revised PM-10 NAAQS.

Of critical importance, however, is that subpart 1, in addition to

the general obligations of section 172(c), includes a no-backsliding

principle operative in the event of revisions to a NAAQS. Section

172(e) of the Act clearly provides that a no-backsliding principle

should apply upon a relaxation of an existing NAAQS. It provides that

EPA is to conduct a rulemaking within 12 months of the promulgation of

a relaxed NAAQS to promulgate requirements applicable to areas not

attaining the existing standard that will provide for controls which

are not less stringent than the controls applicable to areas designated

nonattainment before such relaxation.

The EPA believes that a no-backsliding principle is even more

important and by implication was intended by the Act to be a governing

principle when an existing NAAQS is strengthened, as is the case with

ozone. However, the Act does not expressly

[[Page 65754]]

address how to implement the no-backsliding principle before the new

NAAQS is implemented through the SIP program. Therefore, in order to

provide greater assurance that the currently existing and required

control measures will continue to be implemented until the

implementation program for the new ozone NAAQS actually begins, which

will probably not occur for several years, EPA is proposing (in the

NAAQS proposal published elsewhere in today's Federal Register) that

the effective date of the revocation of the existing ozone NAAQS (the

1-hour standard) be deferred until EPA determines that an area has a

SIP that provides for the achievement of the new NAAQS. This deferral

of the effective date would be on a case-by-case basis, e.g., once an

attainment demonstration for the new ozone NAAQS is approved for a

particular nonattainment area or EPA determines that a SIP for an

attainment area meets the requirements of section 110(a)(1), the

existing 1-hour ozone standard NAAQS would no longer be in effect as to

that area. This will provide greater assurance that the air quality

benefits of the existing ozone NAAQS implementation program, which EPA

believes are necessary to attain and maintain the potential new or

revised ozone NAAQS, will be retained, than would reliance solely on a

no-backsliding principle implemented administratively through the

general provisions of subpart 1 of part D of the Act.

The purposes for which EPA is not deferring the effective date of

the revocation of the existing ozone NAAQS are those for which EPA

believes it is not necessary or desirable to retain the existing NAAQS

as part of a transition from the old to the new ozone NAAQS. These

exceptions are twofold: (1) The requirement to demonstrate attainment

of the existing NAAQS by the attainment dates set forth in subpart 2 of

part D, and (2) the provisions regarding the reclassification of areas

upon a failure to attain the current ozone standard by the applicable

attainment dates in subpart 2. The EPA believes it is appropriate to

exempt the first requirement from the general deferral of the effective

date of the revocation of the existing NAAQS since its focus is on

demonstrating attainment of the existing NAAQS as of a certain date--

which will be superseded by a new requirement to attain the new NAAQS

by new dates. The EPA believes it is appropriate for areas to shift

their efforts to develop attainment demonstrations from the existing

NAAQS to the new NAAQS. With respect to the second requirement, EPA

believes that while areas should have to continue with the

implementation of the control measure programs required as of the date

a new NAAQS is promulgated, they need not have to comply with the

additional specified control measures that they would have been subject

to had they been reclassified in accordance with the provisions of

subpart 2. As described below, EPA is relying on an independent basis

for requiring these areas to achieve the same rate of progress in terms

of emission reductions that they would have had to achieve after a

reclassification under subpart 2. For the reasons described therein,

EPA believes these areas should have greater flexibility in adopting

and implementing new control measures to achieve the same progress than

if they were simply subject to the reclassification provisions of

subpart 2.

Also, based in part on the Subcommittee's deliberations and

recommendations, the EPA believes that rather than expending

significant effort during this interim period to evaluate whether to

retain or eliminate the various existing and required control measures

in light of the potential new or revised NAAQS, States and stakeholders

should focus their planning efforts on moving forward to attain the new

NAAQS rather than reevaluating prior planning decisions.

C. Interim Policy

1. Effective Dates

The interim policy that EPA is proposing in this notice is intended

to take effect on the date of the NAAQS promulgation and remain as to

each area until the effective date of EPA approval of the SIP revision

for achievement of the new NAAQS. The EPA believes that approval rather

than submission of a SIP is appropriate because submission of a new SIP

alone provides neither sufficient assurance to allow the requirements

in the currently EPA-approved SIP to be changed nor a sufficient legal

basis for revising, amending or deleting requirements in a SIP that had

been previously approved by EPA. The EPA notes that SIP's are approved

through rulemaking action by EPA and thereby become Federal rules that

are incorporated in the CFR. In order to revise such Federal rules,

through a revision to a SIP, further EPA rulemaking action must be

taken. Thus, EPA is proposing that the effective dates for the interim

policy are from the date of NAAQS promulgation to the effective date of

EPA approval of the new SIP for each area to achieve the new NAAQS. The

length of time this policy remains in effect could be several years and

depends on the time necessary for States to develop new SIP's and be

approved by EPA.

This interim policy is not intended to apply to new attainment

demonstrations and SIP submissions made to implement a new NAAQS which

occurs after areas have undergone designations under section 107(d)(1)

with respect to a new NAAQS. Further policy, guidance, and/or rules

will be developed following further deliberations of the FACA that will

apply to such submissions.

2. Designations, Redesignations and Classifications

In section 107(d)(1)(B)(iv), the Act provides that existing ozone

and PM-10 designations remain in effect until areas are redesignated

pursuant to section 107(d)(3). By analogy, EPA believes it is

reasonable for such designations to remain in effect after promulgation

of new NAAQS until new designations are undertaken after promulgation

of the new NAAQS. In addition, in the case where the current ozone

NAAQS would remain in effect, the designations would remain in effect

so long as the current 1-hour ozone NAAQS remains in effect. No similar

provision exists for classifications, however. Nevertheless, as

classifications are linked with the control requirements applicable to

the nonattainment areas, they should continue to have force inasmuch as

they determine the control requirements applicable for purposes of

applying the no-backsliding principle. In particular for ozone, because

the existing NAAQS would remain in effect, the classifications remain

in effect as well. Since classifications continue, control measures

required for a specific classification in policy or guidance continue

to apply.

a. Ozone

The EPA is proposing that ozone nonattainment areas with clean air

quality data at the time of promulgation of the new or revised ozone

NAAQS may be redesignated to attainment provided they satisfy the

criteria of section 107(d)(3)(E) including having a fully-approved SIP,

meeting all applicable requirements and an approved maintenance plan.

Any redesignation action taken on areas currently designated attainment

or nonattainment does not preclude EPA from taking future action with

respect to these areas in the new round of designations that will

address the new or revised NAAQS.

The following two scenarios would apply to existing ozone

nonattainment

[[Page 65755]]

areas that wish to redesignate to attainment:

(1) Requests Submitted and EPA Approved Prior to Promulgation

Complete redesignation requests and maintenance plans for ozone

nonattainment areas submitted prior to the promulgation date of the new

or revised ozone NAAQS will be allowed to redesignate to attainment

prior to promulgation of the new or revised ozone NAAQS upon approval

of the maintenance plan provided that all available air quality data

show attainment of the current 1-hour NAAQS. Therefore, any requests

submitted prior to promulgation of the new NAAQS, which are not finally

approved by EPA, will be processed according to scenario 2 below.

(2) Requests Submitted and EPA Approved on or After Promulgation

Ozone redesignation requests and maintenance plans submitted on or

after promulgation of the new or revised NAAQS will be evaluated in

accordance with section 107(d)(3)(E). In this case, maintenance plans

must demonstrate attainment and maintenance of the 1-hour NAAQS and the

new or revised NAAQS.

The EPA also recommends that previously redesignated ozone

nonattainment areas review their maintenance plans to determine if

their contingency provisions need to be modified to reflect the

promulgation of a new or revised NAAQS.

b. PM-10

The EPA is proposing that PM-10 nonattainment areas with clean air

quality data at the time of promulgation of the new and/or revised PM

standards be allowed to redesignate to attainment if they satisfy the

criteria of section 107(d)(3)(E) including having a fully-approved SIP,

meeting all applicable requirements, and a maintenance plan. Thus, in

the event that the 24-hour PM-10 standard is revised, existing

nonattainment areas could redesignate to attainment if they otherwise

satisfy the criteria of section 107(d)(3)(E) and submit a maintenance

plan which demonstrates attainment with a SIP-approved design value

which is equivalent to or below the revised PM-10 24-hour standard. If

the area has already submitted a redesignation request, it need not

withdraw and revise it unless the existing redesignation request and

maintenance plan do not demonstrate that the SIP-approved design value

will be below the revised PM-10 24-hour standard. In such a case, they

should resubmit a revised redesignation request and maintenance plan

that shows attainment and maintenance of the revised PM-10 standard.

In the event the PM-10 24-hour standard is eliminated, current

nonattainment areas with clean air quality data at the time of

promulgation would still be eligible to redesignate to attainment

pending a submittal of a fully-approvable SIP demonstrating attainment

of the PM-10 annual standard and the submittal of the maintenance plan

under section 175A as required in section 107(d)(3)(E).

A nonattainment classification for PM-10 remains in effect until

States can assess the impact of a revised PM-10 standard. In the case

of PM-10, reclassification to serious is based on the inability of the

area to practicably attain the 24-hour and/or annual PM-10 NAAQS within

the timeframes prescribed by the Act. Consistent with the no-

backsliding principle, those areas which failed to attain the PM-10

NAAQS in 1994 should have been reclassified as serious PM-10 areas.

Since the deadline by which to reclassify to serious was before the

June 1997 NAAQS promulgation, the requirements for serious areas would

still apply. Areas with attainment dates occurring during the interim

period will not be reclassified during the interim period.

3. Program Requirements

a. Progress Requirements for Serious and Above Ozone Areas

The EPA believes that the current ROP requirements should continue

until EPA has approved the new SIP for the new NAAQS. Section

182(c)(2)(B) provides specifically that ozone nonattainment areas

classified as serious and higher under the current NAAQS must submit a

SIP (post-1996 ROP plan) which provides for actual VOC or NOX

emissions reductions of at least 3 percent per year averaged over each

consecutive 3-year period beginning November 15, 1996 until the area's

attainment date. The due date for this SIP was November 15, 1994 under

the Act, but was extended to the end of 1995 in the ``Ozone Attainment

Demonstrations,'' memorandum from Mary D. Nichols to Regional

Administrators, March 2, 1995 (March 2, 1995 policy statement).

For ten States and the District of Columbia, EPA, by rulemaking

published July 10, 1996 (61 FR 36292), made findings of failure to

submit for (1) the first 9 percent of the post-1996 ROP plan and (2)

for those States with severe ozone nonattainment areas, the commitment

to adopt the additional post-1999 ROP control measures. This is

discussed more fully below under July 1996 Findings Issued by EPA.

For ozone nonattainment areas classified as severe and higher, EPA

believes that the post-1996 ROP plan should still include emissions

reductions after 1999 in the event the new SIP's to attain the new

NAAQS are delayed. Therefore, EPA is proposing to continue the

requirement for an average of 3 percent per year ROP post-1999 until

SIP's to attain the new NAAQS are approved by EPA. Although this

represents a modification of the current requirement to provide for 3

percent-per-year ROP until the applicable attainment dates, EPA

believes this is reasonable in light of a new NAAQS and the shift to

planning for attainment of that NAAQS.

As mentioned above, the commitment to adopt the additional post-

1999 ROP rules for the severe areas was due at the end of 1995, and EPA

has made findings appropriately. However, the rules for the completion

of the post-1999 ROP should be identified with the second SIP

submittal, as described in the March 2, 1995 policy statement. That

submittal is described below under Attainment Demonstration.

The March 2, 1995 policy statement indicates that States may phase-

in adoption of the rules to provide for implementation of measures for

post-1999 ROP beginning in the period immediately following 1999. Thus,

these rules should be submitted to EPA no later than the end of 1999.

The EPA believes these requirements will facilitate reasonable progress

in the interim period.

Areas with ROP plans approved by EPA, such as certain areas in

California, should continue to implement the ROP requirements of their

SIP's.

For international border areas, EPA may continue to approve a SIP

that establishes that the implementation of the plan would be adequate

to attain and maintain the relevant NAAQS but for emissions emanating

from outside the United States. Under these circumstances, States would

be allowed to defer the adoption of a post-1996 ROP plan.

b. Attainment Demonstrations

(1) Ozone

Serious and Higher Classified Areas

Ozone attainment demonstration SIP's for serious and higher

classified areas were due November 15, 1994. The EPA recognized that

many of these serious and above ozone nonattainment areas were unable

to complete SIP

[[Page 65756]]

requirements within schedules prescribed in the Act due to

circumstances beyond their control. Of special concern was the

influence of regional transport of ozone and its precursors on urban

areas' ability to demonstrate attainment.

Through the March 2, 1995 policy statement, EPA provided States

with a two-phased SIP submittal process which would allow additional

time for States to perform an assessment of regional transport and its

impact on urban areas. Areas that have adopted certain specified

control measures and made appropriate commitments to interstate

activities to study and address ozone transport are currently allowed

until mid-1997 to submit full demonstration-of-attainment SIP's which

take into account regional measures in nonattainment and attainment

areas recommended by the interstate study to assess ozone transport.

The EPA believes that after promulgation of a new or revised ozone

NAAQS, States should no longer be required to provide full

demonstration-of-attainment SIP's for the 1-hour NAAQS; however, States

are obliged to continue attainment planning toward the new NAAQS. The

EPA believes that the full development of SIP's to attain the current

1-hour NAAQS is not a critical component of the transition from the

current NAAQS to the new NAAQS, and that it would be advantageous for

States to continue to achieve the required ROP while shifting their

planning efforts toward satisfying the requirement to demonstrate

attainment of the new ozone NAAQS.

Accordingly, the EPA proposes the following program elements

related to attainment demonstrations: (1) That regional control

measures identified (as discussed below) to reduce regional transport

and support urban attainment planning and demonstrations be adopted and

implemented in accordance with current programs; (2) that States submit

the urban modeling analysis to establish the NOX and VOC percent

reductions but not the specific measures necessary to attain the 1-hour

NAAQS by the attainment dates set forth in subpart 2; and (3) that

within 90 days of promulgation of a revised NAAQS, States submit to EPA

an early assessment of attaining the revised NAAQS by estimating the

NOX and VOC percent reductions needed to attain the revised NAAQS

by those dates. This is discussed further below under Methods. States

would not at this time be required to adopt and submit to EPA specific

control measures to attain the new or revised ozone NAAQS. The first

two elements described above, currently under way, will be useful to

lay the groundwork for assembling attainment demonstrations for the new

NAAQS. In the future, the EPA will prescribe new requirements for

modeling demonstrations and SIP's to address the new or revised NAAQS.

Methods

The EPA believes that 90 days is a reasonable period of time for

the early assessment. The early assessment should utilize information

that is or will be generated through the current requirement for

States' SIP attainment demonstration analyses. No new modeling runs are

required for the early assessment beyond what is currently required for

attainment demonstrations. Using the modeling results from the early

assessment, States are expected to review the results to determine the

effectiveness of the NOX and VOC measures identified towards

attaining the revised NAAQS. From this review, States are expected to

estimate the levels of emission reductions needed to attain the revised

NAAQS.

It is expected that the early assessment will require processing of

existing modeling results. Two methods are being proposed. The first

method results in a set of NOX and VOC reductions needed to attain

the revised NAAQS. For this method, it is assumed that States have

performed a series of NOX and VOC reduction runs and are able to

generate an ozone response curve. The modeling required to produce the

percent reductions to attain the 1-hour standard may be used to

calculate predicted values (at each grid cell) for the revised

standard. These values may then be used to quantitatively estimate the

VOC and NOX percent reductions necessary to attain the revised

standard. This is typically done through the use of ozone response

curves which show predicted changes in ozone as a result of changes in

VOC and NOX emissions in the inventory.

The second method results in an analysis of the effectiveness of a

specific NOX/VOC strategy toward attaining the revised NAAQS. Some

areas may elect to model a specific strategy rather than a matrix of

NOX and VOC reductions to demonstrate attainment of the current

NAAQS. For example, a State may elect to demonstrate attainment by

modeling the impact of the regional control measures along with a local

strategy (i.e., 9 percent ROP). In this case, the series of NOX

and VOC reduction runs are not needed to demonstrate attainment of the

current NAAQS. For the second method, modeling results from the final

attainment strategy run may be used to calculate the predicted values

(at each grid cell) for the revised standard. These values may be used

to produce the number of grid-cell-hours above the standard, display

the spacial extent of daily maximum values above the revised standard,

and determine the peak value predicted. This information may then be

used to estimate the NOX and VOC reductions needed to attain the

revised NAAQS.

The early assessment will give States/local agencies and EPA an

appreciation for the magnitude of possible additional controls needed

to attain the revised standard. State/local agencies and EPA could use

this information to begin preparations for development of a revised SIP

to attain the new NAAQS.

It is EPA's intention that States that fail to submit the 90-day

preliminary estimate be subject to a finding for failure to submit a

required SIP element, which could subject the State to sanctions.

The EPA believes that regional control measures being identified in

the current program to reduce regional transport and support attainment

planning are critical to attainment of the current NAAQS and the new or

revised NAAQS. These regional control measures are intended to reduce

levels of ozone and its precursors over a larger geographic area rather

than a single nonattainment area. Thus, these measures are applicable

in rural areas or attainment areas and could also include measures

needed in urban and nonattainment areas. The EPA reaffirms the

importance of regional measures during the interim period. The EPA

expects that these measures will promote progress toward attainment of

the new NAAQS and, therefore, should be implemented. The EPA intends to

work with all affected States to ensure that the required reductions

are achieved. The EPA will address this issue more specifically in

future guidance or rulemaking.

(2) PM-10

All moderate and serious area PM-10 attainment demonstration SIPs

should have been submitted prior to the June 1997 promulgation of the

revised PM-10 NAAQS. While the majority of the nonattainment areas have

satisfied this requirement, there are still quite a few areas that have

not. Consistent with the no-backsliding principle, EPA believes that

areas that failed to submit an attainment demonstration during the

1991-1997 timeframe should still be required to satisfy relevant PM-10

requirements. Thus, specifically for PM-10, EPA is requiring the

attainment demonstration, not for the purpose of

[[Page 65757]]

meeting the attainment demonstration requirement per se, but instead

only for purposes of defining the appropriate level of RACM or BACM so

that EPA can prevent RACM or BACM backsliding.

c. July 1996 Findings Issues by EPA--Ozone

By notice published July 10, 1996 (61 FR 36292), EPA issued three

findings (the ``July 10, 1996 Findings'') for nine nonattainment areas

in ten States and the District of Columbia (note that serious areas

only received the first and third findings). These were for failure to

submit: (1) A SIP provision for fully adopted rules requiring emissions

reductions of 9 percent in ozone precursors from the end of 1996 to

1999, (2) a SIP commitment to adopt any additional rules needed to

complete the requirements for ROP reductions after 1999 and until the

attainment date, and (3) a SIP commitment to adopt additional measures

needed for attainment of the 1-hour NAAQS.

The EPA interprets the July 10, 1996 findings as based not only on

the requirements of section 182(c)(2) (A)-(B), which apply specifically

to ozone nonattainment areas classified under the current NAAQS, but

also on the requirements of section 172(c) (1)-(2), which apply

generally to nonattainment areas. Specifically, the ``reasonable

further progress'' requirement in section 172(c)(2) continues to be

relevant.

Furthermore, EPA proposes to interpret the section 172(c)(2)

``reasonable further progress'' requirement as mandating VOC or

NOX reductions of 3 percent per year, averaged over a 3-year

period, for ozone nonattainment areas classified under the current

NAAQS that retain their nonattainment designation post-1996. The EPA

believes that the requirement for 3 percent-per-year ROP found in

section 182(c)(2)(B) indicates that the Act would have intended that

this amount of progress continue in ozone nonattainment areas with this

degree of air quality problem. Thus, the continuation of the ROP

requirement is grounded in both the retention of the 1-hour ozone NAAQS

(with the consequent effectiveness of section 182(c)(2)(B)) until SIP's

implementing the new NAAQS are approved and the requirements of section

172(c) (1) and (2), under which EPA would apply the ROP requirements

for anti-backsliding purposes.

Because the requirements of both section 182(c)(2)(B) related to

the first 9 percent of the post-1999 ROP plan, and the comparable

requirement of section 172(c)(2) continue to apply following

promulgation of a revised NAAQS, the first finding and associated

sanctions and Federal implementation plan (FIP) clocks continue to

apply. This finding concerns the first 9 percent of the post-1996 ROP

plan.

The EPA proposes to modify the second finding which requires severe

areas to submit a SIP commitment to adopt additional 3 percent average

annual reductions from the end of 1999 through the attainment date. The

EPA proposes to modify this finding to cover the obligation of the

affected States to commit to submit the reductions which are required

only from the end of 1999 until EPA approves the attainment SIP's

addressing the revised NAAQS.

The EPA proposes to retract the third finding which is for a SIP

commitment to adopt additional measures needed to attain the 1-hour

NAAQS. As described above, EPA proposes to take the position that the

requirement to demonstrate attainment of the 1-hour NAAQS no longer

applies in light of the need for States to focus on planning to attain

the new ozone NAAQS. The EPA proposes to replace the third finding with

a finding to require that States submit the 90-day preliminary estimate

described above. This estimate assists the State in developing both ROP

plans and attainment plans under the revised NAAQS.

Depending on its review of any comments to this interim

implementation policy including any comments from the CAAAC, EPA

intends to promulgate the above-described revisions to the July 10,

1996 findings and new findings in subsequent rulemakings. Because the

July 10, 1996 findings were made through rulemaking, modifications

would similarly need to be made through rulemaking.

Previously-issued findings pertaining to other required elements in

the ozone program are carried forward during the interim period.

d. New Requirements for Marginal and Moderate Areas--Ozone

The Act requires moderate ozone nonattainment areas to attain the

1-hour NAAQS by November 15, 1996. The EPA is proposing that States

with moderate and any remaining marginal nonattainment areas that do

not attain the 1-hour NAAQS by November 15, 1996, submit to EPA, within

18 months after promulgation of a new ozone NAAQS: (1) a plan to

achieve an emission reduction of 9 percent (3 percent-per-year average

ROP through 1999), or alternatively, an attainment demonstration for

the new NAAQS; as well as (2) the new source review (NSR) requirements

as discussed below under New Source Review. Further, the EPA is

proposing that all existing control measures that are in place,

including those measures needed for the current moderate classified

nonattainment areas to achieve 15 percent VOC ROP emission reductions

through 1996, remain in place. The EPA believes that these requirements

apply under section 172(c), paragraphs (1) (attainment demonstrations),

(2) (reasonable further progress), and (5) (NSR). The applicability of

paragraphs (1) and (2) of section 172(c) were discussed above. The EPA

proposes to interpret paragraph (5), concerning NSR, as applicable for

the same reasons.

The EPA believes that 18 months is a reasonable period of time for

the States to make the required submission because much of the work

required of the States should already have been completed under the

requirements of the provisions of section 182(b)-(c) applicable to

marginal and moderate nonattainment areas under the current NAAQS.

Moreover, this period is generally consistent with the amount of time

EPA allowed for submittal of new requirements when marginal areas were

bumped up to moderate areas under the current NAAQS (59 FR 38410 (July

28, 1994), 59 FR 50848 (October 6, 1994) proposed and final bump-up of

the Poughkeepsie, NY, marginal nonattainment area to moderate).

The EPA will conduct an early pre-designation determination within

90 days of promulgation of a new or revised ozone NAAQS using air

quality data to evaluate if these marginal and moderate nonattainment

areas are attaining the new NAAQS. The pre-designation determination

will not affect the new round of designations and classifications that

will occur after promulgation of new ozone NAAQS.

Two exceptions are discussed below:

(1) For areas not attaining the 1-hour NAAQS that are attaining the

new NAAQS, EPA is proposing to defer implementation of the 9 percent

ROP plans or the attainment demonstrations for the new NAAQS and the

NSR requirements of the higher classification described above. However,

the 9 percent ROP plan or attainment demonstration must still be

adopted, submitted, and approved by EPA. The deferment continues as

long as the area is showing attainment with the new NAAQS and until the

SIP for the new NAAQS is approved. This is because the deferral is

based on an early pre-designation determination and the SIP for the new

NAAQS may require an ROP plan.

(2) An exception may also be granted for areas meeting the

requirements for

[[Page 65758]]

an extension under the provisions of section 181(a)(5) of the Act.

Under that section, the Administrator may grant an extension of the

attainment date to areas that are not showing attainment if the area

has: (1) met the requirements of the applicable implementation plan,

and (2) has not recorded more than one exceedance of the ozone NAAQS in

the year preceding the extension year. The EPA is proposing that areas

failing to attain the ozone NAAQS by November 15, 1996 may be granted a

1-year extension.

e. Planning and Control Requirements--PM-10

As part of the no-backsliding principle, the EPA believes that if

the PM-10 24-hour NAAQS is revised that, the PM-10 requirements and

control programs required prior to the June 1997 promulgation date

remain in place. Under the current program, 70 areas were initially

designated as moderate nonattainment areas for PM-10. These areas were

required to submit SIP's in November 1991 that included RACM/RACT and

demonstrated attainment by December 31, 1994. Consistent with the no-

backsliding principle, these areas must retain those PM-10 measures

that have been adopted and/or implemented to address the annual and

current 24-hour standard until the State demonstrates attainment of the

PM-10 annual and revised 24-hour NAAQS. Also, PM-10 measures cannot be

dropped without a demonstration that they are not needed to attain the

fine particle NAAQS.

In the spring of 1995, EPA analyzed the air quality data and

determined which areas were attaining the PM-10 standard as of December

31, 1994. At that time EPA determined:

Out of the 43 areas with approved SIP's in place, 22 of

the moderate areas had 3 years of clean air quality data making them

eligible to redesignate to attainment pursuant to section 107(d)(3)(E).

Thirteen of the 43 areas with approved SIP's in place

qualified for a 1-year extension. These areas should be able to

demonstrate attainment of the current PM-10 standard with 3 years of

clean data prior to the June 1997 promulgation and should proceed with

redesignation requests pursuant to section 107(d)(3)(E).

Eight of the 43 areas with approved SIP's in place had

clean, but incomplete, air quality data. Additional data needed to be

collected before EPA could determine whether the areas were attaining

the standard. These areas are still required to correct any

deficiencies present in their moderate area SIP's before the SIP's can

be deemed fully approvable and before a request for redesignation to

attainment may be approved. The areas should also satisfy all remaining

requirements for redesignation to attainment pursuant to section

107(d)(3)(E) prior to the promulgation of the revised NAAQS.

Five of the initial moderate areas failed to attain by the

December 31, 1994 attainment date and did not qualify for attainment

extensions. Pursuant to section 188 of the Act, these areas should have

been reclassified to serious nonattainment areas for PM-10. The serious

area requirements for these areas included the development and

submission of a best available control measures/best available control

technology (BACM/BACT) and attainment demonstration SIP's showing

attainment by December 31, 2001, as well as more stringent NSR

requirements. Consistent with the no-backsliding principle, those areas

that failed to attain the NAAQS by the December 31, 1994 attainment

date and which also did not qualify for attainment date extensions

should be reclassified as serious and should proceed with their serious

area planning requirements during the interim period.

Five of the initial 70 moderate areas were reclassified to

serious nonattainment areas effective February 8, 1993. These areas

were required to develop and submit BACM SIP's by August 8, 1994 and

are required to submit attainment demonstrations by February 8, 1997

showing attainment of the PM-10 NAAQS by December 31, 2001. These areas

should continue implementing those measures adopted in their BACM

SIP's.

For those areas designated moderate nonattainment after the initial

designations, SIP submittals which included RACM/RACT and demonstrated

attainment by December 31, 2000 were required in 1995. These areas

should continue implementing the measures adopted in their SIP's. Those

areas which fail to attain the PM-10 NAAQS during the interim period

will not be reclassified to serious.

In the event the PM-10 24-hour NAAQS is eliminated, EPA is

proposing that PM-10 measures that do not affect fine particle

concentrations may be candidates for elimination upon demonstration

that removing the measure will not cause the PM-10 annual NAAQS to be

violated. The PM-10 measures that affect fine particle concentrations

must remain in place until the area can demonstrate that elimination of

those measures will not affect the ability to attain and maintain the

fine particle NAAQS. The EPA is also proposing that those nonattainment

areas that do not have a fully-approved SIP in place should submit a

plan which demonstrates attainment and maintenance of the annual PM-10

standard. No additional PM-10 measures will be required other than

those required under the no-backsliding principle during the interim

period. The EPA is also proposing that the requirement for retaining or

requiring additional PM-10 control measures could be reconsidered if

measures resulting in regional reductions are adopted during the

interim period. However, EPA would have to approve the regional

strategy and the State(s) or entity submitting the strategy must be

able to quantitatively demonstrate with available tools that the

regional reductions would be beneficial to reducing PM-10 (including

coarse fractions if applicable), as well as fine particle

concentrations.

f. Substitution of Credits for Emission Reductions

(1) Outside Nonattainment Areas--Ozone

The Subcommittee provided a specific recommendation that a

nonattainment area should be allowed to take credit for emissions

reductions from sources outside the nonattainment area for the post-

1996 and post-1999 3 percent per year ROP requirement so long as the

sources are no farther than 100 km (for VOC sources) or 200 km (for

NOX sources) away from the nonattainment area. The EPA believes

that this additional flexibility for States in their ROP SIP's is

consistent with the Act, since reductions from outside a nonattainment

area within these limits contribute to progress toward attainment

within the area. The 3 percent per year ROP requirement is a general

rate of progress requirement, not a requirement for specific programs

or measures such as vehicle inspection and maintenance. Allowing this

flexibility would continue to provide the same rate of progress in

terms of reducing emissions.

Therefore, EPA is proposing for the interim period that a

nonattainment area should be able to take credit for post-1996 and

post-1999 ROP emission reductions from sources outside the

nonattainment area within the geographic distances from the

nonattainment area mentioned above. For States with areas having

approved NOX waivers, EPA is proposing that substitutions of

NOX reductions outside of the nonattainment area for VOC

reductions within the attainment area would be allowed if accompanied

by a

[[Page 65759]]

technical justification at the time of submittal for replacing NOX

reductions with VOC reductions. Substitutions of NOX for VOC

within nonattainment areas with approved waivers will not be allowed.

The EPA is proposing, however, that the locality-based credit for

substitutions be restricted to the post-1996 and post-1999 3 percent-

per-year requirement. Thus, credit for substitutions to complete or

revise the 15 percent ROP requirement for VOC emission reductions in

nonattainment areas through 1996 would not be allowed. Further, States

would not be able to substitute for specific control measures such as

inspection/maintenance (I/M) or reasonably achievable control

technology (RACT) that are required in an area by the Act. In these

cases, the measures are either: (1) Specific, required measures for

which EPA does not believe it appropriate to allow substitution since

that could jeopardize the amount of reductions from such mandated

programs; or (2) measures that are or should have been in place prior

to promulgation of new ozone NAAQS. Further, States would not be able

to credit toward the 3 percent-per-year requirement reductions from

outside the nonattainment area attributable to other programs

prescribed by the Act when implemented outside nonattainment areas. An

example is credit for maximum achievable control technology standards

controlling hazardous air pollutants or the title IV of the Act

NOX requirements. (These are merely two illustrative examples of

such programs, not an inclusive list of all such programs.) Further,

the EPA is proposing that all existing control measures that are in

place remain in place. The EPA believes that substitutions should be

restricted to intrastate areas unless two or more States involved reach

agreement. Similarly, application of credits from substitutions should

be limited to only one nonattainment area unless two or more States

involved reach agreement on dividing the credit between them such that

the same emission reductions are not credited toward the progress

requirements for more than one area. Interstate substitutions, like

intrastate substitutions, must be enforceable by the States in which

the affected sources are located.

Credit toward the 3 percent-per-year requirement for regional

measures described above to reduce transport and support attainment

planning would be allowed if implemented in nonattainment areas. Such

credit would also be allowed if implemented outside the nonattainment

area but within the 100 and 200 km geographic limits to the extent the

reductions generating the credits are not otherwise due to a prescribed

requirement of the Act.

Emissions from the source or sources being substituted must be

included in the baseline ROP emissions. The other emissions from

source(s) outside the nonattainment area not involved in the

substitution would not have to be inventoried nor included in the SIP

or the baseline ROP emissions for purposes of the substitution. The EPA

is proposing that this provision is only in effect during the interim

transition period, and that the final implementation strategy will

address the principles applicable to substitutions in attainment

demonstrations for implementation of a new NAAQS.

(2) PM-10

The Notice of Proposed Rulemaking for the PM NAAQS lays out a

rationale for why PM-10 and fine particles should be treated as two

separate pollutants. In addition, the PM-10 standard (which will

primarily address coarse particle control) targets localized

nonattainment problems while the fine particle standard will address

the fine particle fraction including secondarily-formed particles and

will focus on the regional aspects and transport of fine particles.

Given the physical and chemical differences in PM-10 and fine particles

and the uncertainties about the localized and regional aspects of PM-10

and fine particles at this time, EPA is proposing that substitutions

for PM in and outside of the nonattainment area should not be allowed

during the interim period.

g. Ozone Transport Region (OTR), Ozone Transport Commission (OTC), and

the Photochemical Assessment Monitoring System (PAMS)

The OTR and the OTC and related regional control measures, as

defined in the Act, continue after promulgation of a new or revised

ozone NAAQS. The OTC is currently in the process of evaluating the

specific control requirements applicable to the OTR and expects to

develop and submit to EPA for consideration an interim implementation

program regarding those requirements. In the event such a submission is

made to EPA, EPA will evaluate the recommendations and consider whether

to modify the portion of this proposed interim implementation policy

that addresses the OTR regional control measures.

The PAMS is also carried forward upon promulgation of new or

revised ozone NAAQS.

h. Conformity

In general, existing part D SIP's will remain in force, and as a

result, motor vehicle emissions budgets and relevant requirements in

existing part D SIP's will continue to apply for transportation and

general conformity purposes until they are superseded by new or revised

part D SIP's.

Conformity determinations will not be required to address the new

NAAQS until SIP's addressing the new NAAQS are approved by EPA.

Conformity will not apply for fine particles or the new 8-hour ozone

NAAQS until SIP's are approved by EPA. The EPA believes this is

appropriate because section 176(c) of the Act requires conformity to an

implementation plan that has been approved or promulgated under section

110 and refers to conformity to an implementation plan's purpose of

reducing violations and attaining the NAAQS; without a SIP addressing

the NAAQS there is nothing to which to conform. Although the 1990

Amendments outlined interim conformity tests that EPA required before

SIP's were submitted, these Act provisions clearly did not envision the

case of new NAAQS, and the emission reduction requirements only applied

to ozone and carbon monoxide areas designated under the then existing

NAAQS. The test applied to these areas was to contribute to annual

emission reductions consistent with the requirements of sections 182

and 187; provisions which do not apply to areas in nonattainment for

fine particles or the new 8-hour ozone NAAQS. In addition, as a policy

matter, it is not reasonable to establish demonstration of reduction in

fine particle emission reductions as a criterion for determining

conformity before the SIP process has identified an emissions inventory

that could serve as a baseline.

Areas that have not submitted ROP plans or attainment

demonstrations for the old standard would be required to conform to the

15 percent plan until a ROP plan or new attainment demonstration is

submitted. Some areas that are nonattainment under the existing NAAQS

but are attaining the new NAAQS will be permitted to defer

implementation of the ROP plan as described above. In such cases,

conformity to the ROP plan would not be required, and these areas would

demonstrate conformity to the 15 percent plan. Areas that were not

required to submit a part D SIP or a 15 percent ROP plan by virtue of

their

[[Page 65760]]

classification (previous marginal areas) and have not been

demonstrating conformity to motor vehicle emissions budgets would be

required to continue demonstrating conformity using the emission

reduction tests until SIP's with motor vehicle emissions budgets are

submitted. Areas that have approved redesignation maintenance plans

should continue demonstrating conformity using the motor vehicle

emissions budgets and relevant requirements for general conformity in

the maintenance plans.

States are free to establish, through the SIP process, a motor

vehicle emissions budget that addresses the new or revised NAAQS in

advance of a complete SIP attainment demonstration. That is, a State

could submit a motor vehicle emissions budget that does not demonstrate

attainment but is consistent with projections and commitments to

control measures and achieves some progress toward attainment. Such a

budget would apply for conformity purposes in addition to existing

budgets addressing the old NAAQS (i.e., a SIP that does not demonstrate

attainment of the new NAAQS would not supersede existing part D SIP's).

Conformity requirements that are based on the classification system

for the former NAAQS, such as the modeling procedures and the

requirements for contents of transportation plans, continue to apply

after the new or revised NAAQS are promulgated until new SIP's are

approved.

i. New Source Review

In accordance with the current NSR requirements, proposed new and

modified stationary sources of air pollution must undergo a pollutant-

specific preconstruction review and obtain authority to construct prior

to beginning their construction activities. A primary purpose of the

NSR requirements is the protection of the NAAQS, including those for

ozone and PM. The applicable NSR requirements generally are based on

the attainment status of the area where the proposed source will locate

for each pollutant for which NAAQS exist and which the source will

emit.

In areas designated as attainment or unclassifiable, proposed new

or modified major stationary sources must be reviewed under the

requirements for prevention of significant deterioration (PSD) of air

quality pursuant to section 165 of part C of title I of the Act.1

The PSD requirements include: (1) A demonstration that the proposed

emissions increase will not cause or contribute to a violation of any

NAAQS or applicable PSD increment; (2) a determination, where

applicable, that the proposed emissions increase from the source will

not have an adverse impact on an air quality related value in a Class I

area; and (3) compliance with best available control technology.

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

\1\ The EPA has adopted PSD regulations pursuant to part C at 40

CFR 51.166 (minimum requirements for submittal and approval of a

State PSD program) and 40 CFR 52.21 (the Federal PSD program).

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

In nonattainment areas and ozone transport regions, new and

modified major sources having the potential to emit major amounts of

the nonattainment pollutant must meet the applicable NSR requirements

contained in part D of title I of the Act.2 The primary NSR

requirements for nonattainment areas, contained in section 173 of

subpart 1 of part D, require new or modified major stationary sources

of any nonattainment pollutant to meet the following requirements: (1)

Obtain offsetting emissions reductions (offsets) from existing sources;

(2) comply with the lowest achievable emission rate; (3) demonstrate

that all major stationary sources owned or operated by the permit

applicant are in compliance with all applicable emission limitations

and standards under the Act; and (4) submit an analysis of alternative

sites, sizes, production processes, and control techniques

demonstrating that the benefits of the proposed source outweigh the

environmental and social costs imposed as a result of its location,

construction, or modification.

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

\2\ The EPA's nonattainment NSR requirements are codified at 40

CFR 51.165(a). These existing regulations do not currently include

the various changes enacted by Congress under the Clean Air Act

Amendments of 1990. The EPA issued policy memos to describe how

certain statutory NSR provisions would apply while EPA's regulations

and State NSR programs were being revised to reflect the 1990

Amendments (March 11, 1991 and September 3, 1992 memoranda from John

S. Seitz, Director, OAQPS). To meet statutory deadlines, most States

have already completed the necessary update of their NSR programs.

The EPA proposed to amend its NSR regulations on July 23, 1996 as

part the NSR reform rulemaking (61 FR 38250-38344).

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

Additional NSR requirements specifically for ozone and PM

nonattainment areas are contained in subparts 2 and 4 of part D,

respectively. These subparts set forth criteria for establishing area

classifications and various NSR requirements based on those

classifications. Subpart 2 (Additional Provisions for Ozone

Nonattainment Areas) contains, among other things, provisions for

emissions offset ratios, major source thresholds, and source

modification requirements for major sources of VOC. Subpart 2 also

contains provisions concerning the treatment of NOx as an ozone

precursor in certain ozone nonattainment areas and ozone transport

regions. Subpart 4 (Additional Provisions for PM Nonattainment Areas)

contains, among other things, NSR requirements for PM-10, including a

70 tons per year (tpy) major source threshold for PM-10 sources in

serious nonattainment areas, and the applicability of PM-10 NSR control

requirements to major stationary sources of PM-10 precursors.

As described earlier in this document, the detailed provisions of

subparts 2 and 4 of part D of title I of the Act that currently apply

to existing ozone and PM-10 nonattainment areas would not apply

directly to the implementation of the proposed new or revised ozone

NAAQS or the proposed annual and 24-hour fine particle NAAQS, which EPA

is proposing elsewhere in today's Federal Register. However, as part of

EPA's proposed interim policy for transitioning from the current

program to implementation of potential new or revised ozone and PM

NAAQS, EPA is proposing to continue the implementation of the existing

NSR requirements with respect to ozone and PM under a policy of no

backsliding. In the case of ozone, this proposed position is further

supported by the fact that EPA is also proposing to defer the effective

date of the revocation of the existing 1-hour ozone NAAQS until such

time that EPA determines that an area has a SIP which provides for

achievement of the new NAAQS. This proposed interim implementation

policy discussed in more detail below, does not address potential new

PSD increments for any new or revised NAAQS because the Act provides

EPA with an additional 2 years from the date of NAAQS promulgation to

address such issues.

Numerous issues will need to be resolved as part of the development

of the final integrated implementation program to address new or

revised NAAQS for ozone and PM and a regional haze program (see ANPR

for Implementation of New or Revised Ozone and Particulate Matter (PM)

National Ambient Air Quality Standards (NAAQS) and Regional Haze

Regulations published elsewhere in today's Federal Register. Some of

these issues, particularly as they relate to fine particles, directly

affect the implementation of the NSR requirements. Of particular

concern is the lack of necessary analytical and technical tools and

guidance governing the preconstruction review of new and modified

stationary sources associated with fine particles. For example, the use

of dispersion models to predict air

[[Page 65761]]

quality impacts of new and modified sources is at the heart of the

required NAAQS compliance demonstration under the PSD program. Air

quality dispersion modeling for ambient fine particle concentrations is

in its infancy.

Another problem is that little information exists in emissions

inventories regarding PM size distribution and corresponding settling

velocities. Emissions factors for estimating the amount of fine

particles from new and modified sources are generally not available and

may take considerable time to develop and validate. The ability to

predict the amounts of fine particle emissions is complicated by the

emissions contribution made by precursors, including sulfates,

nitrates, and VOC.

In addition, ambient fine particle concentrations in many areas

experience a significant contribution from secondary fine particle

transformation and transport. The EPA is currently in the process of

developing a comprehensive modeling system which will account for

secondary fine particle formation and will also eventually incorporate

a method for nesting small local impacts from individual point sources

within a greater modeling domain. The ultimate success of this system

hinges upon the collection of sufficient monitoring data to verify

protocol modeling results.

Finally, while ambient monitoring methods for measuring fine

particles are to be proposed commensurate with the proposal of any new

NAAQS for PM, sufficient monitors are not expected to be available

immediately after promulgation of any new or revised NAAQS to satisfy

the requirement that new and modified sources collect ambient fine

particle data needed for individual PSD air quality analyses.

Consequently, in the absence of the necessary analytical and

technical tools, as well as a final implementation strategy for fine

particles, source owners and operators would have difficulty predicting

amounts of fine particles being emitted from their own proposed source

and from existing sources, and also would be unable to carry out a

comprehensive air quality analysis for fine particle emissions.3

The EPA believes that without the appropriate implementation tools and

policy, such new preconstruction review responsibilities clearly would

place an unreasonable burden on sources, as well as the permitting

authorities, in terms of their ability to satisfy the NSR requirements.

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

\3\ When EPA promulgated the NAAQS for PM-10, EPA also adopted,

as necessary, amendments to the PSD regulations to establish new

requirements applicable to that newly-regulated form of PM. Based on

such new requirements, each PSD application subject to EPA's part 52

PSD regulations, and not eligible to be grandfathered, was required

to address significant emissions increases of PM-10 as of the

effective date of the revised NAAQS for PM (52 FR 24672, July 1,

1987). The EPA adopted, for purposes of PM-10, a new significant

emissions rate, significant monitoring concentration, grandfathering

provisions and special monitoring provisions to enable applicants to

determine the applicability of any proposed PM-10 emissions to the

preconstruction review requirements.

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

The proposed interim policy for NSR will apply the principle of no

backsliding, as described earlier in this document, to provide interim

protection of any new or revised NAAQS after promulgation until EPA

amends its existing NSR requirements and approves SIP's based on those

amendments. The description of the proposed interim implementation

policy for NSR is divided into a general discussion of geographic

applicability for NSR, and separate discussions of how the existing NSR

requirements will be implemented for ozone and PM.

Interim Implementation Policy for Geographic Applicability of the

Existing NSR Requirements. The NSR requirements generally apply to new

or modified major stationary sources with respect to any particular

pollutant based on the attainment status of the area (relative to each

affected pollutant) in which a new or modified source will locate. As

described earlier in this document, EPA is proposing that the existing

PM-10 area designations and classifications remain in effect until new

designations are undertaken after promulgation of the new or revised

NAAQS and that the ozone designations and classifications remain in

effect for so long as the current 1-hour ozone NAAQS remains in effect.

Thus, for the interim period following promulgation of any new or

revised NAAQS for ozone and PM, EPA is also proposing that the existing

NSR requirements continue to apply to sources of VOC (and NOX,

where applicable) and PM-10 (and PM-10 precursors, where applicable) on

the basis of the attainment, unclassifiable, and nonattainment area

designations and classifications that exist at the time of promulgation

of any new or revised NAAQS for ozone and PM, respectively, except for

those possible circumstances where a redesignation based on an existing

ozone or PM NAAQS is approved by EPA subsequent to the promulgation of

new or revised NAAQS. In such cases, EPA is proposing that once such

redesignation is in effect, the area's attainment status based on the

EPA-approved redesignation will determine the applicability of the NSR

requirements for the affected pollutant during the interim period.

Interim Implementation Policy for Ozone NSR. During the interim

period following promulgation of any new or revised NAAQS for ozone,

EPA is proposing that permit applications for new and modified major

sources of VOC (or NOX, as applicable) which locate in an area

designated as nonattainment for the 1-hour ozone NAAQS, or in an ozone

transport region, must continue to satisfy the applicable nonattainment

NSR requirements under part D of title I of the Act. The specific

criteria which must be satisfied are to be based on the classification

of the particular ozone nonattainment area or ozone transport region,

except that for marginal and moderate nonattainment areas which do not

attain the existing 1-hour ozone NAAQS by November 15, 1996 and are not

attaining the new ozone NAAQS, EPA is proposing that the applicable NSR

requirements for VOC and NOX be determined by all of the statutory

NSR requirements for the next higher classification. That is, in ozone

nonattainment areas classified as marginal that failed to attain, the

major source threshold would remain unchanged at 100 tpy of VOC or

NOX, but the interim offset ratio would be at least 1.15:1 (the

offset ratio for moderate areas); and in moderate areas that fail to

attain, the major source threshold would be lowered to 50 tpy of VOC or

NOX (the threshold for serious areas), and the interim offset

ratio would be at least 1.2:1 (the offset ratio for serious areas).

Section 182(b) (6)-(8) of subpart 2 of part D also contains special

requirements for modifications to existing sources in serious (and

severe) ozone nonattainment areas which would also apply to moderate

nonattainment areas that do not attain by November 15, 1996 and are not

attaining the new ozone NAAQS. These requirements include a new de

minimis test involving a significance threshold based on aggregated

emission increases of greater than 25 tpy of VOC or NOX for

proposed modifications; requirements and optional procedures for major

modifications which emit, or have the potential to emit, less than 100

tpy or VOC or NOX; and requirements and optional procedures for

major modifications which emit, or have the potential to emit, 100 tpy

or more of VOC or NOX. Under a separate rulemaking, EPA has

proposed its

[[Page 65762]]

interpretation of these complex provisions.4

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

\4\ The EPA proposed its interpretation of the requirements

contained in section 182(c) (6), (7), and (8) of subpart 2 of part D

in the July 23, 1996 NSR reform proposed rulemaking (61 FR 38250,

38297-38302).

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

The NSR requirements under part D provide that emissions offsets

may be acquired from existing sources either within the affected ozone

nonattainment area or from another ozone nonattainment area with an

equal or higher classification than the affected nonattainment area. In

addition, when offsets from another nonattainment area (of equal or

higher classification) are proposed, it must be shown that emissions

from such nonattainment area contribute to a violation in the affected

nonattainment area. The EPA is proposing that for purposes of the

interim implementation policy, the term ``equal or higher

classification'' is to be based on the actual classifications of the

affected ozone nonattainment areas. For example, if the nonattainment

area where a new source proposes to locate is a moderate nonattainment

area that failed to attain by November 15, 1996 and, therefore,

continues to be treated as a moderate area although the NSR

requirements for serious areas apply under the interim policy, the

offsets may still be obtained under section 173(c) of the Act from

other ozone nonattainment areas classified as moderate or higher.

For areas designated as attainment or unclassifiable for the

existing 1-hour ozone NAAQS, EPA is proposing that permit applications

for major new and modified sources which would have a significant

increase in VOC emissions, must satisfy the applicable existing PSD

requirements. These requirements include compliance with the best

available control technology and the completion of the required air

quality analysis. In addition, there are no PSD increments for ozone.

Interim Implementation Policy for PM NSR. The EPA is also

proposing, as part of its interim implementation policy for NSR, that

the preconstruction review for PM will continue to involve only the

review of PM-10 emissions and their ambient impacts, while deferring a

specific review of potential fine particle emissions and their ambient

impacts. This policy would provide that the review of fine particle

emissions, including the applicant's demonstration of compliance with

the fine particle NAAQS, will not be required until EPA promulgates

amendments to the existing NSR requirements concerning any newly-

regulated form of PM under the integrated implementation program and

SIP's are revised accordingly and approved by EPA. The EPA cannot

reasonably amend its own regulations until it is technically able to

predict and measure emissions of fine particles generated by individual

sources and better understand and estimate the formation and dispersion

of ambient fine particle concentrations in the atmosphere.

For proposed new or modified sources of PM locating in areas

designated as nonattainment for PM-10, EPA is proposing that during the

interim period following promulgation of any new or revised PM NAAQS,

permit applicants must continue to satisfy the applicable State or

local nonattainment NSR requirements for PM-10 consistent with part D

(subparts 1 and 4) of title I of the Act. The part D nonattainment NSR

requirements apply to major new sources of PM-10 and modifications to

existing major sources of PM-10 that would have a significant net

emissions increase of PM-10, i.e., 15 tpy or more. The applicable major

source threshold will continue to be based on the PM-10 level defined

by the classification of the affected PM-10 nonattainment area. That

is, if the nonattainment area is not classified as serious, a 100 tpy

PM-10 emissions threshold will apply. For serious PM-10 nonattainment

areas, a 70 tpy major source threshold will apply.

For areas designated as attainment or unclassifiable for the

existing PM-10 NAAQS, permit applications for major new or modified

stationary sources with the potential to emit significant amounts of

PM-10 emissions (i.e., 15 tpy or more) must also continue to satisfy

the applicable PSD requirements for PM-10. The specific requirements

for PM include a demonstration that the source will: (1) Not cause or

contribute to a violation of the annual or 24-hour PM-10 NAAQS, (2) not

cause or contribute to a violation of the annual or 24-hour PM-10

increments, (3) not have an adverse impact on any air quality-related

value associated with ambient PM-10 concentrations in a Class I area,

and (4) apply best available control technology for PM-10 emissions.

The EPA intends the same interim implementation policy as described

above for PM to apply--whether or not EPA decides to delete the 24-hour

PM-10 NAAQS as an alternative to the proposed revision of the existing

24-hour PM-10 NAAQS. This is based on the need to continue to review

and control PM-10 emissions and their ambient impacts as a surrogate

for addressing the proposed 24-hour fine particle NAAQS during the

interim period.

Dated: November 27, 1996.

Carol M. Browner,

Administrator.

[FR Doc. 96-30898 Filed 12-12-96; 8:45 am]

BILLING CODE 6560-50-P