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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OCT - 3 2007 

OFFICE OF 

AIR AND RADIATION 

MEMORANDUM 

SUBJECT: New Source Review (NSR) Aspects of the Decision of the U.S . Court of 

Appeals for the District of Columbia Circuit on the Phase 1 Rule to 

Implement the 8-Hour Ozone National Ambient Air Quality Standards 

(NAAQS) 

FROM: Robert J. Meyqrs 

Principal Depu 

TO: Regional Administrators 

Regions I-X 

On June 8, 2007, the U.S . Court of Appeals for the District of Columbia Circuit 

responded to our petition for a rehearing of the court's December 22, 2006, decision on 

the Phase 1 Rule to implement the 8-hour ozone National Ambient Air Quality Standards 

(NAAQS). The purpose of this memorandum is to provide a brief summary of the 

implications of the court's opinion for the NSR program in ozone non-attainment areas. 

The court reaffirmed its decision stating that the Environmental Protection 

Agency (EPA) improperly determined that areas designated as non-attainment under the 

1-hour ozone NAAQS would no longer be subject to 1-hour New Source Review 

requirements . A number of areas that were designated as non-attainment for the 1-hour 

standard have lower classifications (and thus less-stringent NSR provisions) under the 8-

hour standard . In the Phase 1 rule published in the Federal Register on April 30, 2004 

(69 FR 23951), EPA made NSR applicability thresholds and emission offsets dependent 

upon the 8-hour attainment status of an air quality region . The effect of the court's ruling 

is to restore NSR applicability thresholds and emission offsets pursuant to classifications 

previously in effect for areas designated non-attainment for the 1-hour ozone standards. 

We intend to undertake rulemaking to conform our NSR regulations to the court's 

decision . Planned NSR-related actions will occur in two distinct phases . First, we will 

issue an immediately-effective final rule under authority of the Good Cause Provision of 

the Administrative Procedures Act to restore the NSR applicability thresholds and 

emission offsets associated with designated 1-hour ozone nonattainment areas . Second, 

Internet Address (URL) 0 http //www.epa gov 

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we plan to undertake a separate notice and comment rulemaking to address longer-term 

applicability of 1-hour NSR requirements . In particular, we will determine the conditions 

and mechanisms under which the requirements for the I -hour standard might cease to 

apply for NSR purposes. While we proceed with rulemaking to address the NSR-related 

components of the court decision, we strongly encourage you to have States comply with 

the court decision as quickly as possible . 

If you or your staff have any questions on specific program elements, please refer 

to the attached list of EPA staff to contact. 

Attachment 

cc: Air Division Directors, Regions I-X 
List of OAR Contacts 

New Source Review -- David Painter (919) 541-5515 

-- Lynn Hutchinson (919) 541-5795 

Ozone Implementation -- John Silvasi (919) 541-5666 

-- Denise Gerth (919) 541-5550