*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 1 of 40 6560-50-P ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 50 and 51 [EPA-HQ-OAR-2010-0885, FRL- ]

RIN 2060-AP24 Implementation of the 2008 National Ambient Air Qua lity Standards for Ozone: Nonattainment Area Classifications Approach, Attainment Deadlines and Revocation of the 1997 Ozone

Standards for Transportation Conformity Purposes AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: The EPA is proposing thresholds for classifying no nattainment areas for the 2008 ozone National Ambient Air Quality Standards (NAAQS) (the “2008 ozone NAAQS”) promulgated by the EPA on March 12, 2008. This proposal also addresses the timing of attainment dates for each classification. Finally, we are proposing to revoke the 1997 ozone NAAQS 1 year after the effective da te of designations for the 2008 ozone NAAQS for transp ortation conformity purposes only. DATES: Comments

. Comments must be received on or before [INSERT DATE 45 DAYS FROM DATE OF PUBLICATION IN THE FEDERAL REGISTER]

. Public Hearings

. One public hearing concerning the proposed regulati on will be held on January 13, 2012. Please refer to SUPPLEMENTARY INFORMATION for additional information on the comment period and the public hearing. ADDRESSES: Submit your comments, identified by Docket ID No. E PA-HQ-OAR-2010-0885, by one of the following methods:

• www.regulations.gov : Follow the on-line instructions for submitting co mments.

• Email : a-and-r-docket@epa.gov*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 2 of 40 • Mail : Air and Radiation Docket and Information Center, Attention Docket ID No. EPA-HQ-OAR2010-0885, Environmental Protection Agency, 1301 Co nstitution Ave., NW, Washington, D.C. 20460. Mail Code: 2822T. Please include two copies if possible. In addition, please mail a copy of your comments on the information collection provisi ons to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Att n: Desk Officer for EPA, 725 17th St. NW, Washington, D.C. 20503.

• Hand Delivery : Air and Radiation Docket and Information Center, Attention Docket ID No. EPAHQ-OAR-2010-0885, Environmental Protection Agency i n the EPA Headquarters Library, Room Number 3334 in the EPA West Building, located at 13 01 Constitution Ave., NW, Washington, D.C. The EPA/DC Public Reading Room is open from 8:30 a. m. to 4:30 p.m. Eastern Standard Time (EST), Monday through Friday, Air and Radiation Doc ket and Information Center. Instructions : Direct your comments to Docket ID No. EPA-HQ-OAR- 2010-0885. The EPA's policy is that all comments received will be includ ed in the public docket without change and may be made available on-line at www.regulations.gov , including any personal information provided, unle ss the comment includes information claimed to be confiden tial business information (CBI) or other information whose disclosure is restricted by statu te. Do not submit information that you consider to be CBI or otherwise protected through www.regulations. gov or email. The www.regulations.gov website is an “anonymous access” system, which means the EPA w ill not know your identity or contact information unless you provide it in the body of yo ur comment. If you send an email comment directly to the EPA without going through www.regulations.go v , your email address will be automatically captured and included as part of the comment that i s placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comme nt and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical diffi culties and cannot contact you for clarification, t he*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 3 of 40 EPA may not be able to consider your comment. Elect ronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about the EPA’s public docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm . For additional instructions on submitting comment s, go to the SUPPLEMENTARY INFORMATION section of this docum ent. Docket: All documents in the docket are listed in www.regu lations.gov . Although listed in the index, some information is not publicly available, i.e., C BI or other information whose disclosure is restric ted by statute. Certain other material, such as copyrig hted material, is not placed on the Internet and wi ll be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air and Radiation Docket an d Information Center in the EPA Headquarters Library, Room Number 3334 in the EPA West Building, located at 1301 Constitution Ave., NW, Washington, D.C. The Pu blic Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal h olidays. The telephone number for the Public Reading Room is (202) 566-1744. FOR FURTHER INFORMATION CONTACT : For further general information on this rulemakin g, contact Dr. Karl Pepple, Office of Air Quality Plan ning and Standards, U.S. Environmental Protection Agency (C539-01), Research Triangle Park, NC 27711, phone number (919) 54l-2683, fax number (919) 54l-0824 or by email at pepple.karl@epa.gov or Mr. Butch Stackhouse, Office of Air Quality Planning and Standards, U.S. Environmental Protecti on Agency (C539-01), Research Triangle Park, NC 27711, phone number (919) 54l-5208, fax number (919 ) 54l-0824 or by email at stackhouse.butch@epa.gov . For information on the public hearing or to regis ter to speak at the public hearing, contact Ms. Pamela S. Long at (919) 541–06 41 or by email at long.pam@epa.gov

. SUPPLEMENTARY INFORMATION: I. General Information*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 4 of 40 A. Does this action apply to me? Entities potentially affected directly by the propo sed rule for this action include state, local, and tribal governments. Entities potentially affected i ndirectly by the proposed rule include owners and operators of sources of emissions [volatile organic compounds (VOCs) and nitrogen oxides (NO x )] that contribute to ground-level ozone concentrations. B. What should I consider as I prepare my comments for EPA? 1. Submitting CBI. Do not submit this information to the EPA through www.regulations.gov or email. Clearly mark the part or all of the informat ion that you claim to be CBI. For CBI information i n a disk or CD ROM that you mail to the EPA, mark the o utside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM t he specific information that is claimed as CBI. In addition to one complete version of the comment tha t includes information claimed as CBI, a copy of the comment that does not contain the information c laimed to be CBI must be submitted for inclusion in the public docket. Information so marked will not b e disclosed except in accordance with procedures se t forth in 40 CFR part 2. 2. Tips for Preparing Your Comments . When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register

date and page number).

• Follow directions - The agency may ask you to respo nd to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternat ives and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 5 of 40 • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concer ns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment pe riod deadline identified. C. Where can I get a copy of this document and othe r related information? In addition to being available in the docket, an e lectronic copy of this notice will be posted at http://www.epa.gov/air/ozonepollution/actions.html# impl under “recent actions.” D. What should I know about the public hearing? The public hearing will be held on January 13, 201 2 at the [location] at [time.] It will convene at X:XX a.m. and end at X:XX.p.m. or until the last re gistered speaker has spoken. If you would like to speak at this public hearing, please contact Ms. Pa mela Long no later than 5:00 p.m. on January 11,
2012. The public hearing will provide interested parties the opportunity to present data, views, or arguments concerning the proposal. The EPA may ask clarifying questions during the oral presentations, but will not respond to the presentations at that t ime. Written statements and supporting information submitted during the comment period will be conside red with the same weight as any oral comments and supporting information presented at the public hearing. Written comments on the proposed rule must be postmarked by [INSERT DATE 45 DAYS FROM DATE OF PUBLICATION IN TH E FEDERAL REGISTER]

. Commenters should notify Ms. Long if they will need specific equipment, or if there are other special needs related to providing comments at the hearings. The EPA will provide equipment for commenters to show overhead slides or make computer ized slide presentations if we receive special*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 6 of 40 requests in advance. Oral testimony will be limited to 5 minutes for each commenter. The EPA encourages commenters to provide EPA with a copy of their oral testimony electronically (via email or CD) or in hard copy form. The hearing schedules, including lists of speakers, will be posted on the EPA’s website at http://www.epa.gov/air/ozonepollution/actions.html# impl. Verbatim transcripts of the hearings and written statements will be included in the docket f or the rulemaking. The EPA will make every effort to follow the schedu le as closely as possible on the day of the hearings; however, please plan for the hearing to r un either ahead of schedule or behind schedule. For updates and additional information on the public he aring, please check the EPA’s website for this rulemaking at http://www.epa.gov/ozonepollution/act ions.html

. E. How is this notice organized? The information presented in this notice is organiz ed as follows: I. General Information A. Does this action apply to me? B. What should I consider as I prepare my comments for EPA? C. Where can I get a copy of this document and other r elated information? D. What should I know about the public hearing? E. How is this notice organized? II. Background for Proposal A. Overview B. History of Nonattainment Area Classification System s for the Ozone NAAQS C. Initial Area Designations for the 2008 Ozone NAAQS D. Transportation Conformity and the 1997 Ozone NAAQS III. What are the proposed classification threshold s for nonattainment areas for the 2008 ozone NAAQS? A. Proposed Classification Thresholds B. Reclassification of Nonattainment Areas That Hav e Voluntarily Requested Higher Classifications C. What are we proposing as the attainment deadline s for nonattainment areas in each classification of the 2008 ozone NAAQS? IV. What is the EPA proposing regarding revocation of the 1997 ozone NAAQS at this time? A. What is the background for our proposal? B. What is the rationale for our proposal? C. Why is it necessary to revoke the 1997 ozone NA AQS now for transportation conformity purposes?*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 7 of 40 D. Is the EPA proposing to revoke the 1997 ozone N AAQS for other purposes as part of this rulemaking? V. What does this rulemaking not address? VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and R eview and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordina tion with Indian Tribal Governments G. Executive Order 13045: Protection of Children fr om Environmental Health and Safety Risks H. Executive Order 13211: Actions Concerning Regula tions That Significantly Affect Energy Supply, Distribution, or Use. I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Addres s Environmental Justice in Minority Populations and Low-Income Populations K. Determination under Section 307(d) VII. Statutory Authority
LIST OF SUBJECTS II. Background for Proposal A. Overview On March 12, 2008 1 , the EPA revised the primary National Ambient Air Quality Standards (NAAQS) for ozone to a level of 0.075 parts per mil lion (ppm) (annual fourth-highest daily maximum 8-hour concentration, averaged over 3 years). 2,3 On July 16, 2009, the EPA announced that it would initiate a rulemaking to reconsider the standard fo r various reasons, including the fact the 0.075 ppm level fell outside of the range recommended by the Clean Air Scientific Advisory Committee. Pending the outcome of that reconsideration, the EPA suspen ded further work on designating areas, including developing a classification approach for areas that would be designated nonattainment. In September 2011, the Office of Management and Budget (OMB) ret urned for further consideration the EPA’s draft

1 See 73 FR 16436. 2 The secondary ozone standard, designed to protect public welfare, was set at the same level and with the same averaging time as the primary standard. 3 For a detailed explanation of the calculation of t he 3-year 8-hour average, see 40 CFR part 50, Appendix I.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 8 of 40 rulemaking to reconsider the 2008 ozone NAAQS. 4 The current NAAQS for ozone thus remains at 0.075 ppm, as established in 2008. The 2008 NAAQS r etains the same general form and averaging time as the 0.08 ppm NAAQS set in 1997 but is set at a m ore stringent level. 5 While the 2008 NAAQS was being reconsidered, the EP A deferred initial designation of areas as attainment or nonattainment with respect to that st andard until March 12, 2011. 6 (See 75 FR 2936.) Since this deadline has passed and the EPA’s draft rulemaking to reconsider the 2008 ozone NAAQS has been returned by OMB for further consideration, the EPA is now proceeding with certain activities to implement the 2008 ozone NAAQS. In a separate ac tion, the EPA will propose a rule to address the steps states will take to implement the NAAQS and t he timing of those steps. In this action, we addres s the system for classifying nonattainment areas and a limited set of additional implementation issues. A key first step after promulgating a new or revise d NAAQS is for the EPA to issue initial area designations. Following the schedule provided in Cl ean Air Act (CAA) section 107(d), states were required to submit designation recommendations for every area of each state to the EPA by March 12, 2009, which was 1 year after the promulgation date of the 2008 ozone NAAQS. The EPA has received these recommendations and intends to proceed with t he designations process based on these recommendations. In accordance with CAA section 181(a)(1), the class ification for each ozone nonattainment area will be established by operation of law at the same time as the area is designated by the EPA. Therefo re, the EPA intends to finalize classification threshol ds on or before the date that initial area designat ions are issued by the Administrator.

4 Memorandum from Cass R. Sunstein to Administrator Lisa Jackson, dated September 2, 2011. 5 Note that the 2008 NAAQS is based on a different r ounding convention than the 1997 NAAQS. 6 The 2008 ozone NAAQS was promulgated on March 12, 2008. By the 2-year designation requirement found in CAA §107(d)(1), the deadline for designati ng areas was March 12, 2010. The EPA determined that due to the reconsideration there was insuffici ent information to designate areas, and invoked the additional year for designations as allowed under C AA §107(d)(1)(B).*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 9 of 40 Under Subpart 2 of part D of title I of the CAA, s tate planning and emissions control requirements for ozone are determined, in part, by a nonattainment area’s classification. In 1990, Congress amended part D of title I of the CAA by ad ding several new subparts, including subpart 2, which specifies implementation requirements for ozo ne nonattainment areas. These requirements apply in addition to the general State Implementation Pla n (SIP) planning requirements applicable to all nonattainment areas under subpart 1 of part D. Unde r subpart 2, ozone nonattainment areas are classifi ed based on the severity of their ozone levels (as det ermined based on the area’s “design value,” which represents the most recent 3-year average of the ai r quality in the area) 7 . Nonattainment areas with a “lower” classification have ozone levels that are c loser to the standard than areas with a “higher” classification. The subpart 2 classification sectio n provides an increasing amount of time from the da te of designation to attain the standards for the prog ressively higher classifications: Marginal (3 years ), Moderate (6 years), Serious (9 years), Severe-15 (1 5 years), Severe-17 (17 years), and Extreme (20 years). Areas in the lower classification levels have fewer and/or less stringent mandatory air quality planning and control requirements than those in hig her classifications. For instance, Marginal areas a re exempt from the requirement to prepare an attainmen t demonstration and associated contingency measures, although such areas are required to adopt an emissions statement rule for stationary sources , submit a baseline emissions inventory, and implemen t a nonattainment area preconstruction permit program. A Moderate area needs to comply with the M arginal area requirements; in addition the state must submit a demonstration that the area will atta in within 6 years after designation, and it must ad opt (and submit for EPA approval) certain emissions con trol requirements, such as reasonably available control technology, a basic vehicle inspection and maintenance program if the area meets the applicabl e

7 The air quality design value for the 8-hour O3 NAA QS is the 3-year average of the annual 4th highest daily maximum 8-hour average ozone concentrations.”*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 10 of 40 population thresholds, and provisions for increased offsets for new or modified sources under the stat e’s new source review (NSR) program. The higher classif ications similarly require additional emissions controls and stricter NSR offset requirements beyon d those required for a Moderate area. In addition, under the higher classifications, smaller sources a re considered “major sources” for permitting and ot her requirements. B. History of Nonattainment Area Classification Sys tems for the Ozone NAAQS The CAA was amended in 1990 to add specific provis ions that apply to ozone nonattainment areas. These include timelines for both planning an d implementation, and requirements for specific programs to reduce emissions that vary based on an area’s classification. The ozone standard that was in effect at the time of the 1990 CAA amendments was a 1-hour exceedance-based standard of 0.12 ppm. 8 Accordingly, the classification provisions in Table 1 in section 181 of subpart 2 of the CAA (also referred to herein as the “subpart 2 classification table”) are specific to that 1-hour standard. In 1 997, the EPA revised both the form and level of the ozone NA AQS to a 3-year average of daily maximum 8-hour
averages. 9 In a subsequent rulemaking, the EPA adapted the CA A’s 1-hour classification thresholds to the new 8-hour standard 10 and used the new 8-hour threshold values to classi fy certain areas designated nonattainment for the 1997 8-hour NAAQS. This appro ach for translating the CAA’s 1-hour threshold values to 8-hour threshold values was challenged in litigation and was upheld by the court. See South Coast Air Quality Management District v. Environmen tal Protection Agenc y, 472 F.3d at 896-898. C. Initial Area Designations for the 2008 Ozone NAA QS Under CAA §107(d), initial area designations are required when a NAAQS is revised. The process involves interaction between the EPA and st ates, starting with states preparing recommendation s and submitting them to the EPA for review. If the E PA intends to modify a state’s recommendation, the

8 For additional detail on the 1-hour ozone NAAQS, s ee 56 FR 56694. 9 See 40 CFR Appendix I. 10 Referred to as the Phase 1 Rule, see 40 CFR Part 51, Subpart X at 51.903.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 11 of 40 EPA must notify the state of such modification by l etter no later than 120 days (“120 day letters”) pr ior to making a final decision. 11 For the 2008 ozone NAAQS, most states submitted de signation recommendations to the EPA as required under sectio n 107(d) in March 2009, 1 year after the 2008 NAAQS was promulgated. States also had the opportun ity to update these recommendations in the fall of 2011, based on ambient air quality monitoring da ta for the years 2008-2010, which were (and still are) the most recent monitoring data available. The EPA plans to consider the state recommendation s received in 2009 and any updates provided by the states based on current monitoring data in deciding whether to modify any recommendations. In the event that the EPA intends to modify a state’s recommendation, the EPA will notify the state 120 days prior to issuing designat ions. The EPA’s goal is to finalize designations by mid-2012. D. Transportation Conformity and the 1997 Ozone NAA QS In this rulemaking, the EPA is proposing to revoke the 1997 ozone NAAQS for transportation conformity purposes only. The revocation of the 199 7 ozone standard for this limited purpose would occur 1 year after the effective date of initial ar ea designations for the 2008 ozone NAAQS. We believ e this approach is the most logical because it would result in only one ozone NAAQS – the more protective 2008 ozone NAAQS – applying for purposes of transportation conformity, after the end of the 1-year transportation conformity grace period that applies to newly designated nonattainment areas (se e CAA section 176(c)(6)). If the 1997 ozone NAAQS wer e to remain in place after conformity applies for the 2008 ozone NAAQS, areas currently in nonattainm ent or maintenance for the 1997 ozone NAAQS that are designated nonattainment for the 2008 ozon e NAAQS would be required to implement the

11 While CAA section 107, which governs the process f or initial area designations, specifically addresse s states, the EPA intends to follow the same process for tribes to the extent practicable, pursuant to s ection 301(d) of the CAA regarding tribal authority and th e Tribal Authority Rule (63 FR 7254; February 12, 1998). The EPA is working with the tribes and triba l organizations regarding their participation in th e designations process.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 12 of 40 transportation conformity program for both ozone NA AQS concurrently. The EPA is proposing to revoke the 1997 ozone NAAQS for purposes of transpo rtation conformity in an attempt to avoid this overlap of NAAQS for conformity requirements. The E PA intends to discuss potential revocation of the 1997 NAAQS for other purposes in a future, separate rulemaking. III. What are the proposed classification threshold s for nonattainment areas for the 2008 ozone NAAQS? A. Proposed Classification Thresholds 1. Background The subpart 2 classification table includes the c lassification thresholds for areas designated as nonattainment for the 1-hour ozone NAAQS. The subpa rt 2 classification table is based on 1-hour ozone nonattainment area design values (DVs) (i.e., begin ning at a level of 0.121 ppm) because it was design ed for implementation of the 0.12 ppm 1-hour standard, which was the effective ozone standard when Congress added the table to the CAA in 1990. Becaus e the table is based on DVs for a 0.12 ppm 1-hour standard, we recognized in the rulemaking to implem ent the 1997 NAAQS that it did not make sense to apply the thresholds listed in the table for implem enting the 1997 0.08 ppm 8-hour standard. The EPA believed that using 8-hour DVs to classify areas fo r the 8-hour standard would reflect the magnitude o f the 8-hour ozone problem more accurately than would using the 1-hour DVs in the subpart 2 classification table. In addition, many of the area s that were nonattainment for the 1997 8-hour NAAQS had 1-hour DVs less than 0.121 ppm and would not ha ve been covered by the subpart 2 classification table at all. We adopted by regulation a modified version of the subpart 2 classification table for the 1997 8- hour ozone standard which contains 8-hour DV thresh olds for each classification, rather than the statutory 1-hour DV thresholds. We translated the c lassification thresholds in the subpart 2 classific ation table from 1-hour DVs to 8-hour DVs based on the pe rcentage by which each classification threshold in*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 13 of 40 the table exceeds the 1-hour ozone NAAQS. We noted that these percentages, as established by Congress in 1990, set the classification thresholds at certain percentages or fractions above the leve l of the standard. 12 We refer to this method as the “percent-above-the- standard” method. We are proposing to take the same approach for the 2008 ozone NAAQS. As we did for the 1997 8-hour NAAQS, we are proposing to establish by regulation a modified ver sion of this classification table to account for th e new level of 0.075 ppm as compared to the level of 0.08 ppm used to establish the classification table for the 1997 ozone NAAQS. As we did for the 1997 NAAQS, the EPA analyzed vari ous alternative options for establishing thresholds for classifications for the 2008 ozone N AAQS. However, we are proposing to use the same “percent-above-the-standard” methodology as was use d for the 1997 ozone standard. 13 Options that were evaluated other than the one we are proposing are discussed briefly below and described in more detail in a background information document 14 in the docket to this rulemaking. The percent-above-the-standard method is a simple a nd straightforward method for establishing classification thresholds that is based on principl es inherent in the subpart 2 classification table i tself. The principles include the following:

• Areas are grouped by the severity of their air qual ity problem as characterized by the degree of nonattainment based on their DV.

• Classification would occur “by operation of law” wi thout relying on EPA exercising discretion for individual situations (prior to any application of the 5 percent adjustment provision under section

12 The upper thresholds of the Marginal, Moderate, Se rious, and Severe classifications are precise percentages or fractions above the level of the sta ndard, namely 15 percent (3/20ths more than the standard), 33.33 percent (one-third more than the s tandard), 50 percent (one-half more than the standard), and 133.3 percent (one and one-third mor e than the standard). 13 Background Information Document: Hypothetical Nona ttainment Areas for Purposes of Understanding the EPA Proposed Rule for Implementin g a 2008 8-Hour Ozone National Ambient Air Quality Standard--Illustrative Analysis Based on 20 10 Design Values. December 2011. 14 Background Information Document: Additional Option s Considered for Classification of Nonattainment Areas under the 2008 Ozone NAAQS. Dec ember 2011.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 14 of 40 181(a)(4)). See section III.B of this rule for additional details on how EPA intends to address previous requests for voluntary bump-ups for the 19 97 ozone NAAQS.

• Classification thresholds are derived from the stru cture or logic of the CAA’s nonattainment area planning and control requirements, including the su bpart 2 classification table, and consistent with the overall goal of subpart 2 of attaining the stan dards as expeditiously as practicable. 2. Proposed Classification Threshold Method – Perc ent-Above-the-Standard Method In this section, we describe the EPA’s proposed me thodology for establishing classification thresholds for purposes of classifying ozone nonatt ainment areas with respect to the 2008 ozone NAAQS. Using this approach for the 2008 NAAQS, the classification thresholds in the subpart 2 classification table would be translated into a cor responding set of 8-hour DVs by setting threshold D Vs in the new table at the same percentages above the 2008 ozone NAAQS as the DV levels in the subpart 2 classification table are above the 1-hour ozone N AAQS. For example, the threshold separating the Marginal and Moderate classifications in the subpar t 2 classification table (0.138 ppm) is 15 percent above the 1-hour ozone NAAQS (0.12 ppm). Thus, unde r this approach, the threshold separating the Marginal and Moderate classifications for the 2008 ozone NAAQS would be 0.075 ppm plus 15 percent, or 0.086 ppm. Table 1, below, depicts this proposed translation for classifications as it would apply for the 2008 ozone NAAQS.

TABLE 1 SUBPART 2 1-HOUR OZONE DESIGN VALUE CLASSIFICATION TABLE TRANSLATION TO 8-HOUR DESIGN VALUES FOR THE 2008 OZ ONE NAAQS of 0.075 PPM Area class 1-hour design value (ppm) Percent above 1-hour

ozone NAAQS 8-hr ozone design value (ppm) Marginal From 0.121 0.833 0.076

up to 1 0.138 15 0.086 Moderate From 0.138 15 0.086*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 15 of 40 up to 1 0.160 33.333 0.100 Serious From 0.160 33.333 0.100

up to 1 0.180 50 0.113 Severe-15 From 0.180 50 0.113

up to 1 0.190 58.333 0.119 Severe-17 From 0.190 58.333 0.119

up to 1 0.280 133.333 0.175 Extreme equal to

or above 0.280 133.333 0.175

Note 1: But not including. Based on our analysis of air quality information f rom 2008-2010, we estimate that approximately 52 areas had ambient ozone concentrations exceeding the 2008 ozone NAAQS. We use these 52 “hypothetical nonattainment areas” for purposes of the following discussion. 15 These hypothetical areas are intended to illustrate the distribution of area s into the proposed classifications. The actual num ber of total nonattainment areas and the classification of each area will depend on decisions made in the separate designations process under section 107(d). If we were to use the proposed thresholds in Table 1, above, as the basis for classifying nonattainment a reas with respect to the 2008 ozone NAAQS, the 52 hypothetical nonattainment areas based on 2008-2010 air quality data would be distributed in each classification as shown in Table 2.
TABLE 2 NUMBER OF HYPOTHETICAL NONATTAINMENT AREAS IN EACH CLASSIFICATION UNDER THE 2008 OZONE NAAQS: PERCENT-ABOVE-THE-STAND ARD METHOD Classification 2008 O3 NAAQS (hypothetical areas)

15 Background Information Document: Hypothetical Non attainment Areas for Purposes of Understanding The EPA Proposed Rule for Implementin g a 2008 8-Hour Ozone National Ambient Air Quality Standard--Illustrative Analysis Based on 20 10 Design Values. December 2011. Most hypothetical nonattainment areas include multiple c ounties, based on the existing 1997 8-hour ozone nonattainment areas, Combined Statistical Area, or Core Based Statistical Area boundary associated with a violating monitor. Note that these areas are used for analytical purposes only. Actual nonattainment areas and boundaries will be determin ed through the designations process.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 16 of 40 Marginal 43 Moderate 6 Serious 3 Severe 0 Extreme 0 Total 52

The proposed classification method would result in the vast majority of nonattainment areas being classified as Marginal. It is possible that a few areas would have a later maximum statutory attainment date for their existing classification u nder the 1997 ozone NAAQS than they would have for their new classification under the 2008 NAAQS. For example, an area that would be classified Marginal for the more stringent 2008 ozone NAAQS (with an an ticipated maximum statutory attainment date in 2015), may have been classified as Severe for the l ess-stringent 1997 ozone NAAQS (with a later maximum statutory attainment date in 2019). 16 This issue did not arise when we promulgated the classification structure for the 1997 NAAQS. (See section III.B of this rule for additional details on how EPA intends to address previous requests for volunt ary bump-ups for the 1997 ozone NAAQS.) Many Marginal areas are expected to attain the 2008 NAAQS within 3 years of designation (e.g., in 2015) due to reductions of ozone precursors resu lting from a number of federal and state emission reduction programs that have already been adopted. Such programs include more stringent emission standards for onroad and nonroad vehicles and equip ment (with associated fleet turnover), regional reductions in power plant emissions to address inte rstate transport, 17 and potential future programs such as the boiler maximum achievable control technology standards. The EPA estimates that in about half of the Marginal areas, these reductions in conjunction with other ongoing state and federal controls shou ld

16 As indicated elsewhere in this preamble, the EPA i ntends to designate areas for the 2008 standard by mid-2012. Thus, a 3-year attainment deadline would be in 2015. 17 Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals. August 8, 2011; 76 FR 48208.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 17 of 40 be sufficient to bring about attainment. 18 In other areas, additional control measures may be needed for timely attainment. 3. Other Classification Methods Considered A number of interested parties have recommended to the EPA other options for classification of ozone nonattainment areas. The EPA evaluated many o ther methods but we are not proposing them or soliciting comment on them because we did not find them as compelling as the option discussed in this proposal. We have included in the docket all writte n recommendations we have received in recent years regarding classification approaches. Other options that we considered but are not proposing are also summarized in the docket. 19
B. Reclassification of Nonattainment Areas that Hav e Voluntarily Requested Higher Classifications The CAA provides three mechanisms for addressing no nattainment areas that may not be able to attain by the attainment date provided for their cl assification. First, section 181(a)(4) provides tha t within 90 days of designation and classification, t he Administrator may exercise discretion to reclass ify an area to a higher (or lower) classification if it s DV is within 5 percent of the DV range of the hig her (or lower) classification. 20 Any state interested in taking advantage of this f lexibility should submit a request to the EPA in sufficient time for the Admin istrator to make a determination within the 90 days provided. The second mechanism, provided in section 181(b)(2) , requires that an area be reclassified to the next higher classification (i.e., “bumped-up”) if E PA determines that the area has failed to attain th e

18 [Add footnote with EPA’s analysis citation] 19 Additional Options Considered for Classification o f Nonattainment Areas under the Proposed 2008 Ozone NAAQS. U.S. Environmental Protection Agency, Office of Air Quality Planning and Standards. Research Triangle Park, NC. December 2011[verify fu ture date]. 20 This CAA provision also provides the same authorit y for reclassifying areas to a lower classification , an approach that may not be relevant where the area in question is unlikely to attain by the attainmen t date for the classification it receives at the time of designation.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 18 of 40 standard by the attainment date and does not qualif y for the first of two possible 1-year attainment d ate extensions allowed under the CAA (excluding Severe to Extreme reclassification). The third mechanism, provided in section 181(b)(3), allows a state to voluntarily request that the EPA reclassify the area to a higher classification. The EPA has no discretion to deny such requests. Once an area is reclassified to a higher classifica tion, it becomes subject to the associated addition al planning and control requirements for that higher c lassification as well and must attain the standard no later than the later maximum attainment date for th at classification. There are seven areas for which states requested a voluntary reclassification with respect to the 1997 NAAQS. If these areas were classified based on 2008-1010 air quality data and pursuant to the classification structure proposed here, it is likel y that they would have a lower classification and a n earlier maximum attainment date for the 2008 NAAQS than such areas have for the 1997 ozone NAAQS. EPA has granted voluntary reclassification r equests for six of these areas; the request for one area is still pending. 21 These areas are shown in Table 3.
Table 3 Areas for which the State Requested a Voluntary Rec lassification Under the 1997 NAAQS
Nonattainment Area State Original 1997 NAAQS Classification Voluntary

Reclassification Potential

Classification Under 2008 NAAQS 1 Los Angeles-South Coast Air Basin CA Severe Extreme Serious San Joaquin Valley CA Serious Extreme SeriousHouston-GalvestonBrazoria TX Moderate Severe Marginal Riverside County (Coachella Valley) CA Serious Severe Moderate Sacramento Metro CA Serious Severe Serious

21 Ventura County, CA was reclassified from Moderate to Serious (Approved 05/20/2008, 73 FR Page 29073, Effective: 06/19/2008). Houston-Galveston-Br azoria, TX was reclassified from Moderate to Severe-15 (Approved 10/01/2008, 73 FR Page 56983, E ffective: 10/31/2008). Reclassification of the Los Angeles-South Coast, San Joaquin Valley, River side County, and Sacramento Metro areas (May 5, 2010, 75 FR 24409) became effective June 4, 2010. W est Mojave Desert, CA requested voluntary reclassification from Moderate to Severe-17 that is still pending with the EPA.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 19 of 40 Ventura County CA Moderate Serious Moderate Western Mojave 2 CA Moderate Severe Moderate Note 1: Based on thresholds proposed in this notice and 2008-2010 design values. Note 2: This request for a bump-up is still pending

. The EPA is proposing that the approved prior volunt ary reclassification requests for the 1997 ozone NAAQS would also apply for the more stringent 2008 ozone NAAQS unless the state explicitly requests otherwise. We believe this is an appropriate mechan ism to address the limited situation where an area that was voluntarily reclassified for the 1997 ozon e NAAQS would have an attainment date for the more stringent 2008 ozone NAAQS that is earlier than the area’s attainment date for the less stringent 1997 NAAQS. Based on discussions with states, we also be lieve it is reasonable to expect that most, if not all, of the areas that requested a voluntary reclassific ation under the less stringent 1997 NAAQS would make the same request for the 2008 NAAQS. The EPA i s proposing this approach in order to minimize burden on states and obviate the need to go through the voluntary reclassification process again. C. What are we proposing as the attainment deadline s for nonattainment areas in each classification of the 2008 ozone NAAQS? 1. Background The CAA provides that the primary NAAQS attainment dates for areas subject to subpart 2 must be as expeditious as practicable but no later than the deadlines provided in the subpart 2 classificat ion table. The deadlines for attainment in the subpart 2 classification table are specified in terms of a certain number of years from the date of enactment of the 1 990 Amendments to the CAA (i.e., November 15, 1990). For instance, the attainment date for Modera te areas is expressed as “6 years after November 15 , 1990.” Because these time periods are clearly inapp ropriate for a new standard promulgated in 2008, we must interpret the attainment deadlines in the subp art 2 classification table as they would apply to t he 2008 NAAQS.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 20 of 40 In the Phase 1 rule for implementation of the 1997 ozone NAAQS, 22 we interpreted these timeframes to run from the date that area designati ons and nonattainment classifications (by operation of law) became effective. We explained in the proposed and final rules for implementation of the 1997 ozone NAAQS that it was reasonable for these dates to run from the date of designation because other provisions of the CAA established the attainment da te as a set period of time after designation. See 69 FR 23966-67; 68 FR 32817. As discussed below, we ar e proposing this same approach for the 2008 NAAQS and also proposing an alternate approach wher e the attainment dates would be at the end of the calendar year. We are proposing an alternate approa ch because we anticipate that designations for the 2008 NAAQS will be effective some time after the st art of the 2012 ozone season 23 for most areas and possibly well into the summer. As explained in more detail below, the alternative approach would allow Marginal areas 3 full years to attain, Moderate are as 6 full years to attain, etc. 2. Proposal The EPA is proposing two options for establishing t he maximum attainment dates for areas in each nonattainment classification. Under the first option, the attainment dates would be the precise number of years specified in Table 1 with such time period running from the effective date of designation. Under the second option, the attainmen t dates would be December 31 of the year that is th e specified number of years in Table 1 after designat ion. In order to fully evaluate the two options, we note that the EPA intends to complete initial area designations for the 2008 ozone NAAQS no later than May 31, 2012. We anticipate the designations will b e effective 60 days following publication in the Federal Register

and that it will take approximately 2 weeks for th e designations notice to be published. Under this scenario, designations would be effectiv e by approximately mid-August 2012.

22 69 FR 23951 23 The ozone season for each state is defined in 40 C FR part 58, Appendix D, and, for most areas, runs from April to October. See also the July 16, 2009, Proposed Monitoring Rule ( 74 FR 34525).*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 21 of 40 For the first option, we are proposing that the dea dlines in the subpart 2 classification table would be specified in terms of a certain number of years from the effective date of designation for th e 2008 standard. This is the same approach we took fo r the 1997 NAAQS. In this case, we would interpret “year” in the subpart 2 classification table to mea n consecutive 365-day periods, 24 and we would substitute “after the effective date of designation ” for the CAA’s “after November 15, 1990” language in the subpart 2 classification table. Under this appr oach the attainment deadline would fall a precise number of years after the effective date of designa tion. As an example, if the Administrator issued designations for the 2008 NAAQS on May 31, 2012, an d the designations became effective on August 15, 2012, the attainment dates would run from Augus t 15, 2012, such that a Marginal area would be required to attain the 2008 ozone standard by Augus t 15, 2015. For the second and the EPA’s preferred option, the attainment date would be specified as a certain number of years from the end of the calenda r year in which an area’s nonattainment designation is effective. In other words, if the effective dat e of designations for the 2008 ozone NAAQS is Augus t 15, 2012, the 3-year attainment deadline for Margin al areas would be December 31, 2015. We are proposing this option as our preferred optio n for the 2008 ozone NAAQS because, as explained above, we believe it is likely that desig nations will be effective in August 2012, which is late in the ozone season. Where the designation is effec tive late in the ozone season, under the first opti on a Marginal area effectively would have only two ozone seasons following designation to improve its air quality in order to attain by its attainment date. This is because compliance with the standard is bas ed on air quality during the most recent three full conse cutive ozone seasons, and the most recent 3 full oz one seasons preceding the attainment deadline in this c ase would run through the end of the previous year’ s ozone season. Because attainment is based on three full ozone seasons of air quality data, in order to attain “by” its attainment date, the area could not consider air quality for an ozone season during wh ich

24 Except in the case of a leap year, where the year would be a rolling 366 day period.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 22 of 40 the attainment date falls. For example, in the case of the 1997 ozone NAAQS, designations became effective on June 15, 2004 and areas had an attainm ent date of June 15 of the year falling 3, 6, etc. years after designation. Thus, in order for a Marginal ar ea to attain by June 15, 2007, it could not conside r air quality data from the 2007 ozone season, but instea d was required to demonstrate attainment based on the 3 years of air quality data from 2004-2006. In this situation, the area’s attainment date effectiv ely was December 31, 2006. Because we anticipate designations will be effectiv e late in the ozone season for the 2008 NAAQS, we are concerned that if a Marginal area is required to attain in August 2015, the area would effectively have only two ozone seasons (the 2013 a nd 2014 ozone seasons) from the date of designation to improve its air quality for the purpose of showi ng attainment. Accordingly, the state would need to both plan for and achieve all emission reductions n ecessary for the area to attain by the beginning of the 2014 ozone season, so that those reductions would b e reflected in the air quality data considered for determining whether the area attained by its attain ment date (i.e., attainment would be based on air quality data from 2012-2014). Similarly, a Moderate area would need to implement measures to attain by the beginning of the 2017 ozone season in order for those reductions to be reflected in the air qua lity data considered for purposes of determining whether the area attained (data from 2015-2017) by August
2018. We believe this second option is consistent with t he time periods provided for attainment of the 1-hour ozone NAAQS at the time the CAA was amended. The CAA Amendments were enacted on November 15, 1990, after the end of the ozone seaso n for virtually all areas, and for the few areas th at had year-round ozone seasons, EPA interpreted the A ct to allow consideration of air quality in the attainment year even though the attainment date fel l on November 15. Thus, when the CAA was amended in mid-November 1990, 1-hour Marginal areas had three full ozone seasons to achieve any reductions necessary for attainment, and Moderate a reas had six full ozone seasons, because the*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 23 of 40 attainment deadline was the anniversary of the enac tment of the 1990 CAA (November 15). Thus we believe this approach reasonably reflects Congressi onal intent by providing areas the full period specified in Table 1 to achieve reductions necessar y for attainment. Table 4 summarizes for each proposed option how we would interpret the maximum attainment dates for areas in each classification under the 2008 NAAQS, using an example where the ef fective date of designations is August 15, 2012.
TABLE 4 EXAMPLE OF PROPOSED ATTAINMENT DATES FOR THE 2008 S TANDARD IF NONATTAINMENT DESIGNATIONS ARE EFFECTIVE August 15, 2012 Classification Option 1 Option 2 Marginal August 15, 2015 December 31, 2015 Moderate August 15, 2018 December 31, 2018 Serious August 15, 2021 December 31, 2021 Severe August 15, 2027 or 2029 December 31, 2027 o r 2029 Extreme August 15, 2032 December 31, 2032

IV. What is the EPA proposing regarding revocation of the 1997 ozone NAAQS at this time? At this time, the EPA is proposing to revoke the 19 97 ozone NAAQS 1 year after the effective date of designations for the 2008 ozone NAAQS for t ransportation conformity purposes only. 25 Revoking the 1997 ozone NAAQS for transportation co nformity purposes, as described below, will bring certainty to the transportation planning proc ess in ozone nonattainment and maintenance areas. I t will also ensure that backsliding does not occur fo r purposes of transportation conformity as areas

25 Transportation conformity is required under CAA se ction 176(c) to ensure that transportation plans, transportation improvement programs (TIPs) and fede rally supported highway and transit projects are consistent with (“conform to”) the purpose of the S IP. Conformity to the purpose of the SIP means that transportation activities will not cause new air qu ality violations, worsen existing violations, or de lay timely attainment of the relevant NAAQS or interim reductions and milestones. The EPA’s Transportation Conformity Rule (40 CFR 51.390 and P art 93, subpart A) establishes the criteria and procedures for determining whether transportation a ctivities conform to the SIP.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 24 of 40 designated nonattainment for the 2008 ozone NAAQS w ill be required to use adequate or approved SIP motor vehicle emissions budgets for the 1997 ozone NAAQS or 1-hour ozone NAAQS, if the area has such SIP budgets for one of these ozone NAAQS, unti l SIP budgets are found adequate or are approved for the 2008 ozone NAAQS as required by recent cour t decisions discussed below and as required by CAA 176(c)(1). 26 Specifically, CAA section 176(c)(1) states, in par t, “No metropolitan planning organization designated under section 134 of Title 23 shall give its approval to any project, program, or plan which does not conform to an implementation pl an approved or promulgated under section 7410 of this title.” In other words, adequate or approved m otor vehicle emissions budgets for a prior NAAQS must be used in transportation conformity determina tions for a revised NAAQS until such time that budgets for the revised NAAQS are either found adeq uate or are approved. The EPA is proposing this limited revocation of the 1997 ozone NAAQS at this time to provide certainty to the transportation planning process. In a subsequent rulemaking, the E PA will consider whether to also revoke the 1997 NAAQS for other purposes. A. What is the background for our proposal? At the time the EPA promulgated the 2008 NAAQS, th e Administrator determined that the 1997 ozone NAAQS was no longer sufficient to protect pub lic health and the environment with an adequate margin of safety and that it was therefore necessar y to establish a more stringent standard. 73 FR 16 436 (Mar. 27, 2008). In determining how to transition f rom the 1997 NAAQS to the more stringent 2008 NAAQS, the EPA is now presented with the same situa tion that we faced with the transition from the 1- hour ozone NAAQS to the more stringent 1997 ozone N AAQS. For that transition, our Phase 1

26 A motor vehicle emissions budget is that portion of the total allowable emissions de fined in the submitted or approved control strategy implementati on plan revision or maintenance plan for a certain date for the purpose of meeting reasonable further progress milestones or demonstrating attainment or maintenance of the NAAQS, for any criteria pollutan t or its precursors, allocated to highway and trans it vehicle use and emissions.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 25 of 40 implementation rule for the 1997 ozone NAAQS revoke d the 1-hour ozone NAAQS for all purposes 1 year after the effective date of the initial area d esignations for the 1997 ozone NAAQS. (See 69 FR 23954). The Phase 1 rule also established comprehen sive anti-backsliding provisions to ensure that requirements for the 1-hour ozone NAAQS would conti nue in place as areas transitioned to implementing the more stringent 1997 ozone standard

. The revocation of the 1-hour standard and the assoc iated anti-backsliding provisions were the subject of litigation. In its December 2006 decisio n on that challenge, as modified following rehearin g, the Court held with respect to the anti-backsliding approach for transportation conformity, that 1-hou r motor vehicle emissions budgets must be used where such budgets have been found adequate or approved, as part of 8-hour conformity determinatio ns until 8-hour motor vehicle emissions budgets are available. (South Coast Air Quality Management Dist rict v. EPA , XX F.3d at YYY). In addition, the Court affirmed more broadly that in order for trans portation conformity determinations to fulfill the requirements of CAA section 176(c)(1), motor vehicl e emissions budgets for a prior NAAQS must be used in transportation conformity determinations un der a revised NAAQS until emissions budgets for the revised NAAQS are either found adequate or are approved. Therefore, areas designated nonattainment for the 2008 ozone NAAQS that have ad equate or approved SIP budgets for either the 1997 ozone NAAQS or the 1-hour ozone NAAQS must con tinue to use such budgets in transportation conformity determinations until budgets for the 200 8 ozone NAAQS are found adequate or are approved. 27 B. What is the rationale for our proposal? At this time, we are proposing to revoke the 1997 o zone NAAQS for transportation conformity purposes only. The revocation of the 1997 ozone NAA QS for this limited purpose would occur 1 year

27 Areas without adequate or approved SIP budgets for either the 1997 ozone NAAQS or the 1-hour ozone NAAQS are required to demonstrate conformity using one or both of the interim emissions tests depending on their classification as required by 40 CFR 93.119.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 26 of 40 after the effective date of initial area designatio ns for the 2008 ozone NAAQS. Similar to our rationa le in the Phase 1 rule for implementation of the 1997 ozone NAAQS, we believe this approach makes the most sense because it would result in only one ozon e NAAQS – the 2008 ozone NAAQS – applying for purposes of transportation conformity, after the en d of the one-year transportation conformity grace period that applies to newly designated nonattainme nt areas. (CAA section 176(c)(6)). If the 1997 ozon e NAAQS were to remain in place after conformity appl ies for the 2008 ozone NAAQS, metropolitan planning organizations and other state, local, and federal transportation and air quality agencies in areas that are currently nonattainment or maintenance for the 1997 ozone NAAQS and will be designated nonattainment for the 2008 ozone NAAQS would be req uired to implement the transportation conformity program for both ozone NAAQS concurrentl y. This could lead to unnecessary complexity for conformity determinations, especially if an are a’s boundaries for the two ozone NAAQS differ from one another and the same test of conformity cannot be used for both ozone NAAQS. Even where an area’s boundaries are unchanged, different analysis years under the conformity rules may be required f or each ozone NAAQS. Furthermore, we believe that it i s more important to determine conformity for the new 2008 ozone NAAQS that is more protective of hea lth and welfare. For transportation conformity purposes, this propos al would provide a seamless transition from demonstrating conformity for the 1997 ozone NAAQS t o demonstrating conformity for the 2008 ozone NAAQS. Revoking the 1997 ozone NAAQS 1 year after t he effective date of designations for the limited purpose of transportation conformity would leave no gap in conformity’s application in any 200 8 ozone nonattainment areas. C. Why is it necessary to revoke the 1997 ozone NA AQS now for transportation conformity purposes? The EPA has determined that it is necessary to esta blish the date for the revocation of the 1997 ozone NAAQS as it applies for transportation confor mity purposes now in order to provide state and local transportation and air quality agencies with certainty as to what conformity requirements will a pply*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 27 of 40 after designations are finalized for the 2008 ozone NAAQS. Areas designated nonattainment for the 2008 ozone NAAQS will have 1 year after the effecti ve date of the designation to complete a conformity determination for the 2008 ozone NAAQS. If an area does not complete the required conformity determination by the end of the 1-year grace period , the area will enter a conformity lapse until the required determination is completed. 28 Based on 2008 – 2010 air quality monitoring data, and as discussed elsewhere in today’s notice, we anticipat e that 52 areas would be designated as nonattainmen t areas and 44 of these areas are either nonattainmen t or maintenance for the 1997 ozone NAAQS. Areas designated nonattainment for the 2008 NAAQS will li kely need the full 1-year grace period provided in CAA section 176(c)(6) to complete the required init ial conformity determination. Those areas that are designated as either nonattainment or maintenance f or the 1997 ozone NAAQS at the time they are designated as nonattainment for the 2008 ozone NAAQ S, will need certainty as to the specific requirements for that conformity determination. For example they need to know what analysis years must be addressed and, if the boundaries for the tw o ozone NAAQS are different, they need to know whether to address conformity for both areas and wh ich test or tests would apply. By determining conformity for the 2008 standard, wh ich is the more health and welfare protective standard, the EPA is both:

• Fulfilling the CAA’s requirements for transportatio n conformity which include preventing new air quality violations, not making existing violati ons worse and not delaying any interim milestones; and

• making the most efficient use of state and local r esources in fulfilling those requirements. In addition, a large number of areas that are curre ntly required to determine conformity for the 1997 ozone NAAQS are attaining the 2008 ozone NAAQS based on 2008-2010 air quality data. If these

28 During a lapse, an area can proceed with only a li mited amount of transportation projects including projects that are exempt from conformity, projects and project phases that had previously been approve d and transportation control measures included in an approved SIP.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 28 of 40 areas are designated as attainment areas for the 20 08 ozone NAAQS they would not be required to demonstrate conformity for either the 1997 ozone NA AQS, as of the effective date of the revocation of the 2008 ozone NAAQS. These areas would no longer h ave to expend resources to make conformity determinations for the 1997 ozone NAAQS. D. Is the EPA proposing to revoke the 1997 ozone N AAQS for other purposes as part of this rulemaking? As part of this rule, the EPA is not proposing to revoke the 1997 ozone NAAQS for purposes other than transportation conformity. Because of th e necessity to quickly finalize a rule addressing nonattainment area classifications, we are not incl uding a broad proposal here regarding revocation of the 1997 NAAQS and how anti-backsliding requirement s might apply if the 1997 standard is revoked for purposes other than transportation conformity. We are developing a separate proposed rule that wil l address those issues and we expect to issue that pr oposed rule in the spring of 2012. We plan to addre ss any comments on the issue of revocation and anti-ba cksliding for all requirements other than transportation conformity in the context of that fu ture, separate rulemaking. V. What does this rulemaking not address? This proposed rulemaking does not propose to estab lish attainment or nonattainment designations for specific areas nor does it address the principles that will be considered in the designation process. Because the designations are n ot the subject of this proposed rule, we do not int end to respond to comments concerning designations in t he context of this rulemaking. In addition, this proposed rule does not address an y specific SIP requirements associated with different classification categories. This proposed rule also does not address revocation of the 1997 o zone NAAQS for purposes other than transportation confor mity. Similarly, anti-backsliding issues are not addressed in this rule. The remaining implementatio n requirements for the 2008 NAAQS will be*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 29 of 40 addressed in a separate rulemaking. We do not inten d to respond in the context of this rulemaking to comments pertaining to implementation issues that w ill be addressed by a future rulemaking. VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and R eview and Executive Order 13563: Improving Regulation and Regulatory Review Under Executive Order 12866 (58 FR 51735, October 4 , 1993), this action is a “significant regulatory action” because it raises novel legal or policy issues arising out of legal mandates. Accordingly, EPA submitted this action to OMB for r eview under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act This action does not impose an information collect ion burden under the provisions of the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . Burden is defined at 5 CFR 1320.3(b). The EPA is proposing this Classifications Rule for the 2008 ozone NAAQS so that areas may be classified by operation of law at the time of desig nation as provided in section 181(a) of the CAA. Th is proposed rule would also revoke the 1997 ozone NAAQ S for transportation conformity purposes only. The EPA is proposing this limited revocation in ord er to bring certainty to the transportation conform ity process consistent with prior court decisions and C AA section 176(c). This rule, in conjunction with another implementation rule we plan to propose in t he future will help states identify planning requirements that apply for purposes of attaining a nd maintaining the 2008 ozone NAAQS. No new information needs to be collected from the states a s a result of this proposed rule. C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) generally requ ires an agency to prepare a regulatory flexibility analysis of any regulation subject to n otice and comment rulemaking requirements under the*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 30 of 40 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 governme ntal jurisdictions. For purposes of assessing the impacts of these prop osed regulations on small entities, small entity is defined as: (1) a small business as defin ed in the Small Business Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small governme ntal jurisdiction that is a government of a city, county, town, school district or special district w ith a population of less than 50,000; and (3) a sma ll organization that is any not-for-profit enterprise which is independently owned and operated and is no t dominant in its field. The CAA requires the EPA to designate areas and pro vides for nonattainment areas to be classified by operation of law at the time of desig nation. This rule provides a method for establishin g these classifications and interpreting the associat ed attainment deadlines. The CAA also requires that nonattainment and maintenance areas make transporta tion conformity determinations. This rule proposes to revoke the 1997 ozone NAAQS 1 year afte r the effective date of designations so that areas designated nonattainment for the 2008 ozone NAAQS a re required to address conformity requirements for only the more protective 2008 ozone NAAQS. After considering the economic impacts of this prop osed rule on small entities, the EPA certifies that this action will not have a significant econom ic impact on a substantial number of small entities

. This proposed rule will not impose any requirements on small entities. We continue to be interested in the potential impac ts of the proposed rule on small entities and welcome comments on issues related to such impacts. D. Unfunded Mandates Reform Act This action contains no federal mandate under the p rovisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1 538 for state, local, and tribal governments, in*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 31 of 40 the aggregate, or the private sector. This action i mposes no enforceable duty on any state, local or t ribal governments or the private sector. Therefore, this action is not subject to the requirements of sectio n 202 and 205 of the UMRA. This action is not subject to the requirements of s ection 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the nationa l government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The requirement to designate and classify no nattainment areas is imposed by the CAA as are the requirements for nonattainment and maintenance area s to make transportation conformity determinations. This proposed rule, if made final, would interpret how the classification provisions i n section 181(a) will apply for purposes of the 2008 8-hour ozone NAAQS that was finalized on March 27, 2008. (See 73 FR 16436 ]. It also proposes to revoke the 1997 ozone NAAQS 1 year after the effective date of designations for the 2008 ozone N AAQS for transportation conformity purposes only. Thus, Executive Order 13132 does not apply to these proposed regulations. Although this action does not have federalism impli cations as defined in Executive Order 13132, the EPA recognizes that the adoption in 2008 of the more health-protective ozone standards will result in additional effort by state agencies responsible for managing air quality programs. Under the CAA, achieving these health benefits requires the combin ed efforts of the federal, state, and local governments, each accomplishing the tasks for which they are best suited. In the spirit of Executive Order 13121 and consistent with EPA policy to promo te communications between the EPA and state and local governments, the EPA is soliciting commen ts on this proposal from state and local officials. F. Executive Order 13175: Consultation and Coordina tion with Indian Tribal Governments*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 32 of 40 This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). The proposed rules do not have a substantial direct effect on one or more Indian tribes, since no tribe has to develop classi fication recommendations under these proposed regulatory revisions. This proposal revokes the 199 7 ozone NAAQS for transportation and does not significantly or uniquely affect the communities of Indian tribal governments, as the CAA requires transportation conformity to apply in any area that is designated nonattainment or maintenance by the EPA. Furthermore, these proposed regulation revisio ns do not affect the relationship or distribution o f power and responsibilities between the federal gove rnment 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 no thing to modify that relationship. These proposed regulations revisions do not have tribal implicatio ns. Thus, Executive Order 13175 does not apply to t his action. The EPA specifically solicits additional comment o n this proposed action from tribal officials. G. Executive Order 13045: Protection of Children fr om Environmental Health and Safety Risks The EPA interprets Executive Order 13045 (62 FR 198 85, April 23, 1997) as applying only to those regulatory actions that concern health or saf ety risks, such that the analysis required under se ction 5-501 of the Executive Order has the potential to i nfluence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. H. Executive Order 13211: Actions Concerning Regula tions That Significantly Affect Energy Supply, Distribution, or Use This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply,*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 33 of 40 distribution, or use of energy. This action would e stablish classifications for areas that do not atta in the 2008 ozone standard. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer A dvancement Act of 1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The voluntary consensus stan dards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopt ed by voluntary consensus standards bodies. NTTAA dire cts EPA to provide Congress, through OMB, explanations when the agency decides not to use ava ilable and applicable voluntary consensus standards

. These proposed revisions to the regulations do not involve technical standards. Therefore, the EPA is not considering the use of any voluntary con sensus standards. J. Executive Order 12898: Federal Actions to Addres s Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs f ederal agencies, to the greatest extent practicable and permitted by law, to make environmental justice par t of their mission by identifying and addressing, a s appropriate, disproportionately high and adverse hu man health or environmental effects of their programs, policies, and activities on minority popu lations and low-income populations in the United
States. The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on mi nority or low-income populations because it does not affect the level of protection provided to huma n health or the environment. The proposed regulatio ns would, if promulgated, establish classification thr esholds for designated nonattainment areas for the*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 34 of 40 2008 ozone NAAQS, which are designed to protect all segments of the general populations. As such, they do not adversely affect the health or safety o f minority or low-income populations and are design ed to protect and enhance the health and safety of the se and other populations. Today’s action also propo ses to revoke the 1997 ozone NAAQS for transportation c onformity purposes only. Such a revocation would not lead to disproportionately high and adverse hum an health or environmental effects on minority or low-income populations as the CAA requires transpor tation conformity to apply in any area that is designated nonattainment or maintenance by the EPA. This proposed rule ensures that transportation conformity is demonstrated in all areas that are de signated nonattainment for the more protective 2008 ozone NAAQS. K. Determination Under Section 307(d) Pursuant to sections 307(d)(1)(E) and 307(d)(1)(V) of the CAA, the Administrator proposes to determine that this action is subject to the provis ions of section 307(d). Section 307(d)(1)(V) provid es that the provisions of section 307(d) apply to “suc h other actions as the Administrator may determine. ” VII. Statutory Authority The statutory authority for this action is provided by sections 110; 176; 181; and 301(a)(1) of the CAA, as amended (42 U.S.C. 7409; 42 U.S.C. 7506; 42 U.S.C. 7511; 42 U.S.C. 7601(a)(1)). This notice is also subject to section 307(d) of the CAA (42 U. S.C. 7407(d)).*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 35 of 40 Page 35 of 40- Implementation of the 2008 National Ambient Air Quality Standards for Ozone: Nonattainment Area Classifications Approach, Attain ment Deadlines and Revocation of the 1997 Ozone Standards for Transportation Conformity Purpo ses

LIST OF SUBJECTS 40 CFR Part 50 Environmental protection, Air pollution control, C arbon 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.

________________________________ Dated:

________________________________ Lisa P. Jackson, Administrator.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 36 of 40 For the reasons stated in the preamble, Title 40, C hapter I of the Code of Federal Regulations is proposed to be amended as follows: Part 50–National Primary and Secondary Ambient

Air Quality Standards 1. The authority citation for Part 50 continues to read as follows: Authority: 42 U.S.C. 7401, et seq. 2. Section 50.10 is amended by adding a paragraph ( c) to read as follows: §50.10 National 8-hour primary and secondary ambien t air quality standards for ozone

. (c) The 1997 ozone NAAQS set forth in paragraph (a) of this section will no longer apply to an area fo r transportation conformity purposes 1 year after the effective date of the designation of the area for the 2008 ozone NAAQS pursuant to section 107 of the CAA . The 1997 ozone NAAQS set forth in this section will continue to remain applicable to all a reas for all other purposes notwithstanding the promulgation of the 2008 ozone NAAQS under §50.15 o r the designation of areas for the 2008 ozone NAAQS. Area designations and classifications with r espect to the 1997 ozone NAAQS are codified in 40 CFR part 81.

Part 51–Requirements for Preparation, Adoption, and Submittal of Implementation Plans 3. The authority citation for Part 51 continues to read as follows: Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q.

* * * * * 4. Part 51 is amended by adding a new subpart AA to read as follows: Subpart AA–Provisions for Implementation of the 200 8 Ozone National Ambient Air Quality Standards*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 37 of 40 Sec. 51.1100 Definitions. 51.1101 Applicability of Part 51. 51.1102 Classification and nonattainment area plan ning provisions. 51.1103 Application of classification and attainme nt date provisions in section 181 of subpart 2 of t he CAA to areas subject to §51.1102(a).

Subpart AA–Provisions for Implementation of the 200 8 Ozone National Ambient Air Quality Standards. §51.1100 Definitions. The following definitions apply for purposes of thi s subpart. Any term not defined herein shall have t he meaning as defined in 40 CFR 51.100. (a) 1-hour NAAQS means the 1-hour primary and secondary ozone natio nal ambient air quality standards codified at 40 CFR 50.9. (b) 1997 NAAQS means the 8-hour primary and secondary ozone natio nal ambient air quality standards codified at 40 CFR 50.10. (c) 2008 NAAQS means the 2008 primary and secondary ozone NAAQS c odified at 40 CFR 50.15. (d) 1-hour ozone design value is the 1-hour ozone concentration calculated accor ding to 40 CFR part 50, Appendix H and the interpretation methodology i ssued by the Administrator most recently before the date of the enactment of the CAA Amendments of 1990. (e) 8-hour ozone design value is the 8-hour ozone concentration calculated accor ding to 40 CFR part 50, Appendix P. (f) CAA means the Clean Air Act as codified at 42 U.S.C. 7 401 - 7671q (2010).*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 38 of 40 (g) Attainment area

means, unless otherwise indicated, an area designa ted as either attainment, unclassifiable, or attainment/unclassifiable. (h) Attainment year ozone season shall mean the ozone season immediately preceding a nonattainment area’s maximum attainment date. (i) Designation for the 2008 NAAQS shall mean the effective date of the designation f or an area for the 2008 NAAQS. (j) Higher classification/lower classification . For purposes of determining whether a classificat ion is higher or lower, classifications under subpart 2 ar e ranked from lowest to highest as follows: Margina l; Moderate; Serious; Severe; and Extreme. (k) Initially designated means the first designation that becomes effective for an area for the 2008 NAAQS and does not include a redesignation to attai nment or nonattainment for the 2008 NAAQS. (l) Maintenance area

means an area that was designated nonattainment fo r a specific NAAQS and was redesignated to attainment for that NAAQS subject t o a maintenance plan as required by CAA section 175A. (m) Nitrogen Oxides (NO x ) means the sum of nitric oxide and nitrogen dioxide in the flue gas or emission point, collectively expressed as nitrogen dioxide. (n) Ozone season means for each state, the ozone monitoring season as defined in 40 CFR Part 58, Appendix D, section 2.5 for that state.

§51.1101 Applicability of Part 51. The provisions in subparts A-X of part 51 apply to areas for purposes of the 2008 NAAQS to the extent they are not inconsistent with the provisions of th is subpart.*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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Page 39 of 40 §51.1102 Classification. An area designated nonattainment for the 2008 NAAQS will be classified in accordance with CAA section 181, as interpreted in §51.1103(a), and wil l be subject to the requirements of subpart 2 that apply for that classification.

§51.1103 Application of classification and attainm ent date provisions in CAA section 181 of subpart 2 to areas subject to §51.1102. (a) In accordance with CAA section 181(a)(1), each area designated nonattainment for the 2008 ozone NAAQS shall be classified by operation of law at t he time of designation. The classification shall be based on the 8-hour design value for the area at th e time of designation, in accordance with Table 1 below. A state may request a higher or lower classi fication as provided in paragraphs (b) and (c) of t his section. For each area classified under this sectio n, the attainment date for the 2008 NAAQS shall be as expeditious as practicable but not later than the d ate provided in Table 1 as follows:*** E.O. 12866 review – Draft – Do Not Cite, Quote, or Release During Review ***

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40 TABLE 1 CLASSIFICATION FOR 2008 8-HOUR OZONE NAAQS (0.075 ppm)

FOR AREAS SUBJECT TO SECTION 51.1102(a) Area class 8- hour design value (ppm ozone) Primary Standard Attainment Date

(years after designation for 2008 primary NAAQS)** Marginal from 0.076 3

up to* 0.086 Moderate from 0.086 6

up to* 0.100 Serious from 0.100 9

up to* 0.113 Severe-15 from 0.113 15

up to* 0.119 Severe-17 from 0.119 17

up to* 0.175 Extreme equal to or

above 0.175 20 * but not including ** The attainment date is [Option 1: the date that is the specified number of years after the effective date of designations for the primary NAAQS.Option 2: December 31 of the calendar year]

(b) A state may request, and the Administrator must approve, a higher classification for any reason in accordance with CAA section 181(b)(3). (c) A state may request, and the Administrator may in the Administrator’s discretion approve, a higher or lower classification in accordance with C AA section 181(a)(4). (d) Any area designated nonattainment that includes in whole or in part the following areas will be classified by operation of law for the 2008 ozon e NAAQS in accordance with the voluntary classification request submitted for each area for the 1997 ozone NAAQS, unless the state submits a letter to EPA requesting otherwise: Ventu ra Co, CA; Houston-Galveston-Brazoria, TX; Los Angeles-South Coast, CA; San Joaquin Valley , CA; Riverside County, CA; and Sacramento Metro, CA.