and NOX emissions to a 200 kilometer range is intended to
assure that only sources with comparable impacts are included in the
assessment.
b. Final Policy
    The policy for addressing direct PM2.5 emissions in RFP
plans remains unchanged from the proposal: only emissions from within
the nonattainment area may be included. Conversely, for SO2
and NOX, EPA believes that states could be able to justify
considering not only all emissions in the nonattainment area but also
emissions within a distance that may be up to 200 kilometers from the
nonattainment area. States may also be able to justify consideration of
VOC and ammonia emissions outside the nonattainment area on a case-by-
case basis. As we explain more fully below in responding to comments,
in situations where the state demonstrates that VOCs are a significant
contributor to PM2.5 concentrations in the area, it may be
appropriate to include VOC emission sources within a distance of up to
100 kilometers of the nonattainment area. Given the uncertainties
regarding ammonia emission inventories and the effects of reducing
ammonia, EPA is not establishing a policy on this issue with respect to
ammonia. States that expect to regulate ammonia should consult with
their regional offices to determine appropriate approaches for those
areas. The justification for considering emissions outside the
nonattainment area shall include justification of the state's
recommended definition of the area used in the RFP plan for each
pollutant.
    The EPA received comments objecting to the possibility that RFP
inventories for areas outside the nonattainment area could include
selected sources expecting substantial emission reductions while
excluding other nearby sources expecting emission increases. Based on
its review of these comments, EPA is revising its approach for
considering regional emissions. If the state justifies consideration of
precursor emissions for an area outside the nonattainment area, EPA
will expect state RFP assessments to reflect emissions changes from all
sources in this area. The State cannot include only selected sources
providing emission reductions in the analysis. The inventories for
2002, 2009, 2012 (where applicable) and the attainment year would all
reflect the same source domain (i.e. the same set of sources except for
the addition of any known new sources or removal of known, creditably
and permanently shut down sources).
    In cases where the state justifies consideration of emissions of
specified precursors from outside the nonattainment area, the state
must provide separate information regarding on-road mobile source
emissions within the nonattainment area for transportation conformity
purposes. The EPA's transportation conformity regulations (40 CFR Part
93.102(b)) only require conformity determinations in nonattainment and
maintenance areas, and these regulations rely on SIP on-road motor
vehicle emission budgets that address the designated boundary of the
nonattainment area. For this reason, if the state addresses emissions
outside the nonattainment area for a pertinent precursor (i.e. a
precursor for which mobile sources are significant, as discussed in the
May 6, 2005 transportation conformity rule on PM2.5
precursors at 72 FR 24280), the on-road mobile source component of the
RFP inventory will not satisfy the requirements for establishing a SIP
budget for transportation conformity purposes.
    In such a case, the state must supplement the RFP inventory with an

inventory of onroad mobile source emissions to be used to establish a
motor vehicle emissions budget for transportation conformity purposes.
This inventory must address on-road motor vehicle emissions that occur
within the designated nonattainment area, must be provided for the same
milestone year or years as the RFP demonstration (i.e. 2009 and 2012 as
applicable), and must satisfy other applicable requirements of the
transportation conformity regulations. So long as the state provides
this separate emissions budget EPA believes that this approach will
optimally address both the RFP and the transportation conformity
provisions of the Act.
    The EPA is restricting the geographic area for RFP assessments to
include only areas within the state or states represented in the
nonattainment area. For a single state nonattainment area, only
emissions within that state would be considered, even if other states
may be within 200 kilometers of the nonattainment area. For multi-state
nonattainment areas, only regions within states represented in the
nonattainment area shall be included in the RFP assessment. This
restriction is intended to address commenters' concerns about the
enforceability of emission reductions included in the RFP assessment
and helps assure accountability for these reductions. This topic is
discussed further in the discussion below about multi-state
nonattainment areas.
    The EPA is retaining the approach that RFP assessments may not
include direct PM2.5 emissions from sources outside the
nonattainment area. If a State regulates VOC or ammonia emissions as
part of its attainment strategy, the RFP plan must include emissions of
these pollutants. In the event that a State technical demonstration
indicates that emissions of VOC or ammonia from sources outside the
nonattainment area contribute significantly to PM2.5
concentrations in the nonattainment area, EPA will consider on a case-
by-case basis whether it would be appropriate to include emissions from
such sources in the RFP plan.
c. Comments and Responses
    The EPA received numerous comments on its proposal regarding how
regional versus local impacts would be addressed. Multiple commenters
objected to EPA's proposal that states could consider sources reducing
emissions but ignore neighboring sources increasing emissions. Other
commenters recommended that EPA support granting credit for reductions
of direct PM2.5 emissions that occur outside nonattainment
areas. A few commenters also recommended different treatment of
selected pollutants.
    Comment: Several commenters object to the methods by which EPA
proposed to account for reductions outside the nonattainment area.
According to a set of commenters, if indeed sources outside the
nonattainment area contribute to nonattainment, ``then EPA cannot
lawfully or rationally allow the state to claim RFP credit from a
single source's reductions without including in the baseline emissions
from all sources (mobile, area and stationary) within the same distance
from the nonattainment area, and without calculating the impacts of
increases and decreases in such emissions on RFP. Viewing reductions
from a single `outside the area' source in isolation will invariably
provide an incomplete and inaccurate picture of the actual increase or
decrease in emissions contribution to the nonattainment area from all
`outside the area' sources. Moreover, EPA's proposal creates numerous
opportunities to game and undermine the system. By allowing
nonattainment areas to rely on RFP reductions made outside the
nonattainment area, the proposed rule strays from the Act's focus on
achieving emissions reductions from sources within the nonattainment
area.'' Another commenter insisted that states should not be allowed to
consider emissions from sources outside the area unless they can
demonstrate the impacts of these sources on nonattainment area
concentrations.
    In addition, a commenter objects to consideration only of sources
that are reducing emissions and recommends that EPA allow credit for
upwind source reductions only ``on the condition that all other major
sources in the 200 kilometer boundary are also not allowed to increase
emissions.'' Another commenter supports an option which states would
only consider emissions within the nonattainment area, observing that
to consider emissions outside the nonattainment area would be difficult
to administer and might inappropriately ``dilute the reductions needed
in the nonattainment area.'' This commenter also observes that a 200
kilometer limit does not include much of the emissions that yield long
range transport. Another commenter supports crediting reductions
outside the nonattainment area but requests that EPA define the area to
be considered.
    Response: The EPA agrees that examining emissions reductions of
only selected sources outside the nonattainment area gives an
inaccurate assessment of the progress that an area is making. For
example, if a state took credit for emission reductions at Source A but
ignored equal emission increases at neighboring Source B, the state
would claim emission reductions in its RFP plan when in fact no net
emission reductions had occurred.
    The commenters suggest various remedies for this problem. One
suggestion is to include all sources within the area that is used.
Another suggestion is to allow no consideration of emissions outside
the nonattainment area. Yet another suggestion is to allow
consideration of selected sources so long as other sources do not
increase emissions.
    The EPA is adopting the first of these suggestions: for the
pertinent area outside the nonattainment area, the RFP assessment must
include emissions (for all years evaluated) for all sources. The EPA
believes that inclusion of all sources is needed to ensure that the RFP
plan reflects the actual net emissions changes that are occurring in
the relevant area.
    In cases where the state justifies consideration of emissions of
specified precursors from outside the nonattainment area, EPA is
accepting the recommendation of various commenters that the inventories
of these precursors used for RFP purposes shall include mobile source
emissions as well as stationary and area source emissions. However, in
cases where onroad mobile source emissions are significant and are
therefore included, the state would need to submit additional
information for transportation conformity purposes. As discussed above,
in accordance with existing transportation conformity regulations (40
CFR Part 93), the SIP's motor vehicle emissions budget(s) must reflect
an emissions inventory of on-road mobile source emissions for the
nonattainment area. Consequently, in these cases, the state would need
to supplement its RFP inventory with information identifying the
inventory of on-road mobile source emissions within the nonattainment
area for the pertinent precursor(s) for the applicable year or years
(i.e. 2009 and potentially 2012) to be used to establish a motor
vehicle emissions budget for transportation conformity purposes.
    The relevant comments in general did not address the dimensions of
spatial domain of the sources outside the nonattainment area that would
be used in assessing RFP. EPA agrees with a commenter urging, as a
prerequisite to including sources of the pertinent pollutants outside
the nonattainment

area in the assessment, that states must justify the inclusion of
sources outside the nonattainment area. This justification would need
to demonstrate that these emissions have a substantial impact on
nonattainment concentrations that warrants including these emissions
along with nonattainment area emissions in assessing RFP. Another
commenter recommends that EPA define the area to be included. Since the
demonstrations of impact are best done by states, in conjunction with
their attainment planning, EPA intends to allow States to justify the
area to be included, within distance limits discussed above.
    Comment: Numerous commenters recommend that EPA allow credit for
reductions of direct PM2.5 emissions outside the
nonattainment area. Some of these commenters also recommend that EPA
allow credit for mobile source emission reductions outside the
nonattainment area. Other commenters support EPA's proposed approach,
in which states may justify considering precursor emissions outside the
nonattainment area but must evaluate direct PM2.5 emissions
based solely on emissions within the nonattainment area.
    Response: Under Section 107 of the Clean Air Act, EPA is to
designate nonattainment areas that include areas nearby to the
violations that contribute to the violations. Given the spatial scale
of the impacts of direct PM2.5 emissions, EPA believes that
any direct PM2.5 emission source that demonstrably
influences nonattainment area violations (and thus would contribute to
these violations) would also be considered to be nearby to the
violations for designation purposes. The EPA believes that it has
properly defined the nonattainment areas to include all nearby
contributing sources. Nevertheless, EPA asks anyone with evidence that
an additional source or source area contributes to violations in a
nonattainment area to submit that information to EPA and to recommend
incorporation of that source or source area into the nonattainment
area.
    The EPA has commented on consideration of mobile source emissions
above. For direct PM2.5 emissions, EPA believes that the
nonattainment area properly defines the area of consideration, and
emissions from mobile sources outside the nonattainment area, like
emissions from stationary sources outside the nonattainment area,
should not be considered. For precursors for which consideration of
emissions outside the nonattainment area is justified, the applicable
inventories would include emissions from all sources including mobile
sources as well as stationary sources.
    Comment: A commenter states that ``RFP credits for VOC should be
granted for reductions achieved within the nonattainment area as well
as [within] geographical limits outside of the nonattainment area.''
This commenter supports consistency with the ozone policy, which allows
credit for NOX reductions within 200 kilometers and VOC
reductions within 100 kilometers of the nonattainment area. Another
commenter makes similar comments regarding VOC and comments that ``[a]s
the science and understanding of PM2.5 formation increases,
EPA must revisit the 200 kilometer parameter and develop a possible
proposal for ammonia.''
    Response: Conceptually, EPA agrees that in areas where
anthropogenic VOC emissions outside the nonattainment area are shown to
be a significant contributor to nonattainment area PM2.5
concentrations, presumably by formation of organic particles that
influence nonattainment area concentrations, reduction of these VOC
emissions could help improve air quality in the nonattainment area.
Therefore, EPA is revising its policy to accommodate consideration of
these potential impacts. The EPA believes that as the impacts of
anthropogenic VOC on PM2.5 concentrations are better
understood, it may in some cases be appropriate to consider sources
outside the nonattainment area in RFP plans if the impacts from such
sources can be properly quantified and justified.
    Nevertheless, EPA must highlight the technical challenges involved
in assessing the impacts of VOC emission reductions. First, it is
essential that the impacts of secondary organic particle formation from
anthropogenic VOC emissions be differentiated from the impacts caused
by biogenic VOC emissions and from the impacts of direct organic
particle emissions. Second, the process of organic particle formation
is highly complex, and currently available atmospheric models typically
perform poorly in assessing the mass of particles thus formed. Third,
the distance range of impacts, and to be more precise the distance
range over which source impacts are comparable, is especially
uncertain. While the distance range for organic particle formation is
not necessarily the same as for the influence of VOC on ozone
formation, it may be appropriate to include sources within 100
kilometers of the nonattainment area for both purposes, as the
commenter recommended. However, any state wishing to include such
sources outside the nonattainment area must justify the distance range
that is appropriate for the area.
    The EPA is not prepared at this time to establish generally
applicable guidance with respect to how RFP plans should address
ammonia in cases where that precursor is found to be significant.
States that expect to regulate ammonia emissions should consult their
regional office regarding appropriate approaches for their particular
areas.
    Finally, EPA agrees with the commenter that EPA should revisit the
range of issues regarding geographic distances of impacts as more
information and understanding become available.
6. Pollutants To Be Addressed in the RFP Plan
a. Background
    A number of commenters appeared to be confused by the discussion in
the notice of proposed rulemaking regarding the pollutants to be
included in the RFP assessment. The EPA proposed that the attainment
demonstration would provide the key parameters of the RFP
demonstration, and that the list of pollutants to be addressed in the
RFP demonstration would match the list of pollutants regulated as part
of the attainment demonstration. However, the notice of proposed
rulemaking also suggested that the presumptions regarding whether
different pollutants are to be regulated under NSR and RACM (including
RACT) would also apply to RFP. This led some commenters to recommend
different treatment of specific pollutants.
    In fact, the presumptions of applicability that EPA is promulgating
for RACM are not germane to RFP. The pollutant coverage of RFP
assessments is determined on an area-specific basis according to each
area's attainment demonstration, and EPA need not establish
presumptions as to what pollutants are included in the RFP assessment.
For example, if a state includes no NOX emission reductions
in its attainment plan, then the RFP plan would not include
NOX, irrespective of whether the (uncontrolled)
NOX emissions contribute significantly to the areas
PM2.5 concentrations.
    The contrast between establishment of presumptions for RACM and
having no such presumptions for RFP (or for attainment demonstrations)
reflects differences in regulatory context. For RACM, at issue is
whether the impact of the pollutant is sufficient to warrant full
implementation of the RACM requirements. In contrast, for RFP (as for
attainment plans), EPA is establishing

an overall progress requirement that may be met by applying various
control levels to various pollutants, so long as overall emission
reductions are adequate. Indeed, if the state chooses not to control a
particular pollutant in its attainment plan, then the presumption is
that that pollutant would not be reduced in the RFP plan either.
Furthermore, states have the flexibility to meet the overall progress
with any adequate combination of control of relevant pollutants,
regardless of the significance or insignificance of these pollutants'
impacts. For these reasons, EPA is making no presumptions as to what
pollutants will be included in RFP plans.
b. Final Policy
    As proposed, the pollutants to be addressed in the RFP plan are
those pollutants that are subject to control measures in the attainment
plan.
c. Comments and Responses
    Comment: A commenter states that ``VOC should be considered a
presumptive PM2.5 precursor.'' Another commenter recommends
presuming that VOC and ammonia are included in the RFP plan.
    Response: The EPA's approach to RFP does not rely on presumptions
as to whether a pollutant does or does not warrant regulation as a
precursor. Instead, pollutants are to be included or excluded according
to whether the attainment demonstration includes emission controls for
the pollutant that yield quantitative air quality benefits. Thus,
irrespective of the presumptions applicable to RACM, the RFP plan would
not include VOC unless the attainment plan reflects air quality
improvements from VOC emission controls. The challenges of addressing
VOC as part of an RFP plan were discussed earlier in this section.
Similarly, ammonia would not be included in the RFP plan if the
attainment plan does not regulate ammonia emissions.
7. Equivalent Air Quality Improvement
a. Background
    The EPA proposed that states could use alternative combinations of
various types of emission control programs to meet RFP requirements if
the alternative would be expected provide air quality improvements that
are approximately equivalent to those of the benchmark emission
reductions. Some control programs for some pollutants can be
implemented more quickly than other control programs. EPA believes that
it is unnecessary to require that all pollutants be reduced at the same
rate or by the same fraction of the ultimate attainment plan
reductions. The EPA believes instead that the states should have
flexibility to ``mix and match'' control strategies, so long as they
provide a demonstration that the adopted approach can be expected to
yield approximately the same air quality progress as an approach in
which the state achieves an identical fraction of the attainment
strategy for all pollutants by the RFP milestone date.
    The notice of proposed rulemaking presented examples of the
assessment of RFP, illustrating EPA's recommended approach for
establishing a benchmark set of emission reductions and illustrating
EPA's recommended procedures for whether modified approaches that
control some pollutants earlier than other pollutants may be considered
equivalent. While not repeated here, the examples remain appropriate
for describing the approach included in the final rule. (See 70 FR
66012-66013).
    Most commenters supported EPA's proposal to allow alternative
combinations of control that can be shown by simple means to be
equivalent. A set of commenters objected to this approach, given the
uncertainties involved in the equivalency assessment. Nevertheless, for
this aspect of RFP policy, EPA's final policy reflects the policy that
it proposed.
b. Final Policy
    The EPA is adopting an approach that establishes a benchmark level
of controls but allows states the flexibility to adopt any combination
of controls of the various pollutants that can be shown to provide
equivalent benefits using procedures that EPA is recommending (or at
the State's option, air quality modeling). The first step is to
determine the ratio of the number of years from the baseline year to
the RFP review year (e.g., the 7 years from 2002 to 2009) divided by
the number of years from the baseline year to the year in which
attainment level emissions are achieved (e.g. the 10 years from 2002 to
2012, for an area with a 2013 attainment deadline). The benchmark level
of controls is then determined by multiplying this ratio times the
level of control being achieved for each pollutant. For example, for an
area with an attainment deadline extended to 2013, the benchmark level
of controls would reflect \7/10\ of the emission reductions of each
pollutant that is controlled in the attainment plan.
    The equivalency process involves consideration of the air quality
benefits for the emission reductions in the alternative plan for each
regulated pollutant. In effect, the air quality benefits for each
pollutant are used as weighting factors, such that pollutants for which
controls yield larger benefits are weighted more heavily in determining
the adequacy of the resulting plan. For each pollutant, the first step
is to find the ratio of the emission reductions achieved by the RFP
milestone date (e.g. the emission reductions achieved between 2002 and
2009) divided by the emission reductions achieved by the attainment
date. The second step is to multiply this ratio times the air quality
improvement attributable to full implementation in the attainment year
of the attainment strategy relevant to that pollutant. The third step
is to add these pollutant-specific results to obtain a total estimated
air quality benefit of the alternative plan.
    The air quality benefits of the benchmark reductions are easier to
determine. The first step, inherent to defining the benchmark
reductions, is to determine the ratio of the number of years to the RFP
review divided by the number of years to attainment level emissions (in
the example above, \7/10\). The second step is simply to multiply this
ratio times the quantity of air quality improvement achieved by the
attainment plan. (Conceptually, the calculations are the same as are
done for the alternative plan, but the mathematics are simpler because
one is applying the same assumed fraction of the attainment plan
emission reductions (e.g. \7/10\) for all pollutants, so that there is
no need to subdivide by pollutant.) For each milestone date, any
alternative that provides estimated air quality benefits by the RFP
milestone date that at a minimum are generally equivalent to the
estimated benefits of the benchmark level of emission reductions will
be considered to satisfy RFP requirements.
c. Comments and Responses
    Comment: A set of commenters argues that the equivalency process is
too uncertain, and recommends instead that states be required to
achieve at least a fixed percentage reduction for all pollutants. The
commenters cite the uncertainties acknowledged by EPA, including
potential nonlinearity (i.e. that a given percentage of an emission
reduction may yield a different percentage of the related air quality
benefit). The commenters contrast EPA's willingness to accommodate
these uncertainties, for purposes of giving states flexibility for
alternate RFP plan designs, with EPA's unwillingness to accommodate the
uncertainties inherent

in regulating ammonia emissions. The commenters state that ``Rather
than propose a standardized process for coherently determining
`equivalency,' EPA embraces the possibility that States will invent
multiple and disparate methodologies.'' The commenters argue that the
need for certainty in achieving emission reductions trumps the benefits
of state flexibility, not the other way around. The commenters state
that if ``EPA decides nonetheless to accept equivalency demonstrations,
it should at least * * * require States to conduct dispersion
modeling'' to confirm equivalency. The commenters further find unlawful
the fact that EPA would allow ``rough equivalency'' rather than full
equivalency to the benchmark approach. The commenters would prefer that
EPA required a fixed percentage reduction of the emissions of direct
PM2.5 emissions and of each precursor.
    Response: The EPA believes that its proposed approach satisfies the
intent of the RFP requirement, which is to make ongoing, steady
progress toward attainment rather than backloading control strategies.
A requirement to obtain at least a given percentage of each of the
pollutants that contribute to PM2.5 concentrations would
impose an inflexibility that EPA concludes is unnecessary where not
required by the statute. The EPA proposed to require that areas achieve
emission reductions that are generally linear, and a plan that provides
for rough equivalency to the benchmark approach would indeed provide
generally linear reductions. In response to commenters' requests for a
standardized process for assessing equivalency, EPA believes the
process outlined in the final rule is responsive to this request. It is
not clear whether the fixed reduction percentage that certain
commenters recommended would be an area-specific percentage (such as
EPA uses to define the benchmark approach) or a universally applicable
percentage (such as 3 percent per year). If the former, then EPA would
repeat the response above regarding flexibility being consistent with
the Act's requirements; if the latter, then responses in III.6.4
regarding a fixed reduction percentage apply. The EPA believes that the
procedures it is establishing to assess equivalency are adequate for
assessing RFP and that dispersion modeling need not be required for
this purpose.
8. Other RFP Issues
a. Multi-State Nonattainment Areas
    As stated in the proposed rulemaking, EPA seeks to ensure that
nonattainment areas that include more than one State meet RFP
requirements as a whole. Some commenters expressed concern about how
one state's submittal should address emissions in other states,
including how the state might address questions about the
enforceability of another state's requirements.
    The issues here resemble the issues for attainment demonstrations.
In that context as well, EPA seeks plans that reflect active
consultation by the affected states and provide a combination of
reductions that are enforceable by the respective states that
collectively provide for attainment. The active involvement of regional
planning organizations helps assure a collective design of a plan with
specific requirements to be adopted by specific states. Likewise for
RFP, EPA would expect states with multi-state nonattainment areas to
consult with other involved states, to formulate a list of the measures
that they will adopt and the measures that the other state(s) will
adopt, and then to adopt their list of measures under the assumption
that the other state(s) will adopt their listed measures. That is, each
state would be responsible for adopting and thereby providing for
enforcement of its list of measures, and then that state and ultimately
EPA (at such time as the plan is approved) would be responsible for
assuring compliance with the SIP requirements.
    In accordance with this view of RFP, as is the case for attainment
plans, EPA expects states sharing a multi-state nonattainment area to
submit a common assessment of whether RFP will occur. As a default, if
the assessment only includes emissions within the nonattainment area,
then each state would submit an assessment based on emissions from the
full nonattainment area including portions of the area in other states.
If the assessment includes precursor emissions from additional area
outside the nonattainment area, then the states should have a common
rationale for the area included, and all affected states would use the
same inventory of the same multi-state area thus defined in assessing
whether RFP will occur. The EPA would judge such submittals based on
(1) whether the overall projected emission reductions will achieve RFP
and (2) whether the submitting state has adopted the necessary
enforceable measures to assure that the reductions projected within its
boundaries will in fact occur.
    As a point of clarification, even if a state justifies
consideration of emissions outside the nonattainment area in its RFP
assessment, EPA intends that these assessments not use emissions from
outside the state or states represented in the nonattainment area. For
single state nonattainment areas, only emissions within that state
would be considered. This will help assure accountability for the
emission reductions included in the plan.
b. Tribal Areas
    The EPA received no comments on its proposed policy regarding RFP
for tribal areas, and EPA is finalizing the proposed policy. Under its
Tribal Authority Rule (40 CFR 49.4), EPA found that it was not
appropriate to apply SIP schedule requirements to tribes. For similar
reasons, EPA is not requiring tribes to submit RFP plans. Generally
this exemption will have limited if any impact on the achievement of
RFP by an area. Nevertheless, consistent with its general role in
implementing programs for tribes where ``necessary and appropriate,''
EPA will work with the affected tribes and states to ensure that
emissions on tribal lands are addressed appropriately. The EPA intends
to ensure that areas that include both state and tribal lands will
satisfy RFP on a collective basis, similar to the policy applicable to
multi-state nonattainment areas.
9. Mid-Course Review
a. Background
    The EPA proposed requiring mid-course reviews on a case-by-case
basis. The proposal described a mid-course review as a combination of
reviews aimed at assessing whether a nonattainment area is or is not
making sufficient progress toward attainment of the PM2.5
standards. The proposal described the mid-course review as involving
``three basic steps: (1) Demonstrate whether the appropriate emission
limits and emission reduction programs that were approved as part of
the original attainment demonstration and SIP submittal were adopted
and implemented; (2) analyze available air quality, meteorology,
emissions and modeling data and document relevant findings; and (3)
document conclusions regarding whether progress toward attainment is
being made using a weight of evidence determination.'' (Cf. 70 FR
66010)
    The EPA views mid-course review requirements as part of a set of
requirements for implementing the Clean Air Act requirements for
reasonable further progress. For areas that demonstrate attainment by
April 5, 2010, EPA believes that this attainment demonstration also
demonstrates that reasonable further progress is being achieved. For
areas that demonstrate

attainment after April 5, 2010, EPA is requiring states to submit an
RFP plan, due on April 5, 2008, showing that emissions in 2009 and, in
some cases, in 2012, will be sufficiently reduced to provide generally
linear progress toward levels that are expected to yield attainment. At
issue here is how then to conduct ongoing tracking of whether the
planned progress toward attainment is in fact occurring. Subparts 2
(for ozone) and 4 (for PM10) include explicit requirements
for ongoing milestone tracking. Since Subpart 1 (applicable for
PM2.5) allows EPA flexibility in determining how ongoing
progress is to be tracked, EPA may adopt other approaches for achieving
the necessary assurances that ongoing progress toward attainment is
occurring.
    Milestone reviews can be confounded by changes in inventory methods
(a concern expressed by a commenter particularly with respect to
condensable emissions) and involve lengthy delays while inventories are
compiled before planning can begin. Other approaches involving only air
quality data reviews also do not provide for timely planning, insofar
as such approaches involve waiting for three years of air quality data
after implementation of controls before planning can begin. The EPA
believes that a mid-course review provides the most productive
approach, in lieu of establishing milestone tracking or other
requirements, to assure that reasonable further progress in reducing
emissions is being achieved. For this reason EPA proposed a requirement
for mid-course reviews.
    The EPA proposed a process for establishing and implementing mid-
course review. After the state submits an attainment plan (due in April
2008), EPA would evaluate whether a mid-course review is warranted
after considering various factors including factors identified in the
proposal. The EPA did not propose to conduct further rulemaking on
establishing this requirement, but EPA proposed that ``[w]here EPA
finds that a MCR would be required, the approval of the [attainment]
demonstration would be contingent on a commitment from the State to
conduct the MCR.'' The mid-course review would then be due April 2010.
The EPA's proposal also stated that ``EPA would determine [based on
review of the mid-course review] whether additional emissions
reductions are necessary,'' so that states would need to complete the
mid-course review ``three or more years before the applicable
attainment date to ensure that any additional controls that may be
needed can be adopted [in timely fashion].'' Finally, EPA stated ``[i]f
a mid-course review will be required for certain PM2.5
nonattainment areas, separate PM2.5 mid-course review
guidance will be written to address the specific requirements of
PM2.5 nonattainment areas.''
    The EPA received numerous comments objecting to EPA's proposed
approach. Several commenters noted the inconsistency between requiring
a mid-course review in April 2010 versus requiring a mid-course review
due 3 or more years before an attainment date of 2012 or earlier.
Multiple commenters objected to EPA requiring a mid-course review only
2 years after the initial attainment plan is due. A commenter requested
``nationally applicable guidance on when an MCR would be required and
what it would need to include.'' No commenters supported EPA's timeline
for mid-course reviews.
    Based on the comments that EPA received, EPA has reevaluated the
process for mid-course reviews. Upon reevaluation, EPA shares many of
the concerns expressed by commenters about the proposal. The proposal
indeed presents conflicting dates for submittal. The EPA agrees that a
deadline just 2 years after the initial SIP submittal is too soon for
states to conduct meaningful analyses of whether areas are making
progress towards attainment. This problem would be exacerbated by the
proposed process, in particular the fact that states would not know to
begin work on a mid-course review until after they had submitted their
initial SIP and after EPA had sufficiently reviewed the submittal to
determine the need for a mid-course review. An early mid-course review
also would defeat one of the purposes of the mid-course review, which
is to take advantage of advances in the science and understanding of
the nature of condensables and other components of PM2.5, to
adjust plans to be better targeted at solving problems. For these
reasons, EPA is significantly revising its approach to mid-course
reviews as recommended by the commenters. The EPA is establishing a
rule which provides more certainty to the states as to applicability
and content of mid-course review requirements, thereby avoiding the
need for future EPA rulemakings on the subject. The EPA's rule clearly
does not require states with early attainment dates to conduct a mid-
course review and would clearly mandate a mid-course review only for
areas with later attainment dates. The EPA's final rule clarifies the
content of mid-course reviews and provides for states to make decisions
on whether further controls are needed rather than having EPA make this
determination. The mid-course review shall include an updated modeled
attainment demonstration as well as a review of the implementation of
measures in the April 2008 SIP and a review of recent air quality data.
The EPA believes that all of these elements are necessary and should be
sufficient for the state to identify whether additional measures are
needed to achieve attainment by the attainment date in the approved
plan. The EPA believes that states, not EPA, should make the initial
determination as to whether additional measures are needed, and EPA has
designed its mid-course review requirements to provide for the states
to make this determination.
    The EPA is promulgating a fixed date of April 2011 as a date for
submittal of mid-course reviews for areas with attainment dates in 2014
or 2015. This fixed date will facilitate joint planning for multiple
areas to apply common assumptions regarding regional transport. This
date also gives states adequate notice for preparing these reviews and
adequate time after the April 2008 submittal to incorporate new
information and understanding of PM2.5 nonattainment
problems to adjust attainment strategies as appropriate.
    The EPA is not requiring areas demonstrating attainment by 2013 or
before to conduct a mid-course review. Such areas plan to have
attainment level emissions by 2012, and EPA believes that an April 2011
mid-course review would not provide a timely reassessment of such
areas' attainment plans. Instead, EPA is clarifying that mid-course
reviews are only required for areas that demonstrate a need for an
attainment date extension at least to April 2014.
b. Final Rule
    For each area with an approved attainment date in 2014 or 2015, EPA
is requiring the state to submit a mid-course review by April 2011. The
mid-course review shall include an updated attainment demonstration as
well as a review of the implementation status of measures included in
the April 2008 submittal and a review of recent air quality data. The
state shall determine whether additional measures are needed for timely
attainment, just as the state is responsible for determining whether
additional measures are needed in the April 2008 attainment
demonstration, subject to formal EPA SIP review. The EPA is not
requiring RFP milestone reviews, and EPA is requiring mid-course
reviews for areas with sufficiently extended attainment dates in lieu
of any other form of tracking reasonable progress.

c. Comments and Responses
    Comment: A number of commenters objected to EPA's proposed
timeframe that would have areas submit a mid-course review only 2 years
after the initial SIP is due. They recommended, instead, that areas
with attainment dates 2 years or more beyond the first 5-year period
submit mid-course reviews 3 years after the SIPs are due (April 2011)
and every 3 years thereafter, if necessary. Their reason for this
suggestion is that the timing of mid-course review requirements needs
to be clearer and should allow adequate time between plans and mid-
course reviews if they are to serve as meaningful reviews.
    Several commenters also noted an inconsistency in the timing of
mid-course review requirements under EPA's proposal. The EPA proposed
that mid-course review submittals would be due 5 years after the
initial designation, which for all the original designations means 5
years after April 2005, i.e. April 2010. However, EPA also proposed
that mid-course reviews would be due 3 years before the attainment
date, which for areas with an April 2012 attainment date means April
2009. The commenters considered April 2009 for a mid-course review
submittal to be too soon after the initial SIP submittal in April 2008,
arguing that EPA would not have had time to review the 2008 SIP
submittal, and the states would not have time to prepare a mid-course
review by 2009. Some of these commenters expressed a view that EPA
should not require mid-course reviews earlier than 3 years after the
SIP submittal date.
    Response: The EPA agrees with these comments. The EPA is remedying
the inconsistency in submittal dates by establishing the single
submittal due date of April 2011 that was recommended by the
commenters. As requested by commenters, EPA is also clarifying the
applicability of the mid-course review requirement. The requirement
shall apply to areas with attainment dates of 2014 or 2015; mid-course
reviews shall not be required for areas that are expected to attain the
standards by 2013.
    Comment: A commenter supports mid-course reviews as a means of
assuring that areas with longer-term compliance dates are on track to
attain the NAAQS as expeditiously as practicable.
    Response: The EPA agrees that mid-course reviews can be a critical
step in assuring expeditious attainment for areas with extended
attainment dates. Indeed, EPA is relying on mid-course reviews rather
than milestone reviews or other forms of RFP tracking to serve this
purpose.
    Comment: A commenter recommended eliminating mid-course review
requirements for any area with less than seven years between SIP
submittal and attainment. The commenter urged that EPA carefully
reconsider its overall timelines for PM2.5 while considering
the feasibility and practical usefulness of the steps required of
States and emission sources.
    Response: The EPA agrees that the proposed timeline potentially
required mid-course reviews in areas where such reviews would not be
warranted, and the timeline did not provide the clarity as to the
applicability of the requirement that states need to fulfill their
planning responsibilities. In response, EPA is not requiring mid-course
reviews for areas demonstrating attainment prior to 2014. For those
areas that cannot demonstrate that attainment will occur prior to 2014,
EPA has streamlined the mid-course review process so that the state
bears responsibility for making the initial determination as to whether
additional measures are needed to achieve timely attainment, rather
than requiring additional steps of EPA rulemaking and initial findings
by EPA as to the level of controls needed in the state's SIP. With the
revised timetable, states can be assured of a meaningful mid-course
review effort that focuses on the areas that particularly warrant such
a review and for which time is available for a productive assessment of
the need for additional measures.
    Comment: One commenter stated that the proposal that allows the
Agency to determine whether or not a State needs to submit a mid-course
review with their attainment demonstration on a case-by-case basis
lacks sufficient information. Since these attainment demonstrations
must meet rigorous criteria, and require substantial work by the
States, the commenter is concerned that the proposal neglects to
outline the criteria EPA will use to make the case-by-case mid-course
review determinations. The commenter asks that EPA provide the States
with nationally applicable guidance on when an MCR would be required
and what it would need to include.
    Response: The EPA agrees with this comment. In particular, EPA
agrees that establishing clear criteria for applicability and content
of a mid-course review requirement will provide states the opportunity
to plan for these reviews and conduct appropriate reviews in a timely
fashion. Therefore, this final rule is establishing specific criteria
for the applicability of the mid-course review requirement, namely that
a mid-course review shall be conducted for any area that cannot
demonstrate attainment before 2014. This final rule is also identifying
the necessary elements of this mid-course review, i.e. a review of the
implementation of measures in the 2008 SIP, and review of recent air
quality data, and an updated modeled attainment demonstration.

H. Contingency Measures

a. Background
    Under subpart 1 of the CAA, all PM2.5 nonattainment
areas must include in their SIPs contingency measures consistent with
section 172(c)(9). Contingency measures are additional control measures
to be implemented in the event that an area fails to meet RFP or fails
to attain the standards by its attainment date. These contingency
measures must be fully adopted rules or control measures that are ready
to be implemented quickly upon failure to meet RFP or failure of the
area to meet the standard by its attainment date. The preamble to the
proposal stated that the SIP should contain trigger mechanisms for the
contingency measures, specify a schedule for implementation, and
indicate that the measures will be implemented without significant
further action by the State or by EPA. The contingency measures should
consist of other control measures for the area that are not included in
the control strategy for the SIP.
    The April 16, 1992 General Preamble provided the following
guidance: ``States must show that their contingency measures can be
implemented without further action on their part and with no additional
rulemaking actions such as public hearings or legislative review. In
general, EPA will expect all actions needed to affect full
implementation of the measures to occur within 60 days after EPA
notifies the State of its failure.'' (57 FR at 13512.) This could
include Federal measures and local measures already scheduled for
implementation, as explained below.
    The EPA has approved numerous SIPs under this interpretation--i.e.,
that use as contingency measures one or more Federal or local measures
that are in place and provide reductions that are in excess of the
reductions required by the attainment demonstration or RFP plan. (62 FR
15844, April 3, 1997; 62 FR 66279, December 18, 1997; 66 FR 30811, June
8, 2001; 66 FR 586 and 66 FR 634, January 3, 2001.) The key is that the
statute requires that contingency measures provide for additional
emission reductions that are not relied

on for RFP or attainment and that are not included in the
demonstration. The purpose is to provide a cushion while the plan is
being revised to meet the missed milestone. In other words, contingency
measures are intended to achieve reductions over and beyond those
relied on in the attainment and RFP demonstrations. Nothing in the
statute precludes a State from implementing such measures before they
are triggered. In fact, a recent court ruling upheld contingency
measures that were previously required and implemented where they were
in excess of the attainment demonstration and RFP SIP. See LEAN v. EPA,
382 F.3d 575, 5th Circuit., 2004.
    One basis EPA recommends for determining the level of reductions
associated with contingency measures is the amount of actual
PM2.5 emissions reductions required by the control strategy
for the SIP to attain the standards. The contingency measures are to be
implemented in the event that the area does not meet RFP, or attain the
standards by the attainment date, and should represent a portion of the
actual emissions reductions necessary to bring about attainment in
area. Therefore, the emissions reductions anticipated by the
contingency measures should be equal to approximately 1 year's worth of
emissions reductions necessary to achieve RFP for the area.
    As stated previously, EPA believes that contingency measures should
consist of other available control measures beyond those required to
attain the standards, and may go beyond those measures considered to be
RACM for the area. It is important, however, that States make decisions
concerning contingency measures in conjunction with their determination
of RACM for the area, and that all available measures needed in order
to demonstrate attainment of the standards must be considered first;
all remaining measures should then be considered as candidates for
contingency measures. It is important not to allow contingency measures
to counteract the development of an adequate control strategy
demonstration.
    The preamble to the proposal stated that contingency measures must
be implemented without ``significant further action'' after EPA
determines that the area has either failed to meet RFP, or has failed
to attain the standard by its attainment date. The purpose of the
contingency measure provision is to ensure that corrective measures are
put in place automatically at the time that EPA makes its determination
that an area has either failed to meet RFP or failed to meet the
standard by its attainment date. The EPA is required to determine
within 90 days after receiving a State's RFP demonstration, and within
6 months after the attainment date for an area, whether these
requirements have been met. The consequences for states which fail to
attain or to meet RFP are described in section 179 of the CAA.
2. Final Rule
    The final rule includes regulatory text for contingency measures
and maintains the overall policy approach as described in the preamble
to the proposal. The key requirements associated with contingency
measures are:

--Contingency measures must be fully adopted rules or control measures
that are ready to be implemented quickly upon failure to meet RFP or
failure of the area to meet the standard by its attainment date.
--The SIP should contain trigger mechanisms for the contingency
measures, specify a schedule for implementation, and indicate that the
measures will be implemented without further action by the State or by
EPA.
--The contingency measures should consist of other control measures for
the area that are not included in the control strategy for the SIP.
--The measures should provide for emission reductions equivalent to
about 1 year of reductions needed for RFP, based on the overall level
of reductions needed to demonstrate attainment divided by the number of
years from the 2002 base year to the attainment year. Contingency
measures are those measures that would not be included in the
attainment strategy for various reasons; for example, they may not be
as economically feasible as other measures that are considered to be
RACM, or it may not be possible to implement the measures soon enough
to advance the attainment date (e.g. federal mobile source measures
based on the incremental turnover of the motor vehicle fleet each
year).
3. Comments and Responses
    Comment: Several comments were received concerning the requirement
for contingency measures under section 172(c)(9). The proposal
indicated that contingency measures adopted as part of the State plan
are to be equal to approximately 1 year's worth of emissions reductions
necessary to achieve RFP, as determined by the attainment demonstration
for the area. One commenter indicates that this amount of reductions
for contingency measures may be excessive in some cases. The commenter
stated that States should be allowed to demonstrate appropriate amount
of reductions for contingency measures in each area based on the degree
of the PM2.5 nonattainment area problem and the progression
of emission reductions planned for the area as a part of the SIP.
    Response: The EPA agrees that the CAA does not include the specific
level of emission reductions that must be adopted to meet the
contingency measures requirement under section 172(c)(9). One possible
interpretation of the CAA would assume that contingency measures should
be in place in the event that all of the State's measures fail to
produce their expected emission reductions. Under this scenario, the
State theoretically would be required to adopt sufficient contingency
measures to make up for the entire short fall. In other words, the
State would have to adopt ``double'' the measures required to satisfy
the applicable emissions reduction requirements.
    The EPA believes that this scenario would be highly unlikely and
that this interpretation would be an unreasonable requirement. The
adoption of double the measures needed for attainment would be
difficult for States. Therefore, the EPA believes that it is reasonable
that contingency measures should, at a minimum, ensure that an
appropriate level of emissions reduction progress continues to be made
if attainment or RFP is not achieved, or if an area fails to attain the
standard by its statutory attainment date and additional planning is
needed by the State. The EPA believes that the contingency measures
adopted by the State for the affected area should represent a portion
of the actual emissions reductions necessary to bring about attainment
in the area. Therefore, EPA believes that it is reasonable to require
states to adopt contingency measures equal to approximately 1 year's
worth of emissions reductions necessary to achieve RFP for the area.
    Comment: One commenter claimed that EPA incorrectly quoted the CAA
as requiring SIPs to provide for implementation of contingency measures
upon an attainment or RFP failure, without ``significant'' further
action by the State or EPA. The commenter stated that section 172(c)(9)
does not contain the word ``significant.'' The CAA requires that
contingency measures take effect ``without further action'' by the
State or EPA.
    Response: The EPA agrees with the commenter that the general
requirements for attainment plans specified under section 172(c)(9)
State that each plan must contain additional measures that will take
effect without

`further action' by the State or EPA if an area either fails to make
RFP or fails to attain the standard by the applicable attainment date.
Section 51.1012 of the final rule describes the contingency measures
requirement and does not include the word ``significant.'' However, as
a matter of practicality states need to take minimal steps to make
contingency measures effective and alert the affected public that the
measures are in force. Thus, EPA has indicated based on conclusions
first made in the 1992 General Preamble that states should complete all
of these administrative steps within 60 days and that all regulatory
steps be completed before SIP submission.
    Comment: The commenter further states that EPA is wrong in
asserting that contingency measures can include Federal measures and
local measures already scheduled for implementation, or previously
implemented measures that provide `excess' reductions. The CAA requires
contingency measures to consist of controls `to be undertaken if ' the
area fails to meet attainment or RFP. The commenter states that this
language clearly states that such measures are to be new measures that
will be undertaken upon the triggering event specifically to address
RFP or failure to attain, not measures already in place, or measures
required for other reasons.
    Further, the commenter claims that EPA can not rationally refer to
any reductions prior to an attainment or RFP failure as `excess' when
total reductions in the area in fact prove insufficient to meet
attainment RFP. The commenter states that EPA cites a 5th Circuit case
as support, but the commenter respectfully submits that the case was
incorrectly decided on this issue for the aforementioned reasons.
    Response: In response to comments claiming that EPA is wrong in
asserting that contingency measures can include Federal measures and
local measures already scheduled for implementation, or previously
implemented measures that provide `excess' reductions, as stated
previously, the EPA has approved numerous SIPs under this
interpretation. The statute requires that contingency measures provide
for additional emission reductions that are not relied on for RFP or
attainment and that are included in the attainment demonstration for
the area. These measures are intended to provide a ``cushion'' in terms
of emissions reductions for the area while the State is revising the
SIP for the area due to the failure to show RFP or attain. In other
words, contingency measures are intended to achieve reductions over and
beyond those relied on in the attainment and RFP demonstrations.
Nothing in the statute precludes a State from implementing such
measures before they are triggered.
    As noted above, EPA's General Preamble interpreted the control
measure requirements of sections 172(c)(9) and 182(c)(9) to allow
nonattainment areas to implement their contingency measures early. 57
FR 13498, 13511 (April 16, 1992). The EPA has applied this
interpretation in rulemakings. See, for example, 67 FR 6,590, 6,591-92
(September 26, 2002). See also rulemakings cited in the Background
section, above. As set forth above, the Fifth Circuit has upheld EPA's
interpretation. Louisiana Environmental Action Network v. EPA, 382 F.3d
575 (Fifth Cir. 2004). (``LEAN'') Commenters have not provided a basis
for concluding that the Fifth Circuit in the LEAN case wrongly
interpreted the CAA.
    Commenters contend that the language in the CAA regarding
contingency measure controls ``to be undertaken'' requires measures not
already in place or required for other reasons. The Fifth Circuit
disagreed, finding that the terms in section 172(c)(9)--``to be
undertaken'' and ``to take effect''--were ambiguous, and finding
persuasive EPA's interpretation that this language allows measures
already in place or otherwise required. The Court held:

    ``Here, the EPA's allowance of early reductions to be used as
contingency measures comports with a primary purpose of the CAA--the
aim of ensuring that nonattainment areas reach NAAQS compliance in
an efficient manner--and necessary requirements of the CAA.'' 382
F.3d at 583.

The Court further found that ``By utilizing contingency measures early,
the contingency measures ensured that `an appropriate level of
emissions reduction progress' would be implemented while the State
`adopt[ed] newly required measures resulting from the bump-up to a
higher classification.'' [citing the General Preamble]. Id.
    In addition, the Court agreed with EPA that ``early reductions are
necessary in order to create an incentive for nonattainment areas to
implement `all reasonably available control measures as expeditiously
as practicable' '' in accordance with section 172(c)(1) of the CAA.
Thus the Court concluded that it would be ``illogical to penalize
nonattainment areas that are taking extra steps, such as implementing
contingency measures prior to a deadline, to comport with the CAA's
mandate that such states achieve NAAQS compliance as `expeditiously as
practicable.' '' Id. at 583-584.
    The Fifth Circuit also endorsed the concept of ``excess''
reductions, noting that the reductions credits at issue in that case,
``although already implemented, are in effect set aside, `to be applied
in the event that attainment is [not] achieved' and such reduction
credits `are not available for any other use.' [citations omitted]. The
setting aside of a continuing, surplus emissions reduction fits neatly
within the CAA's requirement that a necessary element of a contingency
measure is that it must `take effect without further action by the
State or [EPA]'.'' The Court concluded that ``the early activation of
continuing contingency measures is consistent with the purpose and
requirements of the CAA statute.'' Id. at 584.
    Thus, EPA's approval of early implemented contingency measures is
consistent with the CAA, as well as with EPA guidance. For example, EPA
has consistently taken the position that ozone nonattainment areas
classified moderate and above must include sufficient contingency
measures so that ``upon implementation of such measures, additional
emissions reductions of up to 3 percent of the emissions in the
adjusted base year inventory (or such lesser percentage that will cure
the identified failure) would be achieved in the year following the
year in which the failure has been identified.'' 57 FR at 13511 (EPA's
General Preamble). Thus the contingency measures are supposed to ensure
that progress towards attainment will occur while the relevant State
adopts whatever additional controls may be necessary to correct a
shortfall in emissions reductions. Id. The EPA has historically allowed
early reductions--that is, reductions achieved before the contingency
measure is ``triggered''--to be used as contingency measures. See also
August 13, 1993 Memorandum from G.T. Helms: Early Implementation of
Contingency Measures for Ozone and Carbon Monoxide (CO) Nonattainment
Areas).
    The commenter's argument that emission reductions cannot be valid
contingency measures if they are otherwise required is also misplaced.
A State must have the legal authority to require whatever reductions it
may require as a contingency measure. As EPA has previously stated,
``all contingency measures must be fully adopted rules or measures.''
62 FR 15844, 15846 (April 3, 1997). The fact that the State or Federal
government has already exercised that authority is irrelevant because,
as noted above, contingency measures must ``take effect

without further action by the State or [EPA].'' Section 172(c)(9).
Thus, by definition, the State necessarily will have already exercised
its legal authority to require reductions as a contingency measure
before the measure is triggered. It does not matter whether or not a
specific contingency measure is already required by law, as long as the
emissions reductions that will result from that contingency measure
have not been accounted for in the attainment and reasonable further
progress demonstrations. If the reductions from the contingency measure
are not available for any other use, then they are surplus that is set
aside in the event reasonable further progress or attainment is not
achieved.
    A key element of a valid contingency measure reduction is that the
State may not use the reduction in its attainment or reasonable further
progress demonstrations if it is already using the reduction as a
contingency measure. Those demonstrations must account for the actual
emissions reductions that will make reasonable further progress
towards, and achieve attainment of the NAAQS in the absence of
contingency measures.

I. Transportation Conformity

    Transportation conformity is required under CAA section 176(c) (42
U.S.C. 7506(c)) to ensure that Federally supported highway and transit
project activities are consistent with (``conform to'') the purpose of
the SIP. Conformity currently applies to areas that are designated
nonattainment, and those redesignated to attainment after 1990
(``maintenance areas'' with plans developed under CAA section 175A) for
the following transportation-related criteria pollutants: ozone,
particulate matter (PM2.5 and PM10), carbon
monoxide (CO), and nitrogen dioxide (NO2). Conformity to the
purpose of the SIP means that transportation activities will not cause
new air quality violations, worsen existing violations, or delay timely
attainment of the relevant NAAQS (or ``standards'').
    The final PM2.5 implementation rule does not contain any
revisions to the transportation conformity regulation. The EPA
addressed the transportation conformity requirements that apply in
PM2.5 nonattainment and maintenance areas in three separate
rulemakings as described below.
    First, on July 1, 2004, EPA published a final rule (69 FR 40004)
that addressed the majority of requirements that apply in
PM2.5 areas including:
     Regional conformity tests to be used in conformity
determinations both before and after SIPs are submitted and motor
vehicle emissions budgets are found adequate or are approved;
     Consideration of direct PM2.5 emissions in
regional emissions analyses;
     Consideration of re-entrained road dust in
PM2.5 regional emissions analyses;
     Consideration of transportation construction-related
fugitive dust in PM2.5 regional emissions analyses; and
     Compliance with PM2.5 SIP control measures.
    Then on May 6, 2005, EPA promulgated a final rule (70 FR 24280)
that specified the transportation-related PM2.5 precursors
and when they apply in transportation conformity determinations in
PM2.5 nonattainment and maintenance areas.
    Finally, on March 10, 2006, EPA promulgated a final rule (71 FR
12468) that establishes the criteria for determining which
transportation projects must be analyzed for local particle emissions
impacts in PM2.5 and PM10 nonattainment and
maintenance areas. If required, an analysis of local particle emissions
impacts is done as part of a transportation project's conformity
determination.
    Transportation conformity for the PM2.5 standards began
applying in PM2.5 nonattainment areas on April 5, 2006, one
year after the effective date of EPA's PM2.5 nonattainment
designations (i.e., April 5, 2005). CAA section 176(c)(6) and 40 CFR
93.102(d) provide a one-year grace period before conformity applies in
areas newly designated nonattainment for a new standard.
PM2.5 SIP submissions such as RFP and attainment
demonstrations would identify motor vehicle emissions budgets
(``budgets'') for direct PM2.5 or PM2.5
precursors, as described below. These budgets would be used for
satisfying transportation conformity requirements, once the budgets are
found adequate or the SIP containing the budgets is approved by EPA.
For example, state and local agencies would consider during the
development of the PM2.5 SIP whether reductions of on-road
mobile source S02 emissions are a significant contributor to
an area's PM2.5 air quality problem, and if so, establish a
S02 motor vehicle emissions budget for transportation
conformity purposes.
    The EPA has previously addressed its intentions regarding when
budgets must be established in PM2.5 SIPs for transportation
conformity purposes. RFP plans, attainment demonstrations, and
maintenance plans must include a budget for direct PM2.5
emissions, except for certain cases as described below. All
PM2.5 SIP budgets would include directly emitted
PM2.5 motor vehicle emissions from tailpipe, brake wear, and
tire wear. States should also consider whether re-entrained road dust
or highway and transit construction dust are significant contributors
and should be included in the PM2.5 budget. For further
information, see 40 CFR 93.102(b) and 93.122(f) of the transportation
conformity regulation, as well as Sections VIII-X of the July 1, 2004
conformity rule preamble at 69 FR 40031-40036.
    Under certain circumstances, directly emitted PM2.5 from
on-road mobile sources may be found an insignificant contributor to the
air quality problem and NAAQS. Section 93.109(k) of the conformity rule
states that ``[s]uch a finding would be based on a number of factors,
including the percentage of motor vehicle emissions in the context of
the total SIP inventory, the current state of air quality as determined
by monitoring data for that NAAQS, the absence of SIP motor vehicle
control measures, and historical trends and future projections of the
growth of motor vehicle emissions.'' The EPA discussed its intentions
for applying the insignificance provision in the July 2004 final rule
(69 FR 40061-40063).
    In the May 6, 2005 final rule, EPA provided details regarding when
states must establish SIP budgets for any PM2.5 precursor
(i.e., NOX, VOCs, S02 and ammonia). If through
the SIP process a state concludes that on-road mobile source emissions
of one or more precursors are significant (i.e. need to be addressed in
order to attain the PM2.5 standards as expeditiously as
practicable), then EPA expects that the state will include a budget in
the SIP for each of the relevant precursors. (70 FR 24287) The EPA also
noted in the May 2005 conformity rule that, if inventory and modeling
analyses demonstrating RFP, attainment or maintenance indicate a level
of emissions of a precursor that must be maintained to demonstrate
compliance with the applicable requirement, then that level of
emissions should be clearly identified in the SIP as a budget for
transportation conformity purposes, even if the SIP does not establish
particular controls for the given precursor. If the state fails to
identify such a level of emissions as a budget, EPA will find the
submitted SIP budgets inadequate because the SIP fails to clearly
identify the motor vehicle emissions budget as required by the
conformity rule (40 CFR 93.118(e)(4)(iii)). (70 FR 24287) In
determining whether the on-road mobile source emissions of a
PM2.5 precursor are significant, state and local agencies
would use the criteria for insignificance findings provided in 40 CFR
93.109(k)

of the transportation conformity regulation. A further discussion of
the criteria to be considered in establishing PM2.5
precursor budgets is contained in the May 2005 final transportation
conformity rule (70 FR 24282-24288). If state and local agencies
conclude that on-road sources of a precursor are not a significant
contributor to the area's PM2.5 air quality problem, as
described above, motor vehicle emissions budgets would not be
established even though emissions may be addressed in the area's RFP
plan, attainment demonstration and/or maintenance plan.

J. General Conformity

a. Background
    The General Conformity regulations promulgated in 1993 establish an
implementation process where Federal agencies are responsible for
making their own determination of conformity with State implementation
plans (SIPs), and EPA plays an advisory role. Recognizing that it was
impracticable to evaluate all Federal actions for conformity, EPA
created a number of exemptions in those regulations for actions with
insignificant or not reasonably foreseeable emission increases,
including exemptions for Federal actions with emissions below specified
de minimis levels. When a Federal agency must demonstrate conformity
for an action, the regulations provide several methods for making that
demonstration. With the designations of PM2.5 nonattainment
areas on April 5, 2005, requirements for demonstrating conformity
become effective in those areas on April 5, 2006.
    On July 17, 2006 EPA issued a final rule (71 FR 40420) to amend the
General Conformity Regulations to establish de minimis levels for
PM2.5 for the General Conformity program. The final rule
established 100 tons/year of direct PM2.5 emissions and its
precursors as the de minimis level where the General Conformity
regulations would apply in PM2.5 nonattainment areas. In the
process of finalizing the de minimis level for PM2.5 three
comments were received. One commenter was concerned about emissions
from burning by Federal agencies. Another commenter proposed that the
de minimis level for emissions of direct PM2.5 should be set
significantly lower than 100 tons--in the range of 25-50 tons per year
(TPY) in areas that are likely to attain the PM2.5 national
ambient air quality standard within 5 years, and a level of 10-25 TPY
in areas that are likely to take more than 5 years to achieve the
national ambient air quality standard. A third commenter supported the
proposed de minimis level.
    The final rule revises the tables in sub-paragraphs (b)(1) and
(b)(2) of the General Conformity Regulations by adding a de minimis
emission level for PM2.5 and its precursors. This action
maintained our past policy of consistency between the conformity de
minimis emission levels and the size of a major stationary source under
the New Source Review program (70 FR 65984). These levels are also
consistent with the levels promulgated for Reasonably Available Control
Technology applicability levels for volatile organic compound and
nitrogen oxide emissions in subpart 1 areas under the 8-hour ozone
implementation strategy (68 FR 32843). Since EPA is not finalizing any
classifications for the PM2.5 nonattainment areas, we did
not establish differing PM2.5 de minimis emission levels for
higher classified nonattainment areas.
b. Comments and Responses
    Comment: One commenter requests that EPA communicate to all Federal
agencies the value of the agencies advising the States as soon as
possible of any planned future projects in nonattainment areas that may
be above the General Conformity de minimis values or that will have to
be evaluated to show that they are below de minimis. This is for
projects that are very likely to proceed. The aim is to consider these
future emissions in any growth projections during SIP development since
such growth may not be anticipated well by the available growth model
(E-GAS). States can communicate with existing Federal facilities now
concerning this issue.
    Response: The EPA sees the value in Federal agencies working with
States to anticipate growth in emissions and include those anticipated
emissions in the applicable SIP. The EPA is in the process of proposing
regulatory amendments to the General Conformity regulations that
provide a framework for Federal facilities to work with States to
account for facility-wide emissions in SIPs and to include Federal
facility emissions in future SIPs. The EPA anticipates that these rule
amendments should be proposed before the end of summer 2006.
    Comment: Some commenters stated that the de minimis level for
PM2.5 for conformity applicability should be less than 100
tons per year. A level of 50 tons per year was suggested for direct
PM2.5 emissions.
    Response: Similar comments were received when the PM2.5
de minimis level was proposed on April 5, 2006. The response to those
comments can be found in the preamble to the final rule setting the de
minimis level for PM2.5 at 71 FR 40420.
    Comment: Are the precursors for general conformity consistent with
this rulemaking or with the transportation conformity rulemaking?
    Response: The precursors for general conformity are generally
consistent both with this rule and the transportation conformity rule.
The only difference between the transportation rule and this rule is
that SO2 is not considered a precursor for transportation
conformity determinations that occur prior to a PM2.5 SIP
unless EPA or the State air agency finds on-road mobile source
emissions significant. For more information, see the May 6, 2005
transportation conformity rule on PM2.5 precursors at 70 FR
24283. Since general conformity includes analysis of stationary sources
the general conformity rule requires SO2 as a precursor both
before and after a PM2.5 SIP is submitted.
    Comment: When will rulemaking containing the de minimis levels for
PM2.5 and for the precursors be issued? There is some
confusion, since the proposed rule says that states should assume 100
tpy for all PM2.5 pollutants, as this would make it
consistent with the levels for NOX and VOC for the subpart 1
areas under 8-hour ozone. However, since New Jersey's classification is
moderate under the 8-hour ozone standard and we are in an Ozone
Transport Region, the de minimis level for VOC is 50 tons per year.
    Response: On July 17, 2006 EPA issued a final rule (71 FR 40420) to
amend the General Conformity Regulations to establish de minimis levels
for PM2.5 for the General Conformity program. The final rule
established 100 tons/year of direct PM2.5 emissions and its
precursors as the de minimis level where the General Conformity
regulations would apply in PM2.5 nonattainment areas. Since
EPA is not finalizing any classifications for the PM2.5
nonattainment areas, we did not establish differing PM2.5 de
minimis emission levels for based on a classification scheme.
    Comment: If a Statement of Conformity has been issued on a project
and if the project has not been completed to date, are they required to
address PM2.5 prior to completion of the project or will
they be grandfathered in?
    Response: If a Federal action has completed a conformity
determination and the action has started (regardless of whether the
project is complete or not) then no new determination is needed. If

the conformity determination was completed, but the action did not
start in 5 years a new determination is needed under the general
conformity rules.
    Comment: What guidance should states use to establish budgets for
large facilities or military bases?
    Response: The EPA has not issued any guidance for States and
Federal facilities to establish facility-wide budgets in the applicable
SIP. There is nothing in the General Conformity regulations preventing
this approach which would allow Federal actions that do not increase
total facility emissions over the budget in the SIP from determining
the action conforms on the basis of its compliance with the budget
limit. The EPA sees this practice as a positive step to encourage
States and Federal agencies to work together to account for emissions
in a SIP so they conform with the purposes and goals of the SIP. The
EPA intends to address the approach and provide guidance in planned
revisions to the General Conformity regulations which are expected to
be proposed in 2006.

K. Emission Inventory Requirements

a. Background
    Emission inventories are critical for the efforts of State, local,
tribal and federal agencies to attain and maintain the NAAQS that EPA
has established for criteria pollutants including PM2.5.
Pursuant to its authority under section 110 of Title I of the CAA, EPA
has long required States to submit emission inventories containing
information regarding the emissions of criteria pollutants and their
precursors. The EPA codified these requirements in 40 CFR part 51,
subpart Q in 1979 and amended them in 1987.
    The 1990 CAAA revised many of the provisions of the CAA related to
attainment of the NAAQS and the protection of visibility in mandatory
Class I Federal areas (certain national parks and wilderness areas).
These revisions established new emission inventory requirements
applicable to certain areas that were designated nonattainment for
certain pollutants. In the case of particulate matter, the emission
inventory provisions are in the general provisions under Section
172(c)(3).
    In June 2002, EPA promulgated the Consolidated Emissions Reporting
Rule (CERR) (67 FR 39602; June 10, 2002), 40 CFR part 51 subpart A. The
CERR consolidated the various emissions reporting requirements that
already existed into one place in the CFR, established new reporting
requirements for PM2.5 and ammonia, and established new
requirements for the statewide reporting of area source and mobile
source emissions.
    The CERR established two types of required emission inventories:
annual inventories, and 3-year cycle inventories. The annual inventory
requirement is limited to reporting statewide emissions data from the
larger point sources. For the 3-year cycle inventory, States need to
report data from all of their point sources plus all of the area and
mobile sources on a statewide basis. A special case existed for the
first 3-year cycle inventory for the year 2002 which was due on June 1,
2004.
    The EPA issued guidance suggesting that 2002 be used as the Base
Year for 8-hour ozone, PM2.5 and regional haze planning
efforts (November 18, 2002 EPA memorandum ``2002 Base Year Emission
Inventory SIP Planning: 8-hr Ozone, PM2.5 and Regional Haze
Programs'' http://www.epa.gov/ttn/chief/eidocs/2002baseinven_102502new.pdf
).

    States should estimate mobile source emissions by using the latest
emissions models and planning assumptions available at the time the SIP
is developed. Information and guidance on the latest emissions models
is available at http://www.epa.gov/otaq/stateresources/transconf/policy.htm#models and at http://www.epa.gov/otaq/models.htm.

.epa.gov/otaq/models.htm.

mobile sources into a comprehensive emission inventory, State, local
and tribal agencies may do the following:
     Set a baseline for SIP development.
     Measure their progress in reducing emissions.
     Have a tool to support future trading programs.
     Answer the public's request for information.
    The EPA uses the data submitted by the States to develop the
National Emission Inventory (NEI). The NEI is used by EPA to show
national emission trends, as modeling input for analysis of potential
regulations, and other purposes.
    Most importantly, States need these inventories to help in the
development of control strategies and demonstrations to attain the
annual and 24-hour PM2.5 NAAQS. In April 1999, EPA published
the ``Emissions Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS) and
Regional Haze Regulations,'' EPA-454/R-99-006. The EPA updated this
guidance in November 2005.\46\ The current version of this guidance is
available at: http://www.epa.gov/ttn/chief/eidocs/eiguid/index.html.

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. While the CERR sets forth requirements for data
elements, EPA guidance complements these requirements and indicates how
the data should be prepared for SIP submissions.
---------------------------------------------------------------------------

    \46\ Emissions Inventory Guidance for Implementation of Ozone
and Particulate Matter National Ambient Air Quality Standards
(NAAQS) and Regional Haze Regulations,'' (EPA-454/R-05-001, November
2005.
---------------------------------------------------------------------------

    The SIP inventory must be approved by EPA as a SIP element and is
subject to public hearing requirements, whereas 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.
In addition, the geographic area encompassed by some aspects of the SIP
submission inventory will be different from the statewide area covered
by the CERR emissions inventory. The CERR inventory was due June 1,
2004, while the SIP inventory due date is later. Because of this time
lapse, the State may choose to revise some of the data from the CERR
when it prepares its SIP inventory to account for improvements in
emissions estimates. If a State's 2005 emission inventory (or a later
one) becomes available in time to use for timely development of a
nonattainment area SIP, then that inventory can be used. We also
encourage the cooperation of the Tribes and the State and local
agencies in preparing their emissions inventories.
b. Final Rule
    In the proposed rulemaking, in Sec.  51.1008(a), to meet the
emission inventory requirements of section 172(c)(3), EPA proposed to
require submission of the CERR inventories as well as ``any additional
emission inventory information needed to support an attainment
demonstration and RFP plan ensuring expeditious attainment of the
annual and 24-hour PM2.5 standards.'' Section 51.1008(b) set
forth specifications for baseline emissions inventories for attainment
demonstrations and RFP requirements. Section 51.1008 of the final rule
reflects our proposed rule but is different from the draft regulatory
text. The proposal did not specify a deadline for

submission of the emission inventory. To ensure clarity, the final rule
contains language addressing the deadline for submission of emissions
inventories for nonattainment areas under section 172(c)(3) and section
172(b), and reflects the statutory requirement of no later than 3 years
after designation of the area. See Sec.  51.1008(a). In addition, Sec.
51.1008(a)(1) of the proposed rule has been changed for purposes of
clarification. The proposal referred to the requirement to submit
statewide emission inventories under the (CERR), contained in 40 CFR
part 51, subpart A. The final regulatory text clarifies this to refer
to the requirements for data elements under 40 CFR part 51, subpart A.
The EPA did not intend that the emissions inventories developed under
the CERR, which are statewide, would be appropriate for and satisfy all
aspects of SIP inventories developed for SIP submissions. Section
51.1008(b) has a minor change to clarify that this subsection refers to
the inventories required for submission under paragraph (a) of section
51.1008, and also clarifies the reference to 40 CFR Part 51 subpart A,
which currently contains the CERR. In addition, section 51.1008(b) as
finalized provides that ``The baseline emission inventory for calendar
year 2002 or other suitable year shall be used for attainment planning
and RFP plans for areas initially designated nonattainment for the
PM2.5 NAAQS in 2004.'' The EPA added this flexibility to be
consistent with EPA's ozone implementation rule, and to enable a State
to use a more recent and improved base year inventory if it is
completed in time to allow for timely development of the attainment
plan. As noted above, we expect that States will consult the guidance
document titled Emission Inventory Guidance for Implementation of Ozone
and Particulate Matter National Ambient Air Quality Standards
(``NAAQS'') and Regional Haze Regulations, November 2005,and submit
inventories that are appropriate for the geographic area at issue and
consistent with regulations and this guidance. We expect the States to
include in their SIP submission documentation explaining how the
emissions data were calculated.
    In the proposed rulemaking, EPA asked ``What emission inventory
requirements should apply under the PM2.5 NAAQS.'' Several
specific questions followed this general question to assess whether or
not additional emission inventory requirements or guidance are needed
to implement the proposed standard. It was noted in the proposal that
the basis for EPA's emission inventory program is specified in the
Consolidated Emissions Reporting Rule (CERR) and the related guidance
document titled Emissions Inventory Guidance for Implementation of
Ozone and Particulate Matter National Ambient Air Quality Standards
(NAAQS) and Regional Haze Regulations.
    Subsequent to the proposed rulemaking, EPA proposed the Air
Emissions Reporting Rule (AERR) at 71 FR 69 (Jan. 3, 2006). The AERR
would update CERR reporting requirements by consolidating and
harmonizing new emissions reporting requirements with pre-existing sets
of reporting requirements under the Clean Air Interstate Rule (CAIR)
and the NOX SIP Call. At this time, EPA is reviewing
comments submitted on the AERR proposal and expects to finalize this
rulemaking during calendar year 2007. The AERR is expected to be a
means by which the Agency will implement additional data reporting
requirements for PM2.5 SIP emission inventories. Since the
AERR rulemaking is in progress, EPA believes it is appropriate to defer
responding to certain comments on the proposed PM2.5
Implementation Rule related to data reporting and emission inventory
requirements that were discussed in the AERR proposal. Those comments
will be addressed in the final AERR rulemaking. Significant comments
that are separable from the AERR rulemaking and relate to data
reporting and emission inventory requirements for the PM2.5
NAAQS are addressed below and in EPA's Responses to Comments document.
    With respect to SIP emission inventory requirements under this
rulemaking, EPA recognizes NOX, SO2, VOCs, and
ammonia as potential precursors of PM2.5 because these
pollutants can contribute to the formation of PM2.5 in the
ambient air. To provide a technical foundation for understanding
contributions to PM2.5 nonattainment problems and for
identifying potential future measures to reduce PM2.5
concentrations, EPA is requiring under 40 CFR part 51 subpart A and 40
CFR 51.1008 of this rule that States develop and submit inventories for
direct PM2.5 and all precursors of PM2.5. This
requirement stands apart from the policies in this rule regarding the
required treatment of various precursor emissions in the development of
control strategies for attaining the PM2.5 standards. With
respect to the latter requirements, EPA has not made a finding that all
precursors should be evaluated for potential control measures in each
specific nonattainment area. The policy approach in the rule instead
requires evaluation of control measures for direct PM2.5 and
sulfur dioxide in all areas, and describes general presumptive policies
that NOX sources need to be evaluated for control measures
in all areas unless findings of insignificance are made, but that
control measure evaluations are not required for sources of ammonia and
VOC unless findings of significance are made. The rule also provides a
mechanism by which the State and/or EPA can make an area-specific
demonstration to reverse the general presumption for these three
precursors. (See section II.A.8 for additional discussion on these
issues.)
c. Comments and Responses
1. Should EPA Specify an Inventory Approval Process?
    Comment: Several commenters indicated that the current process of
approving SIP inventories by EPA regional offices is appropriate and
did not believe that additional approval requirements were necessary.
Some commenters noted that flexibility is needed to address regional
concerns. Several commenters noted that SIP emission inventories may
include requirements or information in addition to data required by the
Consolidated Emissions Reporting Rule (CERR). One commenter observed
that States routinely develop information outside the CERR for purposes
of their SIP development and that additional requirements should not be
defined by EPA. Another commenter recommended that requirements for
nonattainment area emission inventories be incorporated in the CERR or
AERR. A few commenters felt that additional guidance was needed on the
SIP emission inventory approval process.
    Response: The SIP emissions inventory is a plan provision that must
be approved by EPA under section 110(k) of the CAA and is subject to
public hearing requirements pursuant to section 110(a)(2). The EPA
believes that it need not further specify a SIP approval process for
emissions inventories beyond that set forth in the statute, regulation
(51.1008), other related sections of this rulemaking and EPA's current
guidance. The EPA agrees with many of the commenters that the approval
process for SIP emission inventories need not be further defined and
that approval should be conducted at the regional level to provide
flexibility to address regional concerns. The EPA also agrees that use
of Quality Assurance Project Plans developed for each state will be
helpful in establishing the proper approval process. The EPA

addresses the issue of what data elements are needed for SIP approval
in the responses to comments below, including the responses to comments
under Issue 2, below.
    As noted by two commenters EPA describes procedures for approval of
SIP inventories in a document titled Emissions Inventory Guidance for
Implementation of Ozone and Particulate Matter National Ambient Air
Quality Standards (NAAQS) and Regional Haze Regulations, November 2005.
Section 2.5, Inventory Approval, references a memorandum titled Public
Hearing Requirements for 1990 Base-Year Emissions Inventories for Ozone
and CO Nonattainment Areas, September 29, 1992. The EPA intends to use
the procedures discussed in the guidance and memorandum to the extent
that they are applicable to approval of PM2.5 emission
inventories submitted as part of the SIP. 40 CFR 51.1008 sets forth the
requirements for emissions inventories under section 172(c)(3), which
will be reviewed in the context of the SIP approval process. See also
40 CFR 51.1007 and 51.1009 regarding attainment demonstrations and RFP
plans. Thus, EPA believes that its existing SIP approval process is
adequately described in statute, regulation and guidance, and that it
provides flexibility to deal with issues that arise in individual
nonattainment areas.
2. Are the Data Elements Specified Within the CERR Sufficient To
Develop Adequate SIPs? For Example, in the Determination of RACT,
Should More Information on Existing Control Devices Be Required?
    Comment: Several commenters recommended that any additional
reporting requirements should be addressed through the CERR/AERR and
associated guidance and that no additional reporting requirements
should be specified in the Rule. Another commenter stated that more
detail concerning control equipment would be helpful but was concerned
about the additional burden on industry compared to the benefit to
State and local agencies, and suggested that this would be further
addressed in the context of comments on the AERR. One commenter
believed that the reporting requirements within the CERR are sufficient
to develop a PM2.5 SIP for most areas but noted that
nonattainment areas may require additional inventory information which
will need evaluation on a case-by-case basis. The commenter further
stated that any additional inventory requirements should be identified
during the SIP development process, in cooperation with the EPA
regional office, and should not be part of this rule.
    Response: In section 40 CFR 51.1008(a)(1) of the final rule, EPA
incorporates the requirements for data elements required under 40 CFR
part 51, subpart A, which contains the CERR, for inventories submitted
under this section. The EPA notes, however, that the issue of whether
to require additional reporting requirements beyond those required in
the CERR is currently being addressed in the Air Emissions Reporting
Rule (AERR) 71 FR 69 (January 3, 2006). At this time EPA believes that
the requirements for data elements under the CERR, in conjunction with
the other provisions of 40 CFR 51.1008, as well as 40 CFR 51.1007 and
51.1009, are generally adequate to meet the needs for PM2.5
nonattainment emission inventory SIP development. The AERR as proposed
includes additional provisions which may be helpful for
PM2.5 SIP emission inventory development. The EPA will
address this aspect of the AERR, including comments received in this
rulemaking on the issues raised and the additional elements proposed in
the AERR, in the final AERR rulemaking. This final rule indicates that
States shall include data elements for PM2.5 inventories as
required under 40 CFR part 51, subpart A. In addition, 40 CFR
51.1008(a)(2) requires that States submit ``any additional emission
inventory information needed to support an attainment demonstration and
RFP plan ensuring expeditious attainment of the annual and 24-hour
PM2.5 standards.'' See also 40 CFR 51.1007 and 51.1009. Thus
States should be aware that data elements in addition to those required
under the CERR may be needed to support attainment demonstrations and
RFP inventories. Additional data elements needed for other SIP emission
inventory purposes should be handled on a case-by-case basis. Because
of the nature of SIP development, which varies depending on the nature
and needs of individual areas, it may not be possible to require a
level of detail in regulations that will enable a ``one-stop-shop''
information request as suggested by one of the commenters.
    As recommended by one commenter, guidance on reporting requirements
is contained in Emissions Inventory Guidance for Implementation of
Ozone and Particulate Matter National Ambient Air Quality Standards
(NAAQS) and Regional Haze Regulations (EPA-454/R-05-001, November
2005). For example, Section 3.2.1 for Pollutant and Pollutant
Precursors to be Inventoried presents guidance to states on
PM2.5 pollutants and their components that should be
reported for PM2.5 SIP development. See also section 5,
Emission Inventory Development, and other related sections of the
guidance.
    With respect to the comment on additional detail on control
requirements, see also EPA's Response to Comment Document.
3. Is the Current Approach for Reporting Specific Pollutants
Sufficient, or Should EPA Require More Specific Emission Component
Reporting Such as Groups of Compounds or Reporting of Elemental Carbon
and Organic Carbon?
    Comment: Currently the CERR requires the reporting of
SO2, VOC, NOX, CO, Pb, PM10,
PM2.5, and NH3. VOC and PM are speciated by the
emissions processing models based on speciation profiles for specific
source categories. Most commenters supported retaining the existing
reporting requirements under the CERR. Others encouraged expansion of
the requirements to include reporting of specific organic compounds and
organic fractions although some thought this should be a requirement
while others thought it should be optional. One commenter thought that
EPA should work with industry trade groups to develop and improve the
speciation profiles of the most important source categories rather than
asking the state and local agencies to characterize VOC and PM species.
Several commenters thought that EPA should encourage the reporting of
PM components (filterable, condensable and total) for development of
control strategies and attainment demonstrations. Another commenter
noted that including condensable emissions raises ``uncertainty''
issues and urged EPA to devote resources to developing better test
methods. One commenter believed that in addition to reporting
PM2.5 and its components, states should report all
precursors to PM2.5 (SO2, NOX, ammonia
and VOC).
    Response: The EPA agrees with the commenters who argued that the
need for additional speciation should be determined based on specific
SIP needs. 40 CFR part 51, subpart A which contains the CERR, does not
require reporting of specific compounds or compound groups nor does it
require reporting of organic and elemental carbon fractions. As
discussed in the response to comment above, EPA believes that the
requirements for data elements contained in 40 CFR part 51 subpart A,
in conjunction with the provisions of 40 CFR 51.1008, are generally
adequate to meet the needs for PM2.5 nonattainment emissions

inventory SIP development. Section 51.1008(a)(1) applies the data
element requirements contained in 40 CFR part 51 subpart A. Section
51.1008(a)(2) requires States to submit ``any additional emission
inventory information needed to support an attainment demonstration and
RFP plan ensuring expeditious attainment of the annual and 24-hour
PM2.5 standards.'' Thus data elements in addition to those
required under the CERR may be needed to support attainment
demonstrations and RFP inventories under 40 CFR 51.1008(a)(2).
Additional data elements needed for other SIP emission inventory
purposes should be handled on a case-by-case basis. Where States need
to develop speciated emissions for PM2.5 SIP emission
inventories, EPA provides guidance in the document titled Emissions
Inventory Guidance for Implementation of Ozone and Particulate Matter
National Ambient Air Quality Standards (NAAQS) and Regional Haze Ozone
Regulations, November 2005. Section 3.2.1, Pollutants and Pollutant
Precursors to be Inventoried identifies pollutants and their components
to be reported for PM2.5 SIPs. Section 3.3.5, Speciation
Procedures, discusses the preferred approach for speciating
PM2.5 emission inventories for use in ambient air quality
simulations. The approach discussed in the guidance is application of
emission models which use speciation profiles to estimate the mass of
specific compounds and compound groups for VOC and elemental and
organic carbon fractions for PM. The EPA encourages further research
and development of technical tools to better characterize emissions
inventories for specific VOC compounds and to determine the extent of
specific VOC compounds and organic PM mass. The EPA also encourages
States to continue efforts to refine their ammonia inventories. See
sections II.A.3 and II.A.4 of the Preamble.
    As discussed in the guidance document, EPA encourages reporting of
organic and elemental fractions of PM2.5 by state agencies
(see Section 3.2.1, Pollutants and Pollutant Precursors to be
Inventoried). While elemental or black carbon (EC/BC) and organic
carbon (OC) will be identified in default speciation profiles, more
locally-specific data should be collected where available as an input
to model preprocessing. Where such data are available, they should be
provided to EPA to help in improving EPA's speciation profiles. Certain
organic gases have been identified as precursors to secondary organic
aerosols (SOA). Toluene, xylene and ethyl benzene are known to be
important SOA precursors. Additional organic gases may be identified by
ongoing research. While these gases will be identified in default
speciation profiles, more locally-specific data should be collected,
where available, as an input to model preprocessing. State, local and
Tribal agencies can contact EPA's EIAG for more information.
    EPA agrees with the comment that it should take the lead in
updating VOC and PM profiles for most important source categories. The
Agency is close to completing a multi-year effort to update the
SPECIATE database. SPECIATE is EPA's repository of Total Organic
Compound (TOC) and PM speciated profiles for a wide variety of sources.
The profiles in this system are provided for air quality dispersion
modeling and as a library for source-receptor and source apportionment
type models. This recent initiative to update SPECIATE was needed
because speciated emissions profiles continue to be developed and the
data in the existing EPA database (SPECIATE 3.2) was becoming outdated.
    This work was coordinated with interested parties including
industry through an Agency sponsored workgroup. It has depended largely
on the collection and review of existing profile data to accomplish, as
the commenter suggests, delivering the best results for the least
amount of resources spent. Previously, these data were not widely
available to emission inventory developers and lacked the quality
assurance review and evaluation needed to develop profiles used by
emissions models to generate speciated emissions. As suggested by the
commenter, the workgroup was used to help prioritize source categories
for investigation to ensure that updates to existing profiles and
development of new profiles focused on areas of greatest need.
    SPECIATE v4.0 contains more than 2500 source profiles and is
currently undergoing peer review. The EPA expects the final work
product to be available for use by emission inventory preparers during
early calendar year 2007 and it will be distributed through EPA's CHIEF
Web site.
    The EPA agrees with a commenter who noted that in order to meet the
requirements under section 172(c) of the CAA for ``a comprehensive,
accurate, current inventory * * *,'' condensable emissions of
PM2.5 and PM2.5 precursors are important to
support development of local control strategies and attainment
demonstrations. The EPA believes that the final rule provides for the
submission of PM2.5 nonattainment area inventories meeting
the requirements of section 172(c)(3).
    Section 51.1008(a)(1) requires that States submit emission
inventories for PM2.5 that satisfy the data elements
reporting requirements under 40 CFR part 51 subpart A, which contains
the CERR. The CERR requires reporting of ``Primary PM2.5''
which is defined as the sum of the filterable and condensable portions
of PM2.5. Therefore, SIP base year inventories will include
the condensable fraction of PM which was of concern to several
commenters. The CERR also requires reporting of SOx, NOX,
ammonia and VOC which are potential precursors to PM2.5. EPA
notes that the AERR as proposed would require reporting of the same
precursors and would also require reporting of Primary
PM2.5. However, the proposed AERR requires the reporting of
the filterable and condensable fractions of PM2.5 (optional
under the CERR) in addition to the primary PM2.5 total mass.
The EPA will address this requirement in its final rulemaking on the
AERR.
    As noted above, in addition to the data element requirements under
section 51.1008(a)(1), under section 51.1008(a)(2) States must submit
``any additional emission inventory information needed to support'' an
attainment demonstration and RFP plan. Thus States should be aware that
data elements in addition to those required under the CERR may be
needed to support attainment demonstrations and RFP inventories under
40 CFR Part 51.1008(a)(2). Additional data elements needed for other
SIP emission inventory purposes should be handled on a case-by-case
basis.
    The EPA is aware of the issues raised by one commenter regarding
measurement uncertainty for condensable PM. This issue is addressed in
detail under Section II.L of the preamble (``Condensable particulate
matter test methods and related data issues,''). We believe that for
purposes of emissions inventories and attainment demonstrations, States
should continue to describe the impacts of baseline emissions and
develop future air quality strategies using information available on
primary PM2.5 emissions, including condensable
PM2.5. However, with respect to developing enforceable
emissions limits for condensable PM2.5 emissions, the final
rule reflects EPA's adoption of a transition period during which we
will allow time for development of emissions limits for condensable
PM2.5. See 40 CFR 51.1002(c).
    For additional comments and responses related to speciation issues,

see the Response to Comments Document.
4. Should EPA Require That States Develop Their Own Estimates for Area
and Mobile Source Emissions?
    Comment: The CERR allows states to adopt EPA developed emission
estimates from area and mobile sources in lieu of making those
estimates themselves if they accept these estimates for their emission
inventory. One commenter thought that EPA should require States to
develop their own estimates for area and mobile sources based on the
specified 2002 base year. Three commenters thought that the existing
process (under the CERR) was adequate. One of the commenters expressed
concerns about the reporting burden for States if they were required to
compile their own mobile and area source inventories. Another commenter
did not believe that States should be required to submit data on area
and mobile sources but noted that many States would continue to run the
MOBILE model for onroad mobile sources and calculate area source data
for SIP emission inventories. Two of the commenters thought that the
existing process provided flexibility needed by States to focus on
source categories of most concern and address problematic areas with
special inventory needs. One commenter recommended that EPA continue
developing models for area and mobile sources.
    Response: The EPA strongly encourages states to submit their own
estimates for area (nonpoint) and mobile sources unless they can
establish that it is impracticable to do so, given time and resources.
We will continue, in appropriate circumstances, to allow a State to use
EPA-developed emission estimates for mobile and nonpoint sources in
lieu of making those estimates itself if the State accepts the
estimates for its emission inventory. While this has been the case with
respect to reporting under the CERR for the 3-year cycle inventories,
for development of emission inventories to support PM2.5
SIPs, the ability to rely on EPA-developed emission estimates for
development of emission inventories to support PM2.5 SIPS is
more complex and problematic. For mobile sources, the practical use of
these EPA-developed mobile source inventories in a SIP may be very
limited. While EPA has developed inventories for 2002, states will
still have to develop attainment year inventories, including
projections of future activity and the effects of control measures. For
mobile sources, future year inventories are not developed by simply
growing a base year inventory, but instead are developed by running an
emissions model with appropriate inputs for the future year. In order
to develop an attainment demonstration that accurately accounts for the
change in emissions from the base year to the attainment year,
inventories for both of those years will need to be developed using
consistent methods and modeling assumptions. For mobile sources
especially, it may be very difficult for states to replicate the
methods used by EPA for the base year when creating the attainment year
inventory.
    In addition, states cannot use the EPA developed inventories for
the base year if newer models or planning assumptions are available at
the time they begin working on the SIP. For example, if new or better
information about the composition of the local fleet of highway
vehicles in the base year becomes available to the state after the EPA
developed inventories were created, that information should be used by
the state to create a new base year inventory.
    Given the need for emissions modeling for mobile sources in the
projection year, the need for consistency in tools and methods between
the base year and attainment year, and the need to use latest available
models and planning assumptions, EPA believes that most if not all
states will choose to develop their own base year inventories for
mobile sources.
    With respect to nonpoint (area) source emissions, States must make
every effort, consistent with available timing and resources to ensure
that their area source emission inventories are as accurate as
possible. While EPA prepares a national area source emission inventory
that covers all counties, it is designed for national analyses. EPA
does not have access to the more detailed information available to
States that is used to develop an area source inventory. Therefore,
states should develop as much of their area source inventory as
possible using local and State information, and in particular should
develop the inventory for the most significant area source categories
which are critical to ensuring overall accuracy. Where time and
resources preclude a State from developing the estimates for less-
critical area source categories, the State may rely on EPA-developed
area source emissions information for those categories.
    The EPA points out that although guidance has recommended that 2002
be used as the base year for emissions inventories for states initially
designated nonattainment in 2004-5, states remain free to use an
alternate base year, as appropriate. Section 51.1008(b) provides in
relevant part that ``The baseline emission inventory for calendar year
2002 or other suitable year shall be used for attainment planning and
RFP plans for areas initially designated nonattainment for the
PM2.5 NAAQS in 2004.''
    EPA agrees with the comment that it should continue to develop
models and other emission estimation tools. As an example, EPA's Office
of Transportation and Air Quality (OTAQ) is developing a modeling
system termed the Motor Vehicle Emission Simulator (MOVES). This new
system will estimate emissions for on-road and nonroad sources, cover a
broad range of pollutants, and allow multiple scale analysis, from
fine-scale analysis to national inventory estimation. When fully
implemented MOVES will serve as the replacement for MOBILE6.2 and
NONROAD. In addition, as the NEI is reengineered, OAQPS will examine
the need for updating emissions estimation guidance materials and
developing tools which will assist State agencies in estimating
emissions from area source categories. See also EPA's ``Emissions
Inventory Guidance for Implementation of Ozone and Particulate Matter
National Ambient Air Quality Standards (NAAQS) and Regional Haze
Regulations,'' November 2005.
5. Other Inventory Issues
    The EPA's responses to additional comments concerning emission
inventory issues can be found in EPA's Response to Comments Document.

L. Condensable Particulate Matter Test Methods and Related Data Issues

a. Background
    As noted in the preamble to the November 1, 2005 proposed rule,
certain commercial or industrial activities involving high temperature
processes (fuel combustion, metal processing, cooking operations, etc.)
emit gaseous pollutants into the ambient air which rapidly condense
into particle form. The constituents of these condensed particles
include, but are not limited to, organic material, sulfuric acid, and
metals. Because condensable emissions exist almost entirely in the 2.5
micrometer range and smaller, these emissions are inherently more
significant for PM2.5 than for prior particulate matter
standards addressing larger particles. Therefore, we believe that it is
important that the air quality management of particulate matter promote
a comprehensive approach to condensable particulate matter.

    We proposed to require a comprehensive inclusion of condensable PM
for all aspects of SIP development for PM2.5. Under the
proposal, EPA would require condensable PM to be considered in the
emissions inventories and analyses used in attainment demonstrations.
Also under the proposal, any stationary source emissions limits
developed to implement RACT or RACM would reflect control and
measurement of condensable PM.
    We received numerous comments on whether these requirements were
unreasonable in light of the current state of knowledge of and
uncertainties around the measurement of direct PM2.5. Most
commenters supported the overall view that condensable PM should be
addressed in order to provide a complete air quality management program
for PM2.5. On the other hand, many commenters raised
concerns about the availability and implementation of test methods and
related issues about the uncertainties in existing data for condensable
PM2.5. As a result of the concerns, these commenters
believed EPA would be premature in requiring a comprehensive evaluation
of condensable PM2.5, especially as it related to developing
any new emissions limits for stationary sources. In recognition of
these concerns, the final rule reflects EPA's adoption of a transition
period during which we will assess possible revisions to available test
methods and we will allow time for States to update emissions
inventories as needed to address direct PM2.5 emissions. In
this section of the preamble, we outline the elements of the final rule
addressing inventories reflecting control of direct PM2.5.
We also discuss the specific comments raised regarding methods for
measuring direct PM2.5, both filterable and condensable PM,
in implementing the rule. The particular comment areas include defining
test methods, quantifying direct PM2.5 for inventories, and
a transition period for developing effective regulations. Below are
also our responses to those comments.
b. Final Rule
    For the final rule, EPA addresses two broad issues related to
inclusion of condensable PM. The first issue is whether emissions
inventories and attainment demonstrations should include the
condensable portion of direct PM2.5 emissions. The second
issue is whether direct PM2.5 emissions limitations
established by States for purposes of RACT and RACM must include limits
on condensable PM emissions or limits on total direct PM2.5
that includes the condensable PM fraction.
    For purposes of developing emissions inventories and attainment
demonstrations, the final rule reflects a requirement to account for
significant contributors of direct PM2.5 emissions, both
filterable and condensable PM2.5. We recognize that some
States have established inventories consistent with requirements of the
consolidated emissions reporting rule (CERR) to report direct
PM2.5 emissions, including condensable PM, in each inventory
revision. While uncertainties remain with significant issues to address
related to our current knowledge base on condensable PM emissions, we
believe that for purposes of emissions inventories and attainment
demonstrations, States should continue to describe the impacts of
baseline emissions develop future air quality strategies using
information available on direct PM2.5 emissions including
condensable PM.
    With respect to developing enforceable emissions limits for
condensable PM emissions, we note that some States have established
emissions limits or otherwise require PM emissions testing that
includes measurement of condensable PM. We recognize that in some
States there remain questions about the viability of available test
methods, the availability of representative direct PM2.5
emissions data, the uncertainty of the methods used to establish
inventories, and the short time frame within which States must develop
SIPs. In response we have decided to provide a transition period for
developing emissions limits and regulations for condensable
PM2.5. During this transition period, we will provide
technical support to States as requested in establishing effective
PM2.5 emissions limits and corresponding emissions testing
requirements.
    As described further below, we will devote resources early during
this transition period to assessing and improving the available test
methods for condensable PM. During this transition period, we will also
solicit the involvement of stakeholders with an interest in conducting
emissions testing to collect updated direct PM2.5 emissions
data. The purpose of these stakeholder projects will be to collect new
direct filterable and condensable PM emissions data using methodologies
that provide data more representative of source direct PM2.5
emissions. The EPA, States, and others will use these data to improve
emissions factors and to help define or revise source emissions limits
in permits and State implementation plans.
    The time required for our stakeholders and EPA to complete the test
method assessment will limit the degree to which State and local
agencies can address effectively the necessary direct PM2.5
regulations in inventories and in the 2008 SIP submittals. In
recognition of this, we will not require that the emissions limits
included in the 2008 submittals account for the condensable fraction of
direct PM2.5 or to establish limits for total direct
PM2.5, including condensable PM.
    We will expect States to continue developing more complete
inventories with regard to direct PM2.5 emissions,
particularly for condensable PM, during this transition period. We
expect no such allowance period for method assessment or data
collection to be necessary for implementing regulations addressing
precursor PM2.5 emissions.
    The period of transition for establishing emissions limits for
condensable direct PM2.5 will end January 1, 2011. We expect
States to address the control of direct PM2.5 emissions,
including condensable PM, with any new actions taken after January 1,
2011. For example, States must address condensable PM emissions in any
direct PM2.5 emissions limits resulting from midcourse
reviews. Additionally, EPA expects that any direct PM2.5
regulations or limits developed under any new NAAQS for particulate
matter would also address condensable PM emissions.
    Notwithstanding the issues and uncertainties related to condensable
PM, EPA encourages States to identify measures for reducing condensable
PM emissions, particularly where those emissions are deemed significant
contributors to the control strategy needed for expeditious attainment.
We wish to clarify that in order to take credit in the SIP for
reduction of any such condensable PM emissions, there must be
enforceable limitations that ensure that reduction in condensable PM
emissions. These enforceable limits could take the form of a limitation
on the condensable PM emissions or total direct PM2.5
emissions (or a commitment to develop such limitations after the end of
the transition period described above). Alternatively, these
enforceable limitations could provide for enforceable conditions that
ensure that the effect on condensable PM emissions is assured (for
example, enforceable limitations on operating temperature, or limits on
FGD scrubber operations which have the effect of reducing condensable
PM emissions).

c. Comments and Responses
    We received many comments on quantification of direct
PM2.5 emissions particularly about the need to conduct
further validations for the available test methods, the availability of
direct filterable or condensable PM2.5 data or lack thereof
for representative baselines, and the procedures for applying baseline
data for developing effective regulations.
1. Method 202
    Comment: A majority of commenters characterized the performance of
Method 202 as lacking in reliability. Some commenters characterized the
formation of artifacts in Method 202 as significant and the primary
reason for their recommendation to defer the inclusion of condensable
particulate matter in the baseline assessments and regulatory
development for the initial SIPs. The commenters stated that the
principal artifact formed when using Method 202 was the result of
SO2 dissolving in the impinger water and converting to
sulfuric acid.
    Response: We agree that SO2 in particular, and perhaps
other gaseous compounds, can react with the collecting liquids used in
the method to form materials (artifacts) that would not otherwise be
solid or liquid or would not condense upon exiting the stack. We
believe that when Method 202 is applied appropriately (i.e., with the
N2 purge as prescribed), the SO2 artifact
formation is reduced by as much as or more than 90 percent; however, we
agree that further verification and refinement would be appropriate to
verify the potential for artifact formation.
    In response, we are undertaking laboratory studies in collaboration
with several stakeholders to characterize the artifact formation and
other uncertainties associated with conducting Method 202, and to
identify procedures to be used in applying methods to minimize
uncertainties. We are involving stakeholders representing industry and
State and local agencies in the project design and results review.
Stakeholders who have expressed interest in participating in these
studies include the Electric Power Research Institute, companies
associated with the National Environmental Development Association's
Clean Air Project (NEDA/CAP), the Portland Cement Association, the Lime
Manufacturing Association, the American Foundry Association, the
National Aluminum Association, and several governmental organizations
represented by National Association of Clean Air Agencies. Other
parties may participate in the study as well.
    By the end of 2007, we intend to have conducted a comprehensive
laboratory study that examines the relationship between several
critical condensable PM sampling and analysis parameters (e.g.,
SO2 concentration, moisture concentration, sample duration,
and water acidity) and the artifact formation associated with the
measurements. One intended result of the project will be identifying
possible modifications to Method 202 to minimize and quantify the
uncertainties. We will publish the results of the laboratory study
along with an assessment of other input and data from stakeholders on
the EPA website and, to the extent possible, in a widely circulated
peer review journal. Also, to the extent necessary, we intend to
propose revisions to the method to incorporate improvements and to
clarify application.
2. Conditional Test Methods 039 and 040
    Comment: Several commenters cited as a deficiency that neither
conditional test method 040 (CTM-040) for measuring filterable
PM2.5 nor the dilution sampling method (CTM-039) has been
thoroughly validated through EPA Method 301. There were also comments
that neither of the CTMs was published in the Federal Register.
    Response: We agree with the comments that neither method has been
subjected to adequate public notice and comment rulemaking. Taking that
step will facilitate application of the appropriate methods for
implementing the SIPs. On the other hand, there are a number of levels
of validation already achieved for one or more of these methods that
will determine what, if any, additional validation work will be
necessary. For example, while we could seek resources to evaluate
dilution sampling technology, including CTM-039, and to request public
involvement in the project planning, conduct, and review with the
possibility of a Federal Register proposal, our preference would be to
incorporate by reference an approved voluntary consensus test method
(e.g., ASTM standard).
    We believe that a dilution sampling method for measuring direct
PM2.5 eliminates essentially all artifact formation and
provides the most accurate emissions quantification. To the extent that
we need to and can secure resources and stakeholder interest, we plan
to perform additional validation testing of CTM-039 or other dilution