Clean Air Act Reclassification; ArizonaPhoenix Nonattainment Area; Ozone

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[AZ-001-BU; FRL-5886-7]

Clean Air Act Reclassification; Arizona--Phoenix Nonattainment

Area; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA proposes to determine that the Phoenix, Arizona moderate

ozone nonattainment area has not attained the 1-hour ozone national

ambient air quality standard (NAAQS) by the Clean Air Act (CAA)

mandated attainment date for moderate nonattainment areas, November 15,

1996. EPA also proposes to deny the State of Arizona's application for

a one-year extension of the November 15, 1996 attainment date for the

Phoenix area. The proposed determination and denial are based in whole

or in part on EPA's review of monitored air quality data from 1994

through 1996 for compliance with the 1-hour ozone NAAQS. If EPA takes

final action on the determination and denial as proposed, the Phoenix

ozone nonattainment area will be reclassified by operation of law as a

serious nonattainment area. The effect of such a reclassification would

be to continue progress toward attainment of the 1-hour ozone NAAQS

through the development of a new State implementation plan (SIP)

addressing attainment of that standard by November 15, 1999.

DATES: Comments on this proposal must be received in writing by October

2, 1997. Comments should be addressed to the contact listed below.

ADDRESSES: Copies of the State extension request, EPA's draft technical

support document for this rulemaking, and EPA's policies governing

attainment findings and extension requests are contained in the docket

for this rulemaking. A copy of this notice is also

[[Page 46230]]

available in the air programs section of EPA Region 9's website, http:/

/www.epa.gov/region09. The docket is available for inspection during

normal business hours at the following locations:

U.S. Environmental Protection Agency, Region 9, Office of Air

Planning, Air Division, 17th Floor, 75 Hawthorne Street, San

Francisco, California 94105. (415) 744-1248;

Arizona Department of Environmental Quality, Office of Outreach and

Information, First Floor, 3033 N. Central Avenue, Phoenix, Arizona

85012. (602) 207-2217; and

Maricopa County Environmental Services Department, Technical

Services Division, 1001 N. Central Avenue, Suite 201, Phoenix,

Arizona 85004 (602) 506-6010.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, Office of Air Planning

(AIR-2), U.S. Environmental Protection Agency, Region 9, 75 Hawthorne

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

SUPPLEMENTARY INFORMATION:

I. Background

A. CAA Requirements and EPA Actions Concerning Designation and

Classifications

The Clean Air Act Amendments of 1990 (CAA) were enacted on November

15, 1990. Under section 107(d)(1)(C) of the CAA, each ozone area

designated nonattainment for the 1-hour ozone NAAQS prior to enactment

of the 1990 Amendments, such as the Phoenix area, was designated

nonattainment by operation of law upon enactment of the 1990

Amendments.1 Under section 181(a) of the Act, each ozone

area designated nonattainment under section 107(d) was also classified

by operation of law as ``marginal,'' ``moderate,'' ``serious,''

``severe,'' or ``extreme'' depending on the severity of the area's air

quality problem. Ozone nonattainment areas with design values between

0.138 and 0.16 parts per million (ppm), such as the Phoenix area, were

classified as moderate. These nonattainment designations and

classifications were codified in 40 CFR part 81. See 56 FR 56694

(November 6, 1991).

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\1\ On July 18, 1997 (62 FR 38856), EPA revised the ozone NAAQS

to establish a 8-hour standard; however, in order to ensure an

effective transition to the new 8-hour standard, EPA also retained

the 1-hour NAAQS for an area until such time as it determines that

the area meets the 1-hour standard. See revised 40 CFR Sec. 50.9 at

62 FR 38894. As a result of retaining the 1-hour standard, CAA part

D, subpart 2 Additional Provisions for Ozone Nonattainment Areas,

including the reclassification provisions of section 181(b), remain

applicable to areas that are not attaining the 1-hour standard.

Unless otherwise indicated, all references in this notice are to the

1-hour ozone NAAQS.

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States containing areas that were classified as moderate

nonattainment by operation of law under section 107(d) were required to

submit State implementation plans (SIPs) designed to show progress

towards attainment, and attainment of the ozone NAAQS as expeditiously

as practicable but no later than November 15, 1996. Moderate area SIP

requirements are found primarily in section 182(b) of the CAA.

B. Reclassification to Serious

EPA has the responsibility, pursuant to section 181(b)(2)(A) of the

CAA, of determining, within six months of the applicable attainment

date (including any extension of that date) whether an ozone

nonattainment area has attained the ozone NAAQS. Under section

181(b)(2)(A), if EPA finds that a moderate area has not attained the

ozone NAAQS, it is reclassified by operation of law to the higher of

the next higher classification or to the classification applicable to

the area's design value at the time of the finding. Pursuant to section

181(b)(2)(B) of the Act, EPA must publish a notice in the Federal

Register identifying areas which failed to attain the standard and

therefore must be reclassified by operation of law.

The 1-hour ozone NAAQS is 0.12 ppm not to be exceeded on average

more than one day per year over any three year period. 40 CFR 50.9 and

Appendix H. EPA makes attainment determinations for ozone nonattainment

areas using the most recently available, quality-assured air quality

data covering the 3-year period up to and including the attainment

date.2 Consequently, EPA will determine whether the Phoenix

area's air quality has met the moderate area attainment deadline of

November 15, 1996 based upon all 1994, 1995, and 1996 (through November

15) quality-assured air quality data available to the

Agency.3 From the available data, EPA determines the average

number of exceedances per year at each ozone monitor during this

period. If this number is greater than one at any monitor, then the

area is determined to have not attained by November 15, 1996. EPA then

calculates the design value for the area to determine the correct new

classification.4 A design value is an air quality

concentration and is a measure of the severity of an area's air

quality. Ozone design values are used to determine the correct

classification of an area and to determine the level of controls needed

for attainment.

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\2\ See generally 57 FR 13506 (April 16, 1992) and Memorandum

from D. Kent Berry, Acting Director, Air Quality Management

Division, EPA, to Regional Air Office Directors; ``Procedures for

Processing Bump Ups and Extensions for Marginal Ozone Nonattainment

Areas,'' February 3, 1994 (Berry memorandum). While explicitly

applicable only to marginal areas, the general procedures for

processing reclassifications and extension requests described in

this memorandum apply regardless of the initial classification of an

area because all reclassifications are made pursuant to the same

Clean Air Act requirements in section 181(b)(2).

\3\ All quality-assured available data includes all data

available from the state and local/national air monitoring (SLAMS/

NAMS) network as submitted to EPA's AIRS system and all data

available to EPA from special purpose monitoring (SPM) sites that

meet the requirements of 40 CFR 58.13. See Memorandum John Seitz,

Director, OAQPS, to Regional Air Directors; ``Agency Policy on the

Use of Ozone Special Purpose Monitoring Data,'' August 22, 1997 and

section I.D. of this notice.

\4\ See Memorandum from William G. Laxton, Director, Technical

Support Division to the Regional Air Directors; ``Ozone and Carbon

Monoxide Design Value Calculations,'' June 18, 1990.

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C. Attainment Date Extensions

If a state does not have the clean data necessary to show

attainment of the NAAQS, it may apply, under section 181(a)(5) of the

CAA, for a one year attainment date extension. Issuing an extension is

discretionary, but EPA can exercise that discretion only if the state

has: (1) Complied with the requirements and commitments pertaining to

the applicable implementation plan for the area, and (2) the area has

measured no more than one exceedance of the ozone NAAQS at any

monitoring site in the nonattainment area in the year preceding the

extension year. Section 181(a)(5) and Berry memorandum. Under section

181(a)(5), EPA may issue up to two such extensions if these conditions

have been met. The CAA's extension provision is intended to grant areas

close to attainment a short additional period in which to demonstrate

that they are in fact attaining the standard. The underlying premise of

an extension is that an area already has in place a control strategy

adequate to attain the ozone standard and that no additional measures

are necessary.

Areas that apply for an extension should document that they have

initiated rule development activities in order to meet the Act's

requirements associated with the new classification. Berry memorandum.

D. The Use of Special Purpose Monitoring Data

EPA's policy on the use of ozone special purpose monitoring data is

discussed briefly below and is described in the Memorandum entitled

``Agency

[[Page 46231]]

Policy on the Use of Ozone Special Purpose Monitoring Data'' from John

Seitz, Director, Office of Air Quality Planning and Standards, to the

Regional Air Directors, August 22, 1997.

40 CFR 50.9 and Appendix H set forth the method for determining

whether the ozone standard has been met. Section 50.9 provides:

The standard is attained when the expected number of days with

maximum hourly average concentrations above 0.12 ppm is equal to or

less than 1, as determined by Appendix H.

Monitoring to determine attainment under section 50.9 and Appendix

H is governed by 40 CFR part 58. As the Agency charged with

implementing the Clean Air Act, EPA has the authority to establish the

mechanisms necessary to monitor air quality. See CAA sections 103(c),

110(a)(2)(B), 301(a), and 319. Pursuant to this authority, EPA has

required that each state's implementation plan ensure the establishment

of an official network of air pollution monitors, as set forth in 40

CFR part 58. The official network is referred to as the State and Local

Air Monitoring Stations (SLAMS) network.

Data from SLAMS monitors are quality assured by the state and local

agencies prior to submission to EPA, and again by EPA when the data are

entered into EPA's database. Through this system, EPA ensures that its

regulatory decisions are based on scientific data that meet a

consistent standard of reliability.

For data from monitors that are not part of the SLAMS network

required by part 58, EPA regulations provide that EPA will exclude the

data when they do not meet the terms of 40 CFR 58.14 Special purpose

monitors. Section 58.14(a) provides:

Any ambient air quality monitoring station other than a SLAMS or

[prevention of significant deterioration] station from which the

State intends to use the data as part of a demonstration of

attainment or nonattainment or in computing a design value for

control purposes of the [NAAQS] must meet the requirements for SLAMS

described in section 58.22 and, after January 1, 1983, must also

meet the requirements for SLAMS as described in section 58.13 and

appendices A and E to this part.

Sections 58.13 and 58.22 prescribe the operating schedule and

monitoring methodology, respectively, for SLAMS monitors. Appendix A

contains quality assurance criteria to be followed by SLAMS monitors,

and Appendix E contains siting criteria for monitoring instruments.

Section 58.14(b) further provides:

Any ambient air quality monitoring station other than a SLAMS or

PSD station from which the State intends to use the data for SIP-

related functions other than as described in paragraph (a) of this

section is not necessarily required to comply with the requirements

for a SLAMS station under paragraph (a) but must be operated in

accordance with a monitoring schedule, methodology, quality

assurance procedures, and probe or instrument-siting specifications

approved by the Regional Administrator.

Thus, under its current regulations, if data recorded at special

purpose monitors meet the criteria of section 58.14, there is no basis

for EPA to exclude those data from consideration. Data which meet the

requirements of section 58.14(a) have been demonstrated to be of

equivalent reliability as official network monitors, and absent an

explicit regulatory basis for exclusion, must be taken into account.

Since the reliability of these data is based solely on technical and

scientific considerations, EPA has concluded that a state's intended

use of the SPM data is not an appropriate factor in determining whether

data from SPMs that otherwise meet the requirements of section 58.14

may be excluded from consideration in ozone designation and

classification determinations, in computing an ozone design value for

control purposes, or for other ozone SIP-related purposes.

II. Proposal in Regard to the Phoenix Ozone Nonattainment Area

A. The State of Arizona's Extension Application

On May 2, 1997, the Arizona Department of Environmental Quality

(ADEQ) requested a one-year extension of the ozone attainment date for

the Phoenix area. Letter, Russell F. Rhoades, Director, ADEQ to Felicia

Marcus, Regional Administrator, U.S. EPA Region 9, May 2, 1997. In the

letter, the State discusses the Phoenix area's compliance with the

Clean Air Act's two minimum criteria for an extension and also

describes the State's continuing efforts to ensure progress toward

ozone attainment. Attached to the letter is a table listing all 1996

exceedances of the 1-hour ozone standard in and around the Phoenix

area. This table listed not only the one exceedance recorded at a SLAMS

site (the Mesa site) but also the nine exceedances recorded at special

purpose monitoring (SPM) sites in the area. This list of exceedances is

reproduced in Table 1.

Table 1.--Ozone Exceedances in Maricopa County--1996

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Site Type of site Date PPM

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Blue Point............................... SPM July 23, 1996.............. 0.140

Blue Point............................... SPM August 16, 1996............ 0.132

Falcon Field............................. SPM July 23, 1996.............. 0.129

Fountain Hills........................... SPM May 21, 1996............... 0.128

Fountain Hills........................... SPM June 4, 1996............... 0.126

Fountain Hills........................... SPM July 23, 1996.............. 0.129

Fountain Hills........................... SPM August 28, 1996............ 0.132

Mesa..................................... SLAMS July 23, 1996.............. 0.127

Mt. Ord.................................. SPM May 21, 1996............... 0.130

Salt River Pima.......................... SPM July 23, 1996.............. 0.130

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The Falcon Field and Fountain Hills monitoring sites are operated

by the Maricopa County Environmental Services Department (MCESD) and

are located along the rapidly-growing eastern edge of the metropolitan

Phoenix area.5 These sites were established in 1989 and

1996, respectively, and have been operated since as SPMs.6

The sites were

[[Page 46232]]

established in response to several audits (including one by EPA) that

found the County's monitoring network inadequate to meet minimum

monitoring requirements in EPA's regulations. EPA's monitoring

regulations require siting monitors in areas of maximum expected ozone

concentrations and maximum expected population exposure. Evaluation of

the ozone situation in the Phoenix area has indicated that the eastern

edge of the area is the most likely region for both maximum ozone

concentrations and, because of its high population growth rate, maximum

population exposure.

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\5\ The Blue Point and Mount Ord monitors are located outside

the boundaries of the Phoenix ozone nonattainment area but are

clearly influenced by emissions from the nonattainment area. For the

purposes of this notice, however, EPA has not considered data from

these monitors but may do so in future notices.

\6\ EPA has requested the conversion of these sites to SLAMS.

See letter, John Kennedy, U.S. EPA--Region 9 to Al Brown and

Violette Brown, MCESD, February 10, 1997. The County has requested

until conclusion of the State's air monitoring task force late this

fall before responding to EPA's request.

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EPA has evaluated the operation of each site in 1996 by reviewing

documentation prepared by MCESD and/or by independently auditing each

monitor. See Memorandum, Bob Pallarino, EPA, to John Kennedy, EPA;

``Adequacy of Maricopa County Ozone Monitoring network,'' July 31, 1997

and Memorandum, John Kennedy and Bob Pallarino, EPA, to Debbie Jordan

and Frances Wicher, EPA; ``Site Evaluation and Quality Control/Quality

Assurance Review of Selected Maricopa County Ozone Monitoring Sites,''

July 25, 1997. Based on its evaluation, EPA has determined that these

monitors are sited, equipped, and operated consistent with EPA's

regulations at 40 CFR part 58, subpart B and Appendices C and E and

that the 1996 data given in Table 1 meets EPA's quality assurance

requirements at 40 CFR part 58, Appendix A. Therefore, EPA has

considered the ozone exceedances from these SPMs in deciding whether to

issue an extension.

EPA is proposing to deny the State of Arizona's application for a

one-year extension of the moderate area ozone attainment date for the

Phoenix metropolitan nonattainment area. EPA is proposing this denial

because the Phoenix area had more than one exceedance at a monitor in

1996 (4 at Fountain Hills) and thus does not meet the second statutory

criterion for granting an extension, that is, the area has no more than

one exceedance in 1996.

Over the past year, the State of Arizona has been extensively

evaluating the Phoenix ozone problem. ADEQ has developed and continues

to refine an urban airshed model for the Phoenix area. In early 1996,

Governor Symington convened an Air Quality Strategies Task Force to

recommend both short- and long-term strategies for improving Phoenix's

air quality. The Task Force, which included business, environmental,

and local governmental representatives, recommended in December 1996, a

number of additional ozone reduction strategies for the area. Many of

these strategies are contained in legislation passed in the 1997

Arizona legislative session and were submitted to EPA on April 21, 1997

as part of the State's Voluntary Early Ozone Plan (VEOP). Additionally,

on June 3, 1997 (62 FR 30260), EPA approved Governor Symington's

request to extend the federal reformulated gasoline (RFG) program to

the Phoenix area and RFG is now available there. The State is currently

developing its own clean burning gasoline program. These measures are

in addition to the existing ozone control strategy that includes the

State's premier centralized enhanced vehicle inspection program

(approved by EPA on May 8, 1995) that already exceeds the CAA's vehicle

inspection and maintenance program requirement for serious areas.

Unfortunately, initial results from the air quality modelling

undertaken for the VEOP showed that the existing control strategy even

when combined with the additional measures contained in the VEOP were

not enough to demonstrate attainment of the ozone standard. Draft VEOP,

p. E-8. There were, however, significant technical concerns with these

initial modelling results and ADEQ continues to refine the UAM.

Preliminary results from this additional work support the draft VEOP's

basic finding that the Phoenix area will need additional emission

reductions in order to attain the ozone standard. See Memorandum,

Frances Wicher, EPA, to Docket AZ-001-BU; ``Record of Communication,''

August 8, 1997.

As noted before, the underlying premise of an extension is that an

area is close to attainment and already has in place the control

strategy needed for attainment. All evidence in front of the Agency

indicates that the Phoenix area is not close to attainment of the 1-

hour ozone standard and that, despite the State's dedicated efforts to

adopt and implement controls, the area will need to continue its on

going planning and control efforts. Thus, even if the Phoenix area met

the statutory requirements for granting an extension, EPA believes that

such an extension would not be appropriate at this time.

B. Proposed Nonattainment Determination

Attainment of the 1-hour ozone NAAQS is demonstrated in an area

when the expected number of days per calendar year with maximum hourly

average ozone concentrations above 0.12 ppm is equal to or less than

one. 40 CFR 50.9. The average number of days is calculated for a three-

year period. 40 CFR part 50, Appendix H and Laxton memo. The 1994-1996

period is used to demonstrate attainment by November 15, 1996.

Table 2 lists the 3-year average number of days over the 1-hour

ozone standard at each SLAMS monitoring site in the Phoenix

metropolitan area for the period 1994 to 1996 and each monitor's design

value for that period.7 Design values are calculated

following the procedures in the Laxton memo. A complete listing of the

ozone exceedances at each monitor as well as EPA's calculations of the

design values can be found in the TSD.

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\7\ EPA does not have compete 1994 and 1995 data from the SPM

sites and thus is not listing those sites in Table 2. However, based

on the limited data available to the Agency, six SPM sites (Papago

Park, Phoenix Supersite, Phoenix VEI, Falcon Field, Fountain Hills,

and Salt River Pima) averaged more than one ozone exceedance per

year in the 1994-1996 period. Thus, the limited SPM data EPA does

have confirm its proposed determination that the Phoenix area failed

to attain the 1-hour ozone standard by November 15, 1996.

Table 2.--Average Number of Ozone Exceedances Days per Year in the

Phoenix Metropolitan Area

[1994-1996]

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Number of Average

days over number of Site

Site the exceedance design

standard days per value

(1994-1996) year (PPM)

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South Phoenix.......................... 1 0.3 0.110

West Phoenix........................... 0 0.0 0.110

Mesa................................... 4 1.3 0.126

North Phoenix.......................... 4 1.3 0.125

Glendale............................... 0 0 0.109

Pinnacle Peak.......................... 1 0.3 0.119

Central Phoenix........................ 0 0 0.113

South Scottsdale....................... 1 0.3 0.121

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As can be seen from Table 2, two monitoring sites (Mesa and North

Phoenix) have averaged more than 1 exceedance day per year in the 1994-

1996 period. EPA is, therefore, proposing to find that the Phoenix

metropolitan area did not attain the 1-hour ozone NAAQS by the

statutory deadline for moderate area of November 15, 1996.

EPA is also proposing that the appropriate reclassification of the

area is to serious. Section 181(b)(2) requires the area to be

reclassified to the higher of the next higher classification or the

[[Page 46233]]

classification appropriate to the design value at the time of the

nonattainment finding. The next highest classification for Phoenix is

serious. The other potential classification is severe. Based on the

design value calculated using data solely from the SLAMS/NAMS network,

the area's design value is 0.126 ppm. Using the limited data set from

the SPMs, the area's maximum-possible design value is 0.132 ppm. Both

of these design values are well below the range required for a severe

classification, that is 0.180 to 0.280 ppm.

C. SIP Requirements for Serious Ozone Areas

Under section 181(a)(1) of the Act, the attainment deadline for

moderate area ozone nonattainment areas reclassified to serious under

section 181(b)(2) will be as expeditiously as practicable but no later

than November 15, 1999. Under section 182(i), these reclassified areas

are required to submit SIP revisions addressing the serious area

requirements for the 1-hour ozone NAAQS in section 182(c). Section

182(i) further provides that the Administrator may adjust the statutory

schedules for submittal of these SIP revisions. Accordingly, EPA is

exercising this authority to require submittal of the serious area SIP

revisions no later than 12 months from the effective date of the area's

reclassification. EPA believes that a 12 months schedule is appropriate

because attainment date for serious areas, November 15, 1999, is little

more than 2 years away and the State will need to expedite adoption and

implementation of controls to meet that deadline. EPA is requesting

comments on this schedule.

Under section 182(c), the requirements for serious ozone

nonattainment areas include, but are not limited to, the following: (1)

Attainment and reasonable further progress demonstrations; (2) an

enhanced vehicle inspection and maintenance program; (3) clean-fuel

vehicle programs; (4) a 50 ton-per-year major source threshold; (5)

more stringent new source review requirements; (6) an enhanced

monitoring program; and (7) contingency provisions.

EPA has issued a ``General Preamble for the Implementation of Title

I of the Clean Air Act Amendments of 1990'' that sets forth the

Agency's preliminary views on how it will act on SIPs submitted under

Title I of the Act. See generally 57 FR 13498 (April 16, 1992) and 57

FR 18070 (April 28, 1992).

EPA has recently promulgated an 8-hour ozone standard (62 FR 38856,

July 18, 1997). In order to facilitate the transition from the 1-hour

to the 8-hour NAAQS, EPA may issue additional guidance to assist states

in meeting the serious area requirements.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future action. Each

finding of failure to attain or request for an extension of an

attainment date shall be considered separately and shall be based on

the factual situation of the area under consideration and in relation

to relevant statutory and regulatory requirements.

III. Administrative Requirements

A. Executive Order (E.O.) 12866

Under E.O. 12866, (58 FR 51735, October 4, 1993), EPA is required

to determine whether today's proposal is a ``significant regulatory

action'' within the meaning of the E.O., and therefore should be

subject to OMB review, economic analysis, and the requirements of the

E.O. See E.O. 12866, sec. 6(a)(3). The E.O. defines, in sec. 3(f), a

``significant regulatory action'' as a regulatory action that is likely

to result in a rule that may meet at least one of four criteria

identified in section 3(f), including,

(1) Have an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) Raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

EPA has determined that the finding of failure to attain proposed

today, as well as the establishment of SIP submittal schedules

resulting from a bump-up, would result in none of the effects

identified in E.O. 12866 sec. 3(f). Under section 181(b)(2) of the Act,

findings of failure to attain are based upon air quality

considerations, and reclassifications must occur by operation of law in

light of certain air quality conditions. These findings do not, in-and-

of-themselves, impose any new requirements on any sectors of the

economy. In addition, because the statutory requirements are clearly

defined with respect to the differently classified areas, and because

those requirements are automatically triggered by classifications that,

in turn, are triggered by air quality values, findings of failure to

attain and reclassification cannot be said to impose a materially

adverse impact on State, local, or tribal governments or communities.

The same is true of the determination not to grant a one-year

extension, in light of the fact that this determination is also based

in part on air quality values. Similarly, the establishment of new SIP

submittal schedules merely establishes the dates by which SIPs must be

submitted, and does not adversely affect entities.

B. Regulatory Flexibility

Under the Regulatory Flexibility Act, 5 U.S.C. Section 601 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.

sections 603 and 604. Alternatively, EPA may certify that the rule will

not have a significant economic impact on a substantial number of small

entities. Small entities include small businesses, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000.

A finding of failure to attain (and the consequent reclassification

by operation of law of the nonattainment area) under section 181(b)(2)

of the Act, a denial of a one-year extension request, and the

establishment of a SIP submittal schedule for a reclassified area, do

not, in-and-of-themselves, directly impose any new requirements on

small entities. See Mid-Tex Electric Cooperative, Inc. v. FERC, 773

F.2d 327 (D.C. Cir. 1985) (agency's certification need only consider

the rule's impact on entities subject to the requirements of the rule).

Instead, this rulemaking simply proposes to make a factual

determination and to establish a schedule to require States to submit

SIP revisions, and does not propose to directly regulate any entities.

Therefore, pursuant to 5 U.S.C. 605(b), EPA certifies that today's

proposed action does not have a significant impact on a substantial

number of small entities within the meaning of those terms for RFA

purposes.

C. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.

104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector. Under section 202 of the UMRA, EPA

generally must prepare a written statement, including a cost-benefit

analysis, when EPA promulgates ``any general notice of proposed

rulemaking that is likely to result in promulgation

[[Page 46234]]

of any rule that includes any Federal mandate that may result in the

expenditures by State, local, and tribal governments, in the aggregate,

or by the private sector, of $100 million or more'' in any one year. A

``Federal mandate'' is defined, under section 101 of UMRA, as a

provision that ``would impose an enforceable duty'' upon the private

sector or State, local, or tribal governments'', with certain

exceptions not here relevant. Under sec. 203 of UMRA, EPA must develop

a small government agency plan before EPA ``establish[es] any

regulatory requirements that might significantly or uniquely affect

small governments''. Under section 204 of UMRA, EPA is required to

develop a process to facilitate input by elected officers of State,

local, and tribal governments for EPA's ``regulatory proposals'' that

contain significant Federal intergovernmental mandates. Under section

205 of UMRA, before EPA promulgates ``any rule for which a written

statement is required under [UMRA sec.] 202'', EPA must identify and

consider a reasonable number of regulatory alternatives and either

adopt the least costly, most cost-effective or least burdensome

alternative that achieves the objectives of the rule, or explain why a

different alternative was selected.

Sections 202, 204, and 205 of UMRA do not apply to today's action

because the proposed factual determination that Phoenix failed to reach

attainment does not, in-and-of-itself, constitute a Federal mandate

because it does not impose an enforceable duty on any entity. Although

the establishment of a SIP submission schedule may impose such a duty

on the State, this requirement merely establishes due dates, does not

set out any requirements not otherwise already present, and thus cannot

be considered to cost $100 million or more. Finally, section 203 of

UMRA does not apply to today's action because the regulatory

requirements proposed today--the SIP submittal schedule--affect only

the State of Arizona, which is not a small government under UMRA.

D. Rule vs. Adjudication

It should be noted that each of the three administrative

requirements described above--E.O. 12866, the Regulatory Flexibility

Act, and UMRA--apply only with respect to agency actions that fall into

the category of ``rules'', as defined under those provisions or under

the Administrative Procedures Act. E.O. 12866 sec. 3 (d)-(e);

Regulatory Flexibility Act, 5 U.S.C. sec. 603(a), 601(2); Unfunded

Mandates Reform Act, secs. 202-205, 421. EPA is considering the

possibility that today's action, to the extent it consists of a

determination that the Phoenix area failed to attain the ozone NAAQS as

of the end of 1996, might not be considered a ``rule'' as defined under

these provisions, and instead might be considered an informal

adjudication. The basis for this distinction could be that today's

action constitutes a specific factual determination applicable only to

the area in question, based on pre-existing facts. Under these

circumstances, the administrative requirements discussed above might

not apply. However, EPA is taking this approach under consideration, it

is not today proposing this approach.

List of Subjects in 40 CFR Part 81

Environmental protection, Air pollution control, Intergovernmental

relations, Ozone.

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

Dated: August 25, 1997.

Felicia Marcus,

Regional Administrator.

[FR Doc. 97-23234 Filed 8-29-97; 8:45 am]

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