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Citation: 59 Fed. Reg. 39832 1994

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-- The search text of this PDF is generated from uncorrected OCR text.3.9832 Federal Register / Vol. 59, No. 149 / Thursday, August 4. 1994 / Rules and Regulations

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52 [AD-FRL-6023-3]

Selection of Sequence of Mandatory Sanctionsfor Findings Made Pursuant to Section 179 of the Clean AirAct

AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule.

SUMMARY: The EPA is promulgating a rule governing the order in which the sanctions shall apply under the mandatory sanctions provision ofthe Clean Air Act (Act), as amended, after EPA makes a finding offailure specific

to any State implementation plan (SIP)

or plan revision required under the Act's nonattainment area provisions. This final rule provides that the offset sanction shall apply in an area 18 months after the date on which EPA makes such a finding with regard to that

area and that the highway sanctions shall apply in that area 6 months following application ofthe offset sanction. Once this rule is effective, sanctions will apply automatically in the sequence prescribed in all instances in which sanctions are required following applicable findings that EPA has already made or that EPA will make in the future, except when EPA determines through a separate rulemaking to change the sanction
sequence forone ormore specific circumstances. The public will have an opportunity to comment on any such separate rulemaking. EFFECTIVE DATES: This action wil become effective on September 6, 1994. ADDRESS(ES): The public docket for this action, A-93-28, is available for public inspection and copying between 8:30

a.m. and 3:30p.m., Monday through Friday, at the Air and Radiation Docket and Information Center, Room M-1500, Waterside Mall, U.S. EPA, 401 M Street, SW, Washington, DC 20460. A reasonable fee maybe charged for copying.
FOR FURTHER INFORMATION CONTACT: Mr. Christopher Stoneman, Sulfur Dioxide/Particulate Matter Programs Branch, Mail Drop 15, Office ofAir Quality Planning.and Standards, U.S. EPA, Research Triangle Park, North Carolina 27711, telephone (919) 541- 0823. SUPPLEMENTARY INFORMATION: The

content oftoday's preamble is listed in the following outline:

I.Background

A. Introduction B.Consequences ofState Failure 1.Section 179(a) Scope and Findings
2. Section 179(b) Sanctions 3. Applications and Timing ofSection

179(b) Sanctions C.Notice ofProposed Rulemaking
1.

Proposal 2. Rationale for Sanction Order 3. Sanction Effectuation 4. Opportunity for Comment II. Today's Action

A. Final Action B. Summary ofComments and Responses 1. Sanction Sequence and Rationale 2. Sanction Effectuation 3. Sanction Clock Policy 4. Other Areas ofComment C. Summary ofChanges in Rule 1. Section 52.31(a)-Purpose 2. Section 52.31(b)-Definitions 3. Section 52.31(c)-Applicability 4. Section 52.31(d)-Sanction Application

Sequencing 5. Section 52.31(e--Available Sanctions

and Methods for Implementation Ill. Implications ofToday's Rulemaking

A. Implementation ofthe Sanctions B. Areas Potentially Subject to Sanctions IV.Miscellaneous

A. Executive Order 12866 B. Regulatory Flexibility Act 1. Proposal 2. Comments 3. Response C. Paperwork Reduction Act

I. Background

A. Introduction

On October 1, 1993, EPA proposed a rule (58FR 51270) governing the
sequence ofmandatory sanctions under, section 179(a) (42 U.S.C. 7509(a)) ofthe amended Act. The document included extensive background on the Act, some ofwhich is briefly resummarized in this background section because itrelates directly tothe Act's sanction provisions. The information not repeated concerns the overview at pages 51270-2 ofthe proposal provided on the Clean Air Act Amendments of 1990 (1990 Amendments), title I requirements of the Act, and EPA action on SIP's.This background section also summarizes the proposal and therationale.

B. ConsequencesofStateFailure

1. Section 179(a) Scope and Findings

The 1990 Amendments revised the law concerning sanctions Ito address State failures to complywith the

IThe 1990 Amendments also revised the Act's provisions concerning Federal implementation plans (FIP's). Under section 110(c)(1), theFIP requirement is triggered byan EPA finding thata State has failed to make a required submittal orthat

a received submittal does not satisfythe minimum completeness criteria established under section 110(k)(1}(A),or an EPA disapproval ofaSIP submittal in whole or in part. However, since FIP's

arenot the subject ofthis notice, these provisions

are not addressed here. requirements ofthe Act. Under section 179(a) ofthe Act, for any plan or plan revisionrequired under part D oftitle I

orrequired in response to a finding of substantial SIP inadequacy under section 110(k)(5) (42 U.S.C. 7410(k)(5)),2 the Act sets forth fourfindings 3that EPA can make, which may lead to the application ofone orboth ofthe sanctions specified under section 179(b) (42U.S.C. 7509(b)). The four findings

are: (1)A finding under section 179(a)(1) that a State has failed, for a nonattainment area, to submit a SIP or

an element ofa SIP, or that a submitted SIP or.SIP element fails to meet the completenesg criteria established pursuant to section 110(k) (42 U.S.C. 7410(k)); (2) a finding under section 179(a)(2) where EPA disapproves a SIP submission fora nonattainment' area based on its failureto meet one ormore plan elements required by the Act; (3)

a finding under section 179(a)(3) that the State has not made any other submission required by the Act (including an adequate maintenance plan) or has made any other submission that fails tomeet the completeness criteria or has made a required submission that is disapproved by EPA for not meeting the Act's requirements;

or (4) a finding under section 179(a)(4) that a requirement ofan approved plan is notbeing implemented.

The EPA makes section 179(a) findings offailure to submit and findings ofincompleteness via letters from EPA Regional Administrators to State governors or other State officers to whom authority has been delegated. 4

The letter itself triggers the sanctions clock. To make findings of failure to submit and findings ofincompleteness under section 179(a)(1) and section 179(a)(3)(A), EPA is not required to go through notice-and-comment rulemaking.5 For section 179(a)(2) and section 179(a)(3)(B) findings of disapproval, the Federal Register document in which EPA takes final action disapproving the submittal (after notice and comment) initiates the sanctions clock. For section 179(a)(4)

2A finding ofsubstantial inadequacy under section 110(k)(5)-known asa "SIP call"-is made wheneverEPA finds that a plan forany area is substantially inadequate to attain ormaintain the relevant national ambient airquality standard (NAAQSI.

3Section 179(a) refers to findings, disapprovals, and determinations. These will all be referred toby the one term "findings."

47-62, Finding ofFailureto SubmitaRequired StateImplementation Planor Any OtherRequired SubmissionoftheAct, Clean Air Act, Delegations Manual, 12/13/91.

5Notice and comment considerations vis-a-vis findings offailure to submit and incompleteness are discussed in the proposal at page 51272, footnote 7.and in section IV.G. ofthis document.

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### f Rules and Regulations 39833

findings-ofnoniimplementation, the, sanctionsclockstirts.when EPA makes.

a finding oknonimplementationin the, Fedartgist tiroughtnotce-and commentrulemaking. Forboth disappromals and findings of nonimplementatien, the cleck.actually starts.on the date the final:Federal Registeractions are effective.

2. Setion 179(b) Sanctions,

Under-section l79(bXtwo.sanctions,

amavailable forselectin by EPA following atsecdon: 179(a) finding;.One. available'sanctibn is.aresfrictinu.on highwayfunding,.as.provided:i. section 179(b}){j ( 42 U S.E. 7509(b)(1.)), which isdiscussed ir the proposaLat pages.51273;-5129'41.Theothernavailablesanction istfie offset sanction, as. providbdditsectibn 179(b)2) ('42.U:.S.C: 7509(b)(2)).which is also.discussedi in. theproposal ,atpage;512 4',-
3. Applicatibn and'Timing,of Sectibn 179(b),Sanctions

AlthougLapplication.of'section 179(bysanc ions may become mandatory when, EPA makes a finding, undersection,179(e f'( fthe-Statedoes
notcorrect the deficiencyt it is not immediate,.Instead- section 179(a) provides fora-sanction "clock," whicr is.described in.theproposal'atpage. 51274..Genemlly under section-179(a)'s sanction dock,,tha.sanction selected-by; EPA applies,ifthe deficiency that' prompted the~findingisnot corrected before the sanction clock expires. (The' sanction clock is further discussedin section L 3& ofthis,document)
C. Notce of Proposed Bulemakihg,1,..Proposallh'tfie'proposaF,EPA proposed-that the sectibn-179(b)(2): offset,sanction. would appl ,ihan area,18months.fromthe dhfwhten EPA makes a.finding under'sectibn 179(u). Fiirthermorej EPA proposed!that'the-section 179(b)(I)' highway,santion wouWiapplyrin an
area 6-months-folowing application of the ofiet sanction Tie,EPA-proposed to sequencethe application ofsanctions under section 179(h)lintlliimanner'ih, all cases'unless EPAdetermines, througt-iididvidualnr~tfie-and-comment rulemalihg, that tie highway sanction will apply.first:

The.proposal addtressedithe sequence in whichsanctions shallapply asrequired under section 179(a) with, respecttb,afindihg'madb'undbr'

6lmadditom soction.1,79(aprovides.fbran'air polllitiogranmsmctian that appliesto grantsttle ERN mayjawardtundersection 105. However,.since it is norasanction provided'undbr section 1.7,9(b);. it is not one of'the'sanctionsdt'arautormaticall

, apply under sectb'mi7.9(a), subsections (.1-(4)-specific toany implementatibn plbn or-plan revisibn requiied'under part D orany' implementation plhn or revision required:underpart Dfound substantially inadequate.pursuant to section 110(k)(.5). In general, part D. plans andplantrevisions are requii'ed for

areas designated: nonattainment under section 107.7'The prop'osaldid;not encompass'findings EPAcan,makeunder section,179(b)' regarding SIP'ca.lMe fornon-partDplans-or plantrevisions or the sanction provisions-in section 110(m) ofthe Actl.:Ital'so-dbes not encompass anyfindihgs EPA.may make under other titlbsof'the-Act: (';g

, section 502(d) for operating.permitt-ing programs)'

2. Rationale.forSanction-Order

At.pages 512T4;-51275 ofthe proposal, EPA.,described!the purpose sanctions can serve. Quefunction,i'sto encourage:compliance with;the Act'h requirements..A second.function.of sanctionsds.thprotct and preserve-air quality in.areas untilthe dbfi.iency prompting the sanctions.initiating findincam be;corrected

.

In the proposalat'page51275' for three reasons,.EPA proposed.that,.asa. general matter, the offset sanction.appy at 18 months followed by the highway sanctibn,6.months thereafter. First, EPA stated thatconceptually the-offset sanction'will, ingenerali,provide-a more certain airquality benefit in theshorter and longer termthan the-highway sanctinm

Secand; the.proposar stated:the offset sanction.provides.greater'potential for more-significant air'quality pro ction becausetit potentiall.. affects-alF

7WhileparrWDgenerally 'appliesto.nonattainment.

areas,some requirementsaxtend.to otherareas; For example,.section 184(a).specifically, created at enactmenran ozone transpnr'region, called'the NortheastOkone:TransporrRegion.(NOTR:.whih, iscomprisedaf:several mid-Atlkntic and New. England;States;and'tie.Consolldated Metropolitan. StatisticalArea containing-the DistrictofColumbia (see "General Preamble for'the'Implementation of Titb roE theClean AikAot'Amendments:of1990" at pagp 13527'(67 FR 13498)). Though areaswithin
someofthese Statesmay not be designated nonattainment, the States must submit revisions to their SIP'sbyertain.statutory deadlines to inclhdb specific part D measures for these areas (e.g,, anHanced;vahlefiiihspection and maintenance
progrm.,reasonablyavailable control.technology firvolale.organic.compounds (VOC) sources),

8Sectlon'ii,(m),ofthe Act grants-EPA.broad. discretionaryauthority,toapply either sanction listedihsection79(b)"atany timeonr'at.any time aftehtheAdminttrator makes" a finding under section 1.7.9(a) withlrespect,to any portion.of the State. subjoct'to certain limitations (57 FR 44534, Sept. 28, 1993): Theselbctionof'sancttbns being mad.bBy thiitaatin,,however, does not apply to-tie imposition of'sanctions-byEPAunder'seation 1104n)..Note thatsanctionselectionfor section 1 r0(in)'f'fihdiigs wtille made through notice-andcomment'mlbmaking indbpendent from this'action. categories ofstationary sources and, depending on'thepollutant(s) addi-essed in the deficibncy prompting-the finding.
may affect all criteria pollutants (i.e.. pollutants forwhich EPAhas' promulgated national ambient air quality standards.(NAAQS) such as carbon monoxide (CO). PM-10 (partii:les with an aerodynamic diameter less than orequal-to-anominal 10' micrometers), etc.). By contrast,the, highway'sanction wouldaffect onify mobilb-sources and polhitants'emitted bymobilesources. (Mobilesources'are' not, for instance; regorded as significant emitters'of'leed and sulfur-dioxide (SO2)J "

Third in additionto air-quality consideratibns the,2-to-1 offset sanctibn is less complicated'to'implement and, administer than-the highway sanction' by its very natureand-because.ofthe,

manner in which.EPA intends to, effectuate it, as discussed in: the -proposalat pages.5T275-5.1277

In addition, EPAnoted-inthe proposal!that it dbes'not regard sanctionsas a. long-term solution to ai:r quality problems:butrather intends.to work with.States.to resolVe.deficiencies

asrapidly,as.possible;.Thus, by applying,the offsetsanction.at 18. months,,if the State corrects the: deficiency,promptingthet finding,prior
to.6months.thereafter;.then.the highway sanctiomwou'ld not apply and EPAand other affected agentibs.(mostnotably theDepartmentof'Transportatibn. (MOT)):would:not bb:faced'with-ts comparatively greater'implementation. and administration burden.

The EPA, therefore, proposed, asa general matter, that the offset sanction. apply before the.highway,funding, sanction following,a section 179(h), finding.,The EPA recognized, however., that ih specific.cases the particulhr circumstances may leadEPA-to' conclude that ilis more.appropriate-for the highway sanction.to apply first. Therefore.,EPA has:specifically.noted that it may gp through notice-andcomment rulbmaking.fbr the highway, sanction,to apply after 1:8 months.and' the offset sanction 6 months thereafter. (The sanction sequence rationale.isfurther discussed in sectibn I.B.1. of this document'.),

3..Sanction Effictuation.

At pages 51275-51277 ofthe proposal', EPA describes how-the offset sanction applies-and notes-that,,undbr - the highway sanction,.EPA imposes a prohibition-on approval by die Secretary ofDOT'ofcertain'highway.'projects-and grants. Thus, the lighway sanction i's. notdirectly implemented by EPA. ,However,EPA noted-that itis in the

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process ofdeveloping procedures with DOT toprovide for the coordinated implementation ofthe highway sanction. (Sanction effectuation is further discussed in section ll.B.2 ofthis document.)

4. Opportunity for Comment

As discussed above, under section 179(a), the Act requires that sanctions apply ifthe deficiency that prompted EPA*s finding is not corrected within the timeframes prescribed. The only discretion afforded EPA is which ofthe
two section 179(b) sanctions applies at 18 months and which 6 months thereafter. The proposal noted that ifin the future EPA makes exceptions to this rule, then in individual notice-andcomment rulemakings EPA will seek
comment on whether the highway sanction shall apply after 18 months and the offset sanction shall apply 6 months thereafter given the circumstances at hand.

The proposal also noted that the Administrative Procedure Act (APA) provides citizens with a means that could be used topetition EPA to propose thatthe highway sanction apply first.The APA, 5U.S.C. 553(e), provides that "Each agency (including EPA) shall give an interested person the right topetition forthe issuance, amendment, orrepeal ofarule." This provision could conceivably be invoked by a citizen to petition EPA to propose that the highway sanction apply first with respect to a section 179(a) finding covered by this action.

II.Today's Action

A. Final Action By this document, EPA is promulgating a rule which provides that the section 179(b)(2) offset sanction shall apply in an area 18 months from the date when EPA makes a finding under section 179(a)with regard to that

area ifthedeficiency prompting the finding is notcorrected within such period. The final rule also provides that the section 179(b)(1) highway sanction " shall apply in an area 6 months following application of the offset sanction in cases where the deficiency has still notbeen corrected within that period. The section 179(b) sanctions shall be sequenced inthis manner inall

cases unless EPA proposes the highway sanction to apply first through separate notice-and-comment rulemaking. This final rule applies toplan or plan revisions required under part Dbut does
not apply toplans or.plan revisions required under part D found substantially inadequate pursuant to section 110(k)(5). The proposed rule applied toboth types ofSIP's; a discussion ofwhy the latter type of SP's--commonly known aspart D "SIP calls"--are not covered by the final rule is in section U.C.3.This rule also has the immediate effect ofapplying theoffset sanction on September 6, 1994 in affected areas forwhich the Administrator has not determined that the 18-month sanction clock has expired by that date and for whichthe deficiency prompting the finding has
notbeen corrected by that date. Specifically, inthe notice section of today's Federal Register, EPA is providing a list ofareas that will be potentially subject to sanctions on September 6, 1994.

Note that the proposed rule did include tablesin which EPA intended to list areas subject to sanctions. In the final rule,EPA has removed the tables from the rule and decided toprovide information on areasthat will be potentially subject to sanctions in the separate notice mentioned above. (Sections II.C.5. and III.B. below include

a discussion ofwhy the tables were removed from the proposed rule and why such removal does notcarry any substantive significance.)

B. Summary ofCommentsand Responses

With one exception, this section consistsofa briefsummary ofthe
comments received onthe proposal and EPA's responses. Amore detailed summary ofcomments andEPA's responses can be foundin the docket in

a document entitled" Selection of Sequence ofMandatory Sanctions for Findings Made Pursuant to Section 179 ofthe Crean AirAct: DetailedSummary ofComments andEPA'sResponses" (herein referred to as "Detailed Summary ofComments"). The one exception is for the sanction clock policy; a detailed summary is provided here, as well asin the companion document, in orderto fully explain in the Federal Register the changes EPA has madetothe final rule inthis area andbecause ofthe complexity ofthis issue.
1. Sanction Sequence and Rationale

a. SummaryofComments.The EPA's proposal forthe sequence ofmandatory sanctions and the rationale are provided in sections I.C.1. and I.C.2. ofthis document, aswell as inthe proposal at pages 51274-5. The EPA received 14
comments on thispart oftheproposed rule.Comments on the sanction
sequence and rationale can generally be considered in four groups: (1) Commenters whobelieve the sequence should be reversed with the highway sanction applying first, (2) commenters whobelieve that EPA should determink sanction order on a case-by-case basis, (3) commenters whobelieve that the
nature ofthe deficiency should be considered in determining sanction
sequence, and (4) commenters who support the sequence asproposed.

Four commenters stated that the

sequence in which sanctions apply should be reversed with the highway sanction generally applying first. Several ofthe commenters contend that the highway sanction will be more effective atcompelling State correction ofSIP deficiencies because it would have greater economic impact, and it will be more effective at addressing political and statewide failures. One
commenter disagrees with EPA's rationale that the offset sanction is more likely to produce a greater air quality benefit, arguing instead that the highway sanction better encourages early State compliance. Several
commenters challenge EPA's rationale that the offset sanction potentially applies to all criteria pollutants; the
commenters argue that the fact that stationary sources emit more types of pollutants is irrelevant since, in the proposed rule, the offset sanction applies only to the pollutant(s) inthe deficiency. The commenters also raise

an argument that EPA's proposed
sequence unfairly burdens industry when the SIP deficiency is State-caused and that sources willbe unfairly penalized due to project location and timing.

Four commenters believe that EPA. should determine sanction order on a case-by-case basis. These commenters
express concern that EPA's streamlined approach provides insufficient notice of sanctions and leaves many sanction application details unclear. One
commenter argues that EPA should streamline its own rulemaking processes rather than deny notice to affected parties. These commenters were also concerned that general application of the offset sanction would negatively impact stationary sources. One

commenter argues economic competitiveness and air quality will deteriorate under he offset sanction. Two commenters were concerned that because ofthe length ofthe EPA rulemaking process stationary sources will bear the brunt ofthe sanction
burden.

Two commenters believe that the

nature of the SIP deficiency should be considered in determining sanction
sequence. One commenter believes that the sanction chosen should be linked to the SIP deficiency and-that EPA must conduct notice-and-comment

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rulemaking tb determinie whetherthe highwaysanction applies-fistt asto specifiC'types.of SIPdeficiencies. The commenter-is.concernedi that stationary

sourceswif.bearthebrunt-ofthe; sanctions'burden'; and:thatthisresult_ couldstifleieconomic development:,

Thre'commenters support thei proposed sequence ofsanctions. One
commenter supports the position-that the linkbetween,the-highway sanction. and air qpslitbeiiefits-is uncertain and. another commenter agrees.tht the offset sanction:provides.a quantifiable and

more likely-air qualitybenefit.Another
commenter supported.EPA,'sconcerns regarding the adninistrative.and implementatio burdens-ofthe h.ghway sanction as abasis for the offset sanction. applying first.

b. Responseto Comments:Ih.thisfinal rule, EPA liasmaintained'th proposed sanction sequence'wfth theoffset sanctiongenerally,applyiig-first andthe, high-way'sanctibn second. The-EPA. contibues-tbbelieve tliis~sequencei& supportedby,tlleproposed;rat.ionales. that. theogfset sanction (comparedtothe highway sancti'on)will:

(K)

,Provi&a,more.certain.and.direct air qualiybenefit,,

(2) Potentially affect more criteriapollutants;,and.

(3) Be easier'to-implement,and adminisaer. The EPA disagrees-with the comments.that highway sanctions,will always:more effectivelyladdress.SIPrelated. deficiencies,and should, therefore, be.generally applied first Inaddifion,.EPA does be]levetthat the offsetsanction~will more likely produce,

a net. air qpalitybenefit..In some cases,. the-offset sanation.may,be.more. effectiveatresoLving SIP deficiencies. Forexample,,inLan area thatis. undergoing significant economic. growth,.the~offsetsanction.could help. bringpressure through stationary sources:wishing.to expand,orlocate in. theareaand w1ich are faced with the need foran additional,emission offset increment..Furthermore, offsets. achieved'by such asanction wnul benefit air quality inthe affected area. However inparticular instances, theEPA dbes-not deny that-theoffset sanctionmay notbe-as effective because; fbr example; the-areimaybe. economibmllr depressediandinot experieneinggrwtht.In,such a case, there maybe less aii-'quality'beneflt,and perhaps lesspressure to correct the, deficiency inapplying the offsetsanctiow first

Nbnetheless, overall EP t A continues'to believe:that conceptually'the offset sanctioni(domparedfto the.higlway. sanction) pmvides.a-more-certain;, direct air qualitybenefit in the near and Ibng term-and potentiall'y'covers more pollutants. An increased new source review (NSR})offsetratio necessarily reduces air'pollutant emissions as sourcestmodifW or locate,in, an areaunder the offsetsanction. By contrast-, the highway sanctibn may not directly reduce-overall'motor vehicle emissions inthe near tbrmand-any air quality benefits resulting from the highway' sanction wouldbeindirect, 'as appli ation.ofthe highway sanction would not necessarily preventmotorists from driving, noreven necessarily result in overall emissions reductions, at least inthe short term. The EPA recognizes thatin some instances-it maybe more appropriate forthe highway sanction to apply,to addiess'a political faillire and, believes there areadequate mechanismsprovided under the rulbto address these instances.9

The EPA did notintendto suggpst.in the proposarthat the offset.sanction.will applyjih every case, to all criteria pollutants. The.offset sanction will. apply,only to,all'criterih pollutants (and their precursors),forwhich the area is subject' thothe section 173'(42 U:S.C. 7503).offsetreqjuirement when the SIP' deficileacy s.gneral'innature.. When, the findingis dpecific.to.one ormore pollutants.(andi its/thefrprecursor(s)),. the.sanctibn.applies only to. those pollutants (hndlbr.precursorfs)). Thiestatement inthe proposar intndad that the:offset can potentially.affict.all criteria.polhtants,,eitherbecause.of pollutant-specific findingp.or general findings. Thismeans.that, regardless of whether the findingis.pollutant-specific.

or.general,.the offset sanction.wili generally applyp at least tothe pollutants ofdirectconcern and,sometimes.to) others-as-wellh Onthe:otherhond,,the. highway sanction will,potentially affect only those piolhitants mobile sourcesemit signifibantly'and not. for-instance,, leador SO,.However,,EPA also realizes that since.C0 nonattainment area problems'are due primarily to.mobil'e
sources, arguably applicationi.of-the' offset sanction may notaddress.themore.sigpificant sources,contributingto CO nonattainment~probems, Nonetheless,.the-offset sanction still applies:to,CO' for.nonattainmentNSR purposes;and-thus,will:affect sources,. subjectto nonattainmenrNSR that wish
to locate.or,expand,in.a CO nonattainment area; which,would provide'some.airquality benefit inthearea under theoffset sanction. Therefore;,EPA. continues tobeiev.e-that

9 As noted in section:.LC.-of thisnotice, under the.APA.citdzens can petition.the EPA-for. rulenakihg,to,propose the highway,sanction to apply,,first. ov~rall the 

### qffset sanction ismore likely
to produce a.greater air qualitybenefit than thehighway sanction.because,.as
sources: locae in an'area, direct emission reductions willbe achieved through the 2-to-1 offset.for potentially any ofthe criteria pollutants.

With,respect toimposing,sanctions on
a case-by-case-basis, EPAbelieves there aretwo,main disadvantages to this approach which.hare-led EPA to-reject it.

First, theindividhal,notice-and--
comment rulemakings'that wouldbe, needed forimplementing the sanctions

on a case-by-case basis wouldimpose, significant demands on EPA's resources. These resources could,otherwise be spent on activities'that more directly

serve the-gpa'ofthe Act-,namely, clean air; Second',the'approach taken in the final rulb will provide certainty and sufficient notification to-the~parties affectedabout the details-ofsanction applibation and'consistency in the implbmentation"of'section,

# y179.These details'are further-discussed'in section
III.A.andin-the'dbatal'ed.summary of comments document.

Asto'establishing a rule-that linksthe first sanction to'the-deficiency onwhich the sanction is'based, EPAbelieves that approach fails-to'consider'other important considerations'with,respect to. sanctions such- as which-sanctibn is more-likely to'yield the greater air quality benefit. The EPA believes, as a general'matter, thatthe sanctibir that results'fn the'greaterair-quality benefit is'amore imlortant-considbration-than selecting-thesanction sequence based' priinarily-on the nature ofthe deficiency.

.

At- the same, time; EPA recognizes that' in some cases it'maybe moreapproprihte-to apply-the,highway sanetfon'first ifthe'circumstances of'the, dbficiency warrant andthe-offset sanction is! unlikely,to'yield significant air quality,benefits: The.EPA believes therul4-provides the flexibility to, db so. Additionally, EPA cannotpredi'ct,
across,all sanction findings, which sanctibr-will more effbctitvely address State inaction andthus couldinotbase, the general sanction sequence proposal

on thatfactor: Ftndamentally, EPA has based its,sanction,sequencingrationale, primarily on the basis ofwhih sanction, EPAbelievesis likelytoyield thegreaterair quality benefit. It is impossibleo-gpuge the impactsince4he uni ,erse-ofareas which-willbe, sanctionedand-forwhat duration are notknown

The-EPA dbes.notdisagree thatthe offset sanction has the,potenti'al to impact industry-and that this.burden maybe greater'oni'ndustry than on the transportation sector..However, by

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including the offset sanction in the Act, Congress clearly intended thal certain
sources, by virtue ofthe timing and location oftheir projects, would be impacted.

2. Sanction Effectuation

A discussion ofEPA's approach for effectuating the offset and highway sanctions is provided in section I.C.3. of this document and at pages 51275-7 of the proposal. The following is a brief
summary ofmajor comments and EPA's
responses.

a.MajorComments.(1) Offset Sanction. Comments on offset sanction effectuation addressed both the source and pollutant applicability aspects of EPA's proposal. One commenter objects
to the timing ofthe applicability ofthe offset sanction and believes EPA's proposed approach is contrary to past EPA practice. The commenter argues that applying the increased offset ratio
to all sources that have not received a permit as ofthe date the sanction begins would stop many sources during the permitting process for reasons beyond their control. The commenter believes that in the past EPA has avoided these problems by applying tighter NSR requirements Only where permit applications were not complete when the requirements became effective. The
commenter recommends EPA continue with this approach.

Two comments concern the pollutant applicability,ofthe offset sanction. One
commenter objects to the application of the offset requirement to both ozone precursors (nitrogen oxides (NOx) and volatile organic compounds (VOC}) even when the deficiency relates only to one ofthe pollutants. In support, the
commenter notes thebroad nature of section 179 and the manner in which
NOx emissions are treated under the Act vis-a-vis VOC emissions. Regarding PM10 precursors, the commenter argues that the offset sanction should apply to precursors only in those areas where EPA has approved a PM-10 SIP control strategy imposing the offset requirement

on PM-10 precursors.

Another commenter believes that regardless ofthe SIP deficiency the offset sanction should apply to all criteria pollutants and precursors. In support, the commenter argues that section 179references section 173, which applies to all offset requirements in title I ofthe Act, and that thisreflects

a clear Congressional intent to apply the offset sanction to these pollutants. The

commenter also believes that areas that have not yetreceived a section 182(f) (42 U.S.C. 7511a(f) NOx exemption from the section 173 offset requirements should remain subject to the increased offset ratio for NOx until EPA grants an exemption.

(2) HighwaySanction.One
commenter requests that the rule include a requirement thatEPA notify several government entities ofhighway sanctions to focus multi-agency

resources on resolving SIP deficiencies. Another commenter believes thatthe flow offlexible funds for certain
programs (e.g., congestion mitigation air quality improvement program) should continue to flow if sanctions apply because the funds are important for achieving the Act's goals by improving transit.

b. Response to Comments.'(1) Offset Sanction Applicability. Regarding offset sanction source and pollutant applicability, in the final rule, EPA has maintained the approaches in the proposal.

On source applicability, EPA believes it is important to maximize the air quality benefit ofthe offset sanction by requiring that sources whose permits are issued after the date the offset sanction applies comply with a 2-to-1 emission offset requirement. Contrary to the comment, the source applicability definition is not a departure from all pastEPA practices because historically EPA has not always used the "complete application" definition. (The different

source applicability definitions EPA has used in the past are discussed in the detailed response to comments document.) Therefore, EPA believes that past practice does not constrain it from determining today that it is important to enhance the effectiveness ofthe offset sanction by defining source applicability on apermit issuance basis.

Moreover, EPAbelieves that once the offset sanction applies,it wouldbe a violation ofthe sanction for a permit to be issued with an emission offset of less than 2-to-1. The plain language of section 179(a) and section 179(b)(2) does not provide fornor contemplate
any grace period based on whether a

source has submitted acomplete application.

Regarding pollutant applicability of the offset sanction, EPA believes the proposed applicability is reasonably supported and will have the potential to effectively protect air quality. Section 179(b)(2) generally references the offset requirements ofsection 173 and does

not restrictEPA's ability to base the applicability ofthe sanction on a pollutant or pollutants (and its/their precursor(s)). Moreover, pollutantspecific application ofthe offset sanction is consistent with the requirements ofsection 179. Section 179(b)(2)'s language providing that "the ratio ofemission reductions to increased emissions shallbe at least 2 to,1" is general enough such that EPAcan determine the most reasonable method
to apply the sanction. While section 179(b)(2) references thebroader section 173 requirement, EPA believes it is

morereasonable, with one caveat,10 to apply the offset sanction to the criteria pollutants specifically related to the SIP deficiency in question. Pollutantspecific application ofthe offset sanction will encourage the State to
correct its SIP deficiencies and will provide reductions in emissions ofthe relevant pollutant in the interim, without unnecessarily punishing stationary sources in cases where the State's program for other pollutants is adequate.

Regarding ozone and PM-10
precursors, EPA is maintaining the approach inthe proposal that the sanction applies to ozone and PM-10
precursors. The caveat to that general rule has expanded in oneminor respect with respect to the ozone precursor NOx. As provided in the proposed rule,

sources will need to achieve the increased offset ratio forVOC and NOx when the finding concerns an ozone requirement unless EPA approves a section 182(f) demonstration that the Act's NOx nonattainment NSR requirements should not apply. In addition, EPA has added the exception that ifthe area otherwise is not subject
to the section 173 offset requirement for NOx (e.g., submarginal ozone nonattainment areas), then sources in that area would notbe subject to that requirement under the offset sanction (see sections 182(1)and 182(b)(2)). This exception is necessary in light ofthe specific language ofthe offset provision, which tiesthe offset sanction specifically to offsets required under section 173. For PM-10 precursors, EPA has retained the caveat for cases in which EPA has made a section 189(e) (42U.S.C. 7513a(e)) determination for

an area that PM-10 precursors are not significant.

(2) Highway Sanction Effectuation, The issues raised by the commenters are not a subject ofthis rulemaking. The DOT has primary responsibility for implementing the highway sanction and EPA is coordinating with DOT on the development ofprocedures for that
purpose.

0Where the SIPdeficiency is general, the offset sanction applies to thecriteria pollutant(s) (and its/ their precursor(s)) forwhich the area isrequired to meet the section 173NSR requirements. (This pollutant applicability definition for general SIP deficiencies is also discussed in section I1.C.5. below.)

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3. Sanction ClockPolicy

a. Summaryof Proposal. In the proposal, EPA described its proposed policy with respect to the sanctions clock at pages 51272-51273." Under that interpretation, once the sanctions clock has started upon EPA making a finding under section 179(a), in order to stop the clock, EPA must determine that the State has corrected the deficiency that prompted the finding. Similarly, to

remove section 179(b) sanctions applied under section 179(a), EPAmust determine that the State hascome into compliance by correcting the deficiency that prompted the finding that resulted in the application ofone orboth sanctions.

For a finding that a State has failed to submit a SIP oran element ofa SIP, or that the SIP or SIP element submitted fails to meet the completeness criteria of section 110(k), the proposal provided thatEPA will stop the sanctions clock

orremove any sanctions applied upon EPA's determination that the State has submitted the missing plan orplan element and that the submittal meets the completeness criteria established pursuant to section 110(k)(1). Note that EPA's July 9, 1992 SIP processing guidance indicated that ifthe 18-month sanction clock elapses during a completeness review, sanctions would
notbe imposed unless and until EPA determined the plan tobe incomplete.12 In such a case, the 18-month clock would continue to run so that ifEPA determined the plan to beincomplete after 18-months had elapsed, sanctions would immediately apply.

The proposal provided that ifEPA disapproves a SIP submission based on its failure to meet one ormore plan elements required by the Act, to correct the deficiency for purposes of stopping the sanctions clock or removing the sanction, the State must submit a revised SIP to EPA and EPA must approve that submittal pursuant to section 110(k). For a finding that a requirement ofan approved plan is not being implemented, the proposal provided that the sanctions clock would stop or sanctions wouldbe removed through notice-and-comment rulemaking determining that the State is

IIFor general guidance on EPA's interpretation, at the time ofproposal, ofhow the sanctions clock functions andwhat is necessary to stop it, see the memorandum entitled "Processing ofState Implementation Plan (SIP) Submittals" from John Calcagni to Air Division Directors, Regions I-X, July 9, 1992. A copy ofthis memorandum has been placed in thedocket forthisrulemaking.

12Thepolicy alsoprovided that, following findings ofnonsubmittal and incompleteness, sanctions which had applied would continue to apply upon State submittal untilthe submittal was determined to be complete. implementing the approved plan orpart ofa plan.

b. SummaryofComments.Two commenters raise both practical and legal issues with respect to the proposal's sanction clock policy where it indicates that EPA must fully approve SIP submittals beforesanctions clocks that are started by disapprovals can be stopped.

The first commenter's practical

concern is time. With respect to a sanctions clock started by adisapproval, because ofthe length ofthe State's regulatory development, approval and adoption processes and EPA's review period, the interpretation inthe proposed rulecould result in sanctions being imposed even ifa State had fully adopted and submitted thecorrective rule. Sanctions would remain in effect until EPA finished its rulemaking approvingthe corrected rule.The commenter is concerned that the rule could have an adverse impact solely because EPA had not had time to act on SIP revisions that are fully approvable.

The commenter further believes that EPA's policy is not supported by the language ofthe Act. The commenter argues that the Actelsewhere explicitly distinguishes between correcting the deficiency and EPA's process of approving a SIP. Section 110(c)(1)(B) states that the Administrator must 'promulgatea Federal implementation plan (FIP) within two years ofSIP disapproval "* * * unless the state corrects the deficiency, and the' Administrator approves the plan or plan revision * * *." Section 179(a), though, merely provides that sanctions shall apply "unless such deficiency has been corrected * * * and does not include the phrase regarding EPA plan approval. The commenter believes thatEPA cannot ignore the difference between sections 110 and 179 because to don would constitute "reading out" or rendering meaningless theadditional phrase ofsection 110(c)(1)(B).

To support its legal argument, the
commenter states that principles of statutory construction provide that effect must begiven to each word in a statutory provision, and that every effort
mustbe made to avoid an interpretation which renders other provisions ofthe

same statute inconsistent, meaningless,

or superfluous (BoiseCascadeCorp.v. UnitedStatesEnvironmental Protection Agency, 942 F.2d 1427, 1432 (9thCir. 1991)). The commenter also notesthat * an agency cannot ignore or "read out" part ofa statute (Natural Resources Defense Councilv. UnitedStates Environmental Protection Agency, 822 F.2d 104, 113 (D.C. Cir. 1987)). As an alternative to EPA's proposal, the commenter recommends that the sanctions clock policy for disapprovals follow the process inthe proposal for findings ofnonsubmittal and incompleteness. The commenter states that under that alternative policy the clock would be stopped ifa new submittal is received, pending EPA's determination ofwhether the deficiency has been corrected. The commenter urges EPA to adopt a consistent policy to stop sanction clocks in all cases upon receiving a revised SIP submittal. If EPA's preliminary review indicates the deficiency hasbeen corrected, then the clockwould remain stopped and EPA would proceed to approve the plan through rulemaking. Ifthe deficiency

was notcorrected initially, the clock would restart via a letter to the State.

A second commenter raised similar

concerns with EPA's proposal that actual approval was needed to stop a sanctions clock started by a disapproval. According to the commenter, the clock should be suspended with the submittal toEPA ofa completed rulemaking and remain suspended unless EPA disapproves the SIP. The commenter notes that EPA has the opportunity to participate in the State's rulemaking process to ensure'the deficiency is corrected.

c. Responseto Comments.Inresponse to the comments received, EPA reevaluated its proposed sanction clock policy and made two changes. 13

(1)Overview ofChange One.For the

reasons stated in subsection (4) ofthis section lI.B.3.c., EPA doesnot adopt the exact approach set forth by the commenters, which would actually stop

asanctions clock started by a disapproval upon State submittal ofa SIP. However, EPA has determined that it is reasonable totemporarily defer and/or stay the application ofsanctions,

as appropriate,' 4 following SIP disapprovals, where EPA proposes to fully approve a SIP revision or proposes to conditionally approve a SIP.1 - 5In

13The EPA is also making a clarification to the sanction clock policy which is discussed in section 11.C.4.

' 4As discussed below under change two, the proposed sanction clock policy specifically provided forthe deferral ofsanctions during completeness reviews ofSIP's submitted following nonsubmittal and incompleteness findings, but not staying the sanctions The concept set forth here for initial disapprovals and findings offailure to implement is carried forth from this process developed in the proposal for initial findings of failure to submit or ofincompleteness. Incarrying this concept over. EPA believes that it is logical and necessary that ifthe effect ofsanction application is to be deferred that sanctions actually applied should be stayed.

I Note that a proposed partial or limited approval would notresult in the deferral and/or staying of Continued

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addition, EPA has determined that such deferral and/or staying ofsanction application is reasonable following findings ofnonimplementationt6 where EPA proposes to find that a State is implementing its SIP. Simultaneous with such proposed approval or finding of SIP implementation. EPA will issue

a separate, interim final determination that the State has corrected the deficiency that prompted the finding that started the sanctions dock. In all these cases, whether sanctions are deferred and/or stayed depends onthe timing ofEPA'sproposed action vis-avis the sanction clocks.

For initial SIP disapprovals where EPA subsequently fully approves the revised SIP, sanctions would be deferred andfor stayed unless and until EPA's proposed full approval was reversed by aproposed disapproval or final disapproval ofthe revised SIP in whole orin part. At.thatpoint, the interim final determination that the deficiency hadbeen corrected wouldbe rescinded orreversed. For initial SIP disapprovals where EPA subsequently proposes to conditionally approve the revised SIP, sanctions would be deferred and/or stayed unless and until EPA reverses itsproposed conditional approval by a proposed disapproval or final disapproval ofthe revised SIPin whole orin part. Forinitial SIP disapprovals where EPA subsequently conditionally approves therevised SIP in final, sanctions would be deferred and/or stayed unless and until the conditional approval converts toa disapproval, orEPA proposes to disapprove in whole or in part the revised SIP the State submits to fulfill the commitment inits conditionallyapproved SIP. '7When any ofthese events occur with respect to a proposed

or final conditional approval, the

the applicatiok ofsanctions because such actions

are associated with proposed partial or limited .disapprovals, (For adiscussion ofpartial and limited approvals/disapprovals, see the memorandum entitled "Processing ofState Implementation Plan (SIP) Submittals" from John Calcagni to AirDivisionDirectors, Regions I-X, July 9, 1992.)

16AIthough thecomments focused ona clock started by adisapproval, EPAhas extended its changes to aclock startedby a finding offailure to implement, finding no reason totreat findings of failure to implement differently.

17On July, 9, 1992,EPA issued apolicy that included a discussion ofhow conditional approvals convert to disapprovals (seememorandum entitled "Processing of State Implementation Plan [SIP) Submittals" from John Calcagni to Air Division Directors. Regions I-X,July 9, 1992).Butnote that, by this action, EPA is withdrawing the part ofthe July 1992 guidance that addresses how conditional approvals convert to disapprovals. Inthe near future, EPA intends to issue additional guidance to address this aspect ofthe conditional approval policy. interim final determination thatthe deficiency had been corrected would be rescinded orreversed.

,Forinitial findings of nonimplementation, sanctions wouldbe deferred and/or stayed unless and until EPA reversed itsproposed finding that the State wasimplementing itsSIP by proposing to find or finally finding that the State was not implementingits SIP

or by withdrawing its proposed finding that the State was implementing itsSIP. At thepoint ofthat subsequent action, the interim final determination that the State had corrected the deficiency would be rescinded orreversed. (Exactlyhow the application of sanctionswould be deferred and/or stayed following SIP disapprovals and nonimplementation findings is discussed in greater detail below in this section. Change one is reflected in the nile in §52.31 (d)(2), (d)(3), and (d)(4].)

The rationale for the deferring and staying ofsanctions inthese casesis that the proposed full orconditional approval or proposed findingthat the State is implementing its SIP wouldbe thebasis forEPA's interim final determination thatthe State has corrected the deficiency.t When EPA issues thisproposal, theAgency indicates that itbelieves itis more likely than notthat the State is complying with the relevant requirements ofthe Act.The EPA believes it would be inequitable for sanctions toapply in situations where EPA has made such an affirmative finding,even though it is only preliminary. Moreover, EPA believes it wouldbe unfair to apply sanctions merely because the clock had expired before EPA isable totake final action on the submittal inthese situations given the length ofthe rulemaking process.

(2) Overview ofChange Two. The second change tothe rule concerns the guidance discussed in the preamble to the proposed rule at page 51273, footnote 9, where EPA indicated that if the sanction clock started by a finding .offailureto submit orincompleteness expires during a completeness review fora subsequent SIP submittal, the sanction would not apply unless and until EPA foundthe submittal incomplete. In this instance,EPA intended that the sanction clock would nottemporarily stop, but instead would continue to run. Duringthat time,EPA would simply defer the application of the sanction whileit reviewed theSIP submittal to determine whether ornot

"The EPA's final conditional approval would merely continue any stay or deferral initiated by EPA's proposed conditional approval and EPA's simultaneous interim final determination the deficiency hasbeen corrected. the State had corrected the deficiency prompting the finding. Thus,ifand when EPA found the SIP incomplete after expiration ofthe 18-month clock, the sanction would apply on the date EPA foundthe plan incomplete. 9

After further analysis ofthis aspect of the sanction clock policy in the context of addressing comments, EPA has determined that it isinappropriate to defer and/or stay sanctionswhen sanction clocks elapse duringreview for completeness ofplans submitted by States following findings of nonsubmittal and incompleteness. Therefore, EPA'srule provides that the temporary deferral and staying ofthe application ofsanctions occurs only whenEPA takes an affirmative action in which it indicatestheAgency's belief that the State has corrected the deficiency prompting thefinding (e.g., that the State has corrected the finding ofnonsubmittal orincompleieness). The EPA believes thischange isnecessary since, uponfurther reflection, EPA realizes that in such a situation there hasbeen no prioraffirmative action by EPA preliminarily orfinally determining that the State has, in fact, corrected thedeficiency. A proposed approval ofa revised SIP following a disapproval constitutes such an action

as does aproposed finding that a State, isimplementing its SIP following a finding ofnonimplementation. However, mereEPA receipt ofa SIP submittal from a Statefollowing a nonsubmittal or incompleteness finding does not constitute such an action, since EPA takes noaffirmative action preliminarily indicating that the State has submitted a complete SIP, andthere isnothing togive rise toan interim final determination thatthe State has corrected the deficiency.

Under thischange, sanctions will apply ifa sanction clock expires during

a completeness review ofa SIP submitted following a nonsubmittal or incompleteness finding.An example illustrates the implications ofthis change. Suppose EPA finds that a State -failedto submit a SIP andthen at month 17the State submits a SIPwhich the Agency then starts reviewing for completeness. Month 18 arrives and EPA is still reviewing the submittal. Under the approach inthe proposal, application ofthe offset sanction at month 18would be deferred unless and until EPA found theplan incomplete. Under the final rule, the sanction will apply atmonth 18 and only be lifted

'9 Notethat this specificaspect ofthe proposed sanction clockpolicy was not actually reflected in the regulatory language ofthe proposed rule but

was discussed in the preamble only.

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once EPA takes affirmative action finding the plan complete.

ForEPA to continue with the proposed policy ofdeferring sanctions following nonsubmittal and incompleteness findings, EPA would have to view mere receipt ofa submittal from the State as a preliminary correction of the deficiency. However, EPA's view is that receipt ofa State plan does not constitute an affirmative EPA determination that'the revised SIPis complete. 2 0 Therefore, it is inappropriate to defer and/or stay sanctions following nonsubmittal and incompleteness findings. Furthermore,

once EPA has affirmatively determined the plan is complete, any sanctions clock or any applied sanctions would be permanently stopped. Therefore, it is inappropriate to defer or stay sanctions following nonsubmittal and incompleteness findings until EPA has affirmatively determined the plan is complete. 2' The EPA believes this change, as well as change one, makes the Agency's approach in deferring and staying the application ofsanctions

more consistent with the requirements ofthe Act.

2OArguably, EPA could make an interim final
determination that the State's submittal is complete. However, such an interim determination is impractical and inappropriate for at least two

reasons. One, the short time period provided under the Act for EPA to make completeness determinations (i.e., 60 days) indicate that Congress did not intend for EPA (nor contemplate for EPA)
to make preliminary completeness determinations. Two, the nature ofthe completeness review does not lend itself to EPAmaking preliminary and final determinations. The completeness review is intended asa straightforward exercise to determine ifthe SIP revision includes the basic elements to warrant further review for overall adequacy. Therefore, there is no room fora preliminary determination; any review sufficient tomake such

apreliminary determination would be sufficient for EPA's final completeness determination.

21A clarification is being made in the final rule which was not specifically addressed in the proposed rule. Following nonsubmittal and incompleteness findings, the final rule effectively provides that sanction clocks can be stopped (and sanctions lifted) only when EPA makes an affirmative completeness finding, and not when SIP's becomecomplete by operation oflaw pursuant to section 110(k)(1)(B) ofthe Act. This change is further discussed in section IlC.4. below. (3) Scenarios Illustrating First Change. The following five scenarios illustrate how sanctions can be deferred and/or stayed following SIP disapprovals and nonimplementation findings. 2 2 They are provided to clarify change one discussed above. (Section III.A. discusses how the States and the public will be kept informed ofthe status of ,sanction application.)

First, if,before month 18, EPA
proposes to fully or conditionally
approve a plan or proposes to find that

a State is implementing its SIP and that action is reversed 24 ormore months after the finding, at which time the 18- month clock has expired, application of the offset sanction is deferred until EPA's proposed approval or-proposed finding that the State is implementing its SIP is reversed.23 Forboth types of findings, the offset sanction applies on the date EPA reverses its preliminary finding. Following disapprovals, where EPA proposed to fully approve the SIP,

2 2Notethat in the fivecases discussed below in the "scenarios illustrating first change," sanctions would apply orreapply when aconditional approval converts to a disapproval just as they do when aproposed full approval isreversed to a disapproval. Notealso that, unlike full approvals, themandatory sanctions process would not cease upon final conditional approval. Following a disapproval, as indicated above, ifEPAproposes fullapproval ofthe State's revisedplan,resulting in the deferral and/or stayingofsanction application, and then takes final, full approval action, themandatory sanctions process ceases. However, ifthe scenario were one where EPAwas conditionally approving the plan,the final conditional approval does not stop the mandatory sanction process because itdoes not represent EPA'sfinal determination that the SIPisadequate. The EPAwill makethat determination when it reviews the revisedplan theState commitsto submittingas part of theconditional approval. Ultimately, ofcourse, ifthe State fulfills its commitment and EPA approvesthe State's plan revision, then any sanction clocks are permanently stopped and nosanctions are applied orreapplied.

23This scenario assumes that EPAproposes approval priorto 18months and thatEPA's positive finding isreversed after 24 months.Inthat instance, after 24months, only the 18-month clock has expired (and not the 6-month clock) because the 6- month clock is not triggered untilthe offset sanctionapplies. (Section In.A. belowdiscusses howthe section 179 sanctionclocks function.) Therefore, in thisscenario, the 6-month clock does not start untilEPA reverses itspositive finding after 24months. Thenext paragraph and Figure 1give

an example ofhow this functions. the reversal would be eithera proposed

orfinal disapproval in whole or in part, whichever occurs. Following disapprovals, where EPA proposes to or finally conditionally approves the SIP, the reversal would occur as described in subsection (1)above ofthis section II.B.3.c. Following findings of nonimplementation, the reversal would be either aproposed orfinal finding, whichever occurs, that the State was not implementing its SIP. For both disapprovals and nonimplementation findings, the highway sanction applies 6 months from the date the offset sanction applies, unless EPA determines within that period that the State corrected the deficiency prompting the finding. (This scenario is provided for inthe rule in 

### §52.31 (d)(2)(i), (d)(3)(i), and (d)(4)(i).)

The following discussion and Figure 1provide an example ofhow this process functions with respect to a sanctions clock started by an initial disapproval. The process would function in the same manner where the initial finding was a finding offailure to implement. Suppose EPA issues a SIP disapproval, initiating the section 179 sanction process. Suppose thatthe State submits a revised SIP to EPA which EPA proposes to fully orconditionally approve, prior to 18 months from the date thesanctions clock started. The EPA would simultaneously issue an interim final rule, making a finding that the State has corrected the deficiency. In that case, the application ofthe offset sanction would be deferred. Now suppose that, at month 25, EPA reverses its preliminary determination. The reversal would be a proposal to disapprove the SIP in whole orin part

or a final disapproval ofthe SIP in whole orin part. At month 25 (or, for final actions, on the action's effective date), the offset sanction applies. The highway sanction then applies 6 months later at month 31 (or,for final actions, shortly thereafter, as appropriate), if within that periodEPA has notdetermined that the State has corrected the deficiency.

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# Figure 1: Case 1 for SIP Disapprovals

Per disapproval,

State submits revised SIP to EPA

prior to month 18

Prior to month 18,

EPA proposes to fully or conditionally approve SIP and makes interim final determination

deficiency

corrected

18-month sanction clock expires and

application of offset sanction deferred

At month 25, full

or conditional approval becomes disapproval and EPA determines deficiency not corrected At month 25, (or shortly thereafter following final actionsi, offset sanction applies

At month 31. highway sanction applies (or shortly thereafter following final actions), unless EPA determines State corrected

deficiency

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### / Thursday,, August 4, J994 / Rules and Regulations 39841

Second, ifEPA proposes (before expiration ofthe 18-month sanctions clock)to fully orconditionally approve

a plan or proposes to find that a State is implementing its SIPand that proposal action isreversed before the 6- month clock expires that would have followed upon application ofthe offset sanction, application ofthe offset sanction isdeferred until such reversal ofEPA's proposed finding. The offset sanction applies on the date EPA's proposal finding is reversed (or,for final actions, on the action's effective date). The highway sanction then applies 6 months laterifEPA has not determined during that period thatthe State has corrected the deficiency. (Thisscenario is provided for in.the rule at §§ 52.31 (d)(2)(i), (d)(3)(i) and (d)(4)(i).)

The following discussion and Figure 2 provide an example ofhow this process functions for a finding of nonimplementation. 2 4The process would be the same for an initial disapproval. Suppose EPA makes a finding ofnonimplementation, initiating the section 179 sanction process. Suppose that EPA, prior to the end of the 18 month sanctions clock, proposes to find that the State is implementing its approved SIP. At the time ofthe positive finding, EPA would

24This example is given for a finding offailure

to implement, whilethe other four examples are given.for SIPdisapprovals, for illustrative purposes OTrly. simultaneously issue an interim final rule, finding that the State has corrected the deficiency.

In thiscase, the application ofthe offset sanction would be deferred unless and until EPA reverses its proposed positive finding. Now suppose that EPA, atmonth 22, reverses its proposed positive finding by withdrawing its proposed findingthat the State is implementing its SIP. At month 22 (or, for final actions, on the action's effective date), the offset sanction applies. The highway sanction then applies 6 months later at month 28 (or,for final actions, shortly thereafter, as appropriate), if EPA has not determined thatthe State hascorrected the deficiency.

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# Figure 2: Case 2 for Findings of Nonimplementation

EPA makes finding of nonimplementation

Prior to month 18,

EPA proposes that State is implementing SIP and makes interim final determination

that deficiency corrected

18-month sanction clock expires and application of

--

offset sanction deferred

At month 22. EPA
proposes or finally finds that the State is not implementing the SIP and deficiency has not been corrected At month 22, (or .shortly thereafter following final actions), offset sanction applies


# IZLIZ1

At month 28 (or shortly thereafter following final actions), highway sanction applies unless EPA determines the State corrected

deficiency

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Third, ifEPA proposes (after month 18 but before expiration ofthe subsequent 6-month sanctions clock) to fully orconditionally approve a plan or proposes to find that a State is implementing its SIP, application ofthe offset sanction is stayed unless and until EPA's proposed positive finding is reversed. (This scenario assumes that EPA's reversal occurs before expitation ofthe 6-month sanction clock.) For both types of findings, the offset sanction reapplies on the date EPA's preliminary positive determination is reversed. The highway sanction applies 6 months from the date the offset sanction initially applied, ifEPA hasnot determined that the State has corrected thedeficiency prompting the finding. (This scenario is provided for in the rule
at § 52.31 (d)(2)(ii), (d)(3)(ii) and (d)(4)(ii).)

The following discussion and Figure 3provide an example ofhow this process functions for a SIP disapproval. The process isthe samewhere EPA has made an initial finding offailure to implement. SupposeEPA makes a SIP disapproval, initiating the section 179 sanction process. Suppose that the State submitsarevised SIP which EPA, after 18 months butbefore the subsequent 6- -monthclock expires, proposes to fully

orconditionally approve. The EPA would simultaneously issue an interim final rile. finding that the State has corrected thedeficiency. In that case, application ofthe offset sanction would be stayed unless and until EPA's proposed approval is reversed. Now
suppose that, at month 22, EPA reverses its proposed approval. The reversal would be.a prqposal to disapprove the SIP inwhole oroin part ora final disapproval'of'the SIPin whole or in part.At month 22 (or,for final actions,

on the action's effective date), the offset sanction reapolies. The highway sanction then applies at month 24, 6 months after the offset sanction originally applied, unless EPA determines that the State corrected the deficiency withinthat period.

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## Figure 3: Case 3 for SIP Disapprovals

At month 22, (or EPA shortly thereafter disapproves .following final SIP actions), offset sanction re-applies

At month 24, 18-month sanction highway sanction clock expires and applies, unless EPA offset sanction determines that applies State corrected deficiency

Per disapproval,

State submits revised SIP to EPA after month 18 but

before month 24

After month 18 but before month 24, EPA proposes to fully or conditionally approve SIP and makes interim

final determination

that deficiency corrected.,

On date of EPA

interim final determination, application of offset sanction stayed

At.month 22, approval becomes disapproval and 'EPA determines deficiency not corrected

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Fourth, ifEPA proposes (after month 18, but before the subsequent 6-month sanctions clock expires) to fully or conditionally approve a plan or proposes to find that the State is implementing its SIP, and EPA does not take action reversing such positive action until after the subsequent 6- month clock expires, application ofthe offset sanction is stayed and application ofthe highway sanction is deferred unless and until EPA's proposed positive finding is reversed. The offset sanction reapplies and the highway sanction applies on the date EPA's preliminary determination is reversed. (This scenario is provided for in the rule

at §§ 52.31(d)(2)(ii), (d)(3)(ii) and (d)(4)(ii).)

The following discussion and Figure 4 provide an example ofhow this
process functions for a SIP disapproval.. The process functions in the same way for an initial finding offailure to 'implement. Suppose EPA makes a SIP disapproval, initiating the section 179 sanction process. Suppose that EPA, after 18 months (butbefore the subsequent 6-month clock expires),
proposes to fully orconditionally
approve the SIP. The EPA would simultaneously issue an interim final rule, finding that the State has corrected the deficiency. In that case, application ofthe offset sanction wouldbe stayed and application ofthe highway sanction deferred at the time EPA makes its positive finding. Now suppose that, at month 26, EPAreverses its positive finding. The reversal would be a proposal to disapprove the SIP in whole

orin part or a final disapproval of the SIP in whole or in part. At month 26 (or, for final actions, on the action's effective date), the offset sanction reapplies and the highway sanction applies.

BILLING CODE 6560-60-P

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### I Vol. 59, No. 149. / Thursday, August 4, 1994 / Rules, and,Regulations



## Figure 4: Ca

EPA, disapproves SIP

18-month sanction clock expires and offset sanction applies

Per disapproval,

State submits revised SIP to EPA after month 18 but

before month 24

After month 18 but before7 month 24, EPA proposes to fully or conditionally approve SIP and makes interim

final determination

that deficiency corrected

On date of EPA

interim final determination, application of offset sanction stayed

6-month sanction clock expires and

application of. highway sanction deferred 

## se 4 for SIP Disapprovals

At month.Z6,. approval become& disapproval and EPA determines. deficlency,not corrected

At month 26, (or shortly thereafter

following final actions), offset sanction re-applies and highway sanction applies

BILLING CODE 6560-60-C

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Lastly, the rule also provides that, following a SIP disapproval or a finding offailure to implement, ifEPA proposes afterboth sanctions clocks have expired
to fully or conditionally approve a plan

or proposes to find that a State is implementing its SIP, application ofthe offset and highway sanctions is stayed unless anduntil EPA's proposed positive finding is reversed. The offset and highway sanctions reapply on the date EPA's preliminary determination is reversed. (This scenario is provided for inthe rule at §52.31 (d)(2)(iii), (d)(3)(iii) and (d)(4)(iii).)

The following discussion and Figure 5 provide an example ofhow this process functions for aSIP disapproval. The process functions the same for an initial finding offailure to implement. Suppose EPA disapproves a SIP, initiating-the section 179 sanction process. Suppose that the State submits

a revised SIP which EPA, at 25months, proposes to fully orconditionally approve. The EPA would simultaneously issue an interim final rule, finding thatthe State has corrected the deficiency. Inthat case, the application ofboth sanctions would be stayed on the date ofthe positive action. Now suppose that, at month 30, EPA

reverses its proposed positive finding. The reversal wouldbe a proposal to disapprove the SIP in whole orin part

or a final disapproval ofthe SIP in whole or in part. At month 30 (or, for final actions, on the action's effective date), both sanctions reapply.

BILLING CODE 6560-60-P

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## IFigure 5:

18-month sanction clock expires and

offset sanction applies

6-month sanction clock expires and highway sanction applies

Prior to month 25, per disapproval,

State submits revised SIP to EPA

At month 25, EPA proposes to fully

-or conditionally approve SIP and EPA determines deficiency

corrected

On date of EPA

interim final determination, application of both

sanctions stayed

## Case 5 for SIP Disapprovals

At month 3'0, approaml become& disapproval.and EPA determines deficiency not correctei

At month 30, (or shortly thereafter

following final actions), both sanctions re-apply

BILUNG CODE 6560-50-C

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In all cases following disapprovals and findings ofnonimplementation, the sanctions clock stops permanently and any sanctions applied are permanently lifted only whenEPA completes final notice-and-comment rulemaking action fully approving the SIP revision or finding that the State is implementing its SIP.25'

(4) Legal Basis and Rationale for Change One. The EPA believes thatits policy clarification is consistent with the statutory language ofsection 179 and thatit is a reasonable interpretation ofthat language. The EPA believes this policy is consistent with the legal requirements of sectidn 179 ofthe Act and section 553 ofthe APA. Section 179(a)ofthe Act requires sanctions to apply 18 months after adeficiency finding "unless such deficiency has been corrected * * *,"and requires that sanctions apply "until the Administrator determines that the State has come into compliance * * *." The EPA interprets this language torequire thatEPA make a determination that the State hascorrected the deficiency before permanently stopping the sanctions clock or lifting sanctions. In the case of

aclock started by a disapproval, such a determination would berepresented by

afinal, full approval. However, EPA does not believe that section 179(a) requires a final approval in order to defer or staythe application of sanctions, since the statutory language speaks generally in terms of "correcting" deficiencies and "determining" compliance without explicitly linking those events to final approval actions.

Regarding SIPdisapprovals, EPA recognizes the first commenter's

concern over timing and believes that this policy clarification eliminates the potential for sanctions applying in an
area when EPA has a submittal in house for which EPA has determined that it is

more likely than not that the State has corrected the deficiency that prompted the original disapproval. Extending the approach for disapprovals to findings of nonimplementation also serves to avoid applying sanctions when EPA has proposed that a State is implementing its approved SIP.

Consequently, EPA believes it is consistent with section 179to treat proposed full approvals following disapprovals 2 6asthe basis fordeferring

25These actions permanently stop the sanctions clock and permanently remove sanctions because such actions represent EPA's final determination that the'State hasmet the requirements ofthe Act and thus hascorrected the deficiency that initiated the sanctions process.

2 6The following discussion onEPA's legal rationale and basisfor staying and deferring or stayingthe application ofsanctions, while notpermanently stopping the sanctions clock or permanently lifting sanctions. The EPA also believes it is consistent with section 179 for proposed and final conditional approvals to be'the basis for deferring and/or staying the application ofsanctions. 2 7The proposed full orconditional approval then forms the basis for EPA to issue an interim final determination, which EPA would publish in a separate action in the Federal Register contemporaneously with the proposed approval notice, that the State had corrected the deficiency and come into compliance with the requirements ofthe Act. 28While this interim final determination would have the effect ofdeferring orstaying sanctions, it would nothave the final effect ofeither approving the submitted SIP revision, or permanently stopping-a sanctions clock orpermanently lifting sanctions. The interim final determination would be subject to notice and comment and would have effect only until eitherEPA made a final determination that the deficiency was corrected atthe time ofa final approval ofthe SIP revision, orEPA reversed its interim final determination at the time EPA reverses its proposed full or conditional approval. Ifan EPA proposed full approval were reversed by

a proposed disapproval, the Agency would publish a separate action inthe Federal Register withdrawing the interim final determination (thatthe Statehas corrected the deficiency) conteinporaneously with the notice of 1 the proposed disapproval. Ifan EPA proposed approval were reversed by a .finaldisapproval, EPA would take final action finding that the deficiency-has not been corrected inthe final disapproval action. For an EPA proposed conditional approval, a reversal could occurby aproposed or final disapproval. For an EPA final conditional approval, a reversal would

occurwhen the conditional approval converts to a disapproval through the

sanctions only explicitlyaddresses SIP disapprovals but applies equally to findings of nonimplementation.

2'ln NRflC v.EPA,No. 92-1535, slip. op. at 18 (D.C. Cir.May 6, 1994), !heCourt struck down EPA's policy ofconditionally approving committal SIP's (i.e., SIP's consisting solely ofa commitment). However, the Courtprovided that "the conditional approval mechanism was intended to provide EPA with an alternative to disapproving substantive, but
not entirely satisfactory, SIP's * * *." The EPA will issue conditional approvals consistent with that Court's opinibn.

21Since a final conditional approval hasthe effect ofcontinuing thestaying and/or deferring of sanctions, upon final conditional approval. EPA would not publisha second interim final determination that the State has corrected the deficiency (seefootnote 18). State's failing to submit a complete revised SIPto which it committed or by EPA's disapproval ofthe State's revised SIP.

The EPA believes that this approach is similar to the method courts traditionally use to grant interim equitable relief.Courts may grant preliminary injunctions to parties that the court determines are likely to succeed on the merits oftheir case, Where there is no adequate legal remedy available, and where the public interest would not be served in not granting the injunction. Such injunctions may typically last until the court has finally decided the merits ofthe case, either for

or against the party granted the injunction. Deferring or staying the application ofsanctions upon proposed approval ofa SIPrevision is analogous, in that an EPA proposed approval represents EPA's viewthat it is more likely than notthat the State has corrected the disapproval deficiency and come into compliance with the requirements ofthn Act. Also, as SIP approval actions generally require notice-and-comment rulemaking before they can become final, ifa sanctions clock is due to expire after proposed approval but be'fore the Agency can practicably fulfill its notice and
comment duties and grant final approval, there is no other "remedy" available to relieve the State from the punishment ofsanctions, even though it is probable that the State has corrected the deficiency.

Moreover, EPA does not believe, following proposed approvals, that it would bein the public interest for sanctions to remain in effect, as atthat point the Agency believes that there is nothing further that the State need doto

come into compliance, and thus there is

no further need forthe deterrent effect ofsanctions. TheEPA also believes that in these situations it would be especially unfair to States to begin the application ofsanctions where the only

reason the sanctions clock has not permanently stopped is that the Agency
cannot 'complete its rulemaking process to finally approve the SIP before sanctions apply. Finally, EPA notes that like thejudicial preliminary injunction model, this approach provides that
upon reversal ofEPA's preliminary
assessment that the SIP revision is approvable, and that, therefore, the deficiency has notbeen corrected, sanctions would be in effect as ifthe interim final determination that the State had corrected the deficiency had

never been made.

The EPA also believes that this approach is consistent with the requirements ofsection 553 ofthe APA.

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Generally, under the APA, agency rulemaking affecting the rights of individuals must comply with certain minimum procedural requirements, including publishing anotice of proposed rulemaking in the Federal Register and providing an opportunity forthe public to submit written
comments on the proposal, before-the rulemaking can have final effect. The EPA will notbe providing an opportunity for public comment before those deferrals or stays are effective: Consequently, EPA's approach may appear to conflict with the requirements ofthe APA. However, EPA will provide

an opportunity to comment on the proposed approval that was thebasis for the interim final decision and will provide an opportunity, after the fact, for the public to comment on the interim final decision. Thus, an opportunity for comment will be provided before any sanctions clock is permanently stopped or any already applied sanctions are permanently lifted. In the context-of the SIP approval rulemaking, and with respect to the interim final rule, the public would have an opportunity to comnuent on the appropriateness ofEPA's interim determination that the State had corrected the deficiency and on whether the State should remain subject to sanctions, even though the deferral or stay is already effective.

The basis for allowing such an interim final action stems from section 553(b)(B) of theAPA which provides that the notice and opportunity for comment requirements do not apply when the Agency finds that those procedures are "impracticable, unnecessary, or contrary
to the public interest." In the case of sanctions, EPA believeg it wouldbe both impracticable and contrary to the public interest to have to propose and provide anopportunity to comment before anyrelief is provided from the effect ofsanctions. First, until EPA
proposes approval ofa SIPrevision, the Agency's first step in determining, whether a State's SIP submittal meets the requirements ofthe Act, EPA is not in a position to propose that the State has corrected the deficiency; thus, there is no point in the process before proposed approval at which EPA could
propose that the State has corrected the deficiency and provide an opportunity for meaningful public comment on the issue. Second, as discussed above, EPA believes it would be unfair to the State and its citizens, and thus not in the public interest, for sanctions to remain in effect following an EPA proposed approval, since atthat point the Agency has completed a thorough evaluation of the State's SIP revision and publicly stated itsbeliefthat the submittal is approvable andthat the State has corrected the deficiency, but due to the procedural requirements ofthe Act the Agency has not yetbeen able to issue a final approval. The EPA believes sanctions coming into effect following proposed approvals would unnecessarily risk potential dislocation in government programs and the marketplace. The EPA alsobelieves that the riskof an inappropriate deferral or stay would be comparatively small, given the limited scope and duration deferrals and stayswould have and given the rule's mechanism formaking sanctions effective upon reversal of its initial determination that the Statehad corrected the deficiency. Consequently, EPA believes that the "good cause" exception under the APA allows the Agency to dispense with notice and
comment procedures before deferrals and stays ofsanctions become effective, and thatit isthus appropriate to respond tothe commenters with the approach adopted in today's rule. 5)Responses to Other Comments. The EPA does not support the alternative proposed by the commenters that EPA temporarily or permanently stop the sanction clocks started by disapprovals upon EPA receipt ofa submittal that the State believes corrects thedeficiency.

The EPA cannot determine whether the State has corrected the deficiency untilit reviews the plan for adequacy. Ifthe sanction clock were temporarily or permanently stopped upon mere submission ofa plan following any section 179(a) disapproval (or finding of nonimplementation) and not started again until subsequent disapproval, mandatory sanctions would then take that much longer to have the effect of encouraging State compliance and protecting air quality in the area. Temporarily orpermanently stopping the clock upon mere submission ofa plan could result in abuse ofthe system by States knowingly submitting SIP's that EPA cannot approve in order to defer the application of sanctions. By allowing such abuses, such an approach would also be unfair to States which, despite a good faith effort atdeveloping

a corrective rule, are unable to avert sanctions following disapproval. In
sum, under the revised policy, the underlying requirement for stopping the sanction clock is maintained: EPAmust take final action to fully approve a submitted SIP revision orfind that a State is implementing its SIPin order to permanently stop the sanctions clock and permanently liftany sanctions. As discussed above, EPA will defer an'dior stay the application ofsanctions when it proposes a positive finding that forms the basis for EPA to determine through

an interim final action that the deficiency has been corrected; but in these cases EPA will not temporarily orpermanently stop the underlying clock.

The EPA also believes that its interpretation is legally supported under the Act. Generally, section 179 states that, "* * * unless such deficiency has been corrected within 18 months after the finding, disapproval, or determination * * *" one ofthe sanctions shall apply, as selected by the Administrator. Section 110(c)(1) ofthe Actrequires EPA to promulgate a FIP at
any time within 2 years after the Administrator finds that a State has not made arequired submission orhas made an incomplete submission, or disapproves a plan submission, "unless the State corrects the deficiency, and the Administrator approves the plan orplan revision, before the Administrator promulgates such Federal implementation plan. "

The running ofthe sanctions clock is tied to the particular deficiency at issue. For example, ifthe clock was triggered by a finding of failure to submit or a finding ofincompleteness, the clock will stop ifEPA determines that the State submits a complete plan; it is not also necessary forthe plan to be actually approved to stop the clock. Ifthe complete submission is later disapproved, then anew 18-month clock will begin to run, as provided in section 179(a), and will continue to run until that deficiency is corrected with

an EPA approved plan. For the FIP clock, in addition to the deficiency being corrected, section 110(c)(1) includes an additional criterion-EPA SIP approval-that must be satisfied for EPA not to have to promulgate a FIP within 2 years ofa finding of nonsubmittal or incompleteness. The explicitreference to an approval as an addedprerequisite-beyond "correcting the deficiencyV- makes clear that, in the context offailures to submit or submission ofincomplete plans, plan approval is quite distinct from "correcting the deficiency." Theref6re, the Administrator's approval is distinct from "correcting the deficiency" for failure to submit and incompleteness. Therefore, the factthat the "SIP approval" language is redundant for disapprovals, where SIP approval is part ofcorrecting the deficiency, does not render that clause superfluous.

This interpretation of the section 179 sanction clock does not "read out" the section 110(c)requirement, but rather merely illustrates that following disapprovals what is necessary to stop

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### 39851

the sanction and FIP clocks is the same: EPA approval ofthe SIP. (SeeEPA's July 9, 1992 SIP processing guidance, page 10.) However, as discussed above, this is notthe case for sanction clocks started by a finding offailure to submit

or a finding ofincompleteness. There, the State can correct the deficiency merelyby submitting a SIPEPA finds complete. This would stop the sanctions clock. In these situations, the additional step ofEPA approval is required to stop the FIP clock, under the plain language ofsection 110(c)c(1).

Therefore, EPA's interpretation of section 179(a) does notrender the provisions ofsection 110(c)(1)(B) inconsistent, meaningless or superfluous. TheBoise Cascadecase cited by the commenter addressed a situation in which one word, "promulgation," was argued by' petitioners tohave the same meaning as another, "approval" (942F.2d at 1342). The court rejected that argument because failing to distinguish between the terms would have resulted either in

a conflict between two subsections of the Clean Water Act or made superfluous the use of"approval" in anothersubsection (Id). Here, EPA's interpretation ofwhat is required to correct a deficiency under section 179(a) doesnot conflict with the requirement forEPA approval to stop a FIP clock. It logically follows that approval is implicitly required tocorrect a deficiency based on a disapproval, since

a State-cannotbe considered tohave remedied the underlying flaw thatled to

a disapproval untilEPA has determined that the State's attemptto-do so is approvable.2 9The explicit language in section 110(c)(1)(B) is necessary because
FIPclocks alsomay be started by a finding offailure to submit or SIP disapproval. Congress was explicitly providing that inboth these instances EPA approval is required to stop aFTP clock. Therefore, the reference in section 110(c)to the need forEPA approval still hasmeaning when the initial failure was afailure to submit or
an incompleteness finding. Thus,EPA's interpretation does not render

29As discussed above, EPA believes it is appropriate atthe point ofproposed approval to contemporaneously issue aninterim final determination that'tha Statehascorrected the deficiency forpurposes ofdeferring orstaying the application of any sanctions thatare due.Again, this interim final determination would be subject to thecondition that EPA grant final approval to the SIP, andwould not haveany final effect on the actual approval action. Ifthe subsequent condition is not met (i.e.. ifEPA's proposed approval is reversed by aproposed or final disapproval), from that point on the interim final determination would have noeffect and any sanctions required to be applied would be applied. superfluous the explicit language in section 110(c)(1)(B).

Moreover, EPA's interpretation does not ignore or "read out" ofthe statute section'110(c)(1)(B) (NRDCv. USEPA, 822 F.2d at 113). That case addressed a petitioner's attempt to ignore a specific condition ofthe Clean Water Act's applicability provision, which the court viewed asan unacceptable method of construing statutes (Id). Here, rather than disregarding the requirement that EPA approval isnecessary to stop a FIP clock, EPA is interpreting section 179(a) to implicitly require that same element to be satisfied before asanctions clock started for a disapproval can be stopped. This in no wayignores the section 110(c)(1)(B) language forpurposes ofthe
FIP clock, nor represents an attempt to interpret the Act such that the language ofsection 110(c)(1)(B) does nothave full effect. As stated'above, the reference to EPA approval in that section still has meaning where the clock was started by

a finding offailure to submit or incompleteness. (5) AdditionalCommentsRegarding theSanctionsClock.

(a)Comments.Another commenter believes that the final rule should provide forresetting the sanctions clock whenever a State that had failed to submit atimely SIP submits one, even ifthe SIP is later foundto be incomplete. The commenter notes that section 179 provides for an 18-month period following one offour different types offindings ofinadequate State action before sanctions can be imposed. The commenter argues that EPA illegally shortens thisperiod by combining into one, two types of inadequate action under the same 18- monthperiod, and that the final rule should provide for separate clocks for each type ofinadequate action.

Another commenter is concerned that States may be tempted to view the 18- month sanctions clock as additional time in which to meet a deadline.The commenter believes that Congress did notintend that Statesthat failed to submit a timely SIP and later submitted

an inadequate SIP would have more time before facing sanctions than States that submitted a complete but unapprovable SIP on time. Whilethe commenter agrees with EPA's policy thatincomplete submittals cannot temporarily stop the sanctions clock, the commenter believes the overall policy rewards delay in completing programs. The commenter believes that the final rule should state that only EPA approval ofa final rule stopsthe clock.

(b)Responses.As noted above, section 179 indicates that sanctions apply within certain timeframes, unless EPA determines that the deficiency that prompted the finding starting the sanctions clock has been corrected withinthose timeframes. Therefore, EPAbelieves the Act requiresthat sanction clocks stop for findings of failure to submit and findings of incompleteness whenEPA finds a subsequently submitted SIP complete (i.e., findsthat the deficiency has been corrected).

The EPA disagrees thata clock started by a finding offailure to submit should stop based on a mere submittal that may
or may notbe complete. The Act provides under section 110(k)(1)(C) that where the Administrator determines that a plan is incomplete the State is treated as nothaving made the submission. Based on this,EPA believes that an affirmative findingthat a SIP is complete is necessary to cure a nonsubmittal or incompleteness deficiency and stop sanction clocks initiated by such findings.3 0 This interpretation is further supported by the fact that afinding offailure to submit andincompleteness are provided forunder the same provision ofsections 179(a)(1) and 179(a)(3)(A).

On the other hand, EPA does not believe that it isappropriate to allow only EPA approval topermanently stop the sanction clock for alltypes of findings. 3' It is conceivable that a State could abuse the systemunder the process established in the final ruleby submitting a complete butinadequate SIP at 17 monthsthat stops a sanctions clock that started based on a finding of failure to submit or a finding of incompleteness. Such an area could face sanctions later than the State that submitted atimely, complete but unapprovable SIP. However, as discussed above, EPA believes the reference to "such deficiency" immediately following the list ofthe types of deficiency findings in section 179(a) indicates that sanctions clocks will stop if and when the State corrects the specific deficiency that prompted the finding. Consequently, the running and stopping ofthe clock is tied to the particular deficiency at issue, andEPA believes thatit lacksthe statutory

30Asnoted above in this section. thischange is reflected in the rule and is discussed in section UlC.4. ofthis document.

31

As noted above, thecommenter indicates that it agrees with EPA's proposed policy that incomplete submittals cannot temporarily stopthe sanctions clock. The EPA's proposed policy did not state that incomplete submittals cannot temporarily stopthe sanctions clock.Rather, EPA's proposed policy stated that incomplete submittalscannot permanently stop thesanctions clockinitiated by a findingoffailure to submit orincompleteness. Thus, in responding to thecomment permanently stop hasbeen substituted fortemporarily stop.

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authority to apply mandatory sanctions under section 179 upon those States that initially failed tomake a submission (throughfailure to submit orby virtue ofan incomplete submission) butwhich have subsequently submitted a complete plan. The submission ofa complete plan is sufficient to stop a clock started for

a failure to submit any or acomplete plan because at that point the State has corrected the specific earlier deficiency of nothaving submitted a complete plan. Following this correction, the plain language ofsection 179,does not allow application ofmandatory sanctions duetothe original deficiency. but ifthe complete submission is later disapproved, a new sanction clock will begin to run and will continue to run until-that specific deficiency is corrected.32The EPA believes that overall its policy is consistent with the language ofsection 179 andrational in that itrecognizes that what the State must doto correct a deficiency relates directly tothe nature ofthe finding, and that overall thispolicy will encourage compliance with Actrequirements.

Finally, the Act contains due dates by which the State is required to submit certain SIP's. The EPA does not believe that Congress established the 18-month period before mandatory sanctionsmust apply as a grace period inwhich States have alegal right under section 179 to submit SIP's aftertherelevant statutory due date. Infact, EPA interprets section 110(m) ofthe Act asproviding EPA with the authority to " * * apply any of the sanctions listed in section 179(b) atany time (orat any time after) the Administrator makes a finding, disapproval, or determination under * * * section 179(a) * * *."Therefore, EPA isnot precluded from takingmore aggressive action than required under section 179 when States fail to correct deficient plans.
4. Other AreasofComment This section addresses the reniaining

areas oithe proposal where comment

was received.

a. LackofGoodFaith Determination. Under section 179(a), both the offset and highway sanctions shall apply after 18 months ifthe Administrator finds a lack ofgood faith onthe part ofthe State. In the proposal at page 51274, EPA indicated that any finding ofa lack of good faith EPA makesunder section

-12

Furthermore, it appears that theapproach articulated by thiscommenter (i.e., that sanctions clocks and FtPclocks areboth stopped by EPA approval ofa revised SIP)would present the problems recognized in reading out ofsection 11O(c)(1 the clause "the Administrator approves the plan or planrevision" (BoiseCascade, 942 F.2d at 1432. and NRDCv. EPA, 822 F.2d at 113). 179(a) will be subject to notice-andcomment rulemaking.

One commenter believes that the final rule should define a "lack ofgood faith" and require application ofboth sanctions as a default where it exists. The commenter believes that some situations may require fact specific judgment, while others are so extreme that theypresumptively prove the State has decided not to make.a good faith effort at complying. The commenter believes thatEPA need notundertake notice-and-comment rulemaking with respect to findings ofa lack ofgood faith. Another commenter believes that the phrase "if the Administrator finds a lack ofgood faith on the part ofthe ' State" is subjective and ambiguous and needs defining.

In response to the comments, EPA still believes findings ofa lack ofgood faith under section 179(a) must be subject to notice-and-comment since it is adiscretionary action which requires exercise ofa substantial degree of judgment on EPA's part. The public should have an opportunity to comment

on the basis for these actions. Further, EPA does not yethave a policy on how
to further,define the Act's language, or when and where it plans to make findings ofa lack ofgood faith other than the case-by-case approach described above. The notice-andcomment rulemaking will provide an opportunity for the public to comment

on EPA's interpretation of a lack ofgood faith in each case-specific circumstance.

b. SanctionTiming.The proposal at. page 51272 indicated that since section 179(a) provides for automatic sanction application once EPA has made the selection, under this sanction sequence rule sanctions will apply automatically in the orderprescribed herein in all instances in which sanctions are applied following findings under section 179(a) (1)-(4) that EPA has already made or that EPA will make'in the future, except when EPA takes a separate action to select a different
sequence ofsanction application. However, the proposal indicated that where the sanction clock expires-for any findings before this action is final and effective and EPA has not taken independent sanction selection action, EPA interprets section 179(a) to provide that sanctions shallnot apply until EPA makes the sanction selection through notice-and-comment rulemaking, such

as this action.

•At page 51272 ofthe proposal EPA also indicated that EPA intends to notify States ofthe automatic sanctions by letter and publish a document in the Federal Register in which EPA amends the language of the rule to indicate areas subject tothe applicable sanctions. The proposal provided that ifremoval of sanctions is warranted, EPA would notify the State that sanctions are being removed and amend the ruleto reflect that.

One commenter believes that EPA's interpretation ofsection 179 is incorrect and that section 179 unambiguously requires sanction application within 18 months ofa finding. The commenter believes that Congress did notcondition EPA's mandatory sanction application duty on completion ofnotice-andcomment rulemaking.

The plain reading ofsection 179(a) is that sanctions, "as selected by the Administrator," apply within certain prescribed timeframes. The section does notprovide any guidance toEPA on sanction application sequence. Given thiswide discretion, EPA believes that it is necessary for sanction selection to be subject to notice-and7comment in order to provide for public comment. The EPA interprets the phrase "as selected by the Administrator" as words ofcondition that must be met before mandatory sanctions apply. Indeed, EPA is undertaking this rulemaking to satisfythe conditional duty so that sanctions may apply automatically when sanctions clocks expire.

The EPA is also conducting this rulemaking to eliminate the future need (except to reverse .the sanction sequence) forindividual rulemakings forevery finding with respect to partD requirements. The EPA believes in the longrun this action will facilitate. smooth application ofsanctions to encourage State compliance and protect air quality,

c.Noticeand Comment for NonsubmittalandIncompleteness Findings.Inthe proposal at page 51272, EPA's view was that notice-and- " comment is not required for findings of failure to submit because ofinsufficient time provided by the statute. Since EPA has less than 60 days to determine whether a State's submittal is complete, and itis impossible to provide noticeand-comment in 60 days, EPAbelieves that Congress clearly intended that EPA should not go through notice-andcomment rulemaking prior to making findings offailure to submit. Additionally, EPA argued that even if EPA's findings offailure to submit were subject to APArulemaking procedures, EPA believed that the good cause exception to the rulemaking requirement applies (APA section 553(b)(B)). Section 553(b)(B)oftheAPA provides that EPA need not provide notice and an opportunity for comment ifEPA determines that notice and comment are "impracticable.

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unnecessary, or contrary to the public interest." The EPA argued that notice and comment for findings of failure to submit does not require anyjudgment

on the part ofEPA and, therefore, is unnecessary.

One commenter statesthat under the APA, burdens such as sanctions cannot be imposed without notice-andcomment. The commenter argues that EPA provides no defense ofits denial of * public comment for findings of incompleteness and cannot defend such denial for findings ofnonsubmittal and incompleteness. The commenter.further argues thejudgment ofwhether a SIP
meets the SIP completeness criteria is often debatable and discretionary.. Therefore, the commenter argues, the public shouldbe ableto comment.

Another commenter believes that EPA's proposal contradicts the spirit and letter of the notice-and-comment provisions in the Act. The commenter argues the proposal.is contradictory on when it allows for public comment in

some instances but not others.

In response to the comments, EPA maintains that notice and comment is notnecessary for findings of failure to submit and incompleteness. The 60 days the Act provides EPA to determine whether a State submittal iscomplete does not provide sufficient time to conduct notice-and-comment rulemaking prior tomaking findings of failure to submit orfindings of incompleteness. The.EPA continues to believe that the impossibility of conducting notice-and-comment rulemaking within the 60days provided for completeness decisions is itself compelling evidence that Congress did not intend such rulemaking. , , Additionally, EPA does not believe that notice and comment are necessary for findings of incompleteness because section 110(k)(1)(B) does not specifically require it. By enacting section 110(k)(1) on completeness, Congress was codifying an EPA practice created in late 1989 in which EPA did
not provide notice-and-comment rulemaking before making incompleteness findings.33 Bycodifying

- that practice and by not specifically

requiring anything more than the process EPA already established,

33Note that in promulgating the completeness criteria, EPA noted that the purpose ofthe completeness procedure is to "keep incomplete packages out ofthe more extensive review.system (i.e., rulemaking for approval), thereby saving both EPA and the State valuable time" (54 FR 2138, 2139 (January 19.1989)). Therefore, requiring rulemaking action to determine whether a SIP submittal is complete would defeat the purpose ofthe completeness criteria, which isto allow for aquick rejection ofthose submittals that are "essentially unreviewable" (ld). Congress appears tohave adopted EPA's established process ofmaking completeness determinations by letter. Moreover, EPA does not believe thatthe completeness determination is highly discretionary, but instead is a straightforward exercise to assure a State's submittal has all the basic elements to warrant further review for overall adequacy.

Regarding the APA, EPA continues to believe that even ifEPA's findings of failure to submit and incompleteness

were subject to rulemaking procedures under the APA, the good cause exception applies to such findings for the reasons discussed above. It would not be practicable to subject every :completeness review to notice and commentbecause ofthe limited time afforded by the statute. It would also not be in the public's iriterest because it would impose a tremendous burden on the Agency and divert resources from

more important substantive SIP reviews.

Regarding the consistency comment, EPA believes that it is adhering to the notice-and-comment provisions ofthe amended Act and the APA. Where it is appropriate, because the determination requires EPAjudgment, EPA provides for notice and comment (i.e., for SIP disapprovals or findings of nonimplementation). Additionally, as EPA has done via this action,when EPA makes a sanction selection notice and
comment are also provided. On the other hand, as discussed above, in other

cases sufficient time does not exist to provide for notice and comment and the determinations themselves require little, ifany, judgment. Finally, asdiscussed in section II.C.3., the final rule does not

cover findings ofsubstantial inadequacy undersection 110(k)(5) for part D SIP's (so-called SIP calls), which were covered by the proposed rule, because of concerns about adequate notice and comment before sanctions are applied for State failure to respond to a SIP call. The EPA intends to develop an alternative approach for applying mandatory sanctions for State failure to respond to SIP calls that provides for notice and comment.

d. PM-I0Waivers.The proposal did
not address the PM-10 waiver provisions in section 188(f) of theAct. The commenter expresses a. frustration with the definition ofPM-10 "significance" and argues that in the West, PM-10 levels above the standard

are caused predominately by fugitive dust and mobile sources. Therefore, the commenter believes, applying 2-to-1 offsets to industrial sources will have a negligible effect on PM-10 24-hour concentrations. A July 1992 draft addendum to the General Preamble (57 FR 31477, July 16, 1.992) addresses several waiver policy issues, including significance levels. The EPA believes the comment period for that policy, rather than this action selecting sanctions, is the appropriate forum for comments on that issue.The EPA recognizes that in some nonattainment areas industrial sources may be less significant contributors. In those cases,,EPA may decide to apply the highway sanction first, which this rule provides flexibility to do.

C. SummaryofChangesin Rule

1. Section 52.31(a)-Purpose

Section 52.31(a) sets forth the purpose ofthis'rulemaking, which is to establish the sequence ofsanctions required to apply under section 179(a). The substance ofthis provision was not changed from the proposed rule.

2. Section 52.31(b)-Definitions

Section 52.31(b) sets forth the definitions applicable under 40 CFR 52.31. The definitions of "Act" and "1990 Amendments" are not substantively changed. However, the citations forthese two definitions were inadvertently switched and they now correctly provide that the Act,is located
at 42 U.S.C. et seq. and the 1990 Amendments were set forth in Public Law 101-549.

In addition, several definitions were added. Since the regulation provides that the offset sanction only applies to the pollutant(s) that the finding

concerns and its precursors, EPA has added a definition of"precursors." The EPAhas also added a definition of "ozone precursors" which specifically identifies the two ozone precursorsVOC and NO,.

The EPA has added a new definition for "affected area." This term,,while used in the proposed rule (e.g., the tables), was not previously defined. Furthermore, its usage in the final rule has been expanded; in many places the word "area" has now been replaced by "affected area." The definition provides that an "affected area" is the geographic

area subject to or covered by the Act requirement that is the subject ofthe finding and either, for purposes ofthe offset and highway sanctions, is or is within an area designated nonattainment area pursuant to 42 U.S.C. 7407(d) or, for purposes ofthe offset sanction, is or-is within an area otherwise subject to the emission offset requirements of42 US.C. 7503. As used in this rule, in conjunction with § 52.31(e) (1)and (2), the affected area is the area potentially subject to a

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sanction based on a finding. The new definition clarifies that the sanction applies to the geographic area subject to

or covered by the requirement at issue in the finding. This will usually be the entire designated area, but in some instances may be a portion ofa designated area. This pointis made' through the first portion ofthe definition. Moreover, since the affected

area is the area in which a sanction applies, it was necessary to limit the definition to those areas that could be subjectto a sanction. Therefore, the secondportion ofthe definition restricts the definition of"affected area" by incorporating the geographic limits of the highway and offset sanctions. First, the highway sanction, as applied under section 179(a), is limited to nonattainment areas, since section 179(b)(1) provides that the highway sanction may be "applicable to a nonattainment area." -4Second, by its terms, the offset sanction has effect only in those areas in which the offset requirements of section 173 are required

to apply. (See 59 FR 1480 (January 11, 1994) for a further discussion ofthe geographic applicability of section 179(b) sanctions.) This includes all nonattainment areas. In addition, some attainment and unclassified areas (e.g., those located in the NOTR could be subject to the offset sanction,-since those areas may be subject to the offset requirements ofsection 173, even though they are not designated nonattainment (seesection 184, for example). Therefore, the second clause of the definition limits affected areas to nonattainment areas (which would be subject to both the highway and offset sanction) and areas otherwise subject to the emission offset requirements of section 173 (which would be subject to the offset sanctions).

Three examples illustrate how this definition applies. One, ifEPA finds that a State fails to submit a PM-10plan fora moderate PM-10nonattainment

area pursuant to section 189(a) and the State does not correct the deficiency within 18 months, then, pursuant to this rule, the offset sanction shall apply in the PM-10 nonattainment area whose boundaries are described in 40 CFR part 81. If6 months later the deficiency remains uncorrected, then the highway sanction applies inthe nonattainment

area as well. Inboth cases the sanction applies only in the nonattainment area because that is the geographic area covered by the Act requirement.

34Section 171(2) defines "nonattainment area" as "an area which isdesignated'nonattainment' with respect to (an air)pollutant within the meaning of section 107(d)." Two, ifEPA finds a State fails to submit arequired SIPrevision under the Act for arequirement that applies to only a portion ofan area, then the sanctions apply to the portion ofthe

area subject to the requirement and not the whole area. For example, the enhanced inspection and maintenance plan requirement for serious, severe. and extreme nonattainment areas applies only to "each urbanized area (in the nonattainment area) as defined by. the Bureau ofthe Census, with a 1980 population of200,000 or more" (see section 182(c)(3)(A)). Section 184 provides that for all areas within the NOTR, this requirement will apply to urbanized areas with a population in

excess of 100,000. Therefore, this requirement could apply to a smaller

area within a designated nonattainment, attainment orunclassified area. If the State fails to adopt the program for such

an area, the section 179 sanctions would apply only to that smaller area.

Finally, ifEPA finds that a State within the NOTR fails to submit a reasonably available control technology SIP for VOC required pursuant to section 184(b)(1)(B) with respect to all the sources in the State subject to this requirement, and the State does not correct the deficiency within 18 months, then, pursuant to this rule, the offset sanction would apply in the entire State. If 6 months later the deficiency remained uncorrected, then the highway sanction would apply to all ofthe nonattainment artas in the State. Ifthere

were no designated nonattainment areas within the State, the highway sanction would not apply in that State.

The remaining definitions remain substantively unchanged from those in the proposed rule.

3. Section 52.31(c)-Applicability

Section 52.31(c) establishes the applicability ofthe final rule. The portions of§ 52.31(c) setting forth the findings that trigger the sanctions clock remain unchanged as these portions

were taken directly from sections 179(a) (1)-(4). Generally, these findings are that a State has failed to submit a required SIP or SIP element, has submitted a SIP or SIP element that does
not meetEPA's completeness criteria, has submitted a SIPthat is not approvable, or that the State is failing to implement an approved SIP.

The portions of§ 52.31(c) indicating the SIP requirements to which this rule applies have been modified. The proposal indicated the rule covers any part D SIP or SIP revision required under the Act, or any part D SIP or SIP revision required in response to a finding ofsubstantial inadequacy under section 110(k)(5). This section ofthe final rule has been modified to cover only part D SIP and SIPrevisions and
not calls for part D SIP's or SIP revisions under section 110(k)(5). The final rule does not cover part D SIP calls because of concerns about applying sanctions for State failures to respond to such SIP calls following EPA nonsubmittal * findings without opportunity for notice and comment. SIP calls are currently
not subject to notice-and-comment. The public and affected sources must be given notice and opportunity to
comment before SIP calls can have binding effect as aresult of a section 179(a) finding that a State has failed to submit a SIPin response to a SIP call. Thus, ifthis rule were to apply to State failures to respond to SIP calls, mandatory sanctions could apply without an opportunity for such
comment before new obligations become binding against affected

sources. This would be inconsistent with the APA requirements of section 553. Therefore, as discussed in section II.C.3., the final rule does not cover part D SIP calls. The EPA will develop another approach to address SIP calls, providing an opportunity fornotice and
comment before mandatory sanctions apply for a State failure to respond to a SIP call.

4. Section 52.31(d)-Sanction Application Sequencing

Section 52.31(d)(1) is the heart ofthis rule in that it establishes the order in which the automatic sanctions under section 179(a) shall apply. Several clarifications have been made to the section.

One, this provision now requires affirmative EPA action to stop sanction clocks and lift sanctions following section 179(a) findings, including nonsubmittal and incompleteness findings. The EPA's proposed and final sanction clock policy provides that, following findings ofnonsubmittal and incompleteness, sanction clocks are permanently stopped (and any sanctions applied are permanently lifted) when EPA finds the plan complete. Section 110(k)(1)(B) provides that a submittal is deemed complete ifa completeness finding is not made by EPA within 6 months ofEPA's receipt ofthe plan. Under this clarification to § 52.31(d), a SIP becoming complete by operation of law will not be sufficient to stop sanction clocks or for an area to avoid sanctions. The EPA will need to affirmatively determine that the SIP is complete in order for the sanction clock
to stop and any sanctions to be lifted. I This policy clarification will henceforth govern what is required to

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stop sanctions clocks and lift sanctions following findings ofnonsubmittal and incompleteness, and the other section 179 findings. Priorto this policy clarification, in certain cases EPA did stop sanction clocks started by EPA findings offailure to submit or incompleteness by SIP submittals being deemed complete "byoperation oflaw." The EPA believes that this approach

was consistent with EPA guidance at the time and that it is appropriate to grandfather these areas under EPA's grandfathering guidance.

The EPA believes that after consideration ofits grandfathering policy for SIP requirements 35 it is permissible to grandfather these cases from this policy clarification. The EPA's general grandfathering guidance provides that SIPrevisions will remain subject to the requirements in effect on the date that the State adopts the SIP revision, provided acomplete, fully adopted SIP revision is submitted promptly, generally within 60 days of the adoption. Since the policy clarification is effective by this action and all ofthe SIP submittals in question

were adopted morethan 60 days prior to September 6, 1994, under this general grandfathering, these cases are grandfathered. However, the guidance includes several exceptions tothe general guidance which must be addressed before an action is considered by EPA to be grandfathered.

The first exception concerns the intent ofthe policy not to grandfather SIP's submitted hurriedly to avoid new requirements. In the cases at issue, such action hasnot occurred on the part of the State since 'the States have received

no early, formal notification that the sanction clock policy is being clarified in the manner it is today.

The second exception to general guidance on grandfathering concerns - situations where a court ruling has explicitly changed acurrent Federal requirement or has convinced EPA that

aprevious requirement is no longer supportable. Here no such court ruling is at issue so no exception should be made in this case.

The third exception is that the Administrator may determine that grandfathering is not appropriate under

a new policy. In this case, the Administrator is determining that grandfathering is appropriate.

The fourth exception indicates that grandfathering is not appropriate if it would have an imminent and

35See "'Grandfathering' of Requirements for Pending SIPRevisions," memorandum from Gerald A. Emison to Air Division Director, RegionsI-X, June 27, 1988. This memorandum has been entered in the docket forthis rulemaking. substantial adverse environmental effect

or could permanently foreclose use of part Dprovisions such as sanctions. The EPA does notbelieve that grandfathering these areas from this policy clarification will have an imminent and substantial environmental impact given the limited number ofareas and given thatthe States' submittals mustbe adequate to attain and maintain the relevant r4AAQS before EPA can approve them. In addition, this grandfathering does not permanently foreclose the application of sanctions in these areas should EPA, throughrulemaking, find the SIP submittals inadequate to attain and maintain the NAAQS and disapprove them.

The fifth exception provides that action on a SIP revision which comports with the revised requirements but not the original requirements may be based

on the revised requirements. In this instance, this is indeed the case; conceivably, one or more ofthose SIP's deemed complete by operation oflaw may have lacked one or more of the elements needed for EPA to find a plan affirmatively complete. Nonetheless, EPA cannot fullyapprove a plan ifany of the required completeness elements

are lacking. For example, ifa SIP submittal lacks compliance/enforcement strategies, one oftechnical elements required for completeness, then EPA could not fully approve the plan.

. Therefore, while EPA is grandfathering these SIP submittals from completeness, EPA is not grandfathering these areas from having adequate SIP's to attain and maintain the standards.

The sixth exception raises a concern
as to whether grandfathering the SIP from the requirements in question would render the SIP as a whole substantially inadequate. Grandfathering these SIP submittals from this policy does not raise direct

concern that doing so might render the SIP's substantially inadequate since the completeness review is not areview -intended to pass judgement on the adequacy ofSIP's. Rather, it is intended

asa straightforward exercise to determine whether the SIP's contain all the technical and administrative elements to warrant further review. As discussed above, ifany ofthese SIP submittals deemed complete by operation oflaw lack any such elements, then such deficiency will be reflected in EPA's determination as to the SIP's adequacy to attain and maintain the air quality standards.

The seventh exception concerns certain classes ofchanges which are' only indirectly related to attainment and maintenance ofthe air quality standards. Completeness reviews are only indirectly related to attainment and maintenance ofthe standards in that the completeness review is not intended to be review ofthe SIP's adequacy to meet the standards. Therefore, the grandfathering ofthese SIP submittals from the policy clarification satisfies this exception as well.

Two, the phrase "affected area" has been substituted for "area." This is to clarify that the sanction only applies in affected areas, and not necessarily all

areas for which EPA makes a section 179(a) finding. (See the discussion of "affected area".under the definitions sedtion above.) Three, the second
sentence regarding highway sanctions has been clarified to provide that correction ofthe deficiency "forming the basis ofthe finding" is needed to stop thd clock. This language is consistent with the language included inthe proposal section 52.31(d)(1) for the offset sanction in sentence I and consistent with the interpretation established in the preamble to the proposed rule at pages 51272-51273. This revision merely clarifies what deficiency needs to be corrected in order to stop the sanctions clock.

Finally, a new final sentence has been added to the section. The sentence provides that for clocks started by rulemaking actions (i.e., disapprovals and findings of failure to implement), the date ofthe finding starting the clock is the "effective date" ofthe action, not necessarily the date it is signed or the' date it is published in the Federal Register. Since the disapproval or finding offailure to implement is not effective until the "effective date" ofthe final action, the sanctions clock should
not start until such action is effective. Upon further reflection, EPA determined thatthe clarification should be included in therule in orderto

ensure that the public is adequately apprised ofwhen the sanctions clock has started forparticular areas based on
a rulemaking action.

The EPA has revised the final rule to add new sections §§ 52.31(d)(2), (d)(3), and (d)(4). Inresponse to comments, these sections incorporate a revision made to the rule concerning how and when sanctions, notyet applied, may be deferred and sanctions, already applied, may be stayed. A complete discussion of the revisions is set forth in section II.B.3. above. These corrections concern the circumstance where EPA has disapproved a required submittal or where EPA has found that a State has failed to implement an approved SIP. Sections 52.31(d)(2) and 52.31(d)(3) set forth language concerning disapproved SIP's and §52.31(d)(4) sets forth the

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language regarding cases where EPA has made a final finding offailureto implement. For purposes ofan initial disapproval or an initial finding of failure toimplement forwhich EPA subsequently proposes a positive finding and issues an interim final rule finding that the State has corrected the deficiency, any sanctions resulting from

a clock that expires willbe deferred and any sanctions that have been applied will be stayed. (A final conditional approval would continue any stay or deferral that resulted from a proposed conditional approval.) This change providing fora stay or deferral of sanctions does not change the rule's requirement that sanctions and sanctions clocks are notpermanently stopped untilEPA issues a final full approval ordetermination that a State is implementing its SIP.

Anew §52.31(d)(5) has been added which reaffirms what EPA-actions are necessary for the mandatory sanctions process to permanently cease. Specifically, itprovides that any sanction clock willbe permanently stopped and sanctions applied, stayed

or deferred willbe permanently lifted upon a final EPA finding that the deficiency forming the basis ofthe finding has been corrected. For a sanctions clock and applied sanctions based on a finding offailure to submit

or incompleteness, a finding that the deficiency hasbeen corrected will occur by letter from EPA to the governor. For

a sanctions clock or applied, stayed or deferred sanctions based on a SIP disapproval, a finding that the deficiency hasbeen corrected will occur through afinal notice inthe Federal Register fully approving therevised SIP. For a sanctions clock or applied, stayed

or deferred sanctions based on a finding ofnonimplementation, a finding that the deficiency has been corrected will

occur through a final notice in the Federal Register finding that the State is implementing the approved SIP.

Section 52.31(d)(6) is essentially unchanged from §52.31(d)(2) ofthe proposed rule.This section makes clear that EPA may take rulemaking action in any specific circumstance to reverse the order in which sanctions will be applied under section 179(a). In other words, EPA can take rulemaking action so that the highway sanction wouldapply after 18 months and the offset sanction 6 months thereafter. Two minor, nonsubstantive, changes were made. First, EPA replaced the phrase "the EPA" with "the Administrator." Second, EPA changed the term "should" to "shall" to more firmly reflect the mandatory nature ofthe sanctions 5. Section 52.31(e)-Available Sanctions and Methods forImplementation

Section 52.31(e) sets forth the two sanctions that are applied by section 179(a). Thisrule, as did the proposed rule, interprets in greater detail the offset sanction provided under section 179(b)(2).

Regarding §52.31(e)(1), applicability ofthe offset sanction, there have been several changes that are intended to

more clearly capture the concepts in the proposed rule and the preamble to the proposed rule. The EPA has clarified the applicability ofthe offset sanction to PM-10 precursors, modified the rule for PM-10 and ozone precursors, and clarified the language in the rule regarding the pollutant applicability of the offset sanction when the SIP deficiency in question is not specific to

a pollutant or pollutants.A discussion ofthese changes inthe context ofthe specific sections follows.

The EPA-has revised §52.31(e)(1)(i) in several ways. First, EPA has removed the offset sanction table from the rule, and decided to provide the public information on areas that will be potentially subject to sanctions in a separate Federal Register notice. As EPA makes clear elsewhere in this paragraph and the rule, the sanctions automatically apply inthe timeframes prescribed under § 52.31(d), unless EPA determines that the State has corrected the relevant SIP deficiency forming the basis ofthe finding. The EPA never intended the inclusion ofareas in a table in this rule to be necessary for sanctions to apply automatically. The EPA does believe that it must provide the public with as accurate information

as possible on areas that may face sanctions and has elected to do so through notices inthe Federal Register rather than through a table in the body of therule. Substantively, there is no difference in the sense that areas will face sanctions in the timeframes prescribed under §52.31(d) regardless of whether they are listed in a table in the rule or listed in a separate notice.

Second, EPA has added the clause "in the timeframe prescribed under §52.31(d) ofthis section on those affected areas subject under §52.31(d) to the offset sanction ofthis section." As noted above, sanctions apply automatically regardless ofwhether there is a table in the rule listing the

areas subject to sanctions. Thus, this change was made to make it clear that the sanctions apply within the time frames set forth in § 52.31(d). To further clarify this point, a second change to proposed §52.31(e)(1)(i) was to delete "following" in the clause referencing the offset ratio for pollutants and their precursors. The reason forthischange is because the table has been deleted and thus no areas will be listed.The first sentence of §52.31(e)(1)(i) continues to require that the 2 to I offsets be achieved for the pollutant or pollutants and any precursors for which the finding is made. (Forfurther discussion ofthis issue, see section II.B.2.)

The EPA has added a second sentence to §52.31(e)(1)(i). This sentence is partially derived from §52.31(e)(1)(iv) ofthe proposed rule. The purpose of moving this sentence was to alleviate redundancy inthe proposed rule.The first sentence ofproposed §52.31(e)(1)(iv) appeared to echo proposed §52.31(e)(1)(i) by stating that offsets must be achieved for the. pollutant(s) and its (their) precursors for which the finding was made. Therefore, EPAhas not included the first sentence ofproposed §52.31(e)(1)(iv) in the final rule andhas moved the second sentence ofproposed §52.31(e)(1)(iv) to final §52.31(e)(1)(i). The sentence now located as the second sentence of §52.31(e)(1)(i) continues to provide that ifthe underlying finding is not specific to one or more pollutants and their precursors, then the offset sanction shall apply to all pollutants and, as relevant, their precursors for which the area is subject to the new source requirement of section 173 ofthe Act. (See section II.B.2. for further discussion ofpollutant applicability ofthe offset sanction.) This provision, of course, would apply to any
area (nonattainment, attainment, or unclassified) that is the subject of the finding.

In its entirety, then, §52.31(e)(1)(i)

now provides: (1)That the emission offset sanction applies within the time specified in §52.31(d), even though the rule nowcontains no offset sanction table- (2)that the ratio ofemission reductions to increased emissions shall be 2:1; and (3)that the offset ratio shall apply to the one or more pollutants and theirprecursors for which the § 52.31(c) finding was made or to all pollutants and their precursors (for which the area is subject to the new source requirement of section 173 ofthe Act) ifthe finding

was not pollutant specific.

The EPA has added new §52.31(e)(1)(ii) to specifically address the issue offindings made with respect to ozone and itstwo precursors, VOC and NOx.This was discussed generally in the preamble to the proposed rule at page 51276, footnote 18, although no specific language was included in the proposed rule. The Act establishes requirements for ozone nonattainment
areas, some ofwhich are specific for either VOC orNOx. However, since the

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general assumption is that both precursors are critical to ozone formation, EPAbelieves that even though a finding may be specific as to

one ozone precursor, the offset sanction should apply for both precursors. However, there are two exceptions to this general requirement, both ofwhich

are based on theAct. First, affected

areas that are designated nonattainment for ozone but that are not classified as marginal, moderate, serious, severe or extreme, are not required to achieve offsets under section 173 forNOx. The second exception is foraffected areas thathave received a NOx exemption from the NSR requirement pursuant to section 182(f). These two exceptions and the rationale forthem are discussed in section II.B.2.above. A new §52.31(e)(1)(iii) sets up a similar provision with respect to PM-10 precursors, which is also discussed in

more detail in section II.B.2. above.

Section 52.31(e)(1)(iv) ofthe final rule has merely been renumbered. Section 52.31(e)(1)(iii) of theproposed rule previously contained these requirements and substantially remains unchanged. The preamble to the proposed rule at page 51276 provides that this section requires States to apply the offset sanction consistent with amended section 173, regardless of whether the State has approved NSR rules consistent with section 173 requirements. The purpose ofthis provision is to ensure that States that have been delinquent in meetingthe NSR requirements ofthe amended Act

are notbenefitted by applying sanctions in accordance with NSR rules that are
more lenient than required by the Act or by the absence ofNSR requirements within the State. Under this section, therefore, all affected areas subject to the offset sanctions would be subject to similar requirements in achieving those offsets, 'asspecified inthe amended Act.

Section 52.31(e)(1)(v) ofthisrule is unchanged from §52.31(e)(1)(v) ofthe proposed rule. The purpose ofthis provision is to establish when the increased offset requirement will be applied. As noted in section II.B.2. above, EPA received numerous comments on this issue. For purposes of applying the offset sanction, EPA had

some flexibility in determining what permits would be subject to the increased offset requirement. As noted in section II.B.2., numerous commenters suggested other possibilities. For example, some suggested that the increased offset ratio only apply to permits for which an application was received afterthe date the offset sanction applied. As stated more fully in the detailed response to comments document located in the docket, EPA has determined that the offset sanction should have immediate effects in affected areas.

Section 52.31(e)(2) ofthe final rule sets forth the highway sanction. Several revisions have been made to this section. As with §52.31(e)(1)(i), EPA hasremoved the highway sanction table from §52.31(e)(2) ofthe proposed rule forthe same reasons discussed above for why the offset sanction table was removed. Similarly, §52.31(e)(2) includes new language that directly refersto thetiming provisions of § 52.31(d). As with the similarrevised language in § 52.31(e)(1)(i), this is merely to clarify that the highway sanction applies with respect to the times set forth inthat subsection, even though the area is not listed in atable in the rule. In addition, a new sentence has been added which specifies that the highway sanction only applies to affected areas that are also nonattainment areas. Although this issue was not specifically addressed in the proposed rule, the proposed rule and the preamble to the proposed rule referred back to the section 179(b)(1) highway sanction requirement ofthe Act (58 FR 51274, 51279; §51.32(e)(2) of the proposed rule.) Section 179(b)(1) states that "[tihe Administrator may impose a prohibition, applicable to a ndnattainment area * * *." Therefore, EPA is incorporating this language, which was merely referenced in the proposed rule, into the final rule.
III. Implications ofToday'sRulemaking
A. Implementationofthe. Sanctions
Section 179(a) provides that unless the deficiency prompting the finding (i.e., nonsubmittal, disapproval, and nonimplementation) has been corrected within the time periods prescribed therein one ofthe sanctions in section 179(b) "shall apply, as selected by the Administrator." Under this final rule, sanctions will apply automatically in the sequence prescribed herein in all instances in which mandatory sanctions

are applied under section 179(a) following findings under section 179(a)(1)-(4) for part Dplans or plan revisions that EPA has already made or thatEPA will make in the future, except when EPA takes aseparate action to

reverse the sanction sequence. However, ifthe sanction clock has expired for any findings before September 6, 1994, no sanction has yet applied since EPA interprets section 179(a) to provide that sanctions shall not apply until EPA makes the sanction selection through notice-and-comment rulemaking. Since this action constitutes the final sanction selection rulemaking, the offset sanction begins to apply on any areas for which the sanction-clock has elapsed on September 6, 1994. To understand the timing ofthe application ofmandatory sanctions inthese cases, it is first necessary to clarify the discussion in the proposal at p. 51274 on how the sanction clocks function under section 179(a).

Section 179(a) sets up two distinct sanction clocks. The Act states that if the State doesnot correct the deficiency within 18 months after a finding, one of the two available sanctions shall apply,

as selected by the Administrator. It then provides that ifthe deficiency has not been corrected within 6 months thereafter, then both available sanctions shall apply. The EPAinterprets thisto

mean thatthe second sanction always follows 6 months from the actual application of first,regardless of whether this would cause the application ofthe second sanction to be delayed beyond 24 months from the date ofthe finding. Therefore, on September 6, 1994 the offset sanction shall apply on any area(s) for which an 18-month sanction clock has elapsed and EPA has not determined that the State has not corrected the deficiency. Both sanctions shall then apply 6 months from that date ifEPA has not determined the deficiency hasbeen corrected by then.

TheEPA intends to notify States of the application and removal of section 179 mandatory sanctions (asprovided for in §52.31(d) ofthisrule)before they apply. In addition, in its actions on submittals received after a section 179(a) finding, EPA will indicate what the effect ofits action is on the sanctions clock and sanctions application. The following discussion explains how this Will occur, first providing the examples where, prior to 18 months,EPA finally determines whether the State has corrected the deficiency prompting the finding, and then providing examples where EPA finally determines the deficiency has been corrected after month 18.

In the cases where, prior to 18 months,EPA completes its action determining that the State has corrected the section 179(a) deficiency, sanctions would not apply. The following two examples address instances in which EPA finally determines within 18 months ofthe finding that started the sanctions clock whether the State has corrected the deficiency and how EPA's action finding the State corrected the deficiency affects the sanction clock.

In the case where, within 18 months following a finding of nonsubrnittal or incompleteness, EPA determines

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whether a State's SIP submittal corrects the deficiency prompting-the finding (i.e., is complete orincomplete), EPA will inform the State ofwhether the sanctions clock is stopped when it sends the completeness or incompleteness letter to the State. Ifthe SIP submittal is incomplete, then the letterwill indicate that the sanctions clock continues and that automatic sanctions will apply asprescribed by this rule.IftheSIP submittal is complete, then the letter will indicate that the sanctions clock started by the prior finding offailure to submit or incompleteness permanently stops.

In the case where, within 18 months following a SIP disapproval or finding ofnonimplementation, EPA determines whether the Statehas corrected the deficiency prompting the finding (i.e., whether the SIP is approvable or whether the nonimplementation deficiency has been corrected), EPA will indicate whether the sanctions clock is stopped when it takes final rulemaking action on the SIP.36 IfEPA finally disapproves the SIP or finally determines that the nonimplementation deficiency has not been corrected, then the Federal Register action will indicate thatthe sanctions clock continues and that automatic sanctions will apply as prescribed by this rule.IfEPA finally approves the SIP or finally determines that the nonimplementation deficiency has been corrected, then the Federal Register action wi:li indicate that the sanctions clock started by the prior disapproval or finding of nonimplementation permanently stops.

The following examples address how. following the section 179(a) findings, the Stateswill be kept informed when EPA's actions on revised SIP's are not completed within 18 months ofthe finding's deficiency. As provided in this rule at §52.31(d)(1) through (4), in explaining how the States will be kept informed, these examples address sanctioi removal, as well as sanction deferral and staying.

InEPA interim final determinations that the State has corrected the deficiency, issued simultaneously with EPA proposed approvals and proposed findings that States are implementing their SIP's (afterEPA SIP disapprovals

or findings ofnonimplementation), EPA intends to notify interested parties,

3As discussed above in section Il.B.I., proposed approval (ora proposal that the nonimplementation deficiency hadbeen corrected) following a SIP disapproval or nonimplementation finding hasthe effect ofdeferring and/or staying the application of sanctions. In thiscase, though, such proposal action would not have a deferral and/or staying effect because it is'assumed (forthe purposes ofthis example) that EPA completes final rulemaking action on the SIPwithin 18 months. including States, ofany deferral or staying ofsanctions that will result from FederalRegister actions proposing to approve SIP's or to find thatthe State is implementing its SIP, asprovided forin § 52.31(d)(2), (3) and (4) ofthis rule. In these cases, EPA will also indicate to all interested parties whether sanctions are removed, apply orreapply when it takes subsequent final action on the plan in the Federal Register Ifsubsequently EPA's proposed positive finding is reversed, then in that action EPA will indicate that sanctions apply or reapply,

as appropriate, and what sanctions, if any, apply subsequently. IfEPA subsequently fully approves the revised plan, then inthat action EPA will indicate thatthe sanctions clock permanently stops and that any sanctions previously applied due to the original disapproval orfinding offailure
to implement are removed.

In addition to these letters and Federal Register actions, theEPA will also periodically publish notices in the Federal Register in which EPA will provide the public with information on

areas forwhich EPA has made findings and which, therefore, are likelyto be subject tothe offset and highway

. sanctions. 3 7Ifremoval, staying, or deferral ofsanctions is warranted, EPA will similarly provide the public with

- information that sanctions have either

been removed, stayed or deferred in the

area. Finally, to supplement the various letters and actionsdiscussed above, EPA 'will provide information on the status of sanction 12 findings on EPA's Technology Transfer Network (TTN).aa

B.AreasPotentiallySubject to Sanctions

The EPA has made section 179(a) findings offailure to submit and incompleteness for numerous submittals due underthe amended Act. As explained in section II.C.5 above, EPA has elected to provide the public with information on areas potentially subject
to sanctions in a separate notice that
appears inthe notice section,oftoday's Federal Register rather than in tables in today's rule. Therefore, forfurther information on areas likely to face

371n some cases. the letter and/or the action may be combinedwith another action relating to the submittal. Forexample, iffollowing a disapproval EPA proposes to approve a SIP at month 20 after theoffset sanction isin'place, the interim final determination issued simultaneously with the proposed approval action would also serve to notify the public thatapplication of theoffset sanction has beenstayed.

3"TheTTN is EPA's bulletin board system for

- making air quality information available to interested parties. For questions on what information is available on theTTN and how to

access it, contact the systems operator (919) 541- 5384). sanctions on September 6, 1994 see that other notice.

IV. Miscellaneous
A. Executive Order12866

Under Executive Order 12866 (Order), (58 FR51735 (October 4, 1993)) the Agency must determine whether the regulatory action is "significant" and therefore subject to the Office of Management and Budget (OMB) review and the requirements ofthe Order. The Order defines "significant regulatory actions" as one that is likely to result in

a rulethat may: (1)Have an annual effect on the economy of$100 million

or more oradversely affect in a material way the economy, asector ofthe '
economy, productivity, competition, jobs, theenvironment, public health or safety, or State, local, or tribal governm'ents orcommunities; (2) create

a serious inconsistency orotherwise interface with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan. programs orthe rights and obligations of recipients thereof; or (4) raise novel or policy issues arising out oflegal mandates, the President's priorities, or the principles set forth in the Order.

• Pursuant to the terms ofthe Order, OMB has notified EPAthat it considers this a "significant regulatory action"- within the meaning ofthe Order. The EPA has submitted this action to OMB forreview. Changes made in response toOMB suggestions orrecommendations will be documented in the public record.

B.RegulatoryFlexibility Act

1. Proposal

The proposal includes a discussion of the impact ofthe rule on small entities
at pages 51277-8. The regulatory flexibility analysis (RFA) (5U.S.C. 600
et seq.) requires Federal agencies to identify potentially adverse impacts of Federal regulations upon small entities. Agencies are required to perform an RFA where the significant impacts are t ossible on a substantial number of small entities. Small entities include small businesses: small not-for-profit enterprises,' and governmental entities with populations ofless than 50,000.

Because this action will have some impact, an initial RFA was prepared pursuant to EPA-guidelines, which has been placed inthe docket tothis rulemaking. For the following three
reasons, EPA believes the impact ofthis rule on small entities will be limited. First, any impact that may occur from the offset sanction is limited to sources defined as "major" for nonattainment

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NSR purposes, generally 100 tons per year (TPY) or more ofa criteria pollutant, except in the more serious

ozone nonattainment areas. The major

sources most likely to also be small entities as defined pursuant to the RFA

are in these more serious ozone areas where the major source TPY threshold has been lowered under part D oftitle I ofthe Act. Second, the amended Act also increases the nonattainment NSR offset ratio in the ozone nonattainment

areas. The ratio ranges from 1.1-to-1 to 1.5-to-1, depending on he severity of the area's classification. Thus, any impact the 2-to-1 offset sanction will have may notbe as significant in precisely those ozone nonattainment

areas where small entities that are also major sources are most likely to exist. Third, as stated above, the only relevant impact period is 6 months in duration, since after that period the State will either have become subject to both sanctions or have corrected the deficiency and been relieved from any sanctions.

2. Comments

Section II.B.1. ofthis document includes several comments concerning the impact ofthe proposed rule. One additional comment is summarized here.

The commenter statesthat the lowering ofthe major source threshold under the Act exposes many more small

sources to control and the likelihood of sanctions. The commenter believes that
many such small sources are small businesses and that, contrary to the analysis in the proposal, an increase in the offset ratio of0.5 could have a significant impact on the ability of businesses to find adequate offsets.

3. Response

The EPA believes that the final rule will have some impact on small entities. The lowering ofthe major source threshold could expose more sources to the offset safiction. The EPA does not disagree that in individual cases an .increase in the offset ratio could have a significant impact on a small business. However, EPA believes that the impact ofthis rule on small entities will be limited forthe second and third reaions discussed above. Additionally, EPA
notes that the impact ofthis rule will also be lessened by the provision in final rules that provides for the deferral and/or staying ofthe application of sanctions in certain instances when EPA believes it is more likely than not a deficiency has been corrected (see discussion in section II.B.3. ofthis document). However, because this action will have some impact, a final RFA has been prepared pursuant to EPA guidelines, which has been placed in the docket to this rulemaking.

C.Paperwork ReductionAct

This rule does not contain any information collection requirements which require OMB approval under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

When the offset sanction applies,

sources subject to it will not incur an additional information collection burden because sources are already required under the section 173 offset requirements to obtain an emission offset from between 1-to-1 and 1.5-to-1. When the offset sanction applies, it should not impose an additional information collection burden because

sources will not have to provide any information in permit applications beyond that which is already required in the absence ofthe sanction. (For the. information collection burden ofnew requirements ofthe amended Act for nonattainment NSR and prevention of significant deterioration, an information collection request is being prepared to support rulemaking changes to parts 51 and 52.)

When thehighway sanction applies, the Secretary of DOTis required to determine which projects orgrants should not be affected by the sanction and which, therefore, are exempt. This determination will be based on information readily available in existing documentation gathered for the purpose ofevaluating the environmental, social, and economic impacts ofdifferent alternatives for transportation projects. These analyses are required for the preparation of environmental
assessments and impact statements under the National Environmental Policy Act (NEPA), (42 U.S.C. sec. 4321
et seq.). Historically, exemption determinations by DOTfor sanctions have been based on such NEPA documentation and have not necessitated additional information gathering and analysis by the States. In addition, since under NEPA final environmental documents must be approved by DOT, in most cases the NEPA documentation will already be in DOT's possession. Therefore, EPA does
not believe that the highway sanction, when applied, will impose an additional information collection burden on the States.

List of Subjects in 40 CFR Part52

Environmental protection, Air pollution control, Hydrocarbons, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Reporting and recordkeeping requirements, and Sulfur dioxide.

Dated: July 21, 1994. CarolM. Browner, Administrator.

For thereasons set forth in the preamble, part 52 oftitle 40, Code of Federal Regulations, is amended as set forth below:

PART 52-APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

1. The authority citation for part 52 is revised to read as follows:

Authority: 42 U.S.C. 7401-7671q. Subpart A--[Amended]

2. Subpart A is amended by adding a
new § 52.31 to read as follows: §52.31 Selectionof sequence of mandatory sanctions forfindingsmade pursuanttosection 179 ofthe Clean Air Act.

(a)Purpose. The purpose ofthis section is to implement 42 U.S.C. 7509(a) ofthe Act, with respect to the sequence in which sanctions will automatically apply under 42 U.S.C. 7509(b), following a finding made by the Administrator pursuant to42 U.S.C. 7509(a).

(b)Definitions.All terms used inthis section,but not specifically defined herein, shall have the meaning given them in §52.01. (1)1990Amendments means the 1990 Amendments tothe Clean Air Act (Pub. L. No. 101-549, 104 Stat. 2399).

(2)Act means Clean Air Act, as amended in 1990 (42 U.S.C. 7401 etseq. (1991)).

(3) Affected areameans the geographic area subject to or covered by the Act requirement that is the subject ofthe finding and either, forpurposes ofthe offset sanction under paragraph (e)(1) ofthis section and the highway sanction under paragraph (e)(2) ofthis section, is oris within an area designated nonattainment under 42 U.S.C. 7407(d) or, for purposes ofthe offset sanction under paragraph (e)(1) of this sections is oris within an area otherwise subject to theemission offset requirements of42 U.S.C. 7503.

(4)Criteria pollutant means a pollutant forwhich the Administrator has promulgated a national ambient air .quality standard pursuant to 42 U.S.C. 7409 (i.e., ozone, lead, sulfur dioxide, particulate matter, carbon monoxide, nitrogen dioxide).

(5)FindingsorFindingrefer(s) to one
ormore ofthe findings, disapprovals, and determinations described in subsection 52.31 (c).

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