# Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone

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URL: https://www.frixlaw.com/law-library/documents/fr%3A98-26773

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** October 27, 1998
- **Citation:** 63 FR 57356

## Text

SUMMARY: In accordance with the Clean Air Act (CAA), today's action is
a final rule to require 22 States and the District of Columbia to
submit State implementation plan (SIP) revisions to prohibit specified
amounts of emissions of oxides of nitrogen (NOX)--one of the
precursors to ozone (smog) pollution--for the purpose of reducing
NOX and ozone transport across State boundaries in the
eastern half of the United States.
Ground-level ozone has long been recognized, in both clinical and
epidemiological research, to affect public health. There is a wide
range of ozone-induced health effects, including decreased lung
function (primarily in children active outdoors), increased respiratory
symptoms (particularly in highly sensitive individuals), increased
hospital admissions and emergency room visits for respiratory causes
(among children and adults with pre-existing respiratory disease such
as asthma), increased inflammation of the lung, and possible long-term
damage to the lungs.
In today's action, EPA finds that sources and emitting activities
in each of the 22 States and the District of Columbia (23
jurisdictions) emit NOX in amounts that significantly
contribute to nonattainment of the 1-hour and 8-hour ozone national
ambient air quality standards (NAAQS), or will interfere with
maintenance of the 8-hour NAAQS, in one or more downwind States.
Further, by today's action, EPA is requiring each of the affected
upwind jurisdictions (sometimes referred to as upwind States) to submit
SIP revisions prohibiting those amounts of NOX emissions
which significantly contribute to downwind air quality problems. The
reduction of those NOX emissions will bring NOX
emissions in each of those States to within the resulting statewide
NOX emissions budget levels established in today's rule. The
23 jurisdictions are: Alabama, Connecticut, Delaware, District of
Columbia, Georgia, Illinois, Indiana, Kentucky, Massachusetts,
Maryland, Michigan, Missouri, North Carolina, New Jersey, New York,
Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia,
West Virginia, and Wisconsin. These States will be able to choose any
mix of pollution-reduction measures that will achieve the required
reductions.

EFFECTIVE DATES: This rule is effective December 28, 1998. The
incorporation by reference of certain publications listed in the
regulations is approved by the Director of the Federal Register as of
December 28, 1998.

ADDRESSES: Dockets containing information relating to this rulemaking
(Docket No. A-96-56 and Docket No. A-9-35) are available for public
inspection at the Air and Radiation Docket and Information Center
(6102), US Environmental Protection Agency, 401 M Street SW, room M-
1500, Washington, DC 20460, telephone (202) 260-7548, between 8:00 a.m.
and 4:00 p.m., Monday through Friday, excluding legal holidays. A
reasonable fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: General questions concerning today's
action should be addressed to Kimber S. Scavo, Office of Air Quality
Planning and Standards, Air Quality Strategies and Standards Division,
MD-15, Research Triangle Park, NC 27711, telephone (919) 541-3354; e-
mail: [email protected]. Please refer to SUPPLEMENTARY INFORMATION
below for a list of contacts for specific subjects described in today's
action.

SUPPLEMENTARY INFORMATION:

Availability of Related Information

Documents related to the Ozone Transport Assessment Group (OTAG)
are available on the Agency's Office of Air Quality Planning and
Standards' (OAQPS) Technology Transfer Network (TTN) via the web at
http://www.epa.gov/ttn/. If assistance is needed in accessing the
system, call the help desk at (919) 541-5384 in Research Triangle Park,
NC. Documents related to OTAG can be downloaded directly from OTAG's
webpage at http://www.epa.gov/ttn/otag/. The OTAG's technical data are
located at http://www.iceis.mcnc.org/OTAGDC. The notice of proposed
rulemaking for this final action, the supplemental notice of proposed
rulemaking, and associated documents are located at http://epa.gov/ttn/
oarpg/otagsip.html. Information related to Sections II, Weight of
Evidence Determination of Covered States, and IV, Air Quality
Assessment, can be obtained in electronic form from the following EPA
website: http://www.epa.gov/scram001/regmodcenter/t28.htm. Information
related to Section III, Determination of Budgets, may be found on the
following EPA website: http://www.epa.gov/capi. All information in
electronic form may also be found on diskettes that have been placed in
the docket to this rulemaking.

For Additional Information

For technical questions related to the air quality analyses, please
contact Norm Possiel; Office of Air Quality Planning and Standards;
Emissions, Monitoring, and Analysis Division; MD-14, Research Triangle
Park, NC 27711, telephone (919) 541-5692. For legal questions, please
contact Howard J. Hoffman, Office of General Counsel, 401 M Street SW,
MC-2344, Washington, DC 20460, telephone (202) 260-5892. For questions
concerning the statewide emissions budget revisions, please contact
Laurel Schultz; Office of Air Quality Planning and Standards;
Emissions, Monitoring, and Analysis Division; MD-14, Research Triangle
Park, NC 27711, telephone (919) 541-5511. For questions concerning SIP
reporting requirements, please contact Bill Johnson, Office of Air
Quality Planning and Standards, Air Quality Strategies and Standards
Division, MD-15, Research Triangle Park, NC 27711, telephone (919) 541-
5245. For questions concerning the model cap-and-trade rule, please
contact Rob Lacount, Office of Atmospheric Programs, Acid Rain
Division, MC-6204J, 401 M Street SW, Washington, DC 20460, telephone
(202) 564-9122. For questions concerning the regulatory cost analysis
of electricity generating sources, please contact Ravi Srivastava,
Office of Atmospheric Programs, Acid Rain Division, MC-6204J, 401 M
Street SW, Washington DC 20460, telephone (202) 564-9093. For questions
concerning the regulatory cost analysis of other stationary sources and
questions concerning the Regulatory Impact Analysis (RIA), please
contact Scott Mathias, Office of Air Quality Planning and Standards,
Air Quality Strategies and Standards Division, MD-15, Research Triangle
Park, NC 27711, telephone (919) 541-5310.

Outline

I. Background
A. Summary of Rulemaking and Affected States
B. General Factual Background
C. Statutory and Regulatory Background
1. CAA Provisions
a. 1970 and 1977 CAA Amendments
b. 1990 CAA Amendments
2. Regulatory Structure
a. March 2, 1995 Policy
b. OTAG

[[Page 57357]]

c. EPA's Transport SIP Call Regulatory Efforts
d. Revision of the Ozone NAAQS
D. Section 126 Petitions
E. OTAG
F. Discussion of Comment Period and Availability of Key
Information
1. Request for Extension of the Comment Period
2. Request for Time to Conduct Additional Modeling
3. Availability of Key Information
4. Public Hearings
G. Implementation of Revised Air Quality Standards
H. Summary of Major Changes between Proposals and Final Rule
1. EPA's Analytical Approach (Section II.A)
2. Cost Effectiveness of Emissions Reductions (Section II.D)
3. Determination of Budgets (Section III)
4. NOX Control Implementation and Budget Achievement
Dates (Section V)
5. SIP Criteria (Section VI.A)
6. Emissions Reporting Requirements for States (Section VI.B)
7. NOX Budget Trading Program (Section VII)
8. Interaction with Title IV NOX Rule (Section VIII)
9. Administrative Requirements (Section X)
II. EPA's Analytical Approach
A. Interpretation of the CAA's Transport Provisions
1. Authority and Process for Requiring SIP Submissions under the
1-Hour Ozone NAAQS
a. Authority for Requiring SIP Submissions under the 1-Hour
NAAQS
b. Process for Requiring SIP Submissions under the 1-Hour NAAQS
2. Authority and Process for Requiring SIP Submissions under the
8-Hour Ozone NAAQS
a. Authority for Requiring SIP Submissions under the 8-Hour
NAAQS
b. Process for Requiring SIP Submissions under the 8-hour
Standard
3. Requirements of Section 110(a)(2)(D)
a. Summary
b. Determination of Meaning of ``Nonattainment'
c. Definition of Significant Contribution
d. Multi-factor Test for Determining Significant Contribution
e. Air Quality Factors
f. Determination of Highly Cost-effective Reductions and of
Budgets
g. Other Considerations in Determination of Significant
Contribution
h. Interfere with Maintenance
i. Dates
j. Downwind Areas' Control Obligations
k. Section 110(a)(2)(D) Caselaw
B. Alternative Interpretation of Section 110(a)(2)(D)
C. Weight-of-Evidence Determination of Covered States
1. Major Findings from OTAG-Related Technical Analyses
2. Summary of Notice of Proposed Rulemaking Weight-of-Evidence
Approach
a. Quantification of Contributions
b. Evaluation of 1-Hour and 8-Hour Contributions
c. Comments and Responses on Proposed Weight-of-Evidence
Approach to Significant Contribution
3. Analysis of State-specific Air Quality Factors
a. Overall Nature of Ozone Problem (``Collective Contribution'')
b. Extent of Downwind Nonattainment Problems
c. Air Quality Impacts of Upwind Emissions on Downwind
Nonattainment
4. Confirmation of States Making a Contribution to Downwind
Nonattainment
a. Analysis Approach
b. States Which Contain Sources That Significantly Contribute to
Downwind Nonattainment
c. Examples of Contributions From Upwind States to Downwind
Nonattainment
d. Conclusions From Air Quality Evaluation of Downwind
Contributions
5. States Not Covered by This Rulemaking
D. Cost Effectiveness of Emissions Reductions
1. Sources Included in the Cost-Effectiveness Determination
a. Electricity Generating Boilers and Turbines
b. Other Stationary Sources
2. Sources Not Included in the Cost-Effectiveness Determination
a. Area Sources
b. Small Point Sources
c. Mobile Sources
d. Other Stationary Sources
e. Conclusion
E. Other Considerations
1. Consistency of Regional Reductions with Attainment Needs of
Downwind Areas
a. General Discussion
b. 8-hour Nonattainment Problems
c. Commenters' Concerns
2. Equity Considerations
3. General Cost Considerations
4. Conclusion
III. Determination of Budgets
A. General Comments on the Base Emission Inventory
1. Quality
2. Availability
B. Electricity Generating Units (EGUs)
1. Base Inventory
2. Growth
a. Growth Rates
b. Use of IPM
c. Use of ``Corrected'' Growth Rates
3. Budget Calculation
a. Input vs. Output
b. Alternative Emission Limits
c. Consideration of the Climate Change Action Plan
C. Non-EGU Point Sources
1. Base Inventory
2. Growth
3. Budget Calculation
a. Proposed Control Assumptions
b. Small Source Exemption
c. Exemptions for Other Non-EGU Point Sources
d. Sources Without Adequate Control Information
e. Case-By-Case Analysis of Control Measures
f. Cost Effectiveness
g. Industrial Boiler Control Costs
h. Cement Manufacturing
i. Stationary Internal Combustion Engines
j. Industrial Boilers and Turbines
k. Municipal Waste Combustors (MWCs)
D. Highway Mobile Sources
1. Base Inventory
2. Growth
3. Budget Calculation
a. I/M Program Coverage
b. Emissions Cap
c. Tier 2 Standards
d. Low Sulfur Fuel
e. Conformity
E. Stationary Area and Nonroad Mobile Sources
1. Base Inventory
2. Growth
3. Budget Calculation
F. Other Budget Issues
1. Uniform vs. Regional Controls
2. Seasonal vs. Annual Controls
3. Full vs. Partial States
4. NOx Waivers
5. Recalculation of Budgets
6. Compliance Supplement Pool
a. Size of the Compliance Supplement Pool
b. State Distribution of the Compliance Supplement Pool
7. Banking
a. Banking Starting in 2003
b. Management of Banked Allowances
c. Early Reduction Credits
G. Final Statewide Budgets
1. EGU
a. Description of Selected Approach
b. Summary of Budget Component
2. Non-EGU Point Sources
a. Description of Selected Approach
b. Summary of Budget Component
3. Mobile and Area Sources
a. Description of Selected Budget Approach
b. Summary of Budget Component
4. Potential Alternatives to Meeting the Budget
5. Statewide Budgets
IV. Air Quality Assessment
A. Assessment of Proposed Statewide Budgets
B. Comments and Responses
C. Assessment of Alternative Control Levels
1. Scenarios Modeled
2. Emissions for Model Runs
3. Modeling Results
a. Impacts of Alternative Controls
b. Impacts of Upwind Controls on Downwind Nonattainment
c. Summary of Findings
V. NOx Control Implementation and Budget Achievement Dates
A. NOx Control Implementation Date
1. Practicability
a. Combustion Controls
b. Post-Combustion Controls
2. Relationship to SIP Submittal Date
3. Rationale
B. Budget Achievement Date
VI. SIP Criteria and Emissions Reporting Requirements
A. SIP Criteria
1. Schedule for SIP Revision
2. Approvability Criteria
a. Source Categories Subject to Additional Approvability
Criteria

[[Page 57358]]

b. Pollution Abatement Requirements
c. Monitoring Requirements
d. Approvability of Trading Program
3. Sanctions
4. FIPs
B. Emissions Reporting Requirements for States
1. Use of Inventory Data
2. Response to Comments
3. Final Rule
4. Data Elements to be Reported
5. 2007 Report
6. Ozone Season Reporting
7. Data Reporting Procedures
8. Confidential Data
C. Timeline
VII. NOX Budget Trading Program
A. General Background
B. NOX Budget Trading Program Rulemaking Overview
C. General Design of NOX Budget Trading Program
1. Appropriateness of Trading Program
2. Alternative Market Mechanisms
3. State Adoption of Model Rule
a. Process for Adoption
b. Model Rule Variations
4. Unrestricted Trading Market
a. Geographic Issues
b. Episodic Issues
D. Applicability
1. Core Sources
a. Commenters Who Felt the Core Group Should Not Be Changed
b. Commenters Who Felt the Core Group Should Be Expanded
c. Commenters Who Felt the Core Group Is Overly Inclusive
2. Mobile/Area Sources
3. Monitoring
a. Use of Part 75 to Ensure Compliance with the NOX
Budget Trading Program
b. Use of CEMS on Large Units
c. Commenters Who do not Believe that CEMS are Necessary
d. Issues Related to Monitoring and Reporting Needed to Support
a Heat Input Allocation Methodology
e. Amendments to Part 75
E. Emission Limitations/Allowance Allocations
1. Timing Requirements
2. Options for NOX Allowance Allocation Methodology
3. New Source Set-Aside
4. Optional NOX Allocation Methodology in Model Rule
F. Banking Provisions
1. Banking Starting in 2003
2. Management of Banked Allowances
3. Early Reduction Credits
4. Optional Methodology for Issuing Early Reduction Credits
5. Integrating the OTC Program with the NOX Budget
Trading Program's Banking Provisions
G. New Source Review
VIII. Interaction with Title IV NOX Rule
IX. Non-Ozone Benefits of NOX Emissions Decreases
A. Summary of Comments
B. Response to Comments
1. Drinking Water Nitrate
2. Eutrophication
3. Regulatory Impact Analysis
4. Justification for Rulemaking
X. Administrative Requirements
A. Executive Order 12866: Regulatory Impact Analysis
B. Regulatory Flexibility Act: Small Entity Impacts
C. Unfunded Mandates Reform Act
D. Paperwork Reduction Act
E. Executive Order 13045: Protection of Children from
Environmental Health Risks and Safety Risks
1. Applicability of E.O. 13045
2. Children's Health Protection
F. Executive Order 12898: Environmental Justice
G. Executive Order 12875: Enhancing the Intergovernmental
Partnerships
H. Executive Order 13084: Consultation and Coordination with
Indian Tribal Governments
I. Judicial Review
J. Congressional Review Act
K. National Technology Transfer and Advancement Act

Appendix A--Detailed Discussion of Changes to Part 75

CFR Revisions and Additions

Part 51
Sec. 51.121
Sec. 51.122
Part 72
Part 75
Part 96

I. Background

A. Summary of Rulemaking and Affected States

By notice of proposed rulemaking (NPR, proposal, or ``proposed SIP
call'') (62 FR 60318, November 7, 1997) and by supplemental notice
(SNPR or supplemental proposal) (63 FR 25902, May 11, 1998), EPA
proposed to find that NOX emissions from sources and
emitting activities (sources) in 23 jurisdictions (hereinafter also
referred to as States) will significantly contribute to nonattainment
of the 1-hour and 8-hour ozone NAAQS, or will interfere with
maintenance of the 8-hour NAAQS, in one or more downwind States
throughout the Eastern United States. The EPA based these proposals on
data generated by OTAG, public comments, and other relevant
information. Today's final action confirms that proposed finding. It
also requires, under CAA section 110(a)(1) and 110(k)(5), that the 23
jurisdictions adopt and submit SIP revisions that, in order to assure
that their SIPs meet the requirements of section 110(a)(2)(D)(i)(I),
contain provisions adequate to prohibit sources in those States from
emitting NOX in amounts that ``contribute significantly to
nonattainment in, or interfere with maintenance by,'' a downwind State.
The 23 jurisdictions are: Alabama, Connecticut, Delaware, District of
Columbia, Georgia, Illinois, Indiana, Kentucky, Massachusetts,
Maryland, Michigan, Missouri, North Carolina, New Jersey, New York,
Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia,
West Virginia, and Wisconsin.
Each of these States and the District of Columbia is required to
adopt and submit by September 30, 1999, a SIP revision. The SIP
revision must contain measures that will assure that sources in the
State reduce their NOX emissions sufficiently to eliminate
the amounts of NOX emissions that contribute significantly
to nonattainment, or that interfere with maintenance, downwind. By
eliminating these amounts of NOX emissions, the control
measures will assure that the remaining NOX emissions will
meet the level identified in today's rule as the State's NOX
emissions budget. For simplicity, this final rule may refer to the
amounts that such SIP provisions must prohibit in order to meet the
statute as the ``significant amounts'' of NOX emissions.
After prohibiting these significant amounts of NOX, the
remaining amounts emitted by sources in the covered States will not
``significantly contribute to nonattainment, or interfere with
maintenance by,'' a downwind State, under section 110(a)(2)(D)(i)(I).
Section II.C, Weight-of-Evidence Determination of Covered States,
describes how EPA determined which States include sources that emit
NOX in amounts of concern (the ``covered'' States), and
Sections II.D, Cost Effectiveness of Emissions Reductions; II.E,
Comparison of Upwind and Downwind Costs; and III, Determination of
Budgets, describe how EPA determined the significant amounts of
emissions and the resulting statewide emissions budgets for the States
identified above. Section IV, Air Quality Assessment, discusses air
quality analyses conducted by EPA which help confirm the decisions and
requirements set forth in this rulemaking. Section V, NOX
Control Implementation and Budget Achievement Dates, primarily
discusses the dates by which (1) the States must submit SIP revisions
in response to today's action, (2) the sources must implement the
measures the States choose for the purpose of prohibiting the
significant amounts of NOX, and (3) the States are projected
to achieve the budget levels. Section VI, SIP Criteria and Emissions
Reporting Requirements, describes the SIP requirements themselves.
The SIP requirements permit each State to determine what measures
to adopt to prohibit the significant amounts and hence meet the
necessary emissions budget. Consistent with OTAG's recommendations to
achieve

[[Page 57359]]

NOX emissions decreases primarily from large stationary
sources in a trading program, EPA encourages States to consider
electric utility and large boiler controls under a cap-and-trade
program as a cost-effective strategy. The recommended cap-and-trade
program is described in more detail in Section VII, NOX
Budget Trading Program. The EPA also recognizes that promotion of
energy efficiency can contribute to a cost-effective strategy. In
Section VIII, Interaction with Title IV NOX rule, EPA
explains that it is not adopting proposed revisions to the title IV
NOX rule concerning the relationship between this rulemaking
and the title IV NOX rule. The remaining parts of today's
action include Section IX, Non-Ozone Benefits of NOX
Reductions, and Section X, Administrative Requirements.
The EPA also conducted a RIA which is available in the docket to
this rulemaking as a technical support document (TSD), entitled
``Regulatory Impact Analysis for the Regional NOX SIP Call''
(docket no. VI-B-09). A detailed explanation of how EPA calculated the
budgets is also available as a TSD entitled ``Development of Modeling
Inventory and Budgets for the Regional NOX SIP Call''
(docket no. VI-B-10). These two TSDs have been revised for the final
rulemaking. A detailed explanation of the air quality modeling analyses
is also available, entitled ``Air Quality Modeling Technical Support
Document for the Regional NOX SIP Call'' (docket no. VI-B-
11) for this final rulemaking. This preamble for today's notice
responds to some of the comments, but another document, entitled
``Response to Significant Comments on the Finding of Significant
Contribution and Rulemaking for Certain States in the OTAG Region for
Purposes of Reducing Regional Transport of Ozone,'' is included in the
docket (docket no. VI-C-01).

B. General Factual Background

In today's action, EPA takes a significant step toward reducing
ozone in the eastern half of the country. Ground-level ozone, the main
harmful ingredient in smog, is produced in complex chemical reactions
when its precursors, volatile organic compounds (VOC) and
NOX, react in the presence of sunlight. The chemical
reactions that create ozone take place while the pollutants are being
blown through the air by the wind, which means that ozone can be more
severe many miles away from the source of emissions than it is at the
source.
The science of ozone formation, transport, and accumulation is
complex. Ozone is produced and destroyed in a cyclical set of chemical
reactions involving NOX, VOC and sunlight. Emissions of
NOX and VOC are necessary for the formation of ozone in the
lower atmosphere. In part of the cycle of reactions, ozone
concentrations in an area can be lowered by the reaction of nitric
oxide with ozone, forming nitrogen dioxide; as the air moves downwind
and the cycle continues, the nitrogen dioxide forms additional ozone.
The importance of this reaction depends, in part, on the relative
concentrations of NOX, VOC and ozone, all of which change
with time and location.
At ground level, ozone can cause a variety of ill effects to human
health, crops and trees. Specifically, ground-level ozone has been
shown in clinical and/or epidemiologial studies to have the following
health effects:

Decreased lung function, primarily in children
active outdoors
Increased respiratory symptoms, particularly in
highly sensitive individuals
Hospital admissions and emergency room visits for
respiratory causes among children and adults with pre-existing
respiratory disease such as asthma
Inflammation of the lung
Possible long-term damage to the lungs or even
premature death.

The new 8-hour primary ambient air quality standard (62 FR 38856,
July 18, 1997) will provide increased protection to the public from
these health effects.
Each year, ground-level ozone above background is also responsible
for significant agricultural crop yield losses. Ozone also causes
noticeable foliar damage in many crops, trees, and ornamental plants
(i.e., grass, flowers, shrubs, and trees) and causes reduced growth in
plants. Studies indicate that current ambient levels of ozone are
responsible for damage to forests and ecosystems (including habitat for
native animal species).
As part of the efforts to reduce harmful levels of smog, EPA,
today, is establishing a requirement for certain States to revise their
SIPs in order to implement the necessary regional-scale reductions in
NOX emissions, and, thereby, reduce transported
NOX and ozone. Since air pollution travels across county and
State lines, it is essential for State governments and air pollution
control agencies to cooperate to solve the problem.
Currently, the following areas, impacted by the 23 jurisdictions
that are the subject of today's rulemaking, are designated
nonattainment areas for ozone under the 1-hour NAAQS:

Atlanta, GA
Baltimore, MD
Birmingham, AL
Boston-Lawrence-Worcester (eastern MA), MA-NH
Chicago-Gary-Lake County, IL-IN
Cincinnati-Hamilton, OH-KY
Door County, WI
Greater Connecticut
Kent & Queen Anne's Counties, MD
Lancaster, PA
Louisville, KY-IN
Manitowoc County, WI
Milwaukee-Racine, WI
Muskegon, MI
New York-Northern New Jersey-Long Island, NY-NJ-CT
Philadelphia-Wilmington-Trenton, PA-NJ-DE-MD
Pittsburgh-Beaver Valley, PA
Portland, ME
Portsmouth-Dover-Rochester, NH
Providence (All RI), RI
St. Louis, MO-IL
Springfield (western MA), MA
Washington, DC-MD-VA

These areas include many of the major urban centers in the eastern
half of the Nation. The combined population for these areas is
approximately 61.5 million. As described elsewhere, the reductions
called for in today's action will reduce ozone levels throughout these
areas.
Many more areas currently violate the 8-hour NAAQS. The EPA
estimates that a total population of approximately 73 million in the 23
jurisdictions live in counties for which air quality is monitored to be
in violation of that NAAQS. The reductions called for in today's action
will reduce ozone levels throughout these areas as well.
Moreover, as discussed below, many of these areas are expected to
be classified as ``transitional,'' which means, in most cases, that
they are expected to come into attainment solely as a result of the
reductions required by today's action. Thus, for those who live in
these areas, the reductions required under today's action, in-and-of-
themselves, are expected to mean the difference between unhealthful
ozone levels and acceptable ozone levels.
Please note that EPA will not designate ozone nonattainment areas
for the 8-hour NAAQS until 2000, and these designations will be based
on the data that are most recently available at that time.

C. Statutory and Regulatory Background

1. CAA Provisions
a. 1970 and 1977 CAA Amendments. For almost 30 years, Congress has
focused major efforts on curbing ground-level ozone. In 1970, Congress
amended the CAA to require, in title I, that EPA issue, and
periodically review

[[Page 57360]]

and if necessary revise, NAAQS for ubiquitous air pollutants (sections
108 and 109). Congress required the States to submit SIPs to attain and
maintain those NAAQS, and Congress included, in section 110, a list of
minimum requirements that SIPs must meet. Congress anticipated that
areas would attain the NAAQS by 1975.
In 1977, Congress amended the CAA by providing, among other things,
additional time for areas that were not attaining the ozone NAAQS to do
so, as well as by imposing specific SIP requirements for those
nonattainment areas. These provisions first required the designation of
areas as attainment, nonattainment, or unclassifiable, under section
107; and then required that SIPs for ozone nonattainment areas include
the additional provisions set out in part D of title I, as well as
demonstrations of attainment of the ozone NAAQS by either 1982 or 1987
(section 172).
In addition, the 1977 Amendments included two provisions focused on
interstate transport of air pollutants: the predecessor to current
section 110(a)(2)(D), which requires SIPs for all areas to constrain
emissions with certain adverse downwind effects; and section 126,
which, in general, authorizes a downwind State to petition EPA to
impose limits directly on upwind sources found to adversely affect that
State. Section 110(a)(2)(D), which is key to the present action, is
described in more detail below.
b. 1990 CAA Amendments. In 1990, Congress amended the CAA to better
address, among other things, continued nonattainment of the 1-hour
ozone NAAQS; the requirements that would apply if EPA revised the 1-
hour standard; and transport of air pollutants across State boundaries
(Pub. L. 101-549, Nov. 15, 1990, 104 Stat. 2399, 42 U.S.C., 7401-
7671q). Numerous provisions added, or revised, by the 1990 Amendments
are relevant to today's proposal.
(1) 1-Hour Ozone NAAQS. In the 1990 Amendments, Congress required
the States and EPA to review and, if necessary, revise the designation
of areas as attainment, nonattainment, and unclassifiable under the
ozone NAAQS in effect at that time, which was the 1-hour standard
(section 107(d)(4)). Areas designated as nonattainment were divided
into, primarily, five classifications based on air quality design
values (section 181(a)(1)). Each classification carries specific
requirements, including new attainment dates (sections 181-182). In
increasing severity of the air quality problem, these classifications
are marginal, moderate, serious, severe and extreme. The OTAG region
includes nonattainment areas of all classifications except extreme.
As amended in 1990, the CAA requires States containing ozone
nonattainment areas classified as moderate or above to submit several
SIP revisions at various times. One set of SIP revisions included
specified control measures, such as reasonably available control
technology (RACT) for existing VOC and NOX sources (section
182(b)(2), 182(f)). In addition, the CAA requires the reduction of VOC
in the amount of 15 percent by 1996 from a 1990 baseline (section
182(b)(1)). Further, for nonattainment areas classified as serious and
above, the CAA requires the reduction of VOC or NOX
emissions in the amount of 9 percent over each 3-year period from 1996
through the attainment date (the rate-of-progress (ROP) SIP
submittals), under section 182(c)(2)(B). In addition, the CAA requires
a demonstration of attainment, including air quality modeling, for the
nonattainment area (the attainment demonstration), as well as SIP
measures containing any additional reductions that may be necessary to
attain by the applicable attainment date (section 182(c)-(e)). The CAA
established November 15, 1994 as the required date for the ROP and
attainment demonstration SIP submittals for areas classified as serious
and above.1
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\1\ For moderate ozone nonattainment areas, the attainment
demonstration was due November 15, 1993 (section 182(b)(1)(A)),
except that if the State elected to conduct an urban airshed model,
EPA allowed an extension to November 15, 1994.
---------------------------------------------------------------------------

(2) Revised NAAQS. Section 109(d) of the CAA requires periodic
review and, if appropriate, revision of the NAAQS. As amended in 1990,
the CAA further requires EPA to designate areas as attainment,
nonattainment, and unclassifiable under a revised NAAQS (section
107(d)(1); section 6103, Pub. L. 105-178). The CAA authorizes EPA to
classify areas that are designated nonattainment under the new NAAQS
and to establish for those areas attainment dates that are as
expeditiously as practicable, but not to exceed 10 years from the date
of designation (section 172(a)).
(3) General Requirements. The CAA continues, in revised form,
certain requirements, dating from the 1970 Amendments, which pertain to
all areas, regardless of their designation. All areas are required to
submit SIPs within certain timeframes (section 110(a)(1)), and those
SIPs must include specified provisions, under section 110(a)(2). In
addition, SIPs for nonattainment areas are generally required to
include additional specified control requirements, as well as controls
providing for attainment of any revised NAAQS and periodic reductions
providing ``reasonable further progress'' in the interim (section
172(c)).
(4) Provisions Concerning Transport of Ozone and Its Precursors.
The 1990 Amendments reflect general awareness by Congress that ozone is
a regional, and not merely a local, problem. As described above, ozone
and its precursors may be transported long distances across State lines
to combine with ozone and precursors downwind, thereby exacerbating the
ozone problems downwind. The phenomenon of ozone transport was not
generally recognized until relatively recently. Yet, ozone transport is
a major reason for the persistence of the ozone problem,
notwithstanding the imposition of numerous controls, both Federal and
State, across the country.
Section 110(a)(2)(D) provides one of the most important tools for
addressing the problem of transport. This provision, which applies by
its terms to all SIPs for each pollutant covered by a NAAQS, and for
all areas regardless of their attainment designation, provides that a
SIP must contain adequate provisions prohibiting its sources from
emitting air pollutants in amounts that will contribute significantly
to nonattainment, or interfere with maintenance, in one or more
downwind States.
Section 110(k)(5) authorizes EPA to find that a SIP is
substantially inadequate to meet any CAA requirement. If EPA makes such
a finding, it must require the State to submit, within a specified
period, a SIP revision to correct the inadequacy.
The CAA further addresses interstate transport of pollution in
section 126, which Congress revised slightly in 1990. Subsection (b) of
that provision authorizes each State (or political subdivision) to
petition EPA for a finding designed to protect that entity from upwind
sources of air pollutants.2
---------------------------------------------------------------------------

\2\ In addition, section 115 authorizes EPA to require a SIP
revision when one or more sources within a State ``cause or
contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare in a foreign country.''
---------------------------------------------------------------------------

In addition, the 1990 Amendments added section 184, which
delineates a multistate ozone transport region (OTR) in the Northeast,
requires specific additional controls for all areas (not only
nonattainment areas) in that region, and establishes the Ozone
Transport Commission (OTC) for the purpose of recommending to EPA
regionwide controls affecting all areas in that region. At the same
time, Congress added section 176A, which authorizes

[[Page 57361]]

the formation of transport regions for other pollutants and in other
parts of the country.
2. Regulatory Structure
a. March 2, 1995 Policy. Notwithstanding significant efforts, the
States generally were not able to meet the November 15, 1994 statutory
deadline for the attainment demonstration and ROP SIP submissions
required under section 182(c). The major reason for this failure was
that at that time, States with downwind nonattainment areas were not
able to address transport from upwind areas. As a result, in a
memorandum from Mary D. Nichols, Assistant Administrator for Air and
Radiation, dated March 2, 1995, entitled ``Ozone Attainment
Demonstrations,'' (March 2, 1995 Memorandum or the Memorandum), EPA
recognized the efforts made by States and the remaining difficulties in
making the ROP and attainment demonstration submittals. The EPA
recognized that development of the necessary technical information, as
well as the control measures necessary to achieve the large level of
reductions likely to be required, had been particularly difficult for
the States affected by ozone transport.
Accordingly, as an administrative remedial matter, the Memorandum
indicated that EPA would establish new timeframes for SIP submittals.
The Memorandum indicated that EPA would divide the required SIP
submittals into two phases. Phase I generally consisted of (i) SIP
measures providing for ROP reductions due by the end of 1999, (ii) an
enforceable SIP commitment to submit any remaining required ROP
reductions on a specified schedule after 1996, and (iii) an enforceable
SIP commitment to submit the additional SIP measures needed for
attainment. Phase II consists of the remaining submittals, beginning in
1997.
The Phase II submittals primarily consisted of the remaining ROP
SIP measures, the attainment demonstration and additional rules needed
to attain, and any regional controls needed for attainment by all areas
in the region. The March 2, 1995 Memorandum indicated that the
attainment demonstration, target calculations for the post-1999 ROP
milestones, and identification of rules needed to attain and for post-
1999 ROP were due in mid-1997. To allow time for States to incorporate
the results of the OTAG modeling into their local plans, EPA extended
the mid-1997 submittal date to April 1998.3
---------------------------------------------------------------------------

\3\ Guidance for Implementing the 1-hour Ozone and Pre-Existing
PM10 NAAQS, Memorandum from Richard D. Wilson, dated December 29,
1997.
---------------------------------------------------------------------------

b. OTAG. In addition, the March 2, 1995 Memorandum called for an
assessment of the ozone transport phenomenon. The Environmental Council
of the States (ECOS) had recommended formation of a national work group
to allow for a thoughtful assessment and development of consensus
solutions to the problem. The OTAG was a partnership between EPA, the
37 easternmost States and the District of Columbia, industry
representatives, and environmental groups. The OTAG's air quality
modeling and recommendations formed the basis for today's action.
c. EPA's Transport SIP Call Regulatory Efforts. Shortly after OTAG
began its work, EPA began to indicate that it intended to issue a SIP
call to require States to implement the reductions necessary to address
the ozone transport problem. On January 10, 1997 (62 FR 1420), EPA
published a notice of intent that articulated this goal and indicated
that before taking final action, EPA would carefully consider the
technical work and any recommendations of OTAG. The EPA published the
NPR for the NOX SIP call by notice dated November 7, 1997
(62 FR 60319). The NPR proposed to make a finding of significant
contribution due to transported NOX emissions to
nonattainment or maintenance problems downwind and to assign
NOX emissions budgets for 23 jurisdictions. The EPA
published a supplemental notice of proposed rulemaking (SNPR) by notice
dated May 11, 1998 (63 FR 25902) which proposed a model NOX
budget trading program and State reporting requirements and provided
the air quality analyses of the proposed statewide NOX
emissions budgets. The EPA received approximately 700 comments on these
proposals. The comment periods are described in Section I.F, Discussion
of Comment Period and Availability of Key Information. Throughout the
course of the rulemaking, EPA has added information to the docket. By
notice dated August 24, 1998 (63 FR 45032), EPA published a notice of
availability listing the additional documents placed in the docket.
d. Revision of the Ozone NAAQS. On July 18, 1997 (62 FR 38856), EPA
issued its final action to revise the NAAQS for ozone. The EPA's
decision to revise the standard was based on the Agency's review of the
available scientific evidence linking exposures to ambient ozone to
adverse health and welfare effects at levels allowed by the pre-
existing 1-hour ozone standards. The 1-hour primary standard was
replaced by an 8-hour standard at a level of 0.08 parts per million
(ppm), with a form based on the 3-year average of the annual fourth-
highest daily maximum 8-hour average ozone concentration measured at
each monitor within an area. The new primary standard will provide
increased protection to the public, especially children and other at-
risk populations, against a wide range of ozone-induced health effects.
Health effects are described in paragraph I.B, General Factual
Background. The EPA retained the applicability of the 1-hour NAAQS for
existing nonattainment areas until such time as EPA determines that an
area has attained the 1-hour NAAQS (40 CFR 50.9(b)).
The pre-existing 1-hour secondary ozone standard was replaced by an
8-hour standard identical to the new primary standard. The new
secondary standard will provide increased protection to the public
welfare against ozone-induced effects on vegetation.

D. Section 126 Petitions

In a separate rulemaking, EPA is proposing action on petitions
submitted by eight northeastern States under section 126 of the CAA.
Each petition specifically requests that EPA make a finding that
NOX emissions from certain major stationary sources
significantly contribute to ozone nonattainment problems in the
petitioning State. The eight States are Connecticut, Massachusetts,
Maine, New Hampshire, New York, Pennsylvania, Rhode Island, and
Vermont.
Both the NOX SIP call and the section 126 petitions are
designed to address ozone transport through reductions in upwind
NOX emissions. However, the EPA's response to the section
126 petitions differs from EPA's action in the NOX SIP call
rulemaking in several ways. In today's NOX SIP call, EPA is
determining that certain States are or will be significantly
contributing to nonattainment or maintenance problems in downwind
States. The EPA is requiring the upwind States to submit SIP provisions
to reduce the amounts of each State's NOX emissions that
significantly contribute to downwind air quality problems. The States
will have the discretion to select the mix of control measures to
achieve the necessary reductions. By contrast, under section 126, if
findings of significant contribution are made for any sources
identified in the petitions, EPA would determine the necessary
emissions

[[Page 57362]]

limits to address the amount of significant contribution and would
directly regulate the sources. A section 126 remedy would apply only to
sources in States named in the petitions.
Based on the view that the SIP call and section 126 petitions are
both designed to achieve the same goal, several commenters urged EPA to
coordinate the two actions to the maximum extent possible. The EPA
agrees that the two actions are closely related and, therefore, should
be coordinated. This will help provide certainty for State and business
planning requirements. In addition, this coordination can help to
facilitate a trading program among sources in SIP call States that
choose to participate in the NOX trading program, and any
section 126 sources that would be subject to a Federal NOX
trading program.
The section 126 provisions require that any control remedy be
implemented within 3 years from the date of the finding that major
sources or a group of stationary sources emit or would emit in
violation of the relevant prohibition in section 110(a)(2)(D). Under
EPA's anticipated rulemaking schedule 4 on the petitions,
the compliance date for sources for which EPA makes such a finding
could be April 30, 2002; November 30, 2002; or May 1, 2003. Several
commenters expressed concern that the compliance deadline under section
126 was driving EPA's decision on the compliance deadline for the
NOX SIP call. Therefore, they believed that no changes would
be made in the proposed NOX SIP call deadline in response to
comments.
---------------------------------------------------------------------------

\4\ The eight northeastern States that filed section 126
petitions also filed suit in the District Court for the Southern
District of New York, to compel EPA to take action on those
petitions within prescribed periods. State of Connecticut v.
Browner, No. 98-1376 (S.D.N.Y., filed Feb. 25, 1998). The EPA and
the eight northeastern States jointly filed a motion to enter a
consent order prescribing certain dates for EPA action.
---------------------------------------------------------------------------

While EPA believes it is advantageous to coordinate the section 126
and NOX SIP call actions, EPA disagrees that this constrains
EPA from being responsive to public comments and considering
alternative compliance dates. See discussion below in Section V,
NOX Control Implementation and Budget Attainment Dates.
In the NOX SIP call NPR, EPA proposed that States be
required to submit SIPs within 12 months of the final SIP call. One
commenter asserted that the timing and terms of the rulemaking schedule
for the section 126 petitions precludes EPA from considering public
comments advocating different SIP due dates for the NOX SIP
call. The section 126 rulemaking schedule provides several options. One
option would allow findings on the petitions to be deferred pending
certain actions by the States and EPA on State submittals in response
to the NOX SIP call. The premise for the specified schedule
is that the SIP due date would be September 30, 1999 (i.e., roughly 12
months from signature of the notice on the final NOX SIP
call). As discussed below in Section VI, SIP Revision Criteria and
Schedule, EPA continues to believe 12 months is an appropriate
timeframe. However, had EPA determined that a longer timeframe for SIP
submittal was warranted, the section 126 rulemaking schedule would not
have restricted EPA from establishing a later due date.
One commenter supported the section 126 rulemaking schedule because
they thought it had the effect of using the SIP process rather than the
source-based petitions in that it provides an option of deferring
section 126 findings if EPA approves a State's NOX SIP.
Another commenter thought that the conditions for deferring section 126
findings were too stringent, and, therefore, section 126 would
inevitably be triggered prior to approval of any SIP provisions. This
issue is discussed in detail in Section II.A.2.c. in the NPR EPA just
issued on the section 126 petitions, which appears in the docket.

E. OTAG

As discussed in the proposed SIP call, OTAG completed the most
comprehensive analyses of ozone transport ever conducted. The EPA
participated extensively in this process. The EPA believes that the
OTAG process was successful and generated much useful technical and
modeling information on regional ozone transport. This information
provided EPA with the foundation for this rulemaking.
The EPA received numerous comments regarding the relationship
between the OTAG recommendations and EPA's proposed SIP call. Some
commenters asserted that the Agency's proposal was inconsistent with
the OTAG recommendations, while others believed that EPA used the
information and recommendations from OTAG appropriately. Primarily,
commenters stated that OTAG recommended a range of controls for utility
sources instead of a uniform level of control for all of the included
States.
The OTAG did recommend consideration of a range of controls, and
although it did not specifically recommend uniform controls across a
broad region, such a control scheme is within the range of its
recommendation. The EPA's action today is based on its consideration of
OTAG's recommendations, as well as information resulting from EPA's
additional work, and extensive public input generated through notice-
and-comment rulemaking. The EPA continues to believe, for reasons
explained in Section III.F.1, Uniform vs. Regional Controls, that
requiring NOX emissions reductions across the region in
amounts achievable by uniform controls is a reasonable, cost-effective
step to take at this time to mitigate ozone nonattainment in downwind
States for both the 1-hour and 8-hour standards.
Commenters also stated that EPA applied an electric utility control
level that was more stringent than the upper limit of the OTAG range of
utility controls. The OTAG recommended a range of utility controls that
falls between specific CAA-required controls and the less stringent of
85 percent reduction from the 1990 rate (lb/mmBtu), or 0.15 lb/mmBtu.
In determining the appropriate level of emissions reductions, EPA
considered what levels of NOX reductions could be obtained
by applying, to various source sectors, controls that are among the
most cost effective and feasible with today's proven pollution control
technologies. The EPA chose emissions reductions that are equivalent to
an emission limit from utilities of 0.15 lb/mmBtu. The EPA acknowledges
that this level may be more protective than the most protective level
contained in the OTAG recommendation in some cases, but, as discussed
below in Section IV, Air Quality Assessment, EPA believes that it
provides the most improvement in air quality while staying within the
bounds of the most highly cost-effective technology available. (Cost
effectiveness is discussed in Section II.D.) In addition, by relying on
actual 1995-1996 continuous emission monitoring data, rather than
relying on estimated 1990 emission data, this approach provides a more
accurate way of determining the States' budgets since it minimizes any
chances of over-or under-estimation of emissions.
Commenters asserted that OTAG recommended 12 months for additional
modeling--especially subregional modeling--before promulgating the SIP
call; and these commenters expressed concern that EPA did not provide
this amount of time following publication of the NPR. As discussed in
more detail in Section I.F, Discussion of Comment Period and
Availability of Key

[[Page 57363]]

Information, the Agency ultimately provided approximately 1 year from
the conclusion of OTAG for States and other members of the public to
complete and submit subregional and other types of modeling. The EPA
has considered this additional modeling in finalizing today's rule.
Some commenters stated that the goal of OTAG was to address
attainment of the ozone NAAQS. This is incorrect. The OTAG's goal was
to reduce ozone transport, which is one of the steps necessary to
enable attainment; the goal was not to recommend an overall strategy
that would yield attainment through regional measures alone. The OTAG
articulated its overall goal as follows:

* * * identify and recommend a strategy to reduce transported
ozone and its precursors which, in combination with other measures,
will enable attainment and maintenance of the national ambient ozone
standard in the OTAG region. A number of criteria will be used to
select the strategy including, but not limited to, cost
effectiveness, feasibility, and impacts on ozone levels.5

\5\ Ozone Transport Assessment Group Policy Paper approved by
the Policy Group on December 4, 1995.

It is also EPA's goal to ensure that sufficient regional reductions
are achieved to mitigate ozone transport in the eastern half of the
United States and thus, in conjunction with local controls, enable
nonattainment areas to attain and maintain the ozone NAAQS.
Commenters indicated that OTAG focused only on the 1-hour standard
nonattainment problem and did not assess compliance implications of the
8-hour standard. For this reason, according to commenters, EPA should
not base today's action on the nonattainment of the 8-hour NAAQS. It is
true that OTAG was established to address transport issues associated
with meeting the 1-hour standard. The EPA did not promulgate the 8-hour
standard until shortly after OTAG concluded; thus, OTAG did not
recommend strategies to address the 8-hour NAAQS. However, because EPA
had proposed an 8-hour standard, OTAG did examine the impacts of
different strategies on 8-hour average ozone predictions.
In light of OTAG's work and additional information, EPA is able to
assess ozone transport as it relates to the 8-hour NAAQS and to set
forth requirements as necessary to address the 8-hour standard in this
rulemaking. Ozone transport causes problems for downwind areas under
either the 1-hour or 8-hour standard. The regional reductions of
NOX that will be achieved through this SIP call for the 1-
hour NAAQS are key components for meeting the new 8-hour ozone standard
in a cost-effective manner. Therefore, EPA believes that the OTAG
recommendations for how to address ozone transport are valid for both
NAAQS.
Several commenters urged EPA to adopt and implement all Federal
measures identified in the OTAG recommendations.6 The Agency
is committed to continue implementing national control measures for
NOX, as recommended by OTAG. In addition, EPA has adopted
the following national measures for purposes of reducing VOC:
architectural and industrial maintenance coatings, consumer/commercial
products, and autobody refinishing. The EPA has made no decisions
regarding further VOC reductions beyond the reductions specified as
phase I in the OTAG recommendations.7
---------------------------------------------------------------------------

\6\ The OTAG recommendations are located in Appendix B of the
November 7, 1997 NPR (62 FR 60376).
\7\ Letter to the Honorable Ken Calvert, Chairman, Subcommittee
on Energy and Environment, U.S. House of Representatives, from
Robert D. Brenner, Acting Deputy Assistant Administrator for Air and
Radiation, U.S. EPA, June 26, 1998, transmitting EPA's responses to
questions following the May 20, 1998 congressional hearing on EPA's
proposed rule on paints and coatings.
---------------------------------------------------------------------------

Other more specific comments concerning the OTAG recommendations
will be addressed throughout this rulemaking as the issues are
discussed.

F. Discussion of Comment Period and Availability of Key Information

The EPA received numerous comments concerning the adequacy of the
comment period for the November 7, 1997 NPR and May 11, 1998 SNPR. Some
commenters remarked that the comment period for the NPR should be
extended to allow for development and review of technical information,
including inventory data, growth factors, and the resulting budget.
Commenters stated that the additional time was particularly necessary
for subregional air quality modeling, which is modeling designed to
isolate the impacts of emissions from a particular State or group of
States on downwind areas. Many specifically requested an additional 120
days, and one requested an additional 9 months. Some commenters
indicated that EPA did not incorporate their comments from the NPR into
the SNPR. Other commenters insisted that key information supporting the
rule is not publicly available. The EPA also received comments that
additional public hearings should be held in other locations of the
OTAG region.
1. Request for Extension of the Comment Period
The EPA allowed a 120-day public comment period for the November 7,
1997 NPR, which closed on March 9, 1998. By notice (63 FR 17349, April
9, 1998), EPA reopened the comment period for members of the public to
submit additional modeling analyses, as well as comments concerning the
implications that any additional modeling may have for the State NOx
budgets under consideration in the November 7, 1997 proposal. The
comment period was reopened through the end of the comment period on
the SNPR. The SNPR, which was published on May 11, 1998, allowed a
comment period until June 25, 1998. Thus, for most issues addressed in
the NPR, including air quality modeling issues, commenters received an
almost 8-month formal comment period. Indeed, many commenters had
access to the NPR immediately after October 10, 1997, when it was
signed and posted on an EPA website. The Agency also received a number
of comments after June 25, 1998, which were also reviewed and
considered in developing the final rule.
The EPA believes this additional opportunity for the public to
submit comments was reasonable. After March 9, 1998--the initial date
for close of the comment period on the NPR--EPA received numerous
comments on various issues raised in the NPR, including air quality
issues. Many of these comments were extensive, which indicates that
commenters received adequate time.
With respect to the concern that EPA did not incorporate comments
received on the NPR into the SNPR, it would not have been practical for
EPA to incorporate comments received on the NPR into the SNPR because
the SNPR was completed soon after the close of the comment period for
the NPR. In general, the SNPR addressed different aspects of the rule
than the NPR, and one of the purposes of the SNPR was to take comment
on several new issues, as noted above. The EPA has addressed comments
on both the NPR and SNPR in today's action.
The major issues raised in the comments are responded to throughout
the preamble of this final rule. A comprehensive summary of all
significant comments, along with EPA's response to the comments which
have not been responded to in the preamble (Response to Comments), can
be found in the docket for this rulemaking (Docket No. A-96-56).

[[Page 57364]]

2. Request for Time to Conduct Additional Modeling
The OTAG Policy Group, at its June 3, 1997 meeting, recommended
that States have the opportunity to conduct additional local and
subregional modeling and air quality analyses, as well as to develop
and propose appropriate levels and timing of controls. The EPA received
numerous comments related to OTAG's recommendation. The commenters
requested that the Agency give States more time to conduct this
additional modeling so that EPA could more accurately assess each
State's contribution to downwind nonattainment.
The EPA signed the NPR on October 10, 1997, and posted it on a
website at that time, although it was not published in the Federal
Register until November 7, 1997. As noted above, EPA reopened the
comment period through June 25, 1998 for submittal of additional air
quality modeling runs. In effect, this has extended the amount of time
for modeling analyses to over a year from the date OTAG submitted its
recommendations, and to over 8 months from the signature date for the
NPR. By the close of the comment period on June 25, 1998, EPA had
received numerous comments containing new and extensive air quality
modeling studies. Accordingly, EPA believes that commenters received
adequate time.
3. Availability of Key Information
A number of commenters asserted that EPA failed to make publicly
available key information, such as modeling and emissions inventory
data. Specifically, commenters stated that they did not have access to
the emissions data on which EPA based the air quality modeling for the
NPR. In addition, according to some commenters, several models used by
EPA and OTAG are proprietary models and have not been generally
available to the public.
In Section III.A.2, Availability, the Agency discusses the
availability of emissions inventory data to the public.
The OTAG and EPA conducted air quality modeling runs to determine
the level of contribution from emissions in upwind areas to ozone
nonattainment in downwind areas. Some of this modeling employed UAM-
V.8 The UAM-V has generally been available to the public for
the purpose of analyzing information relevant to today's rulemaking.
State and local agencies, as well as utility companies and other
stakeholders, have had access to licenses to use UAM-V.
---------------------------------------------------------------------------

\8\ Variable-Grid Urban Airshed Model.
---------------------------------------------------------------------------

Commenters objected that they were obliged either to purchase
licenses for use of the UAM-V model or to employ as a contractor the
model owner, and that these financial constraints restricted their
access to the model. Because this model has, in general, been privately
developed, EPA believes that reasonable fees for its use should be
expected. The EPA did not receive information indicating that the
associated expenses were other than reasonable. To the extent that
commenters experienced delays in obtaining the UAM-V model, EPA
believes that the extensions of the comment period resulted in adequate
time for comment. In any event, any commenter who was not able to gain
access in the timeframe desired was able to use a comparable model,
such as the Comprehensive Air Quality Model with Extensions (CAMx),
which is not proprietary. For the purpose of responding to public
comments, EPA is considering all information based on CAMx and similar
models.
The Agency made available additional modeling runs used to
determine emissions changes, costs and cost effectiveness for
electricity generating units (EGUs). These runs were placed on the IPM
Analyses web site at www.epa.gov/capi, with links to EPA's Office of
Air and Radiation Policy and Guidance web site.
On August 10, the EPA placed in the docket and made available on
the web site, modeling analyses and other information supporting
today's action. As noted above, by notice dated August 24, 1998 (63 FR
45032), EPA published a notice of availability which stated that
throughout the course of the rulemaking, EPA had placed information in
the docket or made it available on various web sites. This information
included inventory data and additional modeling runs. By placing those
materials in the docket and informing the public of their availability,
EPA provided 4-6 weeks for review and comment by the public. The EPA
did receive comments concerning this information from the Utility Air
Regulatory Group on September 9, and EPA is responding to those
comments in the Response To Comments document. The EPA notes that the
additional modeling analyses were performed in response to comments
received on the NPR urging EPA to conduct State-by-State modeling. The
Agency does not believe it is required to provide for additional
comment on every action it takes in response to comment, particularly
where, as here, the new information confirms the Agency's proposed
conclusions. Therefore, the Agency did not further extend the comment
period.
4. Public Hearings
The Agency conducted two hearings in Washington, DC, including a 2-
day hearing on February 3-4, 1998 for the NPR, and a 1-day hearing on
May 29, 1998 for the SNPR. Some commenters believe that additional
public hearings should have been held in other locations in the OTAG
region. The EPA believes these hearings provided reasonable opportunity
for oral comment on the proposed rulemaking given the timeframes
associated with this rulemaking. Therefore, the Agency did not schedule
any additional hearings. The public also had an opportunity to submit
written testimony within approximately 30 days after each hearing date.

G. Implementation of Revised Air Quality Standards

On July 18, 1997, EPA published its final rule for strengthening
the NAAQS for ozone by establishing an 8-hour standard (62 FR 38856).
Current monitoring data indicate that many areas in the East, Midwest
and South violate the 8-hour NAAQS. Along with areas violating the 1-
hour NAAQS, areas violating the 8-hour NAAQS are also affected by the
transport of ozone across the East. The regional NOX
reduction strategy finalized in today's action will provide a mechanism
to achieve reductions that will assist States in attaining and
maintaining this revised standard. In fact, the regional reductions
alone should be enough to enable the vast majority of the new counties
violating the 8-hour NAAQS that are located in States throughout the
East to attain the revised 8-hour standard.\9\
---------------------------------------------------------------------------

\9\ In the NPR (62 FR 60318, 60363), EPA provided estimates of
the number of counties expected to attain as a result of the
NOX SIP call. The EPA will update this list in the coming
months. The updated estimates of which counties will attain will be
based on more current air quality data and on the State-by-State
emissions budgets contained in today's final rule.
---------------------------------------------------------------------------

On July 16, 1997, President Clinton issued a directive on the
implementation of the revised air quality standards. This
implementation policy was described in the NPR (62 FR 60318, 60362-64).
The EPA received numerous comments on this implementation policy and on
EPA's plan to create a transitional classification\10\ for 8-hour ozone
nonattainment areas that meet certain

[[Page 57365]]

criteria. Since these comments concern implementation efforts for the
revised 8-hour ozone standard and do not relate directly to the
NOX SIP call on which EPA is taking final action in this
rulemaking, EPA is not responding in detail to the comments. The EPA
will address implementation of the revised standard separately. In
August 1998, EPA issued proposed guidance for public comment to explain
the implementation policy in further detail and to provide details on
SIP requirements for transitional areas (63 FR 45060, August 24, 1998).
The EPA expects to finalize the August 1998 draft guidance, as well as
guidance for areas other than transitional, by December 1998.\11\
---------------------------------------------------------------------------

\10\ The ``transitional classification'' EPA intends for 8-hour
ozone nonattainment areas is further discussed in the NPR (62 FR
60318, 60363).
\11\ For a complete listing of the guidance and other actions
EPA plans to issue to implement the revised ozone and PM NAAQS, see
a table on EPA's implementation website: http://
ttnwww.rtpnc.epa.gov/implement/actions.htm.
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H. Summary of Major Changes Between Proposals and Final Rule

This summary describes the major changes that have occurred since
the NPR and SNPR in each of the following sections of today's final
rule.
1. EPA's Analytical Approach (Section II.A)
The NPR proposed two interpretations for the section
110(a)(2)(D)(i)(I) provisions concerning the ``significant
contribution'' test. Under the first, EPA would examine certain factors
relating to level of emissions and their ambient impact to determine
whether to make a finding that all of the emissions from a particular
State's sources contribute significantly to nonattainment or
maintenance problems downwind. If EPA made such a finding, then EPA
would examine certain cost factors to determine the extent to which the
SIP for the State must mitigate (reduce) its emissions. Under the
second interpretation, EPA would examine all of those factors
together--level of emissions, ambient impact, and costs--to determine
whether to make the finding with respect to a specified amount of
emissions. If EPA made the finding, then it would require the SIP to
eliminate that amount. In today's final rule, EPA is adopting the
second interpretation. The EPA indicates, however, that it would adopt
the same rule if it were instead implementing the first interpretation.
2. Cost Effectiveness of Emissions Reductions (Section II.D.)
The methodology of determining cost effectiveness has not
changed. For all sources, the inventory and as a result, the source-
specific costs, in some cases, have changed. This results in a
different overall budget level and a different overall cost-
effectiveness value. For the non-EGUs, while the methodology has not
changed, the analysis focuses on large non-EGU sources. The methodology
in the NPR focused on all non-EGU sources.
3. Determination of Budgets (Section III.)
For EGU, the EPA maintained the approach to use the
higher, by State, of 1995 or 1996 heat input data to calculate baseline
heat input rates for the NFR, and added 577 smaller units to the State
budget inventories which had erroneously been omitted from the NPR.
These units included electricity generating sources of 25 megawatts
(MW) or less of electrical output and additional units not affected
under the Acid Rain Program. Additional controls are not assumed for
these sources, but they are added to the budget at baseline levels. The
Agency has decided to use State-specific growth factors derived from
application of the IPM using the 1998 Base Case and chose to retain the
0.15 lbs/mmBtu as the assumed uniform control level for EGU budget
emissions determination.
The EPA examined alternatives that focus on non-EGU point
source reductions from the largest source categories, and within each
of these categories assumed controls that would result in a regionwide
average cost effectiveness less than $2000/ton. The resulting budget
assumes the emissions reductions from large non-EGU sources that are
among the most cost effective to control and does not include
reductions from smaller sources and sources that, as a group, are not
quite as cost effective or efficient to control, or are already covered
by other Federal measures. As a result, this final rule assumes, for
purposes of calculating the State NOX budgets, the following
emissions decreases from uncontrolled levels for the large (generally
greater than 250 mmBtu or 1 ton/day non-EGU sources (no emission
reductions are assumed for the smaller sources):

--Non-EGU boilers and turbines--60 percent decrease.
--Stationary internal combustion engines--90 percent decrease.
--Cement manufacturing plants--30 percent decrease.

It should be noted that point sources with capacities less than 250
mmBtu/hr but with emissions greater than 1 ton/day are not treated
differently from sources with capacities greater than 250 mmBtu/hr for
purposes of calculating the budget. This is a change from the NPR which
included RACT controls on units with capacities less than 250 mmBtu/hr
and emissions greater than 1 ton/day (see Section III.G.2.a). As under
the proposal, the rule allows States to choose control measures other
than the EPA-assumed controls to meet the numerical budgets.
The EPA has implemented the following changes that the
Agency proposed in the NPR for calculating baseline NOX
emissions from highway vehicles. A 1995 baseline is used for the final
rule in place of the 1990 baseline used in the NPR. The Highway
Performance and Monitoring System data were used to estimate States'
1995 vehicle miles traveled (VMT) by vehicle category, except in those
cases where EPA accepted revisions offered in the comments. Today's
action includes those mobile source reductions which EPA has determined
are appropriate to implement on a national basis, and which have been
promulgated in final form or are expected to be promulgated in final
form before States are required to comply with their budgets. The
highway vehicle budget components include the emission reductions
resulting from implementation of the National Low Emitting Vehicle
(NLEV) program, including the phase-in schedule agreed to by the
States, automobile manufacturers, and EPA. The highway budget
components do not include the effect of Tier 2 light-duty vehicle and
truck standards and any associated fuel standards since these standards
have not yet been proposed. The extent of the reformulated gasoline
(RFG) and inspection and maintenance (I/M) programs was not assumed to
change beyond that assumed for the NPR, except for those States that
were able to demonstrate that the NPR's modeling assumptions did not
conform to the State's SIP and did not reflect CAA requirements.
The EPA has chosen to retain the 1990 baseline inventories
for nonroad mobile sources presented in the NPR for today's action,
with additional changes made in response to public comments. The
control strategies assumed for calculating the nonroad and stationary
area source budget components have not changed from the SNPR.
4. NOX Control Implementation and Budget Achievement Dates
(Section V)
The EPA proposed that the SIP revisions require full
implementation of the necessary State measures by September 2002 and
took comment on a range of dates from September 2002 through September
2004. Based on

[[Page 57366]]

public comments and feasibility analyses conducted by EPA, the Agency
is requiring an implementation date of May 1, 2003. The Agency is also
providing some compliance flexibility to States for the 2003 and 2004
ozone seasons by establishing State compliance supplement pools. This
is described in Section III.F.6.
5. SIP Criteria (Section VI.A)
The Agency has determined that the additional SIP
approvability criteria, as proposed in the SNPR, should apply not only
when States choose to regulate EGUs (63 FR 25912), but also when States
choose to regulate large steam-producing units (i.e., combustion
turbines and combined cycle systems with a capacity greater than 250
mmBtu/hr).
The Agency proposed revisions to part 51 requiring
continuous emissions monitoring systems (CEMS) on all large electrical
generating and steam-producing sources which States elect to subject to
emissions reduction requirements in response to this rulemaking. The
EPA took comment on requiring that, if a State chooses to regulate
these sources to meet the SIP call, the SIP must require these sources
to use the NOX mass monitoring provisions of part 75,
subpart H, to demonstrate compliance with applicable emissions control
requirements. After considering comments, the Agency is requiring that,
in these circumstances, the SIP specify that large sources comply with
the monitoring provisions of part 75, subpart H, which includes non-
CEMS monitoring options for units that are infrequently operated or
units that have low mass emissions.
6. Emissions Reporting Requirements for States (Section VI.B)
The proposed rule required that States report full-year,
as well as ozone-season, emissions from all sources for the triennial
inventories commencing with year 2002 emissions and the 2007 inventory,
and for those sources for which reports had to be submitted annually
starting with year 2003 emissions. The final rule requires only ozone-
season emissions reporting for all sources.
In the SNPR, the EPA proposed, for purposes of reporting
requirements, to define a point source as a non-mobile source which has
NOX emissions of 100 tons/year or greater. Under today's
action, States have the option of establishing a smaller emission
threshold than 100 tons/year of NOX emissions in defining
point source. This will allow the definition of point source to remain
consistent with current definitions in local areas.
7. NOX Budget Trading Program (Section VII.)
For States that choose to participate in the
NOX Budget Trading Program, the preamble clarifies the
intent of the model rule and identifies areas of the rule where States
have flexibility to include variations in their State rules.
In the SNPR, the Agency solicited comment on a range of
options for incorporating banking into the trading program. After
considering these comments, the Agency is including banking provisions
in the final rule. The provisions allow for unlimited banking starting
in 2003 and includes a flow control mechanism to limit the emissions
variability associated with banking.
One of the banking approaches presented in the SNPR
included the option for sources to generate and use early reduction
credits. Consistent with the provisions of the NOX SIP call
which provide for State compliance supplement pools, the final rule
allows States to issue early reduction credits for certain
NOX emissions reductions achieved between September 30, 1999
and May 1, 2003.
The final rule clarifies the timing requirements for State
submission of allowance allocations to EPA and, as proposed, lays out
an allocation approach. Each State remains free to adopt the final
rule's allocation approach or adopt an allocation scheme of its own,
provided it meets the specified timing requirements, requires new
sources to hold allowances, and does not allocate more allowances than
are available in the State trading budget.
8. Interaction with Title IV NOX Rule (Section VIII.)
In the SNPR, EPA proposed revisions to part 76 addressing
the interaction between title IV and the NOX SIP call. In
this final rule, EPA explains that the Agency is not adopting any of
the proposed revisions to part 76.
9. Administrative Requirements (Section X.)
NPR Section VIII, Regulatory Analyses, has been replaced
in the final rule by Section X.A, Executive Order 12866: Regulatory
Impacts Analysis. The new final rule Section X.A indicates that EPA has
prepared a RIA for the final rule and cites the cost and benefit
estimates from that analysis.
The final rule adds several Sections under X,
Administrative Requirements, that were absent from the NPR. These
include: Paperwork Reduction Act; Executive Order 13045: Protection of
Children from Environmental Health Risks and Safety Risks; Executive
Order 12898: Environmental Justice; Executive Order 12875: Enhancing
the Intergovernmental Partnerships; Executive Order 13084: Consultation
and Coordination with Indian Tribal Governments; Judicial Review; and
Congressional Review Act. These new Sections provide a more
comprehensive summary of the Acts and Executive Orders that could apply
to the final rule. Each Section identifies the requirements of the
relevant Act or Executive Order, indicates EPA's interpretation of
whether the Act or Executive Order actually applies to this rulemaking,
and, if so, indicates how the Agency has addressed the Act or Executive
Order.

II. EPA's Analytical Approach

A. Interpretation of the CAA's Transport Provisions

As indicated in the NPR, 62 FR 60323, the primary statutory basis
for today's action is the ``good neighbor'' provision of section
110(a)(2)(D)(i)(I), under which, in general, each SIP is required to
include provisions assuring that sources within the State do not emit
pollutants in amounts that significantly contribute to nonattainment or
maintenance problems downwind. This statutory requirement applies to
SIPs under both the 1-hour ozone NAAQS and the 8-hour ozone NAAQS.
1. Authority and Process for Requiring SIP Submissions Under the 1-Hour
Ozone NAAQS
a. Authority for Requiring SIP Submissions under the 1-Hour NAAQS.
Each State is currently required to have in place a SIP that implements
the 1-hour ozone NAAQS for areas to which that standard still applies.
In the NAAQS rulemaking, EPA determined that the 1-hour NAAQS would
cease to apply to areas that EPA determines have air quality in
attainment of that NAAQS (40 CFR 50.9(b)). In two recent rulemakings,
EPA identified numerous areas of the country to which the 1-hour NAAQS
no longer applies. ``Final Rule: Identification of Ozone Areas
Attaining the 1-Hour Standard and to Which the 1-Hour Standard is No
Longer Applicable,'' (63 FR 31014, June 5, 1998); ``Final Rule:
Identification of Additional Ozone Areas Attaining the 1-Hour Standard
and to Which the 1-Hour Standard is No Longer Applicable,'' (63 FR
27247, July 22, 1998).
The 1-hour NAAQS remains applicable to areas whose air quality
continues to monitor nonattainment. As noted above in Section I.B,
General

[[Page 57367]]

Factual Background, these include many major urban areas in the eastern
half of the United States. States that contain these areas remain
responsible for meeting CAA requirements applicable to those areas for
the purpose of attaining the 1-hour NAAQS. For example, States are
responsible for attainment demonstrations for areas designated
nonattainment and classified as moderate or higher.
By the same token, States that are upwind of these areas are
responsible to meet the ``good neighbor'' requirements of section
110(a)(2)(D). This responsibility is not alleviated simply because, for
areas other than the current nonattainment areas, the 8-hour NAAQS has
replaced the 1-hour NAAQS.
b. Process for Requiring SIP Submissions under the 1-Hour NAAQS. As
explained in the NPR, the appropriate route for EPA to require SIP
submissions under section 110(a)(2)(D)(i)(I) with respect to the 1-hour
standard is issuance of a ``SIP call'' under section 110(k)(5).\12\
Section 110(k)(5) authorizes EPA to find that a SIP is substantially
inadequate to meet a CAA requirement and to require (``call for'') the
State to submit, within a specified period, a SIP revision to correct
the inadequacy. Specifically, section 110(k)(5) provides, in relevant
part:
---------------------------------------------------------------------------

\12\ As discussed in the NPR and in greater detail further
below, the basis for requiring a transport-related SIP revision for
the 8-hour standard is the requirement in section 110(a)(1) that
States submit SIPs meeting the requirements of section 110(a)(2)
within 3 years (or an earlier date established by EPA) of
promulgation of a new or revised NAAQS. This is discussed in further
detail below.

Whenever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to
attain or maintain the relevant [NAAQS], to mitigate adequately the
interstate pollutant transport described in section 176A or section
184, or to otherwise comply with any requirement of this Act, the
Administrator shall require the State to revise the plan as
necessary to correct such inadequacies. The Administrator shall
notify the State of the inadequacies, and may establish reasonable
deadlines (not to exceed 18 months after the date of such notice)
---------------------------------------------------------------------------
for the submission of such plan revisions.

By today's action, EPA is determining that the SIPs for the
specified jurisdictions are substantially inadequate to comply with the
requirements of section 110(a)(2)(D)(i)(I) because the relevant SIPs do
not contain adequate provisions prohibiting their sources from emitting
amounts of NOX emissions that contribute significantly to
nonattainment in downwind areas that remain subject to the 1-hour
NAAQS. Based on these determinations, EPA is requiring the identified
States to submit SIP revisions containing adequate provisions to limit
emissions to the appropriate amount.
If a State does not submit the required SIP provisions in response
to this SIP call, EPA will issue a finding that the State failed to
make a required SIP submittal under section 179(a). This finding has
implications for sanctions as well as for EPA's promulgation of Federal
implementation plans (FIPs). Sanctions and FIPs are discussed in
Section VI, SIP Criteria and Emissions Reporting Requirements.
(1) Commenters' Arguments Concerning the Transport Provisions.
Commenters argued that EPA does not have unilateral authority to issue
a SIP call under section 110(k)(5) to require States to remedy SIPs
that do not meet the requirements of section 110(a)(2)(D). The
commenters noted that when Congress amended the CAA in 1990, Congress
provided that the sole authority for EPA and States to address
interstate transport of pollution is through transport commissions. In
support, the commenters state that Congress: (i) Added sections 176A
and 184, which authorize the establishment of transport regions and the
formation of transport commissions; (ii) revised section 110(k)(5) to
refer to those transport provisions; and (iii) revised section
110(a)(2)(D)(i) to require that SIP provisions designed to eliminate
interstate pollutant transport be consistent with other CAA
requirements. According to the commenters, these provisions, read as a
whole, mandate that if EPA believes that a transport problem exists,
EPA's sole recourse is to form a transport region under sections 176A
and/or 184; EPA may issue a SIP call to mandate compliance with section
110(a)(2)(D)(i) only in response to a recommendation of the transport
region. The commenters also claim that this scheme is sensible because
it provides a consensual forum for States to address interstate
pollution rather than allowing unilateral action on the part of EPA or
a State.
The EPA disagrees with the commenters' conclusion that these
statutory provisions make clear that EPA cannot require a State to
address interstate transport without first establishing a transport
commission and in the absence of a recommendation from the transport
commission. There is no language of limitation in sections 110(a)(2)(D)
or (k)(5), or 176A, or 184. Nor is there any support in the legislative
history for such a narrow reading of the statute. Moreover, under the
commenters' interpretation, the CAA Amendments of 1990 have placed
greater constraints on States' and EPA's ability to address the
interstate transport of pollution. Such an interpretation would be
inconsistent with the overall purpose of the CAA to ensure healthful
air. Thus, EPA believes that the transport provisions were added as an
additional tool to address interstate transport but were not intended
to preclude other methods of addressing interstate pollution than prior
to passage of the amendments.
Under the 1990 Amendments, Congress recognized the growing evidence
that ozone and its precursors can be transported over long distances
and that the control of transported ozone was a key to achieving
attainment of the ozone standard across the nation (Cong. Rec. S16903
(daily ed. Oct. 27, 1990) (statement of Sen. Mitchell); S16970
(conference report) S16986-87 (statement of Sen. Lieberman)). Thus, in
1990, Congress added a new mechanism to address interstate transport.
Specifically, Congress enacted sections 176A and 184, which provide a
mechanism for States to work together to address the interstate
transport problem. However, by their terms, these sections simply
provide authority for EPA to designate transport regions and establish
transport commissions. There is nothing in the language of these
provisions that indicates that they supersede the other statutory
mechanisms for addressing interstate transport, or that they now
provide the sole mechanism for resolving interstate pollution
transport.
Moreover, although Congress expressly added these two provisions
through the 1990 Amendments, Congress did not in any way limit section
110(a)(2)(D), which requires States to address interstate transport in
their SIPs. The addition of the language providing that States' actions
under section 110(a)(2)(D) be ``consistent with [title I] of the Act''
cannot be read to limit the controls States may adopt to meet section
110(a)(2)(D) to those recommended by a transport
commission.13 After all, the transport region provisions are
only two of many provisions in title I. Rather, this

[[Page 57368]]

language concerning consistency should be read as clarifying that any
section 110(a)(2)(D) requirement must be consistent with other
provisions of title I. Similarly, this language makes explicit that SIP
revisions required in accordance with the procedures of the transport
provisions would meet the requirements of section 110(a)(2)(D)(i).
---------------------------------------------------------------------------

\13\ Taken to its logical conclusion, the commenters' argument
would mean that States are precluded from submitting a section
110(a)(2)(D) SIP unless it reflects measures recommended through the
transport commission process. The EPA does not believe that Congress
would first establish a specific mandate (to submit a SIP to address
interstate transport) and then limit it in such a cryptic fashion.
If Congress intended section 110(a)(2)(D) SIPs to only reflect
transport commission recommendations, Congress could have
specifically referenced sections 176A and 184 in section
110(a)(2)(D), rather than generally providing that SIPs be
``consistent'' with title I of the CAA.
---------------------------------------------------------------------------

Furthermore, it is significant that Congress did not in any sense
bind EPA's ultimate discretion to determine whether State plans
appropriately address interstate transport. Under sections 176A and
184, the States may only make recommendations to EPA. Thus, under the
transport provisions, as well as the general SIP requirements of
section 110(a)(2), EPA must ultimately decide whether the SIP meets the
applicable requirements of the CAA. If, as the commenters contend, EPA
is limited to calling on States to address interstate transport only by
strategies recommended by the State, then EPA would be precluded from
ensuring that States address interstate transport. For example, EPA
could establish a transport commission but the commission could fail to
make recommendations or make insufficient recommendations. (Section
176A provides that transport commissions may make recommendations to
EPA only by ``majority vote of all members'' other than those
representing EPA.) Such a reading of the statute would be absurd in
light of the growing recognition at the time of the 1990 Amendments
that transport is a real threat to the primary purpose of title I of
the CAA--attainment of the NAAQS.
By the same token, in amending section 110(k)(5) in the 1990
Amendments, Congress did not add anything that explicitly provides
that, in the case of interstate transport, section 110(k)(5) would
apply only when EPA approved (or substituted measures for) a transport
commission's recommendations. The reference in section 110(k)(5) to the
transport provisions of sections 176A and 184 does not preclude EPA's
use of the SIP call provision to call on States to ensure their SIPs
meet the requirements of section 110(a)(2)(D)(i). Section 110(k)(5)
also provides for EPA to call on States ``to otherwise comply with
requirements of this Act;'' among the requirements in chapter I of the
CAA is the requirement in section 110(a)(2)(D). The reference in
section 110(k)(5) to the transport provisions simply makes explicit
that EPA may employ section 110(k)(5) for the additional purpose of
requiring SIPs to include the control measures as recommended by
transport commissions and approved by EPA under the transport
provisions.
Moreover, there is no indication in the legislative history of the
1990 Amendments that Congress intended the sections 176A and 184
transport provisions to supersede the section 110(k)(5) SIP call
mechanism for ensuring compliance with section 110(a)(2)(D)(i). Reading
the transport provisions to supersede the SIP call mechanism would
constitute a significant change from the CAA as it read prior to the
1990 Amendments. Even if the statute is ambiguous as to whether the
transport provisions supersede the SIP call mechanism--and EPA believes
the statute is clear that the transport provisions do not supersede--
congressional silence would suggest that Congress did not intend such a
significant change (See generally Harrison v. PPG Industries, Inc., 446
U.S. 578, 602, 100 S.Ct. 1889, 1902, 64 L.Ed.2d 525 (1980) (Rehnquist,
J., dissenting), cited with approval in Chisom v. Roemer, 501 U.S. 380,
396 n. 23, 111 S.Ct. 2354, 2364 n. 23, 115 L.Ed.2d 348 (1991)).
Finally, the commenter asserts that EPA's interpretation of the CAA
to allow a SIP call in the absence of a transport commission
recommendation reads out of the CAA the consensual transport commission
procedures under sections 176A and 184. This is simply not true. The
EPA interprets the transport commission process to be one tool to
assess and address interstate transport. In fact, the Northeast Ozone
Transport Commission, under section 184, has been active since
enactment of the 1990 Amendments. In 1995, EPA approved a
recommendation of that commission (60 FR 4712 14). Transport
commissions remain a viable means for dealing with interstate
transport. Furthermore, contrary to the general implication of the
commenter's remark, the OTAG process, though not a formal transport
commission, provided an opportunity not only for Federal and State
governments to assess jointly the transport issue, but also involved
industry, environmental groups and others. The EPA based its SIP call
on information developed through OTAG, as well as additional analyses
performed by the Agency and information submitted by a variety of
groups during the comment period on the proposed rule. Thus, the OTAG
process contained consensual elements.
---------------------------------------------------------------------------

\14\ In Commonwealth of Virginia v. EPA, 108 F.3d 1397 (D.C.
Cir. 1997), the court vacated EPA's SIP call in response to the
Northeast Ozone Transport Commission's recommendation on the basis
that the EPA could not require States to adopt a specific control
measure under its section 110(k)(5) authority and that, in any
event, EPA could not require States to adopt stricter motor vehicle
emission standards under either section 110(k)(5) or section 184.
---------------------------------------------------------------------------

(2) Commenters' Arguments Concerning the Virginia case. Under one
of the approaches described in the proposed rule, EPA proposed to
determine, for each of various upwind States, the aggregate ``amounts''
of air pollutants (NOX) that contribute significantly to
nonattainment, and that, therefore must be prohibited by the various
SIPs. The NOX emissions budget for each State is an
expression of the amount of NOX emissions that would remain
after the State prohibits the amount that contributes significantly to
downwind nonattainment. In the final rule issued today, EPA has
continued this approach, establishing emissions budgets for each of the
23 jurisdictions based on required reductions. This determination is an
important step toward assuring that overall air quality standards are
met downwind.
Commenters argue that even if EPA has authority to call on States
to address interstate transport, EPA does not have the authority under
section 110(a)(2)(D) to mandate that upwind States limit NOX
emissions to specified amounts. Rather, according to this view, EPA's
authority is limited to determining that the upwind States' SIPs are
inadequate, and generally requiring the upwind States to submit SIP
revisions to correct the inadequacies. The upwind States would then,
according to this view, submit a SIP revision that implements what the
upwind States determine to be the appropriate amount of NOX
reductions. If EPA believes that those amounts are too small to correct
the inadequacy, EPA could disapprove the SIP revisions.
Proponents of this view rely on the recent decision in Virginia v.
EPA, 108 F.3d 1397, 1406-10 (D.C. Cir. 1997) (Virginia) (citing Train
v. NRDC), in which the court vacated EPA's SIP call on the basis that
through it, EPA gave States no choice but to adopt the California low
emission vehicle (LEV) program. The court found that the language in
section 110(k)(5) that provides EPA with the authority to call on a
State to revise its SIP ``as necessary'' to correct a substantial
inadequacy did not change the longstanding precept that States have the
primary authority for determining the mix of control measures needed to
attain the NAAQS.
The EPA disagrees that the CAA prohibits EPA from establishing an
emissions budget through a SIP call requiring upwind States to prohibit
emissions that contribute significantly to downwind nonattainment.
Section

[[Page 57369]]

110(a)(2)(D) is silent regarding whether States or EPA are to determine
the level of emission reductions necessary to mitigate significant
contribution. The caselaw cited by the commenters only provides that
States are primarily responsible for determining the mix of control
measures--not the aggregate emission reduction levels that are
necessary. Moreover, Train v. NRDC, which underlies the Virginia
court's decision, relied on section 107(a) of the CAA, which specifies
only that each State is primarily responsible for determining a control
strategy to attain the NAAQS ``within such State.''
Section 110(a)(2)(D) does not provide who--EPA or the States--is to
determine the level of emission reductions necessary to address
interstate transport. As quoted above, section 110(a)(2)(D)(i)(I)
requires that SIPs contain ``adequate provisions prohibiting * * *
[sources] from emitting any air pollutant in amounts which will
contribute significantly to nonattainment'' downwind. Nor does this
provision indicate the criteria for determining the ``amounts'' of
pollutants that contribute significantly to nonattainment downwind. Nor
does this provision indicate the process for determining those
``amounts,'' including whether EPA or the States should carry out this
responsibility. 15 Under Chevron U.S.A., Inc. v. Natural
Resources Defense Council, 468 U.S. 1227, 105 S.Ct. 28, 82 L.Ed.2d 921
(1984) (Chevron), because the statute does not answer these specific
issues, EPA has discretion to provide a reasonable interpretation.
---------------------------------------------------------------------------

\15\ The EPA is not contending that the ``as necessary''
language in section 110(k)(5) provides the basis for EPA's authority
to identify the emissions budget for upwind States.
---------------------------------------------------------------------------

Neither the decision in Virginia, nor the body of caselaw upon
which it relies, addresses this issue. Rather, these cases address
solely the division between the States and EPA regarding the initial
identification of control measures necessary to attain the ambient air
quality standards. The issue before the court in Virginia was whether
EPA had offered States a choice in selecting control measures or
instead had mandated the adoption of a specific control measure.
Relying on Train v. NRDC, 421 U.S. 60, 95 S.Ct. 1470, 43 L.Ed.2d 731
1975), the Virginia court found that under title I of the CAA, EPA is
required to establish the overall air quality standards, but the States
are primarily responsible for determining the mix of control measures
needed to meet those standards and the sources that must implement
controls, as well as the applicable level of control for those sources.
The EPA must then review the State's determination only to the extent
of assuring that the overall air quality standards are met. If EPA
determines that the SIP's mix of control measures does not result in
achieving the overall air quality standards, EPA is required to
disapprove the SIP and promulgate a FIP, under which EPA selects the
sources for emissions reductions (Virginia, 108 F.3d at 1407-08, citing
Train v. NRDC, 421 U.S. 60, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975); Union
Electric Co. v. EPA, 427 U.S. 246, 96 S.Ct. 2518, 49 L.Ed.2d 474
(1976)). This line of cases, which focuses on the selection of
controls, does not address whether EPA or the States--in the first
instance--should determine the aggregate amount of reductions necessary
to address interstate transport.
Moreover, NRDC v. Train addresses State plans for purposes of
intrastate emissions planning. In determining that States have the
primary authority for determining the control measures needed to attain
the standard, the court relied on section 107(a) of the CAA, which
provided (and still provides) that:

Each State shall have the primary responsibility for assuring
air quality within the entire geographic area comprising such State
by submitting an implementation plan which will specify the manner
in which national primary and secondary ambient air quality
standards will be achieved and maintained within each air quality
region in such State.''

(421 U.S. at 64, 95 S.Ct at 1474-75 (emphasis added)).

Thus, the underlying support for the court's determination in Train
v. NRDC applies only where a State is determining the mix of controls
within its boundaries, not to the broader task of determining the
aggregate emissions reductions needed in conjunction with emissions
reductions from a number of other States in order to address the impact
of transported pollution on downwind States. 16
---------------------------------------------------------------------------

\16\ The court's decision in Train v. NRDC appears to rely on
the plain language of the statute in holding that a State is
primarily responsible for determining the mix of control measures
necessary to demonstrate attainment within that State's borders. The
court in Virginia appears to adopt this ``plain meaning''
interpretation without addressing that the language in section
107(a) applies only to intrastate issues. This issue is not relevant
in the present case, however, since States are free to decide the
mix of control measures under today's final action.
---------------------------------------------------------------------------

Although the cases to date have not addressed directly whether it
is the province of EPA or the States to determine the aggregate amounts
of emissions to be prohibited (and hence, the amounts that may remain--
i.e., the emissions budgets), EPA believes it reasonable to interpret
the ambiguity in section 110(a)(2)(D)(i)(I) to include this
determination among EPA's responsibilities, particularly in the current
circumstances. Determining the overall level of air pollutants allowed
to be emitted in a State is comparable to determining overall standards
of air quality, which the courts have recognized as EPA's
responsibility, and is distinguishable from determining the particular
mix of controls among individual sources to attain those standards,
which the caselaw identifies as a State responsibility. In Train, a
State was required to assure that its own air quality attained overall
air quality standards and to implement emissions controls to do so.
Under these circumstances, the court clarified that while the
responsibility for determining the overall air quality standards was
EPA's, the responsibility for determining the specific mix of controls
designed to achieve that air quality was the State's. By comparison, as
stated earlier, a transport case, under section 110(a)(2)(D)(i), does
not concern any requirement of the upwind State to assure that its own
air quality attains overall air quality standards. Rather, a transport
case concerns the upwind State's requirement to assure that its
emissions are reduced to a level that will not contribute significantly
to nonattainment downwind. Determining this overall level of reductions
for the upwind State is analogous to determining overall air quality
standards, and, thus, should be the responsibility of EPA.
Once EPA determines the overall level of reductions (by assigning
the aggregate amounts of emissions that must be eliminated to meet the
requirements of section 110(a)(2)(D)), it falls to the State to
determine the appropriate mix of controls to achieve those reductions.
Unlike the regulation at issue in Virginia, today's regulation
establishing emission budgets for the States does not limit the States
to one set of emission controls. Rather, the States will have
significant discretion to choose the appropriate mix of controls to
meet the emissions budget. The EPA has based the aggregate amounts to
be prohibited on the availability of a subset of cost-effective
controls that are among the most cost effective available. As explained
elsewhere in this final rule and the NPR, the State may choose from a
broader menu of cost-effective, reasonable alternatives, including some
(e.g., vehicle inspection and maintenance programs and reformulated

[[Page 57370]]

gasoline) that may even be more advantageous in light of local
concerns.
The task of determining the reductions necessary to meet section
110(a)(2)(D) involves allocating the use of the downwind States' air
basin. This area is a commons in the sense that the contributing State
or States have a greater interest in protecting their local interests
than in protecting an area in a downwind State over which they do not
have jurisdiction and for which they are not politically accountable.
Thus, in general, it is reasonable to assume that EPA may be in a
better position to determine the appropriate goal, or budget, for the
contributing States, while leaving to the contributing States'
discretion to determine the mix of controls to make the necessary
reductions.
The EPA's decision to assign the budgets in the final rule is
particularly reasonable. Today's rulemaking involves almost half the
States in the Nation, and although these States participated in OTAG
beginning more than 3 years ago, they still have not agreed on whether
particular upwind States should be treated as having sources whose
emissions contribute significantly to downwind nonattainment, what the
aggregate level of emissions reductions should be, or what the State-
by-State reductions should be. The sharply divergent positions taken by
the States in their comments on the NPR and SNPR raise doubts that
those disagreements could ever be resolved by consensus. It is most
efficient--indeed necessary--for the Federal government to establish
the overall emissions levels for the various States. This is
particularly true for an interstate pollution problem such as the one
being dealt with in this action where the downwind areas at issue are
affected by pollution coming from several States and the actions taken
by each of the concerned States could have an effect on the appropriate
action to be taken by another State. For example, if EPA did not
specify the emissions to be prohibited from each of the various States
affecting New York City, each of those States might claim it could
reduce its emissions less provided other States did more. Or, a State
close to New York might assert that it could just as effectively deal
with its contribution to New York through additional VOC, rather than
NOX, reductions and submit a section 110(a)(2)(D) SIP based
on a VOC-control rather than NOX-control strategy. These
choices, however, even assuming they were valid, necessarily relate to
the choices that would need to be made by the other upwind States
(e.g., Pennsylvania's choice of a VOC-dominated 110(a)(2)(D) control
strategy to deal with its contribution to New York could affect what
Ohio or New Jersey would need to do to deal with their own
contributions by lowering the overall level of NOX
reductions being obtained throughout the pertinent region). Where many
States are involved and the choices of each individual State could
affect the choices and decisions of the other States the need for
initial federal action is manifest. The EPA's action to determine the
amount of NOX emissions that each of the States must
prohibit in this widespread geographic area is needed to enable the
States to decide expeditiously how to achieve those reductions in an
efficient manner that will not undermine the actions of another State.
By notifying each State in advance of its reduction requirements, EPA
enables each State to develop its plan with full knowledge of the
amount and kind of reductions that must be achieved both by itself and
other affected States. The EPA's action provides the minimum framework
necessary for a multi-state solution to a multi-state problem while
preserving the maximum amount of state flexibility in terms of the
specific control measures to be adopted to achieve the needed emission
reductions. The reasonableness of EPA's approach to the interstate
ozone transport problem was recently recognized by a US Court of
Appeals in the context of upholding EPA's redesignation of the
Cleveland ozone nonattainment area to attainment in light of EPA's
approach to the regional transport problem. In the course of doing so
the court rejected the contention that a separate analysis of the
current adequacy of the Cleveland SIP under section 110(a)(2)(D) was
required as a prerequisite to redesignation. The court, after
describing the November 7, 1997 proposed SIP call and the path EPA was
on to deal with this multi-state regional problem, upheld EPA's
redesignation and stated that ``[w]e find that the EPA's approach to
the regional transport problem is reasonable and not arbitrary or
capricious.'' Southwestern Pennsylvania Growth Alliance v. Browner, 144
F.3d 984, 990 (6th Cir. 1998).
As noted above, commenters have argued that if EPA determines to
issue any SIP call, the SIP call must be more general (i.e., one that
simply requires revised SIPs from upwind areas) and not specify the
amounts of NOX emissions that those areas must prohibit.
However, if EPA issued a general SIP call and an upwind State responded
by submitting an inadequate SIP revision, EPA would disapprove that
SIP, and in the disapproval rulemaking, EPA would be obliged to justify
why the submitted SIP was unacceptable. Without determining an
acceptable level of NOX reductions, the upwind State would
not have guidance as to what is an acceptable submission. The EPA's
determination, as part of the issuance of the SIP call, of the amounts
of NOX emissions the SIPs must prohibit obviously provides
for more efficient and smooth-running administrative processes at both
the State and Federal levels. For the same reasons that EPA believes it
is appropriate for the Agency to establish the emissions budgets under
the authority of section 110(a)(2)(D) and (k)(5), EPA believes that it
is necessary to do so through a rule under the general rulemaking
authority of section 301(a). Setting such a rule is necessary, as a
practical matter, for the Administrator's effective implementation of
section 110(a)(2)(D). See NRDC v. EPA, 22 F.3d 1125, 1146-48. Without
such a rule the States could be expected to submit SIPs reflecting
their conflicting interests, which could result in up to 23 separate
SIP disapproval rulemakings in which EPA would need to define the
requirements that each of those States would need to meet in their
later, corrective SIPs. That in turn would trigger a new round of SIP
rulemakings to judge those corrective SIPs. The delay attendant to that
process would thwart timely attainment of the ozone standards.
2. Authority and Process for Requiring SIP Submissions under the 8-Hour
Ozone NAAQS
a. Authority for Requiring SIP Submissions under the 8-Hour NAAQS.
(1) SIP Submissions Under CAA Section 110(a)(1). In the NPR and SNPR,
EPA proposed to require the 23 upwind jurisdictions to submit SIP
revisions to reduce emissions that exacerbate ozone problems in
downwind States under the 8-hour ozone NAAQS, as well as the 1-hour
NAAQS. The EPA recognized that under the 8-hour NAAQS, areas have not
yet been designated as attainment, nonattainment, or unclassifiable,
and are not yet required to have SIPs in place. Even so, EPA proposed
that upwind areas be required to submit SIPs meeting the requirements
of section 110(a)(2)(D)(i)(I) with respect to the 8-hour NAAQS.
In today's action, EPA is confirming its view that it has authority
under the 8-hour NAAQS to require SIP submittals under section
110(a)(2)(D)(i)(I) to reduce NOX emissions by the prescribed
amounts. Section 110(a)(1) provides, in relevant part--

[[Page 57371]]

Each State shall * * * adopt and submit to the Administrator,
within 3 years (or such shorter period as the Administrator may
prescribe) after the promulgation of a national primary ambient air
quality standard (or any revision thereof) * * * a plan which
provides for implementation, maintenance, and enforcement of such
primary standard in each (area) within such State.

Section 110(a)(2) provides, in relevant part--
Each implementation plan submitted by a State under this Act
shall be adopted by the State after reasonable notice and public
hearing. Each such plan shall [meet certain requirements, including
those found in section 110(a)(2)(D)].

The provisions of section 110(a)(1) and (a)(2) apply by their terms
to all areas, regardless of whether they have been designated as
attainment, nonattainment, or unclassifiable under section 107. The
plain meaning of these provisions, read together, is that SIP revisions
are required under the revised NAAQS within 3 years of the date of
revision, or earlier if EPA so requires, and that those SIP revisions
must meet the requirements of section 110(a)(2), including subparagraph
(D).
That the SIP submission requirements of section 110(a)(1) are
triggered by the promulgation of a new or revised NAAQS is made even
clearer by comparing section 172(b), which applies by its terms only to
areas that have been designated nonattainment under section 107.
Section 172(b) provides, in relevant part--

At the time the Administrator promulgates the designation of any
area as nonattainment with respect to a [NAAQS] under section 107(d)
* * *, the Administrator shall establish a schedule according to
which the State containing such area shall submit a plan or plan
revision * * * meeting the applicable requirements of subsection (c)
of this section and section 110(a)(2) * * * Such schedule shall at a
minimum, include a date or dates, extending no later than 3 years
from the date of the nonattainment designation, for the submission
of a plan or plan revision * * * meeting the applicable requirements
of subsection (c) of this section and section 110(a)(2) * * *

Section 172(b) establishes the schedule for submissions due with
respect to nonattainment areas under sections 172(c) and 110(a)(2). The
section 172(c) requirements apply only with respect to areas designated
nonattainment.17
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\17\ As quoted above, section 172(b) refers to ``applicable
requirements of * * * section 110(a)(2).'' This reference appears to
mean those requirements of section 110(a)(2) that either (i) relate
to all SIP submissions, such as the requirement for reasonable
notice and public hearing in the language at the beginning of
section 110(a)(2); or (ii) relate particularly to SIP submissions
required for nonattainment areas, but that have not yet been
submitted by the State.
---------------------------------------------------------------------------

In the NPR, EPA proposed that section 110(a)(1) mandates SIP
submissions meeting the requirements of section 110(a)(2)(D) and
provides full authority for EPA to establish a submission date within 3
years of the July 18, 1997 8-hour ozone NAAQS promulgation date (62 FR
38856 (NAAQS rulemaking): 62 FR 60325 (NOx SIP call NPR)). The EPA
further asserted in the NPR that EPA has the authority to establish
different submittal schedules for different parts of the section
110(a)(1) SIP revision, and that EPA may require the section
110(a)(2)(D) submittal first so that upwind reductions may be secured
at an earlier stage in the regional SIP planning process (62 FR 60325).
Subsections (ii) and (iii) of this section further elaborates on the
reasoning underlying EPA's decision to retain its proposal to require
SIP submissions under section 110(a)(2)(D) for the 8-hour standard.
(2) Commenters and the Definition of ``Nonattainment.'' Commenters
challenged several aspects of EPA's proposal to evaluate the
contribution of upwind areas under the 8-hour NAAQS. Commenters
asserted that section 110(a)(2)(D)(i) applies to constrain emissions
from upwind sources only with respect to downwind areas that are
designated nonattainment. According to these commenters, until EPA
designates areas nonattainment under the 8-hour NAAQS, EPA has no
authority to require SIP submissions, under section 110(a)(1), from
upwind areas with respect to the 8-hour NAAQS. One commenter pointed
out that the new source review requirements and ozone nonattainment
requirements enacted in the 1990 Amendments apply only to areas
designated nonattainment.
The EPA disagrees with this comment. Section 110(a)(2)(D)(i)(I)
provides that a SIP must prohibit emissions that ``contribute
significantly to nonattainment in * * * any other State.''
18 The provision does not, by its terms, indicate that this
downwind ``nonattainment'' must already have been designated under
section 107 as a nonattainment ``area.'' If the provision were to
employ the term ``area'' in conjunction with the term
``nonattainment,'' then it would have to be interpreted to apply only
to areas designated nonattainment. Other provisions of the CAA do
employ the term ``area'' in conjunction with ``nonattainment,'' and
these provisions clearly refer to areas designated nonattainment (e.g.,
sections 107(d)(1)(A)(i), 181(b)(2)(A), 211(k)(10)(D)). Similarly, the
provisions to which the commenter appeared to refer--section 172(b)/
172(c)(5) (new source review) and section 181(a)(1)/182 (classified
ozone nonattainment area requirements)--by their terms apply to a
nonattainment ``area.'' In contrast, section 110(a)(2)(D) refers to
only ``nonattainment,'' not to a nonattainment ``area.''
---------------------------------------------------------------------------

\18\ Section 110(a)(2)(D)(i)(I) further provides that a SIP must
prohibit emissions that ``interfere with maintenance by * * * any
other State.''
---------------------------------------------------------------------------

By the same token, section 176A(a) authorizes EPA to establish a
transport region whenever ``the Administrator has reason to believe
that the interstate transport of air pollutants from one or more States
contributes significantly to a violation of a [NAAQS] in one or more
other States.'' This reference to ``a violation of a [NAAQS]'' makes
clear that EPA is authorized to form a transport region when an upwind
State contributes significantly to a downwind area with nonattainment
air quality, regardless of whether the downwind area is designated
nonattainment. The EPA believes that section 110(a)(2)(D) should be
read the same way in light of the parallels between section
110(a)(2)(D) and section 176A(a). Both provisions address transport and
both are triggered when emissions from an upwind area ``contribute
significantly'' downwind. It seems reasonable to apply a consistent
approach to the type of affected downwind area, which would mean
interpreting the term ``nonattainment'' in section 110(a)(2)(D) as
synonymous with the phrase ``a violation of a [NAAQS]'' in section
176A(a). The CAA contains other provisions, as well, that refer to the
factual, air quality status of a particular area as opposed to its
designation status. These provisions include, among others, (i)
sections 172(c)(2) and 171(1), the reasonable further progress
requirement, which requires nonattainment SIPs to provide for ``such
annual incremental reductions in emissions * * * as * * * may * * * be
required * * * for the purpose of ensuring attainment of the [NAAQS]''
(emphasis added); and (ii) section 182(c)(2), the attainment
demonstration requirement, which mandates a ``demonstration that the
[SIP] * * * will provide for attainment of the [NAAQS]'' (emphasis
added). The emphasized terms clearly refer to air quality status. In a
series of notices in the Federal Register, EPA relied on these
references to air quality status in determining that areas seeking to
redesignate from nonattainment to attainment did not need to complete
ROP SIPs or attainment demonstrations--even though those requirements
generally applied to areas

[[Page 57372]]

designated nonattainment--as long as the air quality for those
redesignating areas was, in fact, in attainment. See ``State
Implementation Plans; General Preamble for the Implementation of Title
I of the Clean Air Act Amendments of 1990; Proposed Rule,'' 57 FR
13498, 13564 (April 16, 1992); ``Determination of Attainment of Ozone
Standard for Salt Lake and Davis Counties, Utah, and Determination
Regarding Applicability of Certain Reasonable Further Progress and
Attainment Demonstration Requirements: Direct Final Rule,'' 60 FR
30189, 30190 (June 8, 1995); and ``Determination of Attainment of Ozone
Standard for Salt Lake and Davis Counties, Utah, and Determination
Regarding Applicability of Certain Reasonable Further Progress and
Attainment Demonstration Requirements: Final Rule,'' 60 FR 36723, 36724
(July 18, 1995). The EPA's interpretation was upheld by the Court of
Appeals for the 10th Circuit, in Sierra Club v. EPA, 99 F.3d 1551, 1557
(10th Cir. 1996).
Accordingly, EPA believes it clear that the reference in section
110(a)(2)(D)(i)(I) to ``nonattainment'' refers to air quality, not
designation status. The EPA believes this matter is clearly resolved by
reference to the terms of the provision itself, so that under the first
step of the Chevron analysis, no further inquiry is needed. If,
however, it were concluded that the provision is ambiguous on this
point, then EPA believes that, under the second step in the Chevron
analysis, EPA should be given deference for any reasonable
interpretation. Interpreting ``nonattainment'' to refer to air quality
is reasonable for the reasons described above.19
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\19\ Similarly, EPA believes that the term ``maintenance'' in
another clause of section 110(a)(2)(D)(i)(I) ref

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A98-26773. Public record. Not legal advice.