8. For Areas Covered by Subpart 1 Instead of Subpart 2, How Should the RFP Requirement Be Structured? As described above, the RFP requirement under subpart 1 is more general than that under subpart 2, and EPA thus has more flexibility in determining what RFP means under subpart 1. For instance, the State may rely on emissions reductions of VOC or NOX or a combination of both to meet its RFP requirement. However, we are also mindful of the need for ensuring equity between areas with similar 8 hour ozone problems covered under VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32835 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 47NOX Substitution Guidance. December 15, 1993; avaialble at http:// www. epagov/ ttn/ oarpg/ t1pgm. html. 48 Additional Options Considered for `` Proposed Rule to Implement the 8 Hour Ozone National Ambient Air Quality Standard.'' U. S. Environmental Protection Agency, Office of Air Quality Planning and Standards, Research Triangle Park, NC. March 2003. 49 Memorandum of May 10, 1995, `` RFP, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,'' from John S. Seitz, Director, Office of Air Quality Planning and Standards. Available at: http:// www. epa. gov/ ttn/ oarpg/ t1/ memoranda/ clean15. pdf. subpart 1 and those covered under subpart 2. We are proposing rules for three kinds of areas: ( a) Areas with attainment dates 3 years or less after designation; ( b) Areas with attainment dates between 3 and 6 years after designation; and ( c) Areas with attainment dates beyond 6 years after designation. Note that the CAA requires that attainment dates for areas subject only to subpart 1 be no longer than 10 years after designation. a. Areas with attainment dates 3 years or less after designation. We propose a RFP requirement for these areas similar to that for areas under subpart 2 that are classified as marginal. Such an area would not be subject to a separate RFP requirement, but would have to attain the standard by its attainment date. b. Areas with attainment dates between 3 to 6 years after designation. These areas would have attainment dates similar to subpart 2 areas classified as moderate. We propose two options for these areas: ( i) Option 1. This option would require the RFP plan to be submitted with the attainment demonstration within 3 years after designation of the nonattainment area. The SIP would have to show that all emissions reductions needed for attainment would be implemented by the attainment date. This situation would occur, for example, for an area with a base year inventory of 2002, designation in 2004, a required attainment SIP submission date of 2007 and an attainment date of 2010. Where areas have only 3 years after SIP submission before attainment, this option recognizes that there may be only a short amount of time available to achieve any specified emissions reductions beyond that needed to demonstrate attainment and therefore would not require a showing that a specified amount of emissions reductions occur between the time of SIP submission and the attainment date. ( ii) Option 2. This option would require these areas to be treated in a manner similar to subpart 2 areas classified as moderate. The RFP SIP would have to provide for a 15 percent emission reduction from the baseline year within 6 years after the baseline year. The RFP SIP would have to be submitted within 2 years after designation. However, since the area is subject only to subpart 1, NOX emissions reductions could be substituted for some or all of the 15 percent reduction requirement, consistent with EPA's NOX substitution policy. 47 Also, we are soliciting comment on whether a percentage other than 15 percent should be required as the minimum. Additional measures that would provide the remaining portion of the emissions reductions needed for attainment would have to be submitted with the area's attainment demonstration within 3 years after designation. c. Areas with attainment dates beyond 6 years after designation. These areas are similar in attainment dates to areas classified under subpart 2 as serious or higher. We are proposing that the RFP plan show increments of progress from the baseline emission inventory year until the attainment date. The RFP SIP would first have to provide for a 15 percent emission reduction from the baseline year within 6 years after the baseline year. The 15 percent RFP SIP would have to be submitted within 2 years after designation. However, since the area is subject only to subpart 1, NOX emissions reductions could be substituted for some or all of the 15 percent reduction requirement, consistent with EPA's NOX substitution policy. Also, we are soliciting comment on whether a percentage other than 15 percent would be more appropriate. Then, for each subsequent 3 year period out to the attainment date, another RFP SIP would have to provide for an additional increment of progress no less than the amount of emissions reductions that would be proportional to the time between the end of the first increment ( in 2008) to the attainment date. This second RFP SIP would have to be submitted at the same time as the attainment demonstration, namely within 3 years after designation.

9. How Should the RFP Requirements Be Implemented for Areas Designated for the 8 Hour Ozone Standard That Entirely or in Part Encompass an Area That Was Designated Nonattainment for the 1 Hour Ozone Standard? We are proposing the following approach to address this issue. Develop a new baseline and new ROP/ RFP emission reduction targets for the entire 8 hour standard nonattainment area ( the old 1 hour standard nonattainment area and the newly added portion of the 8 hour standard nonattainment area). Emissions reductions from measures in the 1 hour ozone SIP that are achieved after the 8 hour ozone NAAQS baseline year could count ( subject to creditability restrictions as discussed above in this proposed rulemaking) toward meeting the RFP requirement for the entire 8 hour area. This approach would set a ROP target for the entire 8 hour ozone nonattainment area. The State would have to ensure that the target is at least as stringent as the 1 hour ROP/ RFP target, thus ensuring no backsliding on the 1 hour NAAQS requirements. Under this approach, the new ROP/ RFP target for the 8 hour standard would replace the previous 1 hour ozone target ( while ensuring that, at a minimum, the emissions reductions required to meet the old target are met). For example, the 1 hour ozone NAAQS nonattainment area may comprise four counties and have a target level for one future RFP increment of 350 tons/ day of VOC and 300 tons/ day of NOX. The 8 hour ozone nonattainment area may comprise the initial 1 hour ozone standard nonattainment area and two more counties. The target for the same increment period for the entire six county nonattainment area may now be, for instance, 400 tons/ day of VOC and 350 tons/ day of NOX ( assuming that these emission reductions were consistent with the attainment demonstration). We considered another option for this issue. This option, which is not being proposed, is discussed in a separate document available in the docket. 48 10. Will EPA's `` Clean Data Policy'' Continue to Apply Under the 8 Hour Standard for RFP?

We issued a clean data waiver policy on May 10, 1995, which allows EPA to determine that an area has attained the standard and that certain requirements ( e. g., RFP) will not apply so long as the area remains in attainment. 49 We propose that this policy would remain effective under the 8 hour ozone NAAQS.

11. How Will RFP Be Addressed in Tribal Areas?

As mentioned elsewhere in this proposed rulemaking, the TAR provides the Tribes with the ability to develop TIPs to address the NAAQS. However, it also provides the Tribes with VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32836 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules flexibility to develop these plans in a modular way, as long as the elements of their TIPs are `` severable.'' For example, each TIP submission must include a demonstration that the Tribe has authority to develop and run its program, the ability to enforce its rules, and the capacity and resources to implement the program it adopts. However, the modular approach provided for Tribes in the TAR allows the TIP to address a particular problem on the reservation. Therefore, it may include one or two source specfic requirements but may not include provisions for RFP and other SIP requirements. We will review and approve these TIPs as a step in addressing an overall air quality plan to achieve health and environmental goals. In addition, a Tribe may later add other elements to the plan, or EPA may be obligated to step in to fill air quality gaps. In approving the TIPs, we will ensure that they will not interfere with the overall air quality plan for an area when Tribal lands are part of a multijurisdictional area. Because many of the nonattainment areas will include jurisdictions, including both Tribes and States, it is important for Tribes and States to work together wherever possible to coordinate their planning efforts.

12. How Will RFP Targets Be Calculated? We propose a methodology for the calculation of ROP target levels of emissions that is based on the method developed for the CAA Amendments of 1990, while taking into account our interpretation of CAA restrictions on creditable emissions and our proposal to use the 2002 inventory as the baseline inventory for the ROP requirement. The CAA Amendments of 1990 specify four types of measures that were not creditable toward the 15 percent RFP requirement. These were: ( 1) Any measure relating to motor vehicle exhaust or evaporative emissions promulgated by the Administrator by January 1, 1990; ( 2) Regulations concerning Reid Vapor Pressure that would go into effect in 1992; ( 3) State regulations submitted to correct deficiencies in existing VOC RACT regulations or previously required RACT rules; ( 4) State regulations submitted to correct deficiencies in I/ M programs. These four types of measures were all expected to result in a decrease in emissions between 1990 and 1996. Of these four types of measures, RACT and I/ M program corrections and the 1992 Reid vapor pressure ( RVP) requirements were completely in place by 1996 and therefore are already accounted for in the 2002 baseline. As a result, they would produce no additional reductions between 2002 and 2008 or later milestone years. However, the pre 1990 Federal Motor Vehicle Control Program ( FMVCP) will continue to provide benefits during the first two decades of the 21st century as remaining vehicles meeting pre 1990 standards leave the vehicle fleet. Because these benefits are not creditable for ROP purposes, in order to calculate the target level of emissions for ROP milestone years ( i. e., 2008, 2011, etc.), States must first calculate the reductions that would occur over these years as a result of the pre 1990 FMVCP. We propose the following methods to properly account for the non creditable reductions when calculating ROP targets for the 2008 and later ROP milestone years. Method 1: For areas that must meet a 15 percent VOC reduction requirement by 2008: ( 1) Estimate the actual anthropogenic base year VOC inventory in 2002 with all 2002 control programs in place. ( 2) Using the same highway vehicle activity inputs used to calculate the actual 2002 inventory, run MOBILE6 for 2002 and for 2008 with all post 1990 CAA measures turned off. This is accomplished using the NO CLEAN AIR ACT command as described in the MOBILE6 User's Guide. Any other local inputs for I/ M programs should be set according to the program that was required to be in place in 1990. Fuel RVP should be set at 9.0 or 7.8 depending on the RVP required in the local area as a result of fuel RVP regulations promulgated in June, 1990. ( 3) Calculate the difference between 2002 and 2008 VOC emission factors and multiply by 2002 VMT. The result is the VOC emissions reductions that will occur between 2002 and 2008 without the benefits of any post 1990 CAA measures. These are the noncreditable reductions that occur over this period. ( 4) Subtract the non creditable reductions calculated in step 3 from the actual anthropogenic 2002 inventory estimated in step 1. ( 5) Reduce the VOC inventory calculated in step 4 by 15 percent. The result is the target level of VOC emissions in 2008 in order to meet the 2008 ROP requirement. The actual projected 2008 inventory with all control measures in place and including projected 2008 growth in activity must be at or lower than this target level of emissions. Method 2: For areas that qualify under option 2 of section 3 above and must meet an 18 percent VOC emission reduction requirement by 2008 with NOX substitution allowed, following EPA's NOX Substitution Guidance: ( 1) Estimate the actual anthropogenic base year inventory in 2002 with all 2002 control programs in place. ( 2) Using the same highway vehicle activity inputs used to calculate the actual 2002 inventory, run MOBILE6 for 2002 and for 2008 with all post 1990 CAA measures turned off. This is accomplished using the NO CLEAN AIR ACT command as described in the MOBILE6 User's Guide. Any other local inputs for I/ M programs should be set according to the program that was required to be in place in 1990. Fuel RVP should be set at 9.0 or 7.8 depending on the RVP required in the local area as a result of fuel RVP regulations promulgated in June, 1990. ( 3) Calculate the difference between 2002 and 2008 VOC emissions factors and multiply by 2002 VMT. The result is the emissions reductions that will occur between 2002 and 2008 without the benefits of any post 1990 CAA measures. These are the non creditable reductions that occur over this period. ( 4) Subtract the non creditable reductions calculated in step 3 from the actual anthropogenic 2002 inventory estimated in step 1. ( 5) Reduce the inventory calculated in step 4 by 18 percent. The result is the target level of emissions in 2008 in order to meet the 2008 ROP requirement. The actual projected 2008 inventory with all control measures in place and including projected 2008 growth in activity must be at or lower than this target level of emissions. Method 3: For all areas that must meet an additional reduction VOC requirement of 9 percent every 3 years after 2008 with NOX substitution allowed, following EPA's NOX Substitution Guidance. Each subsequent target level of emissions should be calculated as emissions reductions from the previous target. ( 1) Using the same highway vehicle activity inputs used to calculate the actual 2002 inventory, run MOBILE6 for 2008 ( previously done in step 2 above) and 2011 with all post 1990 CAA measures turned off. This is accomplished using the NO CLEAN AIR ACT command as described in the MOBILE6 User's Guide. Any other local inputs for I/ M programs should be set according to the program that was required to be in place in 1990. Fuel RVP should be set at 9.0 or 7.8 depending on the RVP required in the VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00036 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32837 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 50 40 CFR part 52, State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule. April 16, 1992. ( 57 FR 13498); 40 CFR part 52, State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990; Implementation of Title I; Proposed Rule. November 25, 1992. ( 57 FR 55620). 51 `` Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations   Clarification to Appendix D of November 24, 1987, Federal Register.'' Ozone/ Carbon Monoxide Program Branch, Air Quality Management Division, Office of Air Quality Planning and Standards, U. S. Environmental Protection Agency. May 25, 1988; Federal Register of November 24, 1987, Appendix D ( 52 FR at 45105). local area as a result of fuel RVP regulations promulgated in June, 1990. ( 2) Calculate the difference between 2008 and 2011 emission factors and multiply by 2002 VMT. The result is the emissions reductions that will occur between 2008 and 2011 without the benefits of any post 1990 CAA measures. These are the non creditable reductions that occur over this period. ( 3) Subtract the non creditable reductions calculated in step 2 from the 2008 target level of emissions calculated previously. ( 4) Reduce the inventory calculated in step 3 by 9 percent. The result is the target level of emissions in 2011 in order to meet the 2011 ROP requirement. The actual projected 2011 inventory with all control measures in place and including projected 2011 growth in activity must be at or lower than this target level of emissions.

J. Are Contingency Measures Required in the Event of Failure To Meet a Milestone or To Attain the 8 Hour Ozone NAAQS?

1. Background Under the CAA, nonattainment areas must include in their SIPs contingency measures consistent with section 172( c)( 9). However, section 182( a) expressly exempts areas classified as marginal from this obligation. States with ozone nonattainment areas classified as moderate and above must include contingency measures in their SIPs consistent with sections 172( c)( 9) and 182( c)( 9). Contingency measures are additional controls to be implemented in the event the area fails to meet a RFP milestone or fails to attain by its attainment date. These contingency measures must be fully adopted rules or measures which are ready for implementation quickly upon failure to meet milestones or attainment. The SIP should contain trigger mechanisms for the contingency measures, specify a schedule for implementation, and indicate that the measures will be implemented without significant further action by the State or EPA. Additional background information concerning the CAA contingency measure provisions appears in the General Preamble of April 16, 1992 ( 57 FR 13510   13512 and 13520); and Section 9.2 of `` Guidance for Growth Factor, Projections, and Control Strategies for the 15 percent Rate of Progress Plans'' ( EPA   452/ R   93   002), March 1993. The guidance indicates that States should adopt and submit contingency measures to provide a three percent emission reduction ( beyond what is needed for attainment or the ROP requirement) for moderate and above ozone areas, which EPA concludes is generally acceptable to offset emission increases while States are correcting their SIPs. Also, EPA guidance suggests that contingency measures that a State adopted for purposes of the 15 percent ROP requirement may be used as the contingency measures for any post 1996 3 year requirements for RFP, provided they have not been triggered and used as contingency measures for the 15 percent plan. See Section 5.6 of `` Guidance on the Post 1996 Rate of Progress Plan ( ROP) and Attainment Demonstration'' ( corrected version of February 18, 1994). Furthermore, Federal measures that result in additional emission reductions beyond those needed for attainment or ROP in an area could serve as contingency measures for a failure to attain or meet the ROP requirements. EPA has approved the use of Federal measures as part of contingency measures in several EPA actions approving 1 hour ozone SIPs ( 62 FR 15844, April 3, 1997), ( 62 FR 66279, December 18, 1997), and ( 66 FR 30811, June 8, 2001), ( 66 FR 586 and 66 FR 634, January 3, 2001).

2. Proposal For the 8 hour ozone standard, we intend to continue to observe our existing policies regarding contingency measures for areas covered under subpart 2. Areas that are nonattainment for the 8 hour ozone standard that have unused adopted contingency measures for the 1 hour ozone NAAQS may use those measures as appropriate as contingency measures for the 8 hour ozone NAAQS. For areas covered under subpart 1, we will provide additional guidance on the contingency measure requirement, but it is likely that it will be patterned after the subpart 2 requirement.

K. What Requirements Should Apply for RACM and RACT for 8 Hour Ozone Nonattainment Areas?

1. Background Subpart 1 of part D includes general requirements for all designated nonattainment areas, including a requirement that a nonattainment plan provide for the implementation of all RACM as expeditiously as practicable, including such reductions that may be obtained through RACT. Most areas designated nonattainment for the 1 hour ozone standard are also subject to the requirements of subpart 2 of part D, including its detailed control measure provisions. Under subpart 2, RACT requirements for ozone nonattainment areas apply independent of the emissions reductions needed to attain the standard. The RACT requirements also apply in attainment areas within the current ozone transport region ( OTR) ( or any additional OTR that EPA may establish under the CAA), regardless of the emissions reductions needed to attain. The RACT requirement applies to both ozone precursors   NOX and VOC. Since 1990, we have issued guidance on the RACT requirements in subpart 2.50 Prior to enactment of the CAA Amendments of 1990, EPA also issued detailed guidance on RACT for ozone nonattainment area SIPs. 51 This guidance continues to be relevant. Elsewhere in this proposed rulemaking, we are proposing one option for classifying 8 hour ozone nonattainment areas in which some areas would be subject to the requirements of subpart 1. Unlike subpart 2, which contains detailed requirements regarding the adoption of RACT, subpart 1 contains only a general provision which requires that SIPs for nonattainment areas provide for RACM, including RACT. See CAA section 172( c)( 1). Because RACT is a control technology requirement, it is somewhat independent of the need to demonstrate attainment or RFP. In the period prior to enactment of the 1990 CAA Amendments, only the general requirements for RACM and RACT existed, and EPA had issued CTGs to provide presumptive norms for RACT for VOC controls for States to follow in adopting RACT for ozone nonattainment areas. In 1990, Congress institutionalized this requirement for NOX and VOC ( as ozone precursors) in subpart 2, and emphasized the role of CTGs and EPA's pre 1990 guidance for ensuring that RACT rules themselves were adequately structured to ensure they would be effective and enforceable. For instance, ozone nonattainment areas classified as marginal or higher that had a previous obligation to submit corrections to their VOC RACT rules were required to complete and submit VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32838 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 52 The exception to this rule is that States in the OTR are also required for all areas in the State to adopt RACT rules for all sources covered by a CTG and all other major sources of NOx or VOC regardless of their nonattainment classification. See CAA section 184( b). 53 Note that under the anti backsliding provisions proposed above, any portion of an area classified marginal under the 8 hour standard that was classified moderate or higher under the 1 hour standard would also have a continuing RACT requirement from its classification as moderate or higher. 54 Proposed Implementation Guidance for the Revised Ozone and Particulate Matter ( PM) National Ambient Air Quality Standards ( NAAQS) and the Regional Haze Program. November 17, 1998. Found at: http:// www. epa. gov/ ttn/ oarpg/ t1pgm. html. 55 See CAA section 184( b). those corrections within 6 months after the date of classification. See CAA section 182( a)( 2)( A). However, the 1990 CAA Amendments did not require marginal areas to adopt any RACT rules if they did not have a pre 1990 obligation to do so. 52 Also, the amended CAA required EPA to issue CTGs for certain VOC sources by November 15, 1993. See CAA section 183( a) and ( b). Similarly, the EPA was required to issue alternative control techniques ( ACT) documents for additional categories of VOC and NOX. See CAA section 183( c). The ACT documents are intended to help States in making RACT determinations.

2. Proposed Approach for RACT in General for Areas Covered Under Subpart 2 We are proposing that the RACT requirement for areas covered under subpart 2 apply as specified in subpart 2. Thus, areas classified as marginal that had a pre 1990 obligation for RACT would continue to have that obligation. Areas classified as moderate and above would be required to adopt RACT for the categories covered by the CTG's that EPA has issued and to adopt non CTG RACT measures for major sources. 53 3. Proposed Approach for RACT in General for Areas Covered Only Under Subpart 1 We are proposing two alternative options for addressing RACT for areas covered under subpart 1. a. Option 1: Treatment of RACT similar to subpart 2 areas. Based on the provisions of the CAA described above and the apparent differences in treatment regarding RACT between marginal and other areas, we propose to interpret the CAA in a manner similar to that under subpart 2 by requiring areas covered under subpart 1 to face different RACT requirements based on the magnitude of the ozone problem. This proposal has the advantage of minimizing some of the apparent inequities that might exist under the classification option ( discussed elsewhere in this proposed rulemaking) in which some areas are covered under subpart 1 and others under subpart 2. ( i) Areas similar to marginal areas. Those 8 hour nonattainment areas covered only under subpart 1 that have an ozone problem that is similar in degree to that of a marginal area would be subject to the same RACT requirement as areas classified as marginal under subpart 2. These areas would be defined as those whose 8 hour ozone design value at the time of designation/ classification would have placed them in the marginal classification if they had been subject to subpart 2 ( i. e., areas that have an 8 hour design value of less than 0.092 ppm. ( See elsewhere in this proposed rulemaking under the section concerning classification.) Similarly, if we adopt the incentive feature proposed in the classification section, and a subpart 1 area with a design value of 0.092 ppm or greater can demonstrate that it will attain within 3 years after designation, then it would be subject to the same RACT requirement as applies to marginal areas under subpart 2. As noted in the background of this section, the 1990 CAA Amendments did not require marginal areas ( with the exception of those located in the OTR) to adopt any RACT rules if they did not have a pre 1990 obligation to do so. Marginal areas that had a pre 1990 obligation for RACT were required to make any corrections to those rules that we had previously identified. ( ii) Areas similar to moderate and higher classified areas. Those 8 hour nonattainment areas covered under subpart 1 that have an ozone problem that is similar in degree to that of a moderate or higher classified area would be subject to the same RACT requirements as those that apply in subpart 2 for moderate and above areas. These areas would be defined as those whose 8 hour ozone design value at the time of designation/ classification would have placed them in the moderate or above classification if they had been subject to subpart 2. As proposed elsewhere in this proposed rulemaking, this would mean areas that have an 8 hour design value of 0.092 ppm or greater that are not able to demonstrate attainment within 3 years after designation. b. Option 2: Alternative treatment for RACT under subpart 1. This option is similar to the approach we proposed in our November 17, 1998 draft implementation guidance. 54 At the time, we stated that we believed we had authority under subpart 1 to apply an interpretation for RACT for ozone nonattainment areas for the 8 hour NAAQS that was similar to the Agency's policy for pollutants other than ozone. Under that interpretation and this option, for the 8 hour ozone NAAQS, if the area is able to demonstrate attainment of the standard as expeditiously as practicable with emission control measures in the SIP, then RACT will be met, and additional measures would not be required as being reasonably available. c. Ozone transport regions. In addition, all areas of the OTR are required to adopt NOX and VOC RACT requirements, regardless of their attainment classification. 55 Of course, these areas were already required to submit RACT rules for purposes of the 1 hour standard.

4. Proposed Approach for Previous Source Specific Major Source RACT Determinations Section 182( b)( 2)( C) requires SIPs in moderate and higher classified areas to provide for RACT for major stationary sources of VOC that are not covered by CTGs. Section 182( f)( 1) provided that this requirement also apply to major sources of NOX. Many areas subject to the major source RACT requirement under the 8 hour ozone standard would have previously addressed the RACT requirement with respect to the 1 hour ozone standard. This includes the non CTG major source VOC RACT requirement and the NOX major source RACT requirement. For example, major sources located in States of the OTC were subject to the NOX RACT requirement in the mid 1990s. We believe that, in many cases, a new RACT determination under the 8 hour standard would call for installation of similar control technology as the initial RACT determination under the 1 hour standard because the fundamental control techniques are still applicable. In other cases, a new RACT analysis could determine that better technology has become available and some additional emissions reductions are achievable. The cost per ton of NOX removed associated with installing a second round of RACT controls is likely to be high in many cases due to the relatively small amount of additional NOX emission reductions expected. In these cases, the additional costs associated with the replacement of the existing RACT controls may be an unnecessary burden, given the small emissions benefit potential. In contrast, a RACT analysis for uncontrolled VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32839 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 56 Memorandum of March 16, 1994, from D. Kent Berry re: `` Cost Effective Nitrogen Oxides ( NOX Reasonably Available Control Technology ( RACT).'' U. S. Environmental Protection Agency, Research Triangle Park, North Carolina. sources would be much more likely to find that cost effective controls are available. Therefore, in portions of 8 hour ozone nonattainment areas where major sources or source categories were previously reviewed and controls subsequently applied to meet the RACT requirement under the 1 hour standard, we propose that States may choose to accept the initial RACT analysis as meeting the RACT requirements for the 8 hour program and need not submit a new RACT SIP. At the time the State submits its attainment demonstration, it should submit a certification that it previously met the RACT requirement as part of its SIP revision. We also propose that a RACT determination would be necessary for major sources in any portion of the 8 hour nonattainment area that was not subject to an initial RACT program under the 1 hour standard. Furthermore, in cases where the initial RACT analysis under the 1 hour standard for a specific source or source category concluded that no additional controls were necessary, we propose that a new RACT determination is required. The new RACT determination is needed to take into account that newer, cost effective control measures may have become available for sources that were not previously regulated. Thus, the State needs to reassess whether controls should be required. In addition, any major VOC or NOX source that exists at the time of final rulemaking on implementation of the 8 hour ozone standard but that did not exist during a previous RACT determination must be subject to a RACT determination as part of the SIP for the 8 hour ozone standard.

5. Proposed Approach for NOX RACT Determinations in Areas Affected by the NOX SIP Call All States submitting SIP revisions to meet the NOX SIP Call ( October 27, 1998, 63 FR 57356) have elected to require large boilers and turbines to comply with an emissions cap and trade program consistent with EPA's model cap and trade rule. As a result, all these sources are already subject to stringent control requirements. As described below, these sources collectively achieve more emissions reductions than would be required by application of RACT requirements to each source. Therefore, where a nonattainment area is located in a State with an EPAapproved cap and trade program, EPA proposes that sources subject to the capand trade program already meet the NOX RACT requirements. In previously issued guidance concerning NOX RACT for boilers and turbines, EPA indicated that NOX RACT for certain types of electricity generating units ( EGUs) is equivalent to the title IV requirements and is the most effective level of combustion modification reasonably available ( NOX General Preamble at 57 FR 55625). In subsequent guidance, EPA further indicated that NOX RACT should generally be expected to achieve approximately 30   50 percent reduction from uncontrolled levels. 56 Large boilers and turbines subject to the NOx SIP Call cap and trade program are expected to achieve much greater emissions reductions than these NOX RACT levels. The NOX SIP Call base case assumes EGUs meet the title IV and/ or RACT requirements. In the NOX SIP Call control case, EGUs are expected to achieve a 64 percent reduction beyond the base case requirements ( 65 FR 11225). Thus, these EGUs are expected to reduce emissions by far greater amounts than would be required by a RACT program. Furthermore, the EGU emissions reductions comprise nearly 85 percent of the overall emissions reductions resulting from the NOX SIP Call. The non EGUs subject to the States' cap and trade program are expected to achieve a 60 percent reduction from uncontrolled levels ( 63 FR 57402). These non EGU reductions are clearly beyond the 30   50 percent expected from a RACT program. Because the NOX SIP Call is a marketbased program, there may be a few units that choose to meet those requirements simply by emissions trading, even though the vast majority of units affected by the NOX SIP Call will install controls. In any nonattainment areas where this is the case, EPA believes that the overall emission reductions from sources in the NOX SIP Call cap andtrade program will achieve more emissions reductions in the nonattainment area than would application of RACT to each of those units. In summary, the level of emissions reductions required by the NOX SIP Call is far greater than the level of reductions achieved by controls we have determined to be NOX RACT. Therefore, EPA believes the sources that comply with the NOX SIP Call cap and trade program meet NOX RACT requirements. Accordingly, EPA proposes that the State need not perform a NOX RACT analysis for sources subject to the State's emission cap and trade program where the cap and trade program has been approved by EPA as meeting the NOX SIP Call requirements and need not submit a new NOX RACT SIP for those sources. EPA invites comment on this approach. As described in section 4, proposed approach for previous source specific major source RACT determinations, States would need to make a RACT determination for major sources not subject to the cap and trade program. However, in cases where States have adopted controls consistent with the NOX SIP Call for cement kilns ( i. e., 30 percent reduction), the State may choose to accept the NOX SIP Call requirements as meeting the NOX RACT requirements for the 8 hour standard and need not submit a new NOX RACT SIP for those sources. As part of the NOX SIP Call, EPA determined that highly cost effective controls for cement kilns will achieve a 30 percent reduction and that many cement plants in the SIP Call region implemented such controls in State RACT programs ( 63 FR 57418). In its RACT SIP submission, the State should identify the cement plants that are subject to NOX SIP Call controls and that, therefore, already meet RACT. In addition, through the NOX SIP Call or other programs ( e. g., NSR) States may have adopted control measures for specific NOX sources that equal or exceed RACT requirements. For these sources, States may choose to submit, as part of its NOX RACT SIP revision, documentation that the previously adopted control measure meets the RACT requirement, where applicable. Finally, in developing the NOX SIP Call, States may have considered control measures for sources not in the cap andtrade program   or may consider additional sources in responding to the second phase of the NOX SIP Call. EPA's NOX RACT guidance ( NOX General Preamble at 57 FR 55625) encourages States to develop RACT programs that are based on `` areawide average emission rates.'' Thus, States can submit a demonstration as part of their RACT submittal showing that the weighted average emission rate from sources in the nonattainment area subject to RACT   including sources reducing emissions to meet the NOX SIP Call requirements   meet RACT requirements. It should also be noted that this proposal in no way limits States' discretion to require beyond RACT NOX reductions from any source ( including NOX SIP Call sources) in a plan to demonstrate attainment of the healthbased ozone standards. In certain areas, States may choose to require NOX controls based on more advanced VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32840 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 57 For example, the 1991 National Academy of Sciences report entitled Rethinking the Ozone Problem in Urban and Regional Air Pollution recommends that `` To substantially reduce O3 [ ozone] concentrations in many urban, suburban, and rural areas of the United States, the control of NOX emissions will probably be necessary in addition to, or instead of, the control of VOCs.'' 58 For example, NOX SIP Call ( published October 27, 1998), Tier 2/ Gasoline Sulfur regulations ( published on February 10, 2000); and Control of Emissions of Air Pollution from 2004 and Later Model Year Heavy duty Highway Engines and Vehicles ( published October 6, 2000). 59 `` State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule.'' 57 FR 13498 at 13560 ( April 16, 1992). `` Guidance on the Reasonably Available Control Measures ( RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas.'' John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: www. epa. gov/ ttn/ oarpg/ t1pgm. html. Memorandum of December 14, 2000, from John S. Seitz, Director, Office of Air Quality Planning and Standards, re: `` Additional Submission on RACM from States with Severe One Hour Ozone Nonattainment Area SIPs.'' 60 Section 182( a) provided that marginal areas with pre 1990 RACT obligations had to submit corrections to their RACT rules within 6 months after classification under the 1990 CAAA. New 8 hour ozone nonattainment areas that are classified as marginal would not have this requirement. 61 See 57 FR 55622 (`` Nitrogen Oxides Supplement to the General Preamble,'' published November 25, 1992). 62 As stated in EPA's I/ M ( 57 FR 52950) and conformity rules ( 60 FR 57179 for transportation rules and 58 FR 63214 for general rules), certain NOX requirements do not apply where EPA granted an areawide exemption under section 182( f). 63 See 57 FR 55620, `` Nitrogen Oxides Supplement to the General Preamble,'' published November 25, 1992. 64 The EPA's primary guidance regarding section 182( f) is contained in the `` Guideline for Determining the Applicability of Nitrogen Oxide Requirements under Section 182( f),'' issued by John S. Seitz, Director, Office of Air Quality Planning and Standards, to the Regional Division Directors, December 16, 1993. control technologies to provide for attainment of the ozone standards. As stated in section 3, above, we are proposing an alternative option for RACT under subpart 1. In this option, areas that are able to demonstrate attainment of the 8 hour standard as expeditiously as practicable with the control measures in their SIP would be considered as having met RACT.

6. Proposed Approach for NOX as an Ozone Precursor In addition to the issue regarding the nature of the RACT rules that apply under subpart 1, another issue concerns the pollutants ( precursors) to which the RACT rules apply. Although NOX has long been recognized as a precursor to ozone 57 and several national rules 58 have been promulgated to control NOX for purposes of helping attain the ozone standard, subpart 1 does not specifically address either NOX or VOC, but rather RACT in general. We propose to clarify this by recognizing both NOX and VOCs as precursors to ozone and to require NOX and VOC RACT under subpart 1. This is consistent with the application of RACT under subpart 2. Under section 182( f) ( in subpart 2), a waiver from NOX RACT is possible under certain circumstances ( the waiver provision is discussed elsewhere in this proposed rulemaking) for areas subject to subpart 2. We are proposing to allow areas subject to subpart 1, to seek a waiver consistent with the tests set forth in section 182( f).

7. Proposed Approach for RACM We have also issued guidance for implementing the RACM provisions of the CAA that interprets those provisions to require a demonstration that the State has adopted all reasonable measures to meet RFP and attainment as expeditiously as practicable and thus that no additional measures that are reasonably available will advance the attainment date or contribute to RFP for the area. 59 The RACM requirement, which is set forth in section 172( c)( 1) of the CAA, applies to all nonattainment areas that are required to submit an attainment demonstration, whether covered under only subpart 1 or also subpart 2.

8. Proposed Submission Date for RACT and RACM Requirements We are proposing that the SIP provisions for RACT for a nonattainment area   regardless of whether the area is covered under subpart 1 or subpart 2   be submitted within 2 years after the area's nonattainment designation; this is consistent with the timing for submission of RACT rules in section 182( b)( 2) for moderate areas. 60 We are proposing that the SIP provisions for RACM for a nonattainment area   regardless of whether the area is covered under subpart 1 or subpart 2   be submitted within 3 years after the area's nonattainment designation; this is consistent with the timing for submission of an area's demonstration of attainment.

L. How Will the Section 182( f) NOX Provisions Be Handled Under the 8 Hour Ozone Standard? In subpart 2 of part D, section 182( f) requires States to apply the same requirements to major stationary sources of NOX as are applied to major stationary sources of VOC. The applicable requirements are RACT and NSR for major stationary sources in certain ozone nonattainment areas and throughout States in the OTR. 61 In addition, section 182( f) specifies circumstances under which these NOX requirements would be limited or would not apply (`` NOX waiver''). Further, areas granted a NOX waiver under section 182( f) may be exempt from motor vehicle I/ M and certain Federal requirements of general and transportation conformity. 62 For the same reasons described in the `` Nitrogen Oxides Supplement to the General Preamble'' with respect to the 1 hour ozone standard, we propose to also apply the NOX requirements and waiver provisions in section 182( f) for 8 hour ozone nonattainment areas under subpart 2 and OTRs. 63 Elsewhere in today's proposed rulemaking, we propose to establish NOX as a precursor to ozone under subpart 1 and require RACT and NSR in subpart 1 nonattainment areas for major sources of NOX as well as VOC. As noted in the preceding paragraph, we are also proposing that the NOX RACT and NSR requirements apply in certain subpart 2 nonattainment areas and throughout OTRs. While NOX emissions are necessary for the formation of ozone in the lower atmosphere, a local decrease in NOX emissions can, in some cases, increase local ozone concentrations. This potential `` NOX disbenefit'' resulted in Congress including NOX waiver provisions in section 182( f) ( in subpart 2 of part D) for areas classified under subpart 2. We believe the NOX waiver provisions are a prudent safeguard to avoid unnecessary emissions reductions and that these safeguards should be extended to areas classified under subpart 1 that are subject to the NOX RACT and NSR provisions. Therefore, we propose to establish NOX waiver provisions identical to those in section 182( f) for areas subject to subpart 1. In the event that the final rulemaking does not establish NOX as a precursor to ozone under subpart 1 and the NOX RACT and/ or NSR requirements do not apply, a NOX waiver provision would be unnecessary with respect to subpart 1 areas. We propose that the concepts contained in the existing 1 hour ozone guidance 64 regarding section 182( f) would apply for the 8 hour ozone program under subparts 1 and 2. We would update the existing guidance to take into account the new ozone and PM standards and modeling techniques now available. For areas that were previously granted a NOX waiver under the 1 hour ozone standard, a re approval would be needed to make it clear that the exemption applies, to allow for public VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32841 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 65 The EPA's Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision ( EPA 420   F   99   025, May 1999). comment, to be consistent with the waiver guidance under the 8 hour standard ( once issued), and to account for any new information that may point to a different conclusion.

M. What Aspects of Transportation Conformity and the 8 Hour Ozone Standard Are Addressed in This Proposal?

1. What Is Transportation Conformity?

Transportation conformity is required under section 176( c) of the CAA ( 42 U. S. C. § 7506( c)) to ensure that federally supported highway and transit project activities are consistent with (`` conform to'') the purpose of a SIP. Conformity to the purpose of the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS. Transportation conformity applies in nonattainment areas and maintenance areas. EPA's transportation conformity rule, 40 CFR part 93, establishes the criteria and procedures for determining whether transportation activities conform to the State air quality plan. It also establishes criteria and procedures for determining whether transportation activities conform in areas where no SIP containing mobile source emissions budgets yet exists. EPA first published the transportation conformity rule on November 24, 1993 ( 58 FR 62188) and has amended the rule several times. On August 15, 1997, a comprehensive set of amendments was published that clarified and streamlined language from the 1993 transportation conformity rule ( 62 FR 43780). These rulemakings, as well as other relevant conformity materials such as guidance documents, policy memoranda, and conformity research can be found at EPA's transportation conformity Web site, at: http:// www. epa. gov/ otaq/ transp. htm ( once at the site, click on `` Transportation Conformity.'')

2. Why Is EPA Discussing Transportation Conformity in This Proposed Rulemaking?

We are discussing transportation conformity in this proposed rulemaking in order to provide affected parties with information on when transportation conformity will be implemented under the 8 hour ozone standard and how we plan to make the transition from the 1 hour ozone standard to the 8 hour ozone standard. Affected parties may include State and local transportation and air quality agencies, metropolitan planning organizations ( MPOs) and the U. S. Department of Transportation ( DOT). To determine whether this discussion affects your organization, you should carefully examine the applicability requirements in 40 CFR 93.102 of the transportation conformity rule.

3. Are Any Changes Being Made to Transportation Conformity in This Proposed Rulemaking? No, we are not proposing changes to the transportation conformity rule in this proposed rulemaking. In the future, we plan to conduct a rulemaking to establish the specific conformity tests that will apply under the 8 hour standard. We intend to complete that rulemaking prior to area designations for the 8 hour standard and will provide the public with the opportunity to comment on the proposed changes. We plan to propose this rulemaking in the summer of 2003.

4. When Does Transportation Conformity Apply to 8 hour Ozone Nonattainment Areas? Transportation conformity applies to 8 hour ozone nonattainment areas 1 year after the effective date of an area's designation. This 1 year grace period is found in the CAA at 42 U. S. C. 7506( c)( 6). Specifically, this section of the CAA provides areas, that for the first time are designated nonattainment for a given air quality standard, with a 1 year grace period before the conformity regulation applies with respect to that standard. Since the 8 hour ozone standard is a different standard from the 1 hour ozone standard, every area that is designated nonattainment for the 8 hour ozone standard will have a 1 year grace period before conformity applies for the 8 hour standard, regardless of whether or not it was designated nonattainment or maintenance for the 1 hour ozone standard. For more information, please see the proposed and final rulemaking entitled, `` Transportation Conformity Rule Amendments: Minor Revision of 18 Month Requirement for Initial SIP Submissions and Addition of Grace Period for Newly Designated Nonattainment Areas,'' published October 5, 2001 ( 66 FR 50954); and August 6, 2002 ( 67 FR 50808), respectively for additional discussion of the 1 year grace period for newly designated areas. ( The proposed and final rule can be found on EPA's transportation conformity Web site mentioned above.)

5. How Does the 1 Year Grace Period Apply in Metropolitan Areas? Metropolitan areas are those areas that have a MPO designated as being responsible for transportation planning per 23 U. S. C. 134. In these areas, the 1 year grace period means that, 1 year after the effective date of an area's designation as nonattainment for the 8 hour standard, the area must have a conforming transportation plan and Transportation Improvement Program in place to fund or approve transportation projects. If, at the conclusion of the 1 year grace period, a metropolitan area is not able to make a conformity determination for its plan and Transportation Improvement Program, the area will be in what is known as a `` conformity lapse.'' ( For the discussion of which projects can proceed during a conformity lapse, please see DOT's January 2, 2002 guidance, published February 7, 2002, at 67 FR 5882; and EPA's May 14, 1999 guidance. 65 Both of these documents can be found on EPA's transportation conformity Web site: http:// www. epa. gov/ otaq/ transp/ traqconf. htm.

6. How Does the 1 Year Grace Period Apply in `` Donut'' Areas? For the purposes of conformity, a donut area is the geographic area outside a metropolitan planning area boundary, but inside the boundary of a designated nonattainment/ maintenance area. The conformity requirements for donut areas are generally the same as those for metropolitan areas, and the MPO would include any projects occurring in the donut area in its analysis of the metropolitan transportation plan and TIP. Therefore, the one year grace period applies to donut areas in much the same way that it applies to metropolitan areas. That is, within one year of the effective date of an area's designation, a donut area's projects must be included in an MPO's conformity determination for the metropolitan plan and TIP for those projects to be funded or approved. If, at the conclusion of the one year grace period, the donut area's projects have not been included in an MPO's conformity determination, the entire nonattainment area's conformity would lapse.

7. How Does the 1 Year Grace Period Apply in Isolated Rural Areas?

For the purposes of conformity, a nonattainment or maintenance area ( or portion thereof) is considered to be an isolated rural area if it does not have a metropolitan transportation plan or Transportation Improvement Program required under 23 U. S. C. 134, and its projects are not considered in the emissions analysis of any MPO's VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00041 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32842 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules transportation plan or Transportation Improvement Program. Isolated rural areas are distinguished from `` donut'' areas which are outside the metropolitan planning boundary and inside the nonattainment/ maintenance area boundary. Because isolated rural areas do not have federally required metropolitan transportation plans and Transportation Improvement Programs, a conformity determination need only be done in an isolated rural area when that area has a transportation project or projects that need approval. Therefore, isolated rural areas also have a 1 year grace period before conformity applies under the 8 hour ozone standard, but at the end of that grace period, the area is not required to have made a conformity determination. An isolated rural area would be required to make a conformity determination only at the point when a new transportation project needs approval. This point may occur significantly after the 1 year grace period has ended. ( Conformity requirements for isolated rural areas can be found at 40 CFR 93.109( g)).

8. Does Conformity Apply for the 1 Hour Ozone Standard Once the 1 Hour Ozone Standard Is Revoked? The CAA only requires conformity in areas that are designated nonattainment or maintenance for a standard. Therefore, conformity will not apply for purposes of the 1 hour ozone standard after the 1 hour standard and an area's 1 hour designation are revoked. In other words, existing 1 hour ozone nonattainment and maintenance areas, including those that will not be designated nonattainment for the 8 hour ozone standard, will no longer be required to demonstrate conformity to the 1 hour standard when EPA revokes the standard, 1 year after the effective date of EPA's 8 hour ozone designations. This interpretation that conformity would not apply in 1 hour ozone maintenance areas once the 1 hour standard is revoked is a change from the approach we planned to take in 1997. Since that time, we have reconsidered whether or not conformity should continue to apply in maintenance areas. We have concluded that the better interpretation is that conformity would not apply in 1 hour maintenance areas once the 1 hour ozone standard is revoked because maintenance areas are relieved of the obligation under section 175A of the CAA to have a maintenance plan. Since a maintenance plan is not required, conformity no longer applies in these areas. A detailed discussion of our plans for revoking the 1 hour standard and the associated 1 hour designations may be found elsewhere in today's proposed rulemaking.

9. What Are EPA's Plans for Amending the Conformity Rule To Address the 8 Hour Ozone Standard? The conformity rule will need to be amended to address the implementation of both the 8 hour ozone and PM2.5 air quality standards. We plan to address both standards in one revision to the rule. We anticipate proposing this revision in 2003 and finalizing the rulemaking prior to EPA's finalization of designations of nonattainment areas in 2004. This schedule would allow areas to be well aware of the conformity requirements that will apply to them prior to the start of the 1 year grace period. The proposal will provide an opportunity for stakeholders to offer comments and ideas for providing flexibilities that would be appropriate for some or all nonattainment areas.

10. What Impact Will the Implementation of the 8 Hour Ozone Standard Have on a State's Transportation Conformity SIP? Since we are not now proposing to make specific revisions to our Transportation Conformity Regulations in this proposal, States should not need to revise their Transportation Conformity SIPs, unless they need to do so to ensure the regulations apply in the appropriate areas.

11. What Other Parts of This Proposal Could Affect Transportation Conformity Determinations? We believe that transportation conformity stakeholders would be interested in the proposed Clean Air Development Communities program found in section O, question 9 of this proposal. Section O discusses how we propose to implement the NSR, EPA's program that regulates emissions from stationary sources such as power plants, under the 8 hour ozone standard. In question 9 of section O, we propose two options to recognize the air quality benefits that may result from siting new sources and planning development in a particular manner. Under these two options, the air quality benefit of location decisions would be applied to the stationary source sector. Because the benefits of measures cannot be counted twice, if air quality benefits of location decisions are applied to the stationary source sector, they could not also be credited to the transportation sector in a conformity determination. These options and their implications are discussed in further detail in section O, question 9. We encourage transportation conformity stakeholders to review that section carefully and submit any comments to us.

N. What Requirements for General Conformity Should Apply to the 8 Hour Ozone Standard?

1. What Is the Purpose of the General Conformity Regulations?

Section 176( c) of the CAA requires that before a Federal entity takes an action, it must make a determination that the proposed action will not interfere with the SIP or the State's ability to attain and maintain the NAAQS. In November 1993, EPA promulgated two sets of regulations to implement section 176( c). One set, known as the Transportation Conformity Regulations ( described above) deals with approval and funding of highway and mass transit projects. The other set, known as the general conformity regulations, deals with all other Federal activities. Besides ensuring that Federal actions will not interfere with the SIP, the general conformity program also fosters communications with State/ local air quality agencies, allows for public participation in the review of air quality impacts from Federal actions, and allows for air quality review of individual projects. In 1995, Congress limited the application of section 176( c) to nonattainment and maintenance areas only.

2. How Is the General Conformity Program Currently Structured?

Due to the very broad definition of `` Federal action'' in the statute and the number of Federal agencies subject to the conformity requirement, the number of individual conformity decisions could have been on the order of a thousand or more per day. To avoid creating an unreasonable administrative burden, EPA established de minimis emissions levels and exempted certain actions. In addition, the regulations allow Federal agencies to develop their own list of actions which are presumed to conform. For non exempt actions that increase emissions above the de minimis levels, the Federal agency must demonstrate that the action will conform with the SIP or will not cause or contribute to any new violation of any standard in any area; interfere with provisions in the applicable SIP for maintenance of any standard; increase the frequency or severity of any existing violation of any standard; or delay timely attainment of any standard or any required interim emissions reductions or other milestone. We are currently reviewing the general VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32843 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules conformity program and, in a separate action, may revise the regulations as appropriate, with respect to the 8 hour standard.

3. Who Runs the General Conformity Program? Each Federal agency is responsible for determining if the action it takes is subject to the conformity regulations and, if so, whether the action conforms to the SIP. Each Federal agency's approach to the conformity evaluation differs depending upon the actions being taken. Agencies that are permitting or funding actions subject to the conformity rules generally require the applicant to develop the technical support for the conformity determination, although some agencies undertake the complete evaluation themselves.

4. How Does an Agency Demonstrate Conformity? Depending upon the pollutant and the specific situation, Federal agencies have several options for demonstrating conformity. For actions in ozone nonattainment and maintenance areas, the Federal agency can demonstrate that the project/ action is specifically identified and accounted for in the SIP, obtain documentation from the State that the emissions are included in the SIP, have the State commit to include the emissions in the SIP, or mitigate the emissions or offset the emissions from emissions reductions within the same nonattainment or maintenance area.

5. General Conformity Regulation Revisions for the 8 Hour Ozone Standard a. What de minimis emission levels will be set for ozone precursors? For the ozone precursors VOC and NOX, we are proposing to retain the existing de minimis emission levels. Those levels were based on the definition of a major stationary source for the NSR programs as established by sections 182, 183, and 302 of the CAA. The current de minimis levels are identified in Table 4 below.

TABLE 4.   DE MINIMIS EMISSION LEVELS FOR VOC AND NOX Type of ozone area VOC tons/ year NOX tons/ year Extreme Nonattainment ...................... 10 10 Severe Nonattainment ...................... 25 25 Serious Nonattainment ...................... 50 50 Moderate and Marginal Nonattainment in the OTR ... 50 100 TABLE 4.   DE MINIMIS EMISSION LEVELS FOR VOC AND NOX   Continued Type of ozone area VOC tons/ year NOX tons/ year Other Nonattainment 100 100 Maintenance in OTR 50 100 Other Maintenance ... 100 100 Areas covered by subpart 1 are included in the `` Other Nonattainment'' category listed in Table 4 and would have de minimis emission levels of 100 tons per year for both VOC and NOX emissions. b. What impact will the implementation of the 8 hour ozone standard have on a State's general conformity SIP? Since we are not now proposing to make specific revisions to its general conformity regulations in this proposal, States should not need to revise their general conformity SIPs, unless they need to do so to ensure the regulations apply in the appropriate areas. c. Are there any other impacts on the SIPs related to general conformity based on implementation of the 8 hour standard? Currently, we are reviewing the general conformity regulations and are considering whether it would be appropriate to revise them in the near future. We are not proposing any revisions at this time. However, as areas develop SIPs for the 8 hour ozone standard, we recommend that State and local air quality agencies work with major facilities which are subject to the general conformity regulations ( e. g., commercial airports and large military bases) to establish an emission budget for those facilities in order to facilitate future conformity determinations. Such a budget could be used by Federal agencies in determining conformity or identifying mitigation measures.

6. How Does the 1 Year Grace Period Apply to General Conformity Determinations?

Section 42 U. S. C. 7506( c)( 6) applies to both transportation and general conformity. Therefore, the general conformity requirements would not apply to actions/ projects in newly designated nonattainment areas until 1 year after the effective date of the designation. As discussed in section M. 4., the 8 hour ozone standard is a new standard and the grace period applies to all the areas designated nonattainment for that standard. Actions/ projects in areas previously designated nonattainment or maintenance for the 1 hour ozone standard must demonstrate conformity for the 1 hour standard until that standard is revoked in whole or in part. Once the 1 hour ozone standard is revoked in whole or in part, Federal agencies will be required to conduct conformity determinations for the 8 hour standard if the project/ action is in an area designated nonattainment for that standard. The general conformity regulations specify requirements for actions/ projects in areas without an approved SIP. Those requirements would apply to 8 hour ozone nonattainment areas until the SIP is approved by EPA.

O. How Should the NSR Program be Implemented Under the 8 Hour Ozone NAAQS?

1. Background The major NSR program contained in parts C and D of title I of the CAA is a preconstruction review and permitting program applicable to new or modified major stationary sources of air pollutants regulated under the CAA. In nonattainment areas, and throughout the OTR, the program is implemented under the requirements of part D of Title I of the CAA, and is referred to as nonattainment NSR. In attainment or unclassifiable areas outside the OTR, the requirements under part C of title I of the CAA apply, and the program is called the Prevention of Significant Deterioration ( PSD) program. Collectively, we also commonly refer to these programs as the major NSR program. These regulations are contained in 40 CFR 51.165, 51.166, 52.21, 52.24 and part 51, appendix S. In attainment/ unclassifiable areas outside of the OTR, a new major source, or a major modification to an existing source, must install best available control technology ( BACT) and conduct an air quality modeling analysis and an analysis of potential impacts on Class I areas ( see section 162 of the CAA). If the source is located in a nonattainment area, or anywhere in the OTR, including OTR attainment areas, it must install technology that meets the lowest achievable emission rate ( LAER), secure emission reductions to offset any increases in emissions, and perform other analyses. As of the date areas are designated attainment or nonattainment under the 8 hour standard, major NSR will apply under the standard. In areas outside the OTR that will be designated as attainment for the 8 hour ozone standard, the part C PSD program will apply. As there are currently PSD programs in place in all areas of the country, implementation of the new standard should be a straightforward VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32844 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 66 Should EPA issue revisions to these regulations, the revised NSR program would of course apply to new sources and major modifications. 67 States with already applicable part D NSR programs may choose to amend their SIPs to allow them to take advantage of the transitional option described in this section, provided they meet the transitional program eligibility criteria. matter. ( Note that one change we will be codifying is the addition of NOX as an ozone precursor. This is discussed in more detail later in this section). In areas newly designated as nonattainment for the 8 hour ozone standard, however, a number of implementation issues will arise, which we discuss below. Typically, upon designation, nonattainment areas would be required to implement nonattainment NSR for major sources and major modifications. 66 However, in order to reduce the burden for nonattainment areas meeting certain conditions, we are proposing a revised set of major NSR requirements under the authority of 40 CFR Part 51, appendix S, section VI. We are referring to this as the transitional program, and it is discussed in more detail later in this section.

2. Nonattainment NSR Under the 8 Hour Ozone Standard Some States may already have in place a part D major source program applicable to newly designated 8 hour ozone nonattainment areas. For nonattainment areas in States whose SIPs contain a generic requirement to issue part D major source NSR permits in areas designated as nonattainment, nonattainment NSR permit requirements will become automatically effective upon designation ( See Figure 1). 67 VerDate Jan< 31> 2003 21: 41 May 30, 2003 Jkt 200001 PO 00000 Frm 00044 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32845 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules For a nonattainment area in a State with a SIP that specifically lists the areas in which part D NSR applies, or in areas which currently have no nonattainment plan, there will be an interim period between the designation date and the date that the State amends its SIP either to list any new nonattainment area( s) or to include a part D plan. During this interim period, part D NSR requirements are governed not by section 51.165, but by appendix S to part 51. a. What does appendix S require for nonattainment areas during the interim period? In general, appendix S requires new or modified major sources to meet LAER and obtain sufficient offsetting emissions reductions to assure that the new major source will not interfere with the area's progress toward attainment. ( Readers should refer to 40 CFR part 51, appendix S for a complete understanding of these and other VerDate Jan< 31> 2003 21: 41 May 30, 2003 Jkt 200001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 EP02JN03.000</ GPH> 32846 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 68 The actual language at 40 CFR 52.24( k) allows States to issue permits under appendix S for a maximum period of 18 months after designation. After this time, if the nonattainment area does not have an approved Part D NSR permit program, a construction ban would apply. However, in 1990, Congress altered the provisions of the construction ban such that it would not apply when a State lacked an approved part D NSR permit program in the future. We believe that Congress' removal of the construction ban from the CAA supersedes the regulatory language at 52.24( k) and EPA has reinterpreted this language to allow States to issue permits under appendix S from designation until the SIP is approved even if this exceeds 18 months. See 1991 guidance memo, `` New Source Review ( NSR) Program Transitional Guidance'', John S. Seitz, March 11, 1991. We will be revising the language at section 52.24( k) to properly reflect this interpretation. 69 Note that new sources or modifications which are major as a result of NOX emissions, and are thus subject to nonattainment NSR for NOX, would also be considered major sources of nitrogen dioxide ( NO2), which is also a criteria pollutant. Since all areas are currently in attainment under the NO2 NAAQS, these new NOX sources will also need to go through PSD review of NO2. 70 Certain nonattainment NSR requirements in subpart 2 of part D are specifically spelled out in the CAA, and thus cannot be altered under a transitional program. appendix S permitting requirements.) However, per section VI of appendix S, we have always recognized the need for flexibility under certain circumstances, which we address in detail below. Also, note that EPA does not have a Federal permit program in place for nonattainment NSR. This creates particular difficulties for the Tribes, because their programs are not as mature as the State programs. Therefore, in most locations, EPA, not the Tribes, will need to address the implementation of appendix S in these areas, until a Tribe develops a nonattainment NSR program on its own. b. What is the legal basis for requiring States to issue nonattainment NSR permits during the interim period? Section 110( a)( 2)( c) of the CAA establishes a general duty on States to include a program in their SIP that regulates the modification and construction of any stationary source as necessary to assure that NAAQS are achieved. This general duty, often referred to as `` minor NSR,'' exists during all periods, including before a State has an approved part D NSR permit program. Although section 110( a)( 2)( c) does not define specific requirements States must follow for issuing major source permits during the interim period between nonattainment designation and EPA approval of a part D nonattainment NSR SIP (`` interim period''), EPA's regulations codified at 52.24( k) require States to follow EPA's Emission Offset Interpretative rule codified at 40 CFR part 51, appendix S ( hereinafter referred to as appendix S) during this time. 68 c. Codification of NOX as an ozone precursor. Currently, only VOCs are expressly regulated as ozone precursors under the PSD regulations. Although appendix S specifically states that a source is major for ozone if it is major for VOCs, we do not believe this language is exclusive. The more general portion of the `` major stationary source'' definition states, ``* * * any stationary source that emits, or has the potential to emit, 100 tons per year or more of any pollutant subject to regulation under the Act,'' is considered a major source. There is similar general language within the definition of `` major modification.'' The nonattainment provisions of the Act, as amended in 1990, recognize NOX as an ozone precursor; section 182( f) of the CAA established nonattainment requirements for NOX. In addition, the definition of air pollutant under section 302( g) of the CAA includes, ``* * * any precursors to the formation of any air pollutant * * *'' Thus, where NOX is considered a precursor to the formation of ozone, the State would use appendix S to issue a preconstruction permit to a new major source of NOX emissions during the interim period. 69 Notwithstanding the above, in order to be completely clear, we are proposing to amend both our NSR and PSD regulations to expressly include NOX as an ozone precursor in major PSD and major nonattainment NSR programs. Where relevant for both PSD areas and transitional NSR areas, States would be required to modify their existing programs to include NOX as an ozone precursor. Elsewhere in today's action, we are proposing to include NOX as an ozone precursor for RACT requirements under subpart 1. Under section 182( f) ( in subpart 2), a waiver from NOX RACT and nonattainment NSR is possible under certain circumstances. We are proposing that the section 182( f) waiver provisions would also apply to areas designated nonattainment under either subpart 1 or subpart 2. However, the waiver provisions do not apply in areas where PSD is applicable.

3. Under What Circumstances Is a Transitional Program Needed During the Interim Period? We request comment on providing States flexibility regarding major source nonattainment NSR program requirements in areas that meet specific conditions. We believe that a more flexible NSR option is appropriate in areas that are expected to reach 8 hour ozone attainment early   within 3 years after designation   through, for example, national or regional programs such as the NOX SIP Call and the Tier 2 motor vehicle emissions standards. In these areas, we believe that States should have the flexibility to apply a nonattainment NSR program that provides some relief from certain requirements. Several factors warrant a flexible approach for implementing NSR in areas which qualify for the transitional program. We expect many areas to attain the new 8 hour standard within 3 years solely through regional NOX reductions under the NOX SIP Call rule and other currently applicable Federal programs. We intend this option to be available to any 8 hour ozone nonattainment areas located outside the NOX SIP Call area, so long as those nonattainment areas can meet the 8 hour ozone NAAQS within 3 years after designation. Some of these areas may be in nonattainment due largely to transport from upwind sources; but no allowance is made under major NSR for sources in areas overwhelmed by transport. As we have construed it, this option would also encourage the early adoption of attainment plans, which we believe will lead to emissions reductions and resultant health benefits earlier than would otherwise occur. We request comment on the transitional program described in this proposed rulemaking, and in particular welcome information from States regarding how many new major sources or major modifications they anticipate would construct in transitional areas during the period between EPA's approval of a transitional part D nonattainment NSR plan and the State reaching attainment of the 8 hour NAAQS.

4. Elements of the Appendix S Transitional Program a. Which nonattainment areas would be eligible for the transitional program? The appendix S transitional program would only be available to 8 hour ozone nonattainment areas that are subject to NSR under subpart 1, not subpart 2 ( see discussion of classifications elsewhere in this proposal). In addition, in order to be eligible for the transitional option, by the date EPA publishes the nonattainment designations for the 8 hour standard ( currently expected in 2004) a subpart 1 nonattainment area must: ( 1) Be attaining the 1 hour ozone standard; ( 2) be subject to subpart 1, not subpart 2, of part D; 70 ( 3) have submitted an attainment plan that demonstrates attainment within 3 years after designation; the attainment plan would have to include control measures under the NOX SIP Call rule where VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32847 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 71 The actual attainment date   as proposed elsewhere in this proposal   would be 3 years after the nonattainment designation. 72 U. S. EPA Office of Air Quality Planning and Standards, New Source Review Workshop Manual, Prevention of Significant Deterioration and Nonattainment Area Permitting, Draft, October 1990. Available at: http:// www. epa. gov/ ttn/ nsr/ gen/ wkshpman. pdf. applicable; and ( 4) have submitted an attainment plan containing any additional local control measures needed for attainment of the 8 hour standard. These plans must commit the State to implement, by December 31, 2004, all measures necessary to bring the nonattainment area into attainment by a 2007 attainment date. 71 In addition, when a State submits its attainment plan, it should note that it intends to implement a program under appendix S, section VI that meets the requirements for transitional areas discussed below. Note that, under this option, the attainment plan submission timing ( i. e., submission by the date of EPA designation of nonattainment areas) for transitional areas is about 3 years earlier than is otherwise required for areas not meeting the 8 hour standard. Note also that areas would be eligible for this transitional NSR provision even though we are not establishing a `` transitional'' nonattainment classification for areas covered under subpart 1. We request comment on these criteria. Also, note that while relief from offsets is provided for the NSR transitional program ( see discussion below), those States and Tribes subject instead to the main body of appendix S will still need to provide offset provisions. b. What would be the basic requirements of a transitional nonattainment NSR program under appendix S, section VI? i. Major source applicability threshold. Under the general part D NSR requirements, the applicability threshold for `` major stationary source'' is defined as 100 tons per year of a nonattainment pollutant; in some instances under subpart 2 the major source threshold can be as low as 10 tons per year. In contrast, the major source threshold under the PSD program is either 100 or 250 tons per year, depending upon the type of stationary source undergoing review. We propose that, consistent with the subpart 1 part D NSR requirements, an appendix S, subpart VI transitional nonattainment programs will use a major source threshold of 100 tons per year for each ozone precursor. ii. Emission Control. Another key provision of the part D nonattainment NSR program is that, in order to be permitted, major new and modified sources must minimize their emission rate by applying control technology to achieve LAER, which is generally the most stringent emission limit contained in a SIP or achieved in practice. In contrast to LAER, which does not consider costs and other factors, a BACT analysis requires consideration of energy, environmental, and economic impacts in determining the maximum degree of reduction achievable for the proposed new source or modification. In a BACT analysis, as described in the New Source Review Workshop Manual, 72 the most stringent emission limit, including the limit representing LAER and its associated control technology, must be considered. If the most stringent limit is rejected as BACT for a particular case, that decision must be supported by an analysis that shows that the most stringent limit should not be chosen in light of the costs or other relevant factors. For example, if the most effective control technology would impose unacceptably high costs because of site specific factors, that technology could be rejected as BACT for the proposed source. In this way, BACT may be less stringent than LAER. We request comment on whether a BACT requirement, consistent with the BACT approach described in the NSR workshop manual, may be required in transitional appendix S nonattainment NSR programs in lieu of requiring LAER. We believe granting this relief is appropriate, given the minimal difference we would expect between the emissions reductions achieved from BACT, rather than LAER, for the small number of sources that may trigger nonattainment NSR in transitional areas, for the few years the area is nonattainment. iii. Relief from source specific offsets requirements. We are proposing that major sources and major modifications would not be required to obtain case and source specific offsets under the transitional program. However, despite locating in a nonattainment area which qualifies for the NSR transitional program, a new major source may not cause or contribute to the existing violation in the nonattainment area. If the State determines that the source does not contribute to the existing violation, then mitigation would not be required. There are several circumstances under which it is reasonable to assume that a new major source locating in a nonattainment area will not interfere with timely attainment of the standard. First, if the nonattainment area which qualifies for the NSR transitional option is participating in the NOX SIP Call ( 63 FR 57356; October 27, 1998), we expect that a source locating in the area will not cause or contribute to the existing violation, so long as the new emissions are consistent with growth projections. This is because it is assumed that where new emissions are consistent with growth projections, those new emissions will not interfere with timely attainment of the standard. Under the NOX SIP Call, we modeled emissions for 2007. We included future growth projections for both VOC and NOX emissions, and allocated each State a NOX budget designed to control interstate NOX transport. Because these budgets include an emission growth factor for VOC and NOX, we believe that new major sources may locate in those nonattainment areas which qualify for the NSR transitional option without interfering with the area's ability to reach attainment, provided that any new emissions are within the projected emissions growth factor. We expect States to develop appropriate emission inventory procedures to assure that any new emissions are consistent with projected growth in emissions. Those nonattainment areas which qualify for the NSR transitional program that are not projected to attain under the NOX SIP Call or are not covered by the NOX SIP Call may also allow for an increase in new major source emissions if their attainment demonstration includes an emissions growth factor for major new and modified sources and demonstrates that, provided emission increases from new major sources remain below this level, the area will reach attainment. Again, we expect States to develop appropriate emission inventory procedures to demonstrate that the new emissions are consistent with projected growth in emissions. iv. Other requirements. In addition to the control technology requirements discussed above, and consistent with current NSR requirements under appendix S, section IV, condition 2, sources locating in transitional areas will be required to certify statewide compliance of all existing major sources under the same ownership or control. We believe this requirement will not impose a substantial burden on permit applicants or permitting authorities. v. Backstop Provisions. Should a nonattainment area under the appendix S, section VI transitional program fail to meet its SIP obligations to attain the NAAQS before the end of the interim period, then it will no longer be eligible for the transitional program. We request comment on the need for a backstop provision that requires a State to notify VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32848 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 73 The actual attainment date   as proposed elsewhere in this proposed rulemaking   would be 3 years after the effective date of nonattainment designation, which we anticipate will occur in the spring of 2004. us, at the time of such failure, that it is reverting to the traditional nonattainment requirements under appendix S. We also request comment on any other findings which should end eligibility for the transitional program.

5. Will a State Be Required To Assure That the Increased Emissions From a new Major Source Do Not Cause or Contribute to a Violation in a Nearby Nonattainment Area Before It Issues a Preconstruction Permit Under Appendix S? At the current time, EPA allows the State to presume that a source locating outside a designated ozone nonattainment area will have no significant impact on the designated nonattainment area. See section III of appendix S. However, given the recent advances in the scientific understanding of ozone formation, we may revise these guidelines in the near future. In the meantime, under the PSD rules, States may choose to address the impacts of sources in attainment areas on nearby nonattainment areas in a more proactive manner; i. e., through PSD offsets and/ or tighter emission controls when the source is shown to contribute to a violation of the NAAQS.

6. What Happens at the End of the Interim Period? a. Transitional NSR areas. As noted above, this transitional option is only intended to apply to certain nonattainment areas that expect to attain the 8 hour ozone NAAQS within 3 years after designation. Therefore, we expect these areas to be in attainment on or before an attainment date in 2007. Accordingly, States must submit, by the attainment date in 2007, an attainment demonstration with a maintenance plan. A State may continue implementing transitional NSR under appendix S, section VI for 6 months following submission of its attainment plan, or until its attainment plan is approved, whichever is earlier. b. Traditional NSR areas. If a State has never been or is no longer operating under a section VI transitional program, it must submit a part D nonattainment NSR plan within 3 years after designation ( in 2007). The State may continue implementing traditional part D nonattainment requirements under appendix S until we approve its part D plan.

7. What Is the Legal Basis for Providing This Transitional Program? As stated earlier, appendix S applies during the period after an area is designated nonattainment but before a part D nonattainment NSR plan is due under subparts 1 and 2 of part D. Application of appendix S during this interim period ensures compliance with the section 110( a)( 2)( C) `` minor'' NSR program. However, Congress was ambiguous regarding what specific requirements States must follow for issuing major source permits during the interim period described above. Thus, we have discretion to interpret those regulations in a reasonable manner. Chevron, U. S. A. v. NRDC, 467 U. S. 837 ( 1984). The transitional appendix S approach is reasonable for several reasons. First, it would be available only for those areas that are already attaining the 1 hour standard and that will attain the 8 hour standard within 3 years after designation ( before a part D nonattainment NSR SIP revision is due) through national and regional planning. These areas appropriately deserve a different approach for implementing the section 110( a)( 2)( C) requirements than areas that are in nonattainment for the 1 hour standard and thus currently implementing NSR, or those areas that are not projected to reach attainment of the 8 hour in the short term. We believe that the transitional option, as we have constructed it, would result in a level of emissions reductions that is substantially similar to the level that would be achieved from traditional NSR for the small number of sources it will affect in the short period during which these areas are designated nonattainment. Thus, these transitional areas would still be implementing a program that regulates the modification and construction of any stationary source `` as necessary'' to assure that the NAAQS are achieved as expeditiously as practicable. Currently, the language of section VI allows all States to exempt a new major source from complying with the requirement to install LAER and obtain offsets if the source will meet all other applicable SIP requirements and not interfere with the area's ability to meet its attainment date. However, we plan to revise section VI to remove this general exemption and apply the transitional approach. This revision is appropriate because we do not believe that areas not meeting the transitional approach would be able to ensure that they were implementing an NSR program `` as necessary'' to ensure the attainment of the NAAQS without complying with appendix S in general ( e. g., sections I   V). Note that section VI of appendix S originally applied only to secondary NAAQS, and we revised section VI to include primary standards following the 1977 Amendments. The exemption provided by section VI applied to areas whose attainment dates were shortly after the CAA was re authorized in 1977 because these areas had already submitted their attainment plans to us, and we believed that these areas would reach attainment without having to impose LAER and offsets on new major sources. While nonattainment areas that qualify for the 8 hour ozone standard NSR transitional option are in a similar situation, areas not qualifying for the transitional approach are not. In order to qualify for the NSR transitional option, States will have to submit an attainment plan by the date of designation for the 8 hour NAAQS in 2004. These plans must commit the State to implement by December 31, 2005, all measures necessary to bring the nonattainment area into attainment and to meet a 2007 attainment date. 73 Similar to the nonattainment areas to which section VI originally applied, we believe that nonattainment areas which qualify for the NSR transitional option will be able to meet a 2007 attainment date without imposing LAER and offsets on new major sources. On its surface, section VI's existing language could be applied in any nonattainment area during the interim period. For an area that fails to meet the transitional option requirements, however, we believe that the area would not be able to show that it will continue to meet the areas attainment date if it does not apply LAER or obtain offsets. Thus, we are proposing to revise the language of section VI to apply only in areas qualifying for the transitional NSR program.

8. How Should the NSR Requirements Be Implemented for New 8 Hour Ozone Areas that Encompass the Old 1 Hour Ozone Nonattainment Areas After EPA Revokes the 1 Hour Ozone Standard? Newly designated 8 hour ozone areas which include areas which have never attained the 1 hour standard will have two different sets of requirements in place until a point in time proposed elsewhere in this proposed rulemaking under the anti backsliding provisions. ( There are two options proposed in the anti backsliding section of this proposal for that point in time   until either the level of the 1 hour ozone standard is achieved or the 8 hour ozone standard is attained.) The 1 hour NSR requirements and higher offset ratios ( if applicable) will remain in place in the area that was designated nonattainment VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32849 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 74 Brownfields are generally considered to be abandoned or underutilized properties ( especially industrial and commercial facilities) where redevelopment or expansion may be complicated by possible environmental contamination ( real or perceived). However, a brownfield site, as defined by The Small Business Liability Relief and Brownfields Revitalization Act of January 11, 2002, is any `` real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.'' Further information is available at: http:// www. epa. gov/ compliance/ resources/ faqs/ cleanup/ brownfields/ index. html. for the 1 hour standard until that point in time. The remaining portion of the newly designated 8 hour ozone area must comply only with the 8 hour ozone NSR requirements and offset ratios ( if applicable).

9. NSR Option To Encourage Development Patterns That Reduce Overall Emissions   Clean Air Development Communities EPA is considering two options to recognize the air quality benefits which can accrue when areas site new sources and plan development in a manner that results in overall reduced emissions. EPA would define a community that changes its development patterns in such a way that air emissions within the non attainment area are demonstrably reduced as a `` Clean Air Development Community'' ( CADC). We propose that areas that qualify as CADCs would obtain certain flexibilities in implementing CAA programs. We request comments on the options listed here and encourage commenters to suggest other ways under the CAA that we could encourage development that will result in lower emissions. In the first option, a CADC would have a more flexible NSR program by: ( 1) Being subject to subpart 1 NSR as opposed to subpart 2 NSR; ( 2) lowering NSR major source thresholds for these areas to make them similar to the thresholds for PSD areas; and ( 3) allowing areas that meet certain development criteria ( development zones) to receive NSR offsets from State offset pools. In the second option, a CADC would be able to receive a pool of NSR offset credits equal to the reduced emissions from new development patterns. Credits from the pool could be provided to any new or modified source in a `` development zone'' as offsets. The first goal of a CADC option is that it would give communities a tool to achieve air quality benefits that can accrue from strategic location of new sources. The location of new sources ( often major job centers) can affect regional development patterns and air emissions. As a result, new sources have a dual impact on air quality. The first impact is from their own direct emissions and the second impact is from the emissions associated with other sources whose development is influenced by the new source and any change in travel patterns ( positive or negative) that may result. This option attempts to recognize the net impact that a new source has on a region, not just from their own stationary emissions, but also from their associated stationary, area and mobile source emissions influenced by the location of the new source. It provides a mechanism to recognize the relative emissions reductions associated with locating major job centers in close proximity with transit, commercial/ retail destinations, and workforce housing. Furthermore, the EPA recognizes that brownfields 74 are often prime candidates to realize these locational benefits. Brownfields, as sites of previous economic activity, frequently enjoy excellent proximity to a variety of destinations and a range of transportation infrastructure. Second, given their potentially contaminated state, manufacturing or other industrial uses are often the appropriate type of revitalization. The productive re use of these sites is a priority for the Agency. This option will provide flexibility within CAA programs to achieve the dual goals of brownfields revitalization and reduced air emissions. The second goal of a CADC program would be that it would allow communities to use the air benefits of their development practices as an incentive for locating new sources and their associated economic growth. Anthropogenic emissions within a region come from three kinds of sources: Mobile sources, areas sources, and stationary sources. Thus, the ability of a region to accommodate new stationary sources is dependent not only on stationary source emissions but also on mobile and area source emissions. Localities which choose to engage in development that reduces emissions from mobile and area sources, with either of these options, could have the opportunity to turn those reductions into incentives for siting new economic activity. It should be noted that an area that decides to become a CADC is, in effect, transferring to the stationary source sector emission reductions which normally would remain in the mobile source sector where they could, for example, be used for conformity determinations. Areas would have to think through the implications for them of doing this. While we have not decided to go forward with either of these options at this time, we are continuing to examine them and, therefore, request comment on them. In particular, we request comment and suggestions on possible legal rationales for supporting these options which would enable them to be implemented through rulemaking. We are also very interested in other potential incentives that we could provide in addition to or instead of those included in this proposal. ( We encourage commenters to focus on those incentives that are within EPA control.) In addition, we request comment on implementation barriers, as well as the analytical complexities in the estimation of emission benefits from changes to development patterns that areas would need to calculate in order to become a CADC. Public comments will help us determine how and whether to include either option in the final rulemaking. a. What is EPA considering? Option 1: EPA is considering a package of three kinds of flexibility for areas subject to subpart 2 whose land use development meets certain criteria. First, we would allow CADC's to be covered under the NSR program under subpart 1 rather than under subpart 2 if: ( a) They adopt specific land use measures into their SIPs that reduced air emissions; and, ( b) they demonstrate that air quality would not decrease as a result of using subpart 1 instead of subpart 2. This demonstration would have to quantify the emissions reductions from adopted land use measures in their SIPs and show that the decreases from the land use measures are sufficient to offset any potential increase in emissions from using subpart 1 instead of subpart 2. Second, we would lower the NSR major source thresholds for CADC areas to make them similar to those under the PSD provisions. Third, we would allow development zones, areas that meet certain development criteria, to receive NSR offsets from `` pools'' or `` banks'' of offsets established by the State. ( A pool would be created by the State's taking action or requiring others to take actions that meet the criteria for NSR offsets. The State would then collect these offsets and could distribute them to new development that would occur in specific areas.) We believe that these actions would help steer development to development zones where fewer regional emissions would occur than if the development had occurred elsewhere. In addition, the change in land use patterns may help areas reduce their mobile source emissions. EPA requests comments on whether an area VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00049 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32850 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules 75 Urbanized area   an area consisting of a central place( s) and adjacent urban fringe that together have a minimum residential population of at least 50,000 and generally an overall population density of at least, 1,000 people per square mile of land area. http:// www. census. gov/ geo/ www. tiger/ glossary. html should receive all three incentives or only one or two of them. Option 2: EPA is also considering a less ambitious program of incentives that focuses on the development zones. In this option, the reduced emissions from improved development patterns are used to create offset pools for use by sources in development zones. We believe that this would also help steer development toward development zones providing the same benefits discussed above. The main advantage to a CADC compared to option 1 is that the offset pool could start with considerable offset credits and, therefore, the credits would not have to be created through additional actions. It would also have the potential of more carefully targeting new development just to the development zone instead of anywhere in the CADC. b. What would a CADC be? A CADC would be a `` community'' that changes its development patterns in such a way that air emissions within the nonattainment area are demonstrably reduced. A CADC does not have to be, and in most cases probably would not be, an entire metropolitan nonattainment area covered by a SIP. A portion of a nonattainment area could be designated a CADC in those cases where the land use changes did not result in a sufficient emissions reductions to allow the entire nonattainment area to qualify. It should be noted, however, that if a CADC smaller than the entire nonattainment area was designated, any analysis of the effect of any changes in development would have to reflect and consider effects on the nonattainment area as a whole. c. What would a development zone be? EPA proposes that areas that meet certain criteria would be considered `` development zones,'' and new sources in these development zones could receive offsets from State offset pools. The following is a list of possible criteria that EPA could use to define those zones. EPA's goal is to help identify zones which promote environmentally sound development, the preservation of regionally or locallydesignated open space, and sites which have adequate, existing infrastructure. Areas would, for example, have to be:   Located within an 8 hour ozone nonattainment area.   Located within an `` urbanized area'' as defined by the U. S. Census Bureau. 75   Zoned for industrial use.   Located within 0.25 miles of rail freight facilities.   Located within 0.5 mile of fixed rail or express bus transit service.   Designated or qualify for designation as a Federal or State redevelopment zone.   Enrolled in a State brownfield remediation plan.   Designated industrial corridor.   Adopting land use density indicators such as population, employment, congestion index. EPA specifically requests comment on these criteria including whether these criteria are appropriate, and if not, how should they be changed? We also request comment regarding whether a site must meet all or just some of the criteria to qualify. d. Why is EPA proposing these ideas? EPA would like to encourage land use practices that reduce emissions, and one possible way could be through NSR program flexibility. EPA recognizes that the way land use occurs in an area can affect emissions in all sectors, including stationary, area and mobile sources. For on road mobile sources, areas can already include the emissions impacts of their land use choices within their SIP, as well as in their transportation conformity determinations. EPA would like to encourage areas to adopt land use practices that result in fewer emissions from all sectors by allowing areas to apply the benefits from certain land use measures to the major stationary source sector and creating special NSR flexibilities for areas that do so. e. If areas receive NSR flexibility for adopting land use measures, can the air quality benefits of land use measures also be applied to other sectors? As part of any flexibility, EPA wants to ensure that areas do not count the effects of a land use activity twice. For example, if areas decide that they want to apply the emissions benefits that result from certain land use decisions toward NSR, then they cannot also include the air quality benefits of land use choices in their motor vehicle emissions budgets in the SIP, or in the area's transportation conformity determinations. EPA recognizes that this means that areas will have to decide for themselves how to apply any emissions benefits of land use activities, and that consultation among all affected parties must occur. For many communities, this could be a difficult decision that would require the input of many stakeholders representing both the mobile and stationary source sectors as well as the general public. One possible way for areas to avoid double counting would be for EPA to give credit only for new measures that are adopted in response to this proposal. This approach would ensure that the proposal acts as an incentive to encourage new actions that will reduce emissions. Such an approach could, however, be seen as unfairly penalizing areas that have already taken positive actions. EPA requests comment on how best to balance the issues of ensuring fair treatment for all areas, preventing double counting, and making this proposal an effective incentive. For example, areas would continue to include existing land use measures in their SIP motor vehicle emissions budgets and in their conformity determinations, and apply the reductions from newly adopted land use measures to demonstrate they qualify for the type of flexibilities proposed here. Quantifying the on road mobile source air quality impacts of land use measures occurs in transportation modeling ( discussed below). Therefore, in a SIP submission that includes land use measures adopted to obtain NSR flexibility, areas would have to show that their motor vehicle emissions budgets do not also include the effects of the newly adopted land use measures. EPA also recognizes that there may be other, potentially easier ways to avoid double counting and encourages commenters to submit them. f. How would areas quantify the benefits of land use choices? Areas would quantify the benefits of land use through their air quality modeling process in the SIP process. EPA's guidance, `` Improving Air Quality Through Land Use Activities'' ( Improving Air Quality Through Land Use Activities Report). U. S. Environmental Protection Agency, Office of Air and Radiation, Office of Transportation and Air Quality. ( EPA420   R   01   001, January 2001). It can be found at: http:// www. epa. gov/ otaq/ transp/ trancont/ r01001. pdf) provides information about how land use measures are modeled and possibly quantified. EPA requests comment on other potential methods of quantifying the reductions. Areas should be aware that quantifying the benefits of land use may not be an easy task. EPA sees two potential difficulties in quantifying the benefits of land use for application to NSR on which we seek input. First, as stated above, it may be very complicated for areas to avoid counting the same air quality benefits twice. One way areas might reduce the risk of such double counting is to produce two sets of modeling. One would be based on the VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32851 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules current situation, the other based on the proposed land use changes made by the community. The difference between these `` before and after modeling'' scenarios would show the emission impacts of the land use changes. We recognize that this modeling is very complex and resource intensive. Complexities arise because in many areas across the country, on road mobile source emissions are estimated using transportation and emissions models. The locations where people live and work in an area, are important inputs to the transportation planning and modeling processes. As such, the long range transportation plan which covers at least 20 years into the future was developed to reflect the mobility needs for a specific land use scenario. It has been long recognized that there is a complicated, dynamic and interrelated relationship among air quality, transportation and land use planning. Evaluation may need to be iterative. For example, if land use changes are proposed to gain air quality benefits, the transportation system may need to be reevaluated to insure, that with the new land use scenario, the transportation system can continue to provide an acceptable level of transportation service to all members of the community. Therefore, it may be difficult for areas to precisely quantify the emissions related to land use choices from this modeling, given the dynamic nature between land use and transportation. In conducting this sort of analysis, States should be working closely with MPOs and other transportation and planning agencies. The second set of difficulties involves setting the timeframe before emission benefits can be realized. EPA seeks comment on the potential difference in the time period over which benefits may be realized from land use strategies compared to the NSR program. Land use strategies tend to be long term. Once a particular land use strategy is adopted, it may take several years before the change results in air quality benefits. For example, suppose an area decides to change its zoning regulations to encourage mixed use development. This strategy may ultimately result in lower relative emissions because of people making fewer vehicle trips because housing, employment, and shopping are located together compared to development patterns that might occur without the changes to the zoning regulations, and the increase in density may generate transportation options such as transit service, bicycling, and walking. However, it may be several years before the zoning regulations actually change where people and businesses decide to locate. Of course, it should be noted that flexibilities proposed do not necessarily mean that new development will occur right away. EPA requests comment on how to take this issue of timing into account in our proposal to give program flexibility for adopting land use measures. g. How can changes to land development affect air quality? As metropolitan areas continue to expand in both size and population, how and where development occurs has significant implications for many environmental impacts including air quality. For example, establishing land use strategies to increase population and housing densities, and support the provision of mixed use development can make transit, and bicycle and pedestrian facilities more viable options to driving. These strategies may decrease the amount of motor vehicle emissions that would occur compared to development patterns if the strategies were not established. h. What is the connection between land use and NSR? A major new source has the potential to be a major economic development generator for a region that may influence development and travel patterns. For example, if a large new facility were to locate outside of the nonattainment area ( in many cases this means outside of the area with existing development, infrastructure and density) it may affect regional travel patterns. Such a facility that hires hundreds of people and is located where there are few opportunities to use alternative modes of transportation ( e. g., mass transit or walking to work) may result in greater amounts of VMT and vehicle trips (`` VT'') per employee than a similar facility accessible by mass transit. For example, a long term effect of locating a large facility in an undeveloped area, particularly one that employs a large number of people, could be that it ultimately attracts additional development. For instance, if enough employees are at the site, the nearby area may attract other service industries ( e. g., fast food, drycleaners, and gas stations). These developments may be low density, auto dependent, and single use, which may generate additional emissions ( both area and mobile sources). The NSR program does not consider or offset these emissions. On the other hand, if a hypothetical source chooses to locate in an area that is already developed, it may generate less VMT and therefore fewer emissions than one located in an undeveloped area. The source may be able to take advantage of the existing infrastructure and service, without the construction of new infrastructure elements ( roads, sewer lines, etc.) that result in their own air emissions and other environmental impacts. Such location in existing developed areas may not open up new areas to development, nor encourage sprawl. With this option, EPA is trying to recognize the indirect impacts of development. If communities use CADC techniques, they should, compared to communities that do not use such practices, offset some of the indirect emissions from new sources. The NSR program only considers the direct impacts from a development. This option tries to look more broadly at all the impacts of development. We would reduce the requirements of NSR and would provide increased program flexibility in exchange for the reduced emissions from CADC practices. A strategy that recognizes the relationships between stationary, area and mobile sources, as well as how these impacts affect total environmental quality, is one that will most effectively deal with today's environmental problems. That is why multiple offices in EPA   the Air Office, the Water Office, the Policy Office and the Brownfields Office   all have programs encouraging development patterns that reduce environmental impacts. These programs use a variety of tools: regulations, information, and partnerships to encourage such development. It would be consistent with these other Agency efforts to develop a way to use flexibilities in CAA programs to encourage CADC practices. It would also be supportive of the many States and localities that are interested in accounting for the air quality benefits of their development choices. i. Are there other environmental impacts that result from land use choices? Yes, low density development patterns tend to disturb more land and create more impervious cover over a region ( e. g., paved roads), harming a region's water quality and disrupting habitat. Because of the close interaction between development and the achievement of national environmental goals, EPA has long been engaged in addressing their environmental impacts. The Office of Water seeks to address the impacts of development through its watershed programs, non point source programs, source water protection efforts, the National Estuary Program, and Total Maximum Daily Load programs. When EPA reviews projects under the National Environmental Policy Act, it examines the secondary and cumulative impacts of development generated by Federal actions. The Brownfields Office, recognizing the VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00051 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32852 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules necessity of engaging the private sector, has sought specifically to encourage development on brownfields. j. What are some of the land use strategies measures included in `` Improving Air Quality Through Land Use Activities''? The guidance includes a number of different activities that may generate on road mobile source emissions reductions. A sampling of them includes:   Grant incentives to build concentrated activity centers: encouraging pedestrian and transit travel by creating high density mixed use nodes that can be easily linked by a transit network.   Change zoning regulations to allow or encourage mixed use development; this encourages pedestrian travel by putting compatible land uses next to each other.   Build, or require developers to install, pedestrian and bicycle facilities; and increase the number of sidewalks, paths, crosswalks, bike lanes, etc., to make walking and bike use safe.   Transfer unused development capacity in outlying areas to increase density above existing limits in central areas and near transit nodes; this moves development away from outlying areas and toward already developed areas.   Provide incentives such as reduced parking requirements to new in fill development; this takes advantage of existing infrastructure and discourages driving. EPA were to go forward with this concept the Guidance would be formally incorporated by reference. k. Does the CAA include the concept of increased flexibility in the NSR program in cases where development is targeted in appropriate areas? Yes, Section 173( a)( 1)( B) replaces the traditional requirement that a new or modified stationary source in a nonattainment area obtain offsets with a growth allowance concept in specially designated zones to which `` economic development should be targeted.'' EPA recognizes, however, that this proposal differs in many respects from section 173. l. Does this option mandate any changes to local land use decisions? No. The CAA, in Section 131, clearly supports the position that land use decisions are local. This option would simply recognize that areas that choose to develop in certain patterns are doing more to improve air quality and that such efforts should be rewarded. m. How would this option be enforced? Since the CADC measures would be in the SIP, they could not be changed without EPA approval of a SIP revision. If measures are changed they must be replaced with other measures of equal or greater effectiveness, and otherwise meet the requirements of section 110( l) concerning antibacksliding Failure to do so would mean that either of these options would no longer apply to the area. EPA understands that it does not have the authority to control local land use decisions. The choice always rests with the community, however, it doesn't get the advantages of being a CADC unless it puts the measures in its SIP. Should it decide to change a land use measure in the SIP, the issue for EPA would be whether or not other new measures yield sufficient reductions to allow the area to remain a CADC. The land use measure itself would be approved. EPA requests comments on how best to enforce these options. n. What are the relative advantages of the two options? The first option provides greater incentive for communities and is, therefore, more likely to encourage changes to land development policies. The second option is simpler since it does not make changes to NSR. As a result, unlike option 1, it does not require communities to estimate the increased emissions that could result from changing NSR applicability   which admittedly would be difficult. o. What are the disadvantages of this proposal? In addition to the modeling issues discussed above in section f, there are several other issues associated with providing flexibilities, such as reducing NSR requirements, for areas that adopt CADC land use measures. It may be difficult to ensure that the CADC land use measures are implemented by areas participating in the option. It may also be difficult to design penalty measures if those land use measures are not implemented by areas. In addition, if the CADC should fail to achieve its envisioned land use pattern, how would the MPO model the area for purposes of conformity. By encouraging growth in established areas, this option may raise environmental justice concerns and unanticipated costs for low income residents. Some States may have difficulties managing and tracking offset pools. EPA requests comment on all of these issues and how we can best resolve them.

10. Tribal Concerns In addition, we expect that some Tribal areas will be designated as nonattainment because of pollution that is transported from the surrounding State( s) and will have little control over the ability of areas under their jurisdiction to attain the air quality standards. In the event that such an area fails to attain by the attainment date, additional flexibility for the Tribes will be needed to address the fairness issues created by transported nonattainment problems. Tribes have asked that we consider providing offset set asides in order to address these issues. We request comment on whether emission offset set asides, possibly generated by innovative measures to promote additional emissions reductions, are an appropriate method to help level the playing field for the Tribes in order to support economic development in Tribal areas. In any case, we believe that some provisions will need to be made for Tribal areas, because they will have limited ability, if any, to generate offsets on their own. We may also need to work with States to help provide the Tribes access to offsets from non Tribal areas. Also, it is important to recognize that the NOX SIP Call does not provide for an emissions budget for Tribes. Therefore, we are asking for comments on how to provide a set aside to provide fair access to development in these areas.

P. How Will EPA Ensure That the 8 Hour Ozone Standard Will Be Implemented in a Way Which Allows an Optimal Mix of Controls for Ozone, PM2.5 and Regional Haze?

1. Could an Area's 8 Hour Ozone Strategy Affect Its PM2.5 and/ or Regional Haze Strategy? Many of the areas that are violating either the 8 hour ozone or PM2.5 NAAQS, may be violating both of these NAAQS. Thus, in many cases, States will have ozone and PM2.5 nonattainment areas with overlapping boundaries. Requirements for regional haze apply to all areas. Each State is responsible for developing SIP revisions to meet all the requirements relevant to each nonattainment area for each pollutant as well as developing a regional haze plan. In some cases, ozone control measures may also be useful for a PM2.5 control strategy or a regional haze plan. Similarly, controls for PM2.5 may lead to reductions in ozone or regional haze. For example, considered in isolation, a metropolitan area's ozone strategy might be based on additional VOC emissions reductions; if the area needs NOX reductions for PM2.5 attainment, however, an optimal approach might include a more complex ozone strategy using both NOX and VOC reductions. We believe integration of ozone and PM2.5 attainment planning will reduce overall costs of meeting multiple air quality goals. Many of the factors affecting concentrations of ozone also affect VerDate Jan< 31> 2003 20: 45 May 30, 2003 Jkt 200001 PO 00000 Frm 00052 Fmt 4701 Sfmt 4702 E:\ FR\ FM\ 02JNP2. SGM 02JNP2 32853 Federal Register / Vol. 68, No. 105 / Monday, June 2, 2003 / Proposed Rules concentrations of PM2.5. Emissions of NOX and/ or VOC will lead to formation of organic particles and the precursors of particulate nitrate, as well as ozone. The presence of ozone is an important factor affecting PM2.5 formation; as ozone builds up, so do OH radicals which are instrumental in oxidizing gas phase SO2 to sulfuric acid. The sulfuric acid may be converted to sulfate particles, increasing the PM2.5 concentration. Further, the local ozone concentrations may be decreased by the reaction of ozone with nitric oxide; thus, in some large urban areas, a decrease in local NOX emissions can result in higher local ozone concentrations, leading to higher OH radical concentrations and increases in secondary PM2.5. Because the precursors for ozone and PM2.5 may be transported hundreds of kilometers, regional scale impacts may also need to be considered.