[Federal Register Volume 62, Number 215 (Thursday, November 6, 1997)]
[Rules and Regulations]
[Pages 60001-60013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29396]


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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[AZ-001-BU; FRL-5917-4]


Clean Air Act Reclassification; Arizona-Phoenix Nonattainment 
Area; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: EPA is finding that the Phoenix nonattainment area (Maricopa

[[Page 60002]]

County, Arizona) has not attained the 1-hour ozone national ambient air 
quality standard (NAAQS) by the applicable attainment date in the Clean 
Air Act (CAA) for moderate ozone nonattainment areas, November 15, 
1996. EPA is also denying Arizona's application for a one-year 
extension of the November 15, 1996 attainment date for the Phoenix 
area. The finding and denial are based on EPA's review of monitored air 
quality data from 1994 through 1996 for compliance with the 1-hour 
ozone NAAQS. As a result of the finding and denial, the Phoenix ozone 
nonattainment area will be reclassified by operation of law as a 
serious ozone nonattainment area on the effective date of this action. 
The effect of the reclassification will be to continue progress toward 
attainment of the 1-hour ozone NAAQS through the development of a new 
State implementation plan (SIP), due 12 months from the effective date 
of this action, addressing attainment of that standard by November 15, 
1999.

EFFECTIVE DATE: December 8, 1997.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, Office of Air 
Planning, AIR-2, Air Division, U.S. Environmental Protection Agency, 
Region 9, 75 Hawthorne Street, San Francisco, California 94105, (415) 
744-1248.

SUPPLEMENTARY INFORMATION:

I. Background

    Under sections 107(d)(1)(C) and 181(a) of the Clean Air Act (CAA), 
the Phoenix metropolitan area was designated nonattainment for the 1-
hour ozone NAAQS and classified as ``moderate.'' See 56 FR 56694 
(November 6, 1991). Moderate nonattainment areas were required to show 
attainment by November 15, 1996. CAA section 181(a)(1).
    Pursuant to section 181(b)(2)(A) of the CAA, EPA has the 
responsibility for determining, within six months of an area's 
applicable attainment date, whether the area has attained the 1-hour 
ozone NAAQS. <SUP>1</SUP> Under section 181(b)(2)(A), if EPA finds that 
an area has not attained the 1-hour ozone NAAQS, it is reclassified by 
operation of law to the higher of the next higher classification or to 
the classification applicable to the area's design value at the time of 
the finding. CAA section 181(b)(2)(B) of the Act requires EPA to 
publish a notice in the Federal Register identifying areas which failed 
to attain the standard and therefore must be reclassified by operation 
of law.
---------------------------------------------------------------------------

    \1\ On July 18, 1997 (62 FR 38856), EPA revised the ozone NAAQS 
to establish a 8-hour standard; however, in order to ensure an 
effective transition to the new 8-hour standard, EPA also retained 
the 1-hour NAAQS for an area until such time as it determines that 
the area meets the 1-hour standard. See revised 40 CFR 50.9 at 62 FR 
38894. As a result of retaining the 1-hour standard, CAA part D, 
subpart 2, Additional Provisions for Ozone Nonattainment Areas, 
including the reclassification provisions of section 181(b), remain 
applicable to areas that are not attaining the 1-hour standard. 
Unless otherwise indicated, all references in this notice are to the 
1-hour ozone NAAQS.
---------------------------------------------------------------------------

    If a state does not have the clean data necessary to show 
attainment of the NAAQS, it may apply, under CAA section 181(a)(5) of 
the CAA, for a one-year attainment date extension. Issuance of an 
extension is discretionary, but EPA can exercise that discretion only 
if the state has: (1) complied with the requirements and commitments 
pertaining to the applicable implementation plan for the area, and (2) 
the area has measured no more than one exceedance of the ozone NAAQS at 
any monitoring site in the nonattainment area in the year preceding the 
extension year.
    A complete discussion of the statutory provisions and EPA policies 
governing findings of whether an area failed to attain the ozone NAAQS 
and extensions of the attainment date can be found in the proposal for 
this action at 62 FR 46229 (September 2, 1997).

II. Proposed Action

    On September 2, 1997, EPA proposed to find that the Phoenix ozone 
nonattainment area failed to attain the 1-hour ozone NAAQS by the 
applicable attainment date. 62 FR 46229. The proposed finding was based 
upon ambient air quality data from the years 1994, 1995, and 1996. 
These data showed that the 1-hour ozone NAAQS of 0.12 parts per million 
had been exceeded on average more than one day per year over this 
three-year period. Attainment of the 1-hour NAAQS is demonstrated when 
an area averages one or less days per year over the standard during a 
three-year period. 40 CFR 50.9 and Appendix H. EPA also proposed that 
the appropriate reclassification of the area was to serious, based on 
the area's 1994-1996 design value of 0.132 ppm. For a complete 
discussion of the Phoenix ozone data and method of calculating both the 
average number of days over the ozone standard and the design value, 
see 62 FR 46230.
    EPA also proposed to deny the State of Arizona's application for a 
one-year extension of the moderate area ozone attainment date for the 
Phoenix nonattainment area. The proposed denial was based, in part, on 
evidence that the Phoenix area is not close to attainment of the 1-hour 
ozone standard and will need additional controls to attain, and, in 
part, on the area's failure to meet the second statutory criterion for 
granting an extension. That criterion requires that the area have no 
more than one exceedance of the ozone NAAQS in 1996. CAA section 
181(a)(5)(B). The Fountain Hills special purpose monitor in the eastern 
part of the Phoenix nonattainment area recorded 4 exceedances of the 1-
hour ozone NAAQS in 1996. For a complete discussion of the basis for 
the proposed denial of the extension, including EPA's policies related 
to the use of special purpose monitoring data, see 62 FR 46231.
    Finally, EPA proposed to require submittal of the serious area SIP 
revisions no later than 12 months from the effective date of the area's 
reclassification.

III. Response to Comments

    EPA received twenty-one comment letters in response to its 
September 2, 1997 proposal. Comments were received from Arizona 
Governor Jane Dee Hull, the Arizona legislative leadership, U.S. 
Senator Jon Kyl and U.S. Representative John Shadegg, the Arizona 
Department of Environmental Quality (ADEQ), the Maricopa County 
Environmental Services Department (MCESD), several local elected 
officials, numerous business groups, and one environmental group.
    EPA wishes to express its appreciation to each of these individuals 
and organizations for taking the time to comment on the proposal. Each 
raised important issues to which EPA welcomes the opportunity to 
respond.
    As described above, EPA's proposal was composed of three elements: 
(1) a finding of failure to attain by the statutory deadline of 
November 15, 1996; (2) a denial of the State's application for a one-
year extension of the attainment date; and (3) a 12-month schedule for 
submittal of the revised SIP.
    Most commenters emphasized Arizona's leadership in the development 
and implementation of effective ozone controls (many of which are only 
mandated for serious or severe ozone nonattainment areas) and its 
demonstrated commitment to making real improvements in air quality. 
Among the controls cited are: the State's premier vehicle emissions 
inspection program (which includes the only regulatory use of remote 
sensing), Maricopa County's Travel Reduction Program, the extension of 
the Federal Reformulated Gasoline (RFG) program to the Phoenix area, 
the State's adoption

[[Page 60003]]

of its own, more stringent ``Clean Burning Gasoline'' program as well 
as numerous other control programs such as the voluntary lawnmower 
replacement program, mandatory conversion of government fleets to 
alternative fuels, and incentives for conversion of private fleets to 
alternative fuels and for the construction of public fueling 
facilities. The City of Phoenix also listed a number of innovative air 
quality measures that it has implemented, and finally, APS noted the 
voluntary efforts of business and community groups including the 
Business for Clean Air Challenge program.
    EPA is very aware of Arizona's leadership and noted the State's 
dedicated efforts to adopt and implement controls to attain the ozone 
standard in its proposal. See 62 FR 46232. The Agency would like to 
make clear that in taking this action it is neither ignoring Arizona's 
exemplary efforts to adopt controls to improve its air quality nor 
minimizing Arizona's commitment to clean air. Both are evidenced by the 
numerous controls listed above and the State's continuing efforts to 
evaluate its ozone situation.
    As stated above, neither the determination of attainment/
nonattainment nor the determination of whether an area met the 
statutory extension criterion relating to exceedances of the ozone 
NAAQS in 1996 allows for reviewing an area's efforts to adopt controls. 
This exercise involves little more than a rote review of available 
ambient air quality data. While EPA may desire more flexibility in this 
situation to reward Arizona for its demonstrated leadership, the Agency 
has not been granted that flexibility under the Clean Air Act.
    For the most part, commenters made similar, and frequently 
identical, comments. The issues raised relate principally to (1) the 
adverse impacts of the reclassification to serious, (2) the retention 
of the 1-hour ozone NAAQS in EPA's recent action revising the ozone 
NAAQS, (3) the denial of the request for a one-year attainment date 
extension, (4) EPA's compliance with the Regulatory Flexibility Act, 
and (5) proposed measures to mitigate the impact of the 
reclassification. Many of the comments received did not directly 
address EPA's proposals and instead focused on issues that have been 
the subject of earlier EPA rulemakings (e.g., retention of 1-hour ozone 
standard), outside of EPA's regulatory authority in this action (e.g., 
the reclassification to serious), or unrelated to the action (e.g., 
approval of Arizona's excess emissions rule).
    In this preamble, EPA is responding to the most significant 
comments received and has provided more detailed and complete answers 
to all comments received in the Response to Comments (RTC) document 
which is part of the technical support document (TSD) for this 
rulemaking. Copies of the TSD as well as other documents in the docket 
for this rulemaking may be obtained from the contact listed at the 
beginning of this notice.

A. Comments Related to the Proposed Finding of Failure to Attain 
Comment

    ADEQ and others note that Arizona has implemented most of the 
mandatory control programs for both serious and severe ozone 
nonattainment areas and the only remaining requirements are for more 
stringent new source review (NSR) and the federal clean fleets program. 
Because the imposition of these serious area requirements will do 
little to improve air quality in the Phoenix metropolitan area, the 
commenters contend that the reclassification is effectively punitive.
    Response: Serious ozone nonattainment areas (like all other 
classifications) are subject to both specific requirements for 
mandatory control programs and more general requirements for attainment 
and reasonable further progress. EPA agrees that the Maricopa area 
already has in place most of the mandatory control programs required 
for serious area. The State, however, has yet to address the 
requirements for attainment by 1999 in CAA section 181(c)(2)(A) or the 
9 percent rate-of-progress requirement in section 181(c)(2)(B). Both 
these requirements are very likely to require measures beyond the 
specific control programs mandated by a serious area classification, 
resulting in improved air quality for the Phoenix area.
    The classification structure of the Act is a clear statement of 
Congress's belief that the later attainment deadlines afforded higher-
classified and reclassified areas require compensating increases in the 
stringency of controls. The reclassification provisions of the Clean 
Air Act are a reasonable mechanism to assure continued progress toward 
attainment of the health-based ambient air quality standards when areas 
miss their attainment deadlines and are not punitive.
    Comment: ADEQ, MCESD, and others asserted that the schedules for 
planning and attainment under a reclassification almost certainly 
guarantee failure because it would be difficult to complete the needed 
technical analysis within the proposed 12-month SIP submittal schedule 
and then to implement any additional controls needed before the 1999 
ozone season.
    Response: EPA agrees that the short time available for planning and 
attainment between the moderate area deadline of November 15, 1996 and 
the serious area deadline of November 15, 1999 makes completing the 
required technical analysis and adopting additional controls difficult. 
The State, however, has already adopted or is in the process of 
adopting a number of controls that will contribute substantial emission 
reductions in 1997 or beyond. These controls include the federal 
reformulated gasoline program for 1997, Arizona's Clean Burning 
Gasoline program for 1998 and later, improvements to the vehicle 
emission inspection program, and an industrial solvent cleaning rule 
(currently schedule for adoption in early 1998). In addition, ADEQ 
continues to evaluate and refine the Urban Airshed modeling performed 
for the draft Voluntary Early Ozone Plan (VEOP). All these actions give 
Arizona a head start in meeting the serious area requirements.
    In proposing a 12-month schedule for submittal of the revised plan, 
EPA understood that this was an ambitious schedule but stated that it 
believed ``a 12-month schedule is appropriate because the attainment 
date for serious areas, November 15, 1999, is little more than 2 years 
away and the State will need to expedite adoption and implementation of 
controls to meet that deadline.'' See 62 FR 42633. EPA is therefore 
retaining the 12-month schedule for submittal of the SIP revisions 
needed to meet the serious area requirements.
    Comment: Commenters argue that because stationary sources are not 
the cause of the ozone problem in Phoenix, the more stringent new 
source review (NSR) requirements that come with the serious area 
classification will do little to improve the air quality and are thus 
merely punitive.
    Response: Phoenix is not being singled out for more stringent NSR 
requirements than any other similarly-classified area in the Country 
such as Atlanta, Washington, D.C. and San Diego. The more stringent NSR 
provisions (which principally affect which sources are subject to major 
source NSR) are required by statute of all serious areas without 
exception. This tightening of control requirements as areas move up the 
classification ladder and are given more time to attain is part of the 
basic Clean Air Act scheme for ozone attainment. In establishing this 
scheme, Congress determined that the more stringent NSR provision were 
reasonable for serious areas and, since

[[Page 60004]]

Congress did not provide relief from these requirements for 
reclassified areas, it also determined that they were reasonable 
without exception for moderate areas being reclassified to serious.

B. Comments Related to Retention of the 1-Hour Ozone Standard Comment

    A number of comments were received on the legality of EPA's 
decision, having promulgated an 8-hour NAAQS, to defer revocation of 
the 1-hour ozone NAAQS.
    Response: The continued applicability of the 1-hour standard until 
EPA determines that the applicable area is meeting that standard is not 
the subject of this rulemaking. This rulemaking only concerns the 
finding that the Phoenix area failed to attain the 1-hour standard and 
the denial of the State's request for an extension of the attainment 
deadline for that standard. The issue of the continued applicability of 
the 1-hour standard was part of the rulemaking in which EPA promulgated 
an 8-hour ozone standard. 62 FR 38856 (July 18, 1997). That rulemaking 
proceeding, not this one concerning Phoenix, was the appropriate forum 
in which to raise issues concerning the continued applicability of the 
1-hour standard.

C. Comments Related to the Proposal to Deny Arizona's Application for a 
One-Year Extension of the Attainment Date

    Almost all comments received opposed EPA's proposed denial of the 
State's application for a one-year extension of the November 15, 1996 
attainment date. Before responding to the specific comments raised with 
regard to this issue, some introductory remarks are in order. In 
general, the commenters misperceive the nature of section 181(a)(5) of 
the CAA that provides:

    Upon application of any State, the Administrator may extend for 
1 additional year (hereinafter referred to as the ``Extension 
Year'') the [attainment deadline] if--
    (A) the State has complied with all requirements and commitments 
pertaining to the area in the applicable implementation plan, and
    (B) no more than 1 exceedance of the national ambient air 
quality standard level for ozone has occurred in the area in the 
year preceding the Extension Year.
    No more than 2 one-year extensions may be issued under this 
paragraph for a single nonattainment area. Emphasis added.

    Many commenters erroneously assume that if the conditions in 
subparagraphs A and B above are met, then EPA must automatically grant 
the extension. However, by its terms, section 181(a)(5) is ultimately 
discretionary. See 62 FR 46230. While EPA cannot grant an extension 
request if the conditions are not met, it is not required to do so even 
if they are.
    While EPA believes, as discussed at length below, that the second 
condition has not been met, the Agency has ample justification for 
denying the request even if that were not the case. In its proposal, 
EPA articulated two reasons to deny the extension request. The first--
the failure to meet the second extension criterion--will be discussed 
further below. The second--that the Phoenix area was not close to 
attainment--went virtually unaddressed by most the commenters. As EPA 
stated in its notice:

[T]he underlying premise of an extension is that an area is close to 
attainment and already has in place the control strategy needed for 
attainment. All evidence in front of the Agency indicates that the 
Phoenix area is not close to attainment of the 1-hour ozone standard 
and that, despite the State's dedicated efforts to adopt and 
implement controls, the area will need to continue its on going 
planning and control efforts. Thus, even if the Phoenix area met the 
statutory requirements for granting an extension, EPA believes that 
such an extension would not be appropriate at this time. Emphasis 
added. 62 FR 46232.

    While several commenters questioned EPA's conclusion that the 
Phoenix area was not close to attainment, their comments (which are 
addressed later) did not persuade EPA that its conclusion was wrong. In 
fact, an equal number of commenters tacitly agreed with EPA's position 
by arguing the need for long-term measures to solve Phoenix's ozone 
problem and the impossibility of showing attainment by 1999.
    The central thrust of the comments EPA received on the extension 
issue is that EPA improperly included data from special purpose 
monitors (SPMs) <SUP>2</SUP> in its calculation of whether the Phoenix 
area experienced no more than one exceedance of the ozone NAAQS in 
1996, the year preceding the extension year, and had EPA properly 
excluded the data, then the Phoenix area would have been granted an 
extension. For the reasons discussed below, EPA believes that it was 
entitled to rely on that data in making this assessment. However, even 
if the SPM data were excluded from the calculation, the Agency believes 
that it can properly exercise its discretion to deny the State's 
extension request.
---------------------------------------------------------------------------

    \2\ In the Phoenix area, MCESD operates eight ozone monitors in 
its official or state or local air monitoring station/national air 
monitoring station (SLAMS/NAMS) network. ADEQ and MCESD operate a 
total of nine ozone special purpose monitors in the area.
---------------------------------------------------------------------------

    As documented below and in Appendix B to the TSD, since at least 
1989, Arizona has maintained an inadequate official monitoring network 
and has consistently declined to convert the SPMs (which meet all of 
EPA's technical criteria) to cure those deficiencies. If it had to rely 
solely on this inadequate monitoring network, it would be impossible 
for EPA to determine whether the Phoenix area had one or fewer 
exceedances of the ozone standard in 1996 because the official network 
does not adequately represent Phoenix's air quality. Only when the data 
from the SPMs are combined with those of the official network is it 
possible to make this determination and with the SPM data it is clear 
that the Phoenix area is not close to attaining the ozone 1-hour NAAQS. 
Modeling conducted by the State confirms this conclusion. Thus the 
underlying intent of the statute's extension provision has not been 
met. In acknowledging this reality, EPA can appropriately exercise its 
discretion to deny the extension request.
    Comment: ADEQ contends that in a letter dated June 6, 1997, to the 
Clerk of the United States Court of Appeals for the Third Circuit, 
EPA's legal counsel noted that EPA was not required to consider non-
network (i.e., not part of the SLAMS/NAMS network) data showing 
violations of the NAAQS. Letter, June 6, 1997, from Lois J. Schiffer, 
Assistant Attorney General, Environmental Natural Resources Division 
(by Greer S. Goldman), U.S. Department of Justice (DOJ) to P. Douglas 
Sisk, Clerk, United States Court of Appeals for the Third Circuit 
(``3rd Circuit letter''). ADEQ also cites Southwestern Pennsylvania 
Growth Alliance v. Browner, 121 F.3d 106 (3rd Cir. 1997), to support 
its position that EPA in the past has excluded exceedance data from its 
evaluation of a redesignation request because the data came from 
monitors that were not part of the SLAMS network.
    Response: In the 3rd Circuit letter, EPA actually concluded that 
the Agency's regulation on the use of SPM data, 40 CFR 58.14, does not 
authorize it to take into account the State's intended use of SPM data 
that otherwise meet that regulation's requirements when deciding 
whether to use it in an ozone redesignation action.<SUP>3</SUP> As a 
result, under EPA's regulation, all available SPM data that meet the 
minimum federal siting and quality assurance requirements in 40 CFR 
Part 58 must be used in making regulatory decisions

[[Page 60005]]

such as redesignations and reclassifications.
---------------------------------------------------------------------------

    \3\ This letter was signed by DOJ on behalf of EPA and 
accurately reflects the Agency's position on the use of SPM data.
---------------------------------------------------------------------------

    Southwestern Pennsylvania Growth Alliance involves EPA's 
disapproval of the Commonwealth of Pennsylvania's request to 
redesignate the Pittsburgh-Beaver Valley nonattainment area to 
attainment for ozone. The disapproval was based on 1995 violations of 
the ozone standard recorded on the area's SLAMS/NAMS network. 61 FR 
19193 (May 1, 1996) The Southwestern Pennsylvania Growth Alliance 
(SWPGA), an organization of major manufacturers and local governments 
in the Pittsburgh-Beaver Valley region, sought review of EPA's 
disapproval by the Third Circuit Court of Appeals. A full history of 
EPA's actions on Pennsylvania's redesignation request can be found in 
the TSD for today's notice.
    Among the issues raised by SWPGA was the use of the 1995 SLAMS/NAMS 
data. SWPGA argued that EPA acted contrary to the Act by considering 
the 1995 ozone exceedances because they occurred after the EPA's 18 
month deadline to act on the State's redesignation request which had 
been submitted in November, 1993. In an effort to clarify certain 
statements made in its brief, EPA identified certain instances where it 
had not used available data when acting on a redesignation request. In 
one instance, the San Francisco-Bay Area redesignation to attainment 
for ozone, EPA had excluded SPM data from its redesignation evaluation. 
The other instance, LaFourche Parish, Louisiana, involved only SLAMS/
NAMS data. 121 F.3d at 115.
    The court then directed EPA to address a number of questions, 
including why it is lawful for EPA to exclude consideration of data 
from monitors that are not part of the SLAMS network. The 3rd Circuit 
letter cited by ADEQ is EPA's response to the court on this issue. As 
stated in this letter (p. 4):

    For data from monitors that are not part of the SLAMS network 
required by [40 CFR] Part 58 [EPA's monitoring regulation], EPA 
regulations provide that EPA will exclude the data when they do not 
meet the terms of 40 CFR 58.14. That section provides, in relevant 
part:
    Any ambient air quality monitoring station other than a SLAMS or 
[prevention of significant deterioration] station from which the 
State intends to use the data as part of a demonstration of 
attainment or nonattainment or in computing a design value for 
control purposes of the [NAAQS] must meet the requirements for SLAMS 
described in section 58.22 and, after January 1, 1983, must also 
meet the requirements for SLAMS as described in section 58.13 and 
appendices A and E to this part.
    * * * In at least one case, EPA has interpreted section 58.14 to 
make a state's intent a factor in determining whether data from 
special purpose monitors that otherwise meet the requirements of 
section 58.14 may be excluded from consideration in an ozone 
redesignation action. However, EPA has recently evaluated that 
interpretation and concluded that it is not authorized by section 
58.14.

The passage supports the conclusion that the only circumstance under 
which SPM data may be excluded is if the data do not meet the siting 
and quality assurance requirements of Part 58.
    The statement that ADEQ cites from the 3rd Circuit letter comes 
from the letter's concluding paragraph which discusses the specific 
facts of Southwestern Pennsylvania Growth Alliance. All monitoring data 
under consideration in that case came from SLAMs monitors; there were 
no SPM data at issue in EPA's decision to deny the redesignation 
request. In this context, it is clear that the 3rd Circuit letter does 
not indicate that EPA may ignore SPM data:

    It should be noted, however, that the issue of whether EPA has 
discretion to decide if data from outside the official monitoring 
network should be used in redesignation decisions is not at issue in 
this case, where all monitored violations of the ozone standard were 
recorded at official network monitors. And even if EPA were required 
to consider non-network data showing violations, EPA would not be 
authorized to ignore violations at official network monitors when 
determining whether an area has attained the standard and is 
entitled to redesignation. 3rd Circuit letter (p. 4).

    ADEQ also cites the court's opinion to support its contention that 
EPA has excluded SPM data in the past. While the court noted that 
``[i]n at least one case, the EPA has excluded exceedance data from its 
evaluation of a redesignation request because the data came from 
monitors that were not part of the [SLAMS] network * * *,'' it went on 
to state in the same paragraph:

    Assuming arguendo that the EPA's exclusion of non-SLAMS 
exceedance data violates the EPA's duty not to redesignate an area 
that fails to attain the NAAQS, the EPA's prior disregard of this 
duty did not relieve the EPA of its obligation to act correctly in 
other cases. Emphasis added. 121 F.3d at 115.

Based on its interpretation of Section 58.14, and the facts of the 
Phoenix air quality situation discussed below, EPA believes that it is 
acting correctly in not excluding the SPM data from consideration in 
the Phoenix extension decision.
    Comment: Numerous commenters questioned the timing of EPA's 
issuance of the Memorandum, ``Agency Policy on the Use of Special 
Purpose Monitoring Data,'' dated August 22, 1997, by John Seitz, EPA 
Director of the Office of Air Quality Planning and Standards (``SPM 
policy'' or ``SPM memo''), noting that it was issued just 3 days in 
advance of EPA's announcement that it was proposing to find that the 
Phoenix area had failed to attain the ozone standard and to deny the 
State's extension request. The commenters contend that, absent this 
``ad hoc policy,'' EPA would not have been able to propose to deny 
Arizona's one-year extension request based upon the use of the special 
purpose monitor data that EPA has heretofore rejected.
    Commenters state that the information submitted to EPA's AIRS and 
additional data submitted to EPA by ADEQ demonstrate that, had the 
Fountain Hills special purpose monitor data properly been excluded, the 
criterion in section 181(a)(5)(B) would have been satisfied. Commenters 
note that during the year preceding the extension year (1996), there 
was only one exceedance of the ozone NAAQS at a SLAMS or NAMS monitor 
(the exceedance at the Mesa SLAMS monitor on July 23, 1996, when a 
reading of 0.127 ppm ozone was recorded) and that this was the only 
ozone exceedance recorded during the entire calendar year of 1996 on 
any official SLAMS or NAMS monitor.
    Response: The proper treatment of SPM data has been growing 
national interest for some time, increasing the need for EPA to issue 
national guidance. As noted in the SPM memo (p. 1):

[OAQPS] has received several inquiries from Regional Offices into 
how special purpose monitoring data can be used in making a variety 
of regulatory decisions such as designations, classifications, and 
attainment date extensions. [It] also [has] a final ruling from the 
U.S. Court of Appeals for the Third Circuit which supports the U.S. 
EPA denial of Pennsylvania's redesignation request for the 
Pittsburgh-Beaver Valley ozone nonattainment area. In light of these 
questions, legal developments, and the new [NAAQS] implementation 
directives, [OAQPS] believe[s] it is necessary to discuss the use of 
all publicly available special purpose monitoring data for all 
regulatory applications.

    Further impetus for the SPM policy was the revised ozone NAAQS 
under which EPA must determine within 90 days of their July 18, 1997 
publication which areas of the Country are attaining the 1-hour 
standard. National guidance is clearly essential to assure consistency 
in the use of SPM data for these determinations.
    The interest in and the need for a clear statement of the Agency's 
policy on SPM data was thus far broader than the Phoenix situation. The 
Agency did not, as the commenters imply, create an

[[Page 60006]]

``ad hoc'' policy simply to justify its proposed denial of Arizona's 
request for an extension but rather it articulated a national policy 
applicable to all areas of the Country.
    The commenters, however, wrongly assert that EPA needed the August 
22, 1997 SPM policy to justify its denial of Arizona's extension 
request. Even without a formal written policy statement, EPA believes 
that it has sound reasons to use the SPM data in this case, including 
the inadequate SLAMS/NAMS network in Phoenix, the discrepancies in 
measured air quality between the official monitors and the SPMs, and 
its long-established regulations governing the use of SPM data.
    Moreover, the June 6, 1997 letter to the Third Circuit and the 
Court's subsequent July 28, 1997 decision in Southwestern Pennsylvania 
Growth Alliance, both available long before EPA's announcement, may be 
read to imply that EPA must consider available SPM data in making 
regulatory decisions such as granting extension requests. As noted in 
the SPM memo (p. 2):

The Third Circuit Court decision supports the view that the EPA may 
not redesignate an area from nonattainment to attainment if the EPA 
knows that the area is not meeting the ozone NAAQS. Specifically, if 
the U.S. EPA knows of a violation or violations of the ozone NAAQS 
by either examining information within the AIRS or data from other 
sources and these data meet all 40 CFR Part 58 requirements, the 
U.S. EPA cannot determine that an area is attaining the NAAQS.

    This logic applies equally to extension requests: if EPA knows of 
more than one exceedance in an area in the year preceding the extension 
year by either examining information within AIRS or data from other 
sources and these data meet all 40 CFR part 58 requirements, EPA cannot 
grant an extension of the attainment date.
    Finally, EPA notes that it informed Arizona of its intention to use 
the SPM data in advance of its August 25, 1997 announcement. In a 
presentation to the May 19, 1997 meeting of the Arizona air quality 
monitoring network stakeholders,<SUP>4</SUP> EPA stated that the 
current Maricopa SLAM network was deficient and that it could not, 
without inclusion of the SPM sites, support the granting of an 
extension. At the June 9, 1997 meeting, EPA distributed the 3rd Circuit 
letter and noted that EPA would soon be formally clarifying its use of 
SPM data. EPA also made a series of courtesy calls to state and local 
agencies the week before its announcement to inform them that it would 
be proposing to find that Phoenix had failed to attain and that it was 
proposing to deny the extension request based in part on the SPM data.
---------------------------------------------------------------------------

    \4\ ADEQ convened a series of facilitated stakeholder meetings 
in May through July, 1997 to discuss the ambient air quality 
monitoring network in Maricopa County. Participants included MCESD, 
other local agencies, industry representatives, and environmental 
groups. EPA also participated in the meetings.
---------------------------------------------------------------------------

    Comment: Several commenters contend that the use of the SPM data in 
this instance is inconsistent with actions taken in other nonattainment 
areas where SPM data were excluded for the purposes of making similar 
determinations and conclude that if EPA had followed its earlier 
precedents then data from the Fountain Hills special purpose monitor 
would not have been used to deny the extension request. ADEQ also notes 
that the SPM memo implicitly concedes that Agency policy up to the date 
of the memorandum had been to reject exactly the kind of monitoring 
data on which EPA based its decisions to propose to deny the one-year 
extension. Commenters view EPA's refusal to follow prior precedent and 
disregard special purpose monitor data in this situation as a simple 
case of disparate treatment.
    Response: EPA's previous record on the use of SPM data contains 
numerous examples of instances where the Agency has used SPM data in 
making designation and classification decisions. While commenters note 
one instance where EPA did not use available SPM data (the Beaumont-
Port Arthur reclassification), and the SPM memo notes one other (the 
San Francisco-Bay Area redesignation), there are many more instances 
where the Agency has used SPM data to either designate or classify an 
area, including the original classification of the Phoenix area as 
moderate for ozone and the PM-10 nonattainment designations for the 
Bullhead City and Payson, Arizona areas. See 56 FR 56694, 56703 
(November 6, 1991) and 58 FR 67334, 67336 (December 21, 1993), 
respectively. Outside of Arizona, EPA has used SPM data to redesignate 
to nonattainment portions of White Top Mountain in New York and Smyth 
County, Virginia. See 56 FR 56694, 56704.
    Many commenters cited EPA's 1996 action to correct the Beaumont/
Port Arthur, Texas area ozone classification from serious to moderate 
as an example of EPA's inconsistent use of SPM data. 61 FR 14496 (April 
2, 1996). In this case, data from an SPM had originally been utilized 
to classify the Beaumont/Port Arthur area as a serious ozone 
nonattainment area. Based on additional information provided by Texas, 
EPA corrected the reclassification under CAA section 110(k)(6) from 
serious to moderate, stating that the data from the SPM should not have 
been used for classification purposes because, among other reasons, the 
SPM was not a part of the state monitoring network, the data from the 
monitor were utilized for research purposes, and the data were not 
reported to EPA's Aerometric Information Retrieval System (AIRS).
    Commenters contend that in these three circumstances the Phoenix 
situation closely parallels Beaumont-Port Arthur's; therefore, EPA 
should treat the Phoenix SPM data in a like manner by excluding it. In 
response, EPA notes that it has clarified its policy on the treatment 
of SPM data since the April 2, 1996 action on Beaumont-Port Arthur, 
resulting in all three of these circumstances no longer being grounds 
for excluding SPM data.<SUP>5</SUP>
---------------------------------------------------------------------------

    \5\ This policy clarification is clearly permissible. Moreover, 
even if it were a change or revision in policy, rather than a 
clarification, it would also clearly be permissible. It is well 
established that an agency may modify or reverse its interpretation 
over time provided the agency supplies a reasoned basis for the 
change. See e.g., Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 863 
(1984); Motor Vehicle Manufacturers Assoc. of the U.S., Inc. v. 
State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 42 
(1983)(``we fully recognize that ``[regulatory] agencies do not 
establish rules of conduct to last forever' * * * and that an agency 
must be given ample latitude to ``adapt their rules and policies to 
the demands of changing circumstances.' ''); Good Samaritan Hospital 
v. Shalala, 113 S. Ct. 2151, 2161 (1993) (``[A]n administrative 
agency is not disqualified from changing its mind * * *''). EPA 
provided that reasonable basis in the SPM memo.
---------------------------------------------------------------------------

    Even if EPA's regulations and policy were that valid SPM data could 
be excluded in some cases (which they are not), EPA believes that there 
are two compelling reasons to use the SPM data in the Phoenix case. 
These reasons are (1) the inadequacy of the Maricopa ozone monitoring 
network and (2) the large discrepancy between air quality when measured 
on Maricopa's SLAMS/NAMS network and when measured on the SLAMS/NAMS/
SPM network.
    Since 1989, EPA has consistently found that Maricopa's existing 
ozone SLAMS/NAMS network is inadequate to meet the monitoring 
objectives of Part 58, more specifically the requirement for a site 
measuring maximum concentration. A complete history of EPA's 
evaluations of the Maricopa County monitoring network can be found in 
Appendix D to the TSD. Numerous evaluations, including the recent VEOP, 
have indicated that maximum ozone concentrations are occurring in the 
rapidly-developing eastern-northeastern portion of

[[Page 60007]]

Maricopa County.<SUP>6</SUP> While there are SLAMS sites located 
throughout the central part of the Phoenix metropolitan area, there are 
no SLAMS sites on the eastern edge of the Phoenix area. EPA has been 
urging the County for nearly a decade to locate an ozone SLAMS monitor 
in this area. The County has responded by locating numerous SPM sites 
there (including the Fountain Hills SPM site) but has yet to convert 
any of those sites into SLAMS or NAMS.
---------------------------------------------------------------------------

    \6\ This is borne out by the fact that all but one of the 1996 
exceedances (the one at the Mesa SLAMS monitor) occurred at monitors 
to the east or northeast of the metropolitan area.
---------------------------------------------------------------------------

    Based solely on this inadequate network, it is not possible for EPA 
to accurately determine the area's compliance with the second statutory 
criterion for extensions. Such a determination can only be made based 
on data from a complete network that accurately reflects air quality in 
the area; therefore, even if the SPM data were excluded from the 
calculation, the Agency believes that it can properly exercise its 
discretion to deny the State's extension request.
    The inadequate SLAMS network has led to a troubling discrepancy 
between the air quality measured on the SLAMS/NAMS network and that 
network when augmented by the SPM sites. This is illustrated by Table 1 
below.

   Table 1.--Air Quality Comparison Between the SLAMS/NAMS Network and  
                         SLAMS/NAMS/SPM Network                         
                      [Maricopa County, 1994-1996]                      
------------------------------------------------------------------------
                                                             SLAMS/NAMS/
                                                             SPM network
                                                 SLAMS/NAMS    (w/o Mt. 
                                                  network    Ord or Blue
                                                                Point)  
------------------------------------------------------------------------
Number of Ozone Exceedance....................           10           44
Number of Ozone Violations....................            2           13
Number of Days over the Ozone Standard........            6           21
------------------------------------------------------------------------

    Clearly had EPA ignored the SPM data in Maricopa County, it would 
have greatly underestimated the severity of the area's air quality and 
inappropriately downplayed the impact of that air quality on public 
health.
    Given the significant probability that the Phoenix area would 
eventually face reclassification to serious even if it were granted an 
extension, EPA questions the actual benefit of an extension to the 
area. The commenters have made extensive comments on the adverse 
impacts of reclassification, among them the short-term planning and 
attainment deadlines facing newly serious areas and the imposition of 
the more stringent NSR provisions. An extension would only compound the 
problem of the short time frames while simply deferring the more 
stringent NSR provisions for a short time. Hence, even if it were 
within its discretion to grant an extension, EPA stands by its belief 
that an extension is not appropriate at this time.
    Comment: A number of commenters noted that the Phoenix area had not 
experienced any ozone exceedances in 1997 and asserted that this 
indicates that the area's ozone problem has been solved. Noting that 
the number of ozone exceedances peaked in 1995 and decreased in 1996, 
the County stated that the ``reality check'' provided by the ambient 
data indicates a trend contradictory to EPA's contention that the 
Phoenix area is not close to attainment.
    Response: The clean ozone air quality that the Phoenix area has 
experienced this year is very good news. These lower ozone readings are 
due in some part to the introduction of reformulated gasoline and the 
continuing implementation of other control programs such as the State's 
premier vehicle emission inspection program.
    Unfortunately, a single year of ozone data cannot be used to 
conclude that an area is close to attaining the 1-hour ozone standard. 
The Phoenix area has experienced another year (1989) in which ozone 
exceedances were not recorded, only to have the subsequent years show 
widespread violations.
    Ozone levels are related to both emission levels and meteorology. 
As a result of this meteorological component, ozone levels can vary 
greatly from year to year. The 1-hour ozone standard accounts for the 
weather's effect by evaluating compliance over a three-year period 
(that is, an area can average no more than 1 exceedance per year over a 
three-year period). 40 CFR 50.9 and part 50, Appendix H.
    There is some reason to believe that favorable weather patterns 
this year have also contributed to Phoenix's low ozone readings. In 
fact, 1997 has been an unusually good year for air quality throughout 
the West. All areas in EPA Region 9 (with the exception of San Diego 
and the Imperial Valley) have shown decreases in second-high ozone 
levels from 1996 to 1997, many greater than Phoenix's. None of these 
areas has introduced substantial new emission reduction programs, like 
Phoenix, that would account for these decreases.

D. Comments Related to the Regulatory Flexibility Act Requirements

    Comment: A number of commenters claimed that EPA failed to comply 
with the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) in its proposal.<SUP>7</SUP> The commenters claim that EPA's 
certification that its action would not have a significant economic 
impact on a substantial number of small entities is incorrect.
---------------------------------------------------------------------------

    \7\ SBREFA amended the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601 et seq.
---------------------------------------------------------------------------

    In support of their argument, the commenters state that small 
businesses that emit 50 tpy or more of VOC will become subject to 
reasonably available control technology (RACT) requirements, more 
stringent NSR requirements, and the Title V operating permit program as 
a result of the reclassification to serious and describe in more detail 
the potential adverse impacts of these requirements on small 
businesses.<SUP>8</SUP>
---------------------------------------------------------------------------

    \8\ EPA notes that businesses that emit 100 tpy or more are 
already subject to some of these requirements under the moderate 
area classification.
---------------------------------------------------------------------------

    The commenters further assert that EPA's reliance on Mid-Tex 
Electric Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985) for 
not preparing a regulatory flexibility analysis is misplaced. Finally, 
as an aside, the commenters note that Mid-Tex was decided a decade 
before Congress enacted SBREFA and more significantly,

[[Page 60008]]

SBREFA imposes outreach requirements on EPA and OSHA which are imposed 
on no other government agencies (citing 5 U.S.C. 609(b) and (d)).
    Response: The Regulatory Flexibility Act provides that, whenever an 
agency is required to publish a general notice of rulemaking for a 
proposed rule, the agency must prepare an initial regulatory 
flexibility analysis for the proposed rule unless the head of the 
agency certifies that the rule ``will not, if promulgated, have a 
significant economic impact on a substantial number of small entities'' 
(section 605(b)). EPA certified the proposed determination that the 
Phoenix area did not attain the 1-hour ozone standard by the attainment 
date and the proposed denial of the attainment date extension 
request,<SUP>9</SUP> based on its conclusion that the rule would not 
establish requirements applicable to small entities and therefore would 
not have a significant economic impact on small entities within the 
meaning of the RFA. EPA is reaffirming that certification in this final 
action.
---------------------------------------------------------------------------

    \9\ Commenters only addressed the potential impact on small 
businesses of the reclassification (which is based on the 
determination of nonattainment and the denial of the extension 
request), and not the potential impacts of the SIP submittal 
schedule. Therefore, the latter action is not discussed further in 
response to this comment.
---------------------------------------------------------------------------

    As described elsewhere in this notice, CAA section 181(b) requires 
EPA to determine whether an area has attained a NAAQS by the applicable 
attainment deadline. If EPA finds that the area has not attained, the 
section generally provides that the area ``shall be reclassified by 
operation of law'' (section 181(b)(2)(A)). The section requires EPA to 
publish a notice in the Federal Register identifying each area the 
Agency has determined to be in nonattainment and ``identifying'' the 
resulting reclassification of the area (section 181(b)(2)(B)).
    While determinations that trigger a reclassification do not 
themselves establish regulatory requirements applicable to small (or 
large) entities, they may, as noted by the commenters, trigger the 
application to small entities of regulatory requirements established by 
other rulemakings under the Clean Air Act (and conceivably other 
statutes). EPA, however, has concluded that the word ``impact'' as used 
in the RFA does not include regulatory requirements that the rule does 
not establish, but may trigger under the terms of other rules or 
statutory provisions. For the reasons discussed at length in the TSD, 
EPA believes that the RFA's text, legislative history and case law, 
including Mid-Tex, all make clear that RFA analysis is limited to the 
requirements of the rule being promulgated.
    A more detailed discussion of this issue may be found in the TSD 
for this rulemaking.

E. Comments Related to Mitigating the Adverse Impacts of 
Reclassification

    Many commenters suggested several steps that could be taken to 
mitigate the adverse impacts of the reclassification to serious. While 
EPA will briefly respond to most of the suggestions here, many involve 
issues that are being dealt with in forums other than this action. EPA 
will continue to work with interested parties in Arizona to address 
these issues in those other forums. EPA also received questions 
regarding the implementation of NSR and Title V requirements. Those 
questions are addressed in the TSD.
    Comment: Commenters requested that EPA suspend further enforcement 
of the 1-hour ozone NAAQS in the Phoenix Metropolitan area by amending 
its ``implementation policy'' for the revised 8-hour ozone NAAQS. 
Commenters contend that EPA has the flexibility and authority to do so 
under the ``implementation policy'' by citing the policy's statements 
that implementation of the new 8-hour ozone NAAQS should be ``carried 
out to maximize common sense, flexibility, and cost effectiveness.'' 62 
FR 38421 (July 18, 1997).
    Response: The document referred to and cited by the commenters as 
the ``Implementation Policy,'' 62 FR 38421 (July 18, 1997) is a 
memorandum to the EPA Administrator entitled ``Implementation of 
Revised Air Quality Standards for Ozone and Particulate Matter'' 
(``President's Memorandum'') signed by President Clinton for the 
implementation of the revised ozone and particulate matter standards. 
Attached to that memorandum is a strategy, ``Implementation Plan for 
Revised Air Quality Standards'' (``Implementation Plan'') outlining the 
steps for implementing these standards. EPA is currently developing 
guidance and proposed rules consistent with the President's Memorandum. 
EPA is committed to the goals of maximizing common sense, flexibility, 
and cost effectiveness in implementing the revised NAAQS.
    EPA's action reclassifying Phoenix as a serious ozone nonattainment 
area is in no way inconsistent with those goals. Furthermore, it is 
consistent with the continued applicability of the 1-hour standard and 
subpart 2 as provided for in EPA's rulemaking on the ozone NAAQS. See 
62 FR 38856, 38873. To the extent that the comments concern that issue, 
they are not appropriately raised in this rulemaking.
    Neither the provisions of 40 CFR 50.9, as revised (62 FR 38856, 
38894), nor any other statutory or regulatory provisions, provide EPA 
with the authority to suspend enforcement of the 1-hour NAAQS in 
Phoenix. Moreover, as noted earlier, the Phoenix area has not complied 
with some of the most significant serious area requirements (e.g., the 
9 percent rate of progress requirement). Finally EPA believes that 
complying with those requirements will have a positive, not 
detrimental, effect on the ability of Phoenix to comply with the 8-hour 
standard. Additional comments related to this point are addressed in 
the TSD.
    Comment: The commenters requested that EPA execute an agreement 
with the State of Arizona to act upon submitted SIP revisions within a 
fixed period of time based upon priorities identified by the State and 
to set a schedule for acting on future SIP revisions.
    Response: EPA Region 9 receives hundreds of requests each year to 
revise federally-enforceable SIPs from over 40 different state and 
local air pollution agencies. These include requests to modify 
inventories, attainment demonstrations, and administrative, permit, and 
prohibitory regulations. Given the available resources, Region 9 is 
unable to review and act on each of these requests as quickly as it 
would like. As a result, the Agency relies on the state and local 
agencies to prioritize submittals so that the most important ones to 
the state and local agencies can be acted on first. Region 9 does 
expect to take final action soon on several revisions submitted by 
Maricopa County and has recently contacted the Arizona air pollution 
agencies to request that they identify those submittals that need to be 
acted quickly in order to issue Title V permits or for other purposes. 
Region 9 will process submittals in the priority order requested by 
these agencies.
    Comment: Commenters requested that EPA approve EPA Arizona 
Administrative Code (A.A.C.) R18-2-310 (The Arizona Excess Emissions 
Rule) as a revision to the SIP.
    Response: This comment is closely related to a lawsuit brought by 
the Arizona Mining Association with regard to EPA's interim approval of 
Arizona's Title V operating permit program on October 30, 1996 (61 FR 
55910). The parties involved in the suit have had constructive 
exchanges, which EPA expects to continue, on the appropriate treatment 
of the Arizona Excess Emissions Rule during the settlement discussions.

[[Page 60009]]

    Comment: Commenters request that EPA adopt realistic, streamlined 
national Prevention of Significant Deterioration (PSD) and New Source 
Review (NSR) regulations.
    Response: EPA recognizes that its current regulations governing the 
new source review programs mandated by both parts C (PSD) and D (NSR) 
of Title I of the Clean Air Act are a source of concern for many 
people. On July 23, 1996, EPA proposed major revisions (known as the 
NSR reform proposal) to its PSD and NSR regulations. 61 FR 38250. EPA 
has received many comments on its proposal and is currently carefully 
reviewing and considering these comments as it develops the final rule. 
EPA's goal for this final rule is to simplify its NSR and PSD 
regulations consistent with the Clean Air Act requirements for those 
programs.
    Comment: Commenters request that EPA adopt a regulatory affirmative 
defense for sources with potential VOC emissions of from 50 to 100 tons 
per year that will apply to enforcement of the NSR requirements in 
ozone nonattainment areas that meet certain criteria.
    Response: It appears that the commenters are attempting to ease the 
perceived regulatory burden that will be imposed on sources that emit 
between 50 and 100 tons of VOC per year as a result of the 
reclassification. EPA will study the proposal, but its initial response 
is that the commenters' suggested approach is not the most effective 
means for addressing their underlying concerns. EPA believes it may be 
constructive to engage in a dialogue regarding possible mechanisms for 
limiting sources' potential to emit to below the thresholds that 
trigger NSR. However, where a source's actual emissions exceed the 
major source threshold or the source is unable to reduce its potential 
to emit below the major source threshold, the source is subject to 
major NSR.
    Comment: Commenters request that EPA continue to expeditiously act 
to approve the Arizona Clean Burning Gasoline Program.
    Response: EPA has been very pleased to support Arizona's efforts to 
bring reformulated gasoline to the Phoenix area. In addition to 
approving the Governor's request to join the federal program and the 
State's request for lower RVP limits, the Agency participated in the 
development of the new CBG rules in order to correct any approval 
problems early in the process. EPA is now working closely with ADEQ to 
act on the recent submittal of the CBG rules. This work is among EPA's 
highest priorities.

F. Other Comments

    Comment: Senator Kyl and Representative Shadegg commented that by 
using data collected from 1994 through 1996 as the basis for its 
decision, EPA has not taken into account the significant and positive 
effects of the RFG program and other actions taken by the State of 
Arizona to reduce ozone pollution and that this results in an 
inaccurate and unwarranted reclassification of Phoenix to serious. They 
comment further that this violates principles in President's July 18, 
1997 memorandum that ``implementation of the air quality standards is 
to be carried out to maximize common sense, flexibility, and cost 
effectiveness.''
    Response: EPA agrees that the 1994-1996 data do not reflect the 
1997 implementation of the RFG program and that this program will have 
a continuing positive effect on ozone levels in the Phoenix area. EPA, 
however, is constrained by statute from considering 1997 data in its 
finding of failure to attain and denial of the extension request.
    CAA section 181(b)(4) requires EPA to determine if an area has 
attained ``as of the attainment date.'' For Phoenix, the attainment 
date is November 15, 1996, and under long-established procedures, 
determining attainment as of that date requires reviewing data from the 
three years immediately preceding that date or 1994 through 1996. 40 
CFR 50.9 and part 50, Appendix H.
    The criterion for extensions in CAA section 181(a)(5)(B) is that 
``no more than one exceedance of the [ozone standard] has occurred in 
the area in the year preceding the Extension Year.'' The extension year 
is 1997, thus the ``year preceding'' is 1996.

VI. Final Action

    EPA is finding that the Phoenix ozone nonattainment area did not 
attain the ozone NAAQS by November 15, 1996, the CAA attainment date 
for moderate ozone nonattainment areas. EPA is also denying Arizona's 
application for a one-year extension of the attainment date. As a 
result of this finding and denial, the Phoenix ozone nonattainment area 
is reclassified by operation of law as a serious ozone nonattainment 
area on the effective date of today's action and the submittal of the 
serious area SIP revisions will be due no later than 12 months from 
this effective date. The requirements for this SIP submittal are 
established in CAA section 182(c) and applicable EPA guidance.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future action. Each finding of 
failure to attain, request for an extension of an attainment date, and 
establishment of a SIP submittal date shall be considered separately 
and shall be based on the factual situation of the area under 
consideration and in relation to relevant statutory and regulatory 
requirements.

VI. Administrative Requirements

A. Executive Order (E.O.) 12866

    Under E.O. 12866, (58 FR 51735, October 4, 1993), EPA is required 
to determine whether today's action is a ``significant regulatory 
action'' within the meaning of the E.O., and therefore should be 
subject to OMB review, economic analysis, and the requirements of the 
E.O. See E.O. 12866, sec. 6(a)(3). The E.O. defines, in sec. 3(f), a 
``significant regulatory action'' as a regulatory action that is likely 
to result in a rule that may meet at least one of four criteria 
identified in section 3(f), including,
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    EPA has determined that neither the finding of failure to attain it 
is making today, the denial of Arizona's request for a one-year 
extension of the attainment data, nor the establishment of SIP 
submittal schedule would result in any of the effects identified in 
E.O. 12866 sec. 3(f). As discussed in the response to comments above 
and in more detail in the TSD, findings of failure to attain under 
section 181(b)(2) of the Act are based upon air quality considerations, 
and reclassifications must occur by operation of law in light of 
certain air quality conditions. These findings do not, in and of 
themselves, impose any new requirements on any sectors of the economy. 
In addition, because the statutory requirements are clearly defined 
with respect to the differently classified areas, and because

[[Page 60010]]

those requirements are automatically triggered by classifications that, 
in turn, are triggered by air quality values, findings of failure to 
attain and reclassification cannot be said to impose a materially 
adverse impact on State, local, or tribal governments or communities. 
The same is true of the determination not to grant a one-year 
extension, in light of the fact that this determination is also based 
in part on air quality values. Similarly, the establishment of new SIP 
submittal schedules merely establishes the dates by which SIPs must be 
submitted, and does not adversely affect entities.

B. Regulatory Flexibility

    Under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    As discussed in the response to comments above and in more detail 
in the TSD, a finding of failure to attain (and the consequent 
reclassification by operation of law of the nonattainment area) under 
section 181(b)(2) of the Act, a denial of a one-year extension request, 
and the establishment of a SIP submittal schedule for a reclassified 
area, do not, in-and-of-themselves, directly impose any new 
requirements on small entities. See Mid-Tex Electric Cooperative, Inc. 
v. FERC, 773 F.2d 327 (D.C. Cir. 1985) (agency's certification need 
only consider the rule's impact on entities subject to the requirements 
of the rule). Instead, this rulemaking simply makes a factual 
determination and establishes a schedule to require States to submit 
SIP revisions, and does not directly regulate any entities. Therefore, 
pursuant to 5 U.S.C. 605(b), EPA reaffirms its certification made in 
the proposal (62 FR 46233) that today's final action will not have a 
significant impact on a substantial number of small entities within the 
meaning of those terms for RFA purposes.

C. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, when EPA promulgates ``any general notice of proposed 
rulemaking that is likely to result in promulgation of any rule that 
includes any Federal mandate that may result in the expenditures by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more'' in any one year. A ``Federal 
mandate'' is defined, under section 101 of UMRA, as a provision that 
``would impose an enforceable duty'' upon the private sector or State, 
local, or tribal governments'', with certain exceptions not here 
relevant. Under section 203 of UMRA, EPA must develop a small 
government agency plan before EPA ``establish[es] any regulatory 
requirements that might significantly or uniquely affect small 
governments''. Under section 204 of UMRA, EPA is required to develop a 
process to facilitate input by elected officers of State, local, and 
tribal governments for EPA's ``regulatory proposals'' that contain 
significant Federal intergovernmental mandates. Under section 205 of 
UMRA, before EPA promulgates ``any rule for which a written statement 
is required under [UMRA sec.] 202'', EPA must identify and consider a 
reasonable number of regulatory alternatives and either adopt the least 
costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the rule, or explain why a different 
alternative was selected.
    Generally, EPA has determined that the provisions of sections 202 
and 205 of UMRA do not apply to this decision. Under section 202, EPA 
is to prepare a written statement that is to contain assessments and 
estimates of the costs and benefits of a rule containing a Federal 
Mandate ``unless otherwise prohibited by law.'' Congress clarified that 
``unless otherwise prohibited by law'' referred to whether an agency 
was prohibited from considering the information in the rulemaking 
process, not to whether an agency was prohibited from collecting the 
information. The Conference Report on UMRA states, ``This section [202] 
does not require the preparation of any estimate or analysis if the 
agency is prohibited by law from considering the estimate or analysis 
in adopting the rule.'' 141 Cong. Rec. H3063 (Daily ed. March 13, 
1995). Because the Clean Air Act prohibits, when determining whether an 
area attained the ozone standard or met the criteria for an extension, 
from considering the types of estimates and assessments described in 
section 202, UMRA does not require EPA to prepare a written statement 
under section 202. Although the establishment of a SIP submission 
schedule may impose a federal mandate, this mandate would not create 
costs of $100 million or more, and therefore, no analysis is required 
under section 202. The requirements in section 205 do not apply because 
those requirements for rules ``for which a written statement is 
required under section 202 * * *.''
    With regard to the outreach described in UMRA section 204, EPA 
discussed its proposed action in advance of the proposal with State 
officials.
    Finally, section 203 of UMRA does not apply to today's action 
because the regulatory requirements finalized today--the SIP submittal 
schedule--affect only the State of Arizona, which is not a small 
government under UMRA.

D. Submission to Congress and the General Accounting Office

    Under section 801(a)(1)(A) of the Administrative Procedures Act 
(APA) as amended by the Small Business Regulatory Enforcement Fairness 
Act of 1996, EPA submitted 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 General Accounting 
Office prior to publication of the rule in today's Federal Register. 
This rule is not a ``major rule'' as defined by section 804(2) of the 
APA as amended.

E. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by January 5, 1998. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. See section 307(b)(2).

List of Subjects in 40 CFR Part 81

    Environmental protection, Air pollution control, Intergovernmental 
relations, Ozone.

    Dated: October 27, 1997.
Harry Seraydarian,
Acting Regional Administrator.

    Part 81, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

[[Page 60011]]

PART 81--[AMENDED]

    1. The authority citation for part 81 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

    2. Section 81.303 is amended by revising the table for Arizona-- 
Ozone, for the Phoenix Area to read as follows:


Sec. 81.303  Arizona

* * * * *

                                                                      Arizona-Ozone                                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Designation                                           Classification                    
             Designated area             ---------------------------------------------------------------------------------------------------------------
                                              Date                        Type                        Date                        Type                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
Phoenix Area:                                                                                                                                           
    Maricopa County (part)..............     11/15/90  Nonattainment............................      12/8/97  Serious.                                 
        The Urban Planning Area of the                                                                                                                  
         Maricopa Association of                                                                                                                        
         Governments is bounded as                                                                                                                      
         follows:                                                                                                                                       
            1.Commencing at a point                                                                                                                     
             which is at the                                                                                                                            
             intersection of the eastern                                                                                                                
             line of Range 7 East, Gila                                                                                                                 
             and Salt River Baseline and                                                                                                                
             Meridian, and the southern                                                                                                                 
             line of Township 2 South,                                                                                                                  
             said point is the                                                                                                                          
             southeastern corner of the                                                                                                                 
             Maricopa Association of                                                                                                                    
             Governments Urban Planning                                                                                                                 
             Area, which is the point of                                                                                                                
             beginning;                                                                                                                                 
            2. Thence, proceed northerly                                                                                                                
             along the eastern line of                                                                                                                  
             Range 7 East which is the                                                                                                                  
             common boundary between                                                                                                                    
             Maricopa and Pinal                                                                                                                         
             Counties, as described in                                                                                                                  
             Arizona Revised Statute                                                                                                                    
             Section 11-109, to a point                                                                                                                 
             where the eastern line of                                                                                                                  
             Range 7 East intersects the                                                                                                                
             northern line of Township 1                                                                                                                
             North, said point is also                                                                                                                  
             the intersection of the                                                                                                                    
             Maricopa County Line and                                                                                                                   
             the Tonto National Forest                                                                                                                  
             Boundary, as established by                                                                                                                
             Executive Order 869 dated                                                                                                                  
             July 1, 1908, as amended                                                                                                                   
             and showed on the U.S.                                                                                                                     
             Forest Service 1969                                                                                                                        
             Planimetric Maps;                                                                                                                          
            3. Thence, westerly along                                                                                                                   
             the northern line of                                                                                                                       
             Township 1 North to                                                                                                                        
             approximately the southwest                                                                                                                
             corner of the southeast                                                                                                                    
             quarter of Section 35,                                                                                                                     
             Township 2 North, Range 7                                                                                                                  
             East, said point being the                                                                                                                 
             boundary of the Tonto                                                                                                                      
             National Forest and Usery                                                                                                                  
             Mountain Semi-Regional                                                                                                                     
             Park;                                                                                                                                      
            4. Thence, northerly along                                                                                                                  
             the Tonto National Forest                                                                                                                  
             Boundary, which is                                                                                                                         
             generally the western line                                                                                                                 
             of the east half of                                                                                                                        
             Sections 26 and 35 of                                                                                                                      
             Township 2 North, Range 7                                                                                                                  
             East, to a point which is                                                                                                                  
             where the quarter section                                                                                                                  
             line intersects with the                                                                                                                   
             northern line of Section                                                                                                                   
             26, Township 2 North, Range                                                                                                                
             7 East, said point also                                                                                                                    
             being the northeast corner                                                                                                                 
             of the Usery Mountain Semi-                                                                                                                
             Regional Park;                                                                                                                             
            5. Thence, westerly along                                                                                                                   
             the Tonto National Forest                                                                                                                  
             Boundary, which is                                                                                                                         
             generally the south line of                                                                                                                
             Section 19, 20, 21 and 22                                                                                                                  
             and the southern line of                                                                                                                   
             the west half of Section                                                                                                                   
             23, Township 2 North, Range                                                                                                                
             7 East, to a point which is                                                                                                                
             the southwest corner of                                                                                                                    
             Section 19, Township 2                                                                                                                     
             North, Range 7 East;                                                                                                                       
            6. Thence, northerly along                                                                                                                  
             the Tonto National Forest                                                                                                                  
             Boundary to a point where                                                                                                                  
             the Tonto National Forest                                                                                                                  
             Boundary intersects with                                                                                                                   
             the eastern boundary of the                                                                                                                
             Salt River Indian                                                                                                                          
             Reservation, generally                                                                                                                     
             described as the center                                                                                                                    
             line of the Salt River                                                                                                                     
             Channel;                                                                                                                                   
            7. Thence, northeasterly and                                                                                                                
             northerly along the common                                                                                                                 
             boundary of the Tonto                                                                                                                      
             National Forest and the                                                                                                                    
             Salt River Indian                                                                                                                          
             Reservation to a point                                                                                                                     
             which is the northeast                                                                                                                     
             corner of the Salt River                                                                                                                   
             Indian Reservation and the                                                                                                                 
             southeast corner of the                                                                                                                    
             Fort McDowell Indian                                                                                                                       
             Reservation, as shown on                                                                                                                   
             the plat dated July 22,                                                                                                                    
             1902, and recorded with the                                                                                                                
             U.S. Government on June 15,                                                                                                                
             1902;                                                                                                                                      

[[Page 60012]]

                                                                                                                                                        
            8. Thence, northeasterly                                                                                                                    
             along the common boundary                                                                                                                  
             between the Tonto National                                                                                                                 
             Forest and the Fort                                                                                                                        
             McDowell Indian Reservation                                                                                                                
             to a point which is the                                                                                                                    
             northeast corner of the                                                                                                                    
             Fort McDowell Indian                                                                                                                       
             Reservation;                                                                                                                               
            9. Thence, southwesterly                                                                                                                    
             along the northern boundary                                                                                                                
             of the Fort McDowell Indian                                                                                                                
             Reservation, which line is                                                                                                                 
             a common boundary with the                                                                                                                 
             Tonto National Forest, to a                                                                                                                
             point where the boundary                                                                                                                   
             intersects with the eastern                                                                                                                
             line of Section 12,                                                                                                                        
             Township 4 North, Range 6                                                                                                                  
             East;                                                                                                                                      
            10. Thence, northerly along                                                                                                                 
             the eastern line of Range 6                                                                                                                
             East to a point where the                                                                                                                  
             eastern line of Range 6                                                                                                                    
             East intersects with the                                                                                                                   
             southern line of Township 5                                                                                                                
             North, said line is the                                                                                                                    
             boundary between the Tonto                                                                                                                 
             National Forest and the                                                                                                                    
             east boundary of McDowell                                                                                                                  
             Mountain Regional Park;                                                                                                                    
            11. Thence, westerly along                                                                                                                  
             the southern line of                                                                                                                       
             Township 5 North to a point                                                                                                                
             where the southern line                                                                                                                    
             intersects with the eastern                                                                                                                
             line of Range 5 East which                                                                                                                 
             line is the boundary of                                                                                                                    
             Tonto National Forest and                                                                                                                  
             the north boundary of                                                                                                                      
             McDowell Mountain Regional                                                                                                                 
             Park;                                                                                                                                      
            12. Thence, northerly along                                                                                                                 
             the eastern line of Range 5                                                                                                                
             East to a point where the                                                                                                                  
             eastern line of Range 5                                                                                                                    
             East intersects with the                                                                                                                   
             northern line of Township 5                                                                                                                
             North, which line is the                                                                                                                   
             boundary of the Tonto                                                                                                                      
             National Forest;                                                                                                                           
            13. Thence, westerly along                                                                                                                  
             the northern line of                                                                                                                       
             Township 5 North to a point                                                                                                                
             where the northern line of                                                                                                                 
             Township 5 North intersects                                                                                                                
             with the easterly line of                                                                                                                  
             Range 4 East, said line is                                                                                                                 
             the boundary of Tonto                                                                                                                      
             National Forest;                                                                                                                           
            14. Thence, northerly along                                                                                                                 
             the eastern line of Range 4                                                                                                                
             East to a point where the                                                                                                                  
             eastern line of Range 4                                                                                                                    
             East intersects with the                                                                                                                   
             northern line of Township 6                                                                                                                
             North, which line is the                                                                                                                   
             boundary of the Tonto                                                                                                                      
             National Forest;                                                                                                                           
            15. Thence, westerly along                                                                                                                  
             the northern line of                                                                                                                       
             Township 6 North to a point                                                                                                                
             of intersection with the                                                                                                                   
             Maricopa-Yavapai County                                                                                                                    
             line, which is generally                                                                                                                   
             described in Arizona                                                                                                                       
             Revised Statute Section 11-                                                                                                                
             109 as the center line of                                                                                                                  
             the Aqua Fria River (Also                                                                                                                  
             the north end of Lake                                                                                                                      
             Pleasant);                                                                                                                                 
            16. Thence, southwesterly                                                                                                                   
             and southerly along the                                                                                                                    
             Maricopa-Yavapai County                                                                                                                    
             line to a point which is                                                                                                                   
             described by Arizona                                                                                                                       
             Revised Statute Section 11-                                                                                                                
             109 as being on the center                                                                                                                 
             line of the Aqua Fria                                                                                                                      
             River, two miles southerly                                                                                                                 
             and below the mouth of                                                                                                                     
             Humbug Creek;                                                                                                                              
            17. Thence, southerly along                                                                                                                 
             the center line of Aqua                                                                                                                    
             Fria River to the                                                                                                                          
             intersection of the center                                                                                                                 
             line of the Aqua Fria River                                                                                                                
             and the center line of                                                                                                                     
             Beardsley Canal, said point                                                                                                                
             is generally in the                                                                                                                        
             northeast quarter of                                                                                                                       
             Section 17, Township 5                                                                                                                     
             North, Range 1 East, as                                                                                                                    
             shown on the U.S.                                                                                                                          
             Geological Survey's Baldy                                                                                                                  
             Mountain, Arizona                                                                                                                          
             Quadrangle Map, 7.5 Minute                                                                                                                 
             series (Topographic), dated                                                                                                                
             1964;                                                                                                                                      
            18. Thence, southwesterly                                                                                                                   
             and southerly along the                                                                                                                    
             center line of Beardsley                                                                                                                   
             Canal to a point which is                                                                                                                  
             the center line of                                                                                                                         
             Beardsley Canal where it                                                                                                                   
             intersects with the center                                                                                                                 
             line of Indian School Road;                                                                                                                

[[Page 60013]]

                                                                                                                                                        
            19. Thence, westerly along                                                                                                                  
             the center line of West                                                                                                                    
             Indian School Road to a                                                                                                                    
             point where the center line                                                                                                                
             of West Indian School Road                                                                                                                 
             intersects with the center                                                                                                                 
             line of North Jackrabbit                                                                                                                   
             Trail;                                                                                                                                     
            20. Thence, southerly along                                                                                                                 
             the center line of                                                                                                                         
             Jackrabbit Trail                                                                                                                           
             approximately nine and                                                                                                                     
             three-quarter miles to a                                                                                                                   
             point where the center line                                                                                                                
             of Jackrabbit Trail                                                                                                                        
             intersects with the Gila                                                                                                                   
             River, said point is                                                                                                                       
             generally on the north-                                                                                                                    
             south quarter section line                                                                                                                 
             of Section 8, Township 1                                                                                                                   
             South, Range 2 West;                                                                                                                       
            21. Thence, northeasterly                                                                                                                   
             and easterly up the Gila                                                                                                                   
             River to a point where the                                                                                                                 
             Gila River intersects with                                                                                                                 
             the northern extension of                                                                                                                  
             the western boundary of                                                                                                                    
             Estrella Mountain Regional                                                                                                                 
             Park, which point is                                                                                                                       
             generally the quarter                                                                                                                      
             corner of the northern line                                                                                                                
             of Section 31, Township 1                                                                                                                  
             North, Range 1 West;                                                                                                                       
            22. Thence, southerly along                                                                                                                 
             the extension of the                                                                                                                       
             western boundary and along                                                                                                                 
             the western boundary of                                                                                                                    
             Estrella Mountain Regional                                                                                                                 
             Park to a point where the                                                                                                                  
             southern extension of the                                                                                                                  
             western boundary of                                                                                                                        
             Estrella Mountain Regional                                                                                                                 
             Park intersects with the                                                                                                                   
             southern line of Township 1                                                                                                                
             South;                                                                                                                                     
            23. Thence, easterly along                                                                                                                  
             the southern line of                                                                                                                       
             Township 1 South to a point                                                                                                                
             where the south line of                                                                                                                    
             Township 1 South intersects                                                                                                                
             with the western line of                                                                                                                   
             Range 1 East, which line is                                                                                                                
             generally the southern                                                                                                                     
             boundary of Estrella                                                                                                                       
             Mountain Regional Park;                                                                                                                    
            24. Thence, southerly along                                                                                                                 
             the western line of Range 1                                                                                                                
             East to the southwest                                                                                                                      
             corner of Section 18,                                                                                                                      
             Township 2 South, Range 1                                                                                                                  
             East, said line is the                                                                                                                     
             western boundary of the                                                                                                                    
             Gila River Indian                                                                                                                          
             Reservation;                                                                                                                               
            25. Thence, easterly along                                                                                                                  
             the southern boundary of                                                                                                                   
             the Gila River Indian                                                                                                                      
             Reservation which is the                                                                                                                   
             southern line of Sections                                                                                                                  
             13, 14, 15, 16, 17, and 18,                                                                                                                
             Township 2 South, Range 1                                                                                                                  
             East, to the boundary                                                                                                                      
             between Maricopa and Pinal                                                                                                                 
             Counties as described in                                                                                                                   
             Arizona Revised Statues                                                                                                                    
             Section 11-109 and 11-113,                                                                                                                 
             which is the eastern line                                                                                                                  
             of Range 1 East;                                                                                                                           
            26. Thence, northerly along                                                                                                                 
             the eastern boundary of                                                                                                                    
             Range 1 East, which is the                                                                                                                 
             common boundary between                                                                                                                    
             Maricopa and Pinal                                                                                                                         
             Counties, to a point where                                                                                                                 
             the eastern line of Range 1                                                                                                                
             East intersects the Gila                                                                                                                   
             River;                                                                                                                                     
            27. Thence, southerly up the                                                                                                                
             Gila River to a point where                                                                                                                
             the Gila River intersects                                                                                                                  
             with the southern line of                                                                                                                  
             Township 2 South; and                                                                                                                      
            28. Thence, easterly along                                                                                                                  
             the southern line of                                                                                                                       
             Township 2 South to the                                                                                                                    
             point of beginning which is                                                                                                                
             a point where the southern                                                                                                                 
             line of Township 2 South                                                                                                                   
             intersects with the eastern                                                                                                                
             line Range 7 East                                                                                                                          
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 97-29396 Filed 11-5-97; 8:45 am]
BILLING CODE 6560-50-P