Interim Implementation Policy on New or Revised Ozone and Particulate Matter (PM) National Ambient Air Quality Standards (NAAQS)

Note: EPA no longer updates this information, but it may be useful as a reference or resource.
 [Federal Register: December 13, 1996 (Volume 61, Number 241)]
[Proposed Rules]
[Page 65751-65762]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 51
[FRL-5659-3]
RIN 2060-AF34
 
Interim Implementation Policy on New or Revised Ozone and 
Particulate Matter (PM) National Ambient Air Quality Standards (NAAQS)

AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of Proposed Policy (NPP).



SUMMARY: This document is to propose a policy regarding interim 
implementation requirements for ozone and PM air pollution control 
during the time period following promulgation of new or revised NAAQS. 
Elsewhere in today's Federal Register, EPA is proposing these NAAQS. 
The policy as proposed is intended to ensure momentum is maintained by 
the States in the current program while moving toward developing their 
plans for implementing the new NAAQS. An explanation and structure of 
the Federal Advisory Committee Act (FACA) Subcommittee for Ozone, PM 
and Regional Haze Implementation Programs (Subcommittee) is provided 
under SUPPLEMENTARY INFORMATION.

DATES: Written comments on this proposal must be received by February 
18, 1997.

ADDRESSES: Comments. Comments on this proposal should be submitted (in 
duplicate if possible) to the Air and Radiation Docket and Information 
Center, 401 M Street, SW, Washington, DC 20460, Attention Docket Number 
A-95-38. Docket. The public docket for this action is available for 
public inspection and copying between 8:00 a.m. and 5:30 p.m., Monday 
through Friday, at the Air and Radiation Docket and Information Center 
(6102), Attention Docket A-95-38, South Conference Center, Room 4, 401 
M Street, SW, Washington, DC 20460. A reasonable fee for copying may be 
charged.

FOR FURTHER INFORMATION CONTACT: For general FACA Subcommittee 
questions and comments, contact Ms. Denise Gerth, U.S. EPA, MD-15, 
Research Triangle Park, NC 27711, telephone (919) 541-5550. For 
specific questions and comments on the NPP, contact Ms. Sharon 
Reinders, U.S. EPA, MD-15, Research Triangle Park, NC 27711, telephone 
(919) 541-5284.

SUPPLEMENTARY INFORMATION: The following communications and outreach 
mechanisms have been established:

    Overview information--A World Wide Web (WWW) site has been 
developed for overview information on the NAAQS and the ozone, PM, and 
regional haze (RH) FACA process. The Uniform Resource Location (URL) 
for the home page of the web site is http://www.epa.gov/oar/faca/.
    Detailed and technical information--Available on the O3/PM/RH 
Bulletin Board on the Office of Air Quality Planning and Standards 
(OAQPS) Technology Transfer Network (TTN), which is a collection of 
electronic bulletin board systems operated by OAQPS containing 
information about a wide variety of air pollution topics. The O3/PM/RH 
Bulletin Board contains separate areas for each of the FACA 
Subcommittee's five work groups and includes meeting materials, issue 
papers, as well as general areas with information about the process, 
participants, etc. The TTN can be accessed by any of the following 
three methods:

--By modem: the dial-in number is (919) 541-5742. Communications 
software should be set with the following parameters: 8 Data Bits, No 
Parity, 1 Stop Bit (8-N-1) 14,400 bps (or less).
--Full Duplex.

--ANSI or VT-100 Terminal Emulation.

The TTN is available on the WWW site at the following URL: http://
ttnwww.rtpnc.epa.gov/html/ozpmrh/facahome.htm. The TTN can also be 
accessed on the Internet using File Transfer Protocol (FTP); the FTP 
address is ttnftp.rtpnc.epa.gov. The TTN Helpline is (919) 541-5384.

Table of Contents

Purpose and Objectives

A. FACA Subcommittee

B. Basis for the Interim Implementation Policy
C. Interim Policy


 Effective Dates

 Designations, Redesignations and Classifications
    a. Ozone

    b. PM-10

 Program Requirements

    a. Progress Requirements for Serious and above Ozone Areas
    b. Attainment Demonstrations

    (1) Ozone

    (2) PM-10

    c. July 1996 Findings Issued by EPA--Ozone
    d. New Requirements for Marginal and Moderate Areas--Ozone
    e. Planning and Control Requirements--PM-10
    f. Substitutions

    (1) Ozone

    (2) PM-10

    g. OTR, OTC, PAMS

    h. Conformity

    i. New Source Review

Purpose and Objectives

    This notice proposes an interim implementation policy associated 
with the potential revision of the ozone and PM NAAQS. The interim 
implementation policy is the guidance that EPA will use to continue to 
implement the ozone and PM-10 nonattainment programs. The ozone and PM 
NAAQS are proposed elsewhere in today's Federal Register. The EPA 
intends to propose a regional haze program in mid-1997. Although EPA is 
undertaking a notice and comment process regarding the interim 
implementation policy, the interim implementation policy would 
nevertheless be a policy to be implemented through subsequent 
rulemaking actions, e.g., findings or other actions regarding SIP 
submittals from the States. Thus, the interim implementation policy 
would represent EPA's preliminary views on these issues and, while it 
may include various statements that States must take certain actions, 
these statements are made pursuant to EPA's preliminary 
interpretations, and thus do not bind the States and public as a matter 
of law. Only after EPA has made its interpretations final through 
rulemaking will they be binding on the States and public as a matter of 
law. Such rulemaking will follow the requirements of the Administrative 
Procedure Act, 5 U.S.C. section 553(b) and (c), and in some cases may 
rely on the ``good cause'' exception in 5 U.S.C. section 553(b)(B).
    In advance of these actions, the EPA published an advance notice of 
proposed rulemaking (ANPR) entitled, ``National Ambient Air Quality 
Standards for Ozone and Particulate Matter,'' on June 12, 1996 (61 FR 
29719) which announced the EPA's plans to propose decisions on whether 
to retain or revise the ozone and PM NAAQS. That ANPR also described 
the FACA Subcommittee process established under the Clean Air Act 
Advisory Committee (CAAAC) to provide advice and recommendations to the 
EPA on developing new, integrated approaches for implementing potential 
revised NAAQS for ozone and PM, as well as a new regional haze 
reduction program. The Subcommittee is composed of representatives from 
State, local and tribal organizations, environmental groups, industry 
and trade groups (including small business representatives), 
consultants, academic/

[[Page 65753]]

 scientific communities, and Federal agencies. The organization of the 
Subcommittee includes a Coordination Group and four work groups: (1) 
Base Programs Analyses and Policies Work Group, (2) National and 
Regional Strategies Work Group, (3) Science and Technical Support Work 
Group, and (4) Communications and Outreach Work Group. Through this 
process, EPA is engaging in communications with segments of society 
that may be affected by the implementation of NAAQS and the regional 
haze program.

    Elsewhere in today's Federal Register, the EPA is also publishing 
an ANPR entitled, ``Implementation of New or Revised Ozone and 
Particulate Matter (PM) National Ambient Air Quality Standards (NAAQS) 
and Regional Haze Regulations,'' which outlines policy and technical 
implementation issues and principles, and questions for issues 
associated with the potential revision of the ozone and PM NAAQS and 
the development of a regional haze program.
    These notices are intended to invite stakeholders to participate in 
the implementation development process, to assure that their concerns 
will be addressed and their options assessed, and, ultimately, to 
increase the effectiveness of the NAAQS implementation strategies and 
regional haze reduction program that is established.

A. FACA Subcommittee Recommendations

    The Subcommittee has provided advice and recommendations for 
consideration by CAAAC on implementation of specific programs covering 
the transition time period after new or revised NAAQS are promulgated. 
The EPA is taking the advice and recommendations that the Subcommittee 
recommended for consideration by the CAAAC into consideration in this 
proposal. Where the Subcommittee reached broad agreement in their 
recommendations, EPA is accepting the recommendations. In other 
situations where the Subcommittee may not have reached broad agreement, 
EPA is modifying the recommendations. Where no specific recommendations 
were made, EPA is following the general philosophy that is invoked by 
the other recommendations. The recommendations and advice of the FACA 
Subcommittee provide the foundation of today's proposal.
    The EPA solicits comment on each element contained in this proposal 
and seeks additional suggestions on approaches to increase flexibility 
during the interim period to improve both air quality and pollution 
reduction strategies with a change in the NAAQS. Consistent with longstanding 
EPA policy, States have the ability to propose case-by-case 
modifications to their plans which could make equivalent or improved 
environmental progress. The EPA will review and rulemake on these 
through the normal SIP revision process. Consistent with this, EPA 
solicits comment on whether, and how, to allow flexibility to control 
programs during the timeframe of the IIP to allow additional 
substitutions and/or modifications to existing control programs. 
Additionally, EPA seeks comment on the relevant criteria, such as air 
quality impact, emission reductions, risk and population exposure, 
cost-effectiveness, and transport impacts, it should employ during the 
evaluation of such SIP revisions. The reader is directed to the interim 
policy portion of this notice for further details.
    Recognizing the merit of market-based solutions to pollution 
control, in 1994, EPA issued the economic incentive program (EIP) rule, 
which provides rules and guidance for establishing economic incentive 
programs. The EIP remains available to be used in coordination with 
this policy as part of the States' plans to reduce pollution and 
achieve the new NAAQS.

B. Basis for the Interim Implementation Policy

    The EPA interprets the relevant portions of the Clean Air Act (Act) 
to provide that the general planning requirements of part A of title I 
and the basic nonattainment planning requirements of subpart 1 of part 
D of title I govern the implementation of a new or revised NAAQS. The 
detailed provisions of subparts 2 and 4 of part D that currently apply 
to ozone and PM-10 (particles with an aerodynamic diameter less than or 
equal to a nominal 10 micrometers) nonattainment planning would not 
apply directly to the implementation of a new ozone NAAQS or a new fine 
particle NAAQS, but would continue to apply during the interim period 
after promulgation of a new or revised NAAQS to the extent they are 
retained under a no-backsliding principle and to the extent they are 
needed to comply with the general obligations of subpart 1. The 
provisions of subpart 4, however, would apply to the implementation of 
a new or revised PM-10 NAAQS. Furthermore, with regard to a nobacksliding 
principle, section 110(l) provides that EPA may not approve 
revisions to SIP's that interfere with requirements to attain or make 
reasonable further progress (RFP) or with any other applicable 
requirements of the Act.

    The basis for the view that the specific requirements of subparts 2 
and 4 do not apply directly in the case of the implementation of a new 
or revised ozone NAAQS, or in the implementation of a fine particle 
NAAQS, lies in the language and structure of those subparts, which are 
clearly and explicitly tied to the 1-hour ozone NAAQS in existence at 
the time of the enactment of the 1990 Amendments to the Act in the case 
of subpart 2, and to a PM-10 NAAQS in the case of subpart 4. The 
provisions of subpart 1, however, apply to the implementation of any 
NAAQS, including revisions to NAAQS in effect at the time of the 1990 
Amendments. For example, the current ozone classification scheme of 
subpart 2, which forms the basis for the control requirements and 
attainment dates for nonattainment areas, is explicitly linked with the 
1-hour NAAQS while section 172(a)(1) explicitly authorizes that EPA may 
establish a new classification system with respect to a revision of a 
NAAQS. Subpart 4 expressly applies only to PM-10. Thus, as subparts 2 
and 4 are limited in direct applicability to the 1-hour ozone NAAQS and 
PM-10 NAAQS respectively, only subpart 1 directly applies to 
implementation of new or revised ozone NAAQS or a fine particle NAAQS 
in nonattainment areas. Because the provisions of subpart 4 are not 
linked to a specific PM-10 NAAQS (in contrast to subpart 2's linkage to 
one specific ozone NAAQS), the provisions of subpart 4 would apply to 
the implementation of a revised PM-10 NAAQS.
    Of critical importance, however, is that subpart 1, in addition to 
the general obligations of section 172(c), includes a no-backsliding 
principle operative in the event of revisions to a NAAQS. Section 
172(e) of the Act clearly provides that a no-backsliding principle 
should apply upon a relaxation of an existing NAAQS. It provides that 
EPA is to conduct a rulemaking within 12 months of the promulgation of 
a relaxed NAAQS to promulgate requirements applicable to areas not 
attaining the existing standard that will provide for controls which 
are not less stringent than the controls applicable to areas designated 
nonattainment before such relaxation.

    The EPA believes that a no-backsliding principle is even more 
important and by implication was intended by the Act to be a governing 
principle when an existing NAAQS is strengthened, as is the case with 
ozone. However, the Act does not expressly

[[Page 65754]]

address how to implement the no-backsliding principle before the new 
NAAQS is implemented through the SIP program. Therefore, in order to 
provide greater assurance that the currently existing and required 
control measures will continue to be implemented until the 
implementation program for the new ozone NAAQS actually begins, which 
will probably not occur for several years, EPA is proposing (in the 
NAAQS proposal published elsewhere in today's Federal Register) that 
the effective date of the revocation of the existing ozone NAAQS (the 
1-hour standard) be deferred until EPA determines that an area has a 
SIP that provides for the achievement of the new NAAQS. This deferral 
of the effective date would be on a case-by-case basis, e.g., once an 
attainment demonstration for the new ozone NAAQS is approved for a 
particular nonattainment area or EPA determines that a SIP for an 
attainment area meets the requirements of section 110(a)(1), the 
existing 1-hour ozone standard NAAQS would no longer be in effect as to 
that area. This will provide greater assurance that the air quality 
benefits of the existing ozone NAAQS implementation program, which EPA 
believes are necessary to attain and maintain the potential new or 
revised ozone NAAQS, will be retained, than would reliance solely on a 
no-backsliding principle implemented administratively through the 
general provisions of subpart 1 of part D of the Act.
    The purposes for which EPA is not deferring the effective date of 
the revocation of the existing ozone NAAQS are those for which EPA 
believes it is not necessary or desirable to retain the existing NAAQS 
as part of a transition from the old to the new ozone NAAQS. These 
exceptions are twofold: (1) The requirement to demonstrate attainment 
of the existing NAAQS by the attainment dates set forth in subpart 2 of 
part D, and (2) the provisions regarding the reclassification of areas 
upon a failure to attain the current ozone standard by the applicable 
attainment dates in subpart 2. The EPA believes it is appropriate to 
exempt the first requirement from the general deferral of the effective 
date of the revocation of the existing NAAQS since its focus is on 
demonstrating attainment of the existing NAAQS as of a certain date--
which will be superseded by a new requirement to attain the new NAAQS 
by new dates. The EPA believes it is appropriate for areas to shift 
their efforts to develop attainment demonstrations from the existing 
NAAQS to the new NAAQS. With respect to the second requirement, EPA 
believes that while areas should have to continue with the 
implementation of the control measure programs required as of the date 
a new NAAQS is promulgated, they need not have to comply with the 
additional specified control measures that they would have been subject 
to had they been reclassified in accordance with the provisions of 
subpart 2. As described below, EPA is relying on an independent basis 
for requiring these areas to achieve the same rate of progress in terms 
of emission reductions that they would have had to achieve after a 
reclassification under subpart 2. For the reasons described therein, 
EPA believes these areas should have greater flexibility in adopting 
and implementing new control measures to achieve the same progress than 
if they were simply subject to the reclassification provisions of 
subpart 2.

    Also, based in part on the Subcommittee's deliberations and 
recommendations, the EPA believes that rather than expending 
significant effort during this interim period to evaluate whether to 
retain or eliminate the various existing and required control measures 
in light of the potential new or revised NAAQS, States and stakeholders 
should focus their planning efforts on moving forward to attain the new 
NAAQS rather than reevaluating prior planning decisions.

C. Interim Policy

 Effective Dates

    The interim policy that EPA is proposing in this notice is intended 
to take effect on the date of the NAAQS promulgation and remain as to 
each area until the effective date of EPA approval of the SIP revision 
for achievement of the new NAAQS. The EPA believes that approval rather 
than submission of a SIP is appropriate because submission of a new SIP 
alone provides neither sufficient assurance to allow the requirements 
in the currently EPA-approved SIP to be changed nor a sufficient legal 
basis for revising, amending or deleting requirements in a SIP that had 
been previously approved by EPA. The EPA notes that SIP's are approved 
through rulemaking action by EPA and thereby become Federal rules that 
are incorporated in the CFR. In order to revise such Federal rules, 
through a revision to a SIP, further EPA rulemaking action must be 
taken. Thus, EPA is proposing that the effective dates for the interim 
policy are from the date of NAAQS promulgation to the effective date of 
EPA approval of the new SIP for each area to achieve the new NAAQS. The 
length of time this policy remains in effect could be several years and 
depends on the time necessary for States to develop new SIP's and be 
approved by EPA.

    This interim policy is not intended to apply to new attainment 
demonstrations and SIP submissions made to implement a new NAAQS which 
occurs after areas have undergone designations under section 107(d)(1) 
with respect to a new NAAQS. Further policy, guidance, and/or rules 
will be developed following further deliberations of the FACA that will 
apply to such submissions.

 Designations, Redesignations and Classifications
    In section 107(d)(1)(B)(iv), the Act provides that existing ozone 
and PM-10 designations remain in effect until areas are redesignated 
pursuant to section 107(d)(3). By analogy, EPA believes it is 
reasonable for such designations to remain in effect after promulgation 
of new NAAQS until new designations are undertaken after promulgation 
of the new NAAQS. In addition, in the case where the current ozone 
NAAQS would remain in effect, the designations would remain in effect 
so long as the current 1-hour ozone NAAQS remains in effect. No similar 
provision exists for classifications, however. Nevertheless, as 
classifications are linked with the control requirements applicable to 
the nonattainment areas, they should continue to have force inasmuch as 
they determine the control requirements applicable for purposes of 
applying the no-backsliding principle. In particular for ozone, because 
the existing NAAQS would remain in effect, the classifications remain 
in effect as well. Since classifications continue, control measures 
required for a specific classification in policy or guidance continue 
to apply.

a. Ozone

    The EPA is proposing that ozone nonattainment areas with clean air 
quality data at the time of promulgation of the new or revised ozone 
NAAQS may be redesignated to attainment provided they satisfy the 
criteria of section 107(d)(3)(E) including having a fully-approved SIP, 
meeting all applicable requirements and an approved maintenance plan. 
Any redesignation action taken on areas currently designated attainment 
or nonattainment does not preclude EPA from taking future action with 
respect to these areas in the new round of designations that will 
address the new or revised NAAQS.

    The following two scenarios would apply to existing ozone 
nonattainment

[[Page 65755]]

areas that wish to redesignate to attainment:

(1) Requests Submitted and EPA Approved Prior to Promulgation

    Complete redesignation requests and maintenance plans for ozone 
nonattainment areas submitted prior to the promulgation date of the new 
or revised ozone NAAQS will be allowed to redesignate to attainment 
prior to promulgation of the new or revised ozone NAAQS upon approval 
of the maintenance plan provided that all available air quality data 
show attainment of the current 1-hour NAAQS. Therefore, any requests 
submitted prior to promulgation of the new NAAQS, which are not finally 
approved by EPA, will be processed according to scenario 2 below.

(2) Requests Submitted and EPA Approved on or After Promulgation

    Ozone redesignation requests and maintenance plans submitted on or 
after promulgation of the new or revised NAAQS will be evaluated in 
accordance with section 107(d)(3)(E). In this case, maintenance plans 
must demonstrate attainment and maintenance of the 1-hour NAAQS and the 
new or revised NAAQS.

    The EPA also recommends that previously redesignated ozone 
nonattainment areas review their maintenance plans to determine if 
their contingency provisions need to be modified to reflect the 
promulgation of a new or revised NAAQS.
b. PM-10

    The EPA is proposing that PM-10 nonattainment areas with clean air 
quality data at the time of promulgation of the new and/or revised PM 
standards be allowed to redesignate to attainment if they satisfy the 
criteria of section 107(d)(3)(E) including having a fully-approved SIP, 
meeting all applicable requirements, and a maintenance plan. Thus, in 
the event that the 24-hour PM-10 standard is revised, existing 
nonattainment areas could redesignate to attainment if they otherwise 
satisfy the criteria of section 107(d)(3)(E) and submit a maintenance 
plan which demonstrates attainment with a SIP-approved design value 
which is equivalent to or below the revised PM-10 24-hour standard. If 
the area has already submitted a redesignation request, it need not 
withdraw and revise it unless the existing redesignation request and 
maintenance plan do not demonstrate that the SIP-approved design value 
will be below the revised PM-10 24-hour standard. In such a case, they 
should resubmit a revised redesignation request and maintenance plan 
that shows attainment and maintenance of the revised PM-10 standard.
    In the event the PM-10 24-hour standard is eliminated, current 
nonattainment areas with clean air quality data at the time of 
promulgation would still be eligible to redesignate to attainment 
pending a submittal of a fully-approvable SIP demonstrating attainment 
of the PM-10 annual standard and the submittal of the maintenance plan 
under section 175A as required in section 107(d)(3)(E).
    A nonattainment classification for PM-10 remains in effect until 
States can assess the impact of a revised PM-10 standard. In the case 
of PM-10, reclassification to serious is based on the inability of the 
area to practicably attain the 24-hour and/or annual PM-10 NAAQS within 
the timeframes prescribed by the Act. Consistent with the nobacksliding 
principle, those areas which failed to attain the PM-10 
NAAQS in 1994 should have been reclassified as serious PM-10 areas. 
Since the deadline by which to reclassify to serious was before the 
June 1997 NAAQS promulgation, the requirements for serious areas would 
still apply. Areas with attainment dates occurring during the interim 
period will not be reclassified during the interim period.
3. Program Requirements

a. Progress Requirements for Serious and Above Ozone Areas
    The EPA believes that the current ROP requirements should continue 
until EPA has approved the new SIP for the new NAAQS. Section 
182(c)(2)(B) provides specifically that ozone nonattainment areas 
classified as serious and higher under the current NAAQS must submit a 
SIP (post-1996 ROP plan) which provides for actual VOC or NO<INF>X 
emissions reductions of at least 3 percent per year averaged over each 
consecutive 3-year period beginning November 15, 1996 until the area's 
attainment date. The due date for this SIP was November 15, 1994 under 
the Act, but was extended to the end of 1995 in the ``Ozone Attainment 
Demonstrations,'' memorandum from Mary D. Nichols to Regional 
Administrators, March 2, 1995 (March 2, 1995 policy statement).
    For ten States and the District of Columbia, EPA, by rulemaking 
published July 10, 1996 (61 FR 36292), made findings of failure to 
submit for (1) the first 9 percent of the post-1996 ROP plan and (2) 
for those States with severe ozone nonattainment areas, the commitment 
to adopt the additional post-1999 ROP control measures. This is 
discussed more fully below under July 1996 Findings Issued by EPA.
    For ozone nonattainment areas classified as severe and higher, EPA 
believes that the post-1996 ROP plan should still include emissions 
reductions after 1999 in the event the new SIP's to attain the new 
NAAQS are delayed. Therefore, EPA is proposing to continue the 
requirement for an average of 3 percent per year ROP post-1999 until 
SIP's to attain the new NAAQS are approved by EPA. Although this 
represents a modification of the current requirement to provide for 3 
percent-per-year ROP until the applicable attainment dates, EPA 
believes this is reasonable in light of a new NAAQS and the shift to 
planning for attainment of that NAAQS.

    As mentioned above, the commitment to adopt the additional post-
1999 ROP rules for the severe areas was due at the end of 1995, and EPA 
has made findings appropriately. However, the rules for the completion 
of the post-1999 ROP should be identified with the second SIP 
submittal, as described in the March 2, 1995 policy statement. That 
submittal is described below under Attainment Demonstration.
    The March 2, 1995 policy statement indicates that States may phasein 
adoption of the rules to provide for implementation of measures for 
post-1999 ROP beginning in the period immediately following 1999. Thus, 
these rules should be submitted to EPA no later than the end of 1999. 
The EPA believes these requirements will facilitate reasonable progress 
in the interim period.

    Areas with ROP plans approved by EPA, such as certain areas in 
California, should continue to implement the ROP requirements of their 
SIP's.

    For international border areas, EPA may continue to approve a SIP 
that establishes that the implementation of the plan would be adequate 
to attain and maintain the relevant NAAQS but for emissions emanating 
from outside the United States. Under these circumstances, States would 
be allowed to defer the adoption of a post-1996 ROP plan.
b. Attainment Demonstrations

(1) Ozone

Serious and Higher Classified Areas

    Ozone attainment demonstration SIP's for serious and higher 
classified areas were due November 15, 1994. The EPA recognized that 
many of these serious and above ozone nonattainment areas were unable 
to complete SIP

[[Page 65756]]

requirements within schedules prescribed in the Act due to 
circumstances beyond their control. Of special concern was the 
influence of regional transport of ozone and its precursors on urban 
areas' ability to demonstrate attainment.
    Through the March 2, 1995 policy statement, EPA provided States 
with a two-phased SIP submittal process which would allow additional 
time for States to perform an assessment of regional transport and its 
impact on urban areas. Areas that have adopted certain specified 
control measures and made appropriate commitments to interstate 
activities to study and address ozone transport are currently allowed 
until mid-1997 to submit full demonstration-of-attainment SIP's which 
take into account regional measures in nonattainment and attainment 
areas recommended by the interstate study to assess ozone transport.
    The EPA believes that after promulgation of a new or revised ozone 
NAAQS, States should no longer be required to provide full 
demonstration-of-attainment SIP's for the 1-hour NAAQS; however, States 
are obliged to continue attainment planning toward the new NAAQS. The 
EPA believes that the full development of SIP's to attain the current 
1-hour NAAQS is not a critical component of the transition from the 
current NAAQS to the new NAAQS, and that it would be advantageous for 
States to continue to achieve the required ROP while shifting their 
planning efforts toward satisfying the requirement to demonstrate 
attainment of the new ozone NAAQS.

    Accordingly, the EPA proposes the following program elements 
related to attainment demonstrations: (1) That regional control 
measures identified (as discussed below) to reduce regional transport 
and support urban attainment planning and demonstrations be adopted and 
implemented in accordance with current programs; (2) that States submit 
the urban modeling analysis to establish the NO<INF>X and VOC percent 
reductions but not the specific measures necessary to attain the 1-hour 
NAAQS by the attainment dates set forth in subpart 2; and (3) that 
within 90 days of promulgation of a revised NAAQS, States submit to EPA 
an early assessment of attaining the revised NAAQS by estimating the 
NO<INF>X and VOC percent reductions needed to attain the revised NAAQS 
by those dates. This is discussed further below under Methods. States 
would not at this time be required to adopt and submit to EPA specific 
control measures to attain the new or revised ozone NAAQS. The first 
two elements described above, currently under way, will be useful to 
lay the groundwork for assembling attainment demonstrations for the new 
NAAQS. In the future, the EPA will prescribe new requirements for 
modeling demonstrations and SIP's to address the new or revised NAAQS.

Methods

    The EPA believes that 90 days is a reasonable period of time for 
the early assessment. The early assessment should utilize information 
that is or will be generated through the current requirement for 
States' SIP attainment demonstration analyses. No new modeling runs are 
required for the early assessment beyond what is currently required for 
attainment demonstrations. Using the modeling results from the early 
assessment, States are expected to review the results to determine the 
effectiveness of the NO<INF>X and VOC measures identified towards 
attaining the revised NAAQS. From this review, States are expected to 
estimate the levels of emission reductions needed to attain the revised 
NAAQS.

    It is expected that the early assessment will require processing of 
existing modeling results. Two methods are being proposed. The first 
method results in a set of NO<INF>X and VOC reductions needed to attain 
the revised NAAQS. For this method, it is assumed that States have 
performed a series of NO<INF>X and VOC reduction runs and are able to 
generate an ozone response curve. The modeling required to produce the 
percent reductions to attain the 1-hour standard may be used to 
calculate predicted values (at each grid cell) for the revised 
standard. These values may then be used to quantitatively estimate the 
VOC and NO<INF>X percent reductions necessary to attain the revised 
standard. This is typically done through the use of ozone response 
curves which show predicted changes in ozone as a result of changes in 
VOC and NO<INF>X emissions in the inventory.
    The second method results in an analysis of the effectiveness of a 
specific NO<INF>X/VOC strategy toward attaining the revised NAAQS. Some 
areas may elect to model a specific strategy rather than a matrix of 
NO<INF>X and VOC reductions to demonstrate attainment of the current 
NAAQS. For example, a State may elect to demonstrate attainment by 
modeling the impact of the regional control measures along with a local 
strategy (i.e., 9 percent ROP). In this case, the series of NO<INF>X 
and VOC reduction runs are not needed to demonstrate attainment of the 
current NAAQS. For the second method, modeling results from the final 
attainment strategy run may be used to calculate the predicted values 
(at each grid cell) for the revised standard. These values may be used 
to produce the number of grid-cell-hours above the standard, display 
the spacial extent of daily maximum values above the revised standard, 
and determine the peak value predicted. This information may then be 
used to estimate the NO<INF>X and VOC reductions needed to attain the 
revised NAAQS.

    The early assessment will give States/local agencies and EPA an 
appreciation for the magnitude of possible additional controls needed 
to attain the revised standard. State/local agencies and EPA could use 
this information to begin preparations for development of a revised SIP 
to attain the new NAAQS.

    It is EPA's intention that States that fail to submit the 90-day 
preliminary estimate be subject to a finding for failure to submit a 
required SIP element, which could subject the State to sanctions.
    The EPA believes that regional control measures being identified in 
the current program to reduce regional transport and support attainment 
planning are critical to attainment of the current NAAQS and the new or 
revised NAAQS. These regional control measures are intended to reduce 
levels of ozone and its precursors over a larger geographic area rather 
than a single nonattainment area. Thus, these measures are applicable 
in rural areas or attainment areas and could also include measures 
needed in urban and nonattainment areas. The EPA reaffirms the 
importance of regional measures during the interim period. The EPA 
expects that these measures will promote progress toward attainment of 
the new NAAQS and, therefore, should be implemented. The EPA intends to 
work with all affected States to ensure that the required reductions 
are achieved. The EPA will address this issue more specifically in 
future guidance or rulemaking.

(2) PM-10

    All moderate and serious area PM-10 attainment demonstration SIPs 
should have been submitted prior to the June 1997 promulgation of the 
revised PM-10 NAAQS. While the majority of the nonattainment areas have 
satisfied this requirement, there are still quite a few areas that have 
not. Consistent with the no-backsliding principle, EPA believes that 
areas that failed to submit an attainment demonstration during the 
1991-1997 timeframe should still be required to satisfy relevant PM-10 
requirements. Thus, specifically for PM-10, EPA is requiring the 
attainment demonstration, not for the purpose of

[[Page 65757]]

meeting the attainment demonstration requirement per se, but instead 
only for purposes of defining the appropriate level of RACM or BACM so 
that EPA can prevent RACM or BACM backsliding.
c. July 1996 Findings Issues by EPA--Ozone
    By notice published July 10, 1996 (61 FR 36292), EPA issued three 
findings (the ``July 10, 1996 Findings'') for nine nonattainment areas 
in ten States and the District of Columbia (note that serious areas 
only received the first and third findings). These were for failure to 
submit: (1) A SIP provision for fully adopted rules requiring emissions 
reductions of 9 percent in ozone precursors from the end of 1996 to 
1999, (2) a SIP commitment to adopt any additional rules needed to 
complete the requirements for ROP reductions after 1999 and until the 
attainment date, and (3) a SIP commitment to adopt additional measures 
needed for attainment of the 1-hour NAAQS.
    The EPA interprets the July 10, 1996 findings as based not only on 
the requirements of section 182(c)(2) (A)-(B), which apply specifically 
to ozone nonattainment areas classified under the current NAAQS, but 
also on the requirements of section 172(c) (1)-(2), which apply 
generally to nonattainment areas. Specifically, the ``reasonable 
further progress'' requirement in section 172(c)(2) continues to be 
relevant.

    Furthermore, EPA proposes to interpret the section 172(c)(2) 
``reasonable further progress'' requirement as mandating VOC or 
NO<INF>X reductions of 3 percent per year, averaged over a 3-year 
period, for ozone nonattainment areas classified under the current 
NAAQS that retain their nonattainment designation post-1996. The EPA 
believes that the requirement for 3 percent-per-year ROP found in 
section 182(c)(2)(B) indicates that the Act would have intended that 
this amount of progress continue in ozone nonattainment areas with this 
degree of air quality problem. Thus, the continuation of the ROP 
requirement is grounded in both the retention of the 1-hour ozone NAAQS 
(with the consequent effectiveness of section 182(c)(2)(B)) until SIP's 
implementing the new NAAQS are approved and the requirements of section 
172(c) (1) and (2), under which EPA would apply the ROP requirements 
for anti-backsliding purposes.

    Because the requirements of both section 182(c)(2)(B) related to 
the first 9 percent of the post-1999 ROP plan, and the comparable 
requirement of section 172(c)(2) continue to apply following 
promulgation of a revised NAAQS, the first finding and associated 
sanctions and Federal implementation plan (FIP) clocks continue to 
apply. This finding concerns the first 9 percent of the post-1996 ROP 
plan.

    The EPA proposes to modify the second finding which requires severe 
areas to submit a SIP commitment to adopt additional 3 percent average 
annual reductions from the end of 1999 through the attainment date. The 
EPA proposes to modify this finding to cover the obligation of the 
affected States to commit to submit the reductions which are required 
only from the end of 1999 until EPA approves the attainment SIP's 
addressing the revised NAAQS.

    The EPA proposes to retract the third finding which is for a SIP 
commitment to adopt additional measures needed to attain the 1-hour 
NAAQS. As described above, EPA proposes to take the position that the 
requirement to demonstrate attainment of the 1-hour NAAQS no longer 
applies in light of the need for States to focus on planning to attain 
the new ozone NAAQS. The EPA proposes to replace the third finding with 
a finding to require that States submit the 90-day preliminary estimate 
described above. This estimate assists the State in developing both ROP 
plans and attainment plans under the revised NAAQS.
    Depending on its review of any comments to this interim 
implementation policy including any comments from the CAAAC, EPA 
intends to promulgate the above-described revisions to the July 10, 
1996 findings and new findings in subsequent rulemakings. Because the 
July 10, 1996 findings were made through rulemaking, modifications 
would similarly need to be made through rulemaking.
    Previously-issued findings pertaining to other required elements in 
the ozone program are carried forward during the interim period.
d. New Requirements for Marginal and Moderate Areas--Ozone
    The Act requires moderate ozone nonattainment areas to attain the 
1-hour NAAQS by November 15, 1996. The EPA is proposing that States 
with moderate and any remaining marginal nonattainment areas that do 
not attain the 1-hour NAAQS by November 15, 1996, submit to EPA, within 
18 months after promulgation of a new ozone NAAQS: (1) a plan to 
achieve an emission reduction of 9 percent (3 percent-per-year average 
ROP through 1999), or alternatively, an attainment demonstration for 
the new NAAQS; as well as (2) the new source review (NSR) requirements 
as discussed below under New Source Review. Further, the EPA is 
proposing that all existing control measures that are in place, 
including those measures needed for the current moderate classified 
nonattainment areas to achieve 15 percent VOC ROP emission reductions 
through 1996, remain in place. The EPA believes that these requirements 
apply under section 172(c), paragraphs (1) (attainment demonstrations), 
(2) (reasonable further progress), and (5) (NSR). The applicability of 
paragraphs (1) and (2) of section 172(c) were discussed above. The EPA 
proposes to interpret paragraph (5), concerning NSR, as applicable for 
the same reasons.

    The EPA believes that 18 months is a reasonable period of time for 
the States to make the required submission because much of the work 
required of the States should already have been completed under the 
requirements of the provisions of section 182(b)-(c) applicable to 
marginal and moderate nonattainment areas under the current NAAQS. 
Moreover, this period is generally consistent with the amount of time 
EPA allowed for submittal of new requirements when marginal areas were 
bumped up to moderate areas under the current NAAQS (59 FR 38410 (July 
28, 1994), 59 FR 50848 (October 6, 1994) proposed and final bump-up of 
the Poughkeepsie, NY, marginal nonattainment area to moderate).
    The EPA will conduct an early pre-designation determination within 
90 days of promulgation of a new or revised ozone NAAQS using air 
quality data to evaluate if these marginal and moderate nonattainment 
areas are attaining the new NAAQS. The pre-designation determination 
will not affect the new round of designations and classifications that 
will occur after promulgation of new ozone NAAQS.
    Two exceptions are discussed below:
    (1) For areas not attaining the 1-hour NAAQS that are attaining the 
new NAAQS, EPA is proposing to defer implementation of the 9 percent 
ROP plans or the attainment demonstrations for the new NAAQS and the 
NSR requirements of the higher classification described above. However, 
the 9 percent ROP plan or attainment demonstration must still be 
adopted, submitted, and approved by EPA. The deferment continues as 
long as the area is showing attainment with the new NAAQS and until the 
SIP for the new NAAQS is approved. This is because the deferral is 
based on an early pre-designation determination and the SIP for the new 
NAAQS may require an ROP plan.

    (2) An exception may also be granted for areas meeting the 
requirements for

[[Page 65758]]

an extension under the provisions of section 181(a)(5) of the Act. 
Under that section, the Administrator may grant an extension of the 
attainment date to areas that are not showing attainment if the area 
has: (1) met the requirements of the applicable implementation plan, 
and (2) has not recorded more than one exceedance of the ozone NAAQS in 
the year preceding the extension year. The EPA is proposing that areas 
failing to attain the ozone NAAQS by November 15, 1996 may be granted a 
1-year extension.

e. Planning and Control Requirements--PM-10
    As part of the no-backsliding principle, the EPA believes that if 
the PM-10 24-hour NAAQS is revised that, the PM-10 requirements and 
control programs required prior to the June 1997 promulgation date 
remain in place. Under the current program, 70 areas were initially 
designated as moderate nonattainment areas for PM-10. These areas were 
required to submit SIP's in November 1991 that included RACM/RACT and 
demonstrated attainment by December 31, 1994. Consistent with the nobacksliding 
principle, these areas must retain those PM-10 measures 
that have been adopted and/or implemented to address the annual and 
current 24-hour standard until the State demonstrates attainment of the 
PM-10 annual and revised 24-hour NAAQS. Also, PM-10 measures cannot be 
dropped without a demonstration that they are not needed to attain the 
fine particle NAAQS.

    In the spring of 1995, EPA analyzed the air quality data and 
determined which areas were attaining the PM-10 standard as of December 
31, 1994. At that time EPA determined:

    <bullet> Out of the 43 areas with approved SIP's in place, 22 of 
the moderate areas had 3 years of clean air quality data making them 
eligible to redesignate to attainment pursuant to section 107(d)(3)(E).
    <bullet> Thirteen of the 43 areas with approved SIP's in place 
qualified for a 1-year extension. These areas should be able to 
demonstrate attainment of the current PM-10 standard with 3 years of 
clean data prior to the June 1997 promulgation and should proceed with 
redesignation requests pursuant to section 107(d)(3)(E).
    <bullet> Eight of the 43 areas with approved SIP's in place had 
clean, but incomplete, air quality data. Additional data needed to be 
collected before EPA could determine whether the areas were attaining 
the standard. These areas are still required to correct any 
deficiencies present in their moderate area SIP's before the SIP's can 
be deemed fully approvable and before a request for redesignation to 
attainment may be approved. The areas should also satisfy all remaining 
requirements for redesignation to attainment pursuant to section 
107(d)(3)(E) prior to the promulgation of the revised NAAQS.
    <bullet> Five of the initial moderate areas failed to attain by the 
December 31, 1994 attainment date and did not qualify for attainment 
extensions. Pursuant to section 188 of the Act, these areas should have 
been reclassified to serious nonattainment areas for PM-10. The serious 
area requirements for these areas included the development and 
submission of a best available control measures/best available control 
technology (BACM/BACT) and attainment demonstration SIP's showing 
attainment by December 31, 2001, as well as more stringent NSR 
requirements. Consistent with the no-backsliding principle, those areas 
that failed to attain the NAAQS by the December 31, 1994 attainment 
date and which also did not qualify for attainment date extensions 
should be reclassified as serious and should proceed with their serious 
area planning requirements during the interim period.
    <bullet> Five of the initial 70 moderate areas were reclassified to 
serious nonattainment areas effective February 8, 1993. These areas 
were required to develop and submit BACM SIP's by August 8, 1994 and 
are required to submit attainment demonstrations by February 8, 1997 
showing attainment of the PM-10 NAAQS by December 31, 2001. These areas 
should continue implementing those measures adopted in their BACM 
SIP's.

    For those areas designated moderate nonattainment after the initial 
designations, SIP submittals which included RACM/RACT and demonstrated 
attainment by December 31, 2000 were required in 1995. These areas 
should continue implementing the measures adopted in their SIP's. Those 
areas which fail to attain the PM-10 NAAQS during the interim period 
will not be reclassified to serious.

    In the event the PM-10 24-hour NAAQS is eliminated, EPA is 
proposing that PM-10 measures that do not affect fine particle 
concentrations may be candidates for elimination upon demonstration 
that removing the measure will not cause the PM-10 annual NAAQS to be 
violated. The PM-10 measures that affect fine particle concentrations 
must remain in place until the area can demonstrate that elimination of 
those measures will not affect the ability to attain and maintain the 
fine particle NAAQS. The EPA is also proposing that those nonattainment 
areas that do not have a fully-approved SIP in place should submit a 
plan which demonstrates attainment and maintenance of the annual PM-10 
standard. No additional PM-10 measures will be required other than 
those required under the no-backsliding principle during the interim 
period. The EPA is also proposing that the requirement for retaining or 
requiring additional PM-10 control measures could be reconsidered if 
measures resulting in regional reductions are adopted during the 
interim period. However, EPA would have to approve the regional 
strategy and the State(s) or entity submitting the strategy must be 
able to quantitatively demonstrate with available tools that the 
regional reductions would be beneficial to reducing PM-10 (including 
coarse fractions if applicable), as well as fine particle 
concentrations.

f. Substitution of Credits for Emission Reductions
(1) Outside Nonattainment Areas--Ozone

    The Subcommittee provided a specific recommendation that a 
nonattainment area should be allowed to take credit for emissions 
reductions from sources outside the nonattainment area for the post-
1996 and post-1999 3 percent per year ROP requirement so long as the 
sources are no farther than 100 km (for VOC sources) or 200 km (for 
NO<INF>X sources) away from the nonattainment area. The EPA believes 
that this additional flexibility for States in their ROP SIP's is 
consistent with the Act, since reductions from outside a nonattainment 
area within these limits contribute to progress toward attainment 
within the area. The 3 percent per year ROP requirement is a general 
rate of progress requirement, not a requirement for specific programs 
or measures such as vehicle inspection and maintenance. Allowing this 
flexibility would continue to provide the same rate of progress in 
terms of reducing emissions.

    Therefore, EPA is proposing for the interim period that a 
nonattainment area should be able to take credit for post-1996 and 
post-1999 ROP emission reductions from sources outside the 
nonattainment area within the geographic distances from the 
nonattainment area mentioned above. For States with areas having 
approved NO<INF>X waivers, EPA is proposing that substitutions of 
NO<INF>X reductions outside of the nonattainment area for VOC 
reductions within the attainment area would be allowed if accompanied 
by a

[[Page 65759]]

technical justification at the time of submittal for replacing NO<INF>X 
reductions with VOC reductions. Substitutions of NO<INF>X for VOC 
within nonattainment areas with approved waivers will not be allowed.
    The EPA is proposing, however, that the locality-based credit for 
substitutions be restricted to the post-1996 and post-1999 3 percentper
-year requirement. Thus, credit for substitutions to complete or 
revise the 15 percent ROP requirement for VOC emission reductions in 
nonattainment areas through 1996 would not be allowed. Further, States 
would not be able to substitute for specific control measures such as 
inspection/maintenance (I/M) or reasonably achievable control 
technology (RACT) that are required in an area by the Act. In these 
cases, the measures are either: (1) Specific, required measures for 
which EPA does not believe it appropriate to allow substitution since 
that could jeopardize the amount of reductions from such mandated 
programs; or (2) measures that are or should have been in place prior 
to promulgation of new ozone NAAQS. Further, States would not be able 
to credit toward the 3 percent-per-year requirement reductions from 
outside the nonattainment area attributable to other programs 
prescribed by the Act when implemented outside nonattainment areas. An 
example is credit for maximum achievable control technology standards 
controlling hazardous air pollutants or the title IV of the Act 
NO<INF>X requirements. (These are merely two illustrative examples of 
such programs, not an inclusive list of all such programs.) Further, 
the EPA is proposing that all existing control measures that are in 
place remain in place. The EPA believes that substitutions should be 
restricted to intrastate areas unless two or more States involved reach 
agreement. Similarly, application of credits from substitutions should 
be limited to only one nonattainment area unless two or more States 
involved reach agreement on dividing the credit between them such that 
the same emission reductions are not credited toward the progress 
requirements for more than one area. Interstate substitutions, like 
intrastate substitutions, must be enforceable by the States in which 
the affected sources are located.

    Credit toward the 3 percent-per-year requirement for regional 
measures described above to reduce transport and support attainment 
planning would be allowed if implemented in nonattainment areas. Such 
credit would also be allowed if implemented outside the nonattainment 
area but within the 100 and 200 km geographic limits to the extent the 
reductions generating the credits are not otherwise due to a prescribed 
requirement of the Act.

    Emissions from the source or sources being substituted must be 
included in the baseline ROP emissions. The other emissions from 
source(s) outside the nonattainment area not involved in the 
substitution would not have to be inventoried nor included in the SIP 
or the baseline ROP emissions for purposes of the substitution. The EPA 
is proposing that this provision is only in effect during the interim 
transition period, and that the final implementation strategy will 
address the principles applicable to substitutions in attainment 
demonstrations for implementation of a new NAAQS.
(2) PM-10

    The Notice of Proposed Rulemaking for the PM NAAQS lays out a 
rationale for why PM-10 and fine particles should be treated as two 
separate pollutants. In addition, the PM-10 standard (which will 
primarily address coarse particle control) targets localized 
nonattainment problems while the fine particle standard will address 
the fine particle fraction including secondarily-formed particles and 
will focus on the regional aspects and transport of fine particles. 
Given the physical and chemical differences in PM-10 and fine particles 
and the uncertainties about the localized and regional aspects of PM-10 
and fine particles at this time, EPA is proposing that substitutions 
for PM in and outside of the nonattainment area should not be allowed 
during the interim period.

g. Ozone Transport Region (OTR), Ozone Transport Commission (OTC), and 
the Photochemical Assessment Monitoring System (PAMS)
    The OTR and the OTC and related regional control measures, as 
defined in the Act, continue after promulgation of a new or revised 
ozone NAAQS. The OTC is currently in the process of evaluating the 
specific control requirements applicable to the OTR and expects to 
develop and submit to EPA for consideration an interim implementation 
program regarding those requirements. In the event such a submission is 
made to EPA, EPA will evaluate the recommendations and consider whether 
to modify the portion of this proposed interim implementation policy 
that addresses the OTR regional control measures.
    The PAMS is also carried forward upon promulgation of new or 
revised ozone NAAQS.

h. Conformity

    In general, existing part D SIP's will remain in force, and as a 
result, motor vehicle emissions budgets and relevant requirements in 
existing part D SIP's will continue to apply for transportation and 
general conformity purposes until they are superseded by new or revised 
part D SIP's.

    Conformity determinations will not be required to address the new 
NAAQS until SIP's addressing the new NAAQS are approved by EPA. 
Conformity will not apply for fine particles or the new 8-hour ozone 
NAAQS until SIP's are approved by EPA. The EPA believes this is 
appropriate because section 176(c) of the Act requires conformity to an 
implementation plan that has been approved or promulgated under section 
110 and refers to conformity to an implementation plan's purpose of 
reducing violations and attaining the NAAQS; without a SIP addressing 
the NAAQS there is nothing to which to conform. Although the 1990 
Amendments outlined interim conformity tests that EPA required before 
SIP's were submitted, these Act provisions clearly did not envision the 
case of new NAAQS, and the emission reduction requirements only applied 
to ozone and carbon monoxide areas designated under the then existing 
NAAQS. The test applied to these areas was to contribute to annual 
emission reductions consistent with the requirements of sections 182 
and 187; provisions which do not apply to areas in nonattainment for 
fine particles or the new 8-hour ozone NAAQS. In addition, as a policy 
matter, it is not reasonable to establish demonstration of reduction in 
fine particle emission reductions as a criterion for determining 
conformity before the SIP process has identified an emissions inventory 
that could serve as a baseline.

    Areas that have not submitted ROP plans or attainment 
demonstrations for the old standard would be required to conform to the 
15 percent plan until a ROP plan or new attainment demonstration is 
submitted. Some areas that are nonattainment under the existing NAAQS 
but are attaining the new NAAQS will be permitted to defer 
implementation of the ROP plan as described above. In such cases, 
conformity to the ROP plan would not be required, and these areas would 
demonstrate conformity to the 15 percent plan. Areas that were not 
required to submit a part D SIP or a 15 percent ROP plan by virtue of 
their

[[Page 65760]]

classification (previous marginal areas) and have not been 
demonstrating conformity to motor vehicle emissions budgets would be 
required to continue demonstrating conformity using the emission 
reduction tests until SIP's with motor vehicle emissions budgets are 
submitted. Areas that have approved redesignation maintenance plans 
should continue demonstrating conformity using the motor vehicle 
emissions budgets and relevant requirements for general conformity in 
the maintenance plans.

    States are free to establish, through the SIP process, a motor 
vehicle emissions budget that addresses the new or revised NAAQS in 
advance of a complete SIP attainment demonstration. That is, a State 
could submit a motor vehicle emissions budget that does not demonstrate 
attainment but is consistent with projections and commitments to 
control measures and achieves some progress toward attainment. Such a 
budget would apply for conformity purposes in addition to existing 
budgets addressing the old NAAQS (i.e., a SIP that does not demonstrate 
attainment of the new NAAQS would not supersede existing part D SIP's).
    Conformity requirements that are based on the classification system 
for the former NAAQS, such as the modeling procedures and the 
requirements for contents of transportation plans, continue to apply 
after the new or revised NAAQS are promulgated until new SIP's are 
approved.

i. New Source Review

    In accordance with the current NSR requirements, proposed new and 
modified stationary sources of air pollution must undergo a pollutantspecific 
preconstruction review and obtain authority to construct prior 
to beginning their construction activities. A primary purpose of the 
NSR requirements is the protection of the NAAQS, including those for 
ozone and PM. The applicable NSR requirements generally are based on 
the attainment status of the area where the proposed source will locate 
for each pollutant for which NAAQS exist and which the source will 
emit.

    In areas designated as attainment or unclassifiable, proposed new 
or modified major stationary sources must be reviewed under the 
requirements for prevention of significant deterioration (PSD) of air 
quality pursuant to section 165 of part C of title I of the Act.<SUP>1 
The PSD requirements include: (1) A demonstration that the proposed 
emissions increase will not cause or contribute to a violation of any 
NAAQS or applicable PSD increment; (2) a determination, where 
applicable, that the proposed emissions increase from the source will 
not have an adverse impact on an air quality related value in a Class I 
area; and (3) compliance with best available control technology.


    \1\ The EPA has adopted PSD regulations pursuant to part C at 40 
CFR 51.166 (minimum requirements for submittal and approval of a 
State PSD program) and 40 CFR 52.21 (the Federal PSD program).



    In nonattainment areas and ozone transport regions, new and 
modified major sources having the potential to emit major amounts of 
the nonattainment pollutant must meet the applicable NSR requirements 
contained in part D of title I of the Act.<SUP>2 The primary NSR 
requirements for nonattainment areas, contained in section 173 of 
subpart 1 of part D, require new or modified major stationary sources 
of any nonattainment pollutant to meet the following requirements: (1) 
Obtain offsetting emissions reductions (offsets) from existing sources; 
(2) comply with the lowest achievable emission rate; (3) demonstrate 
that all major stationary sources owned or operated by the permit 
applicant are in compliance with all applicable emission limitations 
and standards under the Act; and (4) submit an analysis of alternative 
sites, sizes, production processes, and control techniques 
demonstrating that the benefits of the proposed source outweigh the 
environmental and social costs imposed as a result of its location, 
construction, or modification.



    \2\ The EPA's nonattainment NSR requirements are codified at 40 
CFR 51.165(a). These existing regulations do not currently include 
the various changes enacted by Congress under the Clean Air Act 
Amendments of 1990. The EPA issued policy memos to describe how 
certain statutory NSR provisions would apply while EPA's regulations 
and State NSR programs were being revised to reflect the 1990 
Amendments (March 11, 1991 and September 3, 1992 memoranda from John 
S. Seitz, Director, OAQPS). To meet statutory deadlines, most States 
have already completed the necessary update of their NSR programs. 
The EPA proposed to amend its NSR regulations on July 23, 1996 as 
part the NSR reform rulemaking (61 FR 38250-38344).



    Additional NSR requirements specifically for ozone and PM 
nonattainment areas are contained in subparts 2 and 4 of part D, 
respectively. These subparts set forth criteria for establishing area 
classifications and various NSR requirements based on those 
classifications. Subpart 2 (Additional Provisions for Ozone 
Nonattainment Areas) contains, among other things, provisions for 
emissions offset ratios, major source thresholds, and source 
modification requirements for major sources of VOC. Subpart 2 also 
contains provisions concerning the treatment of NO<INF>x as an ozone 
precursor in certain ozone nonattainment areas and ozone transport 
regions. Subpart 4 (Additional Provisions for PM Nonattainment Areas) 
contains, among other things, NSR requirements for PM-10, including a 
70 tons per year (tpy) major source threshold for PM-10 sources in 
serious nonattainment areas, and the applicability of PM-10 NSR control 
requirements to major stationary sources of PM-10 precursors.
    As described earlier in this document, the detailed provisions of 
subparts 2 and 4 of part D of title I of the Act that currently apply 
to existing ozone and PM-10 nonattainment areas would not apply 
directly to the implementation of the proposed new or revised ozone 
NAAQS or the proposed annual and 24-hour fine particle NAAQS, which EPA 
is proposing elsewhere in today's Federal Register. However, as part of 
EPA's proposed interim policy for transitioning from the current 
program to implementation of potential new or revised ozone and PM 
NAAQS, EPA is proposing to continue the implementation of the existing 
NSR requirements with respect to ozone and PM under a policy of no 
backsliding. In the case of ozone, this proposed position is further 
supported by the fact that EPA is also proposing to defer the effective 
date of the revocation of the existing 1-hour ozone NAAQS until such 
time that EPA determines that an area has a SIP which provides for 
achievement of the new NAAQS. This proposed interim implementation 
policy discussed in more detail below, does not address potential new 
PSD increments for any new or revised NAAQS because the Act provides 
EPA with an additional 2 years from the date of NAAQS promulgation to 
address such issues.

    Numerous issues will need to be resolved as part of the development 
of the final integrated implementation program to address new or 
revised NAAQS for ozone and PM and a regional haze program (see ANPR 
for Implementation of New or Revised Ozone and Particulate Matter (PM) 
National Ambient Air Quality Standards (NAAQS) and Regional Haze 
Regulations published elsewhere in today's Federal Register. Some of 
these issues, particularly as they relate to fine particles, directly 
affect the implementation of the NSR requirements. Of particular 
concern is the lack of necessary analytical and technical tools and 
guidance governing the preconstruction review of new and modified 
stationary sources associated with fine particles. For example, the use 
of dispersion models to predict air

[[Page 65761]]

quality impacts of new and modified sources is at the heart of the 
required NAAQS compliance demonstration under the PSD program. Air 
quality dispersion modeling for ambient fine particle concentrations is 
in its infancy.

    Another problem is that little information exists in emissions 
inventories regarding PM size distribution and corresponding settling 
velocities. Emissions factors for estimating the amount of fine 
particles from new and modified sources are generally not available and 
may take considerable time to develop and validate. The ability to 
predict the amounts of fine particle emissions is complicated by the 
emissions contribution made by precursors, including sulfates, 
nitrates, and VOC.

    In addition, ambient fine particle concentrations in many areas 
experience a significant contribution from secondary fine particle 
transformation and transport. The EPA is currently in the process of 
developing a comprehensive modeling system which will account for 
secondary fine particle formation and will also eventually incorporate 
a method for nesting small local impacts from individual point sources 
within a greater modeling domain. The ultimate success of this system 
hinges upon the collection of sufficient monitoring data to verify 
protocol modeling results.

    Finally, while ambient monitoring methods for measuring fine 
particles are to be proposed commensurate with the proposal of any new 
NAAQS for PM, sufficient monitors are not expected to be available 
immediately after promulgation of any new or revised NAAQS to satisfy 
the requirement that new and modified sources collect ambient fine 
particle data needed for individual PSD air quality analyses.
    Consequently, in the absence of the necessary analytical and 
technical tools, as well as a final implementation strategy for fine 
particles, source owners and operators would have difficulty predicting 
amounts of fine particles being emitted from their own proposed source 
and from existing sources, and also would be unable to carry out a 
comprehensive air quality analysis for fine particle emissions.<SUP>3 
The EPA believes that without the appropriate implementation tools and 
policy, such new preconstruction review responsibilities clearly would 
place an unreasonable burden on sources, as well as the permitting 
authorities, in terms of their ability to satisfy the NSR requirements.



    \3\ When EPA promulgated the NAAQS for PM-10, EPA also adopted, 
as necessary, amendments to the PSD regulations to establish new 
requirements applicable to that newly-regulated form of PM. Based on 
such new requirements, each PSD application subject to EPA's part 52 
PSD regulations, and not eligible to be grandfathered, was required 
to address significant emissions increases of PM-10 as of the 
effective date of the revised NAAQS for PM (52 FR 24672, July 1, 
1987). The EPA adopted, for purposes of PM-10, a new significant 
emissions rate, significant monitoring concentration, grandfathering 
provisions and special monitoring provisions to enable applicants to 
determine the applicability of any proposed PM-10 emissions to the 
preconstruction review requirements.



    The proposed interim policy for NSR will apply the principle of no 
backsliding, as described earlier in this document, to provide interim 
protection of any new or revised NAAQS after promulgation until EPA 
amends its existing NSR requirements and approves SIP's based on those 
amendments. The description of the proposed interim implementation 
policy for NSR is divided into a general discussion of geographic 
applicability for NSR, and separate discussions of how the existing NSR 
requirements will be implemented for ozone and PM.
    Interim Implementation Policy for Geographic Applicability of the 
Existing NSR Requirements. The NSR requirements generally apply to new 
or modified major stationary sources with respect to any particular 
pollutant based on the attainment status of the area (relative to each 
affected pollutant) in which a new or modified source will locate. As 
described earlier in this document, EPA is proposing that the existing 
PM-10 area designations and classifications remain in effect until new 
designations are undertaken after promulgation of the new or revised 
NAAQS and that the ozone designations and classifications remain in 
effect for so long as the current 1-hour ozone NAAQS remains in effect. 
Thus, for the interim period following promulgation of any new or 
revised NAAQS for ozone and PM, EPA is also proposing that the existing 
NSR requirements continue to apply to sources of VOC (and NO<INF>X, 
where applicable) and PM-10 (and PM-10 precursors, where applicable) on 
the basis of the attainment, unclassifiable, and nonattainment area 
designations and classifications that exist at the time of promulgation 
of any new or revised NAAQS for ozone and PM, respectively, except for 
those possible circumstances where a redesignation based on an existing 
ozone or PM NAAQS is approved by EPA subsequent to the promulgation of 
new or revised NAAQS. In such cases, EPA is proposing that once such 
redesignation is in effect, the area's attainment status based on the 
EPA-approved redesignation will determine the applicability of the NSR 
requirements for the affected pollutant during the interim period.
    Interim Implementation Policy for Ozone NSR. During the interim 
period following promulgation of any new or revised NAAQS for ozone, 
EPA is proposing that permit applications for new and modified major 
sources of VOC (or NO<INF>X, as applicable) which locate in an area 
designated as nonattainment for the 1-hour ozone NAAQS, or in an ozone 
transport region, must continue to satisfy the applicable nonattainment 
NSR requirements under part D of title I of the Act. The specific 
criteria which must be satisfied are to be based on the classification 
of the particular ozone nonattainment area or ozone transport region, 
except that for marginal and moderate nonattainment areas which do not 
attain the existing 1-hour ozone NAAQS by November 15, 1996 and are not 
attaining the new ozone NAAQS, EPA is proposing that the applicable NSR 
requirements for VOC and NO<INF>X be determined by all of the statutory 
NSR requirements for the next higher classification. That is, in ozone 
nonattainment areas classified as marginal that failed to attain, the 
major source threshold would remain unchanged at 100 tpy of VOC or 
NO<INF>X, but the interim offset ratio would be at least 1.15:1 (the 
offset ratio for moderate areas); and in moderate areas that fail to 
attain, the major source threshold would be lowered to 50 tpy of VOC or 
NO<INF>X (the threshold for serious areas), and the interim offset 
ratio would be at least 1.2:1 (the offset ratio for serious areas). 
Section 182(b) (6)-(8) of subpart 2 of part D also contains special 
requirements for modifications to existing sources in serious (and 
severe) ozone nonattainment areas which would also apply to moderate 
nonattainment areas that do not attain by November 15, 1996 and are not 
attaining the new ozone NAAQS. These requirements include a new de 
minimis test involving a significance threshold based on aggregated 
emission increases of greater than 25 tpy of VOC or NO<INF>X for 
proposed modifications; requirements and optional procedures for major 
modifications which emit, or have the potential to emit, less than 100 
tpy or VOC or NO<INF>X; and requirements and optional procedures for 
major modifications which emit, or have the potential to emit, 100 tpy 
or more of VOC or NO<INF>X. Under a separate rulemaking, EPA has 
proposed its

[[Page 65762]]

interpretation of these complex provisions.<SUP>4


    \4\ The EPA proposed its interpretation of the requirements 
contained in section 182(c) (6), (7), and (8) of subpart 2 of part D 
in the July 23, 1996 NSR reform proposed rulemaking (61 FR 38250, 
38297-38302).



    The NSR requirements under part D provide that emissions offsets 
may be acquired from existing sources either within the affected ozone 
nonattainment area or from another ozone nonattainment area with an 
equal or higher classification than the affected nonattainment area. In 
addition, when offsets from another nonattainment area (of equal or 
higher classification) are proposed, it must be shown that emissions 
from such nonattainment area contribute to a violation in the affected 
nonattainment area. The EPA is proposing that for purposes of the 
interim implementation policy, the term ``equal or higher 
classification'' is to be based on the actual classifications of the 
affected ozone nonattainment areas. For example, if the nonattainment 
area where a new source proposes to locate is a moderate nonattainment 
area that failed to attain by November 15, 1996 and, therefore, 
continues to be treated as a moderate area although the NSR 
requirements for serious areas apply under the interim policy, the 
offsets may still be obtained under section 173(c) of the Act from 
other ozone nonattainment areas classified as moderate or higher.
    For areas designated as attainment or unclassifiable for the 
existing 1-hour ozone NAAQS, EPA is proposing that permit applications 
for major new and modified sources which would have a significant 
increase in VOC emissions, must satisfy the applicable existing PSD 
requirements. These requirements include compliance with the best 
available control technology and the completion of the required air 
quality analysis. In addition, there are no PSD increments for ozone.
    Interim Implementation Policy for PM NSR. The EPA is also 
proposing, as part of its interim implementation policy for NSR, that 
the preconstruction review for PM will continue to involve only the 
review of PM-10 emissions and their ambient impacts, while deferring a 
specific review of potential fine particle emissions and their ambient 
impacts. This policy would provide that the review of fine particle 
emissions, including the applicant's demonstration of compliance with 
the fine particle NAAQS, will not be required until EPA promulgates 
amendments to the existing NSR requirements concerning any newlyregulated 
form of PM under the integrated implementation program and 
SIP's are revised accordingly and approved by EPA. The EPA cannot 
reasonably amend its own regulations until it is technically able to 
predict and measure emissions of fine particles generated by individual 
sources and better understand and estimate the formation and dispersion 
of ambient fine particle concentrations in the atmosphere.
    For proposed new or modified sources of PM locating in areas 
designated as nonattainment for PM-10, EPA is proposing that during the 
interim period following promulgation of any new or revised PM NAAQS, 
permit applicants must continue to satisfy the applicable State or 
local nonattainment NSR requirements for PM-10 consistent with part D 
(subparts 1 and 4) of title I of the Act. The part D nonattainment NSR 
requirements apply to major new sources of PM-10 and modifications to 
existing major sources of PM-10 that would have a significant net 
emissions increase of PM-10, i.e., 15 tpy or more. The applicable major 
source threshold will continue to be based on the PM-10 level defined 
by the classification of the affected PM-10 nonattainment area. That 
is, if the nonattainment area is not classified as serious, a 100 tpy 
PM-10 emissions threshold will apply. For serious PM-10 nonattainment 
areas, a 70 tpy major source threshold will apply.
    For areas designated as attainment or unclassifiable for the 
existing PM-10 NAAQS, permit applications for major new or modified 
stationary sources with the potential to emit significant amounts of 
PM-10 emissions (i.e., 15 tpy or more) must also continue to satisfy 
the applicable PSD requirements for PM-10. The specific requirements 
for PM include a demonstration that the source will: (1) Not cause or 
contribute to a violation of the annual or 24-hour PM-10 NAAQS, (2) not 
cause or contribute to a violation of the annual or 24-hour PM-10 
increments, (3) not have an adverse impact on any air quality-related 
value associated with ambient PM-10 concentrations in a Class I area, 
and (4) apply best available control technology for PM-10 emissions.
    The EPA intends the same interim implementation policy as described 
above for PM to apply--whether or not EPA decides to delete the 24-hour 
PM-10 NAAQS as an alternative to the proposed revision of the existing 
24-hour PM-10 NAAQS. This is based on the need to continue to review 
and control PM-10 emissions and their ambient impacts as a surrogate 
for addressing the proposed 24-hour fine particle NAAQS during the 
interim period.

    Dated: November 27, 1996.

Carol M. Browner,

Administrator.

[FR Doc. 96-30898 Filed 12-12-96; 8:45 am]
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