The EPA also received comments from several States opposing EPA's proposed approach. These commenters believe the NOx and VOC guidance is too old, needs updating and, in the case of NOx controls, the improvement over the last three years has been dramatic with controls previously considered to be Best Available Control Technology ( BACT) ( and therefore generally considered at the time to be more stringent than RACT) are now considered to be merely RACT. In addition, one State suggested the presumptive RACT level should be revised to at least 85 percent control or that NOx RACT should be defined as up to $ 10,000/ ton of pollutant removed.

Two States disagreed with EPA's proposal that a new RACT determination should be required in cases where the initial RACT analysis under the l hour NAAQS found that no additional controls were necessary for a specific source or source category. They indicated such re analysis would be an unwise use of resources because it would not yield significant benefits. Further, they do not agree that a RACT determination is warranted for major VOC or NOx sources not PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 292 in existence during the previous RACT determination, because new sources in 1 hour nonattainment areas have been permitted pursuant to the requirements for NSR and, where applicable,

have already been subject to more stringent control requirements.

Response: In 1992, EPA set presumptive NOx RACT for boilers as combustion modification, consistent with Ttitle IV acid rain requirements. For all other NOx stationary source categories, EPA guidance in 1994 indicated States should consider in their RACT determinations technologies that achieve 30 50 percent reduction within a cost range of $ 160

1300 per ton of NOx removed. In the NOx SIP Call Rule, we reviewed all major NOx source categories and stated in the final rule that the NOx SIP Call controls, at less than $ 2,000/ ton, represent reductions beyond those required by RACT. We cannot agree with the suggestion of one State that EPA's RACT guidance should be revised to reflect 85 percent control and $ 10,000/ ton of pollutant removed because the comment lacked supporting documentation that these values represent feasible control levels for the many source categories affected by the RACT program.

Many areas subject to the major source RACT requirement under the 8 hour ozone standard have previously addressed the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 293 RACT requirement with respect to the 1 hour ozone standard.

For example, major sources located in States of the Ozone Transport Commission ( OTC) were subject to the NOx RACT requirement in the mid 1990s. We believe that, in many cases, a new RACT determination under the 8 hour standard would result in the same or similar control technology as the initial RACT determination under the 1 hour standard because the fundamental control techniques, as described in the CTGs and ACTs, are still applicable. In cases where controls were applied due to the 1 hour ozone RACT requirement, we expect the incremental emissions reductions from application of a second round of controls would be small and would not be cost effectivecost effective. In such cases, EPA believes the cost per ton of NOx removed associated with installing a second round of RACT controls ( and perhaps the removal of initial RACT controls) is likely to be beyond the RACT levels in our current guidance ($ 160$ 1300/ ton). In contrast, a RACT analysis for uncontrolled sources would be much more likely to find that RACT level controls are economically and technically feasible.

The CTGs and ACTs for VOC were completed over a period from the late 1970s to mid 1990s and have not been updated.

The CTGs are still used to presumptively define VOC RACT. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 294 The EPA issued NOx ACT documents between 1992 and 1995. In September 2000, updates to the NOx ACT documents were completed for stationary internal combustion engines and cement kilns. The NOx and VOC ACTs describe available control techniques and their cost effectiveness, but do not define presumptive RACT levels as the CTGs do. Updating the ACTs would not, by itself, change EPA's NOx or VOC RACT guidance, but it could provide information that would lead to a new conclusion as to which control measures constitute RACT for a specific source or source category. Since RACT can change over time as new technology becomes available or the cost of existing technology decreases, EPA does not agree with comments that once a source has met RACT, it has met RACT whether or not the ozone standard is revised.

We agree that progress has been made in improving the cost effectiveness of some NOx and VOC controls. States and other interested parties should consider available information that may supplement the CTG and ACT documents.

In cases where additional information is presented, for example, as part of notice and comment rulemaking on a RACT SIP submittal, States ( and EPA) would necessarily consider the additional data in reviewing what control obligation is consistent with RACT. For example, as part of the 1998 NOx PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 295 SIP Call and 2004 CAIR rulemakings, EPA developed and used control and cost data for large boilers and turbines based on newer information than contained in the ACTs. Similarly, we encourage States to use the latest information available in making RACT determinations, whether it is in CTGs, ACTs, or elsewhere.

The EPA agrees that it is more efficient for EPA to broadly assess what is RACT for a specific source category than for States to conduct source by source RACT determinations, especially considering that States need to initiate RACT programs in the near future ( as discussed in a separate comment/ response). The EPA's current RACT guidance may be used for purposes of the 8 hour standard. At the same time, we agree with comments that many of the CTGs/ ACTs have not been revised since issued and thus may not provide the most accurate picture of current control options. Therefore,

we believe States must consider new information that has become available and certify that a 1 hour ozone RACT determination, even where controls were required, still represents an appropriate RACT level of control for the 8

hour ozone program. In the alternative, the State should revise the SIP to reflect a modified RACT requirement for specific sources or source categories. We intend to develop PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 296 updated technology guidance, especially with respect to source categories emitting multiple pollutants in large amounts. States should consider the updated guidance in any RACT determinations or certifications that have not been issued as of the time such an update becomes available.

In summary, we believe the current NOx and VOC RACT guidance, including CTGs and ACTs, may continue to be used by States in making RACT determinations with respect to the 8

hour ozone standard. As the guidance is updated, States should consider the new information in their RACT determinations or certifications. Regardless, States should ensure that their SIPs accurately reflect RACT based on the current availability of technically and economically feasible controls.

Therefore, in portions of 8 hour ozone nonattainment areas where major sources or source categories were previously reviewed and controls subsequently applied to meet the RACT requirement under the 1 hour standard, the final ruleEPA allows States to review and, if appropriate, accept the initial RACT analysis as meeting the RACT requirements for the 8 hour standard. Absent data indicating that the previous RACT determination is no longer appropriate, the State need not submit a new RACT SIP for these sources. In PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 297 such cases, the State should submit a certification as part of its SIP revision, with appropriate supporting information,

such as consideration of updated EPA guidancenew data , that it previously met the RACT requirement for these sources and that the previous determination still represents an appropriate RACT level of control. Where the initial RACT analysis under the 1 hour standard for a specific source or source category concluded that no additional controls were necessary, the final rule requiresEPA believes a new RACT determination is needed. The new RACT determination is needed to consider whether more cost effective control measures have become available for sources that were not previously regulated. A re analysis may determine that controls are now economically and technically feasible and should be required to meet RACT. Furthermore, in this situation, we expect the incremental emissions reductions to be significant, compared to the uncontrolled emissions levels, thereby reducing the cost per ton of emissions controlled and therefore more reasonably available. In all cases where additional information is presented as part of notice and comment rulemaking, including a RACT SIP submittal for sources previously controlled, States ( and EPA) must PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 298 consider the additional information as part of that rulemaking.

We agree with several State and industry comments that a RACT determination would be necessaryrequirements apply for major sources in any portion of the 8 hour nonattainment area that was not subject to a RACT program for the 1 hour standard.

Some commenters objected to EPA's proposal that any major VOC or NOx source that did not exist during a previous RACT determination must be subject to a RACT determination as part of the SIP for the 8 hour ozone standard. These commenters stated that the BACT or LAER provisions would assure at least RACT level controls on such sources. We agree this should be true in many cases, but not all. The BACT/ LAER analyses do not automatically ensure compliance with RACT since the applicability thresholds may differ and the analyses may be conducted many years apart. States may,

however, use information gathered from prior BACT or LAER analyses to help complete a RACT analysis. For VOC sources subject to MACT standards, States may streamline their RACT analysis by including a discussion of the MACT controls and whether any major new technologies have been developed subsequent to the MACT standards. We believe that there are PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 299 many VOC sources that are well controlled ( e. g., through addon controls or through substitution of non VOC non HAP materials for VOC HAP materials) because they are regulated by the MACT standards, which EPA developed under CAA section 112. Any source subject to MACT standards must meet a level that is as stringent as the best controlled 12 percent of sources in the industry. Examples of these HAP sources that may effectively control VOC emissions include organic chemical plants subject to the hazardous organic NESHAP ( HON), pharmaceutical production facilities, and equipment leads and wastewater operations at petroleum refineries. We believe that, in many cases, it will be unlikely that States will identify emission controls more stringent than the MACT standards without identifying control options that would cost many thousands of dollars per ton. Unless the MACT standards do not actually result in decreases in VOC ( such as substitution of a non HAP VOC for a HAP VOC) and unless there are new technologies subsequent to the MACT standards that would lead to cost effective increases in the level of VOC control, States may rely on the MACT standards for purposes of VOC RACT.

Comments: Several State and industry commenters supported EPA's proposed approach. These commenters stated PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 300 that the level of emissions reductions required by the NOx SIP cCall is far greater than the level of reductions achieved by controls that have been determined to be NOx RACT. Other commenters pointed out that many companies have employed averaging programs for NOx SIP Call compliance and want this option preserved under the 8 hour ozone standard since requiring sources to individually meet NOx RACT requirements would greatly increase the costs of compliance at sources already subject to the NOx cap and trade program without achieving greater emissions reductions. One State encourages EPA to provide this exemption to other areas subject to approved cap and trade programs in addition to those areas affected by the NOx SIP cCall.

The EPA also received comments, primarily from several States and environmental groups, opposing the approach.

These commenters stated that there are no exceptions to the RACT mandates in either subpart 1 or subpart 2 for sources subject to SIP call cap and trade programs, and EPA is without authority to invent such an exception. Because the NOx SIP Call's cap  and  trade program does not require emission control technologies to be installed at a particular source, some commenters conclude that RACT requirements are necessary and appropriate to ensure that all sources PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 301 implement at least a minimum level of control. One State indicated there have been numerous cases where sources subject to the NOx SIP Call have not had to install controls comparable to RACT. Commenters also suggested that RACT is intended to be a benchmark for control technology at individual stationary sources, not a level of regional reductions. In addition, some commenters noted that the NOx SIP Call requirements are specific to the ozone season, where RACT requirements are year round. Consequently, these commenters recommended that EPA should also consider nonozone related nitrogen issues, including fine particles,

visibility, nitrification and acidification of watersheds and eutrophication of coastal waters all of which would be reduced with year round controls.

Response: As described below, EPA believes the sources that comply with the CAIR or NOx SIP Call cap and trade programs meet NOx RACT requirements. Accordingly, the State need not perform a NOx RACT analysis for sources subject to the State's emission cap and trade program where the cap

andtrade program has been adopted by the State or approved by EPA or a Federal implementation plan is in place meeting the NOx SIP Call or CAIR ( without opt in units) NOx requirements. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 302 In addition, the State need not submit a new NOx RACT SIP for those sources.

The EPA believes the RACT mandate in subpart 1 and subpart 2 applies in specific geographic areas but does not necessarily require every major source to install controls.

For example, as discussed in a separate comment/ response,

where we are dealing only with subpart 1 RACT, we only require such RACT as will advance attainment or meet RFP.

Thus, EPA does not agree with commenters who conclude that RACT requirements are necessary and appropriate to ensure that all sources implement at least a minimum level of control or that RACT is intended to be a benchmark for control technology at all individual stationary sources.

Some commenters pointed out that the NOx SIP Call requirements are specific to the ozone season, yet RACT requirements are year round. While there are some exceptions, EPA agrees that RACT usually is an application of controls year round; thus, there would be non ozone related nitrogen benefits, including fine particles, visibility,

nitrification and acidification of watersheds and eutrophication of coastal waters due to year round controls.

With respect to CAIR and the NOx SIP Call, EPA believes that the vast majority of sources in the cap and trade program PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 303 will install combustion controls to decrease NOx emissions because it is almost always the most cost effective strategy.

Since combustion controls meet EPA's NOx RACT guidance for level of control and since these controls would be operated year round, EPA believes the RACT requirement would be met year round in the vast majority of cases. Further, because many affected sources also installed post combustion controls to meet the NOx SIP Call requirements, these additional emissions reductions provide further assurance that RACT equivalent emissions reductions will occur, on average, at sources affected by the cap  and  trade program. We agree that there would be non ozone related nitrogen benefits,

including fine particles, visibility, nitrification and acidification of watersheds and eutrophication of coastal waters due to year round controls.

Some commenters argue that RACT should apply to each source because some sources subject to the NOx SIP Call cap and trade program might not install controls and could meet the SIP Call requirements solely by purchasing allowances.

Because the NOx SIP Call is a market based program, there could be units that choose to meet those requirements simply by emissions trading. We expect that very few the vast majority of sources subject to RACT and rules implemented by PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 49In the 1998 NOx SIP Call rRule, average costs of compliance were estimated at about $ 1500/ ton and average RACT level costs are less than $ 1300/ ton. Recent estimates of the projected cost of allowances are about $ 2000 4000/ ton ( NOx Budget Trading Program, 2003 Progress and Compliance Report, August 2004, EPA 430 R 04 010). With respect to RACT, we would note that in some cases, the State may determine that additional controls are not technically and economically feasible. Thus, even if the State analyzed RACT for each source subject to the cap and trade program, that would not guarantee additional emissions reductions at each source because the RACT determination for some could conclude no additional controls are required.

304 the State under CAIR or the NOx SIP Call would choose to not install RACT level control equipment and, instead, choose to rather than meet the NOx SIP Call requirements solely by purchasing allowances. Most likely the cost for purchasing allowances will be higher than the cost for a achieving a RACT level of control. 49 In addition, many units subject to CAIR or the NOx SIP cCall cap will install beyond RACT controls, as discussed below. Therefore, we believe that the NOx SIP callWe believe the combination of RACT level controls on the vast majority of sources and the installation of beyond RACT controls on many units will achieve at least a RACT level of control, on average, among sources subject to RACT in each nonattainment area. Meeting RACT in this way is consistent with EPA guidance allowing RACT to be met in the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 305 aggregate within a nonattainment area, rather than by each individual source.

In other cases, a facility might choose to meet NOx RACT through emissions averaging; e. g., over controlling one large unit and not controlling other smaller units because the smaller units may be retired in the near future or labor or capital is not immediately available. We agree with comments that emission averaging programs such as the NOx SIP Call Rule achieve emission reductions at lower costs.

The EPA's NOx RACT guidance, published in 1992 ( 57 FR 55625), was, in part, for the purpose of " enhancing the ability of States to adopt market based trading systems for NOx" and to encourage States to " structure their RACT requirements to inherently incorporate an emissions averaging concept ( i. e., installing more stringent controls on some units in exchange for lesser control on others)." Since ( NOx General Preamble at 57 FR 55625) encourages States to develop RACT programs that are based on " areawide average emission rates." Thus, States can submit a demonstration as part of their RACT submittal showing that the weighted average emission rate from sources in the nonattainment area subject to RACT   including sources reducing emissions to meet the NOx SIP Call requires greater reductions, on average, than PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 306 RACT, ( see proposal notice at 68 FR 32839 and discussion below) we believe the average emissions at the facility in this example would be less than its emissions under application of a RACT program alone. We would also expect this scenario to be a short term case since the facility may choose later to install controls on the smaller units and sell any excess allowances, depending on the projected cost of allowancesor CAIR NOx requirements   meet RACT requirements.

We agree with comments indicating the overall emission reduction due to the NOx SIP Call would be greater overall than with a RACT program alone, and we believe they would be greater within each nonattainment area. All States submitting SIP revisions to meet the NOx SIP Call ( October 27, 1998, 63 FR 57356) elected to require large boilers and turbines to comply with an emissions cap and trade program consistent with EPA's model cap and trade rule. As a result,

all these sources are already subject to stringent control requirements. As described in the June 2, 2003 proposal,

these sources collectively achieve more emissions reductions than would be required by application of RACT requirements to each source. In the NOx SIP Call control case, electricity generating units ( EGUs) achieve a 64 percent reduction beyond PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 50The EPA's 1992 NOx RACT guidance sets Ttitle IV equal to RACT and specifies emission rates three times larger than the rates later used for coal fired units in the NOxNOx SIP Call ( 0.45 0.50 lb/ mmBtu versus 0.15).

51 Memorandum of March 16, 1994, from D. Kent Berry re: " Cost Effective Nitrogen Oxides ( NOx) Reasonably Available Control Technology ( RACT)." U. S. Environmental Protection Agency, Research Triangle Park, North Carolina.

307 the base case requirements. 50 The non EGUs subject to the States' cap and trade program achieve a 60 percent reduction from uncontrolled levels. These EGU and non EGU reductions are clearly beyond the 30 50 percent expected from a RACT program. 51 We stated in the final rule that the NOx SIP Call controls " represent reductions beyond those required by Title IV or Title I RACT." In addition, because the cap and trade program covers units serving a 25 megawatt generator, it requires emission reductions at many units emitting at less than the general RACT threshold of 100 tons per year. As explained above, we believe that the vast majority of sources subject to the SIP call cap would install combustion controls at a minimum, rather than rely solely on purchase of allowances for compliance. Thus, based on our existingtpy.

In some cases, a facility or a group of sources in a nonattainment area might choose to meet NOx RACT through emissions averaging; e. g., over controlling one large unit PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 308 and not controlling other smaller units because the smaller units may be retired in the near future or labor or capital is not immediately available. We agree with comments that emission averaging programs such as the NOx SIP Call Rule achieve emission reductions at lower costs. The EPA's NOx RACT guidance, we expect the NOx SIP Call to achieve more emission reductions within each nonattainment area than would be achieved through a RACT program.

For the above reasons, EPA believes the sources that comply withpublished on November 25, 1992 ( 57 FR 55625), was,

in part, for the purpose of " enhancing the ability of States to adopt market based trading systems for NOx" and to encourage States to " structure their RACT requirements to inherently incorporate an emissions averaging concept ( i. e.,

installing more stringent controls on some units in exchange for lesser control on others)." Since the NOx SIP Call capand trade program meet NOx RACT requirements. Accordingly,

the State need not perform a NOx RACT analysis for sources subject to the State's emission cap and trade program where the cap and trade program has been approved by EPA asrequires greater reductions, on average, than RACT, ( see proposal notice at 68 FR 32839 and discussion below) we believe the average emissions at the facility in this example would be PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 309 less than its emissions under application of a RACT program alone. We would also expect this scenario to be a short term case since the facility may choose later to install controls on the smaller units and sell any excess allowances,

depending on the projected cost of allowances.

Further, to help determine if sources meeting the NOx SIP Call requirements and the State need not submit a new NOx RACT SIP for those sources. As new or updated EPA RACT guidance becomes available, however, States should consider the new information in theirsubject to NOx RACT requirements for the 8 hour ozone standard will be operating RACT level combustion controls by 2010, EPA analyzed data from base case IPM runs for the Clean Air Interstate final rule ( CAIR). The data, " IPM Base Case 2010 Parsed," are available in the CAIR docket ( at http:// www. epa. gov/ airmarkets/ epa ipm/ iaqr. html)

and show which electricity generating units ( EGUs) are projected to have NOx controls in 2010 before consideration of the CAIR requirements. As described below, the results of the analysis support the conclusion that the vast majority of sources meeting the NOx SIP Call requirements and subject to NOx RACT requirements for the 8 hour ozone standard would be operating RACT level combustion controls by 2010. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 310 The data base included 8,517 EGUs in the CAIR 2010 emission inventory. Our analysis considered the 681 EGUs in the data base which are projected to emit more than 1 ton per day of NOx in 2010. This level of emissions approximates the cutoff level for " large" EGUs in the NOx SIP Call Rule. Of the 681 EGUs, as few as 3  11 are projected to be without NOx controls in 2010 CAIR base case and subject to an 8 hour ozone NOx RACT determinations. determination.

It should be noted that 8 of these EGUs are located in the Chicago area which was granted a waiver from NOx RACT under the 1 hour ozone standard based on a dispersion modeling analysis. Since the area may request a waiver from NOx RACT under the 8 hour standard, these 8 EGUs might not be subject to a NOx RACT determination for ozone. The remaining 3 EGUs are located in the Cleveland area; because there are 7 additional large EGUs in the same area, all of which are expected to have NOx controls ( low NOx burners, selective noncatalytic reduction ( SNCR) and/ or selective catalytic reduction ( SCR)), the area may meet RACT by averaging.

Additionally, because installation of combustion controls to decrease NOx emissions is almost always the most costeffective strategy and since the 2010 CAIR base case did not take into consideration that both areas are subject to RACT PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 311 and attainment demonstration requirements for both ozone and PM2.5 ( the highest particulate nitrate concentrations in the East tend to occur in cooler regions, xxx add cite to CAIR preamble) EPA expects sources subject to the CAIR or NOx SIP Call cap and trade programs in these areas will install at least RACT level controls.

In a similar manner, the same 2010 CAIR base case data was used to determine if EGUs emitting more than one ton/ day of NOx will be operating RACT level combustion controls by 2010 in the following scenario: ( 1) subject to CAIR for ozone, ( 2) not subject to the NOx SIP Call requirements and ( 3) subject to NOx RACT requirements for the 8 hour ozone standard. That is, how many EGUs outside the NOx SIP Call area may meet 8 hour ozone RACT through CAIR and what controls are expected to be in place at those EGUs in the 2010 base case?

The following 6 States are subject to CAIR for ozone but are not included in the NOx SIP Call: Arkansas, Florida,

Iowa, Louisiana , Mississippi and Wisconsin. The following States do not contain areas subject to NOx RACT for the 8

hour ozone standard: Florida, Iowa, Louisiana ( Baton Rouge is marginal), and Mississippi. Crittenden County in Arkansas is subject to NOx RACT for the 8 hour ozone standard; however, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 312 there are no large EGUs in the data base for this area. The Milwaukee and Sheboygan areas in Wisconsin are subject to NOx RACT for the 8 hour ozone standard; in these areas 11 of 13 large EGUs have combustion controls for NOx in the 2010 base case. The 2 without NOx controls are both located in Milwaukee County ( South Oak Creek). Thus, there may be only 2 EGUs at one site which are subject to CAIR and NOx RACT for ozone, are outside the NOx SIP Call area, and are expected to be uncontrolled for NOx in the 2010 CAIR base case. Because there are 6 additional EGUs in Milwaukee County with NOx controls in the 2010 base case, the area may be able to demonstrate RACT by averaging emissions over all the affected sources. Further, because installation of combustion controls to decrease NOx emissions is almost always the most cost effective strategy and since the 2010 CAIR base case did not take into consideration that the area is subject to RACT and attainment demonstration requirements for both ozone and PM2.5 ( the highest particulate nitrate concentrations in the East tend to occur in cooler regions, xxx cite to CAIR preamble), EPA expects sources subject to the CAIR cap and trade program in Milwaukee will install at least RACT level controls. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 313 Under CAIR, a State may elect to meet its state caps for NOx emissions by allowing large NOx sources that are not electric generating units to opt in to the program. If only part of the CAIR reductions are required from EGUs, and the balance of the reductions obtained from non EGU sources, then the stringency of CAIR EGU control would be diminished to some extent ( an amount that cannot currently be determined).

In that event, States would need to conduct individual RACT analyses for EGUs to determine whether or not the lesser EGU reductions satisfied RACT.

As explained above, we believe that the vast majority of sources subject to NOx RACT and rules implemented by the State under CAIR or the NOx SIP call cap will install combustion controls at a minimum, which will meet our existing NOx RACT guidance. We also believe sources could meet NOx RACT through emissions averaging, recognizing that CAIR and/ or the NOx SIP Call will achieve more emissions reductions than would be achieved through a RACT program alone.

As proposed, in cases where States have adopted controls for cement kilns consistent with the NOx SIP Call ( i. e., 30 percent reduction), the State may choose to accept the NOx SIP Call requirements as meeting the NOx RACT requirements PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 52As described in the April 21, 2004 rule ( 69 FR 21608) Federal Register.

314 for the 8 hour standard and need not submit a new NOx RACT SIP for those sources. In its RACT SIP submission, the State should identify the cement plants that are subject to NOx SIP Call controls and that, therefore, already meet RACT. The EPA received comments from States supporting the proposal.

For the same reasons, EPA believes a State may choose to accept the Phase II NOx SIP Call control level for stationary internal combustion engines52 as meeting the NOx RACT requirements. As new or updated EPA RACT guidance becomes available for cement kilns and/ or engines, States should consider the new information in their RACT determinations.

In addition, through the NOx SIP Call or other programs,

( including a SIP approved cap and trade program outside the NOx SIP Call area), States may have adopted control measures for specific NOx sources that equal or exceed RACT requirements. For these sources, States may choose to submit, as part of its NOx RACT SIP revision, documentation that the previously adopted control measure meets the RACT requirement. The EPA's NOx RACT guidance ( NOx General Preamble at 57 FR 55625) encourages States to develop RACT programs that are based on " areawide average emission rates." PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 315 Thus, States can submit a demonstration as part of their RACT submittal showing that the weighted average emission rate from sources in the nonattainment area subject to RACT   including sources reducing emissions to meet the NOx SIP Call requirements   meet RACT requirements.

It should also be noted that this ruleaction in no way limits States' discretion to require beyond RACT NOx reductions from any source ( including CAIR or NOx SIP Call sources) in a plan to demonstrate attainment of the healthbased ozone standards. In certain areas, States may choose to require NOx controls based on more advanced control technologies to provide for attainment of the ozone standards.

Although it is not the basis for the decision in the ozone implementation rule, we intend to propose in the PM2.5 implementation rulemaking an alternative interpretation that would also support a finding that in states which fulfill their CAIR emission reductions entirely through emission reductions from EGUs, CAIR would satisfy RACT requirements for EGU sources. This alternative is outlined below.

As discussed more fully in the CAIR final rulemaking notice, EPA has set the 2009 CAIR NOx cap at a level that will require EGUs to install emission controls on the maximum PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 316 total capacity on which it is feasible to install emission controls by those dates. The 2015 NOx cap is specifically designed to eliminate all NOx emissions from EGUs that are highly cost effective to control ( the first cap represents an interim step toward that end). In general, we expect that the largest emitting sources will be the first to install NOx control technology and that such control technology will gradually be installed on progressively smaller emitting sources until the ultimate cap is reached.

We do not believe that requiring source specific RACT controls on EGUs in nonattainment areas will reduce total NOx emissions from sources covered by CAIR below the levels that would be achieved under CAIR alone. In fact, if states chose to require smaller emitting sources in nonattainment areas to meet source specific RACT requirements by 2009, they would likely use labor and other resources that would otherwise be used for emission controls on larger sources. Because of economies of scale, more boiler makers may be required per megawatt of power generation for smaller units than larger units. In this case, the imposition of source specific RACT on smaller emitting sources by 2009 could actually reduce the amount of " banking" that would otherwise occur and result in higher emissions in 2009 as compared to the level that would PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 317 result from CAIR alone. In any event, the imposition of source specific control requirements on a limited number of sources also covered by a cap and trade program would not reduce the total emissions from sources subject to the program. Under a cap and trade program such as CAIR, there is a given number of allowances that equals a given emission level. Source specific control requirements may affect the temporal distribution of emissions ( by reducing banking and thus delaying early reductions) or the spatial distribution of emissions ( by moving them around from one place to another), but it does not affect total emissions. If sourcespecific requirements were targeted at the units that can be controlled most cost effectively, then the imposition of source specific controls would likely achieve the same result as the cap and trade program. If not, however, the imposition of source specific requirements would make any given level of emission reduction more costly than it would be under the cap and trade program alone. Thus, the imposition of source specific RACT on EGUs covered by CAIR would not reduce total emissions, but would likely achieve the same total emission reductions in a more costly way.

Comments: Several States expressed support for the proposed RACT submittal date of 2 years after designation for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 318 subpart 1 and 2 areas. Other commenters suggested the RACT submittal date for subpart 1 areas should be 3 years after designation in order to coincide with the attainment demonstration submittal deadline and to allow a more efficient use of resources. In addition, comments from industry suggested a 48 60 month period is needed for installation of controls, rather than the 30 month period proposed.

Response: As described in an earlier comment/ response,

in subpart 1 areas that do not request an extension of their attainment date, RACT is met with the control requirements associated with a demonstration that the NAAQS is attained as expeditiously as practicable. The EPA agrees with commenters that it would be more efficient, in these areas, if the date for submittal of the RACT rules were to coincide with submittal of the attainment demonstration since RACT is closely tied to the attainment demonstration. Therefore, in the final rule, the RACT submittal date for these areas is the same as the submittal date for the attainment plan, which is three3 years after designation ( June 2007). Although EPA is not setting a specific RACT rule implementation deadline for these areas, as provided in the Phase 1 rule, controls must be implemented by the beginning of the attainment year PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 53This assumes the ozone season in this example begins May 1. June 15, 2009 is tThe maximum statutory timeframe for subpart 1 areas that do not seek an extension is June 15, 2009. Since the CAA requires attainment as expeditiously as practicable, some subpart 1 nonattainment areas may have an attainment date earlier than June 15, 2009.

319 ozone season. Thus, for example, States would need to require implementation no later than May 1, 2008 in order to help areas attain the ozone standard by a June 15, 2009 attainment date. 53 In some cases, the time from State rule adoption to installation of controls by sources may be relatively short; in other cases, sources may need more time.

Therefore, EPA encourages States to adopt any necessary rules expeditiously ( prior to the June 2007 deadline, where possible) so that sources have more than sufficient time to install the controls prior to the start of the attainment year ozone season.

For subpart 2 moderate and above areas, and areas within an Ozone Transport Region, and subpart 1 areas that request an attainment date extension beyond 5 years after designation for the 8 hour standardOTR, the final rule is consistent withsimilar theo provisions in section 182 of the CAA which require States to submit RACT rules for these areas within 24 months ( June 15, 2006) ofafter the designation. Several PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 54In the 1990 aCAA Amendments to the CAA, Congress specifically added RACT requirements for major sources in section 182. Section 182 required the RACT rules to be implemented " as expeditiously as practicable" but no later than 30 months after the submittal deadline.

320 commenters supported this approach. Since some States may rely on submittal of SIP revisions meeting CAIR to also satisfy RACT for some sources, the final rule extends the proposed RACT submittal date of 24 months to 27 months after designation ( September 15, 2006), to be consistent with the date for submittal of the CAIR provisions ( September 10,

2006).

For areas subject to the 24 7 month RACT submittal date ( June 15, 2006), EPA believes the proposed 30  month ( December 15, 2008) period for installation of controls is reasonable, given that this is the statutorily prescribed period54 ( for the areas covered under subpart 2) and based on our prior experience with States adopting and implementing RACT requirements. Subsequent to the NOx RACT SIP revisions for the 1 hour standard subject to the 30  month CAA period,

EPA approved NOx RACT SIP submittals in some areas which had been exempt from the requirements, including the Dallas and Houston areas, which required implementation within 2 years from the State adoption date. The EPA recently determined PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 321 that a 24  month period is adequate for stationary internal combustion engines to install low emission combustion controls ( April 21, 2004; 69 FR 21633). Furthermore, EPA believes 30 months is adequate since available data support that one of the most challenging retrofit installations   application of selective catalytic reduction ( SCR) as described in the January 2004 CAIR proposal   can be completed, on average, in 21 months ( 69 FR 4617).

The 60  month period ( June 15, 2011) for installation of controls suggested by some commenters was not adequately supported, i. e., there was a lack of detailed justification that more time is necessary. In addition, as described in an earlier comment/ response, EPA anticipates that many sources which applied controls due to RACT requirements with the 1

hour ozone standard will not need to install new controls for the 8 hour standard. Thus, because fewer sources will be subject to a new RACT requirement, there will be less demand for control equipment and. States and many sources face a reduced burden compared to the same CAA requirement in the 1990s.

Since the ozone season ( 40 CFR part 58, Aappendix D)

does not begin for many areas until May 1, however, the final rule allows sources until the beginning of the area's 2009 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 55Note, since the CAA requires attainment as expeditiously as practicable, some moderate nonattainment areas may have an attainment date earlier than June 15, 2010.

322 ozone season ( generally May 1, 2009) rather than DecemberMarch 15, 20089 to install controls. Installation of controls before the 2009 ozone season is sufficient to provide the benefits for timely attainment of the ozone standard in areas with a 2010 or later attainment date. 55 And the short delay ( generally between DecemberMarch 15, 20089 and May 1, 2009) will cause no harm since it is prior to the ozone season, which is when ozone levels are most likely to be at harmful levels. Sources meeting NOx RACT through compliance with CAIR would implement controls by January 1,

2009, as required under CAIR.

For subpart 1 areas that request an attainment date extension ( beyond 5 years after designation), the final rule sets the RACT submittal and implementation dates the same as required for subpart 2 moderate and above areas, except subpart 1 areas shall submit the RACT SIP with its attainment date extension request. The EPA believes this approach is reasonable and provides equity for subpart 1 and 2 areas with attainment dates beyond five5 years after designation.

2. Reasonably Available Control Measures ( RACM) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 56" State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule." 57 FR 13498 at 13560 ( April 16, 1992). " Guidance on the Reasonably Available Control Measures ( RACM) Requirement and Attainment Demonstration Submissions for Ozone Nonattainment Areas." John S. Seitz, Director, Office of Air Quality Planning and Standards. November 30, 1999. Web site: www. epa. gov/ ttn/ oarpg/ t1pgm. html. Memorandum of December 14, 2000, from John S. Seitz, Director, Office of Air Quality Planning and Standards, re: " Additional Submission on RACM from States with Severe One Hour Ozone Nonattainment Area SIPs."

323 a. Background As noted in the June 2, 2003 proposed rule, Ssubpart 1 of part D includes general requirements for all designated nonattainment areas, including a requirement that a nonattainment plan provide for the implementation of all RACM as expeditiously as practicable, including such reductions that may be obtained through RACT. We have also issued guidance for implementing the RACM provisions of the CAA that interprets those provisions to require a demonstration that the State has adopted all reasonable measures to meet RFP and attainment as expeditiously as practicable and thus that no additional measures that are reasonably available will advance the attainment date or contribute to RFP for the area. 56 The RACM requirement, which is set forth in section 172( c)( 1) of the CAA, applies to all nonattainment areas that PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 324 are required to submit an attainment demonstration, whether covered under only subpart 1 or also subpart 2. The June 2,

2003, proposal implied that the current policies and procedures related to RACM would continue to apply for the 8

hour ozone standard. The draft regulatory text provided that for each nonattainment area required to submit an attainment demonstration under section 51 § 51.908, the State would have to 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.

b. Summary of final rule Section 51.912( d) of the final rule reflects our proposal and draft regulatory text. For each nonattainment area required to submit an attainment demonstration under section 51 § 51.908, 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.

In performing their RACM analysis, States should be aware of EPA's conclusions concerning compliance dates in the CAIR rulemaking ( May 12, 2005 ( 70 FR at 25221 et seq.)) that PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 57" State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule." 57 FR 13498 at 13560 ( April 16, 1992). In part this guidance said, " The EPA . . . indicated that where measures that might in fact be available for implementation in the nonattainment area could not be 325 represents an agressive schedule that reflects the limitations of the labor pool, and equipment/ vendor availability, and need for electrical generation reliability for installation of NOx emission controls. States should be aware of these limitations in developing their own compliance schedules for NOx emission controls in meeting their CAIR and RACT responsibilities and use EPA's schedule as a guide. We believe CAIR constitutes control as expeditious as practicable for EGUs for the area covered by the CAIR.

c. Comments and Rresponses Comment: One commenter asked that we clarify whether old SIP measures become RACM.

Response: Under EPA's policy concerning RACM, there are no measures that are automatically deemed RACM. The determination of whether a SIP contains all RACM requires an area specific analysis that there are no additional economically and technologically feasible control measures ( alone or in conjunction with others) that will advance the attainment date. 57 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 implemented on a schedule that would advance the date for attainment in the area, EPA would not consider it reasonable to require implementation of such measures. The EPA continues to take this interpretation of the RACM requirement." As an example, with regard to one possible list of measures ( TCMs under section 108( f) of the Act) that guidance said, ". . . based on experience with implementing TCM's over the years, EPA now believes that local circumstances vary to such a degree from city to city that it is inappropriate to presume that all section 108( f) measures are reasonably available in all areas. It is more appropriate for States to consider TCM's on an areaspecific not national, basis and to consider groups of interacting measures, rather than individual measures."

326 Comment: One commenter recommended that EPA revise its policy permitting SIPs to exclude otherwise feasible and potentially reasonably available control measuresRACM that achieve emissions reductions in increments less than the amount necessary to advance the attainment date by a full year. The commenter believed this was an onerous standard that has stymied development of new control measures,

particularly transportation control measures. The commenter believed EPA's RACM standard is especially harmful to the ability to provide SIP credit for Smart Growth land use, due to the long time frametimeframe over which land is developed and redeveloped. The commenter believes that ever increasing suburbanization of our nation inflates the growth rate in vehicle miles traveled ( VMT), thereby neutralizing improvements in vehicle emissions. The commenter claimed PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 327 that a significant air quality improvement strategy for the 21st Century is compact mixed use pedestrian friendly development near frequent transit and believed that changing land use plans in this direction will benefit air quality by reducing the rate of growth in VMT and emissions. The commenter recommended that EPA be aware of this and revise its RACM standard to encourage local governments to alter their land use plans by providing a mechanism to give credit for air quality beneficial land use changes.

Response: We do not believe our RACM policy has " stymied" development of new control technologies. New emission reduction technologies have surfaced and continue to surface to meet market demands resulting in part from Clean Air ActCAA requirements, which include the requirements to demonstrate attainment as expeditiously as practicable and to make RFP toward attainment. In addition, viable control measures that produce emissions reductions can be approved into SIPs whether or not such measures meet the definition of RACM. Our RACM policy merely interprets the ActCAA as not mandating measures that do not contribute to expeditious attainment and timely RFP. The policy does not limit the potential for States to develop any control measures they wish, including land use measures. In fact, we have prepared PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 58Improving Air Quality Through Land Use Activities; Transportation and Regional Programs Division, Office of Transportation and Air Quality, U. S. Environmental Protection Agency. EPA420 R 01 001. January 2001.

328 a separate guidance document on how areas can develop and receive SIP credit for land use control measures. 58 We conclude, however, that to require areas to adopt and implement as RACM every control technology or measure that obtains a small amount of emissions reductions even if such measure would not advance the attainment date or contribute to RFP is not justified. Such a policy would be extremely burdensome to planning agencies, would detract from the effort to develop more reasonable and effective controls to meet the NAAQS, and would not be necessary to meet the statutory goal of expediting attainment. For these reasons,

and because such requirement is not mandated by the statute,

we are not adopting such a policy.

Comment: One commenter believed that the RACM requirements for subpart 1 areas should be designed so as to not require extensive and unneeded control due to the fact that in most or all cases these controls will not be needed for the area to attain.

Response: We believe the current RACM guidance, which applies to both subpart 1 and 2 areas, works to avoid PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 329 extensive and unneeded controls, while ensuring that areas meet the health based NAAQS as expeditiously as practicable.

Comment: One commenter believed our RACM guidance provides only minimum requirements to ensure attainment as expeditiously as practicable and believes that every nonattainment area must be required to consider adoption of measures that have been implemented in other areas, including the South Coast of California, so as to achieve progress and attainment as expeditiously as practicable. An area should be allowed to reject such measures only upon a showing that they are not practicable due to specified unique circumstances. The commenter urged that given the importance of this issue to fair, expeditious and lawful implementation of the 8 hour standard, EPA's final 8 hour standard implementation rule must explicitly require compliance with this guidance.

Response: To meet the RACM provision of the ActCAA, the State must determine as part of its attainment demonstration whether there are additional measures that are feasible that would expedite attainment. In addition, EPA's RACM policy indicates that areas should consider all candidate measures that are potentially available, including any that have been PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 59In " State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990; Proposed Rule," we noted in the discussion of the RACM requirement that " In addition, any measure that a commenter indicates during the public commenter period is reasonably available for a given area should be closely reviewed by the planning agency to determine if it is in fact reasonably available for implementation in the area in light of local circumstances." The discussion of RACM in that document contains other relevant history concerning the RACM requirement. suggested for the particular nonattainment area. 59 Although areas should consider all available measures, including those being implemented in other areas such as California, areas need adopt measures only if they are both economically and technologically feasible and will advance the attainment date. This interpretation of the section 172 requirements has recently been upheld by several courts. See, e. g.,

Sierra Club v. EPA, et al., 294 F. 3d 155 ( D. C. Cir. Circuit,

2002).

Comment: Several commenters agreed with our proposal to require that the RACM analysis and measures be submitted within 3 years after the effective date of designation for the 8 hour NAAQS.

Response: We acknowledge the support of the comments on the submission timing of the RACM requirements.

H. How will the section 182( f) NOx provisions be handled under the 8 hour ozone standard? PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 60See 57 FR 55622 (" Nitrogen Oxides Supplement to the General Preamble," published November 25, 1992).

331 [ Section VI. L. of June 2, 2003 proposed rule ( 68 FR 32840); section 51 § 51.913 in draft and final regulatory text.]

1. Background While NOx emissions are necessary for the formation of ozone in the lower atmosphere, a local decrease in NOx emissions can, in some cases, increase local ozone concentrations. This potential " NOx disbenefit" resulted in Congress including the NOx exemption provisions in section 182( f) of the CAA for areas classified under subpart 2.

Section 182( f) requires States to apply the same requirements to major stationary sources of NOx as are applied to major stationary sources of VOC under subpart 2. The applicable requirements are RACT and nonattainment major NSR for major stationary sources of NOx in certain ozone nonattainment areas and throughout States in the OTR. 60 In addition,

section 182( f) specifies circumstances under which these NOx requirements would be limited or would not apply (" NOx exemption"). Further, areas granted a NOx exemption under section 182( f) may be exempt from motor vehicle I/ M and PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 61As stated in EPA's I/ M ( November 5, 1992, 57 FR 52950) and conformity rules ( 60 FR 57179 for transportation rules and 58 FR 63214 for general rules), certain NOx requirements in those rules do not apply where EPA granted an areawide exemption under section 182( f).

62See 57 FR 55620, " Nitrogen Oxides Supplement to the General Preamble," published November 25, 1992.

63September 1, 2004 at 69 FR 53378.

64The EPA's primary guidance regarding section 182( f) is contained in the " Guideline for Determining the Applicability of Nitrogen Oxide Requirements under Section 182( f)," issued by John S. Seitz, Director, Office of Air Quality Planning and Standards, to the Regional Division Directors, December 16, 1993.

332 certain Federal requirements of general and transportation conformity. 61 In the June 2, 2003 noticeaction, we proposed to apply the NOx requirements and exemption provisions in section 182( f) for subpart 2 nonattainment areas and in OTRs. 62 In addition, we proposed to allow subpart 1 nonattainment areas to seek a NOxNOx exemption, where appropriate. Further, we proposed that areas previously granted a NOx exemption under the 1 hour ozone standard would need to request an exemption for purposes of the 8 hour standard in order to account for any new information that may point to a different conclusion with respect to the 8 hour standard. Recently, we invited comment63 on draft guidance intended to update the existing 1

hour ozone guidance64 regarding section 182( f) for application PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 65Memorandum 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 I X.

333 to the 8 hour ozone program. We issued the updated guidance regarding section 182( f) on January 14, 2005.65 2. Summary of Ffinal Rrule.

As proposed, the final rule allows a person to petition the Administrator for a NOx exemption under either section 182( f) or our regulations for any area designated nonattainment for the 8 hour ozone NAAQS and for any area in a section 184 ozone transport regionOTR. As with the 1 hour ozone standard, the NOxNOx exemption provision applies to subpart 2 ozone nonattainment areas and in a section 184 ozone transport regionOTR. In addition, the final rule extends to subpart 1 ozone nonattainment areas the opportunity to petition the Administrator for an exemption from nonattainment major NSR and/ or RACT requirements in a manner consistent with section 182( f) provisions. The petition must contain adequate documentation that the provisions of section 182( f) and/ or our regulations are met. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 66Memorandum 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.

334 We recently issued66 updated guidance on appropriate documentation regarding section 182( f) for application to the 8 hour ozone program. In addition, the final rule states that a section 182( f) NOx exemption granted under the 1 hour ozone standard does not relieve the area from any requirements under the 8 hour ozone standard. That is, a new petition with respect to 8 hour ozone must be submitted to EPA and must be approved by EPA before an area is exempt from any 8 hour ozone standard NOx requirements.

3. Comments and responses Comments: Several commenters supported EPA's proposal to make NOx waivers available to 8 hour nonattainment areas and States in an ozone transport regionOTR under either subpart 1 or subpart 2, pursuant to the provisions of section 182( f) of the ActCAA. Some commenters stated that requiring a re approval of existing NOx waivers amounts to rescinding the existing waivers. Another commenter asked what is needed to maintain an exemption. One commenter stated that EPA should make it clear that there is no presumption that a NOx PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 335 waiver granted under Ssection 182( f) of the ActCAA for the 1

hour ozone standard is continued for the 8 hour standard.

Other commenters recommended that the NOx waiver should automatically apply for the 8 hour ozone standard in areas where EPA previously granted a NOx waiver under the 1 hour ozone standard. One commenter stated that the technical basis for granting waivers under the l hour NAAQS remains valid.

Response: We agree with comments supporting the proposal to apply the section 182( f) exemption provisions to subpart 2 nonattainment areas and OTRs and to extend these protections to subpart 1 areas through regulation.

Since a NOx exemption granted for the 1 hour ozone standard was completed through notice and comment rulemaking,

the exemption remains effective for the 1 hour standard unless and until EPA completes rulemaking to remove or revise the waiver for a specific area. This rulemaking on the 8

hour ozone implementation program does not rescind any existing 1 hour NOx waiver provision.

However, for areas previously granted a NOx waiver under the 1 hour ozone standard, a petitioner would need to seek a new waiver for purposes of the 8 hour ozone standard.

The EPA does not believe NOx waivers granted under the 1 hour PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 67E. g: Recision of NOx waiver for the Dallas Fort Worth area on April 20, 1999 ( 64 FR 19283). Also, the temporary waiver for Houston and Beaumont ( originally granted April 19, 1995 60 FR 19515) expired December 31, 1997). ( 60 FR 19515)

336 ozone standard should always be permanent. As sources are regulated and the mix of pollutants is altered, circumstances could show that NOxNOx reductions will begin to provide a benefit. In several cases, the 1 hour NOx waiver has been removed in subsequent rulemaking actions. 67 Indeed, when EPA issued waivers under the 1 hour ozone standard, we stated that the NOx waivers would be removed where new information became available and the rationale for the initial NOx waiver no longer was supported. For example, the waiver may be removed through rulemaking if subsequent modeling data demonstrated an ozone attainment benefit from NOx emission controls.

Given that many NOx waiver actions were based on air quality and dispersion modeling analyses made in the mid

1990s, EPA believes that newer data and analyses should be used to determine if a NOx waiver under the 8 hour ozone standard is warranted. Many NOx waivers were simply based on whether an area had ambient air quality showing attainment of the 1 hour ozone standard; this is not an appropriate basis PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 337 for a waiver under the 8 hour ozone standard since areas may be attaining the 1 hour standard but exceeding the 8 hour standard. Some NOx waivers were based on dispersion modeling. In some cases, the modeling later proved inadequate as attainment was not met in the forecast year.

In other cases, those modeling analyses have been replaced with more recent analyses. The EPA believes that NOx waivers under the 8 hour ozone standard should be supported by analyses specific to the 8 hour ozone standard and should consider relevant information developed after the 1 hour waivers were granted.

The EPA believes the NOx waivers may not be granted except through notice  and  comment rulemaking action. That is, since EPA approval of a waiver request would change SIP requirements, EPA must conduct notice  and  comment rulemaking on that request. The EPA believes this requirement precludes automatic approval of 8 hour NOx waiver requests based on previously issued 1 hour NOx waivers.

Comment: Some commenters urged EPA to expand the section 182( f) waiver to VOC RACT as well as NOx RACT. One commenter states that EPA has substantially more discretion under Ssubpart 1 than it does under Ssubpart 2, and to fail to exercise that discretion to avoid ineffective and PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 68December 1991 NAS report, Rethinking the Ozone Problem in Urban and Regional Air Pollution, page 377.

338 inefficient requirements ( through NOx and VOC waivers) would be irresponsible, and an abuse of its discretion.

Response: The EPA disagrees with these comments. We do not see any provision in the ActCAA that would give us the authority to create such an exemption. While Congress could have created a VOC waiver at the same time the section 182( f)

NOx waiver provisions were enacted, Congress choose not to do so. The Congress further provided for additional review and study under section 185B " to serve as the basis for the various findings contemplated in the NOx provisions" ( H. R.

Rep. 490 at 257). Under section 185B, EPA, in conjunction with the National Academy of Sciences ( NAS), conducted a study on the role of ozone precursors in tropospheric ozone formation. The final section 185B report incorporates this NAS report along with an EPA report addressing the availability and extent of NOx controls. With respect to VOC, the NAS report states that " control of VOCs never leads to a significant increase in ozone" ozone." 68 Thus, the section 185B report does not support a waiver provision for VOC. Thus, while dispersion modeling analyses show that NOx emissions reductions can be counterproductive under certain PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 339 circumstances ( the reason for the NOx waiver provision), we do not see a similar case for VOC. Therefore, we are not expanding the section 182( f) exemption concept to VOC.

Comment: One commenter stated that the draft guidance does not contain a discussion of the linkages between 182( f)

NOx exemptions and certain other regional NOx reduction requirements such as the NOx SIP Call and the proposed " Clean Air Interstate Rule." The commenter believed EPA has an obligation to assess the impact of any section 182( f)

exemption request under the provisions of section 110( a)( 2)( D), including the potential for emissions exempted from controls to contribute to downwind nonattainment or to interfere with the maintenance of any national ambient air quality standardNAAQS.

Response: As discussed in section 4.2 of the draft 8

hour exemption guidance, EPA encourages States/ petitioners to include consideration of air quality effects that may extend beyond the designated nonattainment area. States should consider such impacts since they are ultimately responsible for achieving attainment in all portions of their State and for ensuring that emissions originating in their State do not contribute significantly to nonattainment in, or interfere with maintenance by, any other State. However, EPA believes PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 340 NOx exemptions under section 182( f) of the CAA and interstate transport of emissions under section 110( a)( 2)( D) of the ActCAA can be considered independently. The EPA has separate authority under section 110( a)( 2)( D) to require a State to reduce emissions from stationary and/ or mobile sources where there is evidence showing that such emissions would contribute significantly to nonattainment or interfere with maintenance in other States. In some cases, then, EPA may grant an exemption from certain NOx requirements and, in a separate action, require NOx emission decreases under section 110( a)( 2)( D). Thus, a NOx exemption doesn't affect an obligation of a State to meet a NOx budget established under a SIP call or other transport rule.

I. Should EPA promulgate an NSR provision to encourage development patterns that reduce overall emissions?

[ Section O. 9. of the June 2, 2003 proposed rule ( 68 FR 32849). No draft or final regulatory text.]

Note: Section V of this preamble below addresses rules for NSR for the 8 hour ozone standard. This section addresses only the June 2, 2003 proposal related to Clean Air Development Communities ( CADC).

1. Background PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 341 In the June 2, 2003 proposal, we considered two options designed to recognize the air quality benefits which can accrue when areas site new sources and plan development in a manner that results in overall reduced emissions. We proposed to define a community that changes its development patterns in such a way that air emissions within the nonattainment area are demonstrably reduced as a " Clean Air Development Community" ( CADC). As a result of becoming a CADC, an area would obtain a certain amount of flexibility in its NSR program.

In the first option, we proposed that a CADC would have a more flexible NSR program by: 1) being subject to subpart 1 NSR as opposed to subpart 2 NSR; 2) lowering NSR major source thresholds for these areas to make them similar to the thresholds for PSD areas; and 3) allowing areas that meet certain development criteria ( development zones) to receive NSR offsets from State offset pools. In the second option,

we proposed that a CADC would be able to receive a pool of NSR offset credits equal to the reduced emissions from new development patterns. Credits from the pool could be provided to any new or modified source in a " development zone" as offsets. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 342 We also requested comments on the options and encouraged comments suggesting other ways of encouraging development patterns that would result in lower emissions.

2. Summary of Ffinal Rrule The EPA is not at this time issuing any rule related to CADCs.

3. Comments and Responses Comments: The EPA received numerous comments on the proposal, some supporting and others opposing the CADC provision. A number of the commenters noted that the proposal did not appear to have enough detail. A summary of the comments appears in the response to comment document.

Response: The EPA appreciates the many the comments it has received on this section. The EPA agrees with a number of commenters that while the ideas in this section are interesting and designed to achieve useful goals, much more work is needed in a separate effort to work through the many issues involved. Therefore, EPA will not move forward with this particular effort at this time.

However, EPA does not plan to ignore the issue. The EPA will be looking to bring a group of stakeholders together to see if the group can come up with and support one or more ways that we can use existing programs and authorities to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 343 create positive incentives and tools for communities to reduce sprawl. The process will not be designed to work only through the specific issues in establishing a program to encourage Clean Air Development CommunitiesCADCs as outlined in the proposal, but will be open to all ideas.

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, PM2.5, and regional haze?

[ Section VI. P. of June 2, 2003 proposed rule ( 68 FR 32852); no draft or final regulatory text.]

1. Background As noted in the proposal, in many cases, States will be developing strategies to attain both the 8 hour ozone and PM2.5 NAAQS in the same nonattainment area or in nonattainment areas that have some area or areas in common. Requirements for regional haze apply to all areas. Certain ozone control measures may also be helpful as part of a PM2.5 control strategy or a regional haze plan. Similarly, controls for PM2.5 may lead to reductions in ozone or regional haze.

Because the precursors for ozone and PM2.5 may be transported hundreds of kilometers, regional scale impacts may also be relevant to consider. The EPA expects that strategies to decrease ozone concentrations will not adversely affect PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 344 strategies to attain the PM2.5 NAAQS. We believe integration of ozone, PM2.5, and regional haze planning will reduce overall costs of meeting multiple air quality goals.

2. Summary of Ffinal Rrule.

We are encouraging each State with an ozone nonattainment area which overlaps or is nearby 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. Specifically,

EPA encourages States conducting modeling analyses for ozone to separately estimate effects of a strategy on the following: mass associated with sulfates, nitrates, organic carbon, elemental carbon, and all other species. However,

the final rule does not contain any requirements/ regulatory text on this subject.

3. Comments and responses Comments: Several commenters supported EPA's recommendation for States to integrate planning for 8 hour ozone, PM2.5, and regional haze. These commenters agreed that the integration of ozone, PM2.5 and regional haze controls will reduce the overall costs of meeting multiple air quality goals and that EPA should continue to synchronize the SIP planning requirements for these pollutants to aid in this PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 345 integration. One commenter asked EPA to clarify that this analysis is not an approvability issue associated with an 8

hour attainment demonstration. Other commenters recommended that EPA require nonattainment areas to perform an integrated control strategy assessment to ensure ozone controls will not preclude optimal controls for secondary fine particles and visibility impairment.

Response: We recognize the importance of integrating planning for 8 hour ozone, PM2.5, and regional haze as much as possible, given the overlap in technical work and likely control strategies. None of the commenters, however, has identified legal authority that allows EPA to require nonattainment areas to perform an integrated control strategy assessment to ensure ozone controls will not preclude optimal controls for secondary fine particles and visibility impairment. Therefore, we will continue to encourage States to coordinate their work, but it is not a requirement and,

thus, not an approvability issue.

Comments: Other commenters encouraged EPA to identify flexibility so that areas may be provided more time if they are developing a multi pollutant strategy. Commenters stated that it is imperative that SIP obligations and attainment dates with respect to these regulated air pollutants be PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 346 harmonized and that regulatory requirements and deadlines be closely coordinated. One commenter stated this may require certain deadlines be extended and that they believe Congress would not be opposed to extending deadlines in the name of efficiency.

Response: To the extent our legal authority allows, we are working to harmonize SIP time linestimelines for ozone,

PM2.5, and regional haze. This 8 hour ozone implementation rule is necessarily based on the existing CAA and does not assume any changes to the ActCAA that may occur in the future. Thus, we cannot fully harmonize the deadlines.

However, the substantial overlap in planning periods will allow sStates to coordinate planning efforts among programs,

without postponing implementation.

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

[ Section VI. Q. of June 2, 2003 proposed rule ( 68 FR 32853); section 51 § 51.915 in draft and final regulatory text.]

1. Background As noted in the June 2, 2003 proposed rule, we are relying on existing emissions reporting requirements in 40 CFR Ppart 51, subpart A to satisfy the emissions inventory PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 347 data requirements under the 8 hour ozone NAAQS. Section 182( a)( 1) requires that marginal and above ozone nonattainment areas submit an emission inventory 2 years after designation as nonattainment in 1990. For nonattainment areas classified under subpart 2 for the 8 hour ozone standard, we proposed to interpret this to mean that an emission inventory would be required 2 years after designation ( i. e., in 2006 if EPA designates areas in 2004).

The Consolidated Emission Reporting Rule ( CERR) in 40 CFR part 51, subpart A, requires comprehensive triennial emission inventories, beginning with the 2002 inventory year,

regardless of an area's attainment status. Because these emission inventories will be available, we proposed that the emission inventories required by the CERR are sufficient to meet the provisions of section 182( a)( 1). The draft regulatory text, however, did not contain a specific requirement that the emission inventory be submitted as a SIP revision within 2 years after designation.

For subpart 1 areas, section 172( c) requires submission of the nonattainment area SIP within 3 years after designation as a nonattainment area. However, the June 2,

2003 proposal did not specify a deadline for submission of the emission inventory for subpart 1 areas. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 348 2. Summary of final rule Section 51.915 of the final rule reflects our June 2,

2003 proposal andbut is different from the draft regulatory text. To ensure comprehensive treatment of emission inventory requirements, the final rule contains language addressing the deadlines for submission of emission inventories for both subpart 1 and subpart 2 areas. The deadlines reflect the statutory requirements of no later than 3 years after designation for a subpart 1 area, and no later than 2 years after designation for subpart 2 areas. Existing emissions reporting requirements in 40 CFR Ppart 51, subpart A are sufficient to satisfy the emissions inventory data requirements under the 8 hour ozone NAAQS. The final regulatory text in section 51.915 requires submission of an emission inventory no later than 2 years after designation as part of a subpart 2 SIP and no later than 3 years after designation as part of a subpart 1 SIP. The State may use the emission inventory developed under part 51, subpart A.

3. Comments and Rresponses Comment: Several commenters said that the proposal does not discuss specific requirements above and beyond those in the Consolidated Emissions Reporting Rule ( CERR). However,

the proposal does mention one EPA guidance document, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 349 Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards ( NAAQS) and Regional Haze Regulations. This document states that " The EPA developed this guidance document to complement the CERR and to provide specific guidance to State and local agencies and Tribes on how to develop emissions inventories for 8 hour ozone, PM2.5, and regional haze SIPs." Since the 8 hour emissions inventory requirements are the same for the CERR, there should be no additional, special requirements needed in emissions inventory development for the proposed 8

hour rule.

Response: The 2002 emission inventory submitted as a SIP element under the 8 hour ozone SIP process is not necessarily the same as the 2002 emission inventory submitted under the CERR. We agree that the CERR requirements should satisfy the 8 hour ozone SIP emissions inventory data requirements. Depending on when an area is designated nonattainment and therefore when the SIP is due, in some cases it may be necessary to update the 2002 emissions inventory that was submitted under CERRHowever, the two inventories differ in some important ways. The CERR inventory was due June 1, 2004, the SIP inventory due date is later. The State may choose to change some of the data from PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 69EPA 454/ R 05 001, July 2005 ( available at: http:// www. epa. gov/ ttn/ chief/ eidocs/ eiguid/ index. html).

350 the CERR to the SIP inventory because of improvements in emission estimates. The SIP inventory needs to be approved by EPA as a SIP element and is subject to public hearing requirements where the CERR is not. Because of the regulatory significance of the SIP inventory, EPA will need more documentation on how the SIP inventory was developed by the State as opposed to the documentation required for the CERR inventory. The guidance document " Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards ( NAAQS) and Regional Haze Regulations" 69 provides details on how States should prepare their emission inventory SIP submittals and discusses these and other relevant topics. If a State's 2005 emission inventory ( or a later one) becomes available in time to use for an area subsequently redesignated nonattainment, then that inventory should be used. We also encourage the cooperation of the Tribes and the State and local agencies in preparing their emissions inventories.

Comment: One commenter was concerned with the timing of the release of the final version of the NONROAD model ( used to estimate mobile source emissions from non road sources). PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 351 The commenter agreed that the draft version out for comment during the comment period was superior to previous calculation methodology and should be used for planning purposes, however EPA needs to be cognizant of how disruptive to the planning process it is for new versions of emissions models to be released and incorporated in the middle of the development of a SIP. The commenter strongly encourages EPA to expedite the review and approval of any new models that will ultimately be used by States.

Response: We acknowledge that the timing of the release of new models can sometimes complicate the SIP planning process. In this case, the timing of the final release of the NONROAD is dependent on the timing of the new nonroad standards final rule. We will do what we can to expedite the release of a new version of NONROAD that reflects the emissions benefits of the nonroad rule as soon as possible.

In addition, we intend to provide guidance on the use of NONROAD that allows for completion of ongoing work with the current version of NONROAD if switching to the new version would cause significant delay. The EPA has included similar language in previous SIP policy guidance for the MOBILE model. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 352 Comment: One commenter urged EPA to improve the quality of PM2.5 rates in MOBILE6.2 so that areas will have a more reliable tool for creating a 2002 base year inventory and SIP planning. The commenter was concerned about developing PM2.5 emissions inventories because PM2.5 emissions factors in MOBILE6.2 are based largely on the old Part # 5 emission model and are not as sophisticated as the rates for CO, NOx, and VOC. The commenter also expressed concern about the lack of knowledge and techniques available for performing on road mobile source fine particulate emissions inventories.

Metropolitan Planning Organizations ( MPOs) and air quality agency staff need to have a more reliable tool and acceptable methods for creating base year PM2.5 inventories and for SIP planning.

Response: Particulate emission factors in MOBILE6.2 are based on the best technical information available at the time the model was developed and we believe that it is the best available tool for estimating on road emission factors for PM2.5. We are currently developing a project to collect additional PM data which will be incorporated in future versions of the EPA mobile source emission factor model. We continue to work to improve models and inventory methods for all pollutants. We will facilitate the development of PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 353 workshops and training opportunities to assist MPOs and air quality staff who are working on PM2.5 inventories.

Comment: One commenter stated that since the CERR requires inventories every three3 years, that the CERR should replace the Emission Statement Reporting Program ( ESRP)

requirement, which was required before the CERR was adopted.

Response: The ESRP is statutorily prescribed in section 182 ( a)( 3)( B) of the ActCAA and cannot be replaced by rulemaking. In addition, the emission statement requirement satisfies a different need from the periodic emissions inventory requirement, namely that affected sources themselves have to report to the State their updated emissions information, whereas the emissions inventory requirement is a requirement on States to compile and make available to EPA an emissions inventory. We believe that the ESRP is a complementary program to the CERR and makes it easier for States to satisfy their CERR reporting requirements by providing data to the States from the sources.

Comment: One commenter said that persistent inaccuracies in official emissions inventories have hindered regulatory acknowledgment and mitigation of the automobile VOC and CO gross polluter problem. The EPA should develop PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 354 realistic emissions inventories and require States to do the same. Known errors in these inventories continue to misdirect emission reduction efforts. In particular, too little focus has been placed on the potential for rapid,

substantial VOC and CO reductions from the in use automobile fleet.

Response: We agree that realistic emissions inventories are important to properly direct emission reduction efforts.

Current emission factor models and inventory methods are far superior to previous models and methods and we are working to continually improve models and methods for developing emissions inventories for on road and nonroad vehicles and equipment.

Comment: One commenter stated that the official emissions inventories generated and used by EPA and State regulatory agencies for SIP planning and implementation have been shown repeatedly to suffer from serious inaccuracies and biases. Problems with inventories include errors in the total amount of emissions, as well as errors in the apportionment of emissions among various source categories.

The most serious inventory problems center on VOC and CO,

while problems with NOx inventories appear to be more modest.

Since emissions inventories are a fundamental input to the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 355 process of choosing pollution reduction measures and to the modeling used to demonstrate future attainment of NAAQS, an inaccurate inventory is likely to lead to poor policy choices in terms of cost, effectiveness, or both.

Response: We agree that emissions inventories are fundamental inputs to the air quality management process. We continue to strive to work with State and local agency partners to develop emissions inventories that best reflect the real world and will thus assist in identifying control strategies to make reasonable further progressRFP and attain the NAAQS. One should be aware, however, that it is impossible to develop an emissions inventory for an area that is 100 percent accurate. Part of the problem is that most sources   including mobile sources   don't monitor and report emissions continuously, and therefore we and the States must use other methods to estimate emissions from them. Thus,

emission inventories are by nature estimates of actual releases to the atmosphere. The EPA believes that current emission inventories are sufficiently accurate to support the air quality management decisions that are derived from the application of emission inventories and air quality models.

The emissions data generated and used by EPA and State regulatory agencies for SIP planning and implementation is PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 356 the best available. Although inventories are often criticized as lacking accuracy, seldom do critics supply better information.

Comment: One commenter stated that the Agency proposes that the latest approved version of the MOBILE model should be used to estimate emissions from on road transportation systems. The commenter recommended that if there are other models, which meet EPA performance criteria and are scientifically peer reviewed, they should also be acceptable ( e. g., the California mobile model, " EMission FACtor"

( EMFAC)).

Response: We believe that MOBILE is the best available tool for estimating emissions from on road transportation systems outside of California. We are working to continually improve emission factor models and inventory methods for onroad vehicles. The EMFAC is not designed to be able to estimate fleet, activity, fuel, and environmental characteristics outside of California and is not a reasonable substitute for MOBILE in States other than California.

Comment: One commenter supported the use of MOBILE6 in the 8 hour emissions inventory analyses and believed that EPA should change the guidance with respect to the use of MOBILE6 from " should be used" to " must be used." The commenter PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 357 cautioned that MOBILE6 still significantly over predicts emissions from passenger cars and light duty trucks for many reasons including the following: 1) the model does not adequately account for the benefits of onboard diagnostic regulation in non IM areas; and 2) the model does not reflect the decline in trips per day versus vehicle age.

Response: We cannot use the word " must" in guidance unless the guidance refers to a requirement mandated by the statute or our regulations. In this case, neither the statute nor our regulations specifically requires the use of the latest approved version of MOBILE ( currently MOBILE6.2).

in SIPs. MOBILE6.2 is based on the best information available at the time of its development and release and,

therefore, EPA has indicated that it should be used. We do not believe that more OBDon board diagnostic benefits in non

I/ M areas was justified based on available data at the time of the release of MOBILE6.2. Likewise, we did not have sufficient data to develop alternative assumptions about the relationship between trips per day and vehicle age. We are working to continually improve emission factor models and inventory methods for on road vehicles and will review these issues during the development of the next emission factor model. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 70See 40 CFR Ppart 49.4( a). In addition, EPA determined it was not appropriate to treat tTribes similarly to sStates with respect to provisions of the CAA requiring as a condition of program approval the demonstration of criminal enforcement authority or providing for the delegation of such criminal enforcement authority. See 40 CFR Ppart 49.4( g). To the extent a tTribe is precluded from asserting criminal enforcement authority, the fFederal government will exercise primary criminal enforcement responsibility. See 40 CFR Ppart 49.8. In such circumstances, tTribes seeking approval for CAA programs provide potential investigative leads to an appropriate 358 L. What guidance should be provided that is specific to Tribes?

[ Section VI. R. of June 2, 2003 proposed rule ( 68 FR 32854); no draft or final regulatory text.]

1. Background As noted in the preamble to the proposal, the Tribal Authority Rule ( TAR)( 40 CFR, part 49), which implements section 301( d) of the CAA, gives Tribes the option of developing Tribal Implementation Plans ( TIPs) which can then be submitted to EPA for approval. Unlike States, Tribes are not required to develop implementation plans. Under the TAR,

eligible Tribes are treated in the same manner as a State when implementing the CAA; however, EPA has determined that Tribes are not required to meet plan submittal and implementation deadlines in the CAA, e. g., 110( a)( 1),

172( a)( 2), 182, 187, and 191.70 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 fFederal enforcement agency.

359 The TAR provides flexibility for Tribes in the preparation of a TIP to address the NAAQS. The " modular approach" was described in the June 2, 2003 proposal of this rule. The TAR indicates that EPA ultimately has the responsibility for implementing CAA programs in Indian country, as necessary or appropriate, if Tribes choose not to implement those provisions. The EPA may find it necessary to develop a Federal Implementation Plan ( FIP) to reduce emissions from sources in Indian country where the Tribe has not developed a TIP to address an air quality problem.

Finally, as discussed in the June 2, 2003 proposal, it is important for both States and Tribes to work together to coordinate planning efforts since many nonattainment areas may include both Tribal land and non Tribal land.

Coordinated planning will help ensure that the planning decisions made by the States and Tribes complement each other and that the nonattainment area makes reasonable progress toward attainment and ultimately attains the NAAQS. In reviewing and approving the individual TIPs and SIPs, we will make certain they do not conflict with the overall air PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 360 quality plan for an area, when Indian country lands are part of a multi jurisdictional area.

2. Summary of Ppolicy.

Section 301 ( d) of the CAA recognizes that eligible Indian Tribes are generally the appropriate non fFederal authority to implement the CAA in Indian country. As stated in the Tribal Authority RuleTAR, it is appropriate to treat eligible tTribes in the same manner as States, except for certain identified provisions, including provisions relating to plan submittal and implementation deadlines, 40 CFR section 49.3, 49.4. Therefore, when we discuss the role of the State in implementing this rule, we are also generally referring to eligible tTribes, with the above exception.

As we noted in the June 2, 2003 proposal, States have an obligation to notify Tribes as well as other States in advance of any public hearing( s) on their State plans that will significantly impact such jurisdictions. Under 40 CFR 51.102( d)( 5), States must notify the affected States of hearings on their SIPs; this requirement extends to Tribes under 301( d) of the CAA and the TAR. ( 40 CFR Ppart 49).

Therefore, affected Tribes that have achieved " treatment in the same manner as States" status must be informed of the contents of such plans and the extent of documentation to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 361 support the plans. In addition to this mandated process, we encourage sStates to extend the same notice to all Tribes for the reasons noted in the comment and response below. EPA asAs a matter of policy, EPA intends to consult with and assist all Tribes, regardless of whether a Tribe has received Treatment in a similar manner as a State ( TAS) approval for the purpose of implementing its own TIP, and we encourage sStates to do the same.

Understanding the content of a SIP will be important to Tribes located next to areas where SIPs apply, particularly to Tribes who do not choose or have the capacity to develop a TIP. Therefore, EPA intends to offer Tribes the opportunity for consultation on activities potentially affecting the achievement and maintenance of the NAAQS in Indian country.

In addition, we expect States to work with Tribes with land that is part of the same air quality area during the SIP development process and to coordinate with Tribes as they develop the SIPs. In the case where the State models projected emissions and air quality under the SIP, the Tribes should be made aware of these modeling analyses. Tribes may wish to determine if the Tribal area has been affected by upwind pollution and whether projected emissions from the Tribal area have been considered in the modeling analysis. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 362 Generally, Tribal lands have few major sources, but in many cases, air quality in Indian country is affected by the transport  both long range and shorter distance transport

of pollutants. In many cases, Tribal nonattainment problems caused by upwind sources will not be solved by long range transport policies, as the Tribes' geographic areas are small. Tribes are sovereign entities, and not political subdivisions of States. Strategies used for intrastate transport are not always available. Most of the strategies and policies used by States in dealing with short range transport are not available to Tribes, e. g., requiring local governments to work together and expanding the area to include the upwind sources. Unlike Tribes, States can generally require local governments to work together, or make the nonattainment area big enough to cover contributing and affected areas. We believe that it is also unfair to Tribes to require disproportionate local regulatory efforts to compensate for upwind emissions. In many cases, attainment could not be reached even if emissions from the Tribe were zero.

To address these concerns, in the June 2, 2003 proposal,

we took comment on the following: EPA will review SIPs for their effectiveness in preventing significant contributions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 363 to nonattainment in downwind Tribal areas with the same scrutiny it applies to reviewing SIPs with respect to impacts on downwind States. Where a Tribe has " treatment in the same manner as States," EPA will support the Tribes in reviewing upwind area SIPS during the State public comment period. We intend to take the approach noted in the proposal. There is no regulatory text for this intention.

3. Comments and Rresponses Comment: One commenter stated a concern about the transport of pollutants, including ozone precursors from urbanized areas into areas of Indian country. The commenter expressed strong support for the proposed 8 hour implementation rule language which addresses these transport concerns. He supported the EPA proposal language: " EPA will review SIPS for their effectiveness in preventing significant contributions to nonattainment in downwind Tribal areas with the same scrutiny it applies to impacts on downwind States.

Where a Tribe has ` treatment in the same manner as States,'

EPA will support the Tribe in reviewing upwind area SIPs during the State public comment period." This commenter asked for clarification on the nature of EPA's support for Tribes without TAS status. The commenter also asked if EPA would support Tribes without TAS approval in reviewing upwind PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 364 area SIPs and provide technical assistance in interpreting SIP documentation.

Response: In the TAR, we stated that the CAA protections against interstate pollutant transport apply with equal force to States and eligible Tribes. We stated that the prohibitions and authority contained in sections 110( a)( 2)( D) and 126 of the CAA apply to eligible tTribes in the same manner as sStates. ( See 63 Fed. Reg. FR 7254, 7260 (; February 12, 1998). Section 110( a)( 2)( D) requires, among other things, that sStates include provisions in their SIPs that prohibit any emissions activity within the sState from significantly contributing to nonattainment, interfering with maintenance of the national ambient air quality standards ( NAAQS) or Prevention of Significant Deterioration ( PSD) NAAQS or PSD or visibility protection programs in another sState.

In addition, Ssection 126 authorizes any sState or eligible tTribe to petition EPA to enforce these prohibitions against a sState containing an allegedly offending source or group of sources.

We intend to consult with and assist Tribes during the TIP and SIP development process, regardless of whether a Tribe has received TAS approval for the purpose of implementing its own TIP. Executive Orders and the EPA PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 365 Indian policy generally call for EPA to be proactive with the Tribes. Executive Order 13175, entitled " Consultation and Coordination with Indian Tribal Governments" requires EPA to develop an accountable process to ensure " meaningful and timely input by Tribal officials in the development of regulatory policies that have Tribal implications." As part of EPA's ongoing efforts to actively involve tribal officials in the development of programs which have tTribal implications, EPA in the July 18, 2000 " Guidance on 8 hour Ozone Designations for Indian Tribes" established a consultation process with each Tribe that EPA used throughout the designations process regardless of whether a particular Tribe has received an eligibility determination to implement Ssection 107 of the CAA. In summary, EPA intends, as a matter of policy, to consult with and assist interested Tribal governments, regardless of their TAS status, in ensuring that the NAAQS are achieved in Indian country,

including working with those Tribes located downwind from a polluting area.

Comment: One commenter also asked us to explain how we envision our role in maintaining continued consultation with Tribes throughout the state implementation planSIP development process. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 366 Response: We intend to continue to offer Tribes the opportunity for consultation on activities potentially affecting the achievement and maintenance of the NAAQS in Indian country. In addition, we expect States to work with Tribes with land that is part of a nonattainment area in the SIP development process and to inform Tribes of the content of these SIPs as they develop them. States should coordinate with Tribes when projecting emissions from counties or other areas which include areas of Indian country to ensure that assumptions regarding demographics, economic activity,

commuting patterns, etc. are accurate for the Tribal portions. Where the State models project future emissions under the SIP and their effect on air quality, then Tribes should be made aware of these modeling analyses in order to determine if their Indian country has been affected by upwind pollution and whether this impact has been considered in the modeling analyses.

States have an obligation under 40 CFR 51.102( d)( 5) to notify other States in advance of any public hearing( s) of their State plans which will significantly impact those other entities. This CAA requirement for States to notify other parties extends to Tribes under section 301( d) and the TAR. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 367 Historically, States have not always understood their responsibility to coordinate with other affected entities,

including, where appropriate, Tribes. States may not know how to contact Tribes, particularly when Tribal air programs are not well developed. It may be difficult for a State to obtain a copy of the control requirements for Indian country.

We can assist States in identifying and contacting Tribes that they should be consulting. When developing control strategies and making policy decisions, States should as appropriate, coordinate with Tribes at the earliest opportunity. Where States utilize stake holder based consensus processes to develop SIP strategies, we recommend that Tribes be provided the opportunity to participate in the process to the extent they can.

We are considering providing Tribes with guidance describing how to include Tribes in SIP development and implementation. Many Tribes may not possess the resources to develop a TIP or may decide not to develop a TIP, while others will develop robust air quality programs, which may or may not include a TIP. We intend to work with Tribes with all levels of air management programs. In general, where areas of Indian country have poor air quality, it is most likely as a result of transported pollution sources. We PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 368 recognize that the manner in which States construct the SIP and what sources the SIP controls may impact Indian country located in downwind areas. We intend to develop guidance,

tools and training sessions for interested Tribal communities to understand the SIP development process and to become active participants if they wish.

Comment: One commenter representing a tTribal organization raised concerns about the practical impacts of the New Source Review ( NSR) program on Indian Tribes. The commenter noted that Tribes have long traditions of environmental stewardship and recognize their responsibility to protect the health of their citizens. However, he notes Tribes have the right to pursue industrial and economic development. While that development must comply with all current environmental standards, the Tribes should not be burdened with requirements that in effect subsidize nontTribal sources of pollution.

Under the non attainment NSR program, new major sources locating in a non attainment area are required to obtain emission reductions, referred to as offsets. The commenter states that this requirement poses a hardship on an Indian reservation located in a larger non attainment area. The new source wishing to locate on the reservation must obtain PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 369 offsets from elsewhere in the non attainment area; there are not usually enough sources on the reservation to supply the needed emissions reductions. When a tTribe is located in such a non attainment area, efforts to increase economic development may be stalled by an inability to obtain offsets.

The commenter concludes that this requirement is unfair to tTribes because of past barriers to economic development in Indian country. The Ccommenter also states that in many cases air pollution is transported onto the reservation.

Response: The EPA acknowledges that Ooffsets are a concern for Tribes. We are currently evaluating potential options for addressing this concern.

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

[ Section VI. S. of June 2, 2003 proposed rule ( 68 FR 32855); section 51 § 51.916 in draft and final regulatory text.]

1. Background Section 176A of subpart 1 provides EPA with authority to establish interstate transport regions where transport of air pollutants from one or more States contributes significantly to a violation of a NAAQS in one or more other States. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 370 Section 184 of subpart 2 establishes additional provisions for OTRs. Section 184( a) specifically established an OTR comprising 12 Northeast and Mid Atlantic States and the District of Columbia in order to address the longstanding problem of interstate ozone pollution in that region. To date, the existing OTR is the only transport region for any pollutant that has been established. The general provisions of section 176A apply to any OTR established under section 184.

Section 184( b) sets forth specific VOC and NOx control requirements to be applied throughout the entire OTR, in both attainment and nonattainment areas, to reduce interstate pollution. These additional regional control requirements are part D NSR ( for VOC and NOx), RACT ( for VOC and NOx),

enhanced vehicle I/ M, and Stage II vapor recovery ( for vehicle refueling) or a comparable measure. In general,

these requirements duplicate requirements for certain ozone nonattainment areas that are classified under subpart 2. In the proposal, we indicated that we believed that under section 184 the current OTR will remain in place and remain subject to the section 184 control requirements for purposes of the 8 hour standard.

2. Summary of Ffinal Rrule PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 371 In today's rule we are determining that 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.

Today's rule also describes RACT requirements for portions of an Ozone Transport RegionOTR that are not classified moderate or above. The State must submit a SIP revision that meets the RACT requirements of section 184 of the ActCAA for each area designated as attainment or unclassifiable or that may be classified marginal or under section 51 § 51.904 of this subpart, but which is located in an ozone transport regionOTR. A major stationary source for these areas is defined as a source which directly emits, or has the potential to emit, 100 tons per yeartpy or more of NOxNOx or 50 tons per yeartpy or more of VOC. The State is required to submit the RACT revision no later than 2 years after the effective date of the nonattainment designation of any area in the OTR for the 8 hour NAAQS and must provide for implementation of RACT as expeditiously as practicable but no later than 30 months after the RACT SIP is due.

We believe that this does not result in any new control requirements for any area in the OTR because these control PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 372 requirements are not associated with an area's designation or classification and already apply region wideregionwide under the 1 hour ozone 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 control requirements of section 184.

3. Comments and Rresponses Comments: The EPA received two comments supporting our interpretation of section 184 with regard to the 8 hour standard. One commenter further asserted that for any areas that might be added to the OTR, or for any new OTR, if modeling shows that the control requirements from section 184 are not appropriate and should not be required, then EPA has the discretion to exempt such areas from those requirements.

The commenter pointed to a portion of the decision in Alabama Power v. Costle, 636 F. 2d. 323 ( DC Cir. Circuit, 1979).

Response: Regarding the comment about modeling, we are not prepared to determine whether the de minimis doctrine established by the court in Alabama Power would be available in the situation the commenter describes. As the court in that case explained, such a determination would first require EPA to assess whether Congress, in enacting section 184 of the CAA, was so prescriptive as to foreclose granting such PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 373 waivers. Since that issue of statutory interpretation for the described situation is not presently before the Agency,

EPA is not addressing whether de minimis authority exists under section 184.

N. Are there any additional requirements related to enforcement and compliance?

[ Section VI. T. of June 2, 2003 proposed rule ( 68 FR 32855); no draft or final regulatory text.]

1. Background In the proposal, we noted that Ssection 172( c)( 6)

requires nonattainment SIPs to " include enforceable emission limitations, and such other control measures, means or techniques . . . as well as schedules and timetables for compliance , as may be necessary or appropriate to provide for attainment . . ." We also noted that the current guidance, " Guidance on Preparing Enforceable Regulations and Compliance Programs for the 15 Percent Rate of Progress Plans ( EPA 452/ R 93 005, June 1993)" is relevant to rules adopted for SIPs under the 8 hour ozone NAAQS and should be consulted for purposes of developing appropriate nonattainment plan provisions under section 172( c)( 6). We proposed no specific regulatory provisions related to compliance and enforcement.

2. Summary of final rule PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 374 As in the proposal, we are not setting forth any additional rule related to compliance and enforcement.

3. Comments and Rresponses We received no comments on the proposed approach of handling enforcement and compliance provisions related to SIPs for the 8 hour ozone standard.

O. What requirements should apply to emergency episodes?

[ Section VI. U. of June 2, 2003 proposed rule ( 68 FR 32856); no draft or final regulatory text.]

1. Background In the June 2, 2003 proposal, we noted that subpart H of 40 CFR part 51 specifies requirements for SIPs to address emergency air pollution episodes and for preventing air pollutant levels from reaching levels determined to cause significant harm to the health of persons. We noted that we anticipate proposing a separate rulemaking in the future to update portions of that rule.

2. Summary of final rule We have not yet proposed any rule revision related to emergency episodes, and the final rule below does not contain any such rule revision.

3. Comments and Rresponses We received no comments on our proposed approach. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 375 P. What ambient monitoring requirements will apply under the 8 hour ozone NAAQS?

[ Section VI. V. of June 2, 2003 proposed rule ( 68 FR 32856); no draft or final regulatory text.]

1. Background Ozone monitoring data play an important role in designations, control strategy development, and related implementation activities. We did not propose any revisions to current ambient monitoring requirements listed in 40 CFR part 58.

We indicated in the proposal that we do plan to modify the existing ozone monitoring requirements in a separate rulemaking as part of implementation of the National Ambient Air Monitoring Strategy ( NAAMS), including adoption of a national strategy introducing national core monitoring sites ( NCore) as a replacement for traditional national air monitoring stations/ State and local air monitoring stations ( NAMS/ SLAMS) monitoring currently codified at 40 CFR part 58.

Part of the NCore network would include the existing ozone monitoring sites that currently support the NAAQS related activities. The regulatory modifications are expected to include ozone monitoring requirements based upon the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 376 population of an area and its historical/ forecasted ozone air quality values.

We indicated in the proposal that as part of ongoing air quality monitoring network assessments ( outside the scope of this present rulemaking), each State, local, and Tribal air monitoring agency is being asked to assess the adequacy of its air pollution monitoring networks, including those sites that measure ozone. We will work with these agencies to develop network plans to ensure approval of all network designs. It is expected that the number and location of the original sites will be very similar to the current network.

However, on a local basis, there will be some relocation,

addition, and removal of ozone sites as a result of regional network assessments.

In addition, we stated that we anticipate that we will include a requirement for measuring multiple air pollutants,

including ozone precursors at select locations. The NCore sites are expected to include high sensitivity nitrogen oxide ( NO) and total reactive oxides of nitrogen ( NOy) measurements at locations across the nation to support the tracking of emission reduction strategy efforts such as the NOx SIP Call,

the CAIR if promulgated, and, if created, a statute codifying PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 377 the Administration's Clear Skies Act, which addresses NOx reductions across the nation.

The CAA requires that ozone precursor monitoring be conducted in any ozone nonattainment area classified as serious, severe, or extreme. We adopted regulations reflecting the statutory requirements in 40 CFR part 58 in 1994 as the Photochemical Assessment Monitoring Stations ( PAMS) program.

The PAMS monitoring requirements (" enhanced monitoring"

of ambient air under section 182( c)( 1) of the ActCAA) are retained in areas currently designated as 1 hour ozone serious, severe, and extreme non attainment areas. Areas that are designated serious or above under the 8 hour ozone NAAQS are not currently addressed in 40 CFR part 58 for ozone precursor monitoring. The revisions to the monitoring regulations will also cover all areas that are classified as serious or above for the 8 hour NAAQS. If an area is bumped up to serious or above for the 8 hour NAAQS, it would be subject to the enhanced monitoring rule and would be required to conduct the appropriate PAMS monitoring.

2. Summary of final rule PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 378 There is no change from the proposal. No monitoring requirements are being promulgated as part of this rulemaking.

3. Comments and Rresponses Comment: One commenter noted that the NAAMS, which will likely influence the future of the ozone monitoring network,

is based on the presumption that less criteria pollutant monitoring is needed and that resources must be shifted into measures that support other analyses. The commenter pointed out that many States have already curtailed their criteria pollutant monitoring networks in order to meet program requirements. The commenter argued that we should support and maintain the ozone monitoring network since the data is used as the basis of attainment determinations and the tracking of progress.

Response: While we did discuss some aspects of the NAAMS in the proposed rule, this rulemaking effort does not affect the ambient monitoring requirements listed in 40 CFR part 58. As such, comments on the NAAMS are not germane to this action. As noted above, we are working on a separate rulemaking effort to amend the ambient monitoring requirements. We will address comments on the NAAMS under that action. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 379 We recognize that ozone continues to pose a significant environmental threat, and agree that the current ozone network should be maintained. The NAAMS does not recommend curtailing ozone monitoring, but rather recommends that State and local agencies perform assessments of their ozone networks to assure that the available resources are used to maximum benefit. We do not foresee significant changes to the existing ozone network as a result of these assessments.

The NAAMS does recommend that resources be shifted from criteria pollutant monitoring to other monitoring initiatives ( e. g., air toxics) for those criteria pollutants whose ambient concentrations are well below their respective NAAQS.

Specifically, the strategy recommends significant reductions in total suspended particulate ( TSP), PM10, SO2, CO and NO2 monitoring.

Comment: Two commenters questioned the appropriateness of making high sensitivity nitrogen oxideNOx and carbon monoxideCO measurements at NCore Level 2 sites which may be in urban areas.

Response: This rulemaking effort does not affect the ambient monitoring requirements listed in 40 CFR part 58. As such, comments on the appropriateness of making high PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 380 sensitivity nitrogen oxideNOx and carbon monoxideCO measurements in urban areas are not germane to this action.

Comment: One commenter urged the continued support of the Photochemical Assessment Monitoring Stations ( PAMS)

program. The commenter points out that the PAMS' data has been used to evaluate ( and improve) emissions inventories,

apply observation based models, evaluate photochemical grid based models, and assess effectiveness of control programs. The commenter argues that while fine tuning the PAMS requirements may be appropriate, the program should be maintained.

Response: As part of the anti backsliding provisions of the Phase 1 rule, the PAMS monitoring requirements are retained in areas currently designated as 1 hour ozone serious, severe, and extreme non attainment areas. ( See 40 CFR 51.900( f)( 9).) In addition, areas that are designated serious or above under the 8 hour ozone NAAQS will also be required to comply with the PAMS monitoring requirements.

Also, if an area is bumped up to serious or above for the 8 hour NAAQS, it would be subject to the enhanced monitoring rule ( section 182( c)( 5) of the CAA) and would be required to conduct the appropriate PAMS monitoring. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 381 Currently, areas that are designated serious or above under the 8 hour ozone NAAQS are not addressed in 40 CFR part 58 for ozone precursor monitoring. As discussed above, we are working on a separate rulemaking effort to amend the ambient monitoring requirements. We expect these revisions to ensure that all areas that are classified as serious or above for the 8 hour NAAQS are covered by the PAMS requirements.

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

[ Section VI. W. of June 2, 2003 proposed rule ( 68 FR 32856); section 51 § 51.908( e) in draft regulatory text and section 51 § 51.908( d) of final regulatory text.]

1. Background In the June 2, 2003 noticeaction, we proposed that required attainment demonstrations, which will be based on photochemical grid modeling for all areas must be submitted within 3 years after designation. However, we proposed that a subpart 1 area that desires an attainment date within 3 years after designation would have to provide a demonstration within 1 year after designation that it would attain by that date. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 382 We noted that the proposed time of submission is expected to result in a closer synchronization of the 8 hour ozone and PM2.5 attainment demonstration SIP submittal dates.

2. Summary of final rule The final rule incorporates the approach in the proposal, with one exception. Modeledstates that attainment demonstrations   where required   must be submitted within 3 years after the effective date of the area's nonattainment designation. For subpart 1 areas that request an attainment date within 3 years after designation, we are extending the 12 month submission period we proposed to 18 months. Thus, a subpart 1 area requesting an attainment date of 3 years after designation must submit an attainment demonstration within 18 months after designation for the 8 hour standard. We are allowing an additional 6 months because of the longer

thanexpected time required to publish this final rule.

On June 18, 2004 ( 69 FR 34076), EPA announced it was reconsidering the boundaries of the Las Vegas, NV, 8 hour ozone nonattainment area. The EPA deferred the effective date of the designation until September 13, 2004, and that this reconsideration would not affect the time SIPs would be due for the Clark County nonattainment area.

3. Comments and Rresponses PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 383 Comment: Several commenters noted that they believed some areas would need longer than 3 years to submit their attainment demonstration. At least one of these commenters noted that section 182( c)( 2) allows up to 4 years ( rather than 3 years) for submission of a modeled attainment demonstration for serious and above areas. One commenter recommended that for areas that are violating the eighthour8 hour standard and that are currently not contained within the one hour1 hour boundary, EPA should consider extending attainment modeling deadlines for areas that are not currently contained within the one hour1 hour boundary,

but will now be included in the eight hour8 hour boundary.

At least one commenter agreed with the timing we proposed.

Response: For the reasons stated in the proposal, we believe it is appropriate to require that the modeled attainment demonstrations be submitted within 3 years after designation. In the proposal, we noted the following:

° We do not believe it is appropriate or desirable to require States to submit attainment demonstrations for areas designated nonattainment under the 8 hour standard at greatly different times for different areas. We recognize that photochemical grid modeling   required by the CAA for interstate moderate nonattainment areas, as PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 384 well as serious and higher classified areas   will be performed on large enough scales to address transport and will in most cases encompass a number of nonattainment areas. These numerous nonattainment areas may differ by classification ( some areas may be intrastate moderate areas, some interstate moderate areas, and others serious and above nonattainment areas). Some areas that may require attainment demonstrations may be subject to subpart 1 while others may be subject to subpart 2.

° The control strategies that may be modeled for all the areas in the modeling domain will likely be modeled simultaneously, especially if all the areas are located in a single State.

° At the time of enactment of the CAA Amendments of 1990,

Congress allowed areas that used the recently developed and complex photochemical grid model an extra year ( 4 years rather than 3 years) to submit their attainment demonstration. Photochemical grid modeling is now a standardized model for purposes of developing attainment demonstrations, and all areas will be using these models for purposes of their attainment demonstrations. Thus,

there is no distinction between the tools used for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 7/ 8/ 05 385 attainment modeling that would justify additional time for these areas to submit attainment demonstrations.