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[Federal Register Volume 77, Number 182 (Wednesday, September 19, 2012)]
[Proposed Rules]
[Pages 58072-58076]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22972]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2012-0721; FRL-9727-5]

Finding of Substantial Inadequacy of Implementation Plan; Call 
for California State Implementation Plan Revision; South Coast

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: In response to a remand by the Ninth Circuit Court of Appeals, 
and pursuant to the Clean Air Act, EPA is proposing to find that the 
California State Implementation Plan (SIP) for the Los Angeles-South 
Coast Air Basin (South Coast) is substantially inadequate to comply 
with the obligation to adopt and implement a plan providing for 
attainment of the 1-hour ozone standard. If EPA finalizes this proposed 
finding of substantial inadequacy, California would be required to 
revise its SIP to correct these deficiencies within 12 months of the 
effective date of our final rule. If EPA finds that California has 
failed to submit a complete SIP revision as required by a final rule or 
if EPA disapproves such a revision, such finding or disapproval would 
trigger clocks for mandatory sanctions and an obligation for EPA to 
impose a Federal Implementation Plan. EPA is also proposing that if EPA 
makes such a finding or disapproval, sanctions would apply consistent 
with our regulations, such that the offset sanction would apply 18 
months after such finding or disapproval and highway funding 
restrictions would apply six months later unless EPA first takes action 
to stay the imposition of the sanctions or to stop the sanctions clock 
based on the State curing the SIP deficiencies.

DATES: Written comments must be received on or before October 19, 2012.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2012-0721, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the on-line instructions for submitting comments.
     Email: tax.wienke@epa.gov.
     Mail or deliver: Wienke Tax, Air Planning Office, U.S. 
Environmental Protection Agency, Region 9, Mailcode AIR-2, 75 Hawthorne 
Street, San Francisco, California 94105-3901.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Information that you consider CBI or otherwise 
protected should be clearly identified as such and should not be 
submitted through http://www.regulations.gov or email. The http://www.regulations.gov Web site is an ``anonymous access'' system, and EPA 
will not know your identity or contact information unless you provide 
it in the body of your comment. If you send an email comment directly 
to EPA, your email address will be automatically captured and included 
as part of the public comment. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment.
    Docket: The index to the docket for this action is available 
electronically on the http://www.regulations.gov Web site and in hard 
copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California, 
94105. While all documents in the docket are listed in the index, some 
information may be publicly available only at the hard copy location 
(e.g., copyrighted material), and some may not be publicly available at 
either location (e.g., CBI). To inspect the hard copy materials, please 
schedule an appointment during normal business hours with the contact 
listed in the FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: Wienke Tax, Air Planning Office, U.S. 
Environmental Protection Agency, Region 9, Mail Code AIR-2, 75 
Hawthorne Street, San Francisco, California 94105-3901, 415-947-4192, 
tax.wienke@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and 
``our'' refer to EPA.

Table of Contents

I. Background
    A. Regulatory Context
    B. South Coast Ozone Designations and Classifications and 
Related SIP Revisions
    C. Litigation on EPA's Final Action on 2003 South Coast 1-Hour 
Ozone SIP
    D. Determination of South Coast's Failure to Attain 1-Hour Ozone 
Standard
II. Rationale for Proposed SIP Call
III. Consequences of Proposed SIP Call
IV. Proposed Action and Request for Public Comment
V. Statutory and Executive Order Reviews

I. Background

A. Regulatory Context

    The Clean Air Act (CAA or Act) requires EPA to establish national 
ambient air quality standards (NAAQS or ``standards'') for certain 
widespread pollutants that cause or contribute to air pollution that is 
reasonably anticipated to endanger public health or welfare (see 
sections 108 and 109 of the CAA).
    In 1979, under section 109 of the CAA, EPA established a primary 
health-based NAAQS for ozone \1\ at 0.12 parts per million (ppm) 
averaged over a 1-hour period. See 44 FR 8202 (February 8, 1979). The 
Act, as amended in 1990, required EPA to designate as nonattainment any 
area that had been designated as nonattainment before the 1990 
Amendments [section 107(d)(1)(C) of the Act; 56 FR 56694; (November 6, 
1991)]. The Act further classified these areas, based on the severity 
of their

[[Page 58073]]

nonattainment problem, as Marginal, Moderate, Serious, Severe, or 
Extreme.
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    \1\ Ground-level ozone or smog is formed when oxides of nitrogen 
(NOX), volatile organic compounds (VOC), and oxygen react 
in the presence of sunlight, generally at elevated temperatures. 
Strategies for reducing smog typically require reductions in both 
VOC and NOX emissions. Ozone causes serious health 
problems by damaging lung tissue and sensitizing the lungs to other 
irritants. When inhaled, even at very low levels, ozone can cause 
acute respiratory problems, aggravate asthma, temporary decreases in 
lung capacity of 15 to 20 percent in healthy adults, inflammation of 
lung tissue, lead to hospital admissions and emergency room visits, 
and impair the body's immune system defenses, making people more 
susceptible to respiratory illnesses, including bronchitis and 
pneumonia.
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    The control requirements and date by which attainment of the 1-hour 
ozone standard was to be achieved varied with an area's classification. 
Marginal areas were subject to the fewest mandated control requirements 
and had the earliest attainment date, November 15, 1993, while Extreme 
areas were subject to the most stringent planning requirements and were 
provided the most time to attain the standard, until November 15, 2010. 
The various ozone planning requirements to which Extreme ozone 
nonattainment areas are subject are set forth in section 172(c) and 
section 182(a)-(e) of the CAA.
    In 1997, EPA replaced the 1-hour ozone standard with an 8-hour 
ozone standard of 0.08 ppm. See 62 FR 38856 (July 18, 1997).\2\ We 
promulgated final rules to implement the 1997 8-hour ozone standard in 
two phases. The ``Phase 1'' rule, which was issued on April 30, 2004 
(69 FR 23951) establishes, among other things, the classification 
structure and corresponding attainment deadlines, as well as the anti-
backsliding principles for the transition from the 1-hour ozone 
standard to the 8-hour ozone standard. For an area that was designated 
nonattainment for the 1-hour ozone standard at the time EPA designated 
it as nonattainment for the 1997 8-hour ozone standard as part of the 
initial 8-hour ozone designations, most of the requirements that had 
applied by virtue of the area's classification for the 1-hour ozone 
standard continue to apply even after revocation of the 1-hour ozone 
standard (which occurred in June 2005 for most areas). See 40 CFR 
51.905(a)(1) and 40 CFR 51.900(f). Thus, for example, an area that was 
designated nonattainment and classified as Extreme for the 1-hour ozone 
standard at the time of an initial designation of nonattainment for the 
1997 8-hour standard remains subject to the requirement to have a 
fully-approved attainment demonstration meeting Extreme area 
requirements for the 1-hour ozone standard or an alternative as 
provided under 40 CFR 51.905(a)(1)(ii). See 40 CFR 51.905(a)(1) and 40 
CFR 51.900(f)(13).
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    \2\ In 2008, EPA tightened the 8-hour ozone NAAQS to 0.075 ppm, 
see 73 FR 16436 (March 27, 2008). Today's proposed action relates 
only to SIP requirements arising from the classifications and 
designations of the South Coast with respect to the 1-hour ozone and 
1997 8-hour ozone standards.
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    The Phase 2 rule, which was issued on November 29, 2005 (70 FR 
71612), addresses the SIP obligations for the 1997 8-hour ozone 
standard. Under the Phase 2 rule, an area that is designated as 
nonattainment for the 1997 8-hour ozone standard, and classified under 
subpart 2 (of part D of title I of the CAA), is subject to the 
requirements of subpart 2 that apply for that classification. See 40 
CFR 51.902(a).

B. South Coast Ozone Designations and Classifications and Related SIP 
Revisions

    As noted above, the CAA, as amended in 1990, required EPA to 
designate as nonattainment any area that was violating the 1-hour ozone 
standard. The CAA also required EPA to classify nonattainment areas as 
Marginal, Moderate, Serious, Severe, or Extreme depending upon the 
design value of the area. On November 6, 1991, EPA designated the Los 
Angeles-South Coast Air Basin Area (``South Coast'') \3\ as 
nonattainment and classified it as Extreme for the 1-hour ozone 
standard; thus the area had an attainment date no later than November 
15, 2010 (56 FR 56694).
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    \3\ The South Coast includes Orange County, the southwestern 
two-thirds of Los Angeles County, southwestern San Bernardino 
County, and western Riverside County (see 40 CFR 81.305).
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    The California Air Resources Board (CARB) has submitted a number of 
SIP revisions over the years for the South Coast to address 1-hour 
ozone SIP planning requirements. Specifically, in 1994, CARB submitted 
a 1-hour ozone SIP that, among other things, included for the South 
Coast an attainment demonstration, a ``rate of progress'' (ROP) 
demonstration, and transportation control measures (TCMs). In 1997, EPA 
approved the 1994 South Coast Ozone SIP as it applied to the South 
Coast for the 1-hour standard. See 62 FR 1150 (January 8, 1997).
    In 1997 and 1999, CARB submitted revisions to the 1994 South Coast 
1-Hour Ozone SIP, including a revised ROP demonstration and a revised 
attainment demonstration (``1997/1999 South Coast 1-Hour Ozone SIP''), 
which EPA approved in 2000. See 65 FR 18903 (April 10, 2000). In 2004, 
CARB submitted revisions to the 1997/1999 South Coast 1-Hour Ozone SIP 
(``2003 South Coast 1-Hour Ozone SIP'') intended to update and replace 
the State's control measure commitments in the 1997/1999 South Coast 1-
Hour Ozone SIP. See 73 FR 63408, 63410 (October 24, 2008). The revised 
attainment demonstration submitted as part of the 2003 South Coast 1-
Hour Ozone SIP included updated emissions inventories showing higher 
mobile source emissions than the State had previously projected and 
updated modeling that indicated a lower ``carrying capacity'' in the 
South Coast air basin, as well as additional commitments by CARB to 
achieve specified amounts of VOC and NOX emission reductions 
needed for attainment by the applicable attainment date (November 15, 
2010) in light of these updated analyses. Id. at 73 FR 63410, 63416 
(October 24, 2009). In 2008, however, CARB withdrew key components of 
the emission reduction commitments in the 2003 South Coast 1-Hour Ozone 
SIP. See 73 FR at 63410-12 (citing letter from James Goldstene, 
Executive Officer, CARB, dated February 13, 2008).
    In 2009, EPA approved certain elements of the 2003 South Coast 1-
Hour Ozone SIP \4\ but disapproved the revised ROP demonstrations and 
attainment demonstration in the 2003 South Coast 1-Hour Ozone SIP, in 
large part because CARB's 2008 withdrawal of key components of the 
emission reduction commitments submitted in 2004 rendered the plan 
insufficient to demonstrate attainment and to meet ROP milestones. 74 
FR 10176, 10181 (March 10, 2009). More specifically as to the 
attainment demonstration, EPA concluded that the 2003 South Coast 1-
Hour Ozone SIP did not meet the CAA section 182(c)(2)(A) requirement 
for a demonstration of attainment of the 1-hour ozone NAAQS by the 
applicable attainment date because the modeled attainment demonstration 
``relies upon emission reductions from [CARB's] control strategy as set 
forth in the 2003 State Strategy, most of which was withdrawn by [CARB] 
on February 13, 2008.'' 73 FR 63408, 63416; (October 24, 2008). EPA 
also concluded that the disapproval of the attainment demonstration did 
not trigger sanctions clocks or a Federal implementation plan (FIP) 
obligation because the approved SIP already contained an approved 1-
hour ozone attainment demonstration meeting CAA requirements. See 74 FR 
at 10177, 10181.
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    \4\ Among the elements EPA approved in 2009 were control 
measures adopted by the California Air Resources Board, including a 
control measure, referred to as ``PEST-1'' that carried forward the 
existing Pesticide Element from the 1994 California 1-Hour Ozone SIP 
that EPA approved in 1997, and a demonstration submitted by the 
South Coast Air Quality Management District addressing the first 
element of CAA section 182(d)(1)(A), referred to herein as the ``VMT 
emissions offset demonstration.''
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    With respect to the 1997 8-hour ozone standard, EPA initially 
designated the South Coast as nonattainment and classified it as 
``Severe-17,'' but later approved a request by California to reclassify 
the area to ``Extreme.'' See 69 FR 23858 (April 30, 2004) and 75 FR 
24409 (May 5, 2010). In 2007, CARB

[[Page 58074]]

submitted a SIP revision to address the Extreme 8-hour ozone SIP 
planning requirements for the South Coast (``2007 South Coast 8-hour 
Ozone SIP''), which EPA fully approved in March 2012. See 77 FR 12674 
(March 1, 2012).

C. Litigation on EPA's 2009 Final Action on the South Coast 2003 1-Hour 
Ozone SIP

    On May 8, 2009, several environmental and community groups filed a 
petition for review in the U.S. Court of Appeals for the Ninth Circuit 
challenging EPA's March 2009 partial approval and partial disapproval 
of the 2003 South Coast 1-Hour Ozone SIP. Association of Irritated 
Residents et al. v. EPA, Case Nos. 09-71383 and 09-71404. The case 
centered on three main issues: (1) The consequences of EPA's final 
disapproval of the attainment demonstration; (2) the necessity for 
substantive review of the previously-approved 1994 Pesticide Element 
brought forward in the 2003 State Strategy; and (3) EPA's 
interpretation of CAA section 182(d)(1)(A), which requires SIPs for 
``Severe'' or ``Extreme'' ozone nonattainment areas to include specific 
transportation control strategies and transportation control measures 
(TCMs) to offset any growth in emissions from growth in vehicle miles 
traveled (``VMT emissions offset requirement''), and EPA's approval of 
the State's demonstration of compliance with this SIP requirement.\5\
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    \5\ EPA is addressing issues 2 and 3 in 
separate rulemakings. With respect to issue 2 (the 
continuation of the 1994 Pesticide Element, also known as ``PEST-
1''), the EPA Region IX Regional Administrator signed a final rule 
on August 14, 2012 approving certain State fumigant regulations and 
a revised Pesticide Element commitment for San Joaquin Valley, 
thereby responding to the remand in the Association of Irritated 
Residents case. See, also, 77 FR 24441; (April 24, 2012) (proposed 
rule on fumigant regulations and revised Pesticide Element for San 
Joaquin Valley). With respect to issue 3 (VMT emissions 
offset requirement), EPA is proposing action in a separate document 
in today's Federal Register.
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    On February 2, 2011, the Ninth Circuit ruled in favor of the 
petitioners on all three issues and remanded EPA's 2009 final action on 
the 2003 South Coast 1-Hour Ozone SIP. Association of Irritated 
Residents v. EPA, 632 F.3d 584 (9th Cir. 2011). In so doing, the court 
held that EPA must promulgate a FIP under CAA section 110(c) or issue a 
SIP call where EPA disapproves a new attainment demonstration unless 
the Agency determines that the SIP as approved remains sufficient to 
demonstrate attainment of the NAAQS. Specifically, the court rejected 
EPA's argument that there is no FIP duty where the EPA had already 
approved into the SIP the required plan element and the submission 
disapproved was voluntarily submitted by the State to replace the 
existing approved SIP element. The court briefly referenced its 
analysis of the FIP provisions to conclude that the disapproval also 
triggered mandatory sanctions. Id. at 591-594.
    As to the 1994 Pesticide Element, the court held that EPA had an 
affirmative duty to review the substance of the element anew in light 
of subsequent litigation over the Pesticide Element that revealed 
approvability issues not accounted for in EPA's previous review and 
approval of the element. Id. at 594-595. EPA is addressing this portion 
of the court's decision in a separate rulemaking. See footnote 
5 of this document.
    Finally, the court disagreed with EPA's interpretation of the VMT 
emissions offset requirement and found that the plain language of the 
Act requires SIPs subject to CAA section 182(d)(1)(A) to include 
additional transportation control strategies and measures whenever 
vehicle emissions are projected to be higher, due to growth in VMT, 
than they would have been had VMT not increased, even when aggregate 
vehicle emissions are actually decreasing. Id. at 595-597. EPA is 
addressing this portion of the court's decision in a separate 
rulemaking. See footnote 5 of this document.
    On May 5, 2011, EPA filed a petition for panel rehearing requesting 
the court to reconsider its decision on the issue of whether CAA 
section 179 sanctions are triggered by disapproval of a revision to an 
already-approved SIP element, and on the court's interpretation of CAA 
section 182(d)(1)(A).\6\ On January 27, 2012, the Ninth Circuit denied 
EPA's petition for rehearing but issued an amended opinion deleting 
references to the imposition of sanctions following disapproval of the 
South Coast plan. The mandate in the case issued on February 13, 2012. 
See Association of Irritated Residents v. EPA, 632 F.3d 584 (9th Cir. 
2011), reprinted as amended on January 27, 2012, 686 F.3d 668, further 
amended February 13, 2012 (``AIR v. EPA''). The decision, as amended, 
states inter alia that ``EPA should have ordered California to submit a 
revised attainment plan for the South Coast after it disapproved the 
2003 Attainment Plan'' and remands EPA's action ``for further 
proceedings consistent with [the] opinion.'' Id. at 681.
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    \6\ See Docket Nos. 09-71383 and 09-71404 (consolidated), Docket 
Entry 41-1, Petition for Panel Rehearing.
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D. Determination of South Coast's Failure to Attain 1-Hour Ozone 
Standard

    On December 30, 2011, EPA determined that the South Coast extreme 
ozone nonattainment area had failed to attain the 1-hour ozone standard 
by its applicable attainment date of November 15, 2010. 76 FR 82133; 
(December 30, 2011). This determination was based on quality-assured 
and certified ambient air quality monitoring data from 2008-2010, the 
three-year period preceding the applicable attainment date. Id. EPA 
made this determination pursuant to its obligation and authority under 
CAA section 301(a) and the relevant portion of section 181(b)(2) to 
ensure implementation of 1-hour ozone anti-backsliding contingency 
measures and section 185 fee program requirements. Id. at 82145.

II. Rationale for Proposed SIP Call

    The Ninth Circuit concluded in AIR v. EPA that EPA must promulgate 
a FIP under CAA section 110(c) or issue a SIP call where EPA 
disapproves an attainment demonstration submitted to replace an 
already-approved attainment demonstration in the SIP, unless the Agency 
determines that the SIP as approved remains sufficient to demonstrate 
attainment of the NAAQS. AIR v. EPA, 632 F.3d 584 (9th Cir. 2011), as 
amended at 686 F.3d 668. Consistent with this directive and in response 
to the court's conclusion that ``EPA should have ordered California to 
submit a revised attainment plan for the South Coast after it 
disapproved the 2003 Attainment Plan,'' id. at 681, EPA is proposing to 
issue a SIP call under CAA section 110(k)(5) to require California to 
submit a new attainment demonstration for the 1-hour ozone standard in 
the South Coast.
    Section 110(k)(5) of the CAA states, in relevant part, as follows:

Whenever the Administrator finds that the applicable implementation 
plan for an area is substantially inadequate to attain or maintain 
the relevant national ambient air quality standard, * * * or to 
otherwise comply with any requirement of [the Act], the 
Administrator shall require the State to revise the plan as 
necessary to correct such inadequacies, and may establish reasonable 
deadlines (not to exceed 18 months after the date of such notice) 
for the submission of such plan revisions. Such findings and notice 
shall be public. Any finding under this paragraph shall, to the 
extent the Administrator deems appropriate, subject the State to the 
requirements of this chapter to which the State was subject when it 
developed and submitted the plan for which such finding was made, 
except that the Administrator may adjust any dates

[[Page 58075]]

applicable under such requirements as appropriate (except that the 
Administrator may not adjust any attainment date prescribed under 
part D of this subchapter, unless such date has elapsed).

    Our proposed SIP call is based on the evidence submitted by 
California in the form of the 2003 South Coast 1-Hour Ozone Plan that 
the approved 1997/1999 South Coast 1-Hour Ozone SIP was substantially 
inadequate to provide for attainment of the 1-hour ozone standard by 
the applicable attainment date of November 15, 2010. Two major 
developments that occurred after EPA approval of the 1997/1999 South 
Coast 1-Hour Ozone SIP led the State of California to reconsider the 
adequacy of the control strategy for attaining the 1-hour ozone 
standard in the South Coast by the applicable attainment date (2010).
    First, CARB released a significant update to California's mobile 
source emissions model (EMFAC2002) that resulted in significantly 
higher motor vehicle emissions estimates than previously calculated, 
and second, South Coast Air Quality Management District (SCAQMD) 
updated its ozone modeling and concluded that the carrying capacity of 
the South Coast Air Basin was significantly lower than previously 
calculated. See, generally, appendix III (``Base and Future Year 
Emission Inventories'') and appendix V (``Modeling and Attainment 
Demonstrations'') of the SCAQMD's 2003 South Coast Air Quality 
Management Plan (AQMP), August 2003.
    Together, these technical considerations prompted CARB and SCAQMD 
to conclude that more control measures would be necessary than 
contained in the 1997/1999 South Coast 1-Hour Ozone SIP to attain the 
1-hour ozone standard by 2010. In reference to the 1997/1999 South 
Coast 1-Hour Ozone SIP, the 2003 South Coast 1-Hour Ozone SIP states: 
``The Plan is consistent with and builds upon the approaches taken in 
the 1997 AQMP and the 1999 Amendments to the Ozone SIP for the South 
Coast Air Basin for the attainment of the federal ozone air quality 
standard. However, this revision points to the urgent need for 
additional emission reductions (beyond those incorporated in the 1997/
99 Plan) to offset increased emission estimates from mobile sources and 
meet all federal criteria pollutant standards within the time frames 
allowed under the federal Clean Air Act.'' See SCAQMD, 2003 Air Quality 
Management Plan,'' August 2003, pages ES-1 and ES-2.
    In 2003, EPA approved the use of EMFAC2002 for SIP development 
purposes, and in 2004, EPA found the 1-hour ozone motor vehicle 
emissions budgets (MVEBs) in the 2003 South Coast 1-Hour Ozone SIP to 
be adequate for transportation conformity purposes. See 68 FR 15720; 
(April 1, 2003) and 69 FR 15325; (March 25, 2004). Adequacy findings 
for transportation conformity purposes are generally based on cursory 
reviews of submitted plans, but EPA's approval of EMFAC2002 and finding 
of adequacy of the MVEBs in 2003 South Coast 1-Hour Ozone SIP show 
general agreement by EPA with the technical foundation for the 2003 
South Coast 1-Hour Ozone SIP, which highlights the inadequacy of the 
attainment demonstration in the 1997/1999 South Coast 1-Hour Ozone 
Plan.
    In addition, in 2011, EPA determined, based on quality-assured and 
certified ambient air quality monitoring data, that the South Coast 
area has failed to attain the 1-hour ozone NAAQS by the applicable 
attainment date of November 15, 2010. 76 FR 82133; (December 30, 2011). 
EPA's 2011 determination of failure to attain the standard by the 
applicable attainment date provides further support for our proposed 
action because it establishes, as a factual matter, that the 1997/1999 
South Coast 1-Hour Ozone SIP failed to achieve its stated purpose of 
bringing the South Coast area into attainment of the 1-hour ozone NAAQS 
by the applicable attainment date.
    In light of the evidence discussed above, we propose to find that 
the approved 1997/1999 South Coast 1-Hour Ozone SIP is substantially 
inadequate to provide for attainment of the 1-hour ozone standard and 
is therefore substantially inadequate to comply with EPA's ``anti-
backsliding'' requirement at 40 CFR 51.905(a)(1)(i) to adopt and 
implement such a plan for the South Coast.

III. Consequences of Proposed SIP Call

    EPA is proposing to require the State of California to submit, 
within 12 months, a SIP revision meeting the requirements of CAA 
section 182(c)(2)(A) \7\ and demonstrating attainment of the 1-hour 
ozone standard in the South Coast as expeditiously as practicable but 
no later than five years from the effective date of a final SIP call 
unless the State can justify a later date, not to exceed 10 years 
beyond the effective date of the final SIP call, by considering the 
severity of the remaining nonattainment problem in the South Coast and 
the availability and feasibility of pollution control measures. See CAA 
section 172(a)(2).
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    \7\ Under CAA section 182(c)(2)(A), the State must submit a 
revision to the SIP that includes a demonstration that the plan, as 
revised, will provide for attainment of the ozone NAAQS. The 
attainment demonstration must be based on photochemical grid 
modeling or any other analytical method determined by the EPA to be 
at least as effective.
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    The SIP call provisions of CAA section 110(k)(5) direct EPA, ``to 
the extent [EPA] deems appropriate,'' to ``subject the State to the 
requirements of this chapter to which the State was subject when it 
developed and submitted the plan for which such finding was made, 
except that the Administrator may adjust any dates applicable under 
such requirements as appropriate (except that the Administrator may not 
adjust any attainment date prescribed under part D of this subchapter, 
unless such date has elapsed).'' By relying on section 172(a)(2) as the 
basis for the applicable attainment date for the South Coast, we are 
subjecting the State to the same CAA requirement that applied at the 
time that the State developed and submitted the 1997/1999 South Coast 
1-Hour Ozone SIP, because, at that time, the area was an extreme ozone 
area with an attainment date of 2010 and subject to the potential for a 
finding of failure to attain by the applicable attainment date under 
CAA section 179(c) that would trigger a requirement under CAA section 
179(d) to submit a new plan meeting the requirements of section 172.
    The 12-month deadline for submittal of a revised attainment 
demonstration plan is appropriate in light of the time that has elapsed 
since the AIR decision was published and the significant planning 
effort that the SCAQMD has already undertaken to develop a new 1-hour 
ozone attainment plan but also recognizing the potential need to 
develop additional control measures, beyond those already adopted for 
the purposes of the South Coast 8-hour Ozone SIP, given the geographic 
extent and frequency of exceedances of the 1-hour ozone standard. See, 
e.g., the 1-hour ozone summary data for 2008-2010 published at 76 FR 
56694, at 56697; (September 14, 2011).
    If EPA subsequently finds that California has failed to submit a 
complete SIP revision that responds to a final SIP call, CAA section 
179(a) provides for EPA to issue a finding of State failure. Such a 
finding starts mandatory 18-month and 24-month sanctions clocks and a 
24-month clock for promulgation of a FIP by EPA. The two sanctions that 
apply under CAA section 179(b) are the 2-to-1 emission offset 
requirement for all new and modified major sources subject to the 
nonattainment new source review program and restrictions on highway

[[Page 58076]]

funding. However, section 179 leaves it up to the Administrator to 
decide the order in which these sanctions apply. EPA issued an order of 
sanctions rule in 1994 (59 FR 39832, August 4, 1994, codified at 40 CFR 
52.31) but did not specify the order of sanctions where a state fails 
to submit or submits a deficient SIP in response to a SIP call. 
However, the order of sanctions specified in that rule (40 CFR 52.31) 
should apply here for the same reasons discussed in the preamble to 
that rule.
    Thus, if EPA issues a final SIP call and California fails to submit 
the required SIP revision, or submits a revision that EPA determines is 
incomplete or that EPA disapproves, EPA proposes that the 2-to-1 
emission offset requirement will apply for all new sources subject to 
the nonattainment new source review program 18 months following such 
finding or disapproval unless the State corrects the deficiency before 
that date. EPA proposes that the highway funding restrictions sanction 
will also apply 24 months following such finding or disapproval unless 
the State corrects the deficiency before that date. EPA is also 
proposing that the provisions in 40 CFR 52.31 regarding staying the 
sanctions clock and deferring the imposition of sanctions would apply.
    In addition, CAA section 110(c) obligates EPA to promulgate a FIP 
addressing the deficiency that is the basis for a finding of failure to 
submit or a disapproval within two years after the effective date of 
such finding or disapproval, unless EPA has approved a revised SIP 
correcting the deficiency before that date.

IV. Proposed Action and Request for Public Comment

    EPA is proposing to find, pursuant to section 110(k)(5) of the CAA, 
that the California SIP is substantially inadequate to comply with the 
obligation to adopt and implement a plan providing for attainment of 
the one-hour ozone NAAQS in the South Coast. If EPA finalizes this 
proposal, California will be required to submit a SIP revision 
correcting the deficiency within 12 months of the effective date of 
EPA's final rule.
    We will accept comments on this proposal for 30 days following 
publication of this proposed rule in the Federal Register. We will 
consider all submitted comments in our final rulemaking.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, a finding of substantial inadequacy and 
subsequent obligation for a State to revise its SIP arise out of 
section 110(a) and 110(k)(5). The finding and State obligation do not 
directly impose any new regulatory requirements. In addition, the State 
obligation is not legally enforceable by a court of law. EPA would 
review its intended action on any SIP submittal in response to the 
finding in light of applicable statutory and Executive Order 
requirements, in subsequent rulemaking acting on such SIP submittal. 
For those reasons, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have Tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
finding of SIP inadequacy would not apply in Indian country located in 
the State, and EPA notes that it will not impose substantial direct 
costs on Tribal governments or preempt Tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Ozone, Reporting and recordkeeping requirements, Volatile 
organic compounds.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: August 30, 2012.
Jared Blumenfeld,
Regional Administrator, EPA Region IX.
[FR Doc. 2012-22972 Filed 9-18-12; 8:45 am]
BILLING CODE 6560-50-P
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