PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 6560 50 P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 51, 52, and 80 [ OAR 2003 0079; FRL ]

RIN 2060 AJ99 Final Rule to Implement the 8 Hour Ozone National Ambient Air Quality Standard   Phase 2; Final Rule to Implement Certain Aspects of the 1990 Amendments Relating to New Source Review and Prevention of Significant Deterioration as they Apply in Carbon Monoxide, Particulate Matter and Ozone NAAQS; Final Rule for Reformulated Gasoline AGENCY: Environmental Protection Agency ( EPA).

ACTION: Final Rules.

SUMMARY: In this document, we are taking final action on most remaining elements of the program to implement the 8

hour ozone national ambient air quality standard ( NAAQS or standard). This final rule addresses, among other things,

the following control and planning obligations as they apply to areas designated nonattainment for the 8 hour ozone NAAQS: reasonably available control technology and measures ( RACT and RACM), reasonable further progress ( RFP), modeling and attainment demonstrations, and new source review ( NSR).

We are issuing this rule so that States and Tribes will know PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 2 how these statutory control and planning obligations apply and when State implementation plan ( SIP) revisions are due for these obligations so that the States may develop timely submissions consistent with the statutory obligations and attain the NAAQS as expeditiously as practicable but no later than their maximum attainment dates. The intended effect of the rule is to provide certainty to States and Tribes regarding development of those plans.

In this rule, we are also finalizing several revisions to the regulations governing the nonattainment NSR programs mandated by section 110( a)( 2)( C) and part D of title I of the Clean Air Act ( CAA). First, we are codifying requirements added to part D of title I of the CAA in the 1990 Amendments related to permitting of major stationary sources in areas that are nonattainment for the ozone,

particulate matter ( PM), and carbon monoxide ( CO) NAAQS.

Second, we are revising the criteria for crediting emissions reductions credits from shutdowns and curtailments as offsets. Third, we are revising the regulations for permitting of major stationary sources in nonattainment areas in interim periods between designation of new nonattainment areas and EPA's approval of a revised SIP.

Fourth, we are changing the regulations that impose a PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 3 moratorium ( ban) prohibiting construction of new or modified major stationary sources in nonattainment areas where the State fails to have an implementation plan meeting all of the requirements of part D. In addition to the changes to the nonattainment NSR regulations, we also are making one change to the Prevention of Significant Deterioration ( PSD)

regulations under part C of title I of the CAA. We are codifying nitrogen oxides ( NOx) as an ozone precursor in attainment and unclassifiable areas.

Today's changes regarding NSR are based on the proposed rule published on June 2, 2003 to Implement the 8 hour Ozone National Ambient Air Quality Standard ( NAAQS), as well as the proposed rule published on July 23, 1996 for " Prevention of Significant Deterioration ( PSD) and Non attainment New Source Review ( NSR)." These changes provide a consistent national program for permitting major stationary sources under section 110( a)( 2)( C) and parts C and D of title I,

including major stationary sources of ozone precursors in ozone nonattainment areas.

Finally, this rule addresses what effect the transition to the 8 hour standard will have on certain aspects of the Reformulated Gasoline ( RFG) program. The nine original mandatory RFG areas, as well as most other areas that have PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 4 become mandatory RFG areas by being reclassified as severe areas under section 181( b) of the CAA, will continue to be required to use RFG at least until they are redesignated to attainment for the 8 hour NAAQS. The EPA reserves for future consideration what effect the transition to the 8

hour standard will have on areas reclassified as severe areas for the 1 hour NAAQS under section 181( b) of the CAA that were redesignated to attainment for the 1 hour standard before revocation of that standard.

EFFECTIVE DATE: This rule is effective on [ insert date 60 days from date of publication].

ADDRESSES: The EPA has established a docket for this action under Docket ID No. OAR 2003 0079. All documents in the docket are listed in the EDOCKET index at http:// www. epa. gov/ edocket. Although listed in the index,

some information is not publicly available, i. e.,

Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the EPA Docket Center ( Air Docket), EPA/ DC, EPA West, Room B102, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 5 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is ( 202) 566 1744, and the telephone number for the Office of Air and Radiation Docket and Information Center is ( 202) 566 1742.

In addition, we have placed a variety of earlier materials regarding implementation of the 8 hour ozone NAAQS on the web site:

http:// www. epa. gov/ ttn/ naaqs/ ozone/ o3imp8hr.

FOR FURTHER INFORMATION CONTACT: For general information:

Mr. John Silvasi, Office of Air Quality Planning and Standards, U. S. Environmental Protection Agency, Mail Code C539 02, Research Triangle Park, NC 27711, phone number ( 919) 54l 5666, fax number ( 919) 54l 0824 or by e mail at silvasi. john@ epa. gov or Ms. Denise Gerth, Office of Air Quality Planning and Standards, U. S. Environmental Protection Agency, Mail Code C539 02, Research Triangle Park, NC 27711, phone number ( 919) 54l 5550, fax number ( 919) 54l 0824 or by e mail at gerth. denise@ epa. gov. For information concerning new source review: Ms. Janet McDonald, Office of Air Quality Planning and Standards, U. S.

Environmental Protection Agency, Mail Code C539 03, Research PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 6 Triangle Park, NC 27711, phone number ( 919) 54l 1450, fax number ( 919) 54l 5509 or by e mail at mcdonald. janet@ epa. gov.

SUPPLEMENTARY INFORMATION:

Outline I. What is the Background for this Rule?

II. What is Included in this Rule?

III. In Short, What Does this Final Rule Contain?

IV. Final Rule for Phase 2 Elements Other than NSR and RFG A. Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there flexibility in application in certain narrowly defined circumstances? B. How will we address long range transport of ground level ozone and its precursors when implementing the 8 hour ozone standard? C. How will we address transport of ground level ozone and its precursors for rural nonattainment areas, areas affected by intrastate transport, and areas affected by international transport? D. How will EPA address requirements for modeling and attainment demonstration SIPs for areas implementing the 8 hour ozone standard? E. What requirements for RFP should apply under the 8 hour ozone standard? F. Are contingency measures required in the event of failure to meet a milestone or attain the 8 hour ozone NAAQS? G. What requirements should apply for RACM and RACT for 8 hour ozone nonattainment areas? H. How will the section 182( f) NOx provisions be handled under the 8 hour ozone standard? I. Should EPA promulgate a NSR provision to encourage development patterns that reduce overall emissions? J. How will EPA ensure that the 8 hour ozone standard will be implemented in a way which allows an optimal mix of PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 7 controls for ozone, PM2.5, and regional haze? K. What emissions inventory requirements should apply under the 8 hour ozone NAAQS? L. What guidance should be provided that is specific to Tribes? M. What are the requirements for Ozone Transport Regions ( OTRs) under the 8 hour ozone standard? N. Are there any additional requirements related to enforcement and compliance? O. What requirements should apply to emergency episodes? P. What ambient monitoring requirements will apply under the 8 hour ozone NAAQS? Q. When will EPA require 8 hour attainment demonstration SIP submissions? R. How will the statutory time periods in the CAA be addressed when we redesignate areas to nonattainment following initial designations for the 8 hour NAAQS?

V. EPA's Final Rule for New Source Review A. Background B. Summary of Final Rule and Legal Basis C. Comments and Responses D. NSR Implementation Under the 8 hour ozone NAAQS VI. Final Rule for RFG A. Introduction B. Background C. What Action is EPA Taking? D. Why is EPA Taking This Action? E. Future Proceedings F. Miscellaneous Administrative Changes to RFG Regulations G. Comments and Responses VII. Other Considerations A. How will EPA's implementation of the 8 hour ozone NAAQS affect funding under the Congestion Mitigation and Air Quality Improvement ( CMAQ) Program? B. What is the relationship between implementation of the 8 hour standard and the CAA's title V permits program? C. What action is EPA taking on the Overwhelming Transport Classification for Subpart 1 Areas? PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 8 VIII. STATUTORY AND EXECUTIVE ORDER REVIEWS A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations K. Congressional Review Act L. Petitions for Judicial Review M. Determination Under Section 307( d)

APPENDIX A TO PREAMBLE   Methods to Account for Non Creditable Reductions when Calculating ROP Targets for the 2008 and Later ROP Milestone Years APPENDIX B TO PREAMBLE   GLOSSARY OF TERMS AND ACRONYMS I. What is the Background for this Rule?

On June 2, 2003 ( 68 FR 32805), we published a proposed rule to implement the 8 hour ozone NAAQS. The proposal addressed a number of implementation issues. We proposed one or more options for each issue addressed in the proposal. Please refer to the proposed rule ( 68 FR 32802)

for a detailed discussion and background information on the 8 hour ozone NAAQS; the associated litigation; our proposed strategy for areas to achieve the NAAQS; and the stakeholder PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 1Three petitions for reconsideration of the Phase 1 Rule were filed by: 1) Earthjustice on behalf of the American Lung Association, Environmental Defense, Natural Resources Defense Council, Sierra Club, Clean Air Task Force, Conservation Law Foundation, and Southern Alliance for Clean Energy; 2) the National Petrochemical and Refiners 9 process for gathering input into this effort, among other topics.

On August 6, 2003 ( 68 FR 46536), we published a notice of availability of the draft regulatory text for the proposed rule to implement the 8 hour ozone NAAQS. This notice started a 30 day public comment period on the draft regulatory text.

On April 30, 2004 ( 69 FR 23951), we published a final rule that addressed the following key elements related to implementation of the 8 hour ozone NAAQS: classifications for the 8 hour NAAQS; revocation of the 1 hour NAAQS ( i. e.,

when the 1 hour NAAQS will no longer apply); how antibacksliding principles will ensure continued progress toward attainment of the 8 hour ozone NAAQS; attainment dates; and the timing of emissions reductions needed for attainment.

Following publication of the April 30, 2004 final rule,

the Administrator received three petitions, pursuant to section 307( b)( 7)( B) of the CAA requesting reconsideration of a number of aspects of the final rule. 1 On September 23, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 Association and the National Association of Manufacturers; and 3) the American Petroleum Institute, American Chemistry Council, American Iron and Steel Institute, National Association of Manufacturers and the U. S. Chamber of Commerce.

10 2004, we granted reconsideration of three issues raised in the Earthjustice Petition. On February 3, 2005 ( 70 FR 5593), we published a proposed rule to take comment on two of these issues: 1) the provision that section 185 fees would no longer be applicable once the 1 hour NAAQS is revoked and 2) the timing for determination of what is an " applicable requirement." On May 20, 2005, the final rule on these two issues was signed by the Administrator of EPA.

On April 4, 2005 ( 70 FR 17018), we published a proposed rule to take comment on the issue of whether we should interpret the Act to require areas to retain major NSR requirements that apply to certain 1 hour ozone nonattainment areas in implementing the 8 hour standard. We took final action on the NSR issues on June 30, 2005 ( 70 FR 39413; July 8, 2005).

On January 10, 2005, we granted reconsideration of the overwhelming transport classification issue raised by Earthjustice in their Petition. At the same time, we denied reconsideration of the issues they raised in their Petition dealing with the applicability of RFG when the 1 hour NAAQS PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 11 is revoked and future 8 hour ozone redesignations to nonattainment. We intend to publish a proposed rule on the overwhelming transport classification shortly. We are continuing to review the issues raised in the National Petrochemical and Refiners Association and American Petroleum Institute Petitions. Copies of the Petitions for Reconsideration and actions EPA has taken regarding the Petitions may be found at:

www. epa. gov/ ttn/ naaqs/ ozone/ o3imp8hr.

In addition, in the April 30, 2004 rule, we established a subpart E in 40 CFR part 81 " Identification of Area Designations and Classifications for the 1 Hour Ozone NAAQS as of June 15, 2004 [ Reserved]." We intend to publish that list shortly.

Concerning the major NSR provisions, today's final regulations were proposed as part of two different regulatory packages. On July 23, 1996 ( 61 FR 38250), we proposed changes to the major NSR program, including codification of the requirements of part D of title I of the 1990 CAA Amendments for major stationary sources of volatile organic compounds ( VOC), NOx, particulate matter having a nominal aerodynamic diameter less than or equal to 10 microns ( PM10), and CO. On June 2, 2003 ( 68 FR 32802), we PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 12 proposed a rule to implement the 8 hour ozone NAAQS. In the 2003 action, we proposed a rule to identify the statutory requirements that apply for purposes of developing SIPs under the CAA to implement the 8 hour ozone NAAQS ( 68 FR 32802). We did not propose specific regulatory language for implementation of NSR under the 8 hour NAAQS. However, we indicated that we intended to revise the nonattainment NSR regulations to be consistent with the rule for implementing the 8 hour ozone NAAQS ( 68 FR 32844). On April 30, 2004 ( 69 FR 23951), we published a final rule that addressed classifications for the 8 hour NAAQS. The April 2004 rule also included the NSR permitting requirements for the 8 hour ozone standard, which necessarily follow from the classification scheme chosen under the terms of subpart 1 and subpart 2.

Also, in our 1996 action, and then again in our June 2,

2003 action, we proposed to amend our nonattainment NSR provisions to expressly include NOx as an ozone precursor in nonattainment major NSR programs ( 61 FR 38297 and 68 FR 32847). We also proposed that, as provided under CAA section 182( f), a waiver from nonattainment NSR for NOx as an ozone precursor would be available for both subpart 1 and subpart 2 areas ( 68 FR 32846). Moreover, we proposed to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 13 require States to modify their existing programs to include NOx as an ozone precursor in attainment areas ( 68 FR 32846).

In 1996, we proposed to revise the regulations limiting offsets from emissions reductions due to shutting down an existing source or curtailing production or operating hours below baseline levels (" shutdowns/ curtailments"). We proposed substantive revisions in two alternatives that would ease, under certain circumstances, the existing restrictions on the use of emission reduction credits from source shutdowns and curtailments as offsets.

On July 23, 1996, we proposed to revise § 52.24 to incorporate changes made by the 1990 CAA Amendments related to the applicability of construction bans ( 61 FR 38305). To clarify our intent, our proposed 8 hour ozone NAAQS implementation rule in June 2003 explained that § 52.24( k)

remained in effect and would be retained. In that action,

we also proposed that we would revise § 52.24( k) to reflect the changes in the 1990 CAA Amendments ( 68 FR 32846). On June 2, 2003 ( 68 FR 32802), we explained implementation of the major NSR program under the 8 hour ozone NAAQS during the SIP development period, and proposed flexible NSR requirements for areas that expected to attain the 8 hour NAAQS within 3 years after designation. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 14 For the reader's convenience, a glossary and list of acronyms appears in Appendix B of this preamble.

II. What is Included in this Rule?

Today's action, Phase 2 of the implementation rule,

addresses numerous topics, but primarily focuses on the following key implementation obligations for areas designated nonattainment for the 8 hour NAAQS: RACT and RACM; RFP; modeling and attainment demonstrations; and NSR.

It also addresses what effect the transition to the 8 hour standard will have on certain aspects of the RFG program.

III. In Short, What Does this Final Rule Contain?

This summary is intended to give only a convenient overview of our final rule. It should not be relied on for the details of the actual rule. The final rule ( regulatory text) and the discussion of it in the sections below should be consulted directly.

Summary of Section IV: Final Rule for Phase 2 Elements Other than NSR and RFG A. Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there flexibility in application in certain narrowly defined circumstances?

There may be a basis for waiving a prescribed PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 15 requirement on a case by case basis where imposition of the requirement would create an absurd result. If a State submits a demonstration that application of a specific requirement in a specific nonattainment area would create an absurd result, we will consider application of the absurd results doctrine at that time. We believe that absurd results that might occur from application of mandatory control measures would happen only in rare instances, if at all.

B. How will we address long range transport of ground level ozone and its precursors when implementing the 8 hour ozone standard?

The EPA has issued two major rules to address interstate transport of ozone pollution. The 1998 NOx SIP Call Rule already is achieving significant reductions in NOx emissions that contribute to interstate ozone pollution in the eastern United States. Nineteen States were required to achieve reductions by May 2004, and additional reductions are required by May 2007.

On May 12, 2005, EPA published the Clean Air Interstate Rule ( CAIR) in the Federal Register ( 70 FR 25162). It establishes statewide sulfur dioxide ( SO2) and NOx emissions budgets for upwind States that significantly contribute to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 16 nonattainment or interfere with maintenance of the fine particle or 8 hour ozone air quality standards in downwind States. For ozone, this action established summertime NOx budgets for the District of Columbia and 25 States in the eastern half of the country, with reductions to be achieved by 2009 and 2015. The CAIR goes beyond the SIP call by requiring reductions from additional States and by requiring further emissions reductions in SIP call States.

C. How will we address transport of ground level ozone and its precursors for rural nonattainment areas, areas affected by intrastate transport, and areas affected by international transport?

1. Rural transport nonattainment areas The final rule does not contain any revisions to current policy on rural transport areas under section 182( h). We do not believe there are any 8 hour nonattainment areas covered under subpart 2 that are " rural"

and therefore eligible for consideration for coverage under section 182( h).

2. Intrastate transport The final rule does not contain any additional provisions for addressing intrastate transport for the reasons stated in the proposal. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 17 3. How will EPA address transport of ground level ozone and its precursors for areas affected by international transport?

We are not setting forth any regulatory provisions related to international transport in this rule. Section 179B of the CAA applies for these purposes. We continue to recommend that States confer with the appropriate EPA Regional Office to establish on a case by case basis the technical requirements for these analyses. These analyses will be subject to public comment during the State and Federal SIP processes.

D. How will EPA address requirements for modeling and attainment demonstration SIPs for areas implementing the 8

hour ozone standard?

The final rule retains the following three elements that each attainment demonstration SIP must include: ( 1)

technical analyses to locate and identify sources of emissions that are causing violations of the 8 hour NAAQS within nonattainment areas ( i. e., analyses related to the emissions inventory required for the nonattainment area),

( 2) adopted measures with schedules for implementation and other means and techniques necessary and appropriate for attainment, and ( 3) contingency measures required under PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 18 section 172( c)( 9) of the CAA that can be implemented without further action by the State or the Administrator to cover failures to meet RFP milestones and/ or attainment.

1. Attainment demonstration due date.

Areas required to submit an attainment demonstration must do so no later than 3 years after the effective date of designation for the 8 hour ozone NAAQS.

2. Multi State nonattainment areas State partners involved in a multi State ozone nonattainment area must work together to perform the appropriate modeling analyses to identify control measures that will enable the area to achieve attainment as expeditiously as practicable. Each State will be responsible for its portion of the control program and will be held accountable for controls identified for implementation within its State boundaries.

3. Role of modeling guidance in attainment demonstrations Attainment demonstrations must be consistent with 40 CFR § 51.112. We will generally review the demonstrations for technical merit using EPA's most recent modeling guidance at the time the modeled attainment demonstration is performed.

4. Multi pollutant assessments ( one atmosphere modeling) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 19 There is no regulatory text on this issue, but the preamble makes several recommendations concerning multipollutant assessments.

E. What requirements for RFP should apply under the 8 hour ozone standard?

1. General discussion We are adopting nearly all the approaches set forth in our proposed rule for the various 1 hour rate of progress ( ROP) and 8 hour RFP issues.

2. What is the content and timing of the plan for addressing the RFP requirements under section 182( b)( 1) for areas covered under subpart 2?

Areas that are classified as moderate under the 8 hour standard that have already implemented their 15 percent plans under their 1 hour ozone SIPs would be considered to have met the statutory 15 percent requirement. Reasonable further progress for the first 6 years from the baseline year would be covered under the more generic RFP requirements of subpart 1. Serious and above areas would have to meet 3 percent reductions per year starting in the baseline year averaged over each 3 year period out to the attainment year.

An 8 hour nonattainment area that is identical, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 20 geographically, to its predecessor 1 hour nonattainment area ( which has already done the 15 percent reduction) will not be required to do another 15 percent VOC only reduction plan. For an 8 hour moderate or higher nonattainment area that contains a 1 hour nonattainment area that has an approved 15 percent VOC ROP plan but also contains areas that do not have an approved 15 percent VOC ROP plan, the final rule allows States the choice between two options:

Option 1. Develop a new baseline and new 15 percent VOC ROP emission reduction target for the entire newly expanded area. Determine that emissions reductions that occur after the 2002 baseline emissions inventory year are creditable in the combined new area. The reductions must be of VOC only.

Option 2. Treat the 8 hour nonattainment area as divided between the old 1 hour area( s) and the newly added 8 hour area. For the newly added portion ( which had not previously implemented a 15 percent plan), States must establish a separate 15 percent VOC target under subpart 2. The previous nonattainment area that fell under the 1 hour standard will now be subject to the subpart 1 provisions of the CAA and will be able to credit both VOC and NOx toward meeting the RFP target for this portion of the nonattainment area. VOC reductions to meet the 15 percent requirement for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 21 the portion of the new 8 hour nonattainment area that has not yet met this requirement may come from across the entire 8 hour area.

The subpart 1 RFP provisions addressed by the rule below that are applicable in the former 1 hour portion of the area depend on the subpart 2 area's attainment date as follows:

° In moderate areas that have an attainment date within 5 years after their 8 hour designation, for which portions of the area have previously met their 15 percent requirements under the 1 hour standard, the former 1 hour portion will only be subject to subpart 1 RFP requirements, which will be satisfied with the measures that demonstrate attainment as expeditiously as practicable. These areas will not be developing RFP plans separate from their attainment plans. Thus, for these areas, the only motor vehicle emissions budgets that will be developed will be for the attainment year.

° In moderate areas that have an attainment date beyond 5 years after their 8 hour designation, for which portions of the area have previously met their 15 percent requirements under the 1 hour standard, the former 1 hour portion will only be subject to subpart 1 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 22 RFP requirements, which will be satisfied with a plan to demonstrate 15 percent emissions reductions ( which may be either VOC or NOx or a combination of both) from 2002 to 2008, and any additional emissions reductions needed for attainment beyond 2008. Thus, these areas ( the entire 8 hour nonattainment area) would establish a motor vehicle emission budget for 2008 and for their attainment year.

Serious and above areas will be developing both a 15 percent VOC plan for the new portion of the 8 hour nonattainment area and an 18 percent VOC/ NOx plan for the portion of the area that previously met its 15 percent requirement. Thus,

the RFP plan as a whole will establish total allowable emissions for 2008 for the entire 8 hour nonattainment area.

Therefore, the plans for these areas, as well as moderate areas that choose option one, will establish motor vehicle emissions budgets for both 2008 and the attainment year.

3. What baseline year should be required for the emissions inventory for the RFP requirement?

We are using the 2002 inventory as the baseline inventory for the RFP requirement for areas designated nonattainment in 2004 primarily because of timing concerns related to attainment dates and when data is collected and PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 23 compiled. However, in response to several comments, we are allowing States the option of justifying the use of an alternative baseline year inventory year for RFP.

4. Should moderate and higher classified areas be subject to prescribed additional RFP requirements prior to their attainment date?

Moderate areas would have to provide additional emissions reductions ( VOC/ NOx) needed to provide for attainment by the beginning of the ozone season prior to the area's attainment date. Serious and higher classified areas would need to provide in their SIPs an additional average of three percent per year emission reduction over each subsequent 3 year period beyond the initial 6 year period through the attainment year.

5. What is the timing of the submission of the RFP plan?

For moderate and higher classified areas, the first RFP SIP must be submitted within 3 years after the area's nonattainment designation. For areas with a June 15, 2004 effective date, for the 8 hour designations, the SIP would be due by June 15, 2007. This would provide up to 3 years for States to develop and submit RFP plans, and 1 additional year ( until the end of 2008) for control measures to be implemented. The RFP SIP for any remaining 3 year periods PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 24 out to the attainment date beyond the first 6 years would be required to be submitted with the attainment demonstration,

i. e., within 3 years after designation. We recommend that States complete their RFP plans as soon as possible after designation to provide more time for sources to implement the emissions reductions.

6. How should CAA restrictions on creditable measures be interpreted? Which national measures should count as generating emissions reductions credit toward RFP requirements?

All emissions reductions that occur after the baseline emissions inventory year are creditable for purposes of the RFP requirements in this section except as specifically provided in section 182( b)( 1)( C) and ( D) and section 182( c)( 2)( B) of the CAA which exclude four categories of emissions reductions requirements required to be adopted prior to 1990.

7. For areas covered only by subpart 1, how should the RFP requirement be structured?

We are finalizing rules for two rather than three categories of areas based on the CAA's division of attainment dates for subpart 1 areas under section 172( a)( 2). The following are the two scenarios and the RFP PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 25 requirements for each:

Scenario A: Areas with attainment dates 5 years or less after designation ( i. e., for most areas on or before June 15, 2009). Reasonable further progress for these areas would be met by ensuring emissions reductions needed for attainment are implemented, as noted above, by the beginning of the ozone season prior to the attainment date. This would be similar to subpart 2 RFP for areas classified as marginal.

Scenario B: Areas with attainment dates beyond 5 years after designation ( i. e., beyond 2009).

° The RFP plan must show increments of progress from the baseline emissions inventory year out to 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 ( i. e., out to 2008).

° The 15 percent RFP SIP would have to be submitted within 3 years after designation ( i. e., in 2007).

° Either NOx or VOC emissions reductions ( or both) could be used to achieve the 15 percent emission reduction requirement. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 26 ° For each subsequent 3 year period ( after 2008) out to the attainment date, the RFP SIP would have to provide for an additional increment of progress no less than the amount of emissions reductions that would be roughly proportional to the time between the end of the first increment ( in 2008) and the attainment date.

This second RFP SIP would also have to be submitted within 3 years after the effective date of designation ( i. e., in 2007).

8. Where part of an 8 hour nonattainment area was a 1 hour nonattainment area with a ROP obligation extending past 2002, can emissions reductions from the area's 1 hour ROP plan be used as credit toward meeting the area's 8 hour RFP plan?

Where an area has both 1 hour and 8 hour RFP obligations for the post 2002 period, the State may rely on emissions reductions from the 1 hour plan in achieving RFP for the 8 hour standard. The State could develop a new baseline and new RFP emission reduction targets for the entire 8 hour standard nonattainment area ( i. e., the old 1

hour standard nonattainment area and any newly added portion of the 8 hour standard nonattainment area). Emissions reductions from measures in the 1 hour ozone SIP that are PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 27 achieved after the 8 hour ozone NAAQS baseline year could count ( subject to creditability restrictions as discussed above) toward meeting the RFP requirement for the entire 8

hour area.

This approach would set an RFP target for the entire 8

hour ozone nonattainment area. Under this approach, the new RFP target for the 8 hour standard would replace the previous 1 hour ROP target ( while ensuring that, at a minimum, the emissions reductions required to meet the old target are met; see 40 CFR 51.905( a)( 1)( iii)).

9. Will EPA's " Clean Data Policy" apply for purposes of 8

hour RFP, attainment demonstrations and other related requirements?

We intend to apply the Clean Data Policy, which we had applied under the 1 hour standard, for purposes of the 8

hour standard. In this action EPA is finalizing the statutory interpretation that is embodied in the policy.

The text of the final rule encapsulates the statutory interpretation set forth in the policy.

10. How will RFP be addressed in Tribal areas?

We intend to follow the Tribal Authority Rule ( TAR),

which provides Tribes with the ability to develop Tribal implementation plans ( TIPs) to address and implement the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 28 NAAQS in Indian country. It further provides the Tribes with flexibility to develop these plans in a modular way, as long as the elements of their TIPs are reasonably " severable."

11. How will RFP targets be calculated?

Appendix A to the preamble to this final rule provides calculation procedures for determining the RFP targets.

These have been revised from those in the proposal to account for NOx and for emissions models in addition to the MOBILE model.

12. Should EPA continue the policy of allowing substitution of controls from outside the nonattainment area within 100 kilometers for VOC and 200 kilometers for NOx?

We intend to continue to rely on this policy at the current time. The use of emissions reductions outside the nonattainment area must be shown to be beneficial toward reducing ozone in the nonattainment area and must ensure that the reductions meet the standard tests of creditability ( permanent, enforceable, surplus, and quantifiable).

13. When must RFP emissions reductions be achieved?

The target level of emissions must be met by the attainment date of the attainment year. Section 182( c)( 2)( B) requires that RFP be continued out to the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 29 attainment date.

14. Banked emission reduction credits ( including shutdown credits): Can pre baseline emission reduction credits be used to satisfy the RFP requirement?

° The baseline emissions should not include pre enactment banked emission credits since they were not actual emissions during the calendar year of enactment of the CAA Amendments of 1990.

° Banked emissions reductions credits created prior to enactment of the CAA Amendments of 1990 are not creditable toward the 15 percent progress requirement.

However, for purposes of equity, EPA encourages States to allow sources to use such banked emissions credits for offsets and netting as authorized.

° When States use such banked credits for offsets and netting to the extent otherwise creditable under the part D NSR regulations, these pre enactment emissions credits must be treated as growth. Prior guidance on this issue is still relevant for banked emission reduction credits in relation to the RFP requirement for the 8 hour ozone standard. However, because the rule for implementing the 8 hour ozone standard uses a 2002 baseline year, the prior guidance should be PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 30 interpreted with that baseline in mind instead of enactment of the CAA Amendments of 1990.

F. Are contingency measures required in the event of failure to meet a milestone or attain the 8 hour ozone NAAQS?

Contingency measures are required to be implemented in the event of failure to meet a milestone or attain the 8

hour ozone NAAQS and must accompany the attainment demonstration SIP. All subpart 1 and subpart 2 areas other than marginal areas need contingency measures.

G. What requirements should apply for RACM and RACT for 8

hour ozone nonattainment areas?

1. Reasonably Available Control Technology ( RACT)

For subpart 1 areas that submit a demonstration of attainment for 5 or less years after designation ( i. e., do not request an attainment date extension beyond 5 years after designation), the CAA's RACT requirement is met with the control requirements associated with a demonstration that the NAAQS is attained as expeditiously as practicable.

For subpart 1 areas that submit an attainment demonstration that requests an attainment date extension ( i. e., beyond 5 years after designation), subpart 2 moderate and above areas, and areas within an Ozone Transport Region PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 2This is generally expected with the submission of the attainment demonstration.

3Alternatively, a State need not perform a NOx RACT analysis for sources subject to Federal implementation plan that implements the emission reductions required by the NOx 31 ( OTR), a RACT SIP is required covering CTG sources and major non CTG sources. The RACT submittal date is 27 months after designation, except a subpart 1 area shall submit the RACT SIP with its attainment date extension request. 2 States must require sources to implement RACT no later than the first ozone season or portion thereof which occurs 30 months after the required submittal date.

Where a RACT SIP is required, State SIPs implementing the 8 hour standard generally must assure that RACT is met,

either through a certification that previously required RACT controls represent RACT for 8 hour implementation purposes or through a new RACT determination. States may use existing EPA guidance in making RACT determinations. 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 adopted by the State and approved by EPA as meeting the NOx SIP Call requirements or,

in States achieving CAIR reductions solely from electric generating units ( EGUs), the CAIR NOx requirements. 3 States PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 SIP call or the CAIR.

32 are free to conduct case by case RACT determinations, or RACT determinations or certifications for groups of sources,

at their discretion.

2. Reasonably Available Control Measures ( RACM)

For each nonattainment area required to submit an attainment demonstration, the State must submit with the attainment demonstration a SIP revision demonstrating that it has adopted all control measures necessary to demonstrate attainment as expeditiously as practicable and to meet any RFP requirements.

H. How will the section 182( f) NOx provisions be handled under the 8 hour ozone standard?

The final rule allows a person to petition the Administrator for an exemption from nonattainment major NSR and/ or RACT requirements for major stationary sources of NOx in 8 hour ozone nonattainment areas and for any area in a section 184 ozone transport region. The final rule includes an extension of the NOx waiver provisions to 8 hour ozone nonattainment areas covered under subpart 1 ( as proposed) as well as subpart 2 nonattainment areas. In addition, the final rule states that a section 182( f) NOx exemption PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 4Memorandum dated January 14, 2005, " Guidance on Limiting Nitrogen Oxides ( NOx) Requirements Related to 8 Hour Ozone Implementation" from Stephen D. Page, Director, Office of Air Quality Planning and Standards, to Air Directors, Regions I X.

33 granted under the 1 hour ozone standard does not relieve the area from any requirements under the 8 hour ozone standard.

A petition must contain adequate documentation that the exemption provisions in section 182( f) are met. We recently issued updated guidance on appropriate documentation regarding section 182( f) for application to the 8 hour ozone program. 4 I. Should EPA promulgate a NSR provision to encourage development patterns that reduce overall emissions?

Section V of this preamble below addresses rules for NSR for the 8 hour ozone standard. We are not at this time issuing any rule related to Clean Air Development Communities ( CADCs).

J. 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, fine particulate matter ( PM2.5), and regional haze?

We are continuing our policy of encouraging each State with an ozone nonattainment area which overlaps or is nearby PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 34 a PM2.5 nonattainment area to take all reasonable steps to coordinate the required revisions for these nonattainment areas and meet reasonable progress goals for regional haze.

K. What emissions inventory requirements should apply under the 8 hour ozone NAAQS?

Existing ozone relevant emissions data element requirements under 40 CFR 51 subpart A are sufficient to satisfy the emissions inventory data requirements under the 8 hour ozone NAAQS.

L. What guidance should be provided that is specific to Tribes?

Section 301( d) of the CAA recognizes that American Indian Tribal governments are generally the appropriate authority to implement the CAA in Indian country. As discussed in the TAR, it is appropriate to treat Tribes in the same manner as States for purposes of implementing all of the provisions of the CAA, except those provisions for which EPA has specifically determined that it is not appropriate to treat Tribes in the same manner as States.

( The CAA provisions for which EPA has determined it is not appropriate to treat Tribes in the same manner as States are listed in section IV. L. of this preamble.) Examples of CAA provisions for which EPA has determined it is not PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 35 appropriate to treat Tribes in the same manner as States include specific plan submittal and implementation deadlines.

In implementing this rule, it is important for both States and Tribes to work together to coordinate planning efforts. Other than in very limited circumstances, State regulations do not apply to Indian Country, but SIP control measures could impact downwind areas, including Indian communities. In addition, nonattainment area boundaries may include a portion of Indian Country. Coordinated planning will help ensure that the planning decisions made by the States and Tribes complement each other and achieve progress toward meeting the NAAQS.

M. What are the requirements for OTRs under the 8 hour ozone standard?

Section 184 continues to apply for purposes of the 8

hour standard; therefore, the current OTR remains in place and the section 184 control requirements continue to apply for purposes of the 8 hour standard. If a new OTR is established for purposes of the 8 hour standard pursuant to section 176A, that area would also be subject to the provisions and additional control requirements of section 184. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 36 N. Are there any additional requirements related to enforcement and compliance?

We are not setting forth any additional rule related to compliance and enforcement.

O. What requirements should apply to emergency episodes?

We have not yet proposed any rule revision related to emergency episodes ( at 40 CFR part 51, subpart H), and the final rule below does not contain any such rule revision.

P. What ambient monitoring requirements will apply under the 8 hour ozone NAAQS?

No monitoring requirements are being promulgated as part of this rulemaking. The preamble discusses current relevant requirements ( 40 CFR part 58) and anticipated activities.

Q. When will EPA require 8 hour attainment demonstration SIP submissions?

Modeled attainment demonstrations   where required   must be submitted within 3 years after the effective date of the area's nonattainment designation.

R. How will the statutory time periods in the CAA be addressed when we redesignate areas to nonattainment following initial designations for the 8 hour NAAQS?

For any area that is initially designated attainment or PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 37 unclassifiable for the 8 hour NAAQS and subsequently redesignated to nonattainment for the 8 hour ozone NAAQS,

the attainment date and dates for submittal of any applicable requirements under subpart 1 or subpart 2 and these regulations would run from the date of redesignation to nonattainment for the 8 hour NAAQS.

Summary of Section V: EPA's Final Rule for New Source Review In today's action, we are finalizing previously proposed changes to three regulations that govern major NSR permitting of major stationary sources in nonattainment areas  40 CFR 51.165, appendix S of 40 CFR part 51, and 40 CFR 52.24.

The regulations at 40 CFR 51.165 contain the minimum elements that a State's preconstruction permitting program for major stationary sources in nonattainment areas must contain in order for EPA to approve the State's program into the SIP. In § 51.165, we are making revisions to incorporate the major stationary source thresholds, significant emission rates, and offset ratios pursuant to part D of title I of the CAA, as amended in 1990, for the 8 hour ozone NAAQS, the CO NAAQS, and the PM10 NAAQS. We are also promulgating final changes to the requirements for emissions reductions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 38 achieved from shutdowns or curtailments at § 51.165( a)( 3)( ii)( C). We are not currently acting on any other proposed changes to 40 CFR 51.165.

Appendix S of 40 CFR part 51 contains the preconstruction permitting program that applies to major stationary sources in nonattainment areas lacking an approved part D NSR program. It applies during the interim period after EPA designates an area as nonattainment, but before EPA approves a SIP to implement the nonattainment NSR requirements for that pollutant ( SIP development period).

We are making the same changes to appendix S that we are making to § 51.165 to implement the CAA as revised by the 1990 Amendments. In addition, we are finalizing revisions to section VI of appendix S to qualify applicability of this section. This revision is an outgrowth of the proposed revisions to section VI in the 8 hour NAAQS implementation proposal ( 68 FR 32802). We also are removing an outdated exemption for sources increasing emissions less than 50 tons per year ( tpy).

The regulations at 40 CFR 52.24 contain restrictions on the construction or modification of major stationary sources, including a construction ban applicable in circumstances enumerated by the 1977 CAA. These regulations PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 39 also apply if the Administrator determines pursuant to CAA section 173( a)( 4) that the State is not adequately implementing the SIP for meeting the part D requirements.

Today's final rules codify requirements of the 1990 CAA Amendments related to the applicability of construction bans. The final rules at § 52.24 also codify that § 51.165 applies in interpreting the terms in § 52.24. The regulations at 40 CFR 52.24( k) retain the requirement that appendix S governs permits to construct and operate applied for during the period between the date of designation as nonattainment and the date the part D plan for NSR is approved, but is updated to remove the reference to the construction ban.

In addition to the changes to the nonattainment NSR regulations, we also are making one change to the PSD regulations under part C of title I of the CAA. We are codifying NOx as an ozone precursor in attainment and unclassifiable areas.

Summary of Section VI: Final Rule for RFG Today's rule specifies that the nine original RFG mandatory areas must continue to use RFG at least until they are redesignated to attainment for the 8 hour standard.

Similarly, areas that have been reclassified as severe areas PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 40 under section 181( b) of the CAA for the 1 hour NAAQS, and which were not redesignated to attainment for the 1 hour NAAQS prior to its revocation, must continue to use RFG at least until they are redesignated to attainment for the 8

hour standard. The EPA is reserving for future consideration what RFG requirements apply to areas that were reclassified as severe under the 1 hour standard, but were redesignated to attainment for that standard before its revocation. The only such area that was redesignated to attainment prior to revocation of the 1 hour standard is Atlanta, Georgia. The EPA is also reserving for future consideration whether areas must continue using RFG after they are redesignated to attainment for the 8 hour standard,

for the original nine mandatory areas as well as the areas reclassified to severe. Finally, EPA clarifies that the current opt in rules will remain in place after the 1 hour standard is revoked. Areas classified under subpart 2 as marginal or above are eligible to opt in to the RFG program.

Summary of Section VII: Other Considerations A. How will EPA's implementation of the 8 hour ozone NAAQS affect funding under the Congestion Mitigation and Air Quality Improvement ( CMAQ) Program?

This section describes the relationship between the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 41 CMAQ program and the 8 hour ozone NAAQS implementation program.

B. What is the relationship between implementation of the 8 hour standard and the CAA's title V permits program?

The interrelationship between implementation of the 8

hour ozone standard and the title V permits program was not discussed in the proposed rule. However, various questions have been raised about the interface between the implementation of the 8 hour ozone standard and the title V operating permits program. The preamble presents several questions and answers, mainly dealing with how title V applicability is affected by the new 8 hr ozone standard and the revocation of the 1 hour ozone standard.

C. What action is EPA taking on the Overwhelming Transport Classification for subpart 1 areas? We are not completing rulemaking on the overwhelming transport classification in this rulemaking. This section discusses the status of the rulemaking.

IV. Final Rule for Phase 2 Elements Other than New Source Review and Reformulated Gasoline The discussion of many of the regulatory elements below address timing of required actions, such as submission dates for SIP revisions. The discussion is primarily directed PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 42 toward 8 hour ozone nonattainment areas for which the effective date of the designation was June 15, 2004.

However, a number of areas may have later effective dates for their designations, such as early action compact areas and areas subsequently redesignated from attainment to nonattainment for the 8 hour ozone standard. For these situations, the timing will run from the effective date of those designations. In cases in this preamble where we have used June 15, 2004 as a substitute for the " effective date,"

we are using it only for purposes of those areas with an effective date of June 15, 2004.

A. Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there flexibility in application in certain narrowly defined circumstances?

[ Section VI. D. of June 2, 2003 proposed rule ( 68 FR 32825); no draft or final regulatory text.]

1. Background The 1990 CAA Amendments overhauled the CAA's requirements for ozone nonattainment areas and, in doing so,

specified new mandatory measures for many areas. The approach embodied in subpart 2 was to classify areas according to the severity of their pollution. Areas with PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 43 more serious ozone pollution were given a higher classification that did two things. First, the successively higher classifications provided a successively longer maximum timeframe for attaining the ozone NAAQS. Second,

each higher classification mandated specific additional and/ or more stringent obligations than the classification immediately below. Specifying mandatory measures in the statute was necessary because States and EPA, prior to 1990,

had failed to ensure that SIPs achieved steady reasonable progress in reducing emissions or to require readily available measures that were cost effective and necessary to meet the standard. See generally H. R. Rep. No. 101 490 at 144 48 ( 1990).

For this rule, we examined the issue of mandatory measures from both a legal and policy standpoint. Our legal view is guided by the statutory language in part D of title I of the CAA. In addition, we were guided by the Supreme Court's view of this language. Our policy view is guided by past precedents and also the principles we set forth in our proposed rule ( June 3, 2003; 68 FR 32802).

We have consistently interpreted the CAA to mean that once an area is classified under subpart 2, the subpart 2 requirements apply. While certain requirements allow for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 44 some flexibility in how they apply, the requirements do not allow for broad waivers. For example, all areas classified as serious or above must meet the requirement for an enhanced inspection and maintenance ( I/ M) program, however,

there is some flexibility in determining what type of I/ M program meets the requirement for an enhanced I/ M program.

The Supreme Court, in addressing whether the classification provisions in subpart 2 applied for purposes of the 8 hour ozone NAAQS found that they did and stated that EPA's implementation scheme, which would have avoided classifications under subpart 2, was unreasonable because it would effectively nullify the subpart 2 provisions that Congress created with the intent to limit State and EPA discretion. Whitman v. American Trucking Assoc., 531 U. S.

484 85.

In the proposed rule, we recognized that there is case law doctrine that might allow a case by case waiver from mandatory requirements when sufficient evidence is presented that application of a specific requirement in a particular area would cause absurd results.

2. Final rule We continue to interpret the CAA to mean that the prescribed requirements for each classification under PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 45 subpart 2 apply to areas with such classification for the 8

hour NAAQS. As we noted in the preamble to the proposed rule, there may be a basis for waiving a prescribed requirement on a case by case basis where imposition of the requirement would create an absurd result. However, as stated in the proposed rule, we believe that absurd results that might occur from application of mandatory control measures would happen only in rare instances. If a State submits a demonstration that application of a specific requirement in a specific nonattainment area would create an absurd result, we will consider application of the absurd results doctrine at that time.

3. Comment and responses Comment: A number of commenters supported the approach that we discussed in the proposed rule. Other commenters agreed with the overall concept that we proposed but felt that we should take additional factors into consideration if we make case by case waivers from subpart 2 requirements.

Several commenters suggested that we take the cost of controls into consideration when determining if there were an absurd result while others suggested that we look at relative control strategy effectiveness, e. g., allowing a demonstration that NOx reductions are more effective and PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 46 therefore may be substituted for mandatory VOC emissions reductions.

Several other commenters stated that we should more broadly allow substitution of subpart 2 mandatory measures.

One commenter felt that substitution of subpart 2 measures should be allowed as long as the substituted measures are at least equivalent to the mandatory measures. Another commenter stated that we should allow areas to adopt substitute measures in lieu of subpart 2 measures where the subpart 2 measures would not be as effective as the substitute measures in reaching attainment. The commenter stated that we have been overly limited in our characterization of when subpart 2 measures might be waived to avoid an absurd result. The commenter believed that we should create a categorical exemption as an exercise of agency power to allow areas to substitute NOx for VOC measures or more effective control measures for less effective control measures when doing so would expedite attainment. Another commenter urged us to limit the strict application of subpart 2 measures because the imposition of such measures creates economic disincentives for companies to locate and expand in nonattainment areas. A number of commenters stated that they do not support the vehicle I/ M PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 47 or Stage II vapor recovery programs and recommended that we provide States with flexibility in meeting these requirements.

Response: Many of the commenters' suggestions go beyond the application of an absurd results doctrine and instead suggest broad waiver of subpart 2 requirements based on a determination that an alternative or substitute is more effective. We do not believe that we have the authority to broadly waive measures mandated by Congress. As noted by the Supreme Court, Congress intended to cabin States'

discretion when it mandated the specific controls under subpart 2. See e. g., Whitman, 531 U. S. 484 85. (" Whereas subpart 1 gives EPA considerable discretion to shape nonattainment programs, subpart 2 prescribes large parts of them by law" and " EPA may not construe the statute in a way that completely nullifies textually applicable provisions meant to limit discretion").

However, as stated in our proposed rule, we believe that case law may provide EPA with limited flexibility to waive federally mandated requirements on a case by case basis where application of those requirements would produce an absurd result. We do not need to conclude here what precise circumstances would create an absurd result. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 48 Rather, that decision would need to be made on a case

bycase basis in the context of a specific request. In general, we note that to demonstrate an absurd result, a State would need to demonstrate that application of the requirement would result in more harm than benefit. For example, the programs mandated under subpart 2 are generally effective in reducing emissions of the two ozone precursors   NOx and VOC   and because reductions of those precursors generally lead to improved air quality, we believe that such a demonstration could be made, if at all, only in rare instances.

With regard to the comment relating to Stage II vapor recovery, section 202( a)( 6) of the CAA does provide for revision or waiver of the Stage II vapor recovery requirement under certain conditions: " The requirements of section 182( b)( 3) ( relating to stage II gasoline vapor recovery) for areas classified under section 181 as moderate for ozone shall not apply after promulgation of such standards and the Administrator may, by rule, revise or waive the application of the requirements of such section 182( b)( 3) for areas classified under section 181 as Serious,

Severe, or Extreme for ozone, as appropriate, after such time as the Administrator determines that onboard emissions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 49 control systems required under this paragraph are in widespread use throughout the motor vehicle fleet."

Currently, EPA is formulating policy concerning how widespread use will be determined and has been seeking participation from affected parties. Further information is available at:

http:// www. epa. gov/ ttn/ naaqs/ ozone/ ozonetech/ stage2/.

Comment: A few commenters disagreed with the approach in our proposed rule. One commenter stated that we do not have the statutory authority to create new waivers to subpart 2 requirements. Another commenter stated that the CAA does not allow case by case waivers to avoid " absurd"

results. The commenter further stated that doing so would in effect require us to rewrite the statute by regulation.

Response: As stated above, we agree that we do not have broad authority to waive subpart 2 requirements and that the CAA itself does not expressly create authority to waive such requirements. However, the " absurd results" line of cases provides that where application of a statute as written would create a result counter to what Congress intended, an Agency has limited authority to construe that provision in a manner than would effectuate Congress' PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 5See Holy Trinity Church v. United States, 143 U. S. 457 ( 1892) (" If literal construction of the words of a statute be absurd, the act must be so construed to avoid the absurdity."); Griffin v. Oceanic Contractors, Inc. 458 U. S. 564 ( 1982) ( recognizing the absurdity exemption, but concluding that a harsh penalty provision did not produce results counter to Congress' intent); Mova Pharm. Corp. v. Shalala, 140 F. 3d 1060 ( D. C. Cir. 1998) ( recognizing the absurdity exemption, but finding that a " successful defense" regulation went beyond the statute was not necessary to meet Congressional intent.)

50 intent. 5 B. How will we address long range transport of ground level ozone and its precursors when implementing the 8 hour ozone standard?

[ Section VI. F. of June 2, 2003 proposed rule ( 68 FR 32827); no draft or final regulatory text.]

1. Background Interstate transport can make it difficult or impossible for some States to meet attainment deadlines for areas within their boundaries solely by regulating sources within their own boundaries. Section 110( a)( 2)( D) of the CAA provides an important tool for addressing the problem of interstate transport. It provides that a State must include adequate provisions in its SIP to prohibit sources within the State from emitting air pollutants in amounts that contribute significantly to nonattainment, or interfere with PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 51 maintenance, in one or more downwind States. Section 110( k)( 5) of the CAA authorizes EPA to find that a SIP is substantially inadequate to meet any CAA requirement,

including the requirements of section 110( a)( 2)( D) of the CAA. If we make such a finding, we must require the State to submit, within a specified period, a SIP revision to correct the inadequacy. The CAA further addresses interstate transport of pollution in section 126, which authorizes any State to petition EPA to regulate emissions from significant upwind sources of air pollutants in other States.

In addition to requiring States to control interstate air pollution under section 110( a)( 2)( D), the CAA requires States with nonattainment areas to develop State plans under part D that provide for meeting the NAAQS as expeditiously as practicable, and for maintaining healthy air quality in those areas over time. Together, the section 110( a)( 2)( D)

and part D provisions provide for upwind State and in State controls to ensure that national health based air quality standards are met and maintained.

2. Current approach In the NOx SIP Call Rule, EPA found the SIPs for certain States in the eastern U. S. to be substantially PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 6In light of various challenges to the 8 hour NAAQS, we stayed the 8 hour basis for the NOx SIP Call Rule ( 65 FR 56245; September 18, 2000).

52 inadequate to address emissions transported to downwind States and required those States to select and adopt control measures to meet statewide ozone season NOx emissions budgets based on highly cost effective NOx emissions reductions ( 63 FR 57356, October 27, 1998.) In that rule,

we determined that the same level of emissions reductions was needed to address transport for both the 1 hour and 8

hour standards. 6 The NOx SIP Call Rule is achieving substantial emissions reductions and air quality improvement well in advance of the attainment dates of 8 hour nonattainment areas. In the eastern United States, monitoring data shows a 10 percent improvement between 2002 and 2004 in the seasonal ( May September) average of daily maximum 8 hour ozone concentrations, after adjustment for meteorological differences. The EPA believes that the NOx reductions achieved as a result of the NOx SIP Call are an important factor in this improvement. The compliance date for achieving the required NOx reductions under phase I of the NOx SIP Call was May 31, 2004. All of the 19 affected PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 53 States and the District of Columbia submitted complete Phase I SIPs, which EPA approved, in response to the NOx SIP Call and are implementing their NOx control programs. State programs to implement the rule have focused on reducing emissions from electric power generators and large industrial emitters. The phase II NOx SIP Call Rule, which responds to court decisions on issues from the original SIP call rule involving certain types of sources and geographic coverage, requires additional emissions reductions by May 1,

2007.

The EPA'S modeling for the CAIR indicates that ozone levels across the eastern half of the country will improve substantially by 2010 because of existing requirements   including the NOx SIP call, federal motor vehicle and nonroad engine regulations, and other existing State and federal rules. Last year, EPA designated more than 100 areas in that region as having ozone levels not meeting the 8 hour ozone standard, based on 2001 2003 data. Air quality improvements due to existing requirements ( i. e., without State measures required for areas designated nonattainment for the 8 hour standard) are projected to leave only 16 of these areas in nonattainment in 2010. This estimate is derived from base case CAIR modeling results shown in the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 7The CAIR first phase also provides an annual NOx budget, which also starts in 2009.

54 final notice for the CAIR ( 70 FR 25254, Table VI   12).

On May 12, 2005, EPA published the Clean Air Interstate Rule in the Federal Register ( 70 FR 25162). The EPA determined that 28 States and the District of Columbia contribute significantly to downwind nonattainment, or interfere with maintenance, of the PM2.5 and 8 hour ozone NAAQS in other States. The rule requires these States to submit SIP revisions to reduce SO2 and/ or NOx emissions.

To reduce interstate ozone transport, the rule established statewide ozone season NOx budgets for 25 States and the District of Columbia. The budgets are based on the level of emissions that can be achieved through highly costeffective controls that EPA determined are available from EGUs; however, States have flexibility to choose the measures they will use to achieve the necessary emissions reductions. Due to feasibility constraints, EPA is requiring the CAIR budgets to be achieved in two phases.

For summertime NOx, the first phase starts in 2009 ( covering 2009 2014); 7 the second phase of NOx reductions begins in 2015 ( covering 2015 and thereafter).

The 25 States that are required to meet a summertime PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 8The CAIR requires summertime NOx reductions in the following States not covered by the NOx SIP Call: Arkansas, Florida, Iowa, Louisiana, Mississippi, and Wisconsin. The NOx SIP Call has requirements for two States not covered by CAIR ozone requirements: Rhode Island and Georgia. The EPA has proposed a stay of applicability of the SIP Call to Georgia as an initial response to a petition for reconsideration on whether Georgia should be covered.

55 NOx cap for ozone purposes, along with the District of Columbia, are Alabama, Arkansas, Connecticut, Delaware,

Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana,

Maryland, Massachusetts, Michigan, Mississippi, Missouri,

New Jersey, New York, North Carolina, Ohio, Pennsylvania,

South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin.

The CAIR is geographically broader and more stringent than EPA's previous ozone interstate transport rule, the NOx SIP Call, adopted in 1998.8 The CAIR's ozone requirements are based on updated analyses of the impacts of pollution transported across State borders, and of highly costeffective control opportunities for NOx.

As detailed in the final CAIR action, the CAIR rule will further reduce ozone transport to assist States in their efforts to bring ozone nonattainment areas into attainment or  in the case of downwind receptor areas that attain prior to some or all CAIR reductions  maintain air PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 56 quality meeting the 8 hour ozone NAAQS. In the CAIR rulemaking, EPA projected that 39 counties ( in the 16 nonattainment areas referenced above) would have ozone levels exceeding the standard in 2010 in the absence of further control requirements ( i. e., the base case without CAIR). Most of these counties were projected to be within a few parts per billion ( ppb) of the standard. For the 39 counties, the average reduction in ozone levels estimated from 2009 CAIR NOx controls is 0.4 ppb, and the maximum improvement is 1.4 ppb ( 70 FR 25254, Table VI   12.) The 2009 CAIR NOx requirements will achieve reductions prior to the maximum attainment date for downwind 8 hour ozone areas classified as moderate.

We believe that States will be able to demonstrate timely attainment for most 8 hour ozone nonattainment areas with the help of emissions reductions from Federal rules.

However, we also believe that a limited number of downwind areas, while showing improvement, are likely to remain in nonattainment after 2009. This is due to the severity of projected ozone levels in certain areas, uncertainties about the levels of emissions reductions that will actually occur,

and persistence of historical difficulties with attaining the 1 hour ozone standard. The EPA determined in the CAIR PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 9For the 22 counties projected to be in nonattainment in 2015 in the absence of further control requirements ( i. e., the CAIR base case), the average ozone reduction in 2015 from CAIR is 1.1 ppb, and the maximum improvement is 1.6 ppb. ( 70 FR 25254, 25455, Table VI   13.)

57 that even if all downwind receptor areas attained on time,

many areas will remain close enough to the standard to be at risk of falling back into nonattainment. The EPA concluded that the 2015 summertime NOx reductions will assist attainment and maintenance of the 8 hour standard. 9 In addition to controlling interstate air pollution under section 110( a)( 2)( D), EPA national rules and State rules for controlling local sources of emissions are significantly reducing, and in the future will further reduce, the amount of pollution transported to 8 hour ozone nonattainment areas in downwind States. Downwind States, in devising their attainment and maintenance plans, will be able to take required upwind reductions into account.

Depending on the particular area, the upwind reductions will help to hasten attainment of the NAAQS, make attainment and maintenance of the NAAQS less difficult and costly, or both.

The EPA notes that interstate pollution transport will be further reduced through cost effective measures that individual States adopt for purposes of bringing their ozone PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 10 Many types of sources contribute to ozone transport. The CAIR reduction requirements are based solely upon potential reductions from EGUs; EPA did not find other source types highly cost effective to control.

58 nonattainment areas into attainment. 10 Given the potential for measures adopted by one State to improve air quality downwind, EPA is supportive of multi State cooperation on strategies for attaining the 8 hour standard.

3. Comments and responses This section addresses the more significant comments received; the response to comment document addresses other comments also.

Comment: Several commenters thought the June 2, 2003,

8 hour implementation proposal failed to adequately address transport and disagreed with our statement that 8 hour transport has been addressed up front by the NOx SIP Call.

Some added that this puts northeastern States located in the OTR in a situation where their citizens and businesses are bearing a disproportionate burden of health and economic impacts compared to upwind States that have fewer control requirements than OTR States. Some OTR State commenters said that the rule should address this inequity. One said we cannot assume that transport has been addressed until after the NOx SIP Call is implemented and has been evaluated. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 59 Response: The 8 hour ozone implementation rule is not intended as a rule to address interstate transport of pollution and to achieve emissions reductions from upwind sources as provided under CAA section 110( a)( 2)( D). Rather,

its purpose is to interpret nonattainment requirements ( in subparts 1 and 2 of part D of title I) for State plans to implement the 8 hour NAAQS. We have addressed the section 110( a)( 2)( D) obligation through the NOx SIP Call and CAIR,

which provide substantial air quality benefit for downwind areas significantly affected by transport of pollution from other States.

Comment: Two commenters recommended a regional approach among States to address transport. One commenter thought that Clear Skies is the best way to address transport, but absent that, would support a regional approach. Some commenters thought the 8 hour ozone implementation proposal ignored the issue that ozone is a regional problem that can only be solved through regional planning. These commenters added that instead of incentives for regional planning there were disincentives. Another commenter thought that EPA unrealistically expects States to be able to resolve all potential conflicts between the States by working together in a collaborative process to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 60 identify and adopt appropriate controls that provide for attainment. The commenter suggested that EPA oversight may be necessary in these situations. One commenter thought the development of multiple OTRs for regional planning and coordination may be highly desirable to bring States with a common problem together to coordinate efforts with the strength of several States rather than to go it alone.

Another suggested some criteria for EPA to use if we were to choose to establish OTRs.

Response: We believe that addressing interstate transport requires regional approaches and regional cooperation. The EPA has ensured regional action to reduce interstate ozone transport through the NOx SIP Call Rule and CAIR. In addition, we note that groups of States have worked effectively together in the past to address regional ozone problems. For example, the Lake Michigan Air Directors Consortium ( LADCO) was established in 1990 by the States of Illinois, Indiana, Michigan, and Wisconsin. The main purpose of LADCO is to provide technical assessments for and assistance to its member States on problems of ozone air quality and to provide a forum for its member States to discuss air quality issues. We will continue to encourage these multi State efforts to assess and address ozone PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 61 nonattainment and will work with these States as needed to provide support and ensure progress.

We agree with other commenters that States should work together in the SIP development process to ensure localized transport is addressed. States that share an interstate nonattainment area are expected to work together in developing the nonattainment SIP for that area and in reducing emissions that contribute to local scale interstate transport problems. We would also encourage collaborative efforts even in cases where there is not a multi State nonattainment area but where significant emissions sources in one State might affect air quality in a nonattainment area in an adjacent State.

In response to comments suggesting that EPA establish additional transport regions, at this time we do not anticipate formalizing any additional transport regions. We believe that the NOx SIP Call and CAIR rules go far to effectively address the kind of transport that establishment of a transport region would be intended to address, without the costs of setting up a commission to oversee the transport region.

Comment: Some commenters stated that we should not rely on the proposed Clear Skies legislation to reduce PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 62 emissions transport because there is no guarantee that the legislation will be enacted. Several State commenters added that Clear Skies would not provide adequate or timely emissions reductions. Another commenter suggested that we work with Congress to enact legislation to allow for the development and use of a transport argument in attainment demonstrations.

Response: While we still hope that Congress will adopt the Administration's Clear Skies multi pollutant legislation, we acknowledge that the outcome of that process is uncertain. To ensure that regional transport is addressed in a timely manner, EPA finalized the CAIR in May 2005 based on our existing regulatory authority.

Comment: One commenter proposed that rather than addressing transport through national measures, we could include transport as one of the criteria for determining the adequacy of a SIP. This commenter supported the multi State collaborative effort mentioned in the proposed rule, so that areas work together to address transport as their SIPs are being developed. The commenter asserted that our proposed early, top down approach could significantly hinder SIP planning for local areas considering the complex chemistry of ozone and PM2.5 formation. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 63 Response: We believe that the NOx SIP Call and CAIR help, rather than hinder, SIP planning for nonattainment areas. We agree that the CAA does allow the States to work together in a collaborative fashion to assess regional or sub national transport. The EPA worked with a State led effort in the mid to late 1990' s [ the Ozone Transport Assessment Group ( OTAG) process] to perform such an assessment, which documented the magnitude and extent of long range transport of ozone and its precursors. At that time, EPA concluded that without some certainty of what levels of emission controls would be required in the larger region, States faced great uncertainty regarding the amounts of ozone and precursor concentrations being transported into the modeling domain of the nonattainment area for which they were required to develop their attainment demonstrations.

Therefore, EPA issued the NOx SIP Call   and more recently,

CAIR  to establish the emission reduction responsibilities of upwind States under section 110( a)( 2)( D). In this way,

eastern States could then have a fair degree of certainty regarding required upwind reductions and the amount of transported emissions to be assumed in their 1 hour ozone attainment demonstrations for individual nonattainment areas. Based on the OTAG experience, we believed that there PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 64 was high risk that States working together in a collaborative fashion would not agree on a regional control strategy within the time the CAA provides for States to develop 8 hour attainment demonstrations. Therefore, we believe the commenter is incorrect that the " top down"

approach will significantly hinder SIP planning for the individual areas, and on the contrary, will provide the certainty needed to complete the attainment demonstrations in a timely manner.

The commenter also proposed that rather than addressing transport through national measures, we could include transport as one of the criteria for determining the adequacy of a SIP. It is true that section 110( a)( 2)( D)( i)( I) requires a SIP to " contain adequate provisions . . . prohibiting, consistent with the provisions of this title, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will )

( I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard . . ." Furthermore,

sections 110( a)( 1) and ( 2) of the CAA require States to submit SIPs that implement, maintain, and enforce a new or PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 65 revised NAAQS within 3 years of promulgation of the standard. Among other things, these SIP revisions must address a State's significant contribution of pollution to nonattainment and maintenance problems in other States under section 110( a)( 2)( D). On March 10, 2005, EPA officially notified States that they have failed to submit SIPs to satisfy this requirement of the CAA with respect to the 8

hour ozone and PM2.5 NAAQS ( 70 FR 21147; April 25, 2005).

The finding starts a 2 year clock for EPA to issue a final Federal Implementation Plan ( FIP) that will address the requirements of section 110( a)( 2)( D) unless a SIP revision correcting the deficiency is approved by EPA before the FIP is promulgated. The EPA plans to issue guidance regarding how States could satisfy the section 110( a)( 2)( D)

requirement. For States affected by CAIR, an approved SIP responding to the CAIR would satisfy the requirement and turn off the FIP clock.

C. How will we address transport of ground level ozone and its precursors for rural nonattainment areas, areas affected by intrastate transport, and areas affected by international transport?

[ Section VI. G. of June 2, 2003 proposed rule ( 68 FR PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 11This section of the proposal also addressed multi State nonattainment areas. The discussion of multi State nonattainment areas is now covered under the discussion below on attainment demonstrations and modeling.

66 32828); no draft or final regulatory text.] 11 1. Rural transport nonattainment areas a. Background In the June 2, 2003 proposal, we noted that section 182( h) of the CAA ( under subpart 2) recognizes that the ozone problem in a rural transport area is almost entirely attributable to emissions from upwind areas. This section provides that the only requirements applicable to an area classified under subpart 2 that we determine is a rural transport area are the minimal requirements specified for marginal areas, i. e., those areas expected to attain within 3 years after designation. The timing for attainment for these areas will depend on the schedule for adoption and implementation of control measures in the upwind areas. We did not propose any revision to current policy and practices related to the rural transport area provisions under section 182( h).

b. Summary of final rule The final rule does not contain any revisions to current policy on rural transport areas under section PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 12Based on current information, we do not believe there are any 8 hour nonattainment areas covered under subpart 2 that are " rural" and therefore eligible for consideration for coverage under section 182( h). Existing policy on rural transport areas includes the " General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule," April 16, 1992 ( 57 FR 13505).

67 182( h). 12 c. Comments and responses Comment: Several commenters favored the proposed approach of not revising our current policies with regard to subpart 2 areas that meet the criteria for being a rural transport area under section 182( h).

Response: We agree with these comments.

Comment: Several commenters urged us to provide more flexibility such as extending the provision to other areas whose problems are caused by transport but that do not qualify as rural under section 182( h).

Response: These commenters did not suggest any legal mechanism for granting the flexibility provided under section 182( h) to areas that do not qualify as rural under section 182( h). We have not found any such legal mechanism and, therefore, the final rule does not extend the flexibility provided under section 182( h) to additional areas. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 68 2. Intrastate transport a. Background In the proposed rule, we noted that a number of State air agency representatives had voiced concern about intrastate transport of ozone and precursor emissions and asked EPA to address this concern. We indicated that the CAA requires individual States, as an initial matter, to deal with intrastate transport. We also pointed out that a State could recommend designation of nonattainment areas that are large enough to encompass upwind and downwind areas of the State and require that the individual jurisdictions work together on an attainment plan that accounts for transport and results in attainment by the attainment date for the entire nonattainment area. We also solicited comments on other ways of addressing intrastate transport within the context of the CAA provisions.

b. Summary of final rule The final rule does not contain any additional provisions for addressing intrastate transport for the reasons stated in the proposal. However, as indicated in the Phase 1 Rule published on April 30, 2004, for subpart 1 areas, States and EPA could consider intrastate transport in PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 13Intrastate transport also could be considered in determining the attainment date that is as expeditious as practicable for subpart 2 areas, but if the date were later than allowed for the area's classification, the State would need to requires bump up of the area to a higher classification for that date to be approved.

69 determining the attainment date for an area. 13 In identifying the appropriate attainment date for an area, the State should consider measures to address intrastate transport of pollution from sources within its jurisdiction.

c. Comments and responses Comment: Two commenters recommended that States have regulatory authority to require controls as necessary regarding the problem of intrastate transport. They asserted that nonattainment areas should work with upwind contributing areas within the State to address regional transport within the State.

Response: As provided in the proposed rule ( 68 FR 32829), we agree with the commenters that States have the obligation and authority to address the transport of pollution from one area of the State to a different area of the State.

Comment: Several comments recommended an intrastate transport classification.

Response: Our response to those comments is in the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 70 response to comment document for the Phase 1 Rule of April 30, 2004. ( Docket document OAR 2003 0079 0717; p. 68.)

3. How will EPA address transport of ground level ozone and its precursors for areas affected by international transport?

a. Background As discussed in the proposal, international transboundary transport of ozone and ozone precursors can contribute to exceedances of the NAAQS. It is possible that the international transport of air pollutants may affect the ability of some areas to attain and maintain the 8 hour ozone NAAQS. Section 179B of the CAA ( International Border Areas), applies to nonattainment areas that are affected by emissions emanating from outside the United States. This provision requires EPA to approve a SIP for an ozone nonattainment area if it meets all of the requirements applicable under the CAA, other than a requirement that the area demonstrate attainment and maintenance of the ozone NAAQS by the applicable attainment date, and the State establishes to EPA's satisfaction that the SIP would be adequate to attain and maintain the ozone NAAQS by the applicable attainment date but for emissions emanating from outside the United States. The preamble to the proposed PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 71 rule recommended that States should confer with the appropriate EPA Regional Office to establish on a case

bycase basis the technical requirements for these analyses.

b. Final rule As in the proposal, we are not setting forth any regulatory provisions related to international transport.

Section 179B of the CAA applies for these purposes. We continue to recommend that States confer with the appropriate EPA Regional Office to establish on a case

bycase basis the technical requirements for analyses to support showings under section 179B. These analyses will be subject to public comment during the State and Federal SIP processes.

c. Comments and responses Comment: Several commenters addressed the discussion of international transport in the proposed rule. Two commenters suggested that EPA is placing too high a burden on States to make a demonstration that a nonattainment area would attain but for international transport ( e. g.,

assessing emissions from foreign countries). These commenters stated that EPA has the appropriate resources and technical expertise to evaluate international transport and highlighted certain data EPA has gathered and modeling EPA PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 72 has performed. The commenters suggested that EPA should reevaluate relevant policies regarding section 179B of the CAA to ensure they are streamlined and not unnecessarily burdensome on States in making an international transport demonstration. Another commenter thought that the proposed rule does not adequately address ozone from international sources, especially in a situation where a State does not have jurisdiction over most of the significant sources of ozone or access to available data for modeling in that region. Another commenter encouraged EPA to expand its view of the applicability of section 179B and allow consideration of the impact on attainment of smoke from crop burning activities in Southern Mexico and Central America.

Response: The CAA, not EPA's proposed rule, places the burden on States to demonstrate that an area would be able to attain but for emissions from sources located outside the United States. However, EPA agrees with the commenters that EPA has been performing numerous activities that will provide data that States may be able to rely on as they develop these demonstrations. We recognize that adequate data for foreign sources may not be available to States.

Therefore, modeling, according to the modeling guidance for attainment demonstrations, may not be possible in all cases. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 73 Because the availability of information and the causes of international pollution vary significantly from one area to another, EPA continues to believe that the best approach for addressing international transport is for States to work with EPA on an area by area basis to determine what is the best available information and the best method for analysis that fits the unique situation for each area.

Regarding consideration under section 179B of the impact on attainment of smoke from crop burning activities in Southern Mexico and Central America, in many cases it may not be possible to confidently quantify the impacts to the total ozone loadings from individual foreign sources that are hundreds or even thousands of miles from the U. S.

border. Particularly since 1998, when spring fires in Mexico and Central America were very severe, EPA has received much information about the potential impacts from such occurrences on ozone and PM levels in the United States. A prime lesson learned from those experiences is that a well designed, detailed analysis is required before one can estimate the degree of influence from such fires.

In many cases, sufficient data will not exist to draw such a conclusion. Case by case consultation between EPA and the State will help determine how best to consider this PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 74 information in attainment planning.

With respect to the applicability of section 179B to areas affected by emissions from very distant, foreign sources, EPA currently has not taken a position. If and when there are any SIP submittals that request a section 179B dispensation on such a basis, EPA will examine those submittals on a case by case basis, including focusing on the sufficiency of the technical demonstration, in order to make a determination of section 179B applicability.

The EPA considers international transport of pollution an important issue. The EPA is engaged in several international efforts that will allow us to better understand the linkages between air pollution sources in other countries and their impacts on public health and air quality in the United States. The EPA has cooperative agreements with both Canada and Mexico to investigate international border transport. The information generated by these partnerships will assist States in evaluating international transport affecting 8 hour nonattainment areas.

D. How will EPA address requirements for modeling and attainment demonstration SIPs for areas implementing the 8

hour ozone standard? PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 75 [ Section VI. H. of June 2, 2003 proposed rule ( 68 FR 32830); § 51.908 in draft and final regulatory text.]

As noted in the proposal, an attainment demonstration SIP consists of ( 1) technical analyses to locate and identify sources of emissions that are causing violations of the 8 hour NAAQS within nonattainment areas ( i. e., analyses related to the emissions inventory required for the nonattainment area), ( 2) adopted measures with schedules for implementation and other means and techniques necessary and appropriate for attainment, ( 3) commitments, in some cases,

to perform a mid course review ( MCR), and ( 4) contingency measures required under section 172( c)( 9) of the CAA that can be implemented without further action by the State or the Administrator to cover failures to meet RFP milestones and/ or attainment. The final rule retains three of these four elements, the exception being the requirement for a commitment to perform a MCR. As noted below, EPA will assess whether a MCR is needed on a case by case basis in reviewing individual attainment demonstrations.

In the Phase 1 Rule, § 51.908 contained only the requirement related to the timing of implementation of the emissions reductions needed for attainment. In today's final rule, that provision is retained as paragraph ( d) of PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 14Even though the June 2, 2003 proposal contained the reference to the 0.005 ppm criterion, the draft regulatory 76 § 51.908, and other requirements related to modeling and attainment demonstrations appear in the remaining paragraphs of § 51.908.

In the proposal, we also solicited public comment on the guidance related to multi pollutant assessments ( as discussed below), areas with earlier and later attainment dates, MCR, modeling guidance, and multi State nonattainment areas. These topics are discussed below. Associated with the attainment demonstration also are the RFP/ ROP plans and the SIP submission concerning RACM, both of which we discussed elsewhere in the preamble to the proposed rule and which are discussed in later sections of this preamble.

1. Areas with early attainment dates a. Background The proposal noted that under section 182( a), marginal areas, which have a maximum attainment date of 3 years after designation, are not required to perform a complex modeling analysis using photochemical grid modeling. We noted that areas covered under either subpart 1 or 2 with ozone concentrations close to the level of the NAAQS [ e. g., within 0.005 parts per million ( ppm)] 14 will most likely come into PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 text issued for public comment did not contain a reference to this criterion.

77 attainment within 3 years after designation as nonattainment without any additional local planning as a result of national and/ or regional emission control measures that are scheduled to occur. We noted that regional scale modeling for national rules, such as the NOx SIP Call and Tier II motor vehicle tailpipe standards, projects major ozone benefits for the 3 year period of 2004 2006. Attainment for many areas classified as marginal is further indicated by subsequent modeling used to support the CAIR. This 3 year period coincides with the period that would be used to determine whether an area attains the 8 hour standard within 3 years after designation for areas classified as marginal.

If existing modeling for a marginal area does not indicate the area will attain with the current planned control measures, EPA encouraged the areas to request reclassification to moderate and encouraged the State or Tribe to develop an attainment demonstration using photochemical grid modeling. ( See 68 FR 32831; June 2,

2003.) Even though modeling is not required, it may be prudent.

In the proposal, we noted that many subpart 1 areas are PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 78 projected through regional modeling to come into attainment within 3 years after designation with current control programs. Therefore, we proposed that no additional modeled attainment demonstration would be required for areas with air quality observations close to the level of the standard and where regional or national modeling exists that is appropriate for use to demonstrate the area will attain the 8 hour standard within 3 years after designation ( i. e.,

based on data from 2004 2006).

We proposed that areas subject only to subpart 1 may request an attainment date no later than 3 years following designation for the 8 hour NAAQS by submitting within 1 year of the designation a SIP that demonstrates the area will attain within 3 years following designation. The demonstration must include modeling results and analyses that the State is relying on to support its claim. Such modeling must be consistent with EPA guidance and must be appropriate for the area.

b. Summary of final rule Although we proposed that subpart 1 areas requesting an attainment date within 3 years after designation should submit their attainment demonstration within 12 months, we have removed that provision from the final rule. A subpart PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 15The EPA notes that 8 hour ozone nonattainment areas are also free to develop early SIPs with motor vehicle emissions budgets for transportation conformity purposes in advance of a complete SIP attainment demonstration. For more information on establishing an early 8 hour ozone SIP and how it could be used for conformity, please refer to EPA's July 1, 2004, conformity final rule ( 69 FR 40019).

16If an assessment indicates that a regional modeling analysis is not applicable to a particular nonattainment area, additional local modeling would be required.

79 1 area is free to choose to submit its attainment demonstration at any time prior to the 3 year due date. 15 As is the case with all required attainment demonstrations, the demonstration must be submitted no later than 3 years following designation and must be appropriate for use in the area. We anticipate that most subpart 1 areas will be included in the modeling analyses conducted by areas with later attainment dates. States are encouraged to use these available analyses, as well as future EPA national or regional modeling. The demonstration must include modeling results and analyses that the State or Tribe is relying on to support its claim. Such modeling should be consistent with EPA guidance and should be applicable and appropriate for the area. 16 If acceptable available modeling does not demonstrate attainment, the area would need to submit a local modeled attainment demonstration. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 80 c. Comments and responses Comment: Several commenters recommended that the requirement for attainment demonstrations from all subpart 1 areas be eliminated.

Response: Section 172( c)( 1) clearly requires that nonattainment areas ". . . shall provide for attainment of the national primary ambient air quality standards." To meet this requirement, a State must demonstrate that the area will attain by a specified date and identify and adopt the control measures that will bring the area into attainment. We see no authority for waiving this requirement for areas.

Comment: What are the requirements for subpart 1 areas requesting attainment dates within 3 years of designation?

Response: Subpart 1 areas must submit their attainment demonstrations within 3 years after designation.

2. Areas with later attainment dates a. Background For areas with attainment dates of more than 3 years after designation, regardless of whether they are covered under subpart 1 or subpart 2 ( except marginal areas), we proposed to require them to submit an attainment demonstration SIP. This proposal was reflected in PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 81 § 51.908( b) and ( c) of the draft regulatory text. We stated that local, regional and national modeling developed to support Federal or local controls could be used provided the modeling is consistent with EPA's modeling guidance.

Several States have invested considerable time and resources in regional 8 hour ozone modeling projects following this guidance. Where exceedances of the 8 hour ozone standard are more pervasive and widespread than they were for the 1

hour ozone standard, we recommended that States work together in multi State modeling efforts and leverage off work under development and resources spent on these projects.

b. Summary of final rule Subpart 1 areas with attainment dates later than 3 years after designation and areas classified as moderate or higher under § 51.903, are required to submit an attainment demonstration no later than 3 years after the effective date of designation for the 8 hour ozone NAAQS. Areas with an effective date of designation of June 15, 2004 are required to submit an attainment demonstration no later than June 15,

2007. These demonstrations must be consistent with section 51.112, including appendix W. In addition, for the review of technical adequacy, we will generally rely on our most PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 17U. S. EPA,( 2005), Guidance on the Use of Models and Other Related Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 05 002, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: ozone final. pdf).

18The guidance may not apply to a particular situation, depending upon the circumstances. The EPA and State decision makers retain the discretion to adopt approaches on a case by case basis that differ from this guidance where appropriate. Any decisions by EPA regarding a particular SIP demonstration will only be made based on the statute and regulations, and will only be made following notice and opportunity for public review and comment. Therefore, interested parties will be able to raise questions and objections about the contents of this guidance and the appropriateness of its application for any particular situation.

82 recent modeling guidance at the time the modeled attainment demonstration is performed. We will be making available a final version of the modeling guidance related to developing attainment demonstrations for the 8 hour ozone standard. 17 Areas required to submit an attainment demonstration are encouraged to follow the procedures described in this guidance. Local, regional and national modeling developed to support Federal or local controls generally may be used provided the modeling is consistent with EPA's modeling guidance at the time the modeled attainment demonstration is performed. 18 c. Comments and responses PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 83 We received no comments on this topic per se; comments on the timing of submission of attainment demonstrations is discussed elsewhere. We noted in the proposal that comments on the modeling guidance were welcome at any time and that we would consider those comments in any future revision of that document. We noted that comments submitted on the modeling guidance document would not be docketed as part of this rulemaking, nor would a comment/ response summary of these comments be a part of the final 8 hour ozone implementation rule since they will not affect the rule itself. We will address those comments at the time we issue the final modeling guidance.

3. Multi State nonattainment areas a. Background As discussed in the June 2003 proposal, section 182( j)

of the CAA defines a multi State ozone nonattainment area as an ozone nonattainment area, portions of which lie in two or more States. Section 182( j)( 1)( A) and ( B) set forth certain requirements for such areas. First, each State in which a multi State ozone nonattainment area lies must take all reasonable steps to coordinate the implementation of the required revisions to SIPs for the given nonattainment area [ section 182( j)( 1)( A)]. Next, section 182( j)( 1)( B) requires PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 84 the States to use photochemical grid modeling or any other equally effective analytical method approved by us for demonstrating attainment. We are prevented by section 182( j) from approving any SIP revision submitted under that section if a State has failed to meet the above requirements.

To address the provisions of section 182( j)( 1)( A),

States that include portions of a multi State ozone nonattainment area should develop a joint work plan as evidence of early cooperation and integration. The work plan should include a schedule for developing the emissions inventories, and the attainment demonstration for the entire multi State area. Each State within a multi State ozone nonattainment area is responsible for meeting all the requirements relevant to the given area. Care should be taken to coordinate strategies and assumptions in a modeled area with those in other, nearby modeled areas in order to ensure that consistent, plausible strategies are developed.

Section 182( j)( 2) for multi State nonattainment areas recognizes that one State may not be able to demonstrate attainment for the nonattainment area if other States in which portions of the nonattainment area are located do not adopt and submit the necessary attainment plan for the area. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 85 In such cases, even though the area as a whole would not have an approvable attainment demonstration, the sanction provisions of section 179 will not apply in the portion of the nonattainment area located in a State that submitted an attainment plan.

b. Summary of final rule As discussed in the proposal, State partners involved in a multi State ozone nonattainment area must work together to perform the appropriate modeling analyses to identify control measures that will enable the area to achieve attainment as expeditiously as practicable. Each State will be responsible for its portion of the control program and therefore will be held accountable for controls identified for implementation within its State boundaries. The modeling analyses should encompass the entire multi State nonattainment area as well as adjacent counties which may contribute to the nonattainment problem. State plans should address local transport within the region and its contribution to nonattainment in the multi State area.

Consideration of long range transport and its contributions to nonattainment is discussed in section IV. B. of this preamble. Multi State nonattainment areas are subject to the same modeling and attainment demonstration requirements PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 86 of the final rule that apply to all other areas. Marginal multi State nonattainment areas do not have to submit a modeled attainment demonstration because section 182( a)

exempts marginal areas from the requirement to submit an attainment demonstration.

c. Comments and responses Comment: Several commenters encouraged us to clearly define in the rule how multi State nonattainment areas will be treated if all or a portion of an area is subject only to subpart 1. One of these commenters requested a clarification that photochemical grid modeling will not be required for multi State areas classified under subpart 1 or areas that are classified as marginal. The commenter's reasoning was that such modeling is unnecessary since they are close to achieving the 8 hour NAAQS and will be in attainment before the modeling can be completed.

Response: We agree with these commenters that since section 182( a) exempts marginal areas from the requirement to submit an attainment demonstration, such areas need not develop an attainment demonstration. Section 182( j) of the CAA requires that multi State areas use photochemical grid modeling as part of their attainment demonstrations while Section 172 ( Subpart 1 areas) of the CAA does not explicitly PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 87 require photochemical grid modeling. For subpart 1 areas that do not seek an attainment date of 3 years or less after designation, we make no distinction between multi State and single State subpart 1 nonattainment areas. All subpart 1 nonattainment areas are required to submit an attainment demonstration that relies on photochemical grid modeling,

either one that has already been performed that is appropriate for use in the area, or a new one. We do not believe that techniques other than those based on photochemical grid modeling will provide credible assurance that an area will achieve the 8 hour ozone standard by the area's attainment date.

Comment: One commenter requested that we perform the modeling for multi State areas. Two commenters stated that if any additional photochemical modeling is required for such areas pursuant to CAA 182( j)( 1)( B), then EPA should refine previous modeling; perform new modeling; or approve a less resource intensive, alternate method that fulfills the requirement. The commenters asserted that we should assist the States in coordinating the development of the attainment/ maintenance plans and ensure that areas involving multiple EPA Regions are not hampered by jurisdictional conflicts and inconsistencies. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 88 Response: The EPA has conducted, and will continue to conduct, regional and national scale modeling that covers most of the ozone nonattainment areas. Both single State and multi State nonattainment areas will be able to make use of EPA modeling, where appropriate. The EPA will work with States to determine the steps necessary for the proper use of EPA modeling in a local attainment demonstration. States that plan to use EPA modeling in lieu of local modeling should be prepared to justify the local use of the regional projections as well as conduct additional analyses to monitor progress towards attainment. The EPA will continue to work with States to coordinate the development of consistent attainment/ maintenance plans.

4. Role of modeling guidance in attainment demonstrations a. Background The proposal noted that section 182( b)( 1)( A) requires ozone nonattainment areas to develop an attainment demonstration which provides for reductions in VOC and NOx emissions " as necessary to attain the national primary ambient air quality standard for ozone." Section 172( c),

requires areas covered under subpart 1 to demonstrate attainment. For a subpart 1 area that does not qualify for an attainment date within 3 years after designation, we PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 19As noted above in the discussion of subpart 1 areas with early attainment dates, although the draft regulatory text in § 51.908( a) was structured such that no attainment demonstration was needed for subpart 1 areas that received an attainment date within 3 years after the effective date of the nonattainment designation, this was misleading, since the draft § 51.904( b)( 2) provision that affected these areas required submission of a demonstration of attainment within 3 years after designation. The final regulatory text in § 51.908( b) clarifies this point.

20U. S. EPA, ( 1991), Guideline for Regulatory Application of the Urban Airshed Model, EPA 450/ 4 91 013. Available at: http:// www. epa. gov/ scram001/ tt25. htm; see document DRAFT8HR.

89 proposed to require the State to develop and submit a modeled attainment demonstration. 19 We noted that section 182( c)( 2)( A) provides that for serious and higher classified areas the " attainment demonstration must be based on photochemical grid modeling or any other analytical method determined by the Administrator, in the Administrator's discretion, to be at least as effective." A photochemical grid model should meet several general criteria for it to be a candidate for consideration in an attainment demonstration. We noted that, unlike in previous guidance, 20 we did not propose recommending a specific photochemical grid model for use in the attainment demonstration for the 8 hour NAAQS for ozone.

At present, there is no single model which has been PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 21U. S. EPA, ( May 1998), Draft Guidance on the Use of Models and Other Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 99 004, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: DRAFT8HR).

90 extensively tested and shown to be clearly superior or easier to use than other available models. Criteria for attainment demonstrations are contained in 40 CFR 51.112,

including appendix W ( i. e., " EPA's Guideline on Air Quality Models," 68 FR 18440, April 15, 2003). Appendix W refers to EPA's " Use of Models and Other Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS" and lists a set of general requirements that an air quality model should meet to qualify for use in an attainment demonstration for the 8 hour ozone NAAQS. 21 The proposal described alternatives available to the States and the scope and coverage of the draft guideline. The draft regulatory text of 2003 addressed this requirement in § 51.908( d).

We noted that we were planning to make substantial changes to the draft version of this document before finalizing the attainment demonstration aspects of the implementation rule. We said we welcomed public comments on the guidance at any time and would consider those comments in any future revision of the document. However, we said we PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 22See 40 CFR § 51.900( g) for definition.

91 would not consider comments on the technical merits of the modeling guidance in this present rulemaking.

b. Summary of final rule The final rule [ § 51.908( c)] requires each attainment demonstration to be consistent with the provisions of § 51.112, including appendix W to 40 CFR part 51. In addition, we will generally review the demonstrations for technical merit using EPA's most recent modeling guidance at the time the modeling relied on in the attainment demonstration is performed. This guidance will generally have the State provide ( 1) technical analyses to locate and identify sources of emissions that are causing violations of the 8 hour NAAQS within nonattainment areas, ( 2) adopted measures with schedules for implementation and other means and techniques necessary and appropriate for attainment that are needed for attainment, with implementation no later than the beginning of the attainment year ozone season22 ( e. g.,

prior to 2009 ozone season for areas with June 15, 2010 attainment dates), and ( 3) contingency measures required under section 172( c)( 9) of the CAA that can be implemented without further action by the State or the Administrator to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 23U. S. EPA, ( 1998), Draft Guidance on the Use of Models and Other Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 99 004, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: DRAFT8HR).

92 cover emissions shortfalls in RFP plans and failures to attain.

c. Comments and responses Comment: One commenter recommended that EPA must ensure that attainment demonstrations are based on scientifically valid regional airshed modeling rather than scientifically invalid linear proportional rollback and weight of evidence methods.

Response: Criteria for attainment demonstrations are contained in 40 CFR § 51.112, including appendix W ( i. e.,

" EPA's Guideline on Air Quality Models," 68 FR 18440, April 15, 2003). Appendix W cites EPA's " Use of Models and Other Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS" and describes a set of general criteria that an air quality model and its application should meet to qualify for use in an attainment demonstration for the 8 hour ozone NAAQS. 23 The draft guidance was developed through a collaborative process, which included review from the scientific community, and it has been revised to reflect PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 24U. S. EPA,( 2005), Guidance on the Use of Models and Other Related Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 05 002, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: ozone final. pdf).

93 recent review comments. The procedures described are considered a scientifically valid use of regional and urban airshed modeling. The modeled attainment test makes use of the model derived relationship between ozone and its precursors. It does not, as is the case with proportional rollback, assume equal proportions of the precursors will provide an equally proportional reduction in ozone. For example, it does not assume that 20 percent reduction in precursors will provide 20 percent improvement in ozone.

The guidance also identifies additional data which, if available, should enhance the credibility of model results and results of other analyses used in a weight of evidence determination. The EPA believes use of weight of evidence is appropriate as do many in the scientific community.

Weight of evidence is a credible approach for considering inherent uncertainties in a modeling application. As noted above, we will be making available a final version of the modeling and attainment demonstration guidance for the 8

hour ozone standard. 24 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 94 Comment: All attainment demonstrations should be subject to the same rigorous standards.

Response: The EPA envisions that the final 8 hour ozone modeling guidance will be available for use by the majority of subpart 1 areas and subpart 2 areas classified as moderate and above. However, due to the unique nature of the ozone problem in many areas, EPA will accept various applications of the guidance. Although EPA anticipates all areas will follow the guidance closely, there will be variation based on availability of new and improved data methods and field study data. The EPA is always striving to make best use of available data and improvements in methodologies as the science and our understanding of ozone formation and transport in different parts of the country increases. Unique to many areas is the source receptor configuration, level of precursor data collected and the model's ability to simulate unique factors influencing the formation and transport of ozone. As more information becomes available in particular areas, EPA expects more rigorous demonstrations will be provided. Areas close to attaining the standard for which there is a better understanding of the meteorology and the relationships between precursor emissions and ozone may not require as PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 95 much rigor. These decisions will be made on a case by case basis and the public will be able to express their views during the State SIP development and EPA review process.

Comment: The EPA cannot adopt or change the Draft Guidance, use it for regulatory purposes, or require States to use it for regulatory purposes, without subjecting it to separate notice and comment rulemaking.

Response: The final rule [ § 51.908( c)] requires each attainment demonstration to be consistent with the provisions of 40 CFR 51.112, including appendix W. However,

we are not adopting the Guidance as a rule. The EPA plans to use the current ( 2005) guidance and future updates as a benchmark for reviewing the technical analysis submitted in support of 8 hour ozone attainment demonstrations. The guidance document is not a regulation. Therefore, it does not impose binding, enforceable requirements on any party,

and may not apply to a particular situation based upon the circumstances. The EPA and State decision makers have the discretion to adopt approaches on a case by case basis that differ from this guidance where appropriate. Any decisions by EPA regarding adequacy of a particular SIP to meet the 8

hour ozone NAAQS will be based on the CAA and our regulations. Therefore, interested parties are free to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 04/ 05 96 raise questions and objections about the appropriateness of the application of this guidance to a particular situation during the State SIP development and EPA review process.

Comment: One commenter requested an opportunity to review and comment on the revised guidance prior to the " final" release.

Response: States, Tribes and others were given an opportunity to comment on the revised draft guidance prior to release. Also, EPA received additional comments on the draft guidance during the comment period on the implementation rule. The EPA has reviewed and considered the comments and will be releasing the final guidance. For more information and updates to the modeling guidance for ozone, visit EPA's Technology Transfer Network Support Center for Regulatory Air Models ( TTN/ SCRAM) on the internet, http:// www. epa. gov/ ttn/ scram/. Even though the guidance will be issued in final form shortly, EPA is always open to suggestions for future improvements to the guidance,

including the incorporation of methodologies and procedures that increase accuracy and credibility of results. Such suggestions may be made to EPA regional or headquarters modeling contacts listed at the above TTN/ SCRAM web site.