Clean Air Act Reclassification; Arizona-Phoenix Nonattainment Area; Ozone

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[AZ-001-BU; FRL-5917-4]

Clean Air Act Reclassification; Arizona-Phoenix Nonattainment

Area; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is finding that the Phoenix nonattainment area (Maricopa

[[Page 60002]]

County, Arizona) has not attained the 1-hour ozone national ambient air

quality standard (NAAQS) by the applicable attainment date in the Clean

Air Act (CAA) for moderate ozone nonattainment areas, November 15,

1996. EPA is also denying Arizona's application for a one-year

extension of the November 15, 1996 attainment date for the Phoenix

area. The finding and denial are based on EPA's review of monitored air

quality data from 1994 through 1996 for compliance with the 1-hour

ozone NAAQS. As a result of the finding and denial, the Phoenix ozone

nonattainment area will be reclassified by operation of law as a

serious ozone nonattainment area on the effective date of this action.

The effect of the reclassification will be to continue progress toward

attainment of the 1-hour ozone NAAQS through the development of a new

State implementation plan (SIP), due 12 months from the effective date

of this action, addressing attainment of that standard by November 15,

1999.

EFFECTIVE DATE: December 8, 1997.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, Office of Air

Planning, AIR-2, Air Division, U.S. Environmental Protection Agency,

Region 9, 75 Hawthorne Street, San Francisco, California 94105, (415)

744-1248.

SUPPLEMENTARY INFORMATION:

I. Background

Under sections 107(d)(1)(C) and 181(a) of the Clean Air Act (CAA),

the Phoenix metropolitan area was designated nonattainment for the 1-

hour ozone NAAQS and classified as ``moderate.'' See 56 FR 56694

(November 6, 1991). Moderate nonattainment areas were required to show

attainment by November 15, 1996. CAA section 181(a)(1).

Pursuant to section 181(b)(2)(A) of the CAA, EPA has the

responsibility for determining, within six months of an area's

applicable attainment date, whether the area has attained the 1-hour

ozone NAAQS. 1 Under section 181(b)(2)(A), if EPA finds that

an area has not attained the 1-hour 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. CAA section 181(b)(2)(B) of the Act requires EPA to

publish a notice in the Federal Register identifying areas which failed

to attain the standard and therefore must be reclassified by operation

of law.

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

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

the CAA, for a one-year attainment date extension. Issuance of 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.

A complete discussion of the statutory provisions and EPA policies

governing findings of whether an area failed to attain the ozone NAAQS

and extensions of the attainment date can be found in the proposal for

this action at 62 FR 46229 (September 2, 1997).

II. Proposed Action

On September 2, 1997, EPA proposed to find that the Phoenix ozone

nonattainment area failed to attain the 1-hour ozone NAAQS by the

applicable attainment date. 62 FR 46229. The proposed finding was based

upon ambient air quality data from the years 1994, 1995, and 1996.

These data showed that the 1-hour ozone NAAQS of 0.12 parts per million

had been exceeded on average more than one day per year over this

three-year period. Attainment of the 1-hour NAAQS is demonstrated when

an area averages one or less days per year over the standard during a

three-year period. 40 CFR 50.9 and Appendix H. EPA also proposed that

the appropriate reclassification of the area was to serious, based on

the area's 1994-1996 design value of 0.132 ppm. For a complete

discussion of the Phoenix ozone data and method of calculating both the

average number of days over the ozone standard and the design value,

see 62 FR 46230.

EPA also proposed to deny the State of Arizona's application for a

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

Phoenix nonattainment area. The proposed denial was based, in part, on

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

ozone standard and will need additional controls to attain, and, in

part, on the area's failure to meet the second statutory criterion for

granting an extension. That criterion requires that the area have no

more than one exceedance of the ozone NAAQS in 1996. CAA section

181(a)(5)(B). The Fountain Hills special purpose monitor in the eastern

part of the Phoenix nonattainment area recorded 4 exceedances of the 1-

hour ozone NAAQS in 1996. For a complete discussion of the basis for

the proposed denial of the extension, including EPA's policies related

to the use of special purpose monitoring data, see 62 FR 46231.

Finally, EPA proposed to require submittal of the serious area SIP

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

reclassification.

III. Response to Comments

EPA received twenty-one comment letters in response to its

September 2, 1997 proposal. Comments were received from Arizona

Governor Jane Dee Hull, the Arizona legislative leadership, U.S.

Senator Jon Kyl and U.S. Representative John Shadegg, the Arizona

Department of Environmental Quality (ADEQ), the Maricopa County

Environmental Services Department (MCESD), several local elected

officials, numerous business groups, and one environmental group.

EPA wishes to express its appreciation to each of these individuals

and organizations for taking the time to comment on the proposal. Each

raised important issues to which EPA welcomes the opportunity to

respond.

As described above, EPA's proposal was composed of three elements:

(1) a finding of failure to attain by the statutory deadline of

November 15, 1996; (2) a denial of the State's application for a one-

year extension of the attainment date; and (3) a 12-month schedule for

submittal of the revised SIP.

Most commenters emphasized Arizona's leadership in the development

and implementation of effective ozone controls (many of which are only

mandated for serious or severe ozone nonattainment areas) and its

demonstrated commitment to making real improvements in air quality.

Among the controls cited are: the State's premier vehicle emissions

inspection program (which includes the only regulatory use of remote

sensing), Maricopa County's Travel Reduction Program, the extension of

the Federal Reformulated Gasoline (RFG) program to the Phoenix area,

the State's adoption

[[Page 60003]]

of its own, more stringent ``Clean Burning Gasoline'' program as well

as numerous other control programs such as the voluntary lawnmower

replacement program, mandatory conversion of government fleets to

alternative fuels, and incentives for conversion of private fleets to

alternative fuels and for the construction of public fueling

facilities. The City of Phoenix also listed a number of innovative air

quality measures that it has implemented, and finally, APS noted the

voluntary efforts of business and community groups including the

Business for Clean Air Challenge program.

EPA is very aware of Arizona's leadership and noted the State's

dedicated efforts to adopt and implement controls to attain the ozone

standard in its proposal. See 62 FR 46232. The Agency would like to

make clear that in taking this action it is neither ignoring Arizona's

exemplary efforts to adopt controls to improve its air quality nor

minimizing Arizona's commitment to clean air. Both are evidenced by the

numerous controls listed above and the State's continuing efforts to

evaluate its ozone situation.

As stated above, neither the determination of attainment/

nonattainment nor the determination of whether an area met the

statutory extension criterion relating to exceedances of the ozone

NAAQS in 1996 allows for reviewing an area's efforts to adopt controls.

This exercise involves little more than a rote review of available

ambient air quality data. While EPA may desire more flexibility in this

situation to reward Arizona for its demonstrated leadership, the Agency

has not been granted that flexibility under the Clean Air Act.

For the most part, commenters made similar, and frequently

identical, comments. The issues raised relate principally to (1) the

adverse impacts of the reclassification to serious, (2) the retention

of the 1-hour ozone NAAQS in EPA's recent action revising the ozone

NAAQS, (3) the denial of the request for a one-year attainment date

extension, (4) EPA's compliance with the Regulatory Flexibility Act,

and (5) proposed measures to mitigate the impact of the

reclassification. Many of the comments received did not directly

address EPA's proposals and instead focused on issues that have been

the subject of earlier EPA rulemakings (e.g., retention of 1-hour ozone

standard), outside of EPA's regulatory authority in this action (e.g.,

the reclassification to serious), or unrelated to the action (e.g.,

approval of Arizona's excess emissions rule).

In this preamble, EPA is responding to the most significant

comments received and has provided more detailed and complete answers

to all comments received in the Response to Comments (RTC) document

which is part of the technical support document (TSD) for this

rulemaking. Copies of the TSD as well as other documents in the docket

for this rulemaking may be obtained from the contact listed at the

beginning of this notice.

A. Comments Related to the Proposed Finding of Failure to Attain

Comment

ADEQ and others note that Arizona has implemented most of the

mandatory control programs for both serious and severe ozone

nonattainment areas and the only remaining requirements are for more

stringent new source review (NSR) and the federal clean fleets program.

Because the imposition of these serious area requirements will do

little to improve air quality in the Phoenix metropolitan area, the

commenters contend that the reclassification is effectively punitive.

Response: Serious ozone nonattainment areas (like all other

classifications) are subject to both specific requirements for

mandatory control programs and more general requirements for attainment

and reasonable further progress. EPA agrees that the Maricopa area

already has in place most of the mandatory control programs required

for serious area. The State, however, has yet to address the

requirements for attainment by 1999 in CAA section 181(c)(2)(A) or the

9 percent rate-of-progress requirement in section 181(c)(2)(B). Both

these requirements are very likely to require measures beyond the

specific control programs mandated by a serious area classification,

resulting in improved air quality for the Phoenix area.

The classification structure of the Act is a clear statement of

Congress's belief that the later attainment deadlines afforded higher-

classified and reclassified areas require compensating increases in the

stringency of controls. The reclassification provisions of the Clean

Air Act are a reasonable mechanism to assure continued progress toward

attainment of the health-based ambient air quality standards when areas

miss their attainment deadlines and are not punitive.

Comment: ADEQ, MCESD, and others asserted that the schedules for

planning and attainment under a reclassification almost certainly

guarantee failure because it would be difficult to complete the needed

technical analysis within the proposed 12-month SIP submittal schedule

and then to implement any additional controls needed before the 1999

ozone season.

Response: EPA agrees that the short time available for planning and

attainment between the moderate area deadline of November 15, 1996 and

the serious area deadline of November 15, 1999 makes completing the

required technical analysis and adopting additional controls difficult.

The State, however, has already adopted or is in the process of

adopting a number of controls that will contribute substantial emission

reductions in 1997 or beyond. These controls include the federal

reformulated gasoline program for 1997, Arizona's Clean Burning

Gasoline program for 1998 and later, improvements to the vehicle

emission inspection program, and an industrial solvent cleaning rule

(currently schedule for adoption in early 1998). In addition, ADEQ

continues to evaluate and refine the Urban Airshed modeling performed

for the draft Voluntary Early Ozone Plan (VEOP). All these actions give

Arizona a head start in meeting the serious area requirements.

In proposing a 12-month schedule for submittal of the revised plan,

EPA understood that this was an ambitious schedule but stated that it

believed ``a 12-month schedule is appropriate because the 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.'' See 62 FR 42633. EPA is therefore

retaining the 12-month schedule for submittal of the SIP revisions

needed to meet the serious area requirements.

Comment: Commenters argue that because stationary sources are not

the cause of the ozone problem in Phoenix, the more stringent new

source review (NSR) requirements that come with the serious area

classification will do little to improve the air quality and are thus

merely punitive.

Response: Phoenix is not being singled out for more stringent NSR

requirements than any other similarly-classified area in the Country

such as Atlanta, Washington, D.C. and San Diego. The more stringent NSR

provisions (which principally affect which sources are subject to major

source NSR) are required by statute of all serious areas without

exception. This tightening of control requirements as areas move up the

classification ladder and are given more time to attain is part of the

basic Clean Air Act scheme for ozone attainment. In establishing this

scheme, Congress determined that the more stringent NSR provision were

reasonable for serious areas and, since

[[Page 60004]]

Congress did not provide relief from these requirements for

reclassified areas, it also determined that they were reasonable

without exception for moderate areas being reclassified to serious.

B. Comments Related to Retention of the 1-Hour Ozone Standard Comment

A number of comments were received on the legality of EPA's

decision, having promulgated an 8-hour NAAQS, to defer revocation of

the 1-hour ozone NAAQS.

Response: The continued applicability of the 1-hour standard until

EPA determines that the applicable area is meeting that standard is not

the subject of this rulemaking. This rulemaking only concerns the

finding that the Phoenix area failed to attain the 1-hour standard and

the denial of the State's request for an extension of the attainment

deadline for that standard. The issue of the continued applicability of

the 1-hour standard was part of the rulemaking in which EPA promulgated

an 8-hour ozone standard. 62 FR 38856 (July 18, 1997). That rulemaking

proceeding, not this one concerning Phoenix, was the appropriate forum

in which to raise issues concerning the continued applicability of the

1-hour standard.

C. Comments Related to the Proposal to Deny Arizona's Application for a

One-Year Extension of the Attainment Date

Almost all comments received opposed EPA's proposed denial of the

State's application for a one-year extension of the November 15, 1996

attainment date. Before responding to the specific comments raised with

regard to this issue, some introductory remarks are in order. In

general, the commenters misperceive the nature of section 181(a)(5) of

the CAA that provides:

Upon application of any State, the Administrator may extend for

1 additional year (hereinafter referred to as the ``Extension

Year'') the [attainment deadline] if--

(A) the State has complied with all requirements and commitments

pertaining to the area in the applicable implementation plan, and

(B) no more than 1 exceedance of the national ambient air

quality standard level for ozone has occurred in the area in the

year preceding the Extension Year.

No more than 2 one-year extensions may be issued under this

paragraph for a single nonattainment area. Emphasis added.

Many commenters erroneously assume that if the conditions in

subparagraphs A and B above are met, then EPA must automatically grant

the extension. However, by its terms, section 181(a)(5) is ultimately

discretionary. See 62 FR 46230. While EPA cannot grant an extension

request if the conditions are not met, it is not required to do so even

if they are.

While EPA believes, as discussed at length below, that the second

condition has not been met, the Agency has ample justification for

denying the request even if that were not the case. In its proposal,

EPA articulated two reasons to deny the extension request. The first--

the failure to meet the second extension criterion--will be discussed

further below. The second--that the Phoenix area was not close to

attainment--went virtually unaddressed by most the commenters. As EPA

stated in its notice:

[T]he 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. Emphasis

added. 62 FR 46232.

While several commenters questioned EPA's conclusion that the

Phoenix area was not close to attainment, their comments (which are

addressed later) did not persuade EPA that its conclusion was wrong. In

fact, an equal number of commenters tacitly agreed with EPA's position

by arguing the need for long-term measures to solve Phoenix's ozone

problem and the impossibility of showing attainment by 1999.

The central thrust of the comments EPA received on the extension

issue is that EPA improperly included data from special purpose

monitors (SPMs) 2 in its calculation of whether the Phoenix

area experienced no more than one exceedance of the ozone NAAQS in

1996, the year preceding the extension year, and had EPA properly

excluded the data, then the Phoenix area would have been granted an

extension. For the reasons discussed below, EPA believes that it was

entitled to rely on that data in making this assessment. However, even

if the SPM data were excluded from the calculation, the Agency believes

that it can properly exercise its discretion to deny the State's

extension request.

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\2\ In the Phoenix area, MCESD operates eight ozone monitors in

its official or state or local air monitoring station/national air

monitoring station (SLAMS/NAMS) network. ADEQ and MCESD operate a

total of nine ozone special purpose monitors in the area.

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As documented below and in Appendix B to the TSD, since at least

1989, Arizona has maintained an inadequate official monitoring network

and has consistently declined to convert the SPMs (which meet all of

EPA's technical criteria) to cure those deficiencies. If it had to rely

solely on this inadequate monitoring network, it would be impossible

for EPA to determine whether the Phoenix area had one or fewer

exceedances of the ozone standard in 1996 because the official network

does not adequately represent Phoenix's air quality. Only when the data

from the SPMs are combined with those of the official network is it

possible to make this determination and with the SPM data it is clear

that the Phoenix area is not close to attaining the ozone 1-hour NAAQS.

Modeling conducted by the State confirms this conclusion. Thus the

underlying intent of the statute's extension provision has not been

met. In acknowledging this reality, EPA can appropriately exercise its

discretion to deny the extension request.

Comment: ADEQ contends that in a letter dated June 6, 1997, to the

Clerk of the United States Court of Appeals for the Third Circuit,

EPA's legal counsel noted that EPA was not required to consider non-

network (i.e., not part of the SLAMS/NAMS network) data showing

violations of the NAAQS. Letter, June 6, 1997, from Lois J. Schiffer,

Assistant Attorney General, Environmental Natural Resources Division

(by Greer S. Goldman), U.S. Department of Justice (DOJ) to P. Douglas

Sisk, Clerk, United States Court of Appeals for the Third Circuit

(``3rd Circuit letter''). ADEQ also cites Southwestern Pennsylvania

Growth Alliance v. Browner, 121 F.3d 106 (3rd Cir. 1997), to support

its position that EPA in the past has excluded exceedance data from its

evaluation of a redesignation request because the data came from

monitors that were not part of the SLAMS network.

Response: In the 3rd Circuit letter, EPA actually concluded that

the Agency's regulation on the use of SPM data, 40 CFR 58.14, does not

authorize it to take into account the State's intended use of SPM data

that otherwise meet that regulation's requirements when deciding

whether to use it in an ozone redesignation action.3 As a

result, under EPA's regulation, all available SPM data that meet the

minimum federal siting and quality assurance requirements in 40 CFR

Part 58 must be used in making regulatory decisions

[[Page 60005]]

such as redesignations and reclassifications.

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\3\ This letter was signed by DOJ on behalf of EPA and

accurately reflects the Agency's position on the use of SPM data.

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Southwestern Pennsylvania Growth Alliance involves EPA's

disapproval of the Commonwealth of Pennsylvania's request to

redesignate the Pittsburgh-Beaver Valley nonattainment area to

attainment for ozone. The disapproval was based on 1995 violations of

the ozone standard recorded on the area's SLAMS/NAMS network. 61 FR

19193 (May 1, 1996) The Southwestern Pennsylvania Growth Alliance

(SWPGA), an organization of major manufacturers and local governments

in the Pittsburgh-Beaver Valley region, sought review of EPA's

disapproval by the Third Circuit Court of Appeals. A full history of

EPA's actions on Pennsylvania's redesignation request can be found in

the TSD for today's notice.

Among the issues raised by SWPGA was the use of the 1995 SLAMS/NAMS

data. SWPGA argued that EPA acted contrary to the Act by considering

the 1995 ozone exceedances because they occurred after the EPA's 18

month deadline to act on the State's redesignation request which had

been submitted in November, 1993. In an effort to clarify certain

statements made in its brief, EPA identified certain instances where it

had not used available data when acting on a redesignation request. In

one instance, the San Francisco-Bay Area redesignation to attainment

for ozone, EPA had excluded SPM data from its redesignation evaluation.

The other instance, LaFourche Parish, Louisiana, involved only SLAMS/

NAMS data. 121 F.3d at 115.

The court then directed EPA to address a number of questions,

including why it is lawful for EPA to exclude consideration of data

from monitors that are not part of the SLAMS network. The 3rd Circuit

letter cited by ADEQ is EPA's response to the court on this issue. As

stated in this letter (p. 4):

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

required by [40 CFR] Part 58 [EPA's monitoring regulation], EPA

regulations provide that EPA will exclude the data when they do not

meet the terms of 40 CFR 58.14. That section provides, in relevant

part:

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.

* * * In at least one case, EPA has interpreted section 58.14 to

make a state's intent a factor in determining whether data from

special purpose monitors that otherwise meet the requirements of

section 58.14 may be excluded from consideration in an ozone

redesignation action. However, EPA has recently evaluated that

interpretation and concluded that it is not authorized by section

58.14.

The passage supports the conclusion that the only circumstance under

which SPM data may be excluded is if the data do not meet the siting

and quality assurance requirements of Part 58.

The statement that ADEQ cites from the 3rd Circuit letter comes

from the letter's concluding paragraph which discusses the specific

facts of Southwestern Pennsylvania Growth Alliance. All monitoring data

under consideration in that case came from SLAMs monitors; there were

no SPM data at issue in EPA's decision to deny the redesignation

request. In this context, it is clear that the 3rd Circuit letter does

not indicate that EPA may ignore SPM data:

It should be noted, however, that the issue of whether EPA has

discretion to decide if data from outside the official monitoring

network should be used in redesignation decisions is not at issue in

this case, where all monitored violations of the ozone standard were

recorded at official network monitors. And even if EPA were required

to consider non-network data showing violations, EPA would not be

authorized to ignore violations at official network monitors when

determining whether an area has attained the standard and is

entitled to redesignation. 3rd Circuit letter (p. 4).

ADEQ also cites the court's opinion to support its contention that

EPA has excluded SPM data in the past. While the court noted that

``[i]n at least one case, the EPA has excluded exceedance data from its

evaluation of a redesignation request because the data came from

monitors that were not part of the [SLAMS] network * * *,'' it went on

to state in the same paragraph:

Assuming arguendo that the EPA's exclusion of non-SLAMS

exceedance data violates the EPA's duty not to redesignate an area

that fails to attain the NAAQS, the EPA's prior disregard of this

duty did not relieve the EPA of its obligation to act correctly in

other cases. Emphasis added. 121 F.3d at 115.

Based on its interpretation of Section 58.14, and the facts of the

Phoenix air quality situation discussed below, EPA believes that it is

acting correctly in not excluding the SPM data from consideration in

the Phoenix extension decision.

Comment: Numerous commenters questioned the timing of EPA's

issuance of the Memorandum, ``Agency Policy on the Use of Special

Purpose Monitoring Data,'' dated August 22, 1997, by John Seitz, EPA

Director of the Office of Air Quality Planning and Standards (``SPM

policy'' or ``SPM memo''), noting that it was issued just 3 days in

advance of EPA's announcement that it was proposing to find that the

Phoenix area had failed to attain the ozone standard and to deny the

State's extension request. The commenters contend that, absent this

``ad hoc policy,'' EPA would not have been able to propose to deny

Arizona's one-year extension request based upon the use of the special

purpose monitor data that EPA has heretofore rejected.

Commenters state that the information submitted to EPA's AIRS and

additional data submitted to EPA by ADEQ demonstrate that, had the

Fountain Hills special purpose monitor data properly been excluded, the

criterion in section 181(a)(5)(B) would have been satisfied. Commenters

note that during the year preceding the extension year (1996), there

was only one exceedance of the ozone NAAQS at a SLAMS or NAMS monitor

(the exceedance at the Mesa SLAMS monitor on July 23, 1996, when a

reading of 0.127 ppm ozone was recorded) and that this was the only

ozone exceedance recorded during the entire calendar year of 1996 on

any official SLAMS or NAMS monitor.

Response: The proper treatment of SPM data has been growing

national interest for some time, increasing the need for EPA to issue

national guidance. As noted in the SPM memo (p. 1):

[OAQPS] has received several inquiries from Regional Offices into

how special purpose monitoring data can be used in making a variety

of regulatory decisions such as designations, classifications, and

attainment date extensions. [It] also [has] a final ruling from the

U.S. Court of Appeals for the Third Circuit which supports the U.S.

EPA denial of Pennsylvania's redesignation request for the

Pittsburgh-Beaver Valley ozone nonattainment area. In light of these

questions, legal developments, and the new [NAAQS] implementation

directives, [OAQPS] believe[s] it is necessary to discuss the use of

all publicly available special purpose monitoring data for all

regulatory applications.

Further impetus for the SPM policy was the revised ozone NAAQS

under which EPA must determine within 90 days of their July 18, 1997

publication which areas of the Country are attaining the 1-hour

standard. National guidance is clearly essential to assure consistency

in the use of SPM data for these determinations.

The interest in and the need for a clear statement of the Agency's

policy on SPM data was thus far broader than the Phoenix situation. The

Agency did not, as the commenters imply, create an

[[Page 60006]]

``ad hoc'' policy simply to justify its proposed denial of Arizona's

request for an extension but rather it articulated a national policy

applicable to all areas of the Country.

The commenters, however, wrongly assert that EPA needed the August

22, 1997 SPM policy to justify its denial of Arizona's extension

request. Even without a formal written policy statement, EPA believes

that it has sound reasons to use the SPM data in this case, including

the inadequate SLAMS/NAMS network in Phoenix, the discrepancies in

measured air quality between the official monitors and the SPMs, and

its long-established regulations governing the use of SPM data.

Moreover, the June 6, 1997 letter to the Third Circuit and the

Court's subsequent July 28, 1997 decision in Southwestern Pennsylvania

Growth Alliance, both available long before EPA's announcement, may be

read to imply that EPA must consider available SPM data in making

regulatory decisions such as granting extension requests. As noted in

the SPM memo (p. 2):

The Third Circuit Court decision supports the view that the EPA may

not redesignate an area from nonattainment to attainment if the EPA

knows that the area is not meeting the ozone NAAQS. Specifically, if

the U.S. EPA knows of a violation or violations of the ozone NAAQS

by either examining information within the AIRS or data from other

sources and these data meet all 40 CFR Part 58 requirements, the

U.S. EPA cannot determine that an area is attaining the NAAQS.

This logic applies equally to extension requests: if EPA knows of

more than one exceedance in an area in the year preceding the extension

year by either examining information within AIRS or data from other

sources and these data meet all 40 CFR part 58 requirements, EPA cannot

grant an extension of the attainment date.

Finally, EPA notes that it informed Arizona of its intention to use

the SPM data in advance of its August 25, 1997 announcement. In a

presentation to the May 19, 1997 meeting of the Arizona air quality

monitoring network stakeholders,4 EPA stated that the

current Maricopa SLAM network was deficient and that it could not,

without inclusion of the SPM sites, support the granting of an

extension. At the June 9, 1997 meeting, EPA distributed the 3rd Circuit

letter and noted that EPA would soon be formally clarifying its use of

SPM data. EPA also made a series of courtesy calls to state and local

agencies the week before its announcement to inform them that it would

be proposing to find that Phoenix had failed to attain and that it was

proposing to deny the extension request based in part on the SPM data.

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\4\ ADEQ convened a series of facilitated stakeholder meetings

in May through July, 1997 to discuss the ambient air quality

monitoring network in Maricopa County. Participants included MCESD,

other local agencies, industry representatives, and environmental

groups. EPA also participated in the meetings.

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Comment: Several commenters contend that the use of the SPM data in

this instance is inconsistent with actions taken in other nonattainment

areas where SPM data were excluded for the purposes of making similar

determinations and conclude that if EPA had followed its earlier

precedents then data from the Fountain Hills special purpose monitor

would not have been used to deny the extension request. ADEQ also notes

that the SPM memo implicitly concedes that Agency policy up to the date

of the memorandum had been to reject exactly the kind of monitoring

data on which EPA based its decisions to propose to deny the one-year

extension. Commenters view EPA's refusal to follow prior precedent and

disregard special purpose monitor data in this situation as a simple

case of disparate treatment.

Response: EPA's previous record on the use of SPM data contains

numerous examples of instances where the Agency has used SPM data in

making designation and classification decisions. While commenters note

one instance where EPA did not use available SPM data (the Beaumont-

Port Arthur reclassification), and the SPM memo notes one other (the

San Francisco-Bay Area redesignation), there are many more instances

where the Agency has used SPM data to either designate or classify an

area, including the original classification of the Phoenix area as

moderate for ozone and the PM-10 nonattainment designations for the

Bullhead City and Payson, Arizona areas. See 56 FR 56694, 56703

(November 6, 1991) and 58 FR 67334, 67336 (December 21, 1993),

respectively. Outside of Arizona, EPA has used SPM data to redesignate

to nonattainment portions of White Top Mountain in New York and Smyth

County, Virginia. See 56 FR 56694, 56704.

Many commenters cited EPA's 1996 action to correct the Beaumont/

Port Arthur, Texas area ozone classification from serious to moderate

as an example of EPA's inconsistent use of SPM data. 61 FR 14496 (April

2, 1996). In this case, data from an SPM had originally been utilized

to classify the Beaumont/Port Arthur area as a serious ozone

nonattainment area. Based on additional information provided by Texas,

EPA corrected the reclassification under CAA section 110(k)(6) from

serious to moderate, stating that the data from the SPM should not have

been used for classification purposes because, among other reasons, the

SPM was not a part of the state monitoring network, the data from the

monitor were utilized for research purposes, and the data were not

reported to EPA's Aerometric Information Retrieval System (AIRS).

Commenters contend that in these three circumstances the Phoenix

situation closely parallels Beaumont-Port Arthur's; therefore, EPA

should treat the Phoenix SPM data in a like manner by excluding it. In

response, EPA notes that it has clarified its policy on the treatment

of SPM data since the April 2, 1996 action on Beaumont-Port Arthur,

resulting in all three of these circumstances no longer being grounds

for excluding SPM data.5

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

\5\ This policy clarification is clearly permissible. Moreover,

even if it were a change or revision in policy, rather than a

clarification, it would also clearly be permissible. It is well

established that an agency may modify or reverse its interpretation

over time provided the agency supplies a reasoned basis for the

change. See e.g., Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 863

(1984); Motor Vehicle Manufacturers Assoc. of the U.S., Inc. v.

State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 42

(1983)(``we fully recognize that ``[regulatory] agencies do not

establish rules of conduct to last forever' * * * and that an agency

must be given ample latitude to ``adapt their rules and policies to

the demands of changing circumstances.' ''); Good Samaritan Hospital

v. Shalala, 113 S. Ct. 2151, 2161 (1993) (``[A]n administrative

agency is not disqualified from changing its mind * * *''). EPA

provided that reasonable basis in the SPM memo.

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

Even if EPA's regulations and policy were that valid SPM data could

be excluded in some cases (which they are not), EPA believes that there

are two compelling reasons to use the SPM data in the Phoenix case.

These reasons are (1) the inadequacy of the Maricopa ozone monitoring

network and (2) the large discrepancy between air quality when measured

on Maricopa's SLAMS/NAMS network and when measured on the SLAMS/NAMS/

SPM network.

Since 1989, EPA has consistently found that Maricopa's existing

ozone SLAMS/NAMS network is inadequate to meet the monitoring

objectives of Part 58, more specifically the requirement for a site

measuring maximum concentration. A complete history of EPA's

evaluations of the Maricopa County monitoring network can be found in

Appendix D to the TSD. Numerous evaluations, including the recent VEOP,

have indicated that maximum ozone concentrations are occurring in the

rapidly-developing eastern-northeastern portion of

[[Page 60007]]

Maricopa County.6 While there are SLAMS sites located

throughout the central part of the Phoenix metropolitan area, there are

no SLAMS sites on the eastern edge of the Phoenix area. EPA has been

urging the County for nearly a decade to locate an ozone SLAMS monitor

in this area. The County has responded by locating numerous SPM sites

there (including the Fountain Hills SPM site) but has yet to convert

any of those sites into SLAMS or NAMS.

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

\6\ This is borne out by the fact that all but one of the 1996

exceedances (the one at the Mesa SLAMS monitor) occurred at monitors

to the east or northeast of the metropolitan area.

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

Based solely on this inadequate network, it is not possible for EPA

to accurately determine the area's compliance with the second statutory

criterion for extensions. Such a determination can only be made based

on data from a complete network that accurately reflects air quality in

the area; therefore, even if the SPM data were excluded from the

calculation, the Agency believes that it can properly exercise its

discretion to deny the State's extension request.

The inadequate SLAMS network has led to a troubling discrepancy

between the air quality measured on the SLAMS/NAMS network and that

network when augmented by the SPM sites. This is illustrated by Table 1

below.

Table 1.--Air Quality Comparison Between the SLAMS/NAMS Network and

SLAMS/NAMS/SPM Network

[Maricopa County, 1994-1996]

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

SLAMS/NAMS/

SPM network

SLAMS/NAMS (w/o Mt.

network Ord or Blue

Point)

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

Number of Ozone Exceedance.................... 10 44

Number of Ozone Violations.................... 2 13

Number of Days over the Ozone Standard........ 6 21

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

Clearly had EPA ignored the SPM data in Maricopa County, it would

have greatly underestimated the severity of the area's air quality and

inappropriately downplayed the impact of that air quality on public

health.

Given the significant probability that the Phoenix area would

eventually face reclassification to serious even if it were granted an

extension, EPA questions the actual benefit of an extension to the

area. The commenters have made extensive comments on the adverse

impacts of reclassification, among them the short-term planning and

attainment deadlines facing newly serious areas and the imposition of

the more stringent NSR provisions. An extension would only compound the

problem of the short time frames while simply deferring the more

stringent NSR provisions for a short time. Hence, even if it were

within its discretion to grant an extension, EPA stands by its belief

that an extension is not appropriate at this time.

Comment: A number of commenters noted that the Phoenix area had not

experienced any ozone exceedances in 1997 and asserted that this

indicates that the area's ozone problem has been solved. Noting that

the number of ozone exceedances peaked in 1995 and decreased in 1996,

the County stated that the ``reality check'' provided by the ambient

data indicates a trend contradictory to EPA's contention that the

Phoenix area is not close to attainment.

Response: The clean ozone air quality that the Phoenix area has

experienced this year is very good news. These lower ozone readings are

due in some part to the introduction of reformulated gasoline and the

continuing implementation of other control programs such as the State's

premier vehicle emission inspection program.

Unfortunately, a single year of ozone data cannot be used to

conclude that an area is close to attaining the 1-hour ozone standard.

The Phoenix area has experienced another year (1989) in which ozone

exceedances were not recorded, only to have the subsequent years show

widespread violations.

Ozone levels are related to both emission levels and meteorology.

As a result of this meteorological component, ozone levels can vary

greatly from year to year. The 1-hour ozone standard accounts for the

weather's effect by evaluating compliance over a three-year period

(that is, an area can average no more than 1 exceedance per year over a

three-year period). 40 CFR 50.9 and part 50, Appendix H.

There is some reason to believe that favorable weather patterns

this year have also contributed to Phoenix's low ozone readings. In

fact, 1997 has been an unusually good year for air quality throughout

the West. All areas in EPA Region 9 (with the exception of San Diego

and the Imperial Valley) have shown decreases in second-high ozone

levels from 1996 to 1997, many greater than Phoenix's. None of these

areas has introduced substantial new emission reduction programs, like

Phoenix, that would account for these decreases.

D. Comments Related to the Regulatory Flexibility Act Requirements

Comment: A number of commenters claimed that EPA failed to comply

with the Small Business Regulatory Enforcement Fairness Act of 1996

(SBREFA) in its proposal.7 The commenters claim that EPA's

certification that its action would not have a significant economic

impact on a substantial number of small entities is incorrect.

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

\7\ SBREFA amended the Regulatory Flexibility Act (RFA), 5

U.S.C. 601 et seq.

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

In support of their argument, the commenters state that small

businesses that emit 50 tpy or more of VOC will become subject to

reasonably available control technology (RACT) requirements, more

stringent NSR requirements, and the Title V operating permit program as

a result of the reclassification to serious and describe in more detail

the potential adverse impacts of these requirements on small

businesses.8

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

\8\ EPA notes that businesses that emit 100 tpy or more are

already subject to some of these requirements under the moderate

area classification.

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

The commenters further assert that EPA's reliance on Mid-Tex

Electric Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985) for

not preparing a regulatory flexibility analysis is misplaced. Finally,

as an aside, the commenters note that Mid-Tex was decided a decade

before Congress enacted SBREFA and more significantly,

[[Page 60008]]

SBREFA imposes outreach requirements on EPA and OSHA which are imposed

on no other government agencies (citing 5 U.S.C. 609(b) and (d)).

Response: The Regulatory Flexibility Act provides that, whenever an

agency is required to publish a general notice of rulemaking for a

proposed rule, the agency must prepare an initial regulatory

flexibility analysis for the proposed rule unless the head of the

agency certifies that the rule ``will not, if promulgated, have a

significant economic impact on a substantial number of small entities''

(section 605(b)). EPA certified the proposed determination that the

Phoenix area did not attain the 1-hour ozone standard by the attainment

date and the proposed denial of the attainment date extension

request,9 based on its conclusion that the rule would not

establish requirements applicable to small entities and therefore would

not have a significant economic impact on small entities within the

meaning of the RFA. EPA is reaffirming that certification in this final

action.

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

\9\ Commenters only addressed the potential impact on small

businesses of the reclassification (which is based on the

determination of nonattainment and the denial of the extension

request), and not the potential impacts of the SIP submittal

schedule. Therefore, the latter action is not discussed further in

response to this comment.

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

As described elsewhere in this notice, CAA section 181(b) requires

EPA to determine whether an area has attained a NAAQS by the applicable

attainment deadline. If EPA finds that the area has not attained, the

section generally provides that the area ``shall be reclassified by

operation of law'' (section 181(b)(2)(A)). The section requires EPA to

publish a notice in the Federal Register identifying each area the

Agency has determined to be in nonattainment and ``identifying'' the

resulting reclassification of the area (section 181(b)(2)(B)).

While determinations that trigger a reclassification do not

themselves establish regulatory requirements applicable to small (or

large) entities, they may, as noted by the commenters, trigger the

application to small entities of regulatory requirements established by

other rulemakings under the Clean Air Act (and conceivably other

statutes). EPA, however, has concluded that the word ``impact'' as used

in the RFA does not include regulatory requirements that the rule does

not establish, but may trigger under the terms of other rules or

statutory provisions. For the reasons discussed at length in the TSD,

EPA believes that the RFA's text, legislative history and case law,

including Mid-Tex, all make clear that RFA analysis is limited to the

requirements of the rule being promulgated.

A more detailed discussion of this issue may be found in the TSD

for this rulemaking.

E. Comments Related to Mitigating the Adverse Impacts of

Reclassification

Many commenters suggested several steps that could be taken to

mitigate the adverse impacts of the reclassification to serious. While

EPA will briefly respond to most of the suggestions here, many involve

issues that are being dealt with in forums other than this action. EPA

will continue to work with interested parties in Arizona to address

these issues in those other forums. EPA also received questions

regarding the implementation of NSR and Title V requirements. Those

questions are addressed in the TSD.

Comment: Commenters requested that EPA suspend further enforcement

of the 1-hour ozone NAAQS in the Phoenix Metropolitan area by amending

its ``implementation policy'' for the revised 8-hour ozone NAAQS.

Commenters contend that EPA has the flexibility and authority to do so

under the ``implementation policy'' by citing the policy's statements

that implementation of the new 8-hour ozone NAAQS should be ``carried

out to maximize common sense, flexibility, and cost effectiveness.'' 62

FR 38421 (July 18, 1997).

Response: The document referred to and cited by the commenters as

the ``Implementation Policy,'' 62 FR 38421 (July 18, 1997) is a

memorandum to the EPA Administrator entitled ``Implementation of

Revised Air Quality Standards for Ozone and Particulate Matter''

(``President's Memorandum'') signed by President Clinton for the

implementation of the revised ozone and particulate matter standards.

Attached to that memorandum is a strategy, ``Implementation Plan for

Revised Air Quality Standards'' (``Implementation Plan'') outlining the

steps for implementing these standards. EPA is currently developing

guidance and proposed rules consistent with the President's Memorandum.

EPA is committed to the goals of maximizing common sense, flexibility,

and cost effectiveness in implementing the revised NAAQS.

EPA's action reclassifying Phoenix as a serious ozone nonattainment

area is in no way inconsistent with those goals. Furthermore, it is

consistent with the continued applicability of the 1-hour standard and

subpart 2 as provided for in EPA's rulemaking on the ozone NAAQS. See

62 FR 38856, 38873. To the extent that the comments concern that issue,

they are not appropriately raised in this rulemaking.

Neither the provisions of 40 CFR 50.9, as revised (62 FR 38856,

38894), nor any other statutory or regulatory provisions, provide EPA

with the authority to suspend enforcement of the 1-hour NAAQS in

Phoenix. Moreover, as noted earlier, the Phoenix area has not complied

with some of the most significant serious area requirements (e.g., the

9 percent rate of progress requirement). Finally EPA believes that

complying with those requirements will have a positive, not

detrimental, effect on the ability of Phoenix to comply with the 8-hour

standard. Additional comments related to this point are addressed in

the TSD.

Comment: The commenters requested that EPA execute an agreement

with the State of Arizona to act upon submitted SIP revisions within a

fixed period of time based upon priorities identified by the State and

to set a schedule for acting on future SIP revisions.

Response: EPA Region 9 receives hundreds of requests each year to

revise federally-enforceable SIPs from over 40 different state and

local air pollution agencies. These include requests to modify

inventories, attainment demonstrations, and administrative, permit, and

prohibitory regulations. Given the available resources, Region 9 is

unable to review and act on each of these requests as quickly as it

would like. As a result, the Agency relies on the state and local

agencies to prioritize submittals so that the most important ones to

the state and local agencies can be acted on first. Region 9 does

expect to take final action soon on several revisions submitted by

Maricopa County and has recently contacted the Arizona air pollution

agencies to request that they identify those submittals that need to be

acted quickly in order to issue Title V permits or for other purposes.

Region 9 will process submittals in the priority order requested by

these agencies.

Comment: Commenters requested that EPA approve EPA Arizona

Administrative Code (A.A.C.) R18-2-310 (The Arizona Excess Emissions

Rule) as a revision to the SIP.

Response: This comment is closely related to a lawsuit brought by

the Arizona Mining Association with regard to EPA's interim approval of

Arizona's Title V operating permit program on October 30, 1996 (61 FR

55910). The parties involved in the suit have had constructive

exchanges, which EPA expects to continue, on the appropriate treatment

of the Arizona Excess Emissions Rule during the settlement discussions.

[[Page 60009]]

Comment: Commenters request that EPA adopt realistic, streamlined

national Prevention of Significant Deterioration (PSD) and New Source

Review (NSR) regulations.

Response: EPA recognizes that its current regulations governing the

new source review programs mandated by both parts C (PSD) and D (NSR)

of Title I of the Clean Air Act are a source of concern for many

people. On July 23, 1996, EPA proposed major revisions (known as the

NSR reform proposal) to its PSD and NSR regulations. 61 FR 38250. EPA

has received many comments on its proposal and is currently carefully

reviewing and considering these comments as it develops the final rule.

EPA's goal for this final rule is to simplify its NSR and PSD

regulations consistent with the Clean Air Act requirements for those

programs.

Comment: Commenters request that EPA adopt a regulatory affirmative

defense for sources with potential VOC emissions of from 50 to 100 tons

per year that will apply to enforcement of the NSR requirements in

ozone nonattainment areas that meet certain criteria.

Response: It appears that the commenters are attempting to ease the

perceived regulatory burden that will be imposed on sources that emit

between 50 and 100 tons of VOC per year as a result of the

reclassification. EPA will study the proposal, but its initial response

is that the commenters' suggested approach is not the most effective

means for addressing their underlying concerns. EPA believes it may be

constructive to engage in a dialogue regarding possible mechanisms for

limiting sources' potential to emit to below the thresholds that

trigger NSR. However, where a source's actual emissions exceed the

major source threshold or the source is unable to reduce its potential

to emit below the major source threshold, the source is subject to

major NSR.

Comment: Commenters request that EPA continue to expeditiously act

to approve the Arizona Clean Burning Gasoline Program.

Response: EPA has been very pleased to support Arizona's efforts to

bring reformulated gasoline to the Phoenix area. In addition to

approving the Governor's request to join the federal program and the

State's request for lower RVP limits, the Agency participated in the

development of the new CBG rules in order to correct any approval

problems early in the process. EPA is now working closely with ADEQ to

act on the recent submittal of the CBG rules. This work is among EPA's

highest priorities.

F. Other Comments

Comment: Senator Kyl and Representative Shadegg commented that by

using data collected from 1994 through 1996 as the basis for its

decision, EPA has not taken into account the significant and positive

effects of the RFG program and other actions taken by the State of

Arizona to reduce ozone pollution and that this results in an

inaccurate and unwarranted reclassification of Phoenix to serious. They

comment further that this violates principles in President's July 18,

1997 memorandum that ``implementation of the air quality standards is

to be carried out to maximize common sense, flexibility, and cost

effectiveness.''

Response: EPA agrees that the 1994-1996 data do not reflect the

1997 implementation of the RFG program and that this program will have

a continuing positive effect on ozone levels in the Phoenix area. EPA,

however, is constrained by statute from considering 1997 data in its

finding of failure to attain and denial of the extension request.

CAA section 181(b)(4) requires EPA to determine if an area has

attained ``as of the attainment date.'' For Phoenix, the attainment

date is November 15, 1996, and under long-established procedures,

determining attainment as of that date requires reviewing data from the

three years immediately preceding that date or 1994 through 1996. 40

CFR 50.9 and part 50, Appendix H.

The criterion for extensions in CAA section 181(a)(5)(B) is that

``no more than one exceedance of the [ozone standard] has occurred in

the area in the year preceding the Extension Year.'' The extension year

is 1997, thus the ``year preceding'' is 1996.

VI. Final Action

EPA is finding that the Phoenix ozone nonattainment area did not

attain the ozone NAAQS by November 15, 1996, the CAA attainment date

for moderate ozone nonattainment areas. EPA is also denying Arizona's

application for a one-year extension of the attainment date. As a

result of this finding and denial, the Phoenix ozone nonattainment area

is reclassified by operation of law as a serious ozone nonattainment

area on the effective date of today's action and the submittal of the

serious area SIP revisions will be due no later than 12 months from

this effective date. The requirements for this SIP submittal are

established in CAA section 182(c) and applicable EPA guidance.

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future action. Each finding of

failure to attain, request for an extension of an attainment date, and

establishment of a SIP submittal 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.

VI. 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 action 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 neither the finding of failure to attain it

is making today, the denial of Arizona's request for a one-year

extension of the attainment data, nor the establishment of SIP

submittal schedule would result in any of the effects identified in

E.O. 12866 sec. 3(f). As discussed in the response to comments above

and in more detail in the TSD, findings of failure to attain under

section 181(b)(2) of the Act 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

[[Page 60010]]

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. 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. 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.

As discussed in the response to comments above and in more detail

in the TSD, 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 makes a factual

determination and establishes a schedule to require States to submit

SIP revisions, and does not directly regulate any entities. Therefore,

pursuant to 5 U.S.C. 605(b), EPA reaffirms its certification made in

the proposal (62 FR 46233) that today's final action will 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), Pub.

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 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 section 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.

Generally, EPA has determined that the provisions of sections 202

and 205 of UMRA do not apply to this decision. Under section 202, EPA

is to prepare a written statement that is to contain assessments and

estimates of the costs and benefits of a rule containing a Federal

Mandate ``unless otherwise prohibited by law.'' Congress clarified that

``unless otherwise prohibited by law'' referred to whether an agency

was prohibited from considering the information in the rulemaking

process, not to whether an agency was prohibited from collecting the

information. The Conference Report on UMRA states, ``This section [202]

does not require the preparation of any estimate or analysis if the

agency is prohibited by law from considering the estimate or analysis

in adopting the rule.'' 141 Cong. Rec. H3063 (Daily ed. March 13,

1995). Because the Clean Air Act prohibits, when determining whether an

area attained the ozone standard or met the criteria for an extension,

from considering the types of estimates and assessments described in

section 202, UMRA does not require EPA to prepare a written statement

under section 202. Although the establishment of a SIP submission

schedule may impose a federal mandate, this mandate would not create

costs of $100 million or more, and therefore, no analysis is required

under section 202. The requirements in section 205 do not apply because

those requirements for rules ``for which a written statement is

required under section 202 * * *.''

With regard to the outreach described in UMRA section 204, EPA

discussed its proposed action in advance of the proposal with State

officials.

Finally, section 203 of UMRA does not apply to today's action

because the regulatory requirements finalized today--the SIP submittal

schedule--affect only the State of Arizona, which is not a small

government under UMRA.

D. Submission to Congress and the General Accounting Office

Under section 801(a)(1)(A) of the Administrative Procedures Act

(APA) as amended by the Small Business Regulatory Enforcement Fairness

Act of 1996, EPA submitted a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives and the Comptroller General of the General Accounting

Office prior to publication of the rule in today's Federal Register.

This rule is not a ``major rule'' as defined by section 804(2) of the

APA as amended.

E. Petitions for Judicial Review

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

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

of Appeals for the appropriate circuit by January 5, 1998. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

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

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

List of Subjects in 40 CFR Part 81

Environmental protection, Air pollution control, Intergovernmental

relations, Ozone.

Dated: October 27, 1997.

Harry Seraydarian,

Acting Regional Administrator.

Part 81, chapter I, title 40 of the Code of Federal Regulations is

amended as follows:

[[Page 60011]]

PART 81--[AMENDED]

1. The authority citation for part 81 continues to read as follows:

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

2. Section 81.303 is amended by revising the table for Arizona--

Ozone, for the Phoenix Area to read as follows:

Sec. 81.303 Arizona

* * * * *

Arizona-Ozone

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

Designation Classification

Designated area ---------------------------------------------------------------------------------------------------------------

Date Type Date Type

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

Phoenix Area:

Maricopa County (part).............. 11/15/90 Nonattainment............................ 12/8/97 Serious.

The Urban Planning Area of the

Maricopa Association of

Governments is bounded as

follows:

1.Commencing at a point

which is at the

intersection of the eastern

line of Range 7 East, Gila

and Salt River Baseline and

Meridian, and the southern

line of Township 2 South,

said point is the

southeastern corner of the

Maricopa Association of

Governments Urban Planning

Area, which is the point of

beginning;

2. Thence, proceed northerly

along the eastern line of

Range 7 East which is the

common boundary between

Maricopa and Pinal

Counties, as described in

Arizona Revised Statute

Section 11-109, to a point

where the eastern line of

Range 7 East intersects the

northern line of Township 1

North, said point is also

the intersection of the

Maricopa County Line and

the Tonto National Forest

Boundary, as established by

Executive Order 869 dated

July 1, 1908, as amended

and showed on the U.S.

Forest Service 1969

Planimetric Maps;

3. Thence, westerly along

the northern line of

Township 1 North to

approximately the southwest

corner of the southeast

quarter of Section 35,

Township 2 North, Range 7

East, said point being the

boundary of the Tonto

National Forest and Usery

Mountain Semi-Regional

Park;

4. Thence, northerly along

the Tonto National Forest

Boundary, which is

generally the western line

of the east half of

Sections 26 and 35 of

Township 2 North, Range 7

East, to a point which is

where the quarter section

line intersects with the

northern line of Section

26, Township 2 North, Range

7 East, said point also

being the northeast corner

of the Usery Mountain Semi-

Regional Park;

5. Thence, westerly along

the Tonto National Forest

Boundary, which is

generally the south line of

Section 19, 20, 21 and 22

and the southern line of

the west half of Section

23, Township 2 North, Range

7 East, to a point which is

the southwest corner of

Section 19, Township 2

North, Range 7 East;

6. Thence, northerly along

the Tonto National Forest

Boundary to a point where

the Tonto National Forest

Boundary intersects with

the eastern boundary of the

Salt River Indian

Reservation, generally

described as the center

line of the Salt River

Channel;

7. Thence, northeasterly and

northerly along the common

boundary of the Tonto

National Forest and the

Salt River Indian

Reservation to a point

which is the northeast

corner of the Salt River

Indian Reservation and the

southeast corner of the

Fort McDowell Indian

Reservation, as shown on

the plat dated July 22,

1902, and recorded with the

U.S. Government on June 15,

1902;

[[Page 60012]]

8. Thence, northeasterly

along the common boundary

between the Tonto National

Forest and the Fort

McDowell Indian Reservation

to a point which is the

northeast corner of the

Fort McDowell Indian

Reservation;

9. Thence, southwesterly

along the northern boundary

of the Fort McDowell Indian

Reservation, which line is

a common boundary with the

Tonto National Forest, to a

point where the boundary

intersects with the eastern

line of Section 12,

Township 4 North, Range 6

East;

10. Thence, northerly along

the eastern line of Range 6

East to a point where the

eastern line of Range 6

East intersects with the

southern line of Township 5

North, said line is the

boundary between the Tonto

National Forest and the

east boundary of McDowell

Mountain Regional Park;

11. Thence, westerly along

the southern line of

Township 5 North to a point

where the southern line

intersects with the eastern

line of Range 5 East which

line is the boundary of

Tonto National Forest and

the north boundary of

McDowell Mountain Regional

Park;

12. Thence, northerly along

the eastern line of Range 5

East to a point where the

eastern line of Range 5

East intersects with the

northern line of Township 5

North, which line is the

boundary of the Tonto

National Forest;

13. Thence, westerly along

the northern line of

Township 5 North to a point

where the northern line of

Township 5 North intersects

with the easterly line of

Range 4 East, said line is

the boundary of Tonto

National Forest;

14. Thence, northerly along

the eastern line of Range 4

East to a point where the

eastern line of Range 4

East intersects with the

northern line of Township 6

North, which line is the

boundary of the Tonto

National Forest;

15. Thence, westerly along

the northern line of

Township 6 North to a point

of intersection with the

Maricopa-Yavapai County

line, which is generally

described in Arizona

Revised Statute Section 11-

109 as the center line of

the Aqua Fria River (Also

the north end of Lake

Pleasant);

16. Thence, southwesterly

and southerly along the

Maricopa-Yavapai County

line to a point which is

described by Arizona

Revised Statute Section 11-

109 as being on the center

line of the Aqua Fria

River, two miles southerly

and below the mouth of

Humbug Creek;

17. Thence, southerly along

the center line of Aqua

Fria River to the

intersection of the center

line of the Aqua Fria River

and the center line of

Beardsley Canal, said point

is generally in the

northeast quarter of

Section 17, Township 5

North, Range 1 East, as

shown on the U.S.

Geological Survey's Baldy

Mountain, Arizona

Quadrangle Map, 7.5 Minute

series (Topographic), dated

1964;

18. Thence, southwesterly

and southerly along the

center line of Beardsley

Canal to a point which is

the center line of

Beardsley Canal where it

intersects with the center

line of Indian School Road;

[[Page 60013]]

19. Thence, westerly along

the center line of West

Indian School Road to a

point where the center line

of West Indian School Road

intersects with the center

line of North Jackrabbit

Trail;

20. Thence, southerly along

the center line of

Jackrabbit Trail

approximately nine and

three-quarter miles to a

point where the center line

of Jackrabbit Trail

intersects with the Gila

River, said point is

generally on the north-

south quarter section line

of Section 8, Township 1

South, Range 2 West;

21. Thence, northeasterly

and easterly up the Gila

River to a point where the

Gila River intersects with

the northern extension of

the western boundary of

Estrella Mountain Regional

Park, which point is

generally the quarter

corner of the northern line

of Section 31, Township 1

North, Range 1 West;

22. Thence, southerly along

the extension of the

western boundary and along

the western boundary of

Estrella Mountain Regional

Park to a point where the

southern extension of the

western boundary of

Estrella Mountain Regional

Park intersects with the

southern line of Township 1

South;

23. Thence, easterly along

the southern line of

Township 1 South to a point

where the south line of

Township 1 South intersects

with the western line of

Range 1 East, which line is

generally the southern

boundary of Estrella

Mountain Regional Park;

24. Thence, southerly along

the western line of Range 1

East to the southwest

corner of Section 18,

Township 2 South, Range 1

East, said line is the

western boundary of the

Gila River Indian

Reservation;

25. Thence, easterly along

the southern boundary of

the Gila River Indian

Reservation which is the

southern line of Sections

13, 14, 15, 16, 17, and 18,

Township 2 South, Range 1

East, to the boundary

between Maricopa and Pinal

Counties as described in

Arizona Revised Statues

Section 11-109 and 11-113,

which is the eastern line

of Range 1 East;

26. Thence, northerly along

the eastern boundary of

Range 1 East, which is the

common boundary between

Maricopa and Pinal

Counties, to a point where

the eastern line of Range 1

East intersects the Gila

River;

27. Thence, southerly up the

Gila River to a point where

the Gila River intersects

with the southern line of

Township 2 South; and

28. Thence, easterly along

the southern line of

Township 2 South to the

point of beginning which is

a point where the southern

line of Township 2 South

intersects with the eastern

line Range 7 East

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[FR Doc. 97-29396 Filed 11-5-97; 8:45 am]

BILLING CODE 6560-50-P