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[Federal Register Volume 74, Number 153 (Tuesday, August 11, 2009)]
[Rules and Regulations]
[Pages 40074-40083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19190]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 50 and 51

[EPA-HQ-OAR-2008-0419, FRL-8943-3]
RIN 2060-AP96

Implementation of the 1997 8-Hour Ozone National Ambient Air 
Quality Standard: Addressing a Portion of the Phase 2 Ozone 
Implementation Rule Concerning Reasonable Further Progress Emissions 
Reductions Credits Outside Ozone Nonattainment Areas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to revise a portion of its Phase 2 
implementation rule for the 8-hour ozone National Ambient Air Quality 
Standard (NAAQS or standard) for which the Agency had sought a 
voluntary remand from the U.S. Circuit Court of Appeals for the 
District of Columbia Circuit. The Court granted EPA's request by 
remanding and vacating that portion of the rule. Specifically, this 
rule addresses an interpretation that allowed certain credits toward 
reasonable further progress (RFP) for the 8-hour standard from 
emissions reductions outside the nonattainment area.

DATES: This rule is effective on October 13, 2009.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2008-0419. All documents in the docket are 
listed in http://www.regulations.gov. Although listed in the index, 
some information is not publicly available, i.e., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the Internet and will be publicly available only in hard 
copy form. Publicly available docket materials are available either 
electronically in http://www.regulations.gov or in hard copy at the Air 
and Radiation Docket and Information Center in the EPA Headquarters 
Library, Room Number 3334 in the EPA West Building, located at 1301 
Constitution Ave., NW., Washington, DC. The Public Reading Room is open 
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 
holidays. The telephone number for the Public Reading Room is (202) 
566-1744.

FOR FURTHER INFORMATION CONTACT: For further information on the this 
final rule contact: Ms. Denise Gerth, Office of Air Quality Planning 
and Standards, (C539-01), U.S. EPA, Research Triangle Park, North 
Carolina 27711, telephone number (919) 541-5550 or by e-mail at 
[email protected], fax number (919) 541-0824; or Mr. John Silvasi, 
Office of Air Quality Planning and Standards, U.S. Environmental 
Protection Agency, (C539-01), Research Triangle Park, NC 27711, 
telephone number (919) 541-5666, fax number (919) 541-0824 or by e-mail 
at [email protected].

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected directly by this action include 
state, local, and tribal governments. Entities potentially affected 
indirectly by this rule include owners and operators of sources of 
emissions [volatile organic compounds (VOCs) and nitrogen oxides 
(NOx)] that contribute to ground-level ozone concentrations.

B. Where Can I Get a Copy of This Document and Other Related 
Information?

    A copy of this document and other related information is available 
from the docket EPA-HQ-OAR-2008-0419.

C. How Is This Notice Organized?

    The information presented in this notice is organized as follows:

I. General Information
    A. Does This Action Apply to Me?
    B. Where Can I Get a Copy of This Document and Other Related 
Information?
    C. How Is This Notice Organized?
II. What is the Background for This Rule?
    A. Proposed Regulatory Interpretation of the Phase 2 Rule To 
Address RFP Emission Credits Outside Ozone Nonattainment Areas
III. This Action
    A. Background
    B. Final Rule
    C. Comments and Responses
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
    L. Determination Under Section 307(d)

II. What Is the Background for This Rule?

A. Proposed Regulatory Interpretation of the Phase 2 Rule To Address 
RFP Emission Credits Outside Ozone Nonattainment Areas

    On July 21, 2008 (73 FR 42294), EPA published a proposed rule to 
revise its regulatory interpretation of the Phase 2 implementation rule 
for the 8-hour ozone NAAQS to address the U.S. Circuit Court of Appeals 
for the District of Columbia Circuit's vacatur and remand of that 
portion of the interpretation of the Phase 2 implementation rule for 
which EPA had asked for a voluntary remand. The proposal addressed a 
provision that allowed credit toward RFP for the 8-hour NAAQS from 
emission reductions outside the nonattainment area. Readers should 
refer to the proposed rule for additional background on this action, 
including the final Phase 2 ozone implementation rule and the Court's 
vacatur and remand of the provision allowing credit for emissions 
reductions outside a nonattainment area for the purposes of RFP for the 
8-hour NAAQS.

III. This Action

A. Background

    In the Phase 2 Rule to implement the 8-hour ozone NAAQS, EPA set 
forth an interpretation that stated that credits could be taken for 
emissions reductions from a source outside the nonattainment

[[Page 40075]]

area provided that emissions from these sources were included in the 
baseline for calculating the percent reduction needed. 70 FR 71612. 
However, emissions from other sources outside the nonattainment area 
did not have to be included in the baseline if they did not provide RFP 
credit for the nonattainment area. The regulatory interpretation stated 
that certain additional conditions must be met for such reductions to 
qualify for credit, including that credit could be taken for VOCs and 
NOX emissions reductions within 100 kilometers (km) and 200 
km respectively, and there must be a demonstration that the emissions 
from outside the nonattainment area had an impact on air quality levels 
within the nonattainment area.
    The Natural Resources Defense Council (NRDC) filed a petition for 
review of the Phase 2 Rule including the implementation of the 
statutory provisions regarding RFP. After briefing had concluded in 
this case, EPA published its final rule implementing the NAAQS for fine 
particulate matter (the ``PM2.5 Implementation Rule'') 72 FR 
20586 (April 25, 2007). Because the PM2.5 Implementation 
Rule significantly modified the interpretation regarding credits for 
emissions outside the nonattainment area, EPA requested a voluntary 
remand from the Court on July 17, 2007, to consider whether to revise 
the Phase 2 implementation rule to be consistent with the provisions in 
the PM2.5 rule. In response, the U.S. Court of Appeals for 
the District of Columbia Circuit vacated and remanded that portion of 
the Phase 2 Rule which provided credit under the 8-hour ozone RFP 
requirement for VOCs and NOX emission reductions from 
outside a nonattainment area. EPA proposed to revise its regulatory 
interpretation of the RFP provisions in the Phase 2 Rule to be 
consistent with its regulatory interpretation of the RFP provisions in 
the PM2.5 Implementation Rule. 73 FR 42294 (July 21, 2008).
    EPA received seven comments on this proposed rule. A few commenters 
supported the proposal while others opposed the action we proposed. The 
commenters addressed the following topics: requested clarification on 
how the rule affects general conformity and whether the transportation 
conformity determinations are only required within the nonattainment 
areas; stated that nonattainment areas should be expanded to include 
areas that contribute to nonattainment as required under section 107(d) 
of the Clean Air Act (CAA) rather than allowing areas to take credit 
outside of their nonattainment for RFP reductions; requested assurance 
that the rules do not allow substitution of NOX to meet the 
15 percent VOC reduction requirement; stated that the rule lacks 
mechanisms for addressing overwhelming transport in State 
Implementation Plan (SIP) requirements; stated that the proposed rule 
flouts the language and purpose of the CAA and is arbitrary and that 
EPA fails to offer a lawful or rational justification for the proposal, 
etc. Detailed responses to these comments are in section C under 
Comments and Responses.

B. Final Rule

    Following its stated objective in the request for a voluntary 
remand, EPA re-evaluted its interpretation of the RFP provision and is 
taking final action to revise the earlier interpretation as proposed on 
July 21, 2008 (73 FR 42294) which is consistent with the provisions in 
the PM2.5 Implementation Rule (72 FR 20636). Consequently if 
the state justifies consideration of precursor emissions for an area 
outside the nonattainment area, EPA will expect state RFP assessments 
to reflect emissions changes from all sources in this area. The state 
must include all sources, not just some selected sources, for the area 
providing emission reductions in the calculation of either (a) the RFP 
baseline from which to calculate the percent reduction needed for RFP 
or (b) the reductions obtained that would be credited toward the RFP 
requirement and the analysis of whether the reductions from areas 
outside the nonattainment area would contribute to decreases in ozone 
levels in the nonattainment area. Also, the justification for 
considering emissions outside the nonattainment area will include 
justification of the state's selection of the area used in the RFP plan 
for each pollutant. As is the case with the PM2.5 rule, if a 
state justifies consideration of precursor emissions for an area 
outside the nonattainment area, EPA expects state RFP assessments to 
reflect emissions changes from all sources in the area. The state 
cannot include only selected sources providing emission reductions in 
the analysis. The inventories for 2002, 2009, 2012 (where applicable) 
and the attainment year would all reflect the same source domain, i.e., 
the same set of sources except for the addition of any known new 
sources or removal of known, permanently shut down sources.
    In cases where the state justifies consideration of emissions of 
one or both of the ozone precursors (i.e.,VOC and NOX) from 
outside the nonattainment area, states must provide separate 
information regarding on-road mobile source emissions within the 
nonattainment area for transportation conformity purposes.\1\ However, 
this final rule does not change existing statutory requirements that 
transportation conformity determinations are only required within the 
nonattainment area boundary. The CAA section 176(c)(5) and EPA's 
transportation conformity regulations (40 CFR 93.102(b)) only require 
conformity determinations in nonattainment and maintenance areas, and 
these requirements rely on SIP on-road motor vehicle emission budgets 
that address on-road emissions within the boundary of the designated 
nonattainment area. For this reason and consistent with the 
PM2.5 Implementation Rule (72 FR 20636), if the state 
addresses emissions outside the nonattainment area for an ozone 
precursor, the on-road mobile source component of the RFP inventory 
will not satisfy the requirements for establishing a SIP budget for 
transportation conformity purposes. In such a case, the state must 
supplement the RFP inventory with an inventory of on-road mobile source 
emissions to be used to establish a motor vehicle emissions budget for 
transportation conformity purposes. This inventory must: (1) Address 
on-road motor vehicle emissions that occur only within the designated 
nonattainment area, (2) provide for the same milestone year or years as 
the RFP demonstration, and (3) satisfy other applicable requirements of 
the transportation conformity regulations (40 CFR part 93). As long as 
the state provides this separate emissions budget and conformity is 
determined to that budget, EPA believes that this approach will 
optimally address both the RFP and the transportation conformity 
provisions of the CAA.
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    \1\ Transportation conformity is required under CAA section 
176(c) to ensure that federally supported transportation plans, 
programs, and highway and transit projects are consistent with the 
purpose of the SIP.
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    In addition, we interpret this final rule to restrict the use of 
emission reductions for RFP credit to areas within the state, except in 
the case of multi-state nonattainment areas, and only then would allow 
RFP reductions from outside the state to be credited from outside the 
nonattainment area if the states involved develop and submit a 
coordinated RFP plan. EPA expects states with multi-state nonattainment 
areas to consult with other involved states, to formulate a list of the 
measures that they will adopt and the measures

[[Page 40076]]

that the other state(s) will adopt, and then to adopt their list of 
measures under the assumption that the other state(s) will adopt their 
listed measures. Each state would be responsible for adopting and 
thereby providing for enforcement of its list of measures, and then 
that state and ultimately EPA (at such time as the plan is approved) 
would be responsible for assuring compliance with the SIP requirements 
which is an approach consistent with the approach for RFP in the 
PM2.5 Implementation rule. (72 FR 20640).

C. Comments and Responses

Comments Supporting EPA's Approach
    1. Comment: One commenter noted that, in the Phase 2 Ozone 
Implementation Rule (70 FR 71648, November 29, 2005), EPA stated that 
modeling analyses relating to the NOX SIP call demonstrate 
that significant contribution to nonattainment results not only from 
source emissions within a nonattainment area but also from source 
emissions over a much broader area. The commenter agrees that allowing 
states to take credit for reductions from sources outside of their 
nonattainment areas may help reduce ozone levels in the nonattainment 
area and believes that reductions from outside the nonattainment area 
are sometimes necessary to attain the standard.
    EPA Response: The EPA agrees with commenter. The preamble to the 
final Phase 2 rule explains that the rationale for allowing emission 
reduction credits from outside the nonattainment area for RFP purposes 
is based on modeling analyses that showed that emissions from outside 
the nonattainment area could affect the nonattainment area and that 
emission reductions from upwind of a nonattainment area will help the 
nonattainment area achieve progress toward attainment. 70 FR 71648; 61 
FR 65758 (December 13, 1996), and Memorandum of December 29, 1997 from 
Richard D. Wilson to Regional Administrators, Regions I-X entitled: 
``Guidance for Implementing the 1-Hour Ozone and Pre-Existing 
PM10 NAAQS'' (the 1997 Policy) located at URL: http://www.epa.gov/ttn/oarpg/t1/memoranda/iig.pdf.
    2. Comment: One commenter supports the proposal to revise the 
interpretation for crediting emissions reductions from outside a 
nonattainment area for RFP to be analogous with the provision in the 
PM2.5 Implementation Rule. Specifically, the commenter 
supports the portion of the proposal that allows RFP reductions from 
outside the state to be credited from outside the nonattainment area if 
states develop a coordinated RFP plan as part of their SIPs.
    EPA Response: The EPA agrees with commenter. The EPA by this action 
makes the RFP provisions regarding credits from emission reductions 
outside the nonattainment area in the context of the ozone NAAQS 
consistent with the interpretation in the context of the 
PM2.5 NAAQS with respect to multi-state areas.
Clarification Requested on How This Rule Affects General Conformity
    3. Comment: One commenter appreciates EPA's efforts in the proposal 
to clarify that a state may no longer include only selected sources 
from an area outside of a nonattainment area for emissions reduction 
credit in the SIP. The commenter also appreciates EPA's efforts to 
address how the proposed rule affects transportation conformity. The 
commenter requests that EPA provide clarity on how the proposed rule 
affects general conformity requirements and determinations in the final 
rule.
    EPA Response: This regulatory interpretation does not affect the 
requirement for federal agencies to demonstrate conformity with SIPs. 
These requirements stem from section 176(c) of the CAA. Implementing 
regulations published by EPA (40 CFR 93.150 -160) provide for when and 
how federal agencies can make these determinations. EPA discussed 
transportation conformity in the proposal only to clarify that it 
applies only within nonattainment areas and to facilitate development 
of appropriate budgets for use in areas that take rate of progress 
(ROP) credit from outside the nonattainment area.
Nonattainment Areas Should Be Expanded To Include Contributing Sources
    4. Comment: One commenter is opposed to the revision because it is 
contrary to the CAA. Section 107(d)(1)(A)(i) of the CAA requires the 
designation as nonattainment for ``any area that does not meet (or that 
contributes to ambient air quality in a nearby area that does not meet) 
the national primary or secondary ambient air quality standard for that 
pollutant.'' The CAA requires that instead of allowing an area that is 
contributing to the nonattainment area to be used to demonstrate RFP 
goals, the designated nonattainment area must be expanded to include 
that area. A commenter also feels that the proposal illegally 
circumvents the statutory designation provisions by allowing states to 
selectively claim credit for reductions from outside areas without 
subjecting those areas to the full range of safeguards mandated by 
Congress for such areas.
    EPA Response: As a threshold matter, EPA is not taking any action 
through this regulatory interpretation to establish procedures for 
designating or not designating areas. The designations process for each 
NAAQS generally provides guidance on how to determine nonattainment 
areas. Under CAA section 107 (d)(1)(A) an area is designated 
``nonattainment'' if it does not meet the NAAQS or is a ``nearby'' area 
that contributes to ambient air quality in an area that is violating 
the NAAQS.\2\
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    \2\ For example, Memorandum of March 28, 2002, from John S. 
Seitz, ``Boundary Guidance on Air Quality Designations for the 8-
Hour Ozone National Ambient Air Quality Standards.''
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    As the Agency explained in the final preamble to the Phase 2 rule, 
the CAA does not specify a distance that is ``nearby'' or a specific 
level of emissions that is deemed to ``contribute to'' nonattainment 
(70 FR at 71648). EPA also did not establish a hard-and-fast set of 
rules to determine which areas are ``nearby'' or ``contribute to'' 
nonattainment. Instead, in guidance EPA listed a broad set of factors 
for states and EPA to consider in determining the boundaries of each 
nonattainment area. As for the comment that EPA is circumventing the 
statutory designations provisions by not subjecting the outside areas 
to all the requirements for nonattainment areas, EPA believes that 
since these areas are not necessarily ``nearby'' for designations 
purposes, it is not appropriate to subject these areas to all of the 
requirements for nonattainment areas. In this rule EPA is allowing 
emissions reductions outside a nonattainment area that benefits the 
nonattainment area to be considered for credit in emission reductions 
for ROP purposes. Whether an area is ``nearby'' for purposes of 
designations is an issue that would be considered on a case-by-case 
basis when the area is initially designated nonattainment.
Clarification Requested That Transportation Conformity Only Applies in 
the Nonattainment Area
    5. Comment: One state transportation agency requested clarification 
in the final rule that transportation conformity only applies inside 
the nonattainment area.
    EPA Response: EPA's final rule does not change existing statutory 
requirements that transportation

[[Page 40077]]

conformity determinations are only required within the nonattainment 
area boundary. CAA section 176(c)(5) and section 93.102 of EPA's 
transportation conformity regulations only require conformity 
determinations in nonattainment and maintenance areas. These 
requirements rely on SIP on-road motor vehicle emission budgets that 
address on-road emissions within the boundary of the designated 
nonattainment area. For this reason and consistent with EPA's 
PM2.5 implementation rule (72 FR 20636), if the state 
addresses emissions outside the nonattainment area for an ozone 
precursor, the on-road mobile source component of the RFP inventory 
will not satisfy the requirements for establishing a SIP budget for 
transportation conformity purposes. In such a case, the state must 
supplement the RFP inventory with an inventory of on-road mobile source 
emissions to be used to establish a motor vehicle emissions budget for 
transportation conformity purposes, as described in this final rule. As 
long as the state provides this separate emissions budget and 
conformity is determined to be within the geographic boundary of the 
nonattainment area, EPA believes that this approach will optimally 
address both the RFP and the transportation conformity provisions of 
the CAA.
Lack of Regulatory Text
    6. Comment: One commenter believes that the proposed revision 
appears to provide an appropriate and reasonable degree of flexibility 
to states in meeting the RFP requirements. It is, however, difficult 
for the commenter to evaluate and comment on the proposal because EPA 
has not provided any proposed regulatory text that clearly states the 
precise provisions and limitations of the intended rule.
    EPA Response: In this action we are modifying a regulatory 
interpretation that the Agency adopted in the Phase 2 rule (70 FR at 
71647-48). Since publication of that rule, EPA modified its approach to 
RFP credits from outside the nonattainment area in its PM2.5 
Implementation Rule (72 FR 20636). This action provides a regulatory 
interpretation that is consistent with the approach adopted in the 
PM2.5 Implementation Rule. Neither rule included regulatory 
text on the specific issue of RFP credits from outside the 
nonattainment area and EPA believes that it is unnecessary to include 
regulatory text in this action.
Substitution of NOX To Meet 15 Percent VOC Requirement
    7. Comment: The commenter assumes that EPA does not intend to 
apply, and will not apply, the policy reflected in the proposal in a 
way that would allow crediting of NOX emission reductions 
outside the nonattainment area to meet the 15 percent VOC emission 
reduction requirement in section 182(b)(1) of the CAA. Further the 
commenter stated that allowing states to use NOx emission reductions--
wherever they may occur--to satisfy section 182(b)(1) would contradict 
the explicit statutory provision that the 15 percent ROP reduction 
requirement must be met by VOC emission reductions only. See 70 FR 
71,612, 71,636/1 (November 29, 2005).
    The commenter also noted that this principle is also reflected in 
the December 1997 guidance memorandum that addressed taking credit 
outside nonattainment areas for purposes of RFP.
    EPA Response: The commenter is correct that EPA does not intend to 
apply the policy interpretation in the proposed rule to allow 
substitution of NOX emission reductions outside the ozone 
nonattainment area to meet the 15 percent VOC requirement in section 
182(b)(1). This is consistent with the ``Guidance for Implementing the 
1-Hour Ozone and Pre-Existing PM10 NAAQS'' that EPA issued 
on December 29, 1997 and the Phase 2 Ozone Implementation Rule that EPA 
issued on November 29, 2005.
Lack of Mechanism for Addressing Overwhelming Transport
    8. Comment: One commenter feels that EPA's proposed rule lacks 
reasonable, equitable mechanisms for addressing overwhelming transport 
in SIP requirements. This rule, as proposed, would disallow RFP credit 
in the Michigan SIP for out-of-state reductions even though the local 
areas' contribution to high ozone concentrations measured at monitors 
in counties abutting Lake Michigan are negligible. The contributors, 
large urban areas `across the lake, are in other states, and West 
Michigan nonattainment areas are not part of multistate nonattainment 
areas. The proposed rule does nothing to ameliorate the regulatory 
burdens of ozone transport into West Michigan. Additionally, the 
commenter stated that the CAA lacks adequate provisions to address 
ozone transport and include a presumption that local emissions 
reductions are necessary to reduce ozone levels. The commenter 
recommends that amendments to the CAA be pursued.
    EPA Response: The regulatory interpretation was not intended to 
address the kind of situation posed by the commenter. The revised 
interpretation only applies to ROP plans and does not attempt to 
resolve issues of regional transport. Amendments to the CAA to address 
regional transport are only within Congress' purview.
CAA Does Not Give EPA Authority To Take Credit for Emissions Reductions 
Outside the Nonattainment Area nor Change the Emissions Baseline
    9. Comment: One commenter believes that the proposed rule is 
unlawful and arbitrary. The commenter stated that CAA sections 
182(b)(1) and 182(c)(2)(B) require SIPs for ozone nonattainment areas 
to provide for an initial 15 percent rate of progress cut in ozone-
forming emissions and subsequent three percent per year emission cuts 
until attainment. The CAA requires these cuts to be made from emissions 
``in'' each nonattainment area. Sec.  182(b)(1). The commenter believes 
that allowing areas to claim credit toward these ROP requirements from 
emission cuts outside the nonattainment area would not require that 
outside reductions provide the same ozone reduction benefit to the 
nonattainment area as would equivalent emission reductions inside the 
nonattainment area. The commenter feels that the EPA is without 
authority to allow states to claim ROP credit for emission reductions 
occurring outside of the nonattainment area because section 
182(b)(1)(A) requires each plan to provide for cuts in VOC emissions 
``of at least 15 percent from baseline emissions'' (emphasis added). 
The statute goes on to define ``baseline emissions'' as ``the total 
amount of actual VOC or NOX emissions from all anthropogenic 
sources in the area,'' with certain exclusions not relevant here. Sec.  
182(b)(1)(B) (emphasis added). Thus, Congress explicitly mandated that 
the required 15 percent emissions cut be achieved from a baseline 
comprising emissions from sources ``in the [nonattainment] area.'' 
Congress did not authorize EPA to grant rate of progress credit for 
emission reductions outside the nonattainment area or to redefine 
``baseline emissions'' to include emissions from sources outside of the 
nonattainment area, even where those outside reductions are alleged to 
or do in fact ``contribute'' to ozone concentrations in the 
nonattainment area. The commenter feels that EPA cannot allow states to 
credit emission cuts from outside of the nonattainment area toward 
meeting post-15 percent

[[Page 40078]]

progress requirements. Nor can EPA alter the baseline for the post-15 
percent cuts, a baseline that is identical to the one set in the 
statute for the 15 percent plans, and that is explicitly limited to 
emissions from within the nonattainment area.
    EPA Response: The EPA notes first that the regulatory 
interpretation set forth here does not apply to the section 182(b)(1) 
requirement to provide 15 percent reductions within the first six years 
from a baseline year, but only to the section 182(c)(2)(B) requirement 
for an average of three percent per year for subsequent three year 
periods up to the attainment date. The interpretation is based on the 
December 29, 1997 memorandum from Richard D. Wilson, ``Guidance for 
Implementing the 1-Hour Ozone and Pre-Existing PM10 NAAQS.'' 
Page 7 of the attachment to that memorandum says: ``The EPA believes 
that the start date of the expanded locality-based substitution credit 
for ROP is changed from post-1999 ROP requirements to post-1996 
requirements. EPA does not believe that it may allow credit for 
substitutions to complete or revise the 15 percent ROP requirement for 
VOC emission reductions in nonattainment areas through 1996. Although 
the start date for application of ROP substitution reductions from 
outside the nonattainment area would apply to post-1996 ROP 
requirements, consistent with past Agency policy, states would be able 
to bank excess earlier reduction credits (NOX or VOC) to 
apply to post-1996 and later requirements.''
    Secondly, EPA disagrees with the assertion in the comment that the 
proposed rule is unlawful and arbitrary and that EPA is without 
authority to allow RFP credit for emission reductions from outside the 
nonattainment area. The CAA does not expressly prohibit credits for 
emission reductions outside the area. In fact, the Fifth Circuit, which 
examined the same language at issue here, found the language 
``ambiguous'' reasoning:

    On the one hand, the meaning of ``in the area'' could be limited 
to emissions within the nonattainment area. On the other hand, the 
CAA does not expressly state that emissions outside the 
nonattainment area are prohibited, rather the Act only states that 
emissions from sources ``in the area'' must be included. We 
therefore find the CAA ambiguous on this point.

Louisiana Envtl. Action Network (``LEAN'') v. EPA, 382 F.3d 575, 585 
(5th Cir. 2004).\3\ If Congress intended to disallow credits from 
outside the nonattainment area, it could have expressly disallowed it 
as it did for RFP credit for four other specific categories of emission 
reductions, 42 U.S.C. 7511a(b)(1)(D)(i)-(iv), while otherwise allowing 
credit for any reductions that ``have actually occurred after November 
15, 1990,'' id. section 7511a(b)(1)(C). See also the discussion in 
response to comments 15 and 16.
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    \3\ Although the Fifth Circuit found application of the 1997 
policy as applied to the facts in that case unsupported, it did so 
for reasons that are inapposite here. First, the court was reviewing 
EPA's determination that continuing reductions outside an area could 
be used as contingency measures. The court found EPA had not 
demonstrated that the policy had ``any rational connection with the 
relevant issue of what contingency measures to apply when an 
attainment deadline passes.'' Id. at 586.
    Second, the court found that in the specific case under review 
there was no data to support the presumption that the ``outside'' 
reductions selected in that case ``can affect emissions reductions 
in the * * * area.'' Id. In contrast, in its regulatory 
interpretation, EPA is explicitly requiring that such data be 
demonstrated in all cases prior to accepting credits from outside a 
nonattainment area. 70 FR at 71,647/3.
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Rule Is Unclear as to the Precise Requirements for Crediting Outside 
Reductions
    10. Comment: One commenter stated that the proposal is actually 
unclear as to the precise requirements for crediting these outside 
reductions. The Federal Register notice describes EPA's approach for 
crediting outside reductions in the PM2.5 Implementation 
Rule, and states that EPA is proposing to revise its earlier 
interpretation with respect to ozone plans ``to be consistent with the 
analogous provisions in the PM2.5 Implementation Rule.'' The 
proposal does not explain whether ``consistent with'' means ``identical 
to'' or whether it allows some differences from the PM2.5 
approach. For purposes of these comments, the commenter will assume EPA 
is proposing an identical approach to the one adopted for 
PM2.5.
    EPA Response: The commenter is correct in the assumption that EPA's 
proposed approach follows the same approach for ozone as followed for 
PM2.5.
Rule Does Not Set Meaningful Restrictions on Boundary Drawing for the 
Outside Area
    11. Comment: One commenter alleged that the proposal sets no 
meaningful restrictions on boundary drawing for the ``outside'' area, 
thereby allowing states to gerrymander them in a way that includes 
sources expected to cut emissions while excluding sources that are 
likely to increase their emissions. Although the proposal appears to 
limit the ``outside'' to a doughnut around the nonattainment area of up 
to 200 km, it allows the states to choose the slice or hole in that 
surrounding doughnut to include for purposes of the RFP calculation. 
Assuming EPA is proposing the same approach used in the 
PM2.5 rule, the state need only show that emissions from the 
area selected substantially impact ambient concentrations in the 
nonattainment area. There is no stated requirement that all areas 
substantially impacting the nonattainment area be included. The 
proposal does not prevent states from defining whatever area they 
choose--theoretically even the block on which the selected source 
sits--for inclusion in the RFP inventory.
    EPA Response: Under this approach, as a prerequisite to including 
emission reductions from outside the nonattainment area in the RFP 
assessment, a state must justify the outside area. The justification 
must include a demonstration that these outside emissions have a 
substantial impact on nonattainment concentrations. Because the 
demonstration of such impacts likely involve differing factors and 
characteristics, EPA believes a one-size fits all ``boundary drawing'' 
approach is not an appropriate approach in this instance. EPA will 
evaluate each RFP assessment on a case-by-case basis to determine 
whether a state using RFP credits from outside the nonattainment area 
has included the appropriate and pertinent area for calculating the 
emission reductions. In addition, if a state wants to adopt this 
approach, the RFP assessment must include emissions for all sources 
within the pertinent area in order to ensure that the RFP plan reflects 
the actual net emissions changes that occur within that area.
    12. Comment: One commenter alleged that the proposed 200 km radius 
for the ``outside'' area is also wholly arbitrary. EPA offers no 
rational basis, and none exists, for choosing that particular distance 
and applying it to each and every nonattainment area in the nation. 
There is no evidence, for example, that NOX emission 
reductions 200 km outside a nonattainment area invariably provide the 
same ROP benefit as the same reductions inside the nonattainment area. 
EPA appears to have picked the 200 km figure out of thin air. The 
arbitrariness of EPA's approach here is confirmed by contrasting it 
with agency's approach in drawing nonattainment area boundaries. In the 
latter situation, EPA has taken the position that determining whether 
nearby sources contribute to nonattainment is too complex to be 
dictated by hard and fast rules, and instead requires a multi-factor 
analysis

[[Page 40079]]

tailored to each area. See EPA's Final Brief in Catawba County v. EPA, 
No. 05-1064 (D.C. Cir) filed June 11, 2008.
    EPA Response: The commenter's assertions are incorrect. EPA has not 
picked the distances ``out of thin air.'' As described below, EPA has 
had this policy, adopted after discussions and input from the 
scientific community, in place for over ten years. The December 1997 
policy was developed ``as a result of the modeling results relating to 
the NOX SIP Call, [which] demonstrate that significant 
contribution to nonattainment resulted not only from source emissions 
within a nonattainment area but also from source emissions over a much 
broader area.'' 1997 Policy at 5-6. In addition, under the Federal 
Advisory Committee Act (FACA), we formed a Subcommittee for Development 
of Ozone, Particulate Matter and Regional Haze Implementation Programs 
that provided recommendations and ideas to assist us in developing 
implementation approaches for these programs. We have incorporated 
ideas from the FACA process for a number of SIP elements, particularly 
those related to transport of ozone, the process for demonstrating 
attainment of the ozone standard, and requirements for ensuring 
reasonable further progress. The distance of 100 km for VOC and 200 km 
for NOX resulted from discussions of the FACA Subcommittee 
and generally represent transport of one to two days.\4\ Further 
information on the FACA process and its reports is found at the 
following Web site: http://www.epa.gov/ttn/faca/. This regulatory 
interpretation incorporates the same distance limitations, which must 
be supported in an individual area by data ``that are shown to be 
beneficial toward reducing ozone in the nonattainment area.'' \5\ In 
addition, the proposed regulatory interpretation does not change the 
distances for crediting emissions from outside the nonattainment area 
for NOX and VOCs. EPA proposed and finalized those distances 
in the rulemaking for the Phase 2 rule. The proposed regulatory 
interpretation only modifies those instances where the ozone RFP 
interpretations were not consistent with the PM2.5 
Implementation Rule such as whether emissions from all sources should 
be included in the RFP assessments for the pertinent area outside the 
nonattainment area. Thus, the comments on the distances themselves are 
outside the scope of this rulemaking.
---------------------------------------------------------------------------

    \4\ See Footnote 43 at 68 FR 32833 (June 2, 2003).
    \5\ 70 FR 71647, col 3. (November 29, 2005).
---------------------------------------------------------------------------

Lack of Justification for Proposal
    13. Comment: The commenter states that the proposed rule is 
unlawful and arbitrary in that EPA has failed to offer a lawful or 
rational justification for the proposal. The commenter states that the 
notice of proposed rulemaking offers no justification for allowing 
credit for outside reductions, other than a desire to provide 
``flexibility.'' In the past, EPA has stated other rationales for 
allowing ROP credit for outside reductions, but as the agency does not 
state any intent to rely on them here, they cannot support this 
iteration of the proposal. If EPA wants to provide other rationales for 
the proposal, it must first provide public notice and an opportunity to 
comment.
    EPA Response: EPA disagrees with the commenter's assertion that it 
has provided no justification for its proposal to modify its regulatory 
interpretation of the RFP provisions. First, in the preamble to the 
Phase 2 rule, EPA explained its rationale for permitting credits for 
reductions outside the nonattainment area (70 FR 71647-48). The 
proposed modification of that regulatory interpretation does not change 
the distances or the precursors for which such credits may be taken 
provided other conditions such as reductions are not attributed to 
measures otherwise mandated by the CAA are met. Second, the preamble to 
the proposed regulatory interpretation explains that EPA is modifying 
its approach to allowing credits for emission reductions from outside 
the nonattainment area to make it consistent with the approach that the 
Agency adopted in the PM2.5 Implementation Rule. In the 
PM2.5 Implementation Rule, EPA received comments that 
indicated that RFP inventories for areas outside the nonattainment area 
could include selected sources expecting substantial emissions 
reductions while excluding other sources in the area expecting emission 
increases. In response to those comments, EPA modified its approach and 
required that if a state justifies consideration of emissions for an 
area outside the nonattainment area, the RFP assessments will be 
expected to reflect emission changes from all sources in this area and 
would no longer allow states to include only selected sources that 
provide emission reductions. Because the rationale for the change there 
is equally applicable for ozone, EPA proposed the same regulatory 
interpretation for RFP assessments for ozone.
    14. Comment: The commenter noted that EPA has also tried to justify 
overriding the statutory language by citing section 182(c)(2)(C) which 
provides for substitution of NOX emission cuts for VOC 
emission cuts to meet the percentage reduction requirements in serious 
and above areas, where the state shows that equivalent ozone reductions 
will be achieved. EPA erroneously claimed that this provision somehow 
shows intent to allow even broader exceptions, such as the one here, as 
long as some ozone reductions are achieved within the nonattainment 
area. In reality, section 182(c)(2)(C) contains no language at all 
authorizing states to claim emission reduction credit for emission cuts 
outside of the nonattainment area, nor does it redefine ``baseline 
emissions'' to include emissions from outside the nonattainment area. 
The provision merely defines the limited circumstances in which an area 
can substitute NOX emission cuts for VOC emission cuts to 
meet percentage reduction requirements. It does not allow the required 
reductions to be achieved outside the nonattainment area. Moreover, a 
key requirement of section 182(c)(2)(C) is that any substitution of 
NOX reductions for VOC reductions will ``result in a 
reduction in ozone concentrations at least equivalent'' to that which 
would result from the required VOC percentage reduction (emphasis 
added). EPA's proposed rule merely requires that emissions from the 
``outside'' area ``contribute to'' ozone concentrations in the 
nonattainment area--it does not require the ozone benefits from cutting 
those outside emissions to be at least equivalent to those achievable 
by reductions inside the nonattainment area (70 FR 71647).
    EPA Response: The Phase 2 rule clarified the 1997 policy to respond 
to concerns identified in the Office of Inspector General Report [OAR-
2003-0079-0849 AT 80 (``OIG Report'')]. The regulatory interpretation 
for RFP did not allow crediting of outside emissions based solely on 
distance from the nonattainment area boundary. Instead, the regulatory 
interpretation stated that the distances are only a general presumption 
that would need area-specific data showing that reductions from sources 
in attainment areas benefit the particular nonattainment area. 70 FR 
71647-49. Under this approach, as a prerequisite to including emission 
reductions from outside the nonattainment area in the RFP assessment, a 
state must justify the inclusion of sources outside the area. The 
justification must include a demonstration that these outside emissions 
have a substantial impact on nonattainment concentrations and that

[[Page 40080]]

reductions in these emissions would have a beneficial impact on the 
nonattainment area.
    As clarified in a response below, in evaluating RFP submittals, EPA 
would consider whether the reductions from outside the nonattainment 
area could reasonably be expected to yield comparable air quality 
benefits as would be obtained if the same quantity of reductions were 
to occur inside the nonattainment area.
    15. Comment: The commenter offers as support for the previous 
comment based on the fact that EPA's Office of Inspector General (OIG) 
observed that EPA's policy allows credit ``for all emission reductions 
achieved by outside sources within specified distances outside the 
nonattainment area boundaries without any demonstration of the actual 
impact of these specific emissions on the area's nonattainment * * *'' 
OAR-2003-0079-0849 AT 80 (``OIG Report'').
    EPA Response: EPA believes that when Congress allowed the 
substitution of NOX controls for VOC controls to meet the 
section 182(c)(2)(C) RFP requirement, its choice of specific words is 
telling because it referred to ``reductions in ozone concentrations'' 
in the applicable nonattainment area, rather than ``reductions in 
emissions.'' 70 FR 71648. While the language in the CAA does not 
explicitly state that emission reductions from outside the 
nonattainment area may be credited for RFP assessments, EPA reasonably 
interpreted this language as an indication that Congress' intent was to 
lower ``ozone concentrations''--not just ``emissions'' of ozone 
precursors--within the nonattainment area. As EPA explained, ``(i)t is 
consistent with that intent that emissions reductions from outside the 
nonattainment area that will reduce ozone concentrations in the 
nonattainment area should be creditable (toward) RFP.'' 70 FR 71648.
    As for the commenter's assertion that VOC and NOX 
reductions should result in equivalent benefits within the area, the 
fact that EPA's policy always had limits for the distance outside the 
nonattainment area was intended to preclude emission reductions from 
having negligible ozone benefits within the nonattainment area. While 
it is implicit in EPA's proposed regulatory interpretation in its 
evaluation of the appropriateness of the credit reductions, the Agency 
is now clarifying in response to the commenter's statement that EPA, in 
evaluating RFP submittals, would consider whether the reductions from 
outside the nonattainment area could reasonably be expected to yield 
comparable air quality benefits as would be obtained if the same 
quantity of reductions were to occur inside the nonattainment area.
    In setting forth a requirement for the ozone transport region in 
section 184 of the CAA, Congress realized that controlling ozone would 
require emission reductions from not just nonattainment areas, but all 
areas that were shown to contribute to ozone concentrations, including 
areas outside nonattainment areas. The work done under the Ozone 
Transport Assessment Group (OTAG) led to the NOX SIP call, 
which resulted in State-wide NOX emission budgets. The 
NOX SIP call, with its significant NOX emission 
reductions from attainment as well as nonattainment areas, was highly 
successful in reducing ozone concentrations, and indeed provided 
progress toward attainment for many of the nonattainment areas in the 
eastern portion of the U.S.\6\
---------------------------------------------------------------------------

    \6\ ``Evaluating Ozone Control Programs in the Eastern United 
States: Focus on the NOX Budget Trading Program, 2004'' 
United States Environmental Protection Agency; Office of Air and 
Radiation; Office of Air Quality Planning and Standards; Office of 
Atmospheric Programs. 1200 Pennsylvania Ave., NW., Washington, DC 
20460. EPA454-K-05-001. August 2005. Found at: http://www.epa.gov/airmarkt/progress/docs/ozonenbp.pdf.
---------------------------------------------------------------------------

    A state's ozone attainment demonstration performed with 
photochemical grid modeling will invariably take account of emission 
reductions not only from within the nonattainment area, but also from 
outside the nonattainment area. Generally, a state will be unable to 
demonstrate attainment for many areas unless there are emission 
reductions from attainment and nonattainment areas outside the area for 
which the state is performing the attainment demonstration. An extreme 
hypothetical example of this situation would be a nonattainment area 
that is mostly rural with few emissions of its own, but which is 
ineligible for rural transport area treatment and that is affected by 
significant transport from upwind areas. For its attainment 
demonstration, it must rely totally on emission reductions from upwind 
areas and may not be able to demonstrate RFP from emission reductions 
totally within the nonattainment area.
    Additionally, air quality modeling to make a determination of 
equivalent ozone reductions would be very difficult. Ozone reductions 
from a particular strategy of emission reductions vary based on a 
number of factors such as wind, climate, type of emission source, 
location of sources, and height of emissions release above the ground. 
Therefore, the location and spatial extent of ozone reductions may be 
highly variable on a day-to-day basis. In many cases, emission 
reductions from farther away from a receptor location could be more 
beneficial in reducing ozone than emission reductions from a nearer 
location in the nonattainment area. The fact that the NOX 
SIP call regional emission reductions have been shown to reduce ozone 
concentrations in almost all nonattainment areas is a testament to the 
fact that regional NOX controls are beneficial in reducing 
ozone. The current policy of allowing reductions for RFP purposes only 
out to certain well-defined geographic distances would serve to prevent 
abuse.
    Section 182(c)(2)(C) does require that NOX reductions 
must be shown to reduce ozone concentrations ``at least equivalent'' to 
that which would result from VOC reductions. In response to the CAA's 
requirement of section 182(c)(2)(C), EPA had in the early- and mid-
1990's issued guidance,7 8 for implementation of this 
provision. The guidance is based on two principles: First, an 
equivalency demonstration requires that cumulative RFP emission 
reductions must be consistent with the NOX and VOC emission 
reductions determined in the ozone attainment modeling demonstration; 
in other words, a ton of NOX cannot simply substitute for a 
ton of VOC since the air quality impact might be entirely different. 
Second, specified reductions in NOX and VOC emissions should 
be accomplished in the interim period between the time of the beginning 
of the RFP period in question (at the time, that was the end of 1996) 
and the attainment date, consistent with the continuous RFP emission 
reduction requirement. Thus, substituting NOX emission 
reductions for VOC emission reductions for RFP purposes has 
consistently been done in the context of the area's attainment 
demonstration in order to demonstrate equivalent ozone reductions 
regardless of whether the emission reductions that are credited for RFP 
purposes come wholly within the nonattainment area or where some come 
from outside the nonattainment area.\9\
---------------------------------------------------------------------------

    \7\ NOX Substitution Guidance, December, 1993. Office 
of Air Quality Planning and Standards; U.S. Environmental Protection 
Agency; Research Triangle Park, North Carolina 27711.
    \8\ Memorandum from John Seitz, ``Clarification of Policy for 
Nitrogen Oxides (NOX) Substitution.'' August 8, 1994.
    \9\ It should be noted that reductions toward the RFP 
requirement of the CAA that actually occur within one part of a 
nonattainment area do not necessarily produce the same ozone 
reductions as emissions reductions in another part of the 
nonattainment area. Depending on where the reductions occur, even if 
all the RFP emission reductions occur wholly within the 
nonattainment area, it is possible that there could actually be no 
reduction in ozone concentrations within that nonattainment area.

---------------------------------------------------------------------------

[[Page 40081]]

Mandate From Subpart 1 for RFP
    16. Comment: The commenter also feels that EPA has erroneously 
claimed support from Subpart 1's mandate for ``reasonable further 
progress,'' defined as ``such annual incremental reductions in 
emissions of the relevant air pollutant as are required by this part or 
may reasonably be required by the Administrator for the purpose of 
ensuring attainment of the applicable national ambient air quality 
standard by the applicable date.'' Section 171(1). The agency has 
asserted that this Subpart 1 provision somehow shows that Congress did 
not care about the location of emission reductions as long as they 
contributed to progress toward attainment. 70 FR 71648, quoting CAA 
section 171(1). This argument simply ignores the express language of 
Subpart 2, which explicitly requires the achievement of specified 
percentage reductions ``in'' the nonattainment area. EPA cannot rely on 
a general statutory provision to override a more specific one, or rely 
on policy goals to override express statutory mandates.
    EPA Response: The EPA believes that its interpretation advances the 
general statutory purpose underlying RFP. For both Subparts 1 and 
2,\10\ Congress defined RFP to mean ``such annual incremental 
reductions in emissions of the relevant pollutant as are required by 
this part or may reasonably be required by (EPA) for the purpose of 
ensuring attainment * * * by the applicable date.'' CAA section 171(1). 
Under both Sections 172 and 182, the stated purpose of `reasonable 
further progress' is to ensure attainment by the applicable attainment 
date. Acknowledging this stated purpose, EPA reasoned that ``specific, 
annual emissions reductions from geographic areas outside the 
nonattainment area boundaries that contribute to lower ambient ozone 
levels in the nonattainment area would fall within the scope of `such 
annual incremental reductions' * * * as are required * * * for the 
purpose of ensuring attainment * * *.'' 70 FR 71,648/2. Therefore, 
while it is true that the statute does not expressly authorize RFP 
credit for outside emission reductions, EPA believes its interpretation 
of the statute to allow such credit in the absence of an express 
prohibition is reasonable. The commenter is incorrect in stating that 
this construction relies on a general statutory provision to override a 
more specific one. Although the RFP requirements in Subpart 2 are more 
specific than those in Subpart 1, they do not expressly and 
unambiguously limit the crediting of reductions in the manner the 
commenter suggests. Because no provision speaks precisely to the 
relevant issue, EPA appropriately considered the RFP and creditability 
provisions (CAA section 182 (b)(1)(c)) as a whole to reach a reasonable 
reading of the statute.
---------------------------------------------------------------------------

    \10\ See 42 U.S.C. 7501 (stating that the ensuing definitions 
apply ``(f)or the purpose of this part'').
---------------------------------------------------------------------------

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the 
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and 
is therefore not subject to review under the Executive Order.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
However, the Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing regulations of the Phase 2 Rule published on November 29, 2005 
under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. and has assigned OMB control number 2060-0594. The Phase 2 Rule's 
information collection request (ICR) covered the RFP interpretation 
that is the subject of this final rule. The OMB control numbers for 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an Agency 
to prepare a regulatory flexibility analysis of any regulation subject 
to notice and comment rulemaking requirements under the Administrative 
Procedures Act or any other statute unless the Agency certifies the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this final rule on small 
entities, small entity is defined as: (1) A small business that is a 
small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards. (See 13 CFR 121.); (2) A 
governmental jurisdiction that is a government of a city, county, town, 
school district or special district with a population of less than 
50,000; and (3) A small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impact of this rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This rule 
will not directly impose any requirements on small entities. Rather 
this final rule interprets the RFP requirements under the SIP for 
states to submit RFP plans in order to attain the ozone NAAQS.

D. Unfunded Mandates Reform Act

    This action contains no federal mandate under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for state, local, or tribal governments or the private 
sector. This action imposes no enforceable duty on any state, local, 
and tribal governments or the private sector. Therefore, this action is 
not subject to the requirements of section 202 and 205 of the UMRA.
    This action is also not subject to the requirements of section 203 
of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. The CAA imposes the 
obligation for states to submit SIPs, including RFP, to implement the 
Ozone NAAQS. In this final rule, EPA is merely providing an 
interpretation of those requirements. However, even if this 
interpretation did establish an independent requirement for states to 
submit SIPs, it is questionable whether such a requirement would 
constitute a federal mandate in any case. The obligation for a state to 
submit a SIP that arises out of section 110 and section 172 (part D) of 
the CAA is not legally enforceable by a court of law, and at most is a 
condition for continued receipt of highway funds. Therefore, it is 
possible to view an action requiring such a submittal as not creating 
any enforceable duty within the meaning of section 21(5)(9a)(I) of UMRA 
(2 U.S.C. 658(a)(I)). Even if it did, the duty could be viewed as 
falling within the exception for a condition of federal assistance 
under section 21(5)(a)(i)(I) of UMRA (2 U.S.C. 658(5)(a)(i)(I)).
    The EPA has determined that this rule contains merely an 
interpretation of regulatory requirements and no regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments because these regulations 
affect federal agencies only.

[[Page 40082]]

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by state and local officials in the 
development of regulatory policies that have Federalism implications.'' 
Policies that have ``Federalism implications'' are defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government.''
    This final action does not have federalism implications. It will 
not have substantial direct effects on the states, on the relationship 
between the national government and the states, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This rule addresses the Court's 
vacatur and remand of a portion of the Phase 2 implementation rule for 
the 8-hour standard, namely an interpretation that allowed credit 
toward RFP for the 8-hour standard from emission reductions outside the 
nonattainment area. In addressing the vacatur and remand, this rule 
merely explains the requirements for RFP and does not impose any 
additional requirements. Thus, Executive Order 13132 does not apply to 
this rule.
    In the spirit of Executive Order 13121 and consistent with EPA 
policy to promote communications between EPA and state and local 
governments, EPA specifically solicited comments on the proposed rule 
from state and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This final rule does not have tribal implications as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). It does not have 
a substantial direct effect on one or more Indian tribes, since no 
tribe has to develop a SIP under this final rule. Furthermore, this 
final rule does not affect the relationship or distribution of power 
and responsibilities between the federal government and Indian tribes. 
The CAA and the Tribal Air Rule establish the relationship of the 
federal government and Tribes in developing plans to attain the NAAQS, 
and these revisions to the regulations do nothing to modify that 
relationship. Thus, Executive Order 13175 does not apply to this 
action.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    This final action is not subject to Executive Order 13045 because 
it is not economically significant as defined in Executive Order 12866 
and because EPA does not have reason to believe the environmental 
health or safety risk addressed by the 8-hour ozone RFP Regulations 
present a disproportionate risk to children. This final action 
addresses whether a SIP will adequately and timely achieve reasonable 
further progress to attain and maintain the NAAQS and meet the 
obligations of the CAA. The NAAQS are promulgated to protect the health 
and welfare of sensitive population, including children. However, EPA 
solicited comments on whether this action would result in an adverse 
environmental effect that would have a disproportionate effect on 
children.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28355 
(May 22, 2001)), because it is not a significant regulatory action 
under Executive Order 12866.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the Agency decides not to use 
available and applicable voluntary consensus standards.
    This action does not involved technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629, February 16, 1994) 
establishes federal executive policy on environmental justice. Its main 
provision directs federal agencies, to the greatest extent practicable 
and permitted by law, to make environmental justice part of their 
mission by identifying and addressing, as appropriate, 
disproportionately high and adverse human health or environmental 
effects of their programs, policies, and activities on minority 
populations and low-income populations in the United States.
    EPA has determined that this final rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it does not 
affect the level of protection provided to human health or the 
environment. This final action will address the Court's vacatur and 
remand of a portion of the Phase 2 implementation rule for the 8-hour 
standard, namely an interpretation that allowed credit toward RFP for 
the 8-hour standard from emission reductions outside the nonattainment 
area. This final action merely explains the requirements for RFP and 
does not impose any additional requirements.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective October 13, 2009.

L. Determination Under Section 307(d)

    Under section 307(b)(1) of the Act, judicial review of today's 
final action is available by filing of a petition for review in the 
U.S. Court of Appeals for the District of Columbia Circuit by October 
13, 2009. Any such judicial review is limited to only those objections 
that are raised with reasonable specificity in timely comments. Under 
section 307(b)(2) of the Act, the requirements of this final action may 
not be challenged later in civil or criminal proceedings brought by us 
to enforce these requirements.

[[Page 40083]]

List of Subjects

40 CFR Part 50

    Environmental protection, Air pollution control, Carbon monoxide, 
Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.

40 CFR Part 51

    Air pollution control, Intergovernmental relations, Ozone, 
Particulate matter, Transportation, Volatile organic compounds.

    Authority:  42 U.S.C. 7409; 42 U.S.C. 7410; 42 U.S.C. 7511-
7511f; 42 U.S.C. 7601(a)(1).

    Dated: August 4, 2009.
Lisa P. Jackson,
Administrator.
[FR Doc. E9-19190 Filed 8-10-09; 8:45 am]
BILLING CODE 6560-50-P
```