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Citation: 62 Fed. Reg. 60001 1997

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### Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations 60001

VII. Executive Order12866

Under Executive Order 12866, 4 the Agency must determine whether a regulation is "significant" and therefore subject to OMB review and the requirements ofthe Executive Order. The Order defines "significant regulatory action" as one that is likely
to result in arule that may:

(1) Have an annual effect on the economy of$100 million or more, or adversely affect in a material way the economy, a sector ofthe economy, productivity, competition,jobs, the environment, public health or safety, or State, local or tribal governments of communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter thebudgetary impact ofentitlements, grants, user fees,

or loan programs or therights and obligations ofrecipients thereof,or

(4) Raise novel legal orpolicy issues arising out oflegal mandates, the President's priorities, or theprinciples
setforth in thisExecutive Order. 5

Ithas been determined that thisrule is not a "significant regulatory action" under the terms ofExecutive Order 12866 and is therefore not subject to OMB review.

VIII. Unfunded Mandates

Under Section 202 ofthe Unfunded Mandates Reform Act of 1995 ("UMRA"), Public Law 104-4, EPA
must prepare a budgetary impact
statement to accompany any general notice ofproposed rulemaking or final rule that includes a federal mandate which may result in estimated costs to State, local, or tribal governments in the aggregate, or to theprivate sector, of $100 million or more. Under Section 205, for any rule subject to Section 202 EPA generally must select the least costly, most cost-effective, or least burdensome alternative that achieves the objectives ofthe rule and is consistent with statutory requirements. Under Section 203, before establishing anyregulatory requirements that may significantly or uniquely affect small governments, EPA must take steps to inform and advise small governments of the requirements and enable them to provide input.

EPA has determined that the final rule promulgated today does not include a federal mandate as defined in UMRA. The rule does not include a federal mandate that mayresult in estimated annual costs to State, local or tribal governments in the aggregate, or to the

458 FR51736 (October4, 1993). 51Id.at section 3(f)(1) (4). private sector, of$100 million or more, and it does not establish regulatory requirements that may significantly or uniquely affect small governments.
IX. Paperwork Reduction Act

The action in today's notice does not impose any new information collection burden. Implementation ofthis action would eliminate the existing requirement that product transfer documents (PTDs) for gasoline must identify the oxygenates present. No new information collection requirements would result from the implementation oftheregulatory amendment which is the subject ofthis action. To the contrary, its implementation would eliminate a compliance burden from the majority ofregulated parties.

The Office ofManagement and Budget (OMB)has previously approved the information collection requirements of the Regulation ofDeposit Control Additives contained in 40CFR Part 80 under the provisions ofthe Paperwork ReductionAct,44 U.S.C. 3501 etseq. and has assigned OMB control number 2060-0275 (EPA ICRNumbers 1655-01, 1655-02, and 1655-03).

Burden means the total time, effort, or financial resources expended bypersons to generate, maintain, retain, or disclose

or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able
to respond to acollection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

Copies ofthe ICRdocuments may be obtained from Sandy Farmer, Information Policy Branch; EPA; 401 M St., SW. (mail code 2136); Washington, DC 20460 or by calling (202) 260-2740. Include the ICR and/or OMB number in any correspondence.

X. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business Regulatory Enforcement Fairness Act of 1996, EPA submitted areport containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General ofthe General Accounting Office prior to publication ofthe rule in today's Federal Register. This rule is not a "major rule" as defined by 5 U.S.C. 804(2).

XI. Statutory Authority

The statutory authority for the proposed action in thisrule is granted
to EPAby sections 114, 211(a), (b), (c), and (1), and 301 ofthe Clean Air Act as amended: 42 U.S.C. 7414, 7545(a), (b), (c) and (1), and 7601.
List ofSubjects in 40 CFRPart80

Environmental protection, Fuel additives, Gasoline detergent additives, Gasoline, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements.

Dated: October 30, 1997. CarolM.Browner, Administrator.

For the reasons set forth in the preamble, part 80 oftitle 40ofthe Code ofFederal Regulations is amended as follows:

PART 80-[AMENDED]

1. The authority citation for part 80 continues to read as follows:

Authority: Sections 114, 211 and 301(a) of theClean AirAct as amended (42U.S.C. 7414, 7545, and 7601(a)).
§80.158 [Amended]

2. Section 80.158(a) is amended as follows:

a. Paragraph (a)(5) is removed. b. Paragraphs (a)(6) through (a)(10) are redesignated asparagraphs (a)(5) through (a)(9).
§80.171 [Amended]

3. Section 80.171(a) is amended as follows:

a. Paragraph (a)(5) is removed. b. Paragraphs (a)(6) through (12) are redesignated asparagraphs (a)(5) through (a)(11). [FR Doc. 97 29391 Filed 11 5 97; 8:45 am]

BILLING CODE 6560-50-P

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

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County, Arizona) has not attained the 1- hour ozone national ambient air quality standard (NAAQS) bythe 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 ofthe finding and denial, the Phoenix ozone nonattainment area willbe reclassified by operation oflaw as a serious ozone nonattainment area on the effective date ofthis action. The effect ofthe reclassification will be to continue progress toward attainment ofthe 1- hour ozone NAAQS through the development ofanew State implementation plan (SIP), due 12 months from the effective date ofthis action, addressing attainment ofthat standard byNovember 15, 1999. EFFECTIVE DATE: December 8, 1997. FOR FURTHER INFORMATION CONTACT: Frances Wicher, Office ofAir 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) ofthe Clean Air Act (CAA), the Phoenix metropolitan area was designated nonattainment for the 1-hour

ozone NAAQS and classified as "moderate." See 56 FR56694 (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) ofthe CAA, EPAhas the responsibility for determining, within six months ofan area's applicable attainment date, whether the area has attained the 1-hour

ozone NAAQS. IUnder section 181(b)(2)(A), ifEPA finds that an area has not attained the 1-hour ozone

1 On July 18, 1997 (62FR38856),EPArevised the

ozone NAAQS toestablish a8-hour standard; however, inorderto ensure an effective transition to thenew 8-hour standard, EPAalso retained the 1-hourNAAQS foran areauntil such timeas it determines thatthe areameets the 1-hourstandard. Seerevised 40CFR50.9 at62FR38894.As aresult ofretainingthe 1-hour standard,CAA partD, subpart 2,AdditionalProvisions forOzone Nonattainment Areas,including thereclassification provisions ofsection 181(b),remain applicableto
areas thatarenot attainingthe 1-hour standard. Unless otherwiseindicated, allreferences in this notice are tothe 1-hour ozone NAAQS. 

### NAAQS, itis reclassified by operation oflaw to thehigher ofthenexthigher classification orto theclassification applicable tothe area's design value at the time ofthe finding. CAA section 181(b)(2)(B) ofthe Act requires EPAto publish anotice in the FederalRegister identifying areas which failed to attain the standard and therefore must be reclassified byoperation oflaw.

Ifa state does not have the clean data necessary to show attainment ofthe NAAQS, itmay apply, under CAA section 181(a)(5) ofthe CAA, for aoneyear attainment date extension. Issuance ofan extension isdiscretionary, but EPA can exercise thatdiscretion only if the state has: (1)complied with the requirements and commitments pertaining to the applicable implementation plan for the area, and (2) the areahas measured no morethan

one exceedance ofthe ozoneNAAQS at any monitoring sitein the nonattainment area in theyear preceding the extension year.

A complete discussion ofthe statutory provisions and EPA policies governing findings ofwhether an area failed to attain the ozone NAAQS and extensions ofthe attainment date can be found in the proposalfor this action at 62FR 46229 (September 2, 1997).
II. Proposed Action

On September 2, 1997, EPAproposed to find that thePhoenix ozone nonattainment area failed to attain the 1-hour ozone NAAQS by the applicable attainment date. 62FR46229. The proposed findingwasbased upon ambient airquality data from the years 1994, 1995, and 1996. These data showed thatthe 1-hour ozone NAAQS of0.12 parts permillionhad been exceeded on average morethan one day peryear over this three-year period. Attainment ofthe 1-hour NAAQS is demonstrated when an area averages
one or less daysperyear over the standard during a three-year period. 40 CFR50.9 and Appendix H. EPA also proposed thatthe appropriate reclassification ofthe area was to serious, based on the area's 1994-1996 design value of0.132 ppm. For a complete discussion ofthePhoenix

ozone data and method ofcalculating both the average number ofdays over the ozone standard and the design value, see 62FR46230.

EPA also proposed todeny the State ofArizona's application for aone-year extension ofthe moderate area ozone attainment date for the Phoenix nonattainment area. The proposed denial wasbased, in part,on evidence that thePhoenix area is not closeto attainment ofthe 1-hour ozone standard and will need additional controls to attain, and, inpart, on the area's failure to meetthe second statutory criterion for grantingan extension. That criterion requires thatthe area have no morethan

oneexceedance ofthe ozone NAAQS in 1996. CAA section 181(a)(5)(B). The Fountain Hills special purpose monitor in the eastern part ofthe Phoenix nonattainment area recorded 4 exceedances ofthe i-hour ozone NAAQS in 1996. For a complete discussion ofthe basis fortheproposed denial ofthe extension, includingEPA's policies related to theuse ofspecial purpose monitoringdata, see 62FR 46231.

Finally, EPAproposed to require submittal ofthe serious area SIP revisions no later than 12 months from the effective date ofthe area's reclassification.
Il. Response to Comments

EPA received twenty-one comment lettersin response to its September 2, 1997 proposal. Comments werereceived fromArizona Governor Jane Dee Hull, theArizona legislative leadership, U.S. SenatorJon Kyl and U.S. Representative John Shadegg, theArizona Department ofEnvironmental Quality (ADEQ), the Maricopa County Environmental Services Department (MCESD), several localelected officials, numerous business groups, and one environmental group.

EPA wishes to express its appreciation to each ofthese individuals and organizations for taking thetime 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 ofthree elements: (1)a findingoffailure to attain by the statutory deadline ofNovember 15, 1996; (2) a denial ofthe State's application for a one-year extension of the attainment date; and (3)a 12-month schedule for submittal oftherevised SIP.

Most commenters emphasized Arizona's leadership in the development and implementation of effective ozone controls (many ofwhich

areonly mandated for serious or severe
ozonenonattainment areas) and its demonstrated commitment to making real improvements in airquality. Amongthe controls cited are: the State's premier vehicle emissions inspection program (which includes the only regulatory use ofremote sensing), Maricopa County's Travel Reduction Program, the extension oftheFederal Reformulated Gasoline (RFG)program to the Phoenix area, the State's adoption 

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### Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations 60003

ofits own, more stringent "Clean Burning Gasoline" program as well as

numerous other control programs such

as the voluntary lawnmower replacement program, mandatory conversion ofgovernment fleets to alternative fuels, and incentives for conversion ofprivate fleets to alternative fuels and for the construction ofpublic fueling facilities. The City ofPhoenix also listed a number ofinnovative air quality

measures that ithas implemented, and finally, APS noted the voluntary efforts ofbusiness and community groups including the Business for Clean Air Challenge program.

EPA is very aware ofArizona'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 ofattainment/ nonattainment nor the determination of whether an area met the statutory extension criterion relating to exceedances ofthe ozone NAAQS in 1996 allows for reviewing an area's efforts to adopt controls. This exercise involves little more than arotereview ofavailable 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 ofthe i-hour ozone NAAQS in EPA's recent action revising the ozone NAAQS, (3) the denial ofthe request for

aone-year attainment date extension, (4) EPA's compliance with the Regulatory Flexibility Act, and (5) proposed

measures to mitigate the impact ofthe reclassification. Many ofthe comments received did not directly address EPA's proposals and instead focused on issues that havebeen the subject ofearlier EPA rulemakings (e.g., retention ofi-hour

ozone standard), outside ofEPA'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 ofthe technical support document (TSD)for this rulemaking. Copies ofthe TSD as well as other documents in the docket for this rulemaking may be obtained from the contact listed atthe beginning ofthis notice.

A. CommentsRelatedto theProposed FindingofFailuretoAttain Comment

ADEQ and others note that Arizona has implemented most ofthe 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 ofthese 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 ofthe 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 arevery 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 ofthe Act is a clear statement ofCongress's belief that the later attainment deadlines afforded higher-classified and reclassified areas require compensating increases in the stringency ofcontrols. The reclassification provisions ofthe Clean Air Act are areasonable mechanism to assure continued progress toward attainment ofthe 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 forplanning and attainment under areclassification 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 ofNovember 15, 1996 and the serious area deadline ofNovember 15, 1999 makes completing the required technical analysis and adopting additional controls difficult. The State, however, has already adopted oris in the process ofadopting 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 ahead start in meeting the serious area requirements.

In proposing a 12-month schedule for submittal ofthe 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 ofcontrols to meet that deadline." See 62 FR42633. EPA is therefore retaining the 12-month schedule for submittal ofthe SIP revisions needed to meet the serious

area requirements.

Comment:Commenters argue that because stationary sources are notthe

cause ofthe 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 arethus merely punitive.

Response:Phoenix is not being singled out for more stringent NSR requirements than any other similarlyclassified 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 ofcontrolrequirements as
areas move up the classification ladder and are given more time to attain is part ofthebasic Clean Air Act scheme for

ozone attainment. In establishing this scheme, Congress determined that the

more stringent NSRprovision were reasonable for serious areas and, since

### No. 215 / Thursday, November 6, 1997 / Rules and Regulations

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. CommentsRelatedto Retentionofthe 1-HourOzone StandardComment

A number ofcomments were received

on the legality ofEPA's decision, having promulgated an 8-hour NAAQS, to defer revocation ofthe 1-hour ozone NAAQS.

Response:The continued applicability ofthe 1-hour standard untilEPA determines that the applicable area is meeting that standard is not the subject ofthis rulemaking. This rulemaking only concerns the finding that the Phoenix area failed to attain the 1-hour standard and the denial ofthe State's request for an extension ofthe attainment deadline for that standard. The issue ofthe continued applicability ofthe 1-hour standard was part ofthe rulemaking in which EPA promulgated an 8-hour

ozone standard. 62 FR 38856 (July 18, 1997). That rulemakingproceeding, not this one concerning Phoenix, was the appropriate forum in which to raise issues concerning the continued applicability ofthe 1-hour standard.

C. CommentsRelated to theProposalto DenyA rizona's Application fora OneYearExtension oftheAttainmentDate

Almost all comments received opposed EPA'sproposed denial ofthe State's application for a one-year extension ofthe 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) ofthe CAA that provides:

Upon application ofany State, the Administrator mayextend for 1additional year (hereinafter referred toas the "Extension Year") the [attainment deadline] if

(A)the Statehas complied with all requirements and commitments pertaining to the area in the applicable implementation plan, and

(B)no more than 1exceedance ofthe national ambient air quality standard level for ozonehas occurred in the area in theyear preceding theExtension Year.

No more than 2one-year extensions may be issuedunder thisparagraph fora single nonattainment area. Emphasis added.

Many commenters erroneously

assume that ifthe 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 FR46230. While EPA cannot grant an extension request if the conditions are not met, it is not required to do so even ifthey are.

While EPAbelieves, 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 firstthe 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 premiseofan extension is that an areais close to attainment and already hasin place the control strategy needed for attainment.All evidence infront oftheAgency indicates thatthe Phoenix area is notclose to attainment ofthe 1-hour ozone standard and that,despite the State's dedicated efforts to adopt and implement controls, thearea will need tocontinue its on goingplanning and control efforts. Thus,

even ifthePhoenix areamet the statutory requirements for granting an extension, EPA believes thatsuchan extensionwould notbe appropriate atthistime. 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 ofcommenters tacitly agreed with EPA's position by arguing the need for long-term measures to solve Phoenix's ozone problem and the impossibility ofshowing attainment by 1999.

The central thrust ofthe comments EPA received on the extension issue is that EPA improperly included data from special purpose monitors (SPMs) 2 in its calculation ofwhether the Phoenix area experienced no more than one exceedance ofthe ozone NAAQS in 1996, the year preceding the extension year, and had EPAproperly excluded the data, then the Phoenix area would have been granted an extension. For the

reasons discussed below, EPAbelieves 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.

As documented below and in Appendix B to the TSD, since at least

21n the Phoenix area, MCESD operates eight

ozone monitors inits official orstate or local air monitoring station/national airmonitoring station (SLAMS/NAMS) network. ADEQ and MCESD operate atotal ofnineozone special purpose monitors in the area. 1989, Arizona has maintained an inadequate official monitoring network and has consistently declined to convert the SPMs (which meet all ofEPA's technical criteria) to cure those deficiencies. Ifit 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 ofthe 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 ofthe 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 i-hour NAAQS. Modeling conducted by the State confirms this conclusion. Thus the underlying intent ofthe statute's extension provision has
notbeen met. In acknowledging this reality, EPA can appropriately exercise its discretion to denythe extension request. Comment:ADEQ contends that in a letter dated June 6, 1997, to the Clerk of the United States Court ofAppeals for the Third Circuit, EPA's legal counsel noted that EPA was not required to consider non-network (i.e., notpart of the SLAMS/NAMS network) data showing violations ofthe NAAQS. Letter, June 6, 1997, from Lois J. Schiffer, Assistant Attorney General, Environmental Natural Resources Division (byGreer S. Goldman), U.S. Department ofJustice (DOJ) to P. Douglas Sisk, Clerk, United States Court ofAppeals for the Third Circuit ("3rd Circuit letter"). ADEQ also cites SouthwesternPennsylvaniaGrowth Alliance v. Browner,121 F.3d 106 (3rd Cir. 1997), to support its position that EPA in the past has excluded exceedance datafrom its evaluation of

aredesignation request because the data

came from monitors that were not part ofthe SLAMS network.

Response:In the 3rd Circuit letter, EPA actually concluded that the Agency's regulation on the use ofSPM data, 40CFR 58.14, does not authorize it to take into account the State's intended use ofSPM data that otherwise
meet thatregulation's requirements when deciding whether to use it in an

ozone redesignation action. 3 As aresult, 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

3This letterwas signed by DOJon behalfofEPA and accurately reflects the Agency's position on the

use ofSPM data. 

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such as redesignations and reclassifications.

SouthwesternPennsylvaniaGrowth Alliance involves EPA's disapproval of the Commonwealth ofPennsylvania's request to redesignate the PittsburghBeaver Valley nonattainment area to attainment for ozone. The disapproval

was based on 1995 violations ofthe

ozone standard recorded on the area's SLAMS/NAMS network. 61 FR 19193 (May 1, 1996) The Southwestern Pennsylvania Growth Alliance (SWPGA), an organization ofmajor manufacturers and local governments in the Pittsburgh-Beaver Valley region, sought review ofEPA's disapproval by the Third Circuit Court ofAppeals. A full history ofEPA'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 ofthe 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 ithad notused 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 ofquestions, including why it is lawful for EPA to exclude consideration ofdata from monitors that are not part ofthe 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 notpartof the SLAMS network required by [40 CFR] Part 58 [EPA's monitoringregulation], EPA regulations provide thatEPA will exclude the data when they donot meet theterms of40 CFR58.14. That section provides, inrelevant part:

Any ambient air quality monitoring station other than aSLAMS or [prevention of significantdeterioration] station from which the State intends touse the data aspart of

a demonstration ofattainment or nonattainment or in computing adesign value for control purposes ofthe [NAAQS] must meet therequirements for SLAMS described in section 58.22 and, afterJanuary 1, 1983, must also meet therequirements for SLAMS as described in section 58.13 and appendices A and Etothis part. * * *In at least onecase, EPAhas interpreted section 58.14 tomake a state's intent a factor in determining whether data from special purpose monitors that otherwise meet the requirements ofsection 58.14 may be excluded from consideration in an ozone redesignation action. However, EPAhas recently evaluated that interpretation and concluded that itis 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 ofPart 58.

The statement that ADEQ cites from the 3rd Circuit letter comes from the letter's concluding paragraph which discusses the specific facts of SouthwesternPennsylvaniaGrowth Alliance.All monitoring data under consideration in that case came from SLAMs monitors; there were no SPM data atissue 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 ofwhether EPAhas discretion to decide if data from outside the official monitoring network should be used inredesignation decisions is not at issue inthis case, where all monitored violations ofthe ozone standard wererecorded at official network monitors. And even ifEPAwere required to consider non-network data showing violations, EPA would not beauthorized 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 EPAhas excluded SPM data in the past. While the court noted that "[i]n atleast one case, the EPA has excluded exceedance data from its evaluation ofa redesignation request because the data

came from monitors that were not part ofthe [SLAMS] network * * *,"it went

on to state in the same paragraph:

Assuming arguendo thatthe EPA's exclusion ofnon-SLAMS exceedance data violates the EPA's duty nottoredesignate an
area thatfails toattain the NAAQS, theEPA 's prior disregardofthisduty didnotrelievethe EPA ofits obligation to act correctly in other

cases.Emphasis added. 121 F.3d at 115.
Based on its interpretation ofSection 58.14, and the facts ofthe 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 ofEPA's issuance ofthe Memorandum, "Agency Policy on the Use ofSpecial Purpose Monitoring Data," dated August 22, 1997, by John Seitz, EPA Director ofthe Office ofAir Quality Planning and Standards ("SPM policy" or "SPM memo"), noting that it

was issuedjust 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 hocpolicy," EPA would
nothave been able to propose to deny Arizona's one-year extension request based upon the useofthe 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 dataproperly 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 onlyone exceedance ofthe

ozone NAAQS at a SLAMS or NAMS monitor (the exceedance at the Mesa SLAMS monitor on July 23, 1996, when

areading of0.127 ppm ozone was recorded) and that this was the only

ozone exceedance recorded during the entire calendar year of 1996 on any official SLAMS orNAMS 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 intohow special purpose monitoring data canbe used in making a variety ofregulatory decisions such as designations, classifications, and attainment dateextensions. [It] also [has] afinal ruling from the U.S. CourtofAppeals for theThird Circuitwhich supports theU.S. EPAdenial ofPennsylvania's redesignation request for thePittsburgh-Beaver Valley ozone nonattainment area.In light ofthese questions, legal developments, and the new [NAAQS] implementation directives, [OAQPS] believe[s] itis necessary to discuss theuse ofall publicly available special purpose monitoring datafor allregulatory applications.

Further impetus for the SPM policy

was the revised ozone NAAQS under which EPA must determine within 90 days oftheirJuly 18, 1997 publication which areas ofthe Country are attaining the 1-hour standard. National guidance is clearly essential to assure consistency in the use ofSPM data for these determinations.

The interest in and the need for a clear statement ofthe Agency's policy

on SPM data was thus far broader than the Phoenix situation. The Agency did not, as the commenters imply, create an

### No. 215 / Thursday, November 6, 1997 / Rules and Regulations

"ad hoc" policy simply tojustify its proposed denial ofArizona'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 tojustify its denial of Arizona's extension request.Even without a formal written policy statement, EPAbelieves 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 ofSPM data.

Moreover, the June 6, 1997 letter to the Third Circuit and the Court's subsequent July 28, 1997 decision in SouthwesternPennsylvaniaGrowth Alliance,both available longbefore EPA's announcement, maybe 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 CircuitCourt decision supports the view that theEPAmay notredesignate

an area from nonattainment to attainment if the EPAknows that the area is not meeting the ozone NAAQS. Specifically, iftheU.S. EPAknows ofaviolation or violations ofthe

ozone NAAQS by either examining information within theAIRS ordata from other sources and these datameet all 40 CFR Part 58 requirements, the U.S.EPA cannot determine thatan area is attaining the NAAQS.

This logic applies equally to extension requests: ifEPA knows of

more than one exceedance in an area in the yearpreceding the extension year by either examining information within AIRS or data from other sources and these data meet all40 CFRpart 58 requirements, EPA cannot grant an extension ofthe attainment date.

Finally, EPA notes that it informed Arizona ofits intention to use the SPM data in advance ofits August 25, 1997
announcement. In apresentation to the May 19, 1997 meeting ofthe Arizona air quality monitoring network stakeholders, 4 EPA stated that the current Maricopa SLAM network was deficient and that it could not, without inclusion ofthe SPM sites, support the granting ofan extension. At the June 9,

4ADEQconvened aseries offacilitated stakeholder meetings in Maythrough July, 1997 to discuss the ambient airquality monitoringnetwork in MaricopaCounty. Participants includedMCESD, other localagencies, industryrepresentatives, and environmental groups. EPAalsoparticipated in the meetings. 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.

Comment:Several commenters contend that the use ofthe SPM data in this instance is inconsistent with actions taken in other nonattainment

areas where SPM data were excluded for the purposes ofmaking 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 ofthe memorandum had been to reject exactly the kind of monitoring data on which EPA based its decisions to propose to deny the oneyear 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 useofSPM data contains numerous examples ofinstances 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 (theBeaumont-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 ofthe Phoenix area as moderate forozone and the PM-10 nonattainment designations for the Bullhead City and Payson, Arizona

areas. See 56 FR56694, 56703 (November 6, 1991) and 58 FR 67334, 67336 (December 21, 1993), respectively. Outside ofArizona, EPA has used SPM data to redesignate to nonattainment portions ofWhite Top Mountain in New York and Smyth County, Virginia. See 56 FR56694, 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 ofEPA's inconsistent use ofSPM 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 otherreasons, the SPM was not apart ofthe state monitoring network, the data from the monitor were utilized for research purposes, and the data were notreported to EPA's Aerometric Information Retrieval System (AIRS).

Commenters contend that in these three circumstances the Phoenix situation closely parallels BeaumontPort Arthur's; therefore, EPA should
treatthe Phoenix SPM data in alike

mannerby excluding it.In response, EPA notes that ithas clarified its policy

on the treatment ofSPM data since the April 2, 1996 action on Beaumont-Port Arthur,resulting in allthree ofthese circumstances no longer being grounds for excluding SPM data.5

Even ifEPA's regulations and policy

were that valid SPM data could be excluded in some cases (which they are not), EPAbelieves that there aretwo compellingreasons to use the SPM data in the Phoenix case. These reasons are (1) the inadequacy ofthe 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, EPAhas consistently found that Maricopa's existing ozone SLAMS/NAMS network is inadequate to meet the monitoring objectives ofPart 58, more specifically therequirement for a site measuring maximum concentration. A complete history of EPA's evaluations ofthe 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

5This policy clarification is clearly permissible. Moreover, even if it were a change orrevision in policy, rather than a clarification, it would also clearly bepermissible. Itis well established that an agency may modify orreverse its interpretation over time provided the agency supplies areasoned basis forthe change. See e.g., Chevron U.S.A., Inc. v. NRDC,467 U.S. 837, 863 (1984);MotorVehicle Manufacturers Assoc. ofthe U.S., Inc. v. StateFarm MutualAutomobile InsuranceCo., 463 U.S. 29, 42 (1983)("we fully recognize that "[regulatory] agencies donot 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 ofchanging circumstances.' "); Good SamaritanHospitalv. 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. 

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### Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations 60007

Maricopa County.6While there are SLAMS sites located throughout the central part ofthe Phoenix metropolitan
area, there are no SLAMS sites on the
eastern edge ofthe 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 (includingthe Fountain Hills SPM site)but has yet to convert any of those sites into SLAMS or NAMS.

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 acomplete network that accurately reflects air quality in the
area; therefore, even if the SPM data 

### were excluded from the calculation, the Agency believes thatit can properly exercise its discretion to denythe State's extension request.

The inadequate SLAMS networkhas led to atroubling discrepancy between the airquality measured on the SLAMS/ NAMS network and thatnetwork when augmented by the SPM sites. This is illustrated by Table 1below.

TABLE 1.- AIR QUALITY COMPARISON BETWEEN THE 

### SLAMS/NAMS NETWORK AND 

### SLAMS/NAMS/SPM NETWORK [Maricopa County, 1994-1996]

SLAMS/ SLAMS! NAMS/SPM network NAMS net- (woMt work (W/o Mt. Ord or Blue Point)

NumberofOzone Exceedance ........................................................................................................................................ 10 44 NumberofOzone Violations ............................................................................................................................................ 2 13 Number of D ays over the Ozone Standard

..................................................................................................................... 6 21

Clearly had EPA ignored the SPM data in Maricopa County, itwould have greatly underestimated the severity of the area's air quality and inappropriately downplayed the impact ofthat air quality on public health.

Given the significant probability that the Phoenix area would eventually face reclassification to serious even ifit were granted an extension, EPA questions the actualbenefit ofan extension to the

area. The commenters have made extensive comments on the adverse impacts ofreclassification, among them the short-term planning and attainment deadlines facing newly serious areas and the imposition ofthe more stringent NSRprovisions. An extension would only compound the problem ofthe short time frames while simply deferring the

more stringent NSRprovisions for a short time. Hence, even if itwere within its discretion to grant an extension, EPA stands by its beliefthat an extension is
not appropriate at this time. Comment:A number ofcommenters 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 ofozone 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.

6This is borne outby the fact that all but one of
the 1996 exceedances (the one at theMesa SLAMS monitor) occurred atmonitors to the east or northeast ofthe metropolitan area. 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 somepart to the introduction ofreformulated gasoline and the continuing implementation ofother control programs such asthe State's premier vehicle emission inspection program.

Unfortunately, a single year ofozone 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 ofthis 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 (thatis, an area can average no
more than 1exceedance per year over a three-year period). 40 CFR 50.9 and part 50, Appendix H.

There is somereason 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 ofSan Diego and the Imperial Valley) have shown decreases in second-high ozone levels from 1996 to 1997, many greater

7SBREFA amended the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 etseq.

8EPA notes that businesses that emit 100 tpy or

more are already subject to someofthese than Phoenix's. None ofthese areas has introduced substantial new emission reduction programs, like Phoenix, that would account for these decreases.

D. CommentsRelatedto theRegulatory FlexibilityActRequirements

Comment:A number ofcommenters claimed that EPA failed to comply with the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) in its proposal.7 The
commenters claim that EPA's certification that its action would not have a significant economic impact on

a substantial number ofsmall entities is incorrect.

In support oftheir argument, the
commenters state that smallbusinesses that emit 50 tpy ormore ofVOC will become subject to reasonably available control technology (RACT) requirements, more stringent NSR requirements, and the Title Voperating permit program as aresult ofthe reclassification to serious and describe in more detail the potential adverse impacts ofthese requirements on small businesses.8

The commenters further assert that EPA's reliance onMid-Tex Electric Cooperative,Inc.v. FERC,773 F.2d 327 (D.C. Cir. 1985) for notpreparing a regulatory flexibility analysis is misplaced. Finally, as an aside, the
commenters note thatMid-Tex was decided a decade before Congress enacted SBREFA and more significantly,

requirements under the moderate area classification.

### No. 215 / Thursday, November 6, 1997 / Rules and Regulations

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 ofrulemaking for aproposed rule, the agency must prepare an initial regulatory flexibility analysis for the proposed rule unless the head ofthe agency certifies that therule "will not, if promulgated, have a significant economic impact on a substantial number ofsmall 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 ofthe attainment date extension request, 9based on its conclusion that the rule would not establish requirements applicable to small entities and therefore would nothave a significant economic impact on small entities within the meaning ofthe RFA. EPA is reaffirming that certification in this final action.

As described elsewhere in this notice, CAA section 181(b) requires EPA to determine whether an area has attained

aNAAQS by the applicable attainment deadline. IfEPA finds that the area has
not attained, the section generally provides that the area "shall be reclassified byoperation oflaw" (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 ofthe 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 ofregulatory 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
notinclude regulatory requirements that the rule does not establish, but may trigger under the terms ofotherrules 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 MidTex, all make clear that RFA analysis is

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

A more detailed discussion ofthis issue may be found in the TSD for this rulemaking.

E. CommentsRelatedtoMitigatingthe AdverseImpactsofReclassification

Many commenters suggested several steps that could be taken to mitigate the adverse impacts ofthe reclassification to serious. While EPA will briefly respond to most ofthe 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 ofNSR and Title V requirements. Those questions are addressed in the TSD.

Comment:Commenters requested that EPA suspend further enforcement ofthe 1-hour ozone NAAQS in the Phoenix Metropolitan area by amending its "implementation policy" forthe 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 ofthe 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 ofRevised Air Quality Standards for Ozone and Particulate Matter" ("President's Memorandum") signed by President Clinton for the implementation ofthe revised ozone and particulate matter standards. Attached to that memorandum is a strategy, "Implementation Plan for Revised AirQuality Standards" ("Implementation Plan") outliningthe 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 ofmaximizing

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 ofthe 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 of40 CFR50.9,

asrevised (62 FR 38856, 38894), nor any other statutory or regulatory provisions, provide EPA with the authority to suspend enforcement ofthe 1-hour NAAQS in Phoenix. Moreover, as noted earlier, the Phoenix area has not complied with some ofthe most significant serious area requirements (e.g., the 9 percent rate ofprogress requirement). Finally EPAbelieves that complying with those requirements will have apositive, notdetrimental, effect

on the ability ofPhoenix 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 ofArizona to act upon submitted SIP revisions within a fixed period of timebased upon priorities identified by the State and to set a schedule for acting

on future SIP revisions.

Response:EPA Region 9 receives hundreds ofrequests 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 theserequests as quickly as it would like. As aresult, 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 TitleV 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 ofArizona's TitleV operating permit program on October 30, 1996 (61 FR55910). The parties involved in the suithave had constructive exchanges, which EPA expects to continue, on the appropriate
treatment ofthe Arizona Excess Emissions Rule during the settlement discussions. 

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## 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
sourcereview programs mandated by both parts C (PSD) and D (NSR)ofTitle I ofthe Clean Air Act are a source of

concern for many people. On July 23, 1996, EPAproposed majorrevisions (known as the NSRreform proposal) to its PSD and NSRregulations. 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 aregulatory affirmative defense for sources with potential VOC emissions offrom 50 to 100 tonsper 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 attemptingto ease the perceived regulatory burden that will be imposed on sources that emit between 50 and 100 tons ofVOCper year as a result ofthereclassification. 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 triggerNSR. 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 tojoin the federal program and the State's request for lower RVP limits, the Agency participated in the development ofthe

new CBG rules in order to correct any approval problems early in theprocess. EPA is now working closely with ADEQ
to act on the recent submittal ofthe CBG rules. This work is amongEPA'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 ofthe RFG program and other actions taken by the State ofArizona to reduce ozone pollution and that this results in an inaccurate and unwarranted reclassification ofPhoenix
to serious. They comment further that this violates principles in President's July 18, 1997 memorandum that "implementation ofthe 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 ofthe RFGprogram 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 offailure to attain and denial ofthe 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 dateis November 15, 1996, and under long-established procedures, determining attainment as ofthat date requires reviewing data from the three years immediately preceding that date

or 1994 through 1996. 40CFR 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 ofthe [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 oneyear extension ofthe attainment date. As a result ofthis finding and denial, the Phoenix ozone nonattainment area is reclassified by operation oflaw as a serious ozone nonattainment area on the effective date oftoday's action and the submittal ofthe 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 aprecedent for any future action. Each finding offailure to attain, request for an extension ofan attainment date, and establishment ofa SIP submittal date shall be considered separately and shall be based on the factual situation ofthe 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 FR51735, October4, 1993), EPA is required to determine whether today's action is a "significant regulatory action" within the meaning ofthe E.O., and therefore should be subject to OMBreview, economic analysis, and the requirements ofthe E.O. SeeE.O. 12866,

sec. 6(a)(3). The E.O. defines, in sec. 3(f), a "significant regulatory action" as
aregulatory action that is likely to result in arule that may meet atleast 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 ofthe 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

orplanned by another agency;

(3) Materially alter thebudgetary impact ofentitlements, grants, user fees,

or loan programs or therights and obligations ofrecipients thereof; or

(4) Raise novel legal or policy issues arising out oflegal mandates, the President's priorities, or the principles
set forth in the Executive Order.

EPA has determined that neither the finding offailure to attain it is making today, the denial ofArizona's request for aone-year extension ofthe attainment data, nor the establishment ofSIP submittal schedule would result in any ofthe 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) ofthe Act arebased upon air quality considerations, and reclassifications
must occur by operation oflaw in light ofcertain air quality conditions. These findings do not, in and ofthemselves, impose any new requirements on any sectors ofthe economy. In addition, because the statutory requirements are clearly defined with respect to the differently classified areas, and because 

### Federal Register / Vol. 62,

### No. 215 / Thursday, November 6, 1997 / Rules and Regulations

those requirements are automatically triggered by classifications that, in turn,

are triggered by air quality values, findings offailure to attain and reclassification cannot be said to impose

amaterially adverse impact on State, local, or tribal governments or communities. The same is true ofthe determination not to grant a one-year extension, in light ofthe fact that this determination is also based in part on air quality values. Similarly, the establishment ofnew SIP submittal schedules merely establishes the dates by which SIPs mustbe submitted, and does not adversely affect entities.

B. RegulatoryFlexibility

Under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., EPA must prepare
aregulatory flexibility analysis assessing the impact ofany 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 ofsmall entities. Small entities include small businesses, small not-forprofit enterprises, and government entities withjurisdiction over populations ofless than 50,000.

As discussed in the response to comments above and in more detail in the TSD, a finding offailure to attain (and the consequent reclassification by operation oflaw ofthe nonattainment area)under section 181(b)(2) ofthe Act,

adenial ofa one-year extension request, and the establishment ofa SIP submittal schedule for areclassified area, do not, in-and-of-themselves, directly impose any new requirements on small entities. See Mid-TexElectric 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 therequirements ofthe 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 theproposal (62 FR46233) that today's final action will
not have a significant impact on a substantial number ofsmall entities within the meaning ofthose terms for RFA purposes.
C. UnfundedMandatesReformAct

Title II ofthe 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 ofthe UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, when EPA promulgates "any general notice ofproposed rulemaking that is likely to result in promulgation ofany rule that includes any Federal mandate that may result in the expenditures by State, local, and tribal governments, in the aggregate, orby the private sector, of$100 million or more" in any one year. A "Federal mandate" is defined, under section 101 ofUMRA,

as aprovision that "would impose an enforceable duty" upon theprivate
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 ofUMRA, EPA is required to develop aprocess to facilitate input byelected officers of State, local, and tribal governments for EPA's "regulatory proposals" that contain significant Federal intergovernmental mandates. Under section 205 ofUMRA, before EPA promulgates "any rule for which a written statement is required under [UMRA sec.] 202", EPA must identify and consider areasonable number of regulatory alternatives and either adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives oftherule, or explain why adifferent alternative was selected.

Generally, EPA has determined that the provisions ofsections 202 and 205 ofUMRA do not apply to this decision. Under section 202, EPA is to prepare a written statement that is to contain
assessments and estimates ofthe costs and benefits ofa 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 ofany estimate or analysis if the agency is prohibited by law from considering the estimate or analysis in adoptingthe 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 notrequire EPA to prepare awritten statement under section 202. Although the establishment ofa SIP submission schedule may impose afederal mandate, this mandate would notcreate 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 ofthe proposal with State officials.

Finally, section 203 ofUMRA does
not apply to today's action because the regulatory requirements finalized today-the SIP submittal scheduleaffect onlythe State ofArizona, which is not a small government under UMRA.

D. Submission to Congressandthe GeneralAccountingOffice

Under section 801(a)(1)(A) ofthe Administrative Procedures Act (APA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, EPA submitted a report containing thisrule and otherrequired information
to the U.S. Senate, the U.S. House of Representatives and the Comptroller General ofthe General Accounting Office prior to publication ofthe rule in today's Federal Register. This rule is
not a "major rule" as defined by section 804(2) ofthe APA as amended.

E. Petitions forJudicialReview

Under section 307(b)(1) ofthe Clean AirAct, petitions forjudicial review of this action must be filed in the United States Court ofAppeals for the appropriate circuit by January 5, 1998. Filing apetition for reconsideration by the Administrator ofthis final rule does
not affect the finality ofthis rule for the purposes ofjudicial review nor does it extend the time within which a petition forjudicialreview 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).
ListofSubjects in 40 CFRPart81

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

Dated: October 27, 1997. HarrySeraydarian, ActingRegionalAdministrator.

Part 81, chapter I, title 40 ofthe Code ofFederal Regulations is amended as follows: 

### 60010 Federal Register / Vol. 62,

### Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations 60011

PART 81-[AMENDED] Authority:42 U.S.C. 7401 7671q. §81.303 Arizona
2. Section 81.303 is amended by * * * 

### 1.The authority citation for part 81 revising thetable for Arizona- Ozone, continues toread asfollows: for the Phoenix Area to read asfollows:

ARIZONA-OZONE


### Designation Classification Designated area Date Type Date Type

Phoenix Area: M

aricopa County (part)

....................................................

The Urban Planning Area of the Maricopa Association of Governments is bounded as follows:

1.Commencing at a point which is at the intersection ofthe 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 northerlyalong 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 pointwhere 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 SemiRegional 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 ofthe 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 southeastcorner ofthe Fort McDowell Indian Reservation, as shown on the plat dated July 22, 1902, and recorded with the U.S. Government on June 15, 1902; 11/15/90 1Nonattainment

............... 12/8/97 1Serious.

## 60012 Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations

ARIZONA-OZONE-Continued

Designation Classification Designated area Date Type Date Type

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

Township5 North to a pointwhere the southern line intersects with the eastern line of Range 5 East which line is the boundary of Tonto National Forest and the north boundaryof 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 ofTownship 5 North, which line isthe boundary ofthe 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 boundaryof 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 ofTownship 6 North, which line isthe boundary ofthe 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 southerlyand 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;

### Federal Register / Vol. 62, No. 215 / Thursday, November 6, 1997 / Rules and Regulations 60013

ARIZONA-OZONE-Continued

Designation Classification Designated area Date Type Date Type

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 JackrabbitTrail; 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 1South, 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 ofthe northern line of Section 31, Township 1 North, Range 1West; 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 ofTownship 1South; 23. Thence, easterly along the southern line of

Township 1South to a pointwhere 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 isthe western boundary ofthe Gila River Indian Reservation; 25. Thence, easterly along the southern boundary of the Gila River Indian Reservation which isthe southern line of Sections 13, 14, 15, 16, 17, and 18, Township 2 South, Range 1 East, tothe boundary between Maricopa and Pinal Counties as described inArizona Revised Statues Section 11-109 and 11-113, which isthe 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 intersectsthe Gila River; 27. Thence, southerly up the Gila River to a

point where the Gila River intersectswith the southern lineof 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

[ERDoc. 97 29396 Filed 11 5 97;8:45 am]

BILLING CODE 6560-50-P