Approval and Promulgation of Implementation Plans; Texas; Proposed Conditional Approval or Proposed Disapproval of the Attainment Demonstration State Implementation Plan for the Houston/Galveston Ozone Nonattainment Area

Federal RegisterDec 16, 1999

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX101-2-7421; FRL-6503-4]

Approval and Promulgation of Implementation Plans; Texas;

Proposed Conditional Approval or Proposed Disapproval of the Attainment

Demonstration State Implementation Plan for the Houston/Galveston Ozone

Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to conditionally approve the State

Implementation Plan (SIP) revision for the Houston/Galveston

nonattainment area submitted by the State of Texas on May 19, 1998.

This submission was supplemented by a modeled control strategy and a

transportation conformity budget on November 15, 1999. The EPA is also

proposing, in the alternative, to disapprove the Attainment

Demonstration SIP submittal for the HGA area.

DATES: Comments must be received on or before February 14, 2000.

ADDRESSES: Written comments on this action should be addressed to Mr.

Thomas Diggs, Chief, Air Planning Section (6PD-L), at the EPA Region 6

Office listed below.

Copies of the documents relevant to this action, including the

technical support document, are available for public inspection during

normal business hours at the following locations. Interested persons

wanting to examine these documents should make an appointment with the

appropriate office at least two working days in advance.

Environmental Protection Agency, Region 6, Air Planning Section (6PD-

L), Multimedia Planning and Permitting Division, 1445 Ross Avenue,

Dallas, Texas 75202-2733, telephone: (214) 665-7214.

Texas Natural Resource Conservation Commission, Office of Air Quality,

12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Guy R. Donaldson, Air Planning

Section (6PD-L), Multimedia Planning and Permitting Division,

Environmental Protection Agency, Region 6, 1445 Ross Avenue, Dallas,

Texas 75202-2733, telephone: (214) 665-7242.

SUPPLEMENTARY INFORMATION: This section provides background information

on attainment demonstration SIPs for the 1-hour ozone national ambient

air quality standard (NAAQS) and an analysis of the 1-hour ozone

attainment demonstration SIP submittal for the Houston/Galveston area.

Table of Contents

I. Background Information

II. EPA's Review and Technical Information

III. Administrative Requirements

I. Background Information

A. What Is the Basis for the State's Attainment Demonstration SIP?

1. Clean Air Act (CAA) Requirements

The CAA requires EPA to establish national ambient air quality

standards (NAAQS or standards) for certain widespread pollutants that

cause or contribute to air pollution that is reasonably anticipated to

endanger public health or welfare. CAA Secs. 108 and 109. In 1979, EPA

promulgated the 1-hour 0.12 parts per million (ppm) ground-level ozone

standard. 44 FR 8202 (Feb. 8, 1979). Ground-level ozone is not emitted

directly by sources. Rather, emissions of nitrogen oxides

(NOX) and volatile organic compounds (VOCs) react in the

presence of sunlight to form ground-level ozone. NOX and VOC

are referred to as precursors of ozone.

[[Page 70549]]

An area exceeds the 1-hour ozone standard each time an ambient air

quality monitor records a 1-hour average ozone concentration above

0.124 ppm. An area is violating the standard if, over a consecutive

three-year period, more than three exceedances occur, or would have

been expected to occur, at any one monitor. The CAA, as amended in

1990, required EPA to designate as nonattainment any area that was

violating the 1-hour ozone standard, generally based on air quality

monitoring data from the three-year period from 1987-1989. CAA

Sec. 107(d)(4); 56 FR 56694 (Nov. 6, 1991). The CAA further classified

these areas, based on the area's design value, as marginal, moderate,

serious, severe or extreme. CAA Sec. 181(a). Marginal areas were

suffering the least significant air pollution problems while the areas

classified as severe and extreme had the most significant air pollution

problems.

The control requirements and dates by which attainment needs to be

achieved vary with the area's classification. Marginal areas are

subject to the fewest mandated control requirements and have the

earliest attainment date. Severe and extreme areas are subject to more

stringent planning requirements but are provided more time to attain

the standard. Under section 181(a)(1) and (2),serious areas are

required to attain the 1-hour standard by November 15, 1999, and severe

areas are required to attain by November 15, 2005 (Severe-15) or

November 15, 2007 (Severe-17). The Houston/Galveston area is classified

as severe-17 and its attainment date is November 15, 2007.

Under section 182(c)(2) and (d) of the CAA, serious and severe

areas were required to submit by November 15, 1994, demonstrations of

how they would attain the 1-hour standard and how they would achieve

reductions in VOC emissions of 9 percent for each three-year period

until the attainment year (rate-of-progress or ROP). (In some cases,

NOX emission reductions can be substituted for the required

VOC emission reductions.) Today, EPA is proposing action on the

attainment demonstration SIP submitted by Texas for the Houston/

Galveston area, including the State's commitment to submit by December

2000 the adopted measures necessary for attainment by 2007. The EPA is

also proposing action on the State's commitment to submit by December

2000 ROP target calculations and the adopted measures to achieve ROP

until the attainment year. (Note, EPA will be taking action on the

emission reduction plan for the three year period from 1996-1999 in a

separate action.) In addition, elsewhere in this Federal Register, EPA

is today proposing to take action on nine other serious or severe 1-

hour ozone attainment demonstration and in some cases ROP SIPs. The

additional nine areas are Greater Connecticut, Springfield (Western

Massachusetts), New-York-North New Jersey-Long Island, Baltimore,

Philadelphia-Wilmington-Trenton, Metropolitan Washington, D.C.,

Atlanta, Milwaukee-Racine, and Chicago-Gary-Lake County.

In general, an attainment demonstration SIP includes a modeling

analysis component showing how the area will achieve the standard by

its attainment date and the control measures necessary to achieve those

reductions. Another component of the attainment demonstration SIP is a

motor vehicle emissions budget for transportation conformity purposes.

Transportation conformity is a process for ensuring that States

consider the effects of emissions associated with new or improved

federally-funded roadways on attainment of the standard. As described

in section 176(c)(2)(A), attainment demonstrations necessarily include

the estimates of motor vehicle emissions that are consistent with

attainment, which then act as a budget or ceiling for the purposes of

determining whether transportation plans and projects conform to the

attainment SIP.

2. History and Time Frame for the State's Attainment Demonstration SIP

Notwithstanding significant efforts by the States, in 1995 EPA

recognized that many States in the eastern half of the United States

could not meet the November 1994, time frame for submitting an

attainment demonstration SIP because emissions of NOX and

VOCs in upwind States (and the ozone formed by these emissions)

affected these nonattainment areas and the full impact of this effect

had not yet been determined. This phenomenon is called ozone transport.

On March 2, 1995, Mary D. Nichols, EPA's then Assistant

Administrator for Air and Radiation, issued a memorandum to EPA's

Regional Administrators acknowledging the efforts made by States but

noting the remaining difficulties in making attainment demonstration

SIP submittals.1 Recognizing the problems created by ozone

transport, the March 2, 1995 memorandum called for a collaborative

process among the States in the eastern half of the country to evaluate

and address transport of ozone and its precursors. This memorandum led

to the formation of the Ozone Transport Assessment Group (OTAG)

2 and provided for the States to submit the attainment

demonstration SIPs based on the expected time frames for OTAG to

complete its evaluation of ozone transport.

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\1\ Memorandum, ``Ozone Attainment Demonstrations,'' issued

March 2, 1995. A copy of the memorandum may be found on EPA's web

site at http://www.epa.gov/ttn/oarpg/t1pgm.html

\2\ Letter from Mary A. Gade, Director, State of Illinois

Environmental Protection Agency to Environmental Council of States

Members, dated April 13, 1995.

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In June 1997, OTAG concluded and provided EPA with recommendations

regarding ozone transport. The OTAG generally concluded that transport

of ozone and the precursor NOX is significant and should be

reduced regionally to enable States in the eastern half of the country

to attain the ozone NAAQS.

In recognition of the length of the OTAG process, in a December 29,

1997, memorandum, Richard Wilson, EPA's then Acting Assistant

Administrator for Air and Radiation, provided until April 1998 for

States to submit the following elements of their attainment

demonstration SIPs for serious and severe nonattainment areas: (1)

Evidence that the applicable control measures in subpart 2 of part D of

title I of the CAA were adopted and implemented or were on an

expeditious course to being adopted and implemented; (2) a list of

measures needed to meet the remaining ROP emissions reduction

requirement and to reach attainment; (3) for severe areas only, a

commitment to adopt and submit target calculations for post-1999 ROP

and the control measures necessary for attainment and ROP plans through

the attainment year by the end of 2000 3; (4) a commitment

to implement the SIP control programs in a timely manner and to meet

ROP emissions reductions and attainment; and (5) evidence of a

[[Page 70550]]

public hearing on the State submittal.4 5 This

submission is sometimes referred to as the Phase 2 submission. Motor

vehicle emissions budgets can be established based on a commitment to

adopt the measures needed for attainment and identification of the

measures needed. Thus, State submissions due in April 1998 under the

Wilson policy should have included a motor vehicle emissions budget.

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\3\ [Severe areas only] In general, a commitment for severe

areas to adopt by December 2000 the control measures necessary for

attainment and ROP plans through the attainment year applies to any

additional measures that were not otherwise required to be submitted

earlier. (For example, this memorandum was not intended to allow

States to delay submission of measures required under the CAA, such

as inspection and maintenance (I/M) programs or reasonable available

control technology (RACT) regulations, required at an earlier time.)

Thus, this commitment applies to any control measures or emission

reductions on which the State relied for purposes of the modeled

attainment demonstration or for ROP. To the extent Texas has relied

on a commitment to submit these measures by December 2000 for the

Houston nonattainment area, EPA is proposing a conditional approval

of the area's attainment demonstration. Some severe areas submitted

the actual adopted control measures and are not relying on a

commitment.

\4\ Memorandum, ``Guidance for Implementing the 1-Hour Ozone and

Pre-Existing PM 10 NAAQS,'' issued December 29, 1997. A copy of this

memorandum may be found on EPA's web site at http://www.epa.gov/ttn/

oarpg/t1pgm.html.

\5\ In general, a commitment for severe areas to adopt by

December 2000 the control measures necessary for attainment and ROP

plans through the attainment year applies to any additional measures

necessary for attainment that were not otherwise required to be

submitted earlier. (For example, this memorandum was not intended to

allow States to delay submission of measures required under the CAA,

such as inspection and maintenance (I/M) programs or reasonable

available control technology (RACT) regulations, required at an

earlier time.) Thus, this commitment applies to any control measures

or emission reductions on which the State relied for purposes of the

modeled attainment demonstration. To the extent Houston has relied

on a commitment to submit these measures by December 2000, EPA is

proposing a conditional approval of the area's attainment

demonstration. Some severe areas submitted the actual adopted

control measures and are not relying on a commitment.

The EPA recognizes that motor vehicle emissions budgets can be

established from the items listed in the Wilson memorandum.

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Building upon the OTAG recommendations and technical analyses, in

November 1997, EPA proposed action addressing the ozone transport

problem. In its proposal, the EPA found that current SIPs in 22 States

and the District of Columbia (23 jurisdictions) were insufficient to

provide for attainment and maintenance of the 1-hour standard because

they did not regulate NOX emissions that significantly

contribute to ozone transport. 62 FR 60318 (Nov. 7, 1997). The EPA

finalized that rule in September 1998, calling on the 23 jurisdictions

to revise their SIPs to require NOX emissions reductions

within the State to a level consistent with a NOX emissions

budget identified in the final rule. 63 FR 57356 (Oct. 27, 1998). This

final rule is commonly referred to as the NOX SIP Call.

Texas participated in the OTAG but was not included in the SIP call.

3. Time Frame for Taking Action on Attainment Demonstration SIPs for 10

Serious and Severe Areas

The States generally submitted the SIPs between April and October

of 1998; some States are still submitting additional revisions as

described below. Under the CAA, EPA is required to approve or

disapprove a State's submission no later than 18 months following

submission. (The statute provides up to six months for a completeness

determination and an additional 12 months for approval or disapproval.)

The EPA believes that it is important to keep the process moving

forward in evaluating these plans and, as appropriate, approving them.

Thus, in today's Federal Register, EPA is proposing to take action on

the 10 serious and severe 1-hour ozone attainment demonstration SIPs

(located in 13 States and the District of Columbia) and intends to take

final action on these submissions over the next 6-12 months. The reader

is referred to individual dates in this document for specific

information on actions leading to EPA's final rulemaking on these

plans.

4. Options for Action on a State's Attainment Demonstration SIP

Depending on the circumstances unique to each of the 10 area SIP

submissions on which EPA is proposing action today, EPA is proposing

one or more of these types of approval or disapproval in the

alternative. In addition, these proposals may identify additional

action that will be necessary from the State.

The CAA provides for EPA to approve, disapprove, partially approve

or conditionally approve a State's plan submission. CAA section 110(k).

The EPA must fully approve the submission if it meets the attainment

demonstration requirement of the CAA. If the submission is deficient in

some way, EPA may disapprove the submission. In the alternative, if

portions of the submission are approvable, EPA may partially approve

and partially disapprove, or may conditionally approve based on a

commitment to correct the deficiency by a date certain, which can be no

later than one year from the date of EPA's final conditional approval.

The EPA may partially approve a submission if separable parts of

the submission, standing alone, are consistent with the CAA. For

example, if a State submits a modeled attainment demonstration,

including control measures, but the modeling does not demonstrate

attainment, EPA could approve the control measures and disapprove the

modeling for failing to demonstrate attainment.

The EPA may issue a conditional approval based on a State's

commitment to expeditiously correct a deficiency by a date certain that

can be no later than one year following EPA's conditional approval.

Such commitments do not need to be independently enforceable because,

if the State does not fulfill its commitment, the conditional approval

is converted to a disapproval. For example, if a State commits to

submit additional control measures and fails to submit them or EPA

determines the State's submission of the control measures is

incomplete, the EPA will notify the State by letter that the

conditional approval has been converted to a disapproval. If the State

submits control measures that EPA determines are complete or that are

deemed complete, EPA will determine through rulemaking whether the

State's attainment demonstration is fully approvable or whether the

conditional approval of the attainment demonstration should be

converted to a disapproval.

Finally, EPA has recognized that in some limited circumstances, it

may be appropriate to issue a full approval for a submission that

consists, in part, of an enforceable commitment. Unlike the commitment

for conditional approval, such an enforceable commitment can be

enforced in court by EPA or citizens. In addition, this type of

commitment may extend beyond one year following EPA's approval action.

Thus, EPA may accept such an enforceable commitment where it is

infeasible for the State to accomplish the necessary action in the

short term.

B. What Are the Components of a Modeled Attainment Demonstration?

The EPA provides that States may rely on a modeled attainment

demonstration supplemented with additional evidence to demonstrate

attainment. 6 In order to have a complete modeling

demonstration submission, States should have submitted the required

modeling analysis and identified any additional evidence that EPA

should consider in evaluating whether the area will attain the

standard.

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\6\ The EPA issued guidance on the air quality modeling that is

used to demonstrate attainment with the 1-hour ozone NAAQS. See U.S.

EPA, Guideline for Regulatory Application of the Urban Airshed

Model, EPA-450/4-91-013, (July 1991). A copy may be found on EPA's

web site at http://www.epa.gov/ttn/scram/ (file name: ``UAMREG'').

See also U.S. EPA, Guidance on Use of Modeled Results to Demonstrate

Attainment of the Ozone NAAQS, EPA-454/B-95-007, (June 1996). A copy

may be found on EPA's web site at http://www.epa.gov/ttn/scram/

(file name: ``O3TEST'').

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1. Modeling Requirements

For purposes of demonstrating attainment, the CAA requires serious

and severe areas to use photochemical grid modeling or an analytical

method EPA determines to be as effective. The photochemical grid model

is set up

[[Page 70551]]

using meteorological conditions conducive to the formation of ozone.

Emissions for a base year are used to evaluate the model's ability to

reproduce actual monitored air quality values and to predict air

quality changes in the attainment year due to the emission changes

which include growth up to and controls implemented by the attainment

year. A modeling domain is chosen that encompasses the nonattainment

area. Attainment is demonstrated when all predicted concentrations

inside the modeling domain are at or below the NAAQS or at an

acceptable upper limit above the NAAQS permitted under certain

conditions by EPA's guidance. When the predicted concentrations are

above the NAAQS, an optional weight of evidence determination which

incorporates, but is not limited to, other analyses such as air quality

and emissions trends may be used to address uncertainty inherent in the

application of photochemical grid models.

The EPA guidance identifies the features of a modeling analysis

that are essential to obtain credible results. First, the State must

develop and implement a modeling protocol. The modeling protocol

describes the methods and procedures to be used in conducting the

modeling analyses and provides for policy oversight and technical

review by individuals responsible for developing or assessing the

attainment demonstration (State and local agencies, EPA Regional

offices, the regulated community, and public interest groups). Second,

for purposes of developing the information to put into the model, the

State must select air pollution days, i.e., days in the past with bad

air quality, that are representative of the ozone pollution problem for

the nonattainment area. Third, the State needs to identify the

appropriate dimensions of the area to be modeled, i.e., the domain

size. The domain should be larger than the designated nonattainment

area to reduce uncertainty in the boundary conditions and should

include large upwind sources just outside the nonattainment area. In

general, the domain is considered the local area where control measures

are most beneficial to bring the area into attainment. Fourth, the

State needs to determine the grid resolution. The horizontal and

vertical resolutions in the model affect the dispersion and transport

of emission plumes. Artificially large grid cells (too few vertical

layers and horizontal grids) may dilute concentrations and may not

properly consider impacts of complex terrain, complex meteorology, and

land/water interfaces. Fifth, the State needs to generate

meteorological data that describe atmospheric conditions and emissions

inputs. Finally, the State needs to verify that the model is properly

simulating the chemistry and atmospheric conditions through diagnostic

analyses and model performance tests. Once these steps are

satisfactorily completed, the model is ready to be used to generate air

quality estimates to support an attainment demonstration.

The modeled attainment test compares model predicted 1-hour daily

maximum concentrations in all grid cells for the attainment year to the

level of the NAAQS. A predicted concentration above 0.124 ppm ozone

indicates that the area is expected to exceed the standard in the

attainment year and a prediction at or below 0.124 ppm indicates that

the area is expected to attain the standard. This type of test is often

referred to as an exceedance test. The EPA's guidance recommends that

States use either of two modeled attainment or exceedance tests for the

1-hour ozone NAAQS, a deterministic test or a statistical test.

The deterministic test requires the State to compare predicted 1-

hour daily maximum ozone concentrations for each modeled day

7 to the attainment level of 0.124 ppm. If none of the

predictions exceed 0.124 ppm, the test is passed.

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\7\ The initial, ``ramp-up'' days for each episode are excluded

from this determination.

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The statistical test takes into account the fact that the form of

the 1-hour ozone standard allows exceedances. If, over a three-year

period, the area has an average of one or fewer exceedances per year,

the area is not violating the standard. Thus, if the State models a

very extreme day, the statistical test provides that a prediction above

0.124 ppm up to a certain upper limit may be consistent with attainment

of the standard. (The form of the 1-hour standard allows for up to

three readings above the standard over a three-year period before an

area is considered to be in violation.)

The acceptable upper limit above 0.124 ppm is determined by

examining the size of exceedances at monitoring sites which meet the 1-

hour NAAQS. For example, a monitoring site for which the four highest

1-hour average concentrations over a three-year period are 0.136 ppm,

0.130 ppm, 0.128 ppm and 0.122 ppm is attaining the standard. To

identify an acceptable upper limit, the statistical likelihood of

observing ozone air quality exceedances of the standard of various

concentrations is equated to the severity of the modeled day. The upper

limit generally represents the maximum ozone concentration observed at

a location on a single day and it would be the only reading above the

standard that would be expected to occur no more than an average of

once a year over a three-year period. Therefore, if the maximum ozone

concentration predicted by the model is below the acceptable upper

limit, in this case 0.136 ppm, then EPA might conclude that the modeled

attainment test is passed. Generally, exceedances well above 0.124 ppm

are very unusual at monitoring sites meeting the NAAQS. Thus, these

upper limits are rarely substantially higher than the attainment level

of 0.124 ppm.

2. Additional Analyses Where Modeling Fails to Show Attainment

When the modeling does not conclusively demonstrate attainment,

additional analyses may be presented to help determine whether the area

will attain the standard. As with other predictive tools, there are

inherent uncertainties associated with modeling and its results. For

example, there are uncertainties in some of the modeling inputs, such

as the meteorological and emissions data bases for individual days and

in the methodology used to assess the severity of an exceedance at

individual sites. The EPA's guidance recognizes these limitations, and

provides a means for considering other evidence to help assess whether

attainment of the NAAQS is likely. The process by which this is done is

called a weight of evidence (WOE) determination.

Under a WOE determination, the State can rely on and EPA will

consider factors such as other modeled attainment tests, e.g., a

rollback analysis; other modeled outputs, e.g., changes in the

predicted frequency and pervasiveness of exceedances and predicted

changes in the design value; actual observed air quality trends;

estimated emissions trends; analyses of air quality monitored data; the

responsiveness of the model predictions to further controls; and,

whether there are additional control measures that are or will be

approved into the SIP but were not included in the modeling analysis.

This list is not an exclusive list of factors that may be considered

and these factors could vary from case to case. The EPA's guidance

contains no limit on how close a modeled attainment test must be to

passing to conclude that other evidence besides an attainment test is

sufficiently compelling to suggest attainment. However, the further a

modeled attainment test is from being passed, the more compelling the

WOE needs to be.

[[Page 70552]]

The EPA's 1996 modeling guidance also recognizes a need to perform

a mid-course review as a means for addressing uncertainty in the

modeling results. Because of the uncertainty in long term projections,

EPA believes a viable attainment demonstration that relies on WOE needs

to contain provisions for periodic review of monitoring, emissions, and

modeling data to assess the extent to which refinements to emission

control measures are needed. The mid-course review is discussed in

Section C.6.

C. What Is the Frame Work for Proposing Action on the Attainment

Demonstration SIPs?

In addition to the modeling analysis and WOE support demonstrating

attainment, the EPA has identified the following key elements which

must be present in order for EPA to approve or conditionally approve

the 1-hour attainment demonstration SIPs. These elements are listed

below and then described in detail.

CAA measures and measures relied on in the modeled

attainment demonstration SIP. This includes adopted and submitted rules

for all previously required CAA mandated measures for the specific area

classification. This also includes measures that may not be required

for the area classification but that the State relied on in the SIP

submission for attainment and ROP plans on which EPA is proposing to

take action on today.

NOX reductions affecting boundary conditions.

A motor vehicle emissions budget which can be determined

by EPA to be adequate for conformity purposes.

Tier 2/Sulfur program benefits where needed to demonstrate

attainment. Inclusion of reductions expected from EPA's Tier 2 tailpipe

and low sulfur-in-fuel standards in the attainment demonstration and

the motor vehicle emissions budget.

In certain areas, additional measures to further reduce

emissions to support the attainment test. Additional measures may be

measures adopted regionally such as in the Ozone Transport Region, or

locally (intrastate) in individual States.

Mid-course review. An enforceable commitment to conduct a

mid-course review and evaluation based on air quality and emission

trends. The mid-course review would show whether the adopted control

measures are sufficient to reach attainment by the area's attainment

date, or that additional control measures are necessary.

1. CAA Measures and Measures Relied on in the Modeled Attainment

Demonstration SIP

The States should have adopted the control measures already

required under the CAA for the area classification. Since these 10

serious and severe areas need to achieve substantial reductions from

their 1990 emissions levels in order to attain, EPA anticipates that

these areas need all of the measures required under the CAA to attain

the 1-hour ozone NAAQS.

In addition, the States may have included control measures in its

attainment strategy that are in addition to measures required in the

CAA. (For serious areas, these should have already been identified and

adopted, whereas severe areas have until December 2000 to submit

measures necessary to achieve ROP through the attainment year and to

attain.) For purposes of fully approving the State's SIP, the State

will need to adopt and submit all VOC and NOX controls

within the local modeling domain that were relied on for purposes of

the modeled attainment demonstration.

The following tables present a summary of the CAA requirements that

need to be met for each serious and severe nonattainment area for the

1-hour ozone NAAQS. These requirements are specified in section 182 of

the CAA. Information on more measures that States may have adopted or

relied on in their current SIP submissions is not shown in the tables.

The EPA will need to take final action approving all measures relied on

for attainment, including the required ROP control measures and target

calculations, before EPA can issue a final full approval of the

attainment demonstration as meeting CAA section 182(c)(2) (for serious

areas) or (d) (for severe areas).

CAA Requirements for Serious Areas

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--NSR for VOC and NOX**, including an offset ratio of 1.2:1 and a major

VOC and NOX source cutoff of 50 tons per year (tpy)

--Reasonable Available Control Technology (RACT) for VOC and NOX**

--Enhanced Inspection and Maintenance (I/M) program

--15% volatile organic compound (VOC) plans

--Emissions inventory

--Emission statements

--Attainment demonstration

--9 percent ROP plan through 1999

--Clean fuels program or substitute

--Enhanced monitoring--Photochemical Assessment Monitoring Stations

(PAMS)

--Stage II vapor recovery

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**Areas that are currently attaining the standard or can demonstrate

that NOX controls are not needed can request a NOX waiver under

section 182(f). Houston/Galveston Area is not such an area.

CAA Requirements for Severe Areas

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--All of the nonattainment area requirements for serious areas

--NSR, including an offset ratio of 1.3:1 and a major VOC and NOX source

cutoff of 25 tons per year (tpy)

--Reformulated gasoline

--9% ROP plan through attainment year

--Measures to offset VMT growth

--Requirement for fees for major sources for failure to attain

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2. NOX Reductions Consistent With the Modeling Demonstration

The EPA completed final rulemaking on the NOX SIP call

on October 27, 1998, which required States to address transport of

NOX and ozone to other States. To address transport, the

NOX SIP call established emissions budgets for

NOX that 23 jurisdictions were required to show they would

meet through enforceable SIP measures adopted and submitted by

September 30, 1999. The NOX SIP call is intended to reduce

emissions in upwind States that significantly contribute to

nonattainment problems. The EPA did not identify specific sources that

the States must regulate nor did EPA limit the States' choices

regarding where to achieve the emission reductions. Subsequently, a

three-judge panel of the Court of Appeals for the District of Columbia

Circuit issued an order staying the portion of the NOX SIP

call rule requiring States to submit rules by September 30, 1999.

The NOX SIP call rule establishes budgets for the States

in which nine of the nonattainment areas for which EPA is proposing

action today are located. The nine areas are: Greater Connecticut,

Springfield, MA, New York-North New Jersey-Long Island (NY-NJ-CT),

Baltimore, MD, Philadelphia-Wilmington-Trenton (PA-NJ-DE-MD),

Metropolitan Washington, D.C. (DC-MD-VA), Atlanta, GA, Milwaukee-Racine

WI, and Chicago-Gary-Lake County (IL-IN).

Emission reductions that will be achieved through EPA's

NOX SIP call will reduce the levels of ozone and ozone

precursors entering nonattainment areas at their boundaries. For

purposes of developing attainment

[[Page 70553]]

demonstrations, States define local modeling domains that include both

the nonattainment area and nearby surrounding areas. The ozone levels

at the boundary of the local modeling domain are reflected in modeled

attainment demonstrations and are referred to as boundary conditions.

With the exception of Houston, the 1-hour attainment demonstrations on

which EPA is proposing action have relied, in part, on the

NOX SIP Call reductions for purposes of determining the

boundary conditions of the modeling domain. Emission reductions assumed

in the attainment demonstrations are modeled to occur both within the

State and in upwind States; thus, intrastate reductions as well as

reductions in other States impact the boundary conditions. Although the

court has indefinitely stayed the SIP submission deadline, the

NOX SIP Call rule remains in effect. Therefore, EPA believes

it is appropriate to allow States to continue to assume the reductions

from the NOX SIP call in areas outside the local 1-hour

modeling domains. If States assume control levels and emission

reductions other than those of the NOX SIP call within their

State but outside of the modeling domain, States must also adopt

control measures to achieve those reductions in order to have an

approvable plan.

Accordingly, States in which the nonattainment areas are located

will not be required to adopt measures outside the modeling domain to

achieve the NOX SIP call budgets prior to the time that all

States are required to comply with the NOX SIP call. If the

reductions from the NOX SIP call do not occur as planned,

States will need to revise their SIPs to add additional local measures

or obtain interstate reductions, or both, in order to provide

sufficient reductions needed for attainment.

As provided in section 1 above, any controls assumed by the State

inside the local modeling domain 8 for purposes of the

modeled attainment demonstration must be adopted and submitted as part

of the State's 1-hour attainment demonstration SIP. It is only for

reductions occurring outside the local modeling domain that States may

assume implementation of NOX SIP call measures and the

resulting boundary conditions.

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\8\ For the purposes of this document, ``local modeling domain''

is typically an urban scale domain with horizontal dimensions less

than about 300 km on a side, horizontal grid resolution less than or

equal to 5 x 5 km or finer. The domain is large enough to ensure

that emissions occurring at 8 am in the domain's center are still

within the domain at 8 pm the same day. If recirculation of the

nonattainment area's previous day's emissions is believed to

contribute to an observed problem, the domain is large enough to

characterize this.

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3. Motor Vehicle Emissions Budget

The EPA believes that attainment demonstration SIPs must

necessarily estimate the motor vehicle emissions that will be produced

in the attainment year and demonstrate that this emissions level, when

considered with emissions from all other sources, is consistent with

attainment. The estimate of motor vehicle emissions is used to

determine the conformity of transportation plans and programs to the

SIP, as described by CAA section 176(c)(2)(A). For transportation

conformity purposes, the estimate of motor vehicle emissions is known

as the motor vehicle emissions budget. The EPA believes that

appropriately identified motor vehicle emissions budgets are a

necessary part of an attainment demonstration SIP. A SIP cannot

effectively demonstrate attainment unless it identifies the level of

motor vehicle emissions that can be produced while still demonstrating

attainment.

The EPA has determined that except for the Western MA (Springfield)

attainment demonstration SIP, the motor vehicle emission budgets for

all areas in today's proposals are inadequate or missing from the

attainment demonstration. Therefore, EPA is proposing to disapprove the

attainment demonstration SIPs for those nine areas if the States do not

submit motor vehicle emissions budgets that EPA can find adequate by

May 31, 2000.9 In order for EPA to complete the adequacy

process by the end of May, States should submit a budget no later than

December 31, 1999.10 If an area does not have a motor

vehicle emissions budget that EPA can determine adequate for conformity

purposes by May 31, 2000, EPA plans to take final action at that time

disapproving in full or in part the area's attainment demonstration.

The emissions budget should reflect all the motor vehicle control

measures contained in the attainment demonstration, i.e., measures

already adopted for the nonattainment area as well as those yet to be

adopted.

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\9\ For severe areas, EPA will determine the adequacy of the

emissions budgets associated with the post-1999 ROP plans once the

States submit the target calculations, which are due no later than

December 2000.

\10\ A final budget is preferred; but, if the State public

process is not yet complete, then a draft budget for public hearing

may be submitted. The adequacy process generally takes at least 90

days. Therefore, in order for EPA to complete the adequacy process

no later than the end of May, EPA must have by February 15, 2000,

the final budget or a draft that is substantially similar to what

the final budget will be. The State must submit the final budget by

April 15, 2000.

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4. Tier 2/Sulfur Program Benefits

On May 13, 1999, EPA published a Notice of Proposed Rulemaking

proposing a major, comprehensive program designed to significantly

reduce emissions from passenger cars and light trucks (including sport-

utility vehicles, minivans, and pickup trucks) and to reduce sulfur in

gasoline. Under the proposed program, automakers would produce vehicles

designed to have very low emissions when operated on low-sulfur

gasoline, and oil refiners would provide that cleaner gasoline

nationwide. The EPA subsequently issued two supplemental notices. 64 FR

35112 (June 30, 1999); 64 FR 57827 (October 27, 1999).

These notices provide 1-hour ozone modeling and monitoring

information that support EPA's belief that the Tier 2/Sulfur program is

necessary to help areas attain the 1-hour NAAQS. Under the proposed

rule, NOX and VOC emission reductions (as well as other

reductions not directly relevant for attainment of the 1-hour ozone

standard) would occur beginning in the 2004 ozone season although

incentives for early compliance by vehicle manufacturers and refiners

will likely result in some reductions prior to 2004. Nationwide, the

Tier 2/Sulfur program is projected to result in reductions of

approximately 800,000 tons of NOX per year by 2007 and

1,200,000 tons by 2010.

In the October 27, 1999, supplemental notice, EPA reported in Table

1 that EPA's regional ozone modeling indicated that 17 metropolitan

areas for which the 1-hour standard applies need the Tier 2/Sulfur

program reductions to help attain the 1-hour ozone standard. The

Houston area is included on that list.

The EPA issued a memorandum that provides estimates of the

emissions reductions associated with the Tier 2/Sulfur program

proposal.11 The memorandum provides the NOX and

VOC tonnage benefits for the Tier 2/Sulfur program in 2007 on a county-

by-county basis for all counties within the 10 serious and severe

nonattainment areas for which EPA is proposing to take action today and

the 2005 tonnage

[[Page 70554]]

benefits for the Tier 2/Sulfur program for each county for three areas.

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\11\ Memorandum, ``1-Hour Ozone Attainment Demonstrations and

Tier 2/Sulfur Rulemaking'' from Lydia Wegman, Office of Air Quality

Planning and Standards and Merrylin Zaw-Mon, Office of Mobile

Sources to the Air Division Directors, Regions I-VI, issued November

8, 1999. A copy of this memorandum may be found on EPA's web site at

http://www.epa.gov/oms/transp/traqconf.htm.

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The EPA also issued a memorandum which explains the connection

between the Tier 2/Sulfur program, motor vehicle emissions budgets for

conformity determinations, and timing for SIP revisions to account for

the Tier 2/Sulfur program benefit.12 This memorandum

explains that conformity analyses in serious and severe ozone

nonattainment areas can begin including Tier 2/Sulfur program benefits

once EPA's Tier 2 rule is promulgated, provided that the attainment

demonstration SIPs and associated motor vehicle emissions budgets

include the Tier 2 benefits. For areas that require all or some portion

of the Tier 2 benefits to demonstrate attainment but have not yet

included the benefits in the motor vehicle emissions budgets, EPA's

adequacy finding will include a condition that conformity

determinations may not take credit for Tier 2 until the SIP budgets are

revised to reflect Tier 2 benefits. See EPA's memorandum for more

information.

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\12\ Memorandum, ``Guidance on Motor Vehicle Emissions Budgets

in One-Hour Ozone Attainment Demonstrations,'' from Merrylin Zaw-

Mon, Office of Mobile Sources, to Air Division Directors, Regions I-

VI, issued November 3, 1999. A copy of this memorandum may be found

on EPA's web site at http://www.epa.gov/oms/transp/traqconf.htm.

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For the New York-North New Jersey-Long Island area, Philadelphia-

Wilmington-Trenton, Baltimore, Atlanta and Houston/Galveston

nonattainment areas, the EPA is proposing to determine that additional

emission reductions beyond those provided by the SIP submission are

necessary for attainment. With the exception of the Atlanta

nonattainment area, a portion of that reduction will be achieved by

EPA's Tier 2/Sulfur program, which EPA expects to finalize shortly. In

the case of the Houston/Galveston area, Texas has already included a

preliminary estimate of the reductions for Tier II in their air quality

modeling in the November 15, 1999 supplemental SIP submission. Our

preliminary analysis of Texas' November 15, 1999 submission indicates

that further additional emission reductions beyond Tier II will be

necessary for the area to attain.

States that need to rely in whole or in part on the Tier 2 benefits

to help demonstrate attainment will need to adjust the demonstration

for their SIP submission, emission inventories and motor vehicle

emissions budgets to include the Tier 2/Sulfur program reductions in

order for EPA to approve the SIP submittal. The submittal requirement

including the analysis to make that submission is described in the two

memoranda cited. States may use the tonnage benefits and guidance in

these memoranda to make these adjustments to the SIP submission and

motor vehicle emission budgets. The EPA encourages States to submit

these SIP revisions by December 31, 1999 to allow EPA to include them

in the motor vehicle emissions budget adequacy determinations which

need to be completed by May 31, 2000. Alternatively, these revisions

should be submitted by July 2000 for serious nonattainment areas, as

EPA anticipates completing rulemaking on these SIPs in the fall of

2000. For severe nonattainment areas, these revisions should be

submitted by December 31, 2000.

A number of areas for which the EPA is not proposing to determine

that additional emission reductions beyond those provided by the SIP

submission are necessary for attainment will be taking a partial credit

for Tier 2 when they use credit from national low emissions vehicles

(NLEV) in their attainment demonstration. These nonattainment areas are

the Milwaukee-Racine, Chicago-Gary-Lake County and Metropolitan

Washington, D.C. areas. By regulation, the NLEV standards do not extend

beyond the 2003 model year unless EPA promulgates Tier 2 vehicle

standards at least as stringent as the NLEV standards. See 40 CFR

86.1701-99(c). Thus, the emission reductions relied upon from 2004 and

later model year NLEV vehicles will actually be due to the promulgation

of the Tier 2 standards, either through the extension of the NLEV

program or a portion of the reduction from vehicles meeting the Tier 2

standards.

Like all the other SIPs that rely on Tier 2 reductions in order to

demonstrate attainment, the attainment demonstrations for the

Milwaukee-Racine, Chicago-Gary-Lake County and Metropolitan Washington,

D.C. areas must be revised to estimate the effects of Tier 2 according

to our policy before EPA can take final action approving such

attainment demonstrations. Until the SIPs are revised to include full

Tier 2 credit, EPA can determine by May 31, 2000 that a motor vehicle

emissions budget is adequate if the budget would be otherwise adequate.

No conditions need be placed on such adequacy determinations since the

budgets in such SIPs already include reductions equivalent to the

amount of emission reductions the areas will be relying on from Tier 2

by virtue of the NLEV reductions included in the budgets.

a. Revisions to the Motor Vehicle Emissions Budget and the

Attainment Demonstration When EPA Issues the MOBILE6 Model. Within one

year of when EPA issues the MOBILE6 model for estimating mobile source

emissions which takes into account the emissions benefit of EPA's Tier

2/Sulfur program, States will need to revise their motor vehicle

emissions budgets in their attainment demonstration SIPs if the Tier 2/

Sulfur program is necessary for attainment. In addition, the budgets

will need to be revised using MOBILE6 in those areas that do not need

the Tier 2/Sulfur program for attainment but decide to include its

benefits in the motor vehicle emissions budget anyway. The EPA will

work with States on a case-by-case basis if the new emission estimates

raise issues about the sufficiency of the attainment demonstration.

States described in the paragraph above will need to submit an

enforceable commitment in the near term to revise their motor vehicle

emissions budget within one year after EPA's release of MOBILE6. This

commitment should be submitted to EPA along with the other commitments

discussed elsewhere in this notice, or alternatively, as part of the

SIP revision that modifies the motor vehicle emission inventories and

budgets to include the Tier 2/Sulfur program benefits needed in order

for EPA to approve the SIP submittal.13

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\13\ For purposes of conformity, the State needs a commitment

that has been subject to public hearing. If the State has submitted

a commitment that has been subject to public hearing and that

provides for the adoption of all measures necessary for attainment,

the State should submit a letter prior to December 31, 1999,

amending the commitment to include the revision of the budget after

the release of MOBILE6.

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5. Additional Measures To Further Reduce Emissions

The EPA is proposing to find that the attainment demonstrations for

New York-North New Jersey-Long Island; Baltimore; Philadelphia-

Wilmington-Trenton; Houston-Galveston-Brazoria and Atlanta, even

considering the Tier II/Sulfur program reductions and the WOE, will not

achieve attainment without the application of additional emission

control measures to achieve additional emission reductions. Our

proposal for Houston is based on a preliminary analysis of the Houston

November 15, 1999 submission which indicates even considering Tier II/

Sulfur program reductions and WOE, sufficient measures have not been

identified to achieve attainment. The EPA is also proposing to find

that additional emission control measures are needed for the Atlanta

area. Thus, for each of

[[Page 70555]]

these areas, EPA has identified specific tons per day emissions of

NOX and/or VOC that must be reduced through additional

control measures in order to demonstrate attainment and to enable EPA

to approve the demonstration. The need for additional emission

reductions is generally based on a lack of sufficient compelling

evidence that the demonstration shows attainment at the current level

of adopted or planned emission controls.

The method used by EPA to calculate the amount of additional

reductions is described in a technical support document for this

proposed rule. Briefly, the method makes use of the relationship

between ozone and its precursors (VOC and NOX) to identify

additional reductions that, at a minimum, would bring the model

predicted future ozone concentration to a level at or below the

standard. The relationship is derived by comparing changes in either

(1) The model predicted ozone to changes in modeled emissions or (2) in

observed air quality to changes in actual emissions.

The EPA is not requesting that States perform new photochemical

grid modeling to assess the full air quality impact of the additional

measures that would be adopted. Rather, as described above, one of the

factors that EPA can consider as part of the WOE analysis of the

attainment demonstration is whether there will be additional emission

reductions anticipated that were not modeled. Therefore, EPA will

consider the reductions from these additional measures as part of the

WOE analysis if the State adopts the measures or, as appropriate,

submits an enforceable commitment to adopt the measures.

As an initial matter, for areas that need additional measures, the

State must submit a commitment to adopt additional control measures to

meet the level of reductions that EPA has identified as necessary for

attainment. For purposes of conformity, if the State submitted a

commitment, which has been subject to public hearing, to adopt the

control measures necessary for attainment and ROP through the area's

attainment date in conformance with the December 1997 Wilson policy,

the State will not need an additional commitment at this time. However,

the state will need to amend its commitment by letter to provide two

things concerning the additional measures.

First, the State will need to identify a list of potential control

measures (from which a set of measures could be selected) that, when

implemented, would be expected to provide sufficient additional

emission reductions to meet the level of reductions that EPA has

identified as necessary for attainment. States need not commit to adopt

any specific measures on their list at this time, but if they do not do

so, they must identify sufficient additional emission reductions to

attain the standard with the submitted motor vehicle emissions budget.

These measures may not involve additional limits on highway

construction beyond those that could be imposed under the submitted

motor vehicle emissions budget. (See memorandum, ``Guidance on Motor

Vehicle Emissions Budgets in One-Hour Ozone Attainment

Demonstrations,'' from Merrylin Zaw-Mon, Office of Mobile Sources, to

Air Division Directors, Regions I-VI 14.) States may, of

course, select control measures that do impose limits on highway

construction, but if they do so, they must revise the budget to reflect

the effects of specific, identified measures that were either committed

to in the SIP or were actually adopted. Otherwise, EPA could not

conclude that the submitted motor vehicle emissions budget would be

providing for attainment, and EPA could not find it adequate for

conformity purposes.

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

\14\ Memorandum, ``Guidance on Motor Vehicle Emissions Budgets

in One-Hour Ozone Attainment Demonstrations'', from Merrylin Zaw-

Mon, Office of Mobile Sources, to Air Division Directors, Regions I-

VI, issued November 3, 1999. A copy of this memorandum may be found

on EPA's web site at http://www.epa.gov/oms/transp/traqconf.htm.

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

Second, the letter should provide that the State will recalculate

and submit a revised motor vehicle emissions budget that includes the

effects, if any, of the measure or measures that are ultimately adopted

when those measures are submitted as SIP revisions should any of the

measures pertain to motor vehicles.

For purposes of approving the SIP, the State will need an

enforceable commitment that identifies the date by which the additional

measures will be submitted, identifies the percentage reductions needed

of VOC and NOX, and provides that the State will recalculate

and submit a revised motor vehicle emissions budget that includes the

effects, if any, of the measure or measures that are ultimately adopted

when these measures are submitted as SIP revisions should any of the

measures pertain to motor vehicles. To the extent the State's current

commitment does not include one of the above items or to the extent

that a State plans to revise one of the above items in an existing

commitment, the State will need a new public hearing.

Texas already provided in its May 18, 1998 submission an

enforceable commitment to adopt, by December 31, 2000, all measures

necessary for attainment in Houston without identifying any specific

measure. This commitment was reaffirmed in the November 15, 1999

submission with specific measures identified and modeled.

Unfortunately, the measures identified in the November 15, 1999

submission were not sufficient to demonstrate attainment. Therefore,

Texas needs to send a list of additional measures beyond those

identified in the November 15, 1999 submission that can be used to

achieve the additional reductions needed to achieve attainment. If

Texas determines that it needs additional time beyond December 31, 2000

to adopt some or all of the additional measures not identified in the

November 15, 1999 submission, it must submit an enforceable commitment

to adopt these measures by a date certain that is as expeditiously as

practicable. Moreover, the commitment must specify the necessary

additional percentage reduction. The EPA will work with Texas on what

constitutes an expeditious schedule for adoption.

a. Guidance on Additional Control Measures. Much progress has been

made over the past 25 years to reduce VOC emissions and over the past 9

years to reduce NOX emissions. Many large sources have been

controlled to some extent through RACT rules or other emission

standards or limitations, such as maximum achievable control technology

(MACT), new source performance standards (NSPS) and the emission

control requirements for NSR--lowest achievable emissions rate (LAER)

and best achievable control technology (BACT). However, there may be

controls available for sources that have not yet been regulated as well

as additional means for achieving reductions from sources that have

already been regulated. The EPA has prepared a report to assist States

in identifying additional measures. This report is called ``Serious and

Severe Ozone Nonattainment Areas: Information on Emissions, Control

Measures Adopted or Planned and Other Available Control Measures''. The

purpose of this report is to provide information to State and local

agencies to assist them in identifying additional control measures that

can be adopted into their SIPs to support the attainment demonstrations

for the serious and severe nonattainment areas under consideration.

This report has been added to the record for this proposal.

In Summary, the report provides information in four areas. First,

the report contains detailed information on emissions for ozone

precursor emissions

[[Page 70556]]

of NOX and VOCs. This inventory data gives an indication of

where the major emissions are coming from in a particular geographic

area and may indicate where it will be profitable to look for further

reductions. Second, the report contains information on control measures

for emission sources of NOX and VOC (including stationary,

area and mobile source measures) for which controls may not have been

adopted by many jurisdictions. This would include many measures listed

among the control measures EPA considered when developing the

Regulatory Impact Analysis (RIA) for promulgation of the 8-hour ozone

NAAQS. Third, the report includes information on standards EPA has

issued for the NSPS and MACT programs as well as information on

alternative control techniques (ACT) documents. This may be useful to

States who may already specify emission limits on existing source

categories to which NSPS and MACT for new sources apply, but the

current RACT level of control for these existing sources may not match

the level specified in the NSPS or MACT standards for new sources or

sources which emit hazardous air pollutants. Finally, the report

includes information on the control measures not already covered

elsewhere that States have adopted, or have proposed to adopt at the

date of the report, into their SIPs. Comparison of information on

measures already adopted into others' SIPs may help inform States about

reductions that may be available from their sources whose emissions are

currently not regulated.

Another source of information is the BACT and LAER determinations

that States have made for individual new sources. Information on BACT/

LAER determinations is available through EPA's RACT/BACT/LAER

Clearinghouse (RBLC) which may be accessed on EPA's web site on the

internet at the following address: www.epa.gov/ttn/catc/.

The ACT documents for VOC and NOX are valuable because

EPA has not issued control technique guidelines (CTGs) that specify the

level of RACT for several categories of sources. For some of these

source categories, EPA has prepared ACT documents which describe

various control technologies and associated costs for reducing

emissions. While States were required to adopt RACT for major sources

within these source categories, the ACT documents may identify an

additional level of control for regulated sources or may provide

control options for non-major sources within these source categories.

States are free to evaluate the various options given and use the

results to assist in formulating their own regulations.

The EPA report lists the various sources EPA used to develop the

lists of additional measures. These sources include an EPA draft

control measure data base, State and Territorial Air Pollution

Administrators and the Association of Local Air Pollution Control

Official's (STAPPA/ALAPCO's) books ``Controlling Nitrogen Oxides under

the Clean Air Act: A Menu of Options'', and ``Meeting the 15-Percent

Rate-of-Progress Requirement Under the Clean Air Act: A Menu of

Options'', California's ozone SIP for the South Coast and various ACT

documents.

There is one control approach which bears special mention because

it is broader in application than any one specific control measure.

This is the approach of ``cap and trade.'' In this approach, a cap is

placed on emissions, and existing sources are given emission

allotments. Under a declining cap, emissions would be decreased each

year. Sources may over-control and sell part of their allotments to

other sources which under-control. Overall, the percentage decrease in

emissions is maintained, but the reductions are made where they are

most economical. A cap and trade program has been in operation in the

South Coast Air Quality Management District in California since about

1992.

The State of Illinois has adopted a declining cap and trade

program. The Illinois program will set a cap on future emissions of

major sources in the Chicago area that in most cases is 12 percent

lower than baseline emissions. Illinois will issue a number of emission

allotments corresponding to the cap level and will require each source

to have VOC emissions at or below the level for which it holds emission

allotments. Trading of emission allotments will be allowed, so that

sources that reduce VOC emissions more than 12 percent may sell

emission allotments, and sources that reduce VOC emissions less than 12

percent must buy emission allotments. The proposed reductions are

planned to begin in the next ozone season, May 2000.

In addition, EPA's draft economic incentives program guidance (EIP)

was proposed in September 1999. This encourages cost-effective and

innovative approaches to achieving air pollution goals through

emissions trading. Such an approach has been demonstrated to be

successful and cost-effective in reducing air pollution in EPA's acid

rain emissions trading program. These and other similar programs should

allow cost-effective implementation of additional control measures.

Finally, a reduction in VOC and NOX emissions can be

achieved through a wide range of control measures. These measures range

from technology based actions such as retrofitting diesel trucks and

buses, and controlling ground service equipment at airports to activity

based controls such as increased use of transit by utilizing existing

Federal tax incentives, market and pricing based programs, and ozone

action days. States can also achieve emission reductions by

implementing programs involving cleaner burning fuels. The State of

Texas is also considering a rule to change the times during the day in

which construction can occur to reduce ozone precursor emissions during

periods when ozone formation is occurring. There are a wide range of

new and innovative programs beyond the few examples listed here. These

measures, if taken together, can provide significant emission

reductions for attainment purposes. In addition, a variety of mobile

source measures could be considered as part of the commitment to meet

the need for additional emission reduction measures.

6. Mid-Course Review

A mid-course review (MCR) is a reassessment of modeling analyses

and more recent monitored data to determine if a prescribed control

strategy is resulting in emission reductions and air quality

improvements needed to attain the ambient air quality standard for

ozone as expeditiously as practicable but no later than the statutory

dates.

The EPA believes that a commitment to perform a MCR is a critical

element of the WOE analysis for the attainment demonstration on which

EPA is proposing to take action today. In order to approve the

attainment demonstration SIP for the Houston/Galveston area, EPA

believes that Texas must submit an enforceable commitment to perform a

MCR as described here.15

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\15\ For purposes of conformity, the State needs a commitment

that has been subject to public hearing. If the State has submitted

a commitment that has been subject to public hearing and that

provides for the adoption of all measures necessary for attainment,

the State should submit a letter prior to December 31, 1999,

amending the commitment to include the MCR.

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As part of the commitment, the State should commit to work with EPA

in a public consultative process to develop a methodology for

performing the MCR and developing the criteria by which adequate

progress would be judged.

[[Page 70557]]

For severe areas, the States must have an enforceable commitment to

perform the MCR, preferably following the 2003 ozone season, and to

submit the results to EPA by the end of the review year (e.g., by

December 31, 2003). The EPA believes that an analysis in 2003 would be

most robust since some or all of the regional NOX emission

reductions should be achieved by that date. The EPA would then review

the results and determine whether any States need to adopt and submit

additional control measures for purposes of attainment. The EPA is not

requesting that States commit now to adopt new control measures as a

result of this process. It would be impracticable for the States to

make a commitment that is specific enough to be considered enforceable.

Moreover, the MCR could indicate that upwind States may need to adopt

some or all of the additional controls needed to ensure an area attains

the standard. Therefore, if EPA determines additional control measures

are needed for attainment, EPA would determine whether additional

emission reductions are necessary from States in which the

nonattainment area is located or upwind States, or both. The EPA would

require the affected State or States to adopt and submit the new

measures within a period specified at the time. The EPA anticipates

that these findings would be made as calls for SIP revisions under

section 110(k)(5) and, therefore, the period for submission of the

measures would be no longer than 18 months after the EPA finding. A

draft guidance document regarding the MCR process is located in the

docket for this proposal and may also be found on EPA's web site at

http://www.epa.gov/ttn/scram/.

D. In Summary, What Does EPA Expect To Happen With Respect to

Attainment Demonstrations for the Houston-Galveston Area 1-Hour Ozone

Nonattainment Area?

The following table shows a summary of information on what EPA

expects from Texas to allow EPA to approve the 1-hour ozone attainment

demonstration SIP.

Summary Schedule of Future Actions Related to Attainment Demonstration

for the Houston-Galveston Severe Nonattainment Area in Texas

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

Required no later than: Action

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

12/31/99..................... State submits the following to EPA:

--Motor vehicle emissions budget. 1

--Commitments 2 to do the following:

--Submit by 12/31/00 measures for

additional emission reductions as

required in the attainment

demonstration test.

--Submit revised SIP & motor vehicle

emissions budget by 12/31/00 if

additional measures (due by 12/31/00)

affect the motor vehicle emissions

inventory.

--Submit revised SIP & motor vehicle

emissions budget 1 year after MOBILE6

issued.3

--Perform a mid-course review.

--A list of potential control measures

that could provide additional emission

reductions needed to attain the

standard. 4

4/15/00...................... State submits in final any submissions

made in draft by 12/31/99.

Before EPA final rulemaking.. State submits enforceable commitments for

any above-mentioned commitments that may

not yet have been subjected to public

hearing.

12/31/00..................... --State submits adopted rules that

reflect measures that are needed for ROP

and attainment.

--State revises & submits SIP & motor

vehicle emissions budget if changes in

the adopted control measures affect the

motor vehicle category.

--State revises & submits SIP & motor

vehicle emissions budget to account for

Tier 2 reductions as needed.5

Within 1 yr. after release of State submits revised motor vehicle

MOBILE6 model. emissions budget based on MOBILE6.

12/31/03..................... State submits to EPA results of mid-

course review.

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

\1\ Final budget preferable; however, if public process is not yet

complete, then a ``draft'' budget (the one undergoing public process)

may be submitted at this time with a final budget by 4/15/00. However,

if a final budget is significantly different from the draft submitted

earlier, the final budget must be submitted by 2/15/00 to accommodate

the 90 day processing period prior to the 5/31/00 date by which EPA

must find the motor vehicle emissions budget adequate. Note that the

budget can reflect estimated Tier 2 emission reductions--see

memorandum from Lydia Wegman and Merrylin Zaw-Mon, ``1-Hour Ozone

Attainment Demonstrations and Tier 2/Sulfur Rulemaking.'' Note, Texas

provided a budget for Houston in its November 15, 1999 submission.

\2\ As provided in the preamble text, the State may clarify by letter an

existing commitment, which has been subject to public hearing, to

submit the control measures needed for attainment. if the State has

not yet submitted such a commitment, the State should adopt a

commitment after public hearing. if the public hearing process is not

yet complete, then draft commitments may be submitted at this time.

The final commitment should be submitted no later than 4/15/00. Note,

Texas provides in its May 19, 1998 SIP revision a commitment to adopt

all necessary measures. Texas will need to provide public notice and

comment if it wishes to revise this commitment.

\3\ The revision for MOBILE6 is only required for SIPs that include the

effects of Tier 2. The commitment to revise the SIP after MOBILE6 may

be submitted at the same time that the state submits the budget that

includes the effects of Tier 2 (no later than 12/31/00). Note that

Texas included the effects of Tier 2 in the SIP and associated

attainment budget submitted in November 1999.

\4\ The State is not required to commit to adopt any specific measures.

However, if the State does not do so, the list cannot include any

measures that place limits on highway construction.

\5\ If the State submits such a revision, it must be accompanied by a

commitment to revise the SIP and motor vehicle emissions budget 1 year

after MOBILE6 is issued (if the commitment has not already been

submitted).

A. What Are Some Significant Policy and Guidance Documents?

This proposal has cited several policy and guidance memoranda. The

EPA has also developed several technical documents related to the

rulemaking action in this proposal. Some of the documents have been

referenced above. Some other documents and their location on EPA's web

site are listed below; these documents will also be placed in the

docket for this proposal action.