Comment: The EPA should carefully consider the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 97 resources that will be needed to perform the requisite modeling for multiple areas in many States.

Response: States/ Tribes are encouraged to share and leverage resources currently being used in regional model applications that affect multiple areas. There is much opportunity for common use of data and methodologies among the modeling requirements for the regional haze program, the PM2.5 attainment demonstrations and the ozone attainment demonstrations that should make the overall exercise less onerous. States and Tribes are encouraged to model multiple precursor strategies for multiple areas and review their efficacy for all three programs.

Comment: Any photochemical grid model utilized must either be in the public domain or licensed for unlimited use by any person for purposes of modeling within the area.

Response: The EPA modeling guidance supports this comment which is addressed in section 10 of the modeling guidance. " Applicable models" may be used, if they are nonproprietary A " non proprietary" model is one whose source code is available for free or for a reasonable cost.

Further, the user must be free to revise the code to perform diagnostic analyses and/ or to improve the model's ability to describe observations in a credible manner. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 98 Comment: One commenter recommended that EPA update its guidance in 40 CFR 51, appendix W to include a discussion of the role of weight of evidence as part of a modeling demonstration, and to make any updates in appendix W subject to public review.

Response: In regard to the role of weight of evidence,

EPA does not plan to revise appendix W. Use of weight of evidence is dependent on local information only available when the technical analysis for a specific model application is under development. Therefore, use of weight of evidence is considered on a case by case basis as the appropriate Regional Office works with the State as it develops its SIP and during the State adoption process and during EPA's SIP approval process. Any weight of evidence analysis is available for public review.

5. Mid course review ( MCR)

a. Background The proposal noted that a MCR provides an opportunity to assess whether a nonattainment area is or is not making sufficient progress toward attainment of the 8 hour ozone standard, as predicted in its attainment demonstration. We noted that a commitment to perform a MCR is a critical element of an attainment demonstration that employs a long PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 25Memorandum of March 28, 2002, from Lydia N. Wegman and J. David Mobley, re: " Mid Course Review Guidance for the 1 Hour Ozone Nonattainment Areas that Rely on Weight of Evidence for Attainment Demonstration." Located at URL: http:// www. epa. gov/ scram001/ guidance/ guide/ policymem33d. pdf .

99 term projection period and relies on weight of evidence.

Because of the uncertainty in long term projections, we said we believed such attainment demonstrations need to contain provisions for periodic review of monitoring, emissions, and modeling data to assess the extent to which refinements to emission control measures are needed.

A number of States participated in a consultative process with EPA, which resulted in the development of the 1 hour MCR guidance. 25 We noted that we would update the 1

hour MCR policy and technical guidance to include 8 hour metrics and that we were soliciting comment on appropriate revisions. We proposed that the final MCR guidance incorporating 8 hour metrics would be available at the time we issue our final implementation rule.

The proposal briefly described the procedure for performing a MCR. The proposal noted that States would not have to commit in advance to adopt new control measures as a result of the MCR process. Based on the MCR, if we determine sufficient progress has not been made, we would PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 100 determine whether additional emissions reductions are necessary from the State( s) in which the nonattainment area is located or upwind States or both. We would then require the appropriate State( s) to adopt and submit new measures to bring about the necessary emissions reductions within a specified period. We anticipated that these findings would be made as calls for SIP revisions under section 110( k)( 5)

and, therefore, the period for submission of the measures would be no longer than 18 months after the EPA finding.

Thus, we proposed that States complete the MCR 3 or more years before the applicable attainment date to ensure that any additional controls that may be needed can be adopted in sufficient time to reduce emissions by the start of the ozone season in the attainment year.

b. Summary of final rule The final regulatory text does not contain a requirement for the MCR. In reviewing attainment demonstrations from individual States, however EPA will assess the need for a MCR for areas with an attainment date beyond 6 years after the effective date of the area's designation in the context of whether the attainment demonstration and any weight of evidence analysis is supportable without a commitment by the State to perform a PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 26U. S. EPA,( 2005), Guidance on the Use of Models and Other Related Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 05 002, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: ozone final. pdf).

27Memorandum of March 28, 2002, from Lydia N. Wegman and J. David Mobley, re: " Mid Course Review Guidance for the 1 Hour Ozone Nonattainment Areas that Rely on Weight of Evidence for Attainment Demonstration." Located at URL: http:// www. epa. gov/ scram001/ guidance/ guide/ policymem33d. pdf 101 MCR.

The 8 hour ozone modeling guidance26 is expected to identify measurements and activities to support subsequent reviews of an attainment demonstration SIP ( i. e., MCR), such as improvements in air quality monitoring, meteorology and emission measurements. Even though the proposal noted that we expected to revise the existing 1 hour MCR guidance, EPA now believes the 1 hour MCR guidance coupled with the 8 hour modeling guidance provides sufficient guidance. States should consult with EPA prior to using a methodology other than the one developed through the public consultative process.

Guidance for performing a MCR for the 1 hour ozone NAAQS identifies several methods for reviewing whether the existing SIP is sufficient for the area to attain by its attainment date. 27 These guidance documents should provide PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 102 adequate information for developing protocols for performing MCRs for the 8 hour ozone NAAQS. States/ Tribes should prepare protocols which identify analyses and data bases to be used to support a MCR and discuss these with the appropriate EPA Regional Office prior to performing a MCR.

If we determine that additional guidance is needed, we will issue updated guidance in a timeframe suitable to support the timely completion of MCRs.

c. Comments and responses Comment: Requiring the MCR 3 or more years prior to the attainment date is not reasonable or feasible for some areas. The EPA needs to recognize that for moderate and lower classifications the MCR would be due at the time of the SIP submittal. Mid course review should be required only for areas with nonattainment classifications of serious or greater, as at least 3 years of monitored data are required for a MCR, after the implementation of controls.

One commenter recommended that EPA make the MCR process part of the requirements for RFP and ROP.

Response: The final regulatory text does not require a MCR; as noted above, EPA will assess on a case by case basis whether a MCR would be needed in the context of a particular attainment demonstration. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 28U. S. EPA,( 2005), Guidance on the Use of Models and Other Related Analyses in Attainment Demonstrations for the 8 Hour Ozone NAAQS, EPA 454/ R 05 002, http:// www. epa. gov/ ttn/ scram, ( Modeling Guidance, File name: ozone final. pdf).

103 Comment: The EPA should develop proper analysis techniques so that meteorological conditions do not affect a nonattainment area's perceived progress towards attainment.

A MCR should also include an evaluation of ozone transport into the nonattainment area and control implementation in upwind areas.

Response: Assessments of transport are covered in the MCR guidance. The EPA is improving methods for determining the ozone trends and how they are affected by meteorology.

The latest information will be made available.

Comment: The EPA needs to release the revised MCR guidance before the final rule is issued in order for it to be reviewed and commented on during the public comment period.

Response: The final rule does not incorporate any MCR guidance by reference. The 8 hour ozone modeling guidance28 is expected to identify measurements and activities to support subsequent reviews of an attainment demonstration SIP ( i. e., MCR), such as improvements in air quality PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 29Memorandum of March 28, 2002, from Lydia N. Wegman and J. David Mobley, re: " Mid Course Review Guidance for the 1 Hour Ozone Nonattainment Areas that Rely on Weight of Evidence for Attainment Demonstration." Located at URL: http:// www. epa. gov/ scram001/ guidance/ guide/ policymem33d. pdf.

30Use of models that are capable of simulating transport and formation of multiple pollutants simultaneously. For example, for ozone and fine particles, it is critical that the model simulate photochemistry, which includes interactions among the pollutants and their precursors.

104 monitoring, meteorology and emission measurements. Guidance for performing a MCR for the 1 hour ozone NAAQS identifies several methods for reviewing whether a SIP is on track to attain within prescribed time limits. 29 These guidance documents should provide adequate information for developing protocols for performing MCRs for the 8 hour ozone NAAQS.

States/ Tribes should prepare protocols which identify analyses and data bases to be used to support a MCR and discuss these with the appropriate EPA Regional Office prior to performing a MCR. If we determine that additional guidance is needed, we will issue updated guidance in a timeframe suitable to support completion of MCR's within established deadlines.

6. Multi pollutant assessments ( one atmosphere modeling) 30 a. Background The proposal noted that many factors affecting PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 105 formation and transport of secondary fine particles ( i. e.,

PM2.5 components) are the same as those affecting formation and transport of ozone. The proposal, therefore, noted that models and data analysis intended to address visibility impairment need to be capable of simulating transport and formation of both secondary fine particles and ozone. At a minimum, modeling should include previously implemented or planned measures to reduce ozone, secondary fine particles,

and visibility impairment. An integrated assessment of the impact controls have on ozone, secondary fine particles, and regional haze provides safeguards to ensure ozone controls will not preclude optimal controls for secondary fine particles and visibility impairment.

The concept of modeling control impacts on all three programs is further strengthened by the alignment of the implementation process for ozone and secondary fine particles. As the dates for attainment demonstration and planning SIPs for the three programs are anticipated to be fairly close, the practicality of using common data bases and analysis tools for all three programs is viable and encourages use of shared resources.

The proposal noted that States that undertake multipollutant assessments as part of their attainment PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 106 demonstration would assess the impact of their ozone attainment strategies on secondary fine particles and visibility or perform a consistent analysis for ozone,

secondary fine particles, and visibility. To facilitate such an effort, we encouraged States to work closely with established regional haze Regional Planning Organizations ( RPOs) and the jurisdictions responsible for developing PM2.5 implementation plans. We encouraged States to perform similar multi pollutant assessments as part of their ozone attainment demonstrations, considering the control programs that are in place at the time of the assessment.

Multipollutant assessments are discussed elsewhere in this proposed rulemaking.

b. Summary of final rule There is no regulatory text on the issue of multipollutant assessments, but we recommend the following:

Attainment demonstration modeling should include previously implemented or planned measures to reduce ozone, secondary fine particles, and visibility impairment.

An integrated assessment of the impact controls have on ozone, secondary fine particles, and regional haze is encouraged to promote efficiencies in strategies for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 107 achieving all three goals.

States are also encouraged to use common data bases and analysis tools for all three programs and work closely with established regional haze RPOs and the jurisdictions responsible for developing PM2.5 implementation plans.

States are encouraged to follow EPA's lead and perform similar multi pollutant assessments as part of their ozone attainment demonstrations, considering the control programs that are in place at the time of the assessment.

c. Comments and responses Comments: The EPA received several comments on the recommendation that States perform multi pollutant assessments as part of their ozone attainment demonstrations. Almost all of the comments agreed with the basic rationale behind encouraging an analysis of the expected ozone, PM2.5, and visibility impacts of a given set of air quality control measures associated with an 8 hour ozone attainment demonstration. The comments differed on whether multi pollutant assessments should be required or only encouraged. The commenters who urged EPA to encourage rather than require a multi pollutant assessment provided PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 108 reasons for why they believe a multi pollutant assessment is not possible at this time. One commenter indicated that the proposal was unclear as to whether the multi pollutant assessments were required.

One commenter recommended that EPA require, in certain unspecified cases, nonattainment areas to perform an integrated control strategy assessment to ensure that ozone controls will not preclude optimal controls for secondary fine particles and visibility impairment. Conversely,

several other commenters expressed the opinion that the multi pollutant assessment should not be a requirement of an ozone attainment demonstration. Several reasons were offered for why the assessment should remain optional: 1)

that the state of the science for assessing PM2.5 and visibility is not yet sufficient for providing meaningful input to the regulatory process, 2) that the additional resources necessary to model the atmosphere as a single system would result in an undue burden on the States, and 3)

that requiring a PM2.5 and visibility assessment would result in delayed attainment due to the additional time necessary to complete such an analysis.

Response: The EPA continues to believe that encouraging, but not requiring, multi pollutant assessments PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 109 is the most sound approach for total air quality management given the schedule by which ozone attainment demonstrations are legally required. Much progress has been made on improving the available PM2.5 models and inputs to these models over the past 3 years. As a result, EPA believes that the available tools are able to support air quality planning. Further improvements are likely over the next several years; much of which will be driven by the RPO's.

By working closely with the appropriate RPO's, States can reduce the burden associated with one atmosphere modeling analyses. However, EPA recognizes that many States have already invested resources in an ozone only modeling platform analysis which is typically conducted over a finite number of episode days and for geographic regions that are typically less than ( in time) and smaller than ( in space)

what might be required in a multi pollutant assessment. By encouraging States to consider such assessments, EPA hopes to speed the process of the transition to more integrated air quality planning tools while yielding sound multipollutant control strategies. It is prudent for areas to perform these multi pollutant assessments earlier as it will lessen the planning burden in the long term since later planning activities for PM2.5 and regional haze will need to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 31The EPA guidance on baseline years is found in the memorandum of November 18, 2002, from Lydia Wegman and Peter Tsirigotis, " 2002 Base Year Emission Inventory SIP Planning: 8 hr Ozone, PM2.5 and Regional Haze Programs." This document is available at the following web site: http:// www. epa. gov/ ttn/ oarpg/ meta. 442.1.2002baseinv. pdf. That document noted, " The EPA is aware that some areas have already begun on a voluntary basis to model for purposes of 110 consider the effects of emission control measures adopted for the ozone attainment plan.

7. What baseline emission inventory should be used for the attainment demonstration?

[ Not addressed in the June 2, 2003 proposal; § 51.909 of the draft regulatory text.]

The June 2, 2003 proposal did not discuss baselines for purposes of the attainment demonstration. ( It did, however,

discuss baselines for RFP demonstrations.) Section 51.909 of the draft regulatory text provided that 2002 should be used as the baseline emission inventory year for purposes of both RFP and the attainment demonstration for areas with an effective date of designation of June 15, 2004. We recognize, however, that some areas have already begun to perform modeling for their attainment demonstrations using baseline year inventories earlier than the 2002 inventory,

and because the 2002 inventory may not be in a format to readily be used for photochemical grid modeling. 31 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 the 8 hour ozone standard. These areas may continue to use modeling from previous base years for each set of meteorological episode conditions for use in their SIP submittals if these studies are still applicable for an attainment demonstration."

111 Therefore, the final rule does not specify a baseline for purposes of the attainment demonstration and modeling. As discussed more fully in the section of the preamble regarding RFP, the specification of 2002 as a baseline year for RFP purposes ( for areas with an effective date of designation of June 15, 2004) appears in the RFP provisions of 40 CFR § 51.910. Section 51.909 remains reserved.

8. Voluntary Reclassifications (" Bump ups").

Although we believe most 8 hour nonattainment areas will attain the standard by their statutory attainment date,

we recognize that some areas classified under subpart 2 may need additional time beyond the statutory attainment date for their area to attain as expeditiously as practicable.

As discussed in the Phase 1 Rule ( 69 FR at 23959, col. 3),

in the event an area cannot practicably attain by the maximum date for its classification, the Clean Air Act provides the opportunity for more time. An area regulated under subpart 2 can receive a later maximum attainment date through a State request to bump up to a higher PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 32Although some 8 hour ozone nonattainment areas have additional areas beyond the boundary of the former 1 hour nonattainment area and thus would be faced with new requirements for the higher classification.

112 classification ( e. g. from moderate to serious). The Act requires EPA to grant a State request to reclassify an area to a higher classification; the State plan still must provide for attainment as expeditiously as practicable.

Although bump up means that certain additional specified requirements apply, an area may already be meeting most or all of these specified requirements due to controls previously adopted to implement the 1 hour ozone standard.

This is because some areas had 1 hour classifications that were higher ( and more restrictive) than the areas' 8 hour classification, 32 and because the Phase 1 final implementation rule for the 8 hour O3 NAAQS contains antibacksliding provisions generally requiring areas to continue implementing measures required for the 1 hour classification. Although there may not be additional mandatory control measures required because the areas may already have such measures in place, an area that needs more time to attain may need additional emission reductions to reach attainment.

E. What requirements for RFP should apply under the 8 hour PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 33Note that § 51.900 provides the following definitions: ( p) Reasonable further progress ( RFP) means for the purposes of the 8 hour NAAQS, the progress reductions required under section 172( c)( 2) and section 182( b)( 1) and ( c)( 2)( B) and ( c)( 2)( C) of the CAA. ( q) Rate of progress ( ROP) means for purposes of the 1 hour NAAQS, the progress reductions required under section 172( c)( 2) and section 182( b)( 1) and ( c)( 2)( B) and ( c)( 2)( C) of the CAA.

113 ozone standard?

[ Section VI. I. of June 2, 2003 proposed rule ( 68 FR 32832); § 51.909 and § 51.910 in draft; § 51.910( d) in final regulatory text.]

1. General discussion a. Background As noted in the June 2, 2003 proposal, section 172( c)( 2), which is located in subpart 1, requires State plans for nonattainment areas to require RFP. Section 171( 1) of the CAA defines RFP to mean " such annual incremental reductions in emissions of the relevant air pollutant as are required by this part [ part D of title I]

or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable [ NAAQS] by the applicable date."

Subpart 2 provides more specific RFP requirements for ozone areas classified under section 181.33 In particular, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 114 subpart 2 specifies the base year emissions inventory upon which RFP is to be planned for and implemented, the increments of emissions reductions required over specified time periods, and the process for determining whether the RFP milestones were achieved.

Subpart 2 does not specify RFP requirements for marginal areas. Section 182( b)( 1)( A) mandates a 15 percent VOC emission reduction, accounting for growth, between 1990 and 1996 for moderate and above ozone nonattainment areas.

Furthermore, section 182( c)( 2)( B) of the CAA requires each serious and above ozone nonattainment area to submit a SIP revision providing for an actual VOC emission reduction of at least 3 percent per year averaged over each consecutive 3 year period beginning in 1996 until the area's attainment date ( referred to as the post 1996 ROP plan for the 1 hour standard). Section 182( c)( 2)( C) of the CAA allows for substitution of NOx for VOC emissions reductions for reductions required under section 182( c)( 2)( B). The EPA's policy, NOx Substitution Guidance ( December 15, 1993;

available at http:// www. epa. gov/ ttn/ oarpg/ t1pgm. html),

addresses the substitution of NOx emissions reductions for VOC emissions reductions. The baseline emissions inventory for determining the required ROP reductions for the 1 hour PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 115 standard is specified in section 182 as 1990.

The requirements for RFP under subparts 1 and 2, as described above, are the minimum required for an area. More reductions may be necessary for attainment within the nonattainment area. Moreover, an upwind area that contributes to nonattainment in a downwind area in the same State may need reductions in order for the downwind area to reach attainment by its required attainment date. As we noted above in section IV. D. 8., we recognize that some areas classified under subpart 2 may need additional time beyond the statutory attainment date for their current classification to attain the 8 hour standard as expeditiously as practicable. In the event an area cannot practicably attain by the maximum date for its classification, the CAA provides the opportunity for more time. An area regulated under subpart 2 can receive a later maximum attainment date through a State request to bump up to a higher classification ( e. g. from moderate to serious).

Although a higher classification would mandate additional control measures, in fact there may not be additional mandatory control measures required because the area may already have such measures because of its classificaton for the 1 hour standard and the anti backsliding provisions. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 116 However, an area that needs more time to attain may also need additional emissions reductions to reach attainment.

These reductions may be achieved through implementation of measures that are necessary to demonstrate RFP requirements or additional reductions beyond RFP may be needed.

Preliminary analyses indicate that already required control measures ( e. g., motor vehicle and nonroad engine rules,

CAIR, etc.) may largely or fully fulfill RFP requirements for many areas and that they will provide substantial progress toward attainment for most areas.

Many areas may have significant creditable reductions as a result of Federal motor vehicle and nonroad rules, the NOx SIP Call, and the CAIR. With the statutory exceptions enumerated above, assured emissions reductions that will occur in an area after the base year can be credited toward meeting an RFP emission reduction milestone.

To reduce interstate ozone transport, the CAIR ( described above in section IV. B.) established statewide ozone season NOx budgets for 25 States and the District of Columbia ( i. e., the eastern part of the U. S. where all 8

hour nonattainment areas are classified as moderate or below). As noted above, the first phase of NOx reductions under CAIR starts in 2009 ( covering 2009 2014); the second PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 117 phase of NOx reductions begins in 2015 ( covering 2015 and thereafter).

With respect to timing of reductions, the following table shows how summertime NOx reductions from local CAIR sources that will be achieved by May 1, 2009, or earlier can assist in demonstrating RFP.

Type of 8 hour nonattainment area RFP Requirement* Relationship of CAIR and RFP  Subpart 1 areas with attainment dates within 5 years of designation;  Subpart 2 moderate areas for which expeditious attainment is no later than 5 years after designation. Meet RFP through showing of expeditious attainment CAIR reductions not required prior to ozone season preceding latest attainment date.

Subpart 1 areas with attainment dates 6 10 years from designation Must demonstrate RFP through their attainment date CAIR reductions in 2009 can help fulfill RFP requirement Subpart 2 marginal areas No subpart 2 RFP requirement for marginal areas Not applicable.

Subpart 2 moderate areas with an attainment date later than 5 years after designation. Subject to RFP similar to subpart 1 areas; must demonstrate RFP through their attainment date CAIR NOx reductions in 2009 can help fulfill RFP requirement PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 Type of 8 hour nonattainment area RFP Requirement* Relationship of CAIR and RFP 118 Subpart 2 moderate and above areas that did not implement 15% VOC reductions for 1 hour ozone standard 15% VOC reduction required between 2002 and 2008; continued progress required through attainment date CAIR 2009 NOx reductions can help demonstrate continued progress after 2008 to attainment date * RFP requirement descriptions in table are abbreviated; RFP requirements are more precisely described elsewhere in preamble and rule text.

The CAIR provisions do not require States to require emissions reductions prior to January 1, 2009. However,

States may choose to require or some sources may elect to apply CAIR level NOx controls earlier than that date. If such controls are made enforceable in the SIP ( e. g., through a specific rule), the State may take RFP credit for such emissions reductions for the RFP period ( i. e., an RFP period ending earlier than December 31, 2008) during which the reductions occur.

The RFP provisions in the CAA for both subpart 1 and subpart 2 areas require that actual emissions be reduced from the baseline by the milestone year. Only emissions reductions required to be achieved during an RFP period may be credited toward the State's RFP obligation for that period. In developing their RFP plans, States will have to provide their best estimate of the CAIR affected sources PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 119 that are expected to actually reduce emissions to meet the CAIR requirements and those that are expected to meet CAIR through holding allowances and not actually reducing emissions.

Local CAIR NOx reductions that States must require by May 1, 2015, could assist in meeting RFP for an area that is bumped up to severe and demonstrates attainment cannot be achieved before the end of the 2015 ozone season.

b. Summary of final RFP features We are adopting nearly all the approaches set forth in our proposed rule for the various 8 hour RFP issues. We are making exceptions where convincing arguments were presented by commenters for a suitable alternative or where, through reassessment of the issue, EPA was able to develop a better option that still reflects the concepts in the original proposal. The issues for which we have adopted approaches that vary from the proposal are: a) the timing of the submission of the RFP plan; b) the structuring of RFP requirements in subpart 1 areas; c) the implementation of RFP in areas designated for the 8 hour ozone standard that entirely or in part encompass an area that was designated nonattainment for the 1 hour ozone standard; and d) the substitution of controls from outside the nonattainment area PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 34Memorandum of December 29, 1997 from Richard D. Wilson to Regional Administrators, Regions I X re " Guidance for Implementing the 1 Hour Ozone and Pre Existing PM10 NAAQS." Located at URL: http:// www. epa. gov/ ttn/ oarpg/ t1/ memoranda/ iig. pdf. This policy recognized that VOC emissions up to 100 km and NOx emissions up to 200 km from the nonattainment area could be relied on for RFP. Those distances resulted from Federal Advisory Committee Act discussions cited earlier and generally represent transport of 1 to 2 days. We still believe it is appropriate to allow this credit. However, as noted below, because we received concerns about this policy 120 within 100 kilometers ( km) for VOC and 200 km for NOx. These changes are discussed in the sections below.

In developing an approach for addressing the RFP requirements for the 8 hour ozone standard, we are adopting the following:

° The same baseline year would be used both to address growth ( in emissions, vehicle miles traveled ( VMT) or otherwise) and to calculate the RFP target level. The baseline year of 2002 applies for areas with an 8 hour ozone nonattainment designation effective in June 2004.

° Emissions reductions from outside the nonattainment area up to 100 km for VOC and 200 km for NOx ( and statewide for areas that are part of a regional strategy) would be allowed consistent with ( a) the concepts in EPA's existing December 1997 interim implementation policy for 1 hour ozone NAAQS34, and ( b) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 outside the rulemaking process, we are in the process of subjecting this policy to a technical review and may revise it in light of that review.

121 with the constraint that in all cases the distances in the policy provide only a general policy presumption that, if used, would need data in the record showing that reductions from sources in the specific locations outside the nonattainment area benefit the nonattainment area. This is discussed further below in section IV. E. 12. of this preamble.

° For all 8 hour nonattainment areas classified under subpart 2 as moderate and above that had not met the 15 percent VOC emission reduction requirement for the 1

hour standard, the RFP requirements specified in subpart 2 would apply, namely a 15 percent VOC emission reduction, accounting for growth, in the first 6 years after the baseline year for moderate and above ozone nonattainment areas. In addition, for all 8 hour nonattainment areas classified as serious and above,

the RFP provisions in subpart 2 require a VOC or NOx emission reduction of at least three percent per year averaged over each consecutive 3 year period beginning 6 years after the baseline year. [ See section PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 122 182( c)( 2)( B)].

° Areas classified under subpart 2 as moderate that had met the 15 percent VOC emission reduction requirement for the 1 hour standard are treated in the final rule like areas covered under subpart 1.

° Areas classified under subpart 2 as serious and above that had met the 15 percent VOC emission reduction requirement for the 1 hour standard would be subject to the RFP requirement in section 172( e) and the final rule would require them to obtain an average of 3 percent annual reductions of VOC and/ or NOx emissions reductions for the first 6 years after the baseline year and every subsequent 3 years out to their attainment date.

° The periods for RFP under subpart 2 for the 8 hour ozone NAAQS run from the date of the baseline year, and would be equivalent to the periods Congress established in subpart 2, which applied for the 1 hour NAAQS.

Thus, the first 15 percent reduction would be required for the 6 year period starting after the end of the last day of the baseline year ( e. g., January 1, 2003

December 31, 2008). The first 3 year period for the subsequent ( average of) three percent per year emission PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 35With today's rulemaking, this provision is now codified as 40 CFR § 51.908( d).

123 reduction requirement in serious and higher areas would begin 6 years after the end of the last day of the baseline year ( e. g., January 1, 2009  December 31,

2011). However, the last period for any area would end on the attainment date for the area.

° Subpart 1 areas with attainment dates 5 years or less after designation can meet the RFP requirement by achieving the emission reductions necessary to attain as expeditiously as practicable. These emissions reductions must be implemented by the beginning of the full ozone season prior to the attainment date ( See 40 CFR § 51.908). 35 For subpart 1 areas with attainment dates beyond 5 years after designation, the RFP SIP must provide for a 15 percent emission reduction ( either NOx and/ or VOC) from the baseline year within 6 years after the baseline year. For each subsequent 3 year period out to the attainment date, the RFP SIP would have to provide for an additional increment of progress. The increment for each 3 year period would be a portion of the remaining emission reductions needed for attainment beyond those reductions achieved PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 36For example, if the area's attainment date is 2014, and a total of 30 percent reduction is needed between the end of 2008 and the attainment date ( a 6 year period) to reach attainment, the " annual increment" would be 5 percent ( i. e., 1/ 6 of 30 percent). Thus, the area must achieve roughly the portion of reductions equivalent to three annual increments or 15 percent during the first 3 years ( 2009, 2010, 2011), and the remaining amount over the next 3 years ( 2012, 2013, 2014). Additional discussion of what is meant by " roughly proportional" appears in the full discussion of RFP for subpart 1 areas in section IV. E. 7. of this preamble.

124 for the first increment of progress ( e. g., beyond 2008 for areas designated nonattainment in June 2004).

Specifically, the amount of reductions needed for attainment should be divided by the number of years needed for attainment after the first increment of progress in order to establish an " annual increment."

For each 3 year period out to the attainment date, the area must achieve roughly the portion of reductions equivalent to three annual increments. 36 ° Subpart 2 moderate or higher areas that had not met the 15 percent VOC reduction requirement under the 1 hour standard would be subject to section 182( b)( 1) for the 8 hour standard and would need to obtain the emissions reductions within 6 years after the baseline year ( e. g., for areas designated in June 2004, the reductions would need to occur by the end of 2008, PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 125 based on a baseline year 2002).

° Reductions from any Federal and regional measures promulgated after 1990 ( except those measures that were not creditable under the CAAs creditability provisions ( section 182( b)( 1)( D)) and achieved after the baseline year are creditable for the RFP requirement.

° Allow use of the " Clean Data Policy."

c. Comments and responses This set of comments and responses on our proposal on RFP are of a general nature. Comments and responses on specific topics appear with the sections below on those topics.

Comment: One commenter stated that EPA's proposed 8

hour ozone rule would sharply slow momentum to implement health protective emission reduction strategies in areas with unhealthful air quality. It would curtail the effectiveness of transportation conformity in areas with inadequate air quality, including both old and new ozone nonattainment areas. It would do this by proposing to eliminate any further RFP requirements for pollution reduction in existing 1 hour ozone areas.

Response: The EPA has developed anti backsliding provisions to ensure continuing progress toward attainment PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 126 of the ozone NAAQS. Under these provisions, areas that are nonattainment for the 8 hour standard must continue to meet most obligations for the 1 hour standard, including RFP requirements. Those provisions ( adopted as part of the Phase 1 Rule published April 30, 2004) will ensure areas maintain progress in achieving emissions reductions in areas with unhealthful air quality. Additionally, 8 hour ozone nonattainment areas with attainment dates later than 5 years after designation must meet specified increments of reductions as provided in more detail below.

Comment: Another commenter recommends that EPA not strictly interpret the CAA requirement of a 15 percent reduction in VOC in the first 6 years. If reductions in VOC would not assist the area in progress toward attainment and if an area can provide an analysis that it is at least as sensitive to NOx controls, then the area should be able to reduce NOx emissions for RFP requirements.

Response: We addressed in general those comments that recommended alternatives to the mandatory measures of subpart 2 ( which includes the RFP requirement) in the response to comments above under the topic, " Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 127 flexibility in application in certain narrowly defined circumstances?" We conclude in that section that EPA has no discretion to broadly waive mandatory requirements.

However, we noted that case law may provide support for case by case waivers where implementation of a measure would produce an absurd result.

Comment: One commenter stated that EPA should consider highly reactive VOC reductions that achieve ozone reductions equivalent to an average of 3 percent per year reduction of VOC and/ or NOx as meeting RFP requirements.

Response: The CAA's RFP provisions do not appear to provide for variations in the required percent reduction in VOC based on differences of reactivity of the various VOC compounds. However, EPA is participating with a group called the Reactivity Research Working Group, along with representatives from States, industry and universities, to study the scientific aspects of reactivity and to try to determine if more cost effective and greater ozone reductions can be achieved through use of the concept. The requirement to obtain the required percent reduction of total VOCs remains, and if EPA decides to propose a change,

it would be undertaken in a separate rulemaking action.

2. What is the content and timing of the plan for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 128 addressing the RFP requirements under section 182( b)( 1) and 182( c)( 2)( B) for areas covered under subpart 2?

[ Section VI. I. 3 of June 2, 2003 proposed rule ( 68 FR 32833); § 51.910( a)( 1)( ii) of the draft and final regulatory text.]

a. Background Section 182( b)( 1) requires areas classified as moderate and above to submit a plan to achieve a 15 percent reduction in VOC emissions over a 6 year period following the baseline year. Section 182( c)( 2)( B) requires serious and above areas to achieve an average of nine percent additional emissions reductions for each subsequent 3 year period. We proposed two options regarding how this requirement might apply for purposes of implementing the 8 hour NAAQS.

( i) Option 1. Require 15 percent VOC reductions within 6 years after the baseline year for all areas designated moderate and above for the 8 hour ozone NAAQS. After 6 years, all serious and above areas would be required to achieve a nine percent reduction in VOC and/ or NOx emissions every 3 years, i. e., an average of three percent per year,

until attainment.

( ii) Option 2. For those areas that have an approved 15 percent plan for their 1 hour ozone SIPs, an additional 15 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 129 percent VOC reduction is not necessary. Subpart 2 areas that have approved 15 percent plans for the 1 hour ozone standard would be considered to have met the statutory 15 percent requirement. Instead, such an area that is classified as moderate for the 8 hour standard would be subject to the general RFP requirements of subpart 1 in the same manner as subpart 1 areas. Such an area that is classified as serious and above for the 8 hour standard would be subject to the RFP requirement in section 182( c)( 2)( B) and would have to include in their SIPs an RFP plan that would achieve an average of three percent per year of VOC and/ or NOx over each 3 year period starting at the end of the baseline year out to their attainment year.

We recognized in the proposal that for serious and above areas it would be difficult to adopt and implement emission controls that would provide for the first nine percent emission reduction within 3 years after nonattainment designation. Therefore, consistent with what Congress did under section 182( b)( 1), we proposed to allow the first RFP increment to be averaged over 6 years. We proposed that an area classified serious or above submit its RFP plan within 2 years after designation such that it provides for 18 percent emissions reductions ( VOC and/ or NOx) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 130 over the first 6 years from the baseline year ( e. g., January 1, 2003 to December 31, 2008 using the proposed 2002 baseline year). Then, within 3 years after designation,

submit a plan that provides 9 percent emissions reductions ( VOC and/ or NOx) over each of the next 3 year periods until the area's attainment date ( e. g., from January 1, 2009 to the attainment date).

The proposal noted that this option recognizes previous efforts by areas that submitted 15 percent plans as required under the 1 hour ozone NAAQS and provides flexibility to States to use a mix of NOx and VOC reductions as appropriate to meet the additional ROP/ RFP requirements. For many areas of the country, particularly in the Eastern U. S. outside major metropolitan areas, there is a greater need for NOx reductions rather than VOC reductions to bring about reduced ambient ozone levels. Areas do not have the flexibility to control NOx under the 15 percent requirement   NOx substitution is only allowed under section 182 for the post

1996 RFP requirement ( three percent per year averaged over 3 years). We believe that the statute can be interpreted to require the mandatory 15 percent VOC reduction only once for a given area.

Once the 15 percent VOC reduction requirements have PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 131 been met, an area would instead be subject to the other RFP requirements of the CAA. In some cases, such as for serious and above areas, this might result in an obligation to achieve greater emissions reductions, i. e., 18 percent rather than 15 percent for the 6 year period, but the area would have the flexibility to choose either VOC or NOx reductions as appropriate. We indicated in the proposal that we preferred this second option because it provides more flexibility for the RFP plan to be consistent with the area's needs in attaining the standard. The draft regulatory text incorporated this option.

The proposal did not specifically address an 8 hour area that is partially comprised of one or more 1 hour ozone nonattainment areas with approved 15 percent plans and one or more areas that were not previously subject to the 15 percent requirement.

b. Summary of final rule We are adopting the second option described in the Background above, as adjusted in response to comment.

1. Final rule for 8 hour areas comprised in total of one or more 1 hour nonattainment areas with approved 15 percent plans for the 1 hour standard.

Those 8 hour areas that are composed entirely of one or PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 132 more 1 hour areas that have approved 15 percent plans for their 1 hour ozone SIPs, will be considered to have met the 15 percent VOC requirement in section 182( b)( 1). Such areas that are classified as moderate would instead be subject to the more general RFP requirements of subpart 1. As discussed below, the subpart 1 requirement would depend on the moderate area's attainment date as follows:

° Moderate areas that have an attainment date of 5 years or less after their 8 hour designation, for which all portions of the area have previously met their 15 percent requirements under the 1 hour standard, will be subject to subpart 1 RFP requirements, which will be satisfied with measures that demonstrate attainment as expeditiously as practicable.

° Moderate areas that have an attainment date beyond 5 years after their 8 hour designation, for which all portions of the area have previously met their 15 percent requirements under the 1 hour standard, will be subject to subpart 1 RFP requirements, which will be satisfied with a plan to demonstrate 15 percent emissions reductions ( which may be either VOC or NOx or a combination of both) from 2002 to 2008, and any additional emission reductions needed for attainment PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 37As discussed below in section 5 ( the discussion of the timing of submission of the RFP plan) the RFP plan would have to be submitted within 3 years after designation ( not 2 years as proposed).

133 beyond 2008.

Such areas that are classified as serious or above would be subject to the RFP requirements of section 182( c)( 2)( B) and would need to submit a plan achieving an average of 3 percent reductions per year over the 6 years following the baseline year and then an average of 3 percent per year for each subsequent 3 year period out to the attainment year. 37 2. Final rule for 8 hour areas comprised in part of one or more 1 hour attainment areas with an approved 15 percent plan for the 1 hour standard and in part of one or more areas without approved 15 percent plans for the 1 hour standard.

For 8 hour moderate areas that include all or part of one or more 1 hour areas with an approved 1 hour 15 percent plan, but also include areas that were not subject to the 1

hour 15 percent plan, the final rule would allow the area to choose between two alternative approaches that are consistent with the proposed rule.

° Approach 1. Develop a new baseline and new 8 hour 15 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 134 percent VOC ROP emission reduction target for the entire 8 hour area. Emissions reductions that occur after the 2002 baseline emissions inventory year are creditable except as limited by section 182, as described elsewhere in this final rule. The reductions must be of VOC only.

° Approach 2.

Treat the 8 hour nonattainment area as divided between portions of the area that are subject to an approved 15 percent VOC only plan for the 1 hour standard and the portions of the area that are not subject to a 15 percent plan for the 1 hour standard.

For those areas not subject to an approved 15 percent plan for the 1 hour standard, States must establish a separate 15 percent VOC target under subpart 2. VOC emissions reductions to meet the 15 percent requirement may, however, come from across the entire 8 hour nonattainment area.

For the portion of the area with an approved 15 percent plan for the 1 hour standard, the subpart 1 RFP requirements will apply if the area is classified as moderate for the 8 hour standard and the section 182( c)( 2)( B) RFP requirement will apply if the area is PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 135 classified as serious or above for the 8 hour standard.

These requirements would apply as described above for areas comprised entirely of areas with approved 15 percent plans for the 1 hour standard.

c. Comments and responses Comment: One commenter expressed concern that for a number of subpart 2 areas that were nonattainment for the 1

hour standard, especially those dominated by mobile source emissions and/ or those with existing stringent stationary source controls, it may be difficult to achieve another 18 percent precursor emission reduction within 6 years from the baseline year and then an additional 3 percent per year precursor reduction after that until the area's attainment date. Specific areas were mentioned such as the South Coast District of California and the Houston Galveston Area, which the commenter indicated will be well beyond best available control technology ( BACT) controls and in some cases at or near lowest achievable emission rate ( LAER) NOx controls on stationary sources making them dependent on mobile source fleet turnover for SIP RFP emissions reductions. The commenter further suggested that EPA should have available approved policy options that allow areas in such predicaments to maintain approved SIPs if additional PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 136 emissions reductions are not available to meet RFP requirements and/ or if available emission reduction techniques might be counterproductive to other local and regional air quality goals.

Response: We addressed in general those comments that recommended alternatives to the mandatory measures of subpart 2 ( which includes the RFP requirement) in the response to comments above under the topic, " Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there flexibility in application in certain narrowly defined circumstances?" We concluded in that section that EPA has no discretion to broadly waive mandatory requirements.

However, we noted that case law may provide support for case by case waivers where implementation of a measure would produce an absurd result. Additionally, we note that section 182( b)( 1)( A)( ii) specifically addresses the situation where an area demonstrates that it cannot achieve the required 15 percent reduction. It provides that an area may achieve less than the 15 percent VOC reduction required where the State demonstrates ( 1) NSR requirements apply as they would in an area classified as extreme except that the terms " major source" and " major stationary source" shall PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 38Section 182( c)( 2)( B)( ii) also contains a similar RFP provision for serious and higher classified areas that allows less than 3 percent of baseline emissions each year after the initial 15 percent reduction after designation and classification.

137 include any source with the potential to emit at least 5 tpy of VOCs; ( 2) RACT is required for all major sources ( i. e., a source with the potential to emit at least 5 tons per year of VOCs; and ( 3) the plan includes all measures that can feasibly be implemented in light of technological achievability. 38 Comment: Another commenter supported EPA in recognizing the previous efforts of areas to meet ROP requirements under the 1 hour standard. The commenter concurred with EPA's preferred option, which allows States the flexibility to choose a combination of NOx and VOC strategies to meet ROP/ RFP requirements consistent with an area's need to meet the standard.

Response: We agree with the commenter that if an area has already met the 15 percent VOC emission reduction requirement for the 1 hour standard, the area should not be required to meet that requirement a second time for the 8

hour standard but instead will be subject to the other applicable RFP provisions of the CAA. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 138 Comment: One commenter preferred Option 1 as more protective of air quality and more consistent with the requirements of the CAA. Option 1 would require States to develop RFP plans based on severity and local situation.

Option 2 has some attractive features by recognizing progress that States have already made. This commenter believed that Option 2 is problematic, however, because it relies on plans developed based on 1990 to 1996 emissions.

This time period has passed.

One commenter believed EPA to be completely without authority to waive the 15 percent RFP plan requirement,

which is an explicit mandate of subpart 2. A 15 percent ROP plan under the 1 hour standard cannot possibly satisfy the 15 percent RFP plan obligation for the 8 hour standard,

because the new RFP requirement is designed to implement a revised NAAQS and is measured from a different baseline year. They further believe that EPA offers no plausible legal rationale for waiving the 15 percent ROP requirement,

and, indeed, none exists. Moreover, although the agency proposed to require RFP demonstrations for the first 6 years for serious and severe areas, there is no lawful or rational basis for exempting moderate areas from this statutory requirement. Allowing States to rely on their 1 hour 15 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 139 percent ROP demonstrations is further unsupportable because those demonstrations are almost certainly no longer valid.

Response: The EPA acknowledges that under subpart 2 we must require 15 percent VOC reductions for all moderate and above areas, but we maintain that if an area has met this requirement while subject to section 182( b)( 1)( A) for the 1

hour standard, they will not have to meet it again for the 8 hour standard. The EPA believes that the CAA is quite clear that the SIP must provide for a 15 percent reduction in baseline VOC emissions for some period after 1990 in an area subject to section 182( b)( 1)( A), and, consequently, the SIP for any area newly subject to section 182( b)( 1)( A) must provide for a 15 percent reduction in VOC baseline emissions. But, EPA disagrees that the CAA plainly requires that the SIP for an area must require a second 15 percent reduction in VOC baseline emissions under a revised ozone standard. The EPA believes that section 182( b)( 1)( A) limits our discretion only to the extent that we cannot let the SIP for any area classified as moderate or worse for the 8 hour standard avoid a demonstration that the SIP contains sufficient measures to achieve a 15 percent reduction in VOC baseline emissions and further limits our discretion to allow NOx substitution for the 15 percent RFP demonstration PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 140 requirement under section 182( b)( 1)( A).

If serious and above areas have already met the 15 percent requirement under the 1 hour standard, they must meet the next RFP requirement, namely, the section 182( c)( 2)( B) RFP requirement, which will actually achieve greater reductions, i. e., 3 percent per year over 6 years for a total of 18 percent, but they can meet it with either VOC or NOx reductions. For moderate areas that have already met the 15 percent VOC emission reduction requirement for the 1 hour standard, EPA believes appropriate RFP under subpart 1 should be achieved. For purposes of RFP under subpart 1, there is nothing that limits such reductions to VOC. This provision simply requires reasonable annual incremental reductions towards attainment by the applicable attainment date, and this could be achieved by either VOC or NOx emissions reductions or a combination of both.

Section 182( b)( 1)( A) is the only statutory provision that limits State discretion to substitute NOx reductions for VOC reductions. This applies only for purposes of the initial 15 percent reduction requirement for the 6 year period after the baseline year.

Comment: Another commenter believed the subpart 2 provisions of the CAA do not allow for NOx for VOC PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 141 substitutions for the initial 15 percent RFP requirements.

Response: We agree that the 15 percent requirement in section 182( b)( 1) does not allow the substitution of NOx for VOC. However, the RFP requirements in section 172( c)( 2) and 182( c)( 2)( B) are not constrained by that limitation and either VOC or NOx emissions reductions may be counted toward meeting RFP under those two provisions.

Comment: Some commenters believed an additional 15 percent VOC reduction should not be necessary for 8 hour areas that encompass in whole or in part a 1 hour nonattainment area with an approved 15 percent plan. Such areas should simply be required to achieve whatever NOx or VOC emissions reductions are needed for attainment.

One commenter noted that the proposed § 51.910( a)( ii)

did not address all boundary change scenarios consistent with our proposed approach found in section VI. I. 9. of the June 2, 2003 proposed rule ( 68 FR 32835).

Response: We agree with the commenter that an area with an approved 15 percent plan for the 1 hour standard is not required to adopt a second 15 percent plan under section 182( b)( 1) for purposes of the 8 hour standard. However, if a portion of the 8 hour area was not subject to an approved 15 percent plan for the 1 hour standard, section 182( b)( 1) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 142 applies to that portion of the 8 hour area and may be met by one of two approaches described above and in the regulatory text. We agree with the second commenter who noted that the proposed rule did not explicitly address all possible boundary scenarios; we believe we have fully addressed these different boundary scenarios in the final rule in a manner consistent with the proposal.

Comment: A commenter indicated that they preferred to work with EPA in the development of an alternative that will eliminate or minimize the planning burdens associated with development of a 15 percent RFP plan for one town. One alternative might be the development of a " comparability demonstration," showing that the town had implemented the same controls that had been previously responsible for achieving a 15 percent reduction in VOCs in the l hour ozone nonattainment area associated with the 8 hour nonattainment area including this town.

Response: We are willing to work with individual areas as they develop their 8 hour 15 percent plans and to help them avoid unnecessary planning burdens. We believe that the portion of an 8 hour area not subject to an approved 1

hour 15 percent plan may be able to meet the 15 percent obligation for the 8 hour standard if the area adopts the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 143 same VOC control measures ( for example, VOC RACT at the same source thresholds, I/ M, etc...) as in the portion of the 8

hour nonattainment area subject to a 15 percent plan for the 1 hour standard and if the area has the same mix of emissions sources as in the area subject to the 15 percent plan for the 1 hour standard. We anticipate we could propose approval of a SIP on this basis where supported by the record.

Comments on draft regulatory text Comment: Another commenter generally supported the RFP provisions but suggested that in section 51.910( a)( 1)( ii)( A)

of the draft regulatory text, we insert the language shown in bold:

" An area classified as moderate or higher that has the same boundaries as an area for which EPA fully approved a 15 percent plan for the 1 hour NAAQS is not subject to section 182( b)( 1) of the CAA for the 8 hour NAAQS, but instead   ( A) If classified as moderate, is subject to RFP under section 172( c)( 2) of the CAA and shall meet that obligation by submitting 3 years after the effective date of its designation a SIP revision that provides for implementation of all emission reductions of VOCs and/ or NOx needed for attainment by the beginning of the ozone season in the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 144 area's attainment year." The commenter claimed this language is consistent with the approach EPA has taken in other provisions of this draft.

Response: The commenter's concern is noted. Section 51.910 has been restructured for reasons noted elsewhere in this preamble and it addresses the commenter's concern.

Comment: One commenter suggested that § 51.910( a)( 3) of the draft regulatory text be revised to allow ( even if conditional) NOx reductions to be substituted for VOC reductions ( for any ROP or RFP requirement) whenever such reductions would " result in a reduction in ozone concentrations at least equivalent to that which would result from the amount of VOC emission reductions required."

Response: As noted above, we do not believe the CAA allows substitution of NOx for VOC to meet the 15 percent requirement of section 182( b)( 1).

Comment: One commenter stated that draft § 51.910( a)( 1)( ii) eliminates the 15 percent requirement for areas that have already achieved this requirement under the 8 hour standard and supported that change. However, they further state that the strict criteria of " same boundaries"

should be revisited because there may be limited changes in the nonattainment areas " boundaries" when areas are PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 145 designated for the 8 hour standard. Such changes should not negate this provision. A broader definition needs to apply to this section to allow for changes to boundaries in nonattainment areas between 1 hour and 8 hour designations where such changes do not substantially alter the geographical or population characteristics for the area.

Another commenter supports an exemption for 8 hour nonattainment areas that have met the 15 percent ROP requirement for the 1 hour NAAQS. The commenter requests that EPA clarify the criteria that the area must have the same geographic boundaries to qualify for the exemption.

This means that in the geographic areas for which a State has an approved 15 percent plan, the 15 percent requirement will not apply, and the 15 percent requirement is only intended to apply to the new geographic areas of the 8 hour nonattainment area, and that the 15 percent reduction of emissions from the new areas could come from the entire nonattainment area to satisfy this requirement.

Response: As we explain in our summary of the final rule, we have recognized that there are a variety of boundary scenarios for 8 hour nonattainment areas in relation to the boundaries of areas for the 1 hour standard.

We have modified the draft regulatory text such that the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 146 final rule speaks in terms of 8 hour areas that include all or part of an area with an approved 15 percent plan for the 1 hour standard. For those portions of the 8 hour area with an approved 1 hour 15 percent plan, the 8 hour area is not required to develop a second 15 percent plan under section 182( b)( 1) for purposes of the 8 hour standard, but instead will be subject to section 172( c)( 2) if it is an 8 hour moderate area or subject to section 182( c)( 2)( B) if it is classified as serious or above for the 8 hour standard. If the 8 hour area includes both areas that were subject to an approved 15 percent plan for the 1 hour standard and areas that were not, then the 8 hour area can choose whether to develop a section 182( b)( 1) 15 percent plan for the entire 8 hour area or to develop a 182( b)( 1) plan only for the area not previously subject to such a plan and to treat the remaining portions of the area under section 172( c)( 2) or 182( c)( 2)( B), as described above.

As noted, EPA does not believe the statute allows it to relieve any area that has not already met the 15 percent requirement for the 1 hour standard from the obligation to meet that requirement except as provided in section 182( b)( 1)( A)( ii).

3. What baseline year should be required for the emissions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 39Memorandum of November 18, 2002, from Lydia Wegman and Peter Tsirigotis, " 2002 Base Year Emission Inventory SIP Planning: 8 hr Ozone, PM2.5 and Regional Haze Programs." This document is available at the following web site: http:// www. epa. gov/ ttn/ oarpg/ meta. 442.1.2002baseinv. pdf.

147 inventory for the RFP requirement?

[ Section VI. I. 4. of June 2, 2003 proposed rule ( 68 FR 32833); § 51.909 of the draft regulatory text; § 51.910( d) of the final regulatory text.]

a. Background The baseline inventory for RFP ( under subpart 2) is used as the starting point for the determination of a target level of emissions for the future year RFP and as the baseline from which creditable reductions are determined.

We designated ozone nonattainment areas in April 2004.

Under the " Consolidated Emissions Reporting Rule" ( 67 FR 39602; June 10, 2002) revised emissions inventories are required for the years 2002 and 2005; therefore, we proposed to require use of the 2002 inventory as the baseline inventory for the RFP requirement. This would be the most recent inventory available at the time of designation. We issued a memorandum identifying 2002 as the anticipated emissions inventory base year for the SIP planning process to address the 8 hour ozone and the PM2.5 standards. 39 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 148 b. Summary of final rule As set forth in our proposed rule, for areas designated nonattainment for the 8 hour ozone NAAQS with an effective date of June 15, 2004, we are requiring States to use the 2002 inventory as the baseline inventory for the RFP requirement. As noted in the proposal, the inventory for the 2002 calendar year would be the most recently available inventory at the time of designation in 2004. However, in response to several comments, we are allowing States the option of justifying the use of an alternative baseline inventory year for RFP. To justify an alternative, the State would have to demonstrate how the alternative year meets the CAA's provisions for RFP and provide a rationale for why it is appropriate to use the alternative baseline year rather than 2002 to comply with the CAA's RFP provisions. We believe that for multi State nonattainment areas, several States must agree on a single baseline. Even if a State chooses an alternative baseline inventory year for RFP, 2002 remains the valid baseline year for transportation conformity purposes as described in 40 CFR 93.119. The baseline year test is used only in conformity determinations prior to the submission of a SIP that establishes motor vehicle emissions budgets ( e. g., an RFP PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 149 SIP). Therefore, areas using the baseline year test would continue to use 2002 as the baseline year for conformity purposes because an area's baseline year would not be changed until an RFP SIP is submitted. Once an RFP SIP is submitted and the motor vehicle emissions budgets in that SIP are found adequate or are approved the area would no longer use the baseline year test. Instead the area would use the adequate or approved budgets in the RFP SIP in conformity determinations.

The baseline emissions inventory is calculated as of the effective date of an area's nonattainment designation using the most recent calendar year for which a complete inventory is required to be submitted to EPA under subpart A of 40 CFR part 51, subpart A. Under 40 CFR part 51, subpart A, States are required to submit a comprehensive inventory on 3 year cycles within 17 months after the close of the reporting period. Thus, the 2002 inventory was due 17 months after the December 31, 2002 close of the reporting period, i. e., was due by June 1, 2004. For those areas designated nonattainment for the 8 hour ozone NAAQS effective June 15, 2004 ( 69 FR 23858; April 30, 2004), the baseline emissions inventory should be based on the calendar year 2002 because the 2002 inventory was due under 40 CFR PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 40For example, where the effective date of designation to nonattainment for an area for the 8 hour ozone NAAQS is after June 1, 2007 but before June 1, 2010, the baseline inventory will be for calendar year 2005.

150 part 51, subpart A, prior to the time of designation. For areas with an effective nonattainment designation in the future, the baseline inventory will be for the calendar year of the most recent triennial inventory as of the date of designation. 40 As provided above, the State may use an alternative baseline only if it is demonstrated that it is consistent with the CAA and the State demonstrates why it is necessary.

c. Comments and responses Comment: Some commenters agreed there is a reasonable basis to select 2002 as the date of emissions inventories for the purpose of establishing creditable reductions from the inventory. States are not required by the CAA to adopt the year of the nonattainment designation for the 8 hour standard as the basis for their planning, even though that was the case under the 1990 CAA Amendments. The commenter claims there are a variety of measures that would be implemented after 2002 that local jurisdictions would like to be able to account for as new emissions reductions in their modeling demonstrations. The commenter thus believes PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 151 that reductions between these years " should count." In addition, this was the most recent quality assured/ quality controlled inventory used to support the States'

recommendations for proposed nonattainment designations on July 15, 2003.

Several commenters recommended that the baseline year ( starting the 6 year period for RFP) be set for the year in which designations were made ( i. e., 2004).

Response: The EPA has decided to establish 2002 as the baseline year for RFP SIPs in conformity with both the language of the CAA and the inventory year cycle. Of reasonable importance is the need to maintain consistency with the periodic inventory for use in various milestone considerations such as RFP, milestone compliance demonstration, attainment, and contingency plans. In addition, while there would be a difference in the RFP requirement based on the choice of the RFP baseline, there should be little if any difference in terms of emissions reductions needed to demonstrate timely attainment. If we use 2002, the baseline may be higher but areas can take credit for any 2002 2004 emissions reductions from federally enforceable control measures. If we use 2004, the baseline may be lower but areas can't take credit for measures that PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 152 produce emissions reductions between 2002 2004. Depending on the area, the difference should be minimal in terms of the difference in the amount of reductions needed to reach attainment and what new measures are necessary to get there.

We believe it is reasonable to select an inventory year for which States were already required to produce an inventory rather than requiring States to produce an additional inventory ( e. g., for 2004) that is not otherwise required. Moreover, requiring the use of an inventory for the designation year would cause delay, as it would take the States 1 2 years after the end of 2004 to produce the inventory which would be the basis for selecting controls to achieve the necessary reductions for RFP and for modeling attainment. However, we are allowing States the option of justifying the use of an alternative baseline emission inventory, provided it meets the requirement of the CAA's RFP provisions. As noted above, the use of an alternative year for the baseline inventory for RFP does not change the requirement to use 2002 as the baseline year for transportation conformity as described in 40 CFR 93.119.

Comment: Another commenter referred to EPA's proposal language regarding the RFP SIP that would have required submission of the RFP plan within 2 years after designation. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 153 They stated that EPA is missing the point in that the attainment and RFP submission dates established in subpart 2 are to allow States a sufficient amount of time to achieve the mandated goals.

That commenter referred to another alternative that would amend the proposal to require a 1990, rather than 2002 baseline for those areas not having a previously approved 15 percent RFP plan. They further commented that although a 1990 baseline would not eliminate the planning burden associated with this requirement, it would go far towards minimizing the necessary additional work.

Response: We disagree with the commenters who urged use of the 1990 inventories as the baseline for planning for the 8 hour NAAQS. Use of the 1990 baseline would be unreasonable now since it would have to be substantially recalculated due to changes in emission calculating methodologies. Furthermore, a 1990 inventory was only required for nonattainment areas as of enactment of the 1990 CAA Amendments and therefore may not exist for a number of areas that are currently designated nonattainment for the 8

hour standard. Finally, we believe that reliance on emissions reductions that may have occurred well before 8

hour designations and classifications should not be counted PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 154 as making progress toward attainment.

Comment: Another commenter noted that the 18 percent reduction for serious areas would have to be achieved by 2008. This is 6 years after the base year. The commenter noted that the 2 years that would remain after SIP submission ( from the proposed SIP due date of 2006 until 2008) would be totally inadequate to achieve either the 15 percent reduction in VOCs or the 18 percent reduction in VOCs and/ or NOx. The commenter noted the CAA provides for submission of RFP plans within 3 years ( from 1990) in section 182( b)( 1)( A) and 4 years in section 182( c)( 2).

Response: The final rule reflects a change from the proposal to allow submission of the RFP plan up to 3 years from the date of designation. We do not believe the RFP provisions of subpart 2 of the Act provides relief from the requirement to obtain the specified percent reductions from the RFP baseline within the time constraints specified in those provisions.

Comment: A comment on draft regulatory text § 51.909 noted that EPA specified various program milestone dates,

which were derived from the relationship of these dates to the expected date of initial designation. The commenter recommends deleting all such specific date references from PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 155 the regulation, to avoid the need for revising regulations if the initial designations are not concluded as expected.

This should be replaced by a generic approach, for example by requiring the most recent year's data to be used as the baseline in the second sentence of § 51.909. Deleting the calendar specific dates would not change the result if the designations occur as planned, yet would allow for more recent data to be used if factors beyond the agency's control create a delay in designations. This approach also will allow the regulation to apply to future area designation changes, such as areas that are redesignated nonattainment at some point in the future. Such specific dates are more appropriately included as examples in agency guidance or within the preamble of a final rule with a discussion of how they are derived. The regulation itself should retain only the generic relationship between the milestone and the effective date of designation, which is the approach taken elsewhere in the rule.

Response: Because the designations have already taken effect at this point, we believe it is appropriate to specify 2002 as the presumptive baseline year. The final version of the rule ( now § 51.910( d)) provides general language regarding the appropriate baseline year for areas PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 41We note that even though the draft regulatory text was structured to place the specification of the baseline year for RFP ( as well as for attainment demonstrations) in § 51.909, the final rule places the RFP baseline year requirement in § 51.910.

156 that have an effective date of a nonattainment designation in the future. 41 4. Should moderate and higher classified areas be subject to prescribed additional RFP requirements prior to their attainment date?

[ Section VI. I. 5 of June 2, 2003 proposed rule ( 68 FR 32834); no draft regulatory text; section 51.910( a)( 1)( i) of final regulatory text.]

a. Background As noted in the proposal, for areas initially classified moderate and higher for the 1 hour ozone standard, the baseline inventory was defined as 1990 in the CAA Amendments. Therefore, the 6 year period for the initial 15 percent RFP requirement ended in the same year as the attainment date for moderate areas, viz., 1996. For areas classified moderate and higher under the 8 hour ozone standard, however, we proposed that the 15 percent RFP target level of emissions would be calculated for the 6 year period after the 2002 baseline year, i. e., 2003 2008. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 157 Moderate areas would be required to meet an attainment date no later than 6 years after the area is designated nonattainment for the 8 hour standard. Since the effective date of designation of nonattainment areas is June 15, 2004,

the outside statutory attainment date would be June 15,

2010. This leaves approximately a 1 1/ 2 year gap between the end of the 6 year period for the 15 percent RFP requirement ( i. e., December 31, 2008) and the maximum statutory attainment date. If we were to also require moderate areas to obtain an additional three percent per year emission reduction beyond 2008 for the 1 1/ 2 additional years out to 2010, the RFP requirement could be more than what we believe Congress intended for moderate areas under subpart 2. Additional three percent per year reductions were only required for serious and higher classified ozone nonattainment areas. We proposed that the only specific RFP requirement applicable for moderate areas is the 15 percent VOC requirement between the end of 2002 and the end of 2008.

However, section 172( c)( 2), which requires areas to meet RFP generally, would apply for any period for which RFP is not addressed in subpart 2. For purposes of section 172( c)( 2),

RFP means annual incremental reductions as may be required by the Administrator for purposes of ensuring attainment PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 158 [ CAA Section 171( 1)]. Therefore, we proposed a moderate area would need to provide any additional emissions reductions   VOC and/ or NOx   needed to provide for attainment by the area's attainment date. In proposing this approach for this circumstance, we interpreted the subpart 1 RFP requirement to mean that the area must achieve whatever further reduction is needed for attainment in the remaining period prior to the attainment date ( 2009 through June 15,

2010).

We proposed that serious and higher classified areas would need to provide in their SIPs an additional average of three percent per year emission reduction over each subsequent 3 year period beyond the initial 6 year period through the attainment year, consistent with what Congress specified in section 182( c)( 2)( B) of the CAA.

b. Summary of final rule In the final rule, we are taking the approach we proposed. We are not prescribing additional increments of reductions for the 1 1/ 2 years before the maximum attainment date for moderate areas. Such areas must provide for any additional emissions reductions ( VOC/ NOx) needed to provide for attainment by the beginning of the ozone season prior to PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 42We note that areas must implement controls prior to the beginning of the last full ozone season preceding the attainment date. For moderate areas designated as of June 15, 2004, such reductions would be needed by the beginning of the 2009 ozone season.

159 the area's attainment date. 42 Serious and higher classified areas would need to provide in their SIPs an additional average of three percent per year emission reduction over each subsequent 3 year period beyond the initial 6 year period through the attainment year.

c. Comments and responses Comment: One commenter suggested that following the statutory timetable rather than the one proposed by EPA would eliminate the problem of how to handle the " 1 ½ year gap between the end of the 6 year period for the 15 percent RFP requirement ( i. e., December 31, 2008, as proposed by EPA) and the attainment date." The commenter continued by saying that no such gap is contemplated by subpart 2, which provides in section 18l( b)( l) that moderate areas'

attainment dates and their 15 percent VOC RFP date are to be the same: 6 years after their designation and classification.

Response: As provided in an earlier response, we do not believe the CAA requires the end of the 15 percent RFP PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 160 period and the attainment date to be the same.

Comment: Another commenter noted the proposal states that the only specific RFP requirement applicable for moderate areas is the 15 percent VOC requirement between the end of 2002 and the end of 2008. However, section 172( c)( 2)

also applies, requiring areas to meet RFP generally.

Therefore, a moderate area would still also have to provide any additional emissions reductions   VOC and/ or NOx, i. e.,

whatever is needed to provide for attainment by the beginning of the ozone season prior to the area's attainment date. The commenter agrees that any additional emissions reductions needed to achieve attainment are the only reductions that should be required of moderate areas.

Response: We agree with the commenter, and our rule requires that for purposes of meeting RFP beyond 2008 until the area's attainment date, moderate areas must reduce VOC and NOx emissions as necessary to attain by the area's attainment date.

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

[ Section VI. I. 6 of June 2, 2003 proposed rule ( 68 FR 32834); § 51.910 of the draft and final regulatory text ( several locations)].

a. Background PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 161 As noted in the proposal, section 182( b)( 1) requires that moderate and higher classified areas submit their 15 percent RFP plans within 3 years after 1990. Obviously,

applying the statute as written is absurd, since we are well past that date. The CAA uses identical language for identifying areas' attainment dates under subpart 2. In our Phase 1 Rule, for purposes of attainment dates for the 8

hour NAAQS, we interpreted the CAA's language referring to the date of enactment of the 1990 CAA Amendments to mean the date of designations for the 8 hour standard. We noted in the proposal that if we applied the same interpretation for RFP plans, i. e., that they should be submitted within 3 years after the area's nonattainment designation date ( i. e.,

in 2007 if the area has an effective designation in 2004),

the plans would have to be implemented within 1 year after submission to ensure the 15 percent emissions reductions are achieved by the end of the relevant 6 year period ( i. e.,

December 2008). We indicated concern that this might not provide sources with sufficient time to achieve the reductions by the required deadline. Therefore, we proposed that the RFP SIP be submitted within 2 years after nonattainment designation   namely by 2006 for areas designated in 2004. This would provide for 2 years for the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 162 State to develop and submit its RFP plan, and another 2 years for the control measures to be implemented.

We also proposed that an area classified serious or above submit within 2 years after designation its RFP plan that provides for 18 percent emissions reductions ( VOC and/ or NOx) over the first 6 years from the baseline year and then submit within 3 years after designation a RFP plan that provides nine percent emissions reductions ( VOC and/ or NOx)

over each of the next 3 year periods until the area's attainment date.

b. Summary of final rule In the final rule, we are taking a different approach than proposed in light of concerns raised by States in public comments. These commenters stated that they would need more than 2 years for development, adoption and submission of RFP plans for the increment of progress over the first 6 years after the baseline year. The EPA agrees with the several commenters who urged that 3 years was more consistent with the CAA. Additionally, 3 years is a more reasonable time period for submission because it allows States the necessary time to move regulatory actions through their legislative processes and allows States to consider RFP in conjunction with their attainment demonstrations. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 163 Therefore, for moderate and higher classified areas, the first RFP SIP must be submitted within 3 years after the area's nonattainment designation. For areas with a June 15,

2004 effective date for the 8 hour designations, the SIP would be due by June 15, 2007. This would provide up to 3 years for States to develop and submit RFP plans, and 1 additional year ( until the end of 2008) for control measures to be implemented. The RFP SIP for any remaining 3 year periods out to the attainment date beyond the first 6 years also would be submitted with the attainment demonstration,

i. e., within 3 years after designation. However, since States maintain the flexibility to submit plans early to provide more time for implementation of their SIP control measures, we recommend that States complete their RFP plans as soon as possible after designation to provide as much time as possible for sources to implement the emissions reductions. Furthermore, States may also begin implementing their control measures before submission to EPA as part of their SIPs, which would provide additional time sources may need to comply.

c. Comments and responses Comment: Several commenters opposed EPA's proposal to shorten to 2 years the statutory 3 year period for PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 164 development and submittal of 15 percent VOC RFP plans. They claim this proposal violates the guarantee of 3 years for plan development to the State in section 182( b)( l)( A) and is contrary to EPA's basic proposed principle that [ quoting from the proposal] " subpart 2 SIP submittals will be due as a general matter by the same period of time after designation and classification under the 8 hour standard as provided in subpart 2 for areas designated and classified at the time of enactment of the 1990 CAA." The commenters contended that subpart 2 gives EPA no authority to shorten the statutory 3 year period. In contrast, Congress in subpart 1 authorized EPA to set a schedule for nonattainment SIP submissions. Congress, therefore, knew how to give EPA discretion to shorten SIP submission deadlines according to the commenters; it did not do so in subpart 2.

Concerning the timing of submission of the RFP plan,

another commenter was concerned that the States may not have sufficient photochemical modeling and ambient air analyses to indicate the best mix of RFP SIP controls. Additionally,

in areas dominated by mobile source emissions, it may not be feasible to implement control measures to achieve the RFP target within the 2 years after the proposed required RFP SIP submission date as EPA has suggested. The commenter PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 165 suggested that EPA develop policy options that allow areas in such predicaments to maintain approved SIPs if emissions reductions are not available to meet RFP requirements and/ or if available emission reduction techniques might be counterproductive to other local and regional air quality goals.

Another commenter stated revisions to State emission reduction measures cannot be adopted easily in a 2 year time period because they require administrative action and frequently State legislation to approve. This period can lengthen when proposed measures like enhanced vehicle I/ M involve controversial actions affecting the public.

Logistically, a State must establish a regulation by administrative action with public input before ( though sometimes after) such a measure is approved by the State's legislature. A number of jurisdictions' legislatures are only in regular session to consider such measures several months or, in alternate years. Thus, it is unreasonable for States to have only 2 years from their nonattainment designations to adopt new measures.

Another commenter referenced the case NRDC v. EPA, 22 F. 3d 1125, 1135 ( D. C. Cir., 1994), where the Court considered the propriety of EPA's extension of the deadlines PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 166 by which States had to submit elements of their SIPs. The Court upheld EPA's decision to extend the deadline for submission of a SIP given EPA's failure to meet its own deadline for providing certain necessary guidance to the States. The Court allowed EPA to use the extraordinary remedy of a deadline extension in this instance because Congress would have intended that the deadline be extended to provide a party the full statutory time for acting on the agency guidance. The commenter referenced CAA section 126( c) where EPA may set a compliance deadline " as expeditiously as possible, but in no case later than 3 years after the date of such finding."

One commenter noted that CAA section 182( b)( 1)( A) as modified by section 181( b)( 1) requires for moderate areas that the RFP SIP be submitted 3 years after designation.

The commenter disagreed with the RFP plan requirement to submit the plan 2 years after the effective date of the nonattainment designation as not being consistent with or supported by these CAA sections. The resources involved in developing, proposing and adopting any SIP revision are not insignificant. In order to ensure the most efficient use of resources, the commenter contended that EPA should not require this SIP revision sooner than the submission of the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 167 attainment demonstration, 3 years after the effective date of the designations. Allowing States 3 years to submit the RFP plan is consistent with existing CAA requirements.

Response: After consideration of the comments, we have changed the final rule to be consistent with the approach advocated by a number of commenters. In consideration of the 2004 designation and the need to achieve the 2008 RFP reductions by December 2008, it seems reasonable to EPA that States first be given sufficient time after designation to formulate RFP plans. Therefore, the final rule allows States up to 3 years after designation to submit their RFP SIPs. However, to the extent States are relying on newly developed rules to meet all or part of the RFP requirement,

we recommend that States adopt those rules as soon as possible after designation to provide as much time as possible for sources to achieve the emissions reductions.

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

[ Section VI. I. 7 of June 2, 2003 proposed rule ( 68 FR 32834); § 51.910( a)( 4) of the draft regulatory text;

§ 51.910( a)( 3) of the final regulatory text.] PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 168 a. Background Section 182( b)( 1) contains provisions that limit creditability toward meeting RFP for certain limited emission reduction measures required prior to the enactment of the CAA Amendments of 1990. We noted in the proposal that we believe these specific restrictions should continue to apply for purposes of the 8 hour NAAQS. The proposal noted that Congress intended to prevent areas from taking credit for RFP only for those specific measures that were already adopted and in place ( or required to be in place)

prior to the date of enactment of the CAA Amendments of 1990 ( November 15, 1990). We said that this same holds true for the RFP requirement as it applies to the 8 hour ozone standard, namely preventing credit toward the mandatory RFP percent reductions for continuing reductions from those specific measures cited in the CAA that were already adopted and in place ( or required to be adopted and in place) prior to the date of enactment of the CAA Amendments of 1990.

There is no indication in the CAA that this exclusion should be changed. Congress mandated many emissions reductions in the 1990 CAA Amendments with no indication that they should not be credited to meeting RFP or attainment of any existing or revised NAAQS. Therefore, we proposed that all emissions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 169 reductions that occur from all Federal and any other measures not otherwise identified in section 182( b)( 1)( C)

and ( D) and that occur after the baseline emissions inventory year would be creditable for the RFP requirement.

A number of examples demonstrating emissions reductions that would be creditable toward the RFP requirement were set forth in our proposal.

b. Summary of final rule We are taking the approach we proposed, under which all emissions reductions that occur after the baseline emissions inventory year are creditable for purposes of the RFP requirements in this section except as specifically provided in section 182( b)( 1)( C) and ( D) and section 182( c)( 2)( B) of the CAA. The restriction imposed by section 182( b)( 1)( D)

limits crediting reductions from the following four categories:

° Corrections to or additions of RACT rules as required by CAA section 182( a)( 2)( A).

° Corrections to I/ M programs for areas where the SIP included or was required to include a schedule for I/ M implementation under the CAA in effect immediately before November 15, 1990.

° Regulations concerning Reid Vapor Pressure ( RVP) PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 170 promulgated by EPA before November 15, 1990 or required to be promulgated under CAA section 211( h).

° Motor vehicle exhaust or evaporative emissions measures promulgated by EPA by January 1, 1990.

c. Comments and responses Comment: One commenter supported EPA's proposal to allow credit towards RFP requirements of all emissions reductions, which occur after the baseline emissions inventory year ( 2002) from all Federal, and any other measures not otherwise identified under section 182( b)( 1)( D). This would include reductions from cleaner fuels and engines, reductions from ongoing 1 hour SIP controls and VOC reductions from implementation of MACT standards after the baseline year. The commenter stated that this proposed approach would be critical in a number of areas that already have stringent stationary source controls and/ or in areas dominated by mobile source emissions.

Response: The EPA acknowledges this comment of support for our final action.

Comment: Another commenter believed that early voluntary emissions reductions prior to 2003, and not required under the CAA, should also be creditable toward RFP requirements. The commenter recommended that EPA's final PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 43For example, if an area had VOC emissions in 2001 of 100 tons per day, and a source reduces emissions by 10 tons per day in 2002, the baseline emissions will be 90 tons per day. Thus, the area will need to achieve 13.5 tons per day reduction to meet its 15 percent requirement, rather than 15 tons per day. However, the area cannot take credit in the 15 percent plan for the 10 tons per day of emissions that are not part of the baseline inventory.

171 rule clarify that States be allowed credit for RFP for early voluntary emissions reductions occurring prior to 2003. As a company that has proactively taken measures to reduce NOx emissions through innovative Combustion Initiative ( an enhanced efficiency technology), the commenter believed that EPA's regulations should take these efforts into account as they have resulted in real improvements to air quality.

Another commenter stated that companies who made voluntary reductions prior to 2003 would be penalized for having undertaken such voluntary measures and, thus disallowing credit for these reductions provides disincentives for voluntary reductions.

Response: Voluntary reductions that occur prior to January 1, 2003 will be reflected in the area's baseline inventory. This lower baseline means that fewer reductions will be needed to achieve RFP. 43 Allowing an area to take credit for reducing emissions that are not included in the inventory would result in " double counting" of those PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 172 emissions reductions.

Comment: One commenter suggested that areas should be able to take credit for MACT standards that may reduce VOC for which compliance is required after the 2002 baseline year. The commenter said it would be helpful to States if EPA produced a document detailing the expected VOC reductions after implementation of MACT standards. States could claim these reductions toward any reductions required to meet their target. The commenter suggested that the most useful way to express the reduction would be as a percent of the 2002 emissions.

Response: The EPA agrees that areas can take credit in RFP plans for post 2002 VOC reductions from MACT standards.

We are considering whether to develop the recommended guidance.

Comment: One commenter objected to EPA's proposal to allow States to claim RFP credit from any reductions achieved through post 1990 adoption of the types of measures listed in section 182( b)( 1)( D). The commenter further stated that section 182( b)( 1)( D) prohibits granting RFP credit for any measures contained on the list. Congress wanted the RFP reductions to be new reductions rather than emission cuts that would have occurred anyway. In the case PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 173 of 8 hour nonattainment areas, the baseline year will be 2002. Therefore, according to the commenter, to be consistent with subpart 2, EPA must disallow RFP credit for measures listed in section 182( b)( 1)( D) adopted any time prior to 2002.

Another commenter urged EPA to consider a hybrid approach that gives States credit for approved RFP plans that go beyond 2002, provided that the Plan is evaluated on a 2002 baseline. This approach would give States credit for ongoing emissions reductions, recognize the need to address the 8 hour standard as the ozone standard ( rather than rely on plans developed to meet the 1 hour standard), and potentially avoid some unneeded controls.

Another commenter recommended that EPA not allow emissions reductions credit for all emissions reductions occurring after the baseline year. Emissions reductions to satisfy the RFP requirements of CAA section 182( b)( 1) and 182( c)( 2)( B) are required to be achieved by submitting " a revision to the applicable implementation plan to provide for . . . emissions reductions." The commenter argued that emissions reductions already required by, or accounted for in, the applicable implementation plan may not be credited toward the new RFP requirements. For example, reductions PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 174 that were required to be achieved by SIP or other requirements, but which were not achieved in practice prior to the baseline year, should not be credited toward meeting the new RFP reductions required after the baseline year.

Only new measures submitted with the new SIP revision may be credited for this purpose.

Response: The EPA believes that, with certain exceptions ( see CAA section 182( b)( 1)( C) and ( D)), any reductions that occur after 2002 are creditable towards RFP and attainment and that it should not matter when the State initially adopted or EPA promulgated the measures that produce those reductions. The CAA does not mandate the approaches advocated in the comments. While the comments cite phrases in the CAA that might be read to support the approach advocated in the comments, EPA believes such an interpretation is at odds with other provisions of the CAA.

In addition to the restriction imposed by section 182( b)( 1)( D) on crediting certain measures, section 182( b)( 1)( C) places only two restrictions on creditability of reductions towards RFP: first, reductions are creditable if they result from measures in the applicable implementation plan, i. e., the approved SIP or from rules PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 44Applicable requirements are federally enforceable requirements under the CAA that are created elsewhere but incorporated into a title V permit. See the definition of " Applicable requirement" in 40 CFR 70.2 and 71.2 175 promulgated by EPA, or from the applicable requirements44 that are incorporated into a title V permit; and secondly,

only those reductions that have actually occurred after the baseline year and before the milestone date may be credited towards a RFP milestone. The requirement that the reductions result from measures in the applicable implementation plan or EPA regulations, or applicable requirements contained in a title V operating permit imposes no restriction that such measures must be enacted after the date of designation or after the baseline year. This restriction only requires that the measure approved into the SIP be a rule promulgated by EPA or be an applicable requirement included in a title V permit issued before or concurrently with approval of the RFP SIP revisions, and that the reductions occur after the baseline year and before the milestone date.

While this provision limits EPA's discretion to allow credit towards the RFP requirement from any reduction that does not fit into any of the three aforementioned classes of measures, EPA does not see anything in the statute that PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 176 mandates the adoption of the approach advocated in the comments. In fact, EPA believes the opposite is the case.

The same argument ( i. e., that creditable RFP measures must be measures adopted/ promulgated after designation or after the baseline year) could have been made for the various programs mandated by the 1990 CAA Amendments. These mandated measures included RACT requirements under section 182( b)( 2), Stage II vapor recovery under section 182( b)( 3),

motor vehicle I/ M under sections 182( b)( 4) and 182( c)( 3),

RFG under section 211( k), and the Tier 1 motor vehicle standards under title II. The EPA believes the statute is plain that Congress envisioned that all of these would be adopted after 1990 and in most cases implemented before 1996 because the statute contains enforceable deadlines for submission of the requisite SIP revisions or promulgation of the EPA rules. In many cases, they contain required implementation dates before 1996. Congress clearly did not limit credit for RFP for any of these measures. In our proposed rulemaking, EPA specifically proposed allowing use of reductions resulting from any measure as long as the reductions meet the creditability criteria of section 182( b)( 1)( C) for the very reason EPA concluded Congress did not intend to impose the sort of limit on creditability PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 177 advocated in the comments for the 1 hour standard and for any revised standard.

In summary, the statute says that only four specific categories of emissions reductions are restricted. It does not refer to or include any post 1990 rules' emissions reductions as restricted and only speaks to creditability in terms of when the reductions occurred, not when the rules or measures were adopted. As explained in the proposal and the preceding paragraphs, Congress had reason to limit creditability of pre 1990 rules, mandated many post 90 rules and allowed these rules to be credited towards post 90 RFP,

and nothing in the statute leads us to believe that Congress would not have wanted them to also be creditable to post

2002 RFP. The EPA believes it is appropriate to allow credit toward RFP for emissions reductions other than reductions from the four categories specified in the CAA pursuant to section 182( b)( 1)( D). Language that was once pertinent to the schedule of the 1990 CAA Amendments should be reinterpreted now to mean emissions reductions are creditable toward emissions reductions requirements to the extent they actually occur during the relevant ROP period and after the baseline year.

7. For areas covered only by subpart 1, how should the RFP PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 178 requirement be structured?

[ Section VI. I. 8. of June 2, 2003 proposed rule ( 68 FR 32834); § 51.910( b) of the draft and final regulatory text.]

a. Background The proposal noted that the RFP requirement under subpart 1 is more general than that under subpart 2, and EPA thus has more flexibility in determining what RFP means under subpart 1. For instance, the State may rely on emissions reductions of VOC or NOx, or a combination of both to meet its RFP requirement whereas subpart 2 limits the initial 15 percent to VOC emissions reductions. However, we acknowledged the concern about treating in a similar manner areas under subpart 1 that have an ozone problem similar to areas covered under subpart 2.

We proposed scenarios for three types of subpart 1 areas: ( a) Areas with attainment dates 3 years or less after designation, ( b) Areas with attainment dates between 3 to 6 years after designation, and ( c) Areas with attainment dates beyond 6 years after attainment.

° Areas with attainment dates 3 years or less after designation.

We proposed these areas would be treated similar to areas under subpart 2 that are classified as marginal, which PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 179 do ot have an RFP requirement. We proposed such an area would not be subject to a separate RFP requirement, but RFP would be met by demonstrating the area could attain the standard by its attainment date.

° Areas with attainment dates between 3 to 6 years after designation.

These areas would have attainment dates similar to subpart 2 areas classified as moderate. We proposed two options for these areas:

° Option 1. This option would require the RFP plan to be submitted with the attainment demonstration within 3 years after designation of the nonattainment area and RFP would be met by a SIP that provides for attainment as expeditiously as practicable. Where areas have only 3 years after SIP submission before attainment, this option recognizes that there may be only a short amount of time available to achieve any specified emissions reductions to meet RFP. The draft regulatory text incorporated this option.

° Option 2. This option would require these areas to be treated in a manner similar to subpart 2 areas classified as moderate. The RFP SIP would have to provide for a 15 percent emission reduction from the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 45NOx Substitution Guidance. December 15, 1993 ( available at http:// www. epa. gov/ ttn/ oarpg/ t1pgm. html).

180 baseline year within 6 years after the baseline year.

The RFP SIP would have to be submitted within 2 years after designation. However, since the area is subject only to subpart 1, VOC or NOx emissions reductions could be relied on to meet the 15 percent reduction requirement, consistent with EPA's NOx substitution policy. 45 Also, we solicited comment on whether a percentage other than 15 percent should be required as the minimum. Additional measures that would provide the remaining portion of the emissions reductions needed for attainment would have to be submitted with the area's attainment demonstration within 3 years after designation.

° Areas with attainment dates beyond 6 years after designation.

These areas would have attainment dates similar to areas classified under subpart 2 as serious or higher. We proposed that the RFP plan show increments of progress from the baseline emissions inventory year out to the attainment date. The RFP SIP would first have to provide for a 15 percent emission reduction from the baseline year within 6 PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 181 years after the baseline year. The 15 percent RFP SIP would have to be submitted within 2 years after designation.

However, since the area is subject only to subpart 1, NOx emissions reductions could be substituted for some or all of the 15 percent reduction requirement, consistent with EPA's NOx substitution policy. Also, we solicited comment on whether a percentage other than 15 percent would be more appropriate. For each subsequent 3 year period out to the attainment date, another RFP SIP would have to provide for an additional increment of progress no less than the amount of emissions reductions that would be proportional to the time between the end of the first increment to the attainment date. This second RFP SIP would have to be submitted at the same time as the attainment demonstration,

namely within 3 years after designation.

b. Summary of final rule We are finalizing rules for two, rather than three,

categories of areas based on the CAA's division of attainment dates for subpart 1 areas under section 172( a)( 2). This provision requires that subpart 1 areas must attain as expeditiously as practicable but no later than 5 years after designation as a nonattainment area. It also allows the Administrator to extend the attainment date PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 182 beyond that 5 year period " . . . for a period no greater than 10 years from the date of designation as nonattainment,

considering the severity of nonattainment and the availability and feasibility of pollution control measures."

The two scenarios for RFP for subpart 1 areas are based on whether the area does or does not receive an extended attainment date. The following are the two scenarios and the RFP requirements for each:

Scenario A: Areas with attainment dates 5 years or less after designation ( i. e., on or before June 15, 2009 for areas designated June 15, 2004).

As noted elsewhere in this preamble, for areas classified under subpart 1, emissions reductions needed for attainment must occur by the beginning of the ozone season preceding the attainment date. Thus, to enable a SIP to demonstrate attainment by June 15, 2009, the area must achieve all necessary reductions by the beginning of the 2008 ozone season. The final rule provides that RFP for these areas would be met by ensuring emissions reductions needed for attainment are implemented as noted above by the beginning of the ozone season prior to the attainment date.

Scenario B: Areas with attainment dates more than 5 years after designation ( i. e., beyond June 15, 2009 for those PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 183 areas designated June 15, 2004). For these areas:

° The RFP plan must show increments of progress from the baseline emissions inventory year out to the attainment date.

° The RFP SIP would first have to provide for a 15 percent emission reduction from the baseline year through the 6th year after the baseline year ( e. g.,

from January 1, 2003 through December 31, 2008).

° The 15 percent RFP SIP must be submitted within 3 years after designation ( e. g., by June 15, 2007).

° However, since the area is subject only to subpart 1,

NOx or VOC emissions reductions ( or both) could be used to achieve the 15 percent emission reduction requirement.

° For each subsequent 3 year period out to the attainment date, the RFP SIP would have to provide for an additional increment of progress. The increment for each 3 year period would be a portion of the remaining emission reductions needed for attainment beyond those reductions achieved for the first increment of progress ( e. g., beyond 2008 for areas designated nonattainment in June 2004). Specifically, the amount of reductions needed for attainment should be divided by the number PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 46For example, if the area's attainment date is 2014, and a total of 30 percent reduction is needed between the end of 2008 and the attainment date ( a 6 year period) to reach attainment, the " annual increment" would be 5 percent ( i. e., 1/ 6 of 30 percent). Thus, the area must achieve roughly the portion of reducitons equivalent to 15 percnet ( 3 X 5 percent) during the first 3 years ( 2009, 2010, 2011), and the remaining amount over the next 3 years ( 2012, 2013, 2014). By using the word " roughly" in the regulatory text, EPA does not intend that States would be able to delay substantial emission reductions from one 3 year period to the next. Rather, EPA intends this modifier to allow small deviations from the amount of emission reductions that would be needed to meet a 3 year RFP requirement. For example, assume that the " annual increment" of reductions needed for an area to reach attainment ( after the initial 6 year RFP obligation) is 5 tons per day and that the area has 6 additional years until attainment. Thus, for each of the two 3 year periods until attainment, the area would need " roughly" 15 tons per day, so long as the total for both periods is equivalent to or greater than 30 tons per day ( i. e., the total reductions needed for attainment). Assuming the area could achieve 14 tons per day during the first 3 year period, and achieve the remaining 16 tons per day during the second 3 year period, we believe this would be consistent with achieving " roughly the portion of reductions equivalent to three annual increments." We do not believe, however, that use of the word roughly allows States to delay substantial emission reductions. Thus, in the example above, it would not be appropriate for the State to delay reductions of several tons per day until the second 3 year period.

184 of years needed for attainment after the first increment of progress in order to establish an " annual increment." For each 3 year period out to the attainment date, the area must achieve roughly the portion of reductions equivalent to three annual increments. 46 This second RFP SIP must also be PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 185 submitted within 3 years after the effective date of designation ( i. e., by June 15, 2007).

While the adopted rule is not identical to any of the proposed options, we believe it is a logical outgrowth of our three proposed scenarios. The adopted approach is more stringent than certain of the proposed options and less stringent than others. Since this final decision incorporates elements of the three proposed scenarios, we believe it is similar in result to the three scenarios proposed.

c. Comments and responses Comment: One commenter stated that EPA has no authority to adopt " Option 1" for areas with attainment dates between 3 and 6 years after designation, because that option would waive any showing of RFP.

Response: The EPA acknowledges that Congress prescribed specific RFP requirements under subpart 2, but for subpart 1 provided more flexibility.

Our rule does not eliminate RFP obligations for subpart 1 areas. We are not requiring any specific percent reduction for subpart 1 areas with near term attainment dates. The measures that bring about near term attainment represent all the reductions that are reasonable to require PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 186 as annual incremental progress towards attainment. The EPA is not compelled to require a 15 percent emission reduction for all subpart 1 areas, especially in those cases where a full 15 percent is not needed in order to reach attainment.

However, we believe that it is generally appropriate to require the full 15 percent for areas with long term attainment dates to ensure interim progress towards attainment.

Comment: Some commenters supported the proposal that ties the required RFP showing to the attainment date.

Specifically, these commenters supported the proposal that areas with attainment dates of 3 years or less should have no separate RFP requirement, consistent with the requirement applicable to marginal areas under subpart 2. In addition,

support was shown for Option 1 for subpart 1 areas with an attainment date between 3 and 6 years following designations. Under Option 1, areas would have to show an adequate rate of reduction in order to achieve attainment by the deadline, but there would be no specific percentage reduction required.

Response: We acknowledge the support of these comments.

Comment: Another commenter believed that a 15 percent PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 187 emissions reductions requirement should only be required where such reductions would meaningfully advance the date of attainment. The RFP requirement in subpart 1 requires that the SIP provide for " reasonable further progress," and where emissions reductions would not create " reasonable further progress" either in the area itself or in downwind areas,

there is no basis under subpart 1 to require such specific emissions reductions. They further said that requiring a potentially expensive reduction in emissions in those cases where that reduction would not improve air quality was not justified based on a notion of " equity" with similar areas classified under subpart 2 and noted that such an interpretation was not required by the statute or sensible.

That some subpart 2 areas might have to reduce emissions by a specified percentage even where such reductions would yield no positive environmental benefits is an unfortunate result of the Congress' decision to limit EPA's discretion under subpart 2   which in turn is a result of a far less sophisticated understanding of the dynamics of ozone creation in 1990 than exists now   and where EPA has the discretion not to dictate an ineffective and inefficient result, it must exercise that discretion.

Response: We addressed in general those comments that PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 188 recommended alternatives to the mandatory measures of subpart 2 ( which includes the RFP requirement) in the response to comments above under the topic, " Should prescribed requirements of subpart 2 apply in all 8 hour nonattainment areas classified under subpart 2, or is there flexibility in application in certain narrowly defined circumstances?" We conclude in that section that EPA has no discretion to broadly waive mandatory requirements.

However, we noted that case law may provide support for case by case waivers where implementation of a measure would produce an absurd result.

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

[ Section VI. I. 9. of June 2, 2003 proposed rule ( 68 FR 32835); no draft or final regulatory text.

a. Background We proposed the following approach to address this issue. Where an area has both 1 hour and 8 hour RFP obligations for the post 2002 period, the State may rely on emissions reductions from the 1 hour plan in achieving RFP PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 189 for the 8 hour standard. The State could develop a new baseline and new RFP emission reduction targets for the entire 8 hour standard nonattainment area ( i. e., the old 1

hour standard nonattainment area and any newly added portion of the 8 hour standard nonattainment area). Emissions reductions from measures in the 1 hour ozone SIP that are achieved after the 8 hour ozone NAAQS baseline year could count ( subject to creditability restrictions as discussed above) toward meeting the RFP requirement for the entire 8

hour area.

This approach would set a RFP target for the entire 8

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

b. Summary of final rule We are adopting the approach from the proposal.

c. Comments and responses Comment: One commenter agreed with the approach outlined in the proposal but cautioned that the States would have to ensure that the target is at least as stringent as the 1 hour ROP target, thus ensuring no backsliding on the PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 190 1 hour NAAQS requirements. Under this approach, the State would have to develop a new baseline and new RFP emission reduction targets for the entire 8 hour standard nonattainment area. Emissions reductions from measures in the 1 hour ozone SIP that are achieved after the 8 hour ozone NAAQS baseline year could count ( subject to credibility restrictions as discussed in the proposed rulemaking) toward meeting the RFP requirement for the entire 8 hour area. The new RFP target for the 8 hour standard would replace the previous 1 hour ozone target ( while ensuring that, at a minimum, the emissions reductions required to meet the old target are met).

Response: We agree with the commenter that the emission reduction targets under the 8 hour standard must be at least as stringent as the 1 hour targets. Section IV. E. 3. of this preamble discusses the requirements for RFP for several situations relative to the area's former obligations under the 1 hour standard and the current obligations under the 8 hour standard. The obligations of an area under the anti backsliding provisions of 40 CFR 51.905( a)( 1)( iii) would still apply, meaning that emissions reductions under the 1 hour ROP requirements would still be required as if the 1 hour standard had never been revoked. PREDECISIONAL DRAFT   DO NOT QUOTE, CITE OR DISTRIBUTE draft 11/ 03/ 05 47Memorandum of May 10, 1995, " RFP, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard," from John S. Seitz, Director, Office of Air Quality Planning and Standards. Available at: http:// www. epa. gov/ ttn/ oarpg/ t1/ memoranda/ clean15. pdf.

191 Therefore, the new 8 hour emission target for the 8 hour area would be logically at least as stringent as under the 1 hour area for a given time period.

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

hour RFP, attainment demonstrations and other related requirements?

[ Section VI. I. 10 of June 2, 2003 proposed rule ( 68 FR 32835); no draft regulatory text; section 51.918 of final rule.]

a. Background As noted in the proposal, we issued a policy on May 10,