Federal Register/Vol. 63, No. 132/Friday, July 10, 1998/Rules and Regulations

factors and in relation to relevant

statutory and regulatory requirements.

D. Regulatory Flexibility

The Regulatory Flexibility Act (RFA)

generally requires an agency to conduct

a regulatory flexibility analysis of any

rule subject to notice and comment

rulemaking requirements unless the

agency certifies that the rule will not

have a significant economic impact on

a substantial number of small entities.

Small entities include small businesses,

small not-for-profit enterprises, and

small governmental jurisdictions. This

final rule will not have a significant

impact on a substantial number of small

entities because SIP approvals under

section 110 and subchapter I, part D of

the Clean Air Act do not create any new

requirements but simply approve

requirements that the State is already

imposing. Therefore, because the

Federal SIP approval does not create

any new requirements, I certify that this

action will not have a significant

economic impact on a substantial

number of small entities. Moreover, due

to the nature of the Federal-State

relationship under the Clean Air Act,

preparation of a flexibility analysis

would constitute Federal inquiry into

the economic reasonableness of state

action. The Clean Air Act forbids EPA

to base its actions concerning SIPs on

such grounds. Union Electric Co., v.

U.S. EPA, 427 U.S. 246, 255-66 (1976);

42 U.S.C. 7410(a)(2).

E. Unfunded Mandates

Under section 202 of the Unfunded

Mandates Reform Act of 1995, signed

into law on March 22, 1995, EPA must

undertake various actions in association

with any proposed or final rule that

includes a Federal mandate that may

result in estimated costs to state, local,

or tribal governments in the aggregate;

or to the private sector, of $100 million

or more. This Federal action approves

pre-existing requirements under state or

local law, and imposes no new

requirements. Accordingly, no

additional costs to state, local, or tribal

governments, or the private sector,

result from this action.

F. Audit Privilege and Imm unity Law

Nothing in this action should be

construed as making any determination

or expressing any position regarding

Ohio's audit privilege and immunity

law (sections 3745.70-3745.73 of the

Ohio Revised Code ). EPA will be

reviewing the effect of the Ohio audit

privilege and immunity law on various

Ohio environmental programs,

including those under the Clean Air

Act, and taking appropriate action(s), if

any, after thorough analysis and

opportunity for Ohio to state and

explain its views and positions on the

issues raised by the law. The action

taken herein does not express or imply

any viewpoint on the question of

whether there are legal deficiencies in

this or any Ohio Clean Air Act program

resulting from the effect of the audit

privilege and immunity law. As a

consequence of the review process, the

regulations subject to the action taken

herein may be disapproved, federal

approval for the Clean Air Act program

under which they are implemented may

be withdrawn, or other appropriate

action may be taken, as necessary.

G. Submission to Congress and the

General Accounting Office

The Congressional Review Act, 5

U.S.C. 801 et seq., as added by the Small

Business Regulatory Enforcement

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. EPA will submit a

report containing this rule and other

required information to the U.S. Senate,

the U.S. House of Representatives, and

the Comptroller General of the United

States prior to publication of the rule in

the Federal Register. This rule is not a "major rule" as defined by 5 U.S.C.

804(2).

H. Petitions for Judicial Review

Under section 307(b)(1) of the Act,

petitions for judicial review of this

action must be filed in the United States

Court of Appeals for the appropriate

circuit by September 8, 1998. Filing a

petition for reconsideration by the

Administrator of this final rule does not

affect the finality of this rule for the

purposes of judicial review nor does it

extend the time within which a petition

for judicial review may be filed, and

shall not postpone the effectiveness of

such rule or action. This action may not

be challenged later in proceedings to

enforce its requirements. (See section

307(b)(2)).

V. List of Subjects in 40 CFR Part 52

Environmental protection, Air

pollution control, Hydrocarbons,

Intergovernmental relations, Ozone,

Nitrogen oxides, Transportation

conformity.

Dated: July 1, 1998.

David A. Ullrich,

A cting Regional A dm inistrator.

Part 52, chapter I, title 40 of the Code

of Federal Regulations is amended as

follows:

PART 52-[AMENDED]

1. The authority citation for part 52

continues to read as follows:

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

Subpart KK-Ohio

2. Section 52.1885 is amended by

adding paragraph (a)(9) to read as

follows:

§52.1885 Control Strategy: Ozone

(a) * * *

(9) Approval-On March 13, 1998,

Ohio submitted a revision to the

maintenance plan for the Columbus

area. The revision consists of

establishing a new out year for the area's

emissions budget. The new out year

emissions projections include

reductions from point and area sources;

the revision also defines new safety

margins according to the difference

between the areas 1990 baseline

inventory and the out year projection.

Additionally, the revision consists of

allocating a portion of the Columbus

area's safety margins to the

transportation conformity mobile source

emissions budget. The mobile source

budgets for transportation conformity

purposes for the Columbus area are

now: 67.99 tons per day of volatile

organic compound emissions for the

year 2010 and 70.99 tons per day of

oxides of nitrogen emissions for the year

2010.

[FR Doc. 98 18420 Filed 7 9 98; 8:45 am]

BILLING CODE 6560-50-P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 81

[CA-008-BU, FRL-6120-4]

Designation of Areas for Air Quality

Planning Purposes; State of California;

Redesignation of the San Francisco

Bay Area to Nonattainment for Ozone

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: EPA is taking final action to

redesignate the San Francisco Bay Area

(Bay Area) as a nonattainment area for

the 1-hour ozone National Ambient Air

Quality Standard (NAAQS). The Clean

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Air Act (CAA or Act) provides that EPA

may at any time revise the designation

of an area on the basis of air quality,

planning and control considerations,

following notification to the Governor.

On August 21, 1997, EPA notified the

Governor of California that the Agency

intended to propose to redesignate the

Bay Area from attainment to

nonattainment of the federal 1-hour

ozone standard, based on a total of 43

exceedances and 17 violations of the

standard since the June 1995

redesignation to attainment.

EFFECTIVE DATE: This action is effective

on August 10, 1998.

ADDRESSES: A copy of this document

and related information are available in

the air programs section of EPA Region

9's website, http://www.epa.gov/

region09/air. The docket for this

rulemaking is available for inspection

during normal business hours at EPA

Region 9, Planning Office, Air Division,

17th Floor, 75 Hawthorne Street, San

Francisco, California 94105. A

reasonable fee may be charged for

copying parts of the docket. Please call

(415) 744-1249 or 744-1251 for

assistance.

FOR FURTHER INFORMATION CONTACT:

Regina Spindler (415) 744-1251 or Celia

Bloomfield (415) 744-1249, Planning

Office (AIR-2), Air Division, EPA

Region 9, 75 Hawthorne Street, San

Francisco, CA 94105.

SUPPLEMENTARY INFORMATION:

Outline

. Executive Summary

II. Background

A. Original Nonattainment Designation and

Redesignation and Redesignation to

Attainment

B. Subsequent Violations and Petitions to

Redesignate the Bay Area to

Nonattainment

C. Applicable Statutory Provisions

D. Notification to the Governor and

Governor's Response

E. Proposed Action

11. Summary of Public Comments and EPA

Response

A. Introduction

B. Response of the State

C. Overview of Public Comments

D. Specific Comments and EPA Response

1. Comments Relating to the Basis of EPA's

Proposal to Redesignate the Bay Area to

Nonattainment

a. Air Quality and Emissions

b. Legal Authority

i. General Comments on Mandatory and

Discretionary Authorities to Redesignate

ii. Authority to Redesignate without

Classification

c. Policy Issues

i. Public Notification and Public

Perception

ii. Impact of the Bay Area Emissions on

Downwind Nonattainment Areas and

Issues of Equity

iii. Effect of Redesignation on Limited Air

Pollution Control Resources

iv. Alternatives to Redesignation

2. Comments Relating to EPA's Proposed

SIP Requirements

a. Emissions Inventory

b. Attainment Assessment

c. Control Measures

i. Suggested Measures

ii. NOx Waiver and Efficacy of NOx

Controls

d. Attainment Deadline

e. Planning Schedule

3. Comments on Miscellaneous Issues

a. Conformity

b. Congestion Mitigation and Air Quality

(CMAQ) Funding

c. Unfunded Mandates Reform Act

(UMRA)

d. Procedural Obligations under CAA,

Section 107 and the Administrative

Procedures Act (APA)

IV. Final Action

A. Overview

B. SIP Requirements and Deadlines

C. Changes from Proposal

V. Emission Reduction Opportunities

A. Stationary Sources

B. Transportation Control Measures

C. Voluntary Measures

D. Enhanced Inspection and Maintenance

E. Mitigating Emissions Increases from

Oakland Seaport and Airport Expansion

Projects

VI. Administrative Requirements

A. Executive Order (E.O.) 12866

B. Regulatory Flexibility

C. Unfunded Mandates Reform Act

D. Executive Order 13045: Protection of

Children from Environmental Health

Risks and Safety Risks

E. Submission to Congress and the General

Accounting Office

I. Executive Summary

On December 19, 1997 EPA published

a Notice of Proposed Rulemaking to

redesignate the Bay Area to

nonattainment of the federal 1-hour

ozone standard. During the 60-day

public comment period that followed

publication, EPA received comments

both in support of and in opposition to

our proposed action. All commenters,

regardless of their views on the

proposed redesignation or the proposed

requirements associated with

redesignation, expressed strong support

for clean air progress in the Bay Area.

EPA appreciates the thoughtful

comments on the proposal and greatly

values the commenters' commitment to

improved air quality and public health

protection in the Bay Area. EPA has

made significant changes and

clarifications in response to the

comments and EPA believes the final

action recognizes the innovation and

collaborative efforts that can contribute

to clean air in the Bay Area.

After carefully considering all of the

comments received, EPA has decided to

finalize the redesignation of the Bay

Area to nonattainment of the i-hour

ozone standard while clarifying and

streamlining the actions necessary to

reach attainment. Although the Bay

Area Air Quality Management District

(BAAQMD), the California Air

Resources Board (CARB), other

regulatory agencies, businesses, and the

community as a whole have made great

strides in improving air quality in the

Bay Area, there is still more work to be

done. Redesignation is the most

appropriate course of action to assure

further air quality improvements and

protection of public health and should

place minimal burdens on the local

economy, residents, industry and

regu lators.

When the federal ozone standard is

exceeded, people, and in particular

children, the elderly, and those with

respiratory diseases, may experience

ozone's ill effects, such as chest pain,

cough, lung inflammation, respiratory

infection, and chronic bronchitis. In

light of these significant public health

concerns, EPA believes that it is

important to provide the public with

accurate information and the correct

message that ozone pollution is still a

problem.

EPA is compelled to redesignate the

Bay Area to nonattainment because of

the numerous and widespread

violations of the i-hour ozone standard,

a standard that was designed to protect

public health. The Bay Area's air quality

during 1996 ranked as the 6th worst in

the nation and for the three-year period

1995-1997, it was the 8th smoggiest of

the major metropolitan areas in the

country. The absence of violations in

1997 is a positive sign but the Agency

does not feel that the clean smog season

last year proves that the serious ozone

problem revealed in 1995 and 1996 has

been solved. Compliance with the

standard is measured over a three-year

period so as to account for the effects of

weather and other meteorological

conditions that can work to either the

advantage or disadvantage of air quality.

This is particularly relevant to the Bay

Area's case since the meteorological

conditions prevailing on the West Coast

during 1997 were unusually favorable to

good air quality and, according to an

October 1997 report by the BAAQMD,

the ozone-conducive meteorology that

occurred in 1995 and 1996 is likely to

recur. The BAAQMD report also

revealed that during the 1990s "progress

appears to have lapsed; there appears to

have been an increase in ozone

potential, after accounting for

meteorology."

The number of violations of this

public health standard that occurred in

the Bay Area during 1995 and 1996 is

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especially significant when compared to

the air quality in other parts of the

country and the nonattainment

designation and requirements

applicable to those areas. For example,

EPA recently reclassified or "bumpedup" the Phoenix and Santa Barbara

areas from "moderate" to "serious"

nonattainment areas for failure to attain

the ozone standard by 1996. This

"bump-up" to the "serious"

nonattainment classification means that

these areas must comply with additional

planning and control requirements (e.g.

attainment demonstration, reasonable

further progress demonstration,

enhanced vehicle inspection and

maintenance program, Photochemical

Assessment Monitoring) and must attain

the ozone standard by 1999 or face

"bump-up" to the severe classification,

which would impose still more

requirements. Phoenix monitored 13

violations of the ozone standard, and

Santa Barbara recorded 7 violations,

during the three-year period 1994-1996.

The Bay Area experienced 17 violations

during that same three-year period.

Such a comparison reinforces the

appropriateness of a nonattainment

designation for the Bay Area.

EPA concluded that a redesignation to

nonattainment not only accurately

describes air quality in the Bay Area,

but also provides an opportunity for

reevaluating the causes of the Bay

Area's ozone violations, the quantity of

emission reductions needed to attain the

health-based standard, and the measures

that will achieve those reductions

quickly. Some believe that EPA should

not proceed with redesignation under

the 1-hour standard, and that the

BAAQMD should instead focus all its

energies on planning for the revised 8-

hour ozone standard. EPA is convinced,

however, that some near-term action is

essential to protecting the health and

welfare of the Bay Area residents.

Emission reduction strategies will be

evaluated and put in place much sooner

through a redesignation under the 1-

hour standard than under a plan to meet

the revised 8-hour ozone standard. In

addition, everything that the Bay Area

does to meet the 1-hour standard will

help in meeting the more protective 8-

hour standard. The Bay Area won't have

to complete its planning for the 8-hour

standard until 2003 or comply with the

new standard until 2005 at the earliest.

That is five years during which Bay

Area residents would be breathing

dirtier air than they should be. It is the

public's right, and EPA's obligation, to

be assured that current health standards

are met now.

EPA is redesignating the Bay Area to

nonattainment without assigning it a

specific classification. The classification

system (marginal, moderate, serious,

severe, or extreme) associated with

other current ozone nonattainment areas

was created as part of the 1990 Clean

Air Act amendments to match a

nonattainment area's planning and

control requirements with the severity

of the area's ozone problem. The Bay

Area is in a unique position. It was

designated nonattainment under the

1990 amendments, redesignated to

attainment after implementing most of

the moderate nonattainment area

requirements, and is now being returned

to nonattainment. The existing Clean

Air Act classification system does not

specifically apply to the Bay Area. In

order to allow maximum flexibility and

in keeping with the best legal reading of

the Act, EPA is redesignating the Bay

Area under the longstanding general

nonattainment provisions of the Act,

which have no associated

classifications. During public comment,

the flexibility allowed by this approach

generated uncertainty as to the planning

and control requirements for the Bay

Area. In response to this concern, and

to make sure the Air District's time and

energy are spent on control measures,

not unnecessary paperwork, EPA has

been more specific in the final

rulemaking notice describing what is

required of the Bay Area.

Redesignation should not result in a

burdensome and duplicative planning

effort. EPA wants the District and its colead agencies to focus on emission

reductions, not paperwork. EPA is

asking for only three plan elements: the

existing 1995 emissions inventory for

Volatile Organic Compounds (VOC) and

Nitrogen Oxides (NOx); an assessment

of emission reductions, using available

data and technical analyses, needed to

attain the federal standard; and control

measures to achieve those reductions.

EPA will accept, in addition to or in lieu

of adopted regulations, control measures

with enforceable commitments to adopt

in regulatory form and implement by

specified dates sufficient to attain the 1-

hour ozone standard by the attainment

date. It is an additional public safeguard

to make the control measures in this

plan federally enforceable elements of

the State Implementation Plan (SIP),

since only in this way can the EPA and

the public ensure that the commitments

in the plan are fully implemented and

the plan's promised air quality benefits

are realized.

In response to public comment, EPA

has modified both the schedule and

content for State submissions and the

attainment date. First, EPA is requiring

only one formal State Implementation

Plan (SIP) submittal instead of two. The

one formal SIP submittal will include

the emissions inventory, attainment

assessment, and control measures so

that the District can avoid having to

undergo two public hearing and

adoption processes, one for the

inventory and assessment and a second

for the control measures. EPA is

allowing the BAAQMD to make a single

SIP submittal with the understanding,

pursuant to a letter of commitment from

the Air District and co-lead agencies

dated June 23, 1998, that the emissions

inventory and attainment assessment

will be made available to the public and

submitted informally to EPA within 5

months after signature of the final

redesignation by the Regional

Administrator. This early, informal

submittal will allow EPA to review the

draft inventory and assessment and

work with the District to address any

deficiencies.

Second, EPA has extended the

deadlines for the formal SIP submittal

from May 1998 for the emissions

inventory and attainment assessment,

and from September 1998 for the

adopted control measures and/or

enforceable commitments, to June 15,

1999 for both. This extension gives the

BAAQMD and its co-lead agencies more

time to address the substantive

requirements of the redesignation and

carry out their formal adoption and

submittal processes.

Third, EPA has extended the

attainment deadline from November 15,

1999 to November 15, 2000 in order to

allow additional time for the emission

reduction strategies to take effect on air

quality in the Bay Area.

Fourth, both CARB and the BAAQMD

submitted compelling arguments that a

weekend emissions inventory was too

difficult and resource intensive to

complete at this time, and so EPA has

streamlined the SIP requirements still

further by eliminating that obligation.

Finally, in response to public

comment, EPA has eliminated the

requirement to submit an emissions

inventory for carbon monoxide (CO).

The above changes from the proposed

redesignation are summarized as

follows:

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Proposal-weekend emissions inventory and CO inventory required Final-weekend emissions inventory and CO inventory not required

Emissions inventory and attainment assessment due 5/1/98 .................. Final emissions inventory and attainment assessment due 6/15/99.

(Commitment to make draft available to EPA and the public by 11/

25/98.)

Adopted regulations and/or control measures with enforceable commit- Adopted regulations and/or control measures with enforceable commitments due 9/1/98. ments and final emissions inventory and attainment assessment due

6/15/99.

Attainm ent date of 11/15/99 ..................................................................... Attainm ent date of 11/15/2000.

EPA recognizes that innovative

methods, including voluntary measures,

have the potential to contribute in a

cost-effective manner to emission

reductions needed for progress toward

attainment. To promote the creation and

expansion of effective voluntary mobile

source programs, the Agency has

developed a new policy that allows SIP

credit for such programs.' The Bay Area

has already demonstrated leadership in

crafting innovative approaches to air

quality problems through the "Sparethe-Air" and Silicon Valley ECOPASS

programs. EPA is eager to work with the

local government agencies and members

of the business and environmental

communities, who are critical to

building public support for voluntary

programs, to explore opportunities for

innovation and to ensure that the

voluntary measures stand the test of

public accountability.

II. Background

A. Original Nonattainm ent Designation

and Redesignation to A ttainm ent

For more detailed information on the

Bay Area's original ozone

nonattainment designation,

classification under the 1990 Clean Air

Act Amendments, and redesignation to

attainment, the reader is directed to

EPA's proposed redesignation,

published on December 19, 1997 (62 FR

66578-66583).

The Bay Area was initially designated

under section 107 of the 1977 CAA as

nonattainment for ozone on March 3,

1978 (40 CFR part 81.305). The Bay

Area consists of the following counties:

Alameda, Contra Costa, Marin, Napa,

San Francisco, San Mateo, Santa Clara,

Solano (part), and Sonoma (part).2

Following the 1990 amendments to the

Act, the area was classified by operation

of law, under section 181(a), as a "moderate" ozone nonattainment area.

(56 FR 56694, Nov. 6, 1991). On May 22,

1995 (60 FR 27028), EPA approved the

maintenance plan adopted by

1

Memorandum dated October 23, 1997 entitled,

"Guidance on Incorporating Voluntary Mobile

Sourve Emission Reduction Programs in State

Implementation Plans (SIPs)." 2 For a description of those portions of Solano and

Sonoma County that are included in the Bay Area,

the reader is directed to 40 CFRpart 81.21.

BAAQMD, the Metropolitan

Transportation Commission (MTC), and

the Association of Bay Area

Governments (ABAG) and submitted to

EPA by CARB. In the same document,

EPA redesignated the area to attainment

for ozone, based on 3 violation-free

years of data from the Bay Area's official

monitoring network.

B. Subsequent Violations and Petitions

to Redesignate the Bay Area to

Nonattainm ent

Despite implementation of most of the

measures in the Bay Area's maintenance

plan, the monitoring network has

recorded 43 exceedances and 17

violations of the federal 1-hour ozone

standard over the years 1995-1996. 3

EPA has received 2 petitions

requesting that the Administrator

redesignate the Bay Area to

nonattainment with the federal 1-hour

ozone standard. On March 31, 1997, the

Sierra Club and Communities for a

Better Environment (CBE) requested that

EPA withdraw the 1995 redesignation

action, or alternatively redesignate the

area to nonattainment. The Sierra Club

also requested that EPA issue a CAA

section 1 10(k)(5) SIP call based on the

inadequacy of the current SIP. On July

14, 1997, U.S. Congressman Gary Condit

and a coalition of federal, state and local

elected officials and public interest and

industry groups from downwind areas

(primarily the San Joaquin Valley)

petitioned EPA to withdraw the 1995

redesignation to attainment, or

alternatively redesignate the area to

nonattainment, and issue a SIP call.

Congressman Condit incorporated this

petition in his public comment on the

3 An exceedance of the 1-hour ozone standard

occurs when the hourly average ozone

concentration at a given monitoring site is greater

than or equal to .125 parts per million (ppm). A

violation of the standard occurs when the expected

number of days per calendar year with maximum

hourly average ozone concentrations at or above

.125 ppm is greater than one. 40 CFR part 50.9. The

average number of days is calculated for a 3-year

period. 40 CFR part 50, Appendix H. This 3-year

period was established to reduce the impact of

yearly fluctuations in ozone levels. Table 1 in EPA's

proposed redesignation (62 FR 66579) lists both the

exceedances and the 3-year average number of days

over the 1-hour ozone standard for the period 1994

1996 at Bay Area monitoring sites in the official

State and Local Monitoring (SLAMS) network.

proposed action, and the petition is

summarized in more detail in section

III.C., Overview of Public Comments.

C. Applicable Statutory Provisions

Section 107(d)(3) of the Act gives the

Administrator the authority to

redesignate areas. Under this provision,

the Administrator may "(O)n the basis

of air quality data, planning and control

considerations, or any other air qualityrelated considerations the Administrator

deems appropriate, * * * at any time

notify the Governor of any State that

available information indicates that the

designation of any area * * * should be

revised." Section 107(d)(3)(A). The

Governor then has 120 days to submit

the redesignation, as the Governor

considers appropriate. Section

107(d)(3)(B). The Administrator must

promulgate the redesignation within

120 days of the Governor's response.

The Administrator may make any

modifications to the Governor's

redesignation which she deems

necessary, but must notify the Governor

of such changes 60 days before

promulgating a final redesignation. If

the Governor does not submit the

redesignation, the Administrator shall

promulgate the redesignation which she

deems appropriate. Section 107(d)(3)(C).

D. Notification to the Governor and the

Governor's Response

EPA notified the Governor of

California by letter dated August 21,

1997, that EPA believes that the Bay

Area should be redesignated to

nonattainment, based on repeated

violations of the ozone NAAQS. In the

letter to the Governor, EPA proposed

that the Bay Area be classified as a "moderate" nonattainment area, and

that the area be required to submit by

March 1, 1998, an emissions inventory

and an attainment assessment; submit

by May 1, 1998, a schedule and plan for

completing a field study and modeling;

and submit by September 1, 1998, rules

and/or control measures sufficient to

attain the 1-hour ozone NAAQS by

1999.

The Governor responded to this letter

on December 10, 1997. Noting that the

Bay Area had recorded no exceedances

of the 1-hour ozone NAAQS in 1997, the

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Governor opposed the redesignation,

preferring that EPA allow the BAAQMD

maintenance plan, subsequent

BAAQMD measures, and CARB

measures to ensure that the area would

not violate the ozone NAAQS in the

future. See sections III.B. and III.D.

below for a more detailed summary of

the Governor's comments and EPA's

response.

E. Proposed Action

On December 11, 1997, EPA issued its

proposal to redesignate the San

Francisco Bay Area to nonattainment for

the 1-hour ozone NAAQS because ozone

levels have violated the federal standard

17 times over the 3-year period 1994-

1996. The proposal was published on

December 19, 1997, and invited public

comment through February 17, 1998.

After summarizing applicable CAA

provisions and the Bay Area's record of

exceedances and violations, EPA

proposed to require the BAAQMD and

its co-lead agencies to develop and

submit a SIP revision designed to

provide for attainment of the 1-hour

ozone NAAQS by 1999. EPA's proposal

set forth the Agency's reasons for

concluding that the Bay Area should not

be classified under subpart 2 of the

CAA, but should rather be subject to the

basic SIP requirements of section 110

and the general nonattainment plan

requirements of section 172 (62 FR

66580). Finally, EPA proposed that the

State be required to submit SIP revisions

on the schedule in the table reproduced

below, labeled "Proposed Schedule of

Submittal of Revisions to the State

Implementation Plan for Ozone for the

San Francisco Bay Area."

PROPOSED SCHEDULE OF SUBMITTAL OF REVISIONS TO THE STATE IMPLEMENTATION PLAN FOR OZONE FOR THE SAN

FRANCISCO BAY AREA (62 FR 66578, December 19, 1997)

Action/SIP submittal Date

Current and complete baseline annual average and summer weekday and weekend day emissions inventory for volatile organic 5/1/98

compounds (VOC), nitrogen oxides (NOx), and carbon monoxide.

Assessment, employing available modeling information, of the level of emission reductions needed to attain the current 1-hour ozone 5/1/98

National Ambient Air Quality Standard (NAAQS). This assessment should take into account the meteorological conditions and ambient concentrations associated with the violations of the ozone NAAQS in the period 1995-6, and should be based on likely control measures for reducing VOC and NOx emissions.

Adopted regulations and/or control measures, with enforceable commitments to adopt and implement the control measures in regu- 9/1/98

latory form by specified dates, sufficient to meet reasonable further progress and attain the 1-hour NAAQS expeditiously.

III. Summary of Public Comments and

EPA Response

A. Introduction

EPA received 127 comments between

EPA's notification to the Governor on

August 21, 1997, and the close of the

public comment period on February 17,

1998. The docket for this notice

includes the public comments. Of the

comments, 68 supported the

redesignation and 59 opposed the

redesignation. In section III.D. below,

EPA summarizes and responds to each

of the substantive comments.

B. Response of the State

On the day EPA issued its proposed

redesignation, EPA received an

extensive response from the Governor,

dated December 10, 1997. This was

supplemented by a letter dated February

17, 1998, from Peter M. Rooney,

Secretary for Environmental Protection,

California Environmental Protection

Agency. The Governor's letter was

timely, in that it was received 7 days

before the expiration of the 120-day

period for the Governor to respond to

EPA's notification letter.

This section provides a general

summary of the State's comments,

expressed in the two letters. EPA's

response to the State's comments

appears in section III.D., which

organizes by subject matter all of the

public comments and EPA's responses.

The State opposed the redesignation

as an inefficient use of resources, in

view of the forthcoming planning

responsibilities to address the new,

more stringent 8-hour ozone NAAQS. 4

The State preferred that EPA allow the

region to pursue additional emission

reductions through the air quality

maintenance process and through

implementation of the Bay Area's 1997

Clean Air Plan, rather than force the Bay

Area to divert resources to an

unnecessary planning process triggered

by redesignation. 5 The State noted that

EPA had followed a similar, flexible

approach by not redesignating other

areas that have violated the ozone

standard.

Both letters from the State attached

two legal opinions (CARB memorandum

dated December 8, 1997, from Kathleen

Walsh to Michael P. Kenny; BAAQMD

memorandum dated December 4, 1997,

from Robert N. Kwong to Ellen Garvey).

These legal analyses concluded that,

while EPA has the authority to

redesignate the Bay Area to

nonattainment even if the Governor

does not submit a redesignation request,

the Act also gives EPA other preferable

options. The BAAQMD memorandum

4 EPA promulgated a revised 8-hour ozone

NAAQS on July 18, 1997 (62 FR 38856).

5This plan was adopted by the BAAQMD on

December 17, 1997, to address requirements of the

California Clean Air Act, including a triennial

update to the area's comprehensive strategy for

attaining the State's air quality standards. The plan

was not adopted to address Federal CAA

requirements and it has not been submitted to EPA

as a SIP revision.

discusses 3 options: federal

maintenance plan, SIP call, and Clinton

Administration's common sense plan.

The CARB memorandum argues that

EPA should issue a call for a revision to

the Bay Area's maintenance plan under

CAA section 1 10(k)(5) if the

Administrator determines that a SIP

revision is necessary to correct a

violation, since this approach would

allow a more targeted effort to correct

the problem. The BAAQMD

memorandum adds that a maintenance

plan is the means Congress established

for addressing exceedances following

redesignation to attainment, and both

memoranda conclude that the existing

maintenance plan and the Bay Area's

1997 Clean Air Plan are already at work

toward returning the District to

attainment, as indicated by the absence

of any exceedances of the 1-hour ozone

NAAQS in the Bay Area during 1997.

The State argued that there is no

technical basis for determining a

specific emission reduction target by

EPA's proposed deadline of May 1,

1998, and that a quasi-technical

assessment would not be accepted by

the public or the business community.

The State contended that modeling

information is outdated and inadequate

for purposes of determining an

emissions reduction target.

The State argued that redesignation

would hurt attainment efforts in the

Central Valley, since it would distract

the Bay Area from achieving real

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emissions reductions. 6 The Governor

stated that he has directed the Chairman

of CARB to work with involved districts

to ensure that the BAAQMD develops

additional measures to address the

needs of the Central Valley.

The State concluded that EPA's

proposed schedule does not provide

sufficient time for planning or

attainment, and that accomplishment of

the proposed SIP requirements would

be too costly. The State noted that the

BAAQMD had estimated that EPA's

proposed planning process, although

streamlined, would still cost in the

range of one million dollars or more,

and would require significant

investments of staff time, advisory

committee time, and governing board

time for all 3 co-lead agencies. The State

specifically argued against EPA's

proposed requirements for a weekend

emissions inventory, which would

require several person-years of effort

and associated costs in the range of a

half-million dollars. As an additional

financial burden, the State asserted that

EPA's proposed redesignation of the Bay

Area without a classification jeopardizes

the region's Congestion Mitigation and

Air Quality Improvement Program

(CMAQ) funding.

Finally, the State cited the President's

directive that accompanied the

promulgation of the new federal

standards for ozone and particulate

matter. 7 The State encouraged EPA to

comply with the spirit of the directive,

which emphasizes that

"implementation of the air quality

standards is to be carried out to

maximize common sense, flexibility,

and cost effectiveness." The State

concluded that EPA withdrawal of the

redesignation proposal would be most

consistent with this directive.

C. Overview of Public Comments

EPA's proposed redesignation elicited

a very large number of comments,

offering strong arguments either in

support of, or in opposition to,

redesignation. Many of the letters also

provided helpful information regarding

the impacts, beneficial or adverse,

expected to result from redesignation.

6

California's Central Valley comprises the

Sacramento Valley to the northeast of the Bay Area

and the San Joaquin Valley to the southeast. CARB

has concluded that the Sacramento Valley, the San

Joaquin Valley, and the North Central Coast (to the

south of the Bay Area) are affected by transport of

ozone and ozone precursors from the Bay Area.

7Memorandum from the President to the

Administrator of the Environmental Protection

Agency, dated July 16, 1997, entitled

"Implementation of Revised Air Quality Standards

for Ozone and Particulate Matter," and attaching

"Implementation Plan for Revised Air Quality

Standards." 62 FR 38421 (July 18, 1997).

Regardless of whether or not the writer

favored redesignation, every commenter

strongly supported clean air progress in

the Bay Area. It is notable, for example,

that many commenters from the Bay

Area business community wished to do

their part to improve air quality and

maintain a sound economy, based on

their conviction that investments in air

quality directly enhance the area's

economic vitality and their employees'

quality of life. EPA appreciates each

comment and greatly values the

commenters' commitment to improved

air quality and public health protection.

As previously noted, well over 100

individuals or organizations submitted

comments on the proposed

redesignation.

Included among the comments were

letters supporting redesignation from

Congressman Gary Condit (Fresno) and

from 6 Members of Congress from the

Bay Area (Representatives George

Miller, Lynn Woolsey, Nancy Pelosi,

Pete Stark, Anna Eshoo, and Tom

Lantos). Four Northern California

Members of Congress (Representatives

Ellen Tauscher, Tom Campbell, Frank

Riggs, and Vic Fazio) signed a letter in

opposition to the redesignation.

The Bay Area Members of Congress

opposing the redesignation believed that

such an action is neither consistent with

the CAA nor in the spirit of the

President's 1997 directive on

implementing the ozone and particulate

matter NAAQS. These Representatives

noted that the CAA does not mandate

redesignation but allows EPA to

recognize the Bay Area's track record

and overall quality of air. The Members

felt that redesignation will trigger a

costly, duplicative planning process that

will detract from collaborative efforts to

improve air quality and prepare for

compliance with the 8-hour NAAQS.

The Representatives indicated that

sources informed them that EPA's

proposed action would provide no new

authority, funding and technology. The

legislators felt that declining Bay Area

emissions and the clean 1997 ozone

season prove that a region can quickly

return to attainment without the

economic, political, and administrative

complexities of redesignation. The

Representatives indicated that they are

not opposed to the new 8-hour ozone

NAAQS but wish an efficient, common

sense transition to achieve the NAAQS.

Finally, if EPA redesignates the Bay

Area, the legislators wanted assurance

that the CMAQ funding for the Bay Area

will not be jeopardized by EPA's action.

Congressman Condit fully supported

the proposed redesignation and

referenced scientific data relating to Bay

Area's exceedances and to the impact of

transported pollutants to downwind

areas, such as the San Joaquin Valley.

Congressman Condit asked that a July

14, 1997 petition to EPA be

incorporated in his comment. This

petition was signed by 4 Congressmen

in addition to Congressman Condit

(Representatives George Radanovich,

Richard Pombo, John Doolittle, and Sam

Farr), 4 state legislators, local elected

officials, and officials representing farm

and manufacturing organizations,

environmental groups, and the San

Joaquin Valley Unified Air Pollution

Control District.

The petition summarizes the adverse

impacts of elevated ozone levels on

public health, health care costs, and

crops. The petition also notes reasons

why the years during the early 1990's

when the Bay Area recorded no

violations were exceptional: A severe

drought limited biogenic emissions,

summer peak temperatures were lower

than normal, the area was experiencing

an economic recession, and the 55 mph

speed limit was in effect, reducing

emissions of ozone precursors from cars

and trucks.

The petition notes that no modeling

supported the redesignation of the Bay

Area to attainment, and that

contingency measures in the

maintenance plan yielded no additional

air quality benefit, particularly in light

of EPA's decision to waive certain NOx

control requirements. Thus, the

maintenance plan failed to comply with

the requirement in CAA section 175A(d)

that the plan contain contingency

measures sufficient to assure that the

State will promptly correct any

violation of the standard which occurs

after the redesignation. The petition

adds that it is now apparent that the

maintenance plan failed to comply with

the even more fundamental requirement

of section 175(A)(a) that such plans

contain additional measures, if any, as

may be necessary to ensure maintenance

of the NAAQS.

The petition recounts the Bay Area's

ozone NAAQS violations immediately

following redesignation, some lasting up

to 7 hours on 11 different days, with the

worst exceedance in excess of .150 ppm,

and 13 exceedances at or above .140

ppm. The petition concludes that

prompt action is necessary to achieve

the overriding purpose of the Act, since

the SIP controls have been shown to be

insufficient for attainment or

maintenance.

The petition asks EPA either to

withdraw the redesignation or

redesignate the Bay Area to

nonattainment, and further asks EPA to

find that the current Bay Area SIP is

inadequate and require the State to

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revise the SIP to attain the NAAQS

expeditiously.

The petition states that there is no

longer a defensible basis to believe that

the Bay Area has attained or that the

approved maintenance plan is still

adequate. The petition continues: "The

existing attainment designation sends a

false signal to the public, the regulated

community, local agencies and the

District itself that ozone pollution is no

longer a problem. The complacency

created by that message will hinder

rather than help solve the problem

within the Bay Area and the San

Joaquin Valley * * *."

The petitioners requested EPA to

establish a SIP requirement that the

State perform a comprehensive analysis

of all factors affecting the ozone

precursor "carrying capacity" for

maintenance of the NAAQS in the Bay

Area, and provide accurate estimates of

emission reductions anticipated to be

achieved from additional measures to be

included in the plan, based upon an

updated emissions inventory. While the

nonattainment SIP is being prepared, a

SIP call should allow the State 1 year to

submit a maintenance revision that

includes adopted additional measures to

ensure the earliest practicable

attainment and maintenance of the

ozone NAAQS. The petitioners stated

that, "Given history, the submittal

should demonstrate the reliability and

adequacy of those measures

convincingly." The subsequent SIP

offers an opportunity to fine tune the

maintenance SIP revision and address

any problems that may surface in

implementation.

The 6 Bay Area Members of Congress

supporting the redesignation stressed

that protecting the health of their

constituents is one of their highest

responsibilities as lawmakers. After

careful consideration, these

Representatives concluded that the

specific proposed redesignation

presented by EPA is the best course of

action to provide the greatest assurance

of improving Bay Area air quality and

protecting public health, while placing

the fewest burdens on the local

economy, residents, industry and

regulators.

The legislators noted as significant a

recent BAAQMD report showing a

worsening trend in ozone pollution in

the 1990s. While acknowledging the

BAAQMD's new plan for future actions,

the Members of Congress expressed

concern that the plan, adopted to meet

California Clean Air Act requirements,

is inadequate since it contains only

proposals, not binding commitments,

and can be changed at any time. Since

the plan is not enforceable by EPA or

the public, the Representatives were

unable to verify that the plan would

achieve attainment or genuinely

improve air quality.

The Representatives' letter went on to

stress that there is no way to know

whether Bay Area actions are sufficient

for attainment until federal and local

regulators have a common

understanding of the extent of local air

pollution problems. These Members of

Congress considered that EPA's

redesignation proposal allows the

maximum flexibility to the BAAQMD to

reach attainment by building on its

existing plan and avoiding redundancy,

specifically with respect to emissions

inventory and modeling. The Members

stated that it is incumbent upon the

BAAQMD to work with EPA to find

common ground on credible and

binding actions and timetables.

While aware of arguments against

redesignation based on EPA's recent

adoption of a more stringent 8-hour

ozone NAAQS, the Members of

Congress still favored redesignation and

action now to address the 1-hour

standard, since 10 years may pass before

the Bay Area must comply with the

revised ozone standard, and any steps

taken to comply with the current

standard will only help, not hinder, the

area's ability to meet the 8-hour

standard when it is officially in place.

In the meantime, Bay Area residents are

likely to be exposed to harmful

pollution levels if there is no action.

Finally, these 6 Representatives noted

that the Department of Transportation

has concluded that EPA's proposed

redesignation would not jeopardize the

Bay Area's eligibility for CMAQ funds

under either the existing Intermodal

Surface Transportation and Efficiency

Act (ISTEA) or pending revisions to the

Act.

EPA received numerous letters from

State legislators, mayors, and boards of

supervisors, in almost equal number

supporting and opposing the

redesignation. Fifteen city councils or

county boards of supervisors in the San

Joaquin Valley adopted resolutions

supporting the redesignation and

Federal actions to mandate additional

controls in the Bay Area to reduce

pollution levels exported into the

Valley.

Five California air pollution control

districts (Monterey, San Joaquin,

Sacramento, Yolo-Solano, and Placer)

wrote to support further emission

reductions in the Bay Area, while the

BAAQMD opposed the redesignation.

EPA summarizes and responds to the

BAAQMD's extensive comments in

section III.D., below.

EPA received letters from over 20 Bay

Area businesses and business

organizations arguing against the

proposed redesignation, as well as

several letters from San Joaquin Valley

businesses supporting the redesignation.

Letters supporting the redesignation

and encouraging adoption of specific

additional controls were sent by

Northern California environmental

groups. These commenters generally

perceived a contrast between the major

threat to public health reflected in the

recent ozone violations and the lack of

political will shown by State and Bay

Area officials. The commenters

supported a stringent timetable for SIP

revisions and attainment, agreeing with

EPA that the urgent priority is to

actually adopt measures to ensure that

the Bay Area ozone violations will not

recur.

Nineteen public interest groups

representing the Bay Area

Environmental Justice Community

signed a letter in support of the

redesignation, emphasizing the need to

stem job flight to the suburbs and to

increase public transit within the Bay

Area. The environmental justice groups

noted that these changes would benefit

poor people and communities of color

both by improving their health and by

increasing their access to jobs and

essential services.

All letters from downwind areas

(including, notably, the San Joaquin

Valley) strongly urged EPA to finalize

the redesignation, on the grounds that

the Bay Area exports ozone or ozone

precursors to their region, thus

jeopardizing public health, prosperity,

and scenic and resource values. These

letters typically noted that the Bay Area,

as an attainment area, does not confront

Federal control responsibilities, and that

this double standard unfairly penalizes

downwind nonattainment areas, which

face specific CAA mandates associated

with their "serious" or "severe" ozone

classifications.

Letters from Bay Area local officials

and businesses generally pointed to

unusual weather during 1995 and 1996

as the cause of the ozone exceedances;

the Bay Area's continuing efforts to

reduce emissions and the BAAQMD's

projections that emission levels will

decline significantly in future years; the

fact that the Bay Area recorded no

exceedances in 1997; and the

importance of not diverting resources

from implementation of existing

measures and planning for the more

protective 8-hour ozone NAAQS. The

commenters frequently observed that

EPA's proposed SIP timetable was too

hasty to allow for good decision making.

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D. Specific Comments and EPA

Response

1. Comments Relating to the Basis of

EPA's Proposal to Redesignate the Bay

Area to Nonattainment

a. Air Quality and Emissions

Comment: The primary cause of the

recent ozone exceedances is the very

unusual weather patterns of 1995 and

1996. There were fewer exceedances of

the 1-hour ozone NAAQS in 1996 and

no exceedances in 1997. The Bay Area

should therefore continue to be

considered an attainment area.

Response: The Bay Area is not in

compliance with the federal ozone

standard, a standard that was designed

to protect public health. The absence of

violations in 1997 is a positive sign, but

compliance with the federal ozone

standard is measured over a 3-year

period, not on an annual basis. The

primary reason for the 3-year time frame

is to account for the effects of weather

and other meteorological conditions that

can work to either the advantage or

disadvantage of air quality. This is

particularly relevant in the Bay Area's

case, since the meteorological

conditions prevailing on the West Coast

during 1997 were unusually favorable to

good air quality. Furthermore, according

to a recent technical analysis by the

BAAQMD, the ozone-conducive

meteorology that occurred in 1995 and

1996 is likely to recur (BAAQMD

Evaluation of the 1995 and 1996 Ozone

Seasons in the San Francisco Bay Area,

October 1997, attached to Governor

Wilson's December 10, 1997 letter to

EPA Administrator Browner). Bay Area

residents must be assured of clean air

under all weather conditions.

The Bay Area recorded 17 violations

of the 1-hour standard over the 3-year

period 1994-1996. During that period,

exceedances of the ozone standard were

measured at 15 official network

monitoring locations throughout the Bay

Area. Although air quality improved

between 1995 and 1996, the Bay Area's

ranking in 1996 was the 6th worst in the

nation for number of days when ozone

levels exceeded the federal standard.

Over the period 1995-1997, the Bay

Area recorded 15 violations and had

significantly worse air quality than most

other metropolitan areas designated as

nonattainment for ozone (see response

to the following comment). Many of

these areas are classified as "serious" or

higher under the Clean Air Act, and are

subject to specific mandatory

requirements which would not apply to

the Bay Area in EPA's redesignation

proposal.

These high ozone levels are harmful

to public health in the Bay Area.

Exposure to ambient ozone

concentrations, even at relatively low

levels and for brief periods of time, can

cause respiratory symptoms such as a

reduction in lung function, chest pain,

and cough. Repeated exposure can make

people more susceptible to respiratory

infection and lung inflammation, and

can aggravate preexisting respiratory

diseases such as asthma. In

consideration of these significant public

health concerns associated with the Bay

Area's elevated ozone levels, EPA

continues to believe that redesignation

to nonattainment is warranted.

Comment: The Bay Area has the

cleanest air of any metropolitan region

in the nation. Since 1990, the Bay Area

has been in attainment 99.995% of the

time.

Response: There is no question that

air quality in the Bay Area has improved

over the last 40 years. However, the Bay

Area is not currently attaining the

federal 1-hour ozone standard, a

standard that was designed to protect

public health and which has been made

more protective by adoption of a new,

8-hour standard. The magnitude of the

problem is significant as demonstrated

by the number of violations (17 since

redesignation to attainment in 1995) and

the number of days when the standard

was exceeded (19 days between 1995-

1997). When comparing air quality in

the Bay Area to other major

metropolitan areas, there are a number

of large metropolitan areas, such as

Chicago and Detroit, with fewer

violations and exceedance days than

experienced in the Bay Area.

Furthermore, the Bay Area ranks among

the worst of the 243 Air Quality Control

Regions in the country, based on data

from the most recent 3-year period.

Finally, in contrast to most areas of the

Country, there is not a significant

downward trend in the number of ozone

exceedances in the Bay Area since 1989.

Comment: EPA's reliance on a

statistic ranking the Bay Area the 6th

worst in the nation in number of days

over the ozone standard is misplaced.

EPA's simplistic characterization of the

number of exceedances fails to

realistically depict the situation. A more

realistic characterization is based on a

review of the exceedances in terms of

hours over the standard relative to hours

in the ozone season for six or seven

years. Following this approach, the

number of hours over the standard is

less than 21oo of a percent for 1990-

1996. This analysis properly focuses on

long-term trends rather than short-term

data.

Response: When EPA establishes an

ambient air quality standard, it sets not

only the level of the standard (in this

case, .12 ppm) but also the averaging

time of the standard (1-hour) and the

form of the standard (how compliance is

measured). Each of these components of

the NAAQS is set based on EPA's

review of the available health effects

data. When EPA set the 1-hour ozone

NAAQS, EPA specified that the form be

based on the number of exceedance

days per year averaged over 3 years.

Therefore, EPA's characterization of the

Bay Area air quality in terms of number

of days over the standard is appropriate.

The form of the standard is not based on

the number of hours over the standard

relative to hours in the ozone season for

6 or 7 years, so an examination of the

Bay Area's air quality on this basis

would not be appropriate.

Comment: Some commenters

concluded that the absence of violations

in 1997, in conjunction with predicted

further declines in emissions, proves

that the Bay Area's ozone problem has

been solved. Other commenters noted

that the West Coast's extraordinary

meteorology in 1997 kept ozone

concentrations unusually low, and that

emissions in the Bay Area may in fact

not be decreasing as much as predicted,

given the strong economic growth in the

area and other factors.

Response: The October 1997

BAAQMD report referenced above

identifies a downtrend in ozone

precursor emissions from 1979 through

the early 1990s, but notes that during

the 1990s "progress appears to have

lapsed; there appears to have been an

increase in ozone potential, after

accounting for meteorology" (page v).

The report further notes that the ozone

violations in 1995 and 1996 cannot be

attributed solely to unusual

circumstances. It identifies possible

explanations for increased emissions

over this time period (e.g., increased

speed limits, increased congestion

levels, and increased employment levels

in East Bay communities).

EPA believes that a redesignation to

nonattainment not only accurately

describes air quality in the Bay Area,

but also provides an opportunity for

reevaluating the causes of the Bay

Area's ozone violations, the quantity of

emission reductions needed to attain the

health-based standard, and the measures

that will achieve those reductions

expeditiously. This may involve not

only CARB and BAAQMD but also MTC

and ABAG in cooperative efforts to

reduce the motor vehicle contribution to

the Bay Area's continuing smog

problem.

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Comment: EPA has not demonstrated

that contingency measures in the Bay

Area's maintenance plan in conjunction

with other projected reductions will fail

to bring the region back into attainment.

Response: EPA acknowledges that

additional emission reductions are

likely to be achieved from measures

already in the SIP or submitted for SIP

approval. No commenter, however, has

provided any evidence that these

reductions will be sufficient to avoid

violations in the future. Indeed, many

commenters, including the BAAQMD

and the State, emphasized that recently

adopted control measure commitments

in the Bay Area's 1997 Clean Air Plan

are important in order to ensure

continued air quality progress.

The Clean Air Act places the burden

on the State to demonstrate that its plan,

at all times, provides for attainment and

maintenance of the NAAQS, through

federally enforceable emission

reductions sufficient to avoid violations

of the NAAQS. The Federal CAA also

provides protections to the public in the

event that State plans are not fully and

successfully implemented to achieve the

scheduled emission reductions and air

quality improvements. These

protections include federally imposed

nonimplementation sanctions and

opportunities for citizens to sue to

compel implementation.

EPA believes, therefore, that

redesignation and new SIP obligations

for the Bay Area are consistent with the

overall structure and intent of the CAA,

and provide key public health benefits.

The State and BAAQMD will assess,

using available data and technical

analyses, the amount of emission

reductions needed to ensure that

violations of the 1-hour ozone NAAQS

do not recur. The State, BAAQMD, and

other responsible local agencies must

then identify control measures that will

achieve these reductions. EPA expects

that the agencies will analyze which

control measures from the 1997 Clean

Air Plan are needed to attain the

standard and which measures beyond

those contained in the plan are also

needed. The State, BAAQMD, and other

responsible agencies will be subject to a

schedule for adopting and

implementing the necessary controls.

The public will have increased

protections as a result of making control

measures needed to attain the standard

part of the SIP, thus providing insurance

that the measures will be carried out, if

necessary, through federal enforcement

or citizen suit.

Comment: EPA received a number of

comments related to the continued

applicability of the 1-hour ozone

NAAQS in light of the new 8-hour

standard.

Response: EPA is responding to these

comments at length below to further the

public's understanding of this issue.

However, EPA's decisions that (1) the 1-

hour standard will remain in effect in an

area until it is attained, and (2) that the

standard continues to apply in the Bay

Area because the area is not attaining

the standard, are not at issue in this

rulemaking action and are not

appropriately challenged here. EPA's

views regarding these issues are set

forth in 63 FR 31013, June 5, 1998.

Comment: The Bay Area had attained

the 1-hour ozone NAAQS and,

therefore, rather than being redesignated

to nonattainment, the area was entitled

to revocation of the 1-hour NAAQS in

conformance with the President's

directive.

Response: The President's

"Implementation Plan for Revised Air

Quality Standards" ("Implementation

Plan") (62 FR 38424) called for EPA to

revoke the 1-hour ozone NAAQS in all

areas that attain the standard. The

President did not direct EPA to revoke

the 1-hour ozone standard in all areas

currently designated as maintenance or

attainment areas. The President clearly

intended that current air quality be the

basis of EPA's determination of which

areas attain. The Implementation Plan

states that "[f]or areas where the air

quality does not currently attain the 1-

hour standard, the 1-hour standard will

continue in effect" (emphasis added).

Moreover, the controlling regulatory

provision, 40 CFR section 50.9(b),

specifies that an area must have air

quality that meets the standard at the

time of the decision. EPA's rulemaking

action to determine that the 1-hour

standard no longer applies in areas that

are not currently violating the standard

is therefore consistent with the

Presidential memorandum. 63 FR 31013

(June 5, 1998). Because the Bay Area is

currently violating the 1-hour ozone

standard, the area is not currently

eligible for this determination.

Comment: EPA has indicated that if

the Agency's review of recent

monitoring data finds that an attainment

or maintenance area now violates the 1-

hour standard, EPA will not redesignate

these areas to nonattainment under the

1-hour standard.

Response: Both EPA's final regulation

promulgating the new ozone regulation

(62 FR 38873) and the Presidential

memorandum regarding implementation

of the standards (62 FR 38424) explain

that in order to ensure a smooth

transition to the implementation of the

8-hour ozone standard, the 1-hour

standard will remain applicable to an

area until it has attained the 1-hour

standard. As long as the 1-hour standard

remains in effect in an area, so does

EPA's authority under CAA section

107(d)(3) to redesignate that area as a

nonattainment area. EPA's "Guidance

for Implementing the i-Hour Ozone and

Pre-Existing PM 1o NAAQS" (December

29, 1997 Memorandum from Richard D.

Wilson, to EPA Regional

Administrators) clarifies that "in certain

cases where air quality data through

1997 show nonattainment, EPA may be

redesignating areas from attainment to

nonattainment for the i-hour standard."

Comment: EPA should treat the Bay

Area like other maintenance areas in the

Country, where the i-hour NAAQS is

not being revoked because the areas

have had recent violations of the

NAAQS. These areas are not being

reclassified to nonattainment.

Response: The Bay Area's number of

exceedances and violations and the Bay

Area's peak concentrations (highest

monitored value and design

concentration) far exceed those in all

other maintenance areas that have had

exceedances since 1994. There are 5

other ozone maintenance areas in

addition to the Bay Area that have

experienced violations of the 1-hour

ozone standard after redesignation:

Kansas City, Detroit-Ann Arbor, DaytonSpringfield, Grand Rapids and

Memphis. Three of these maintenance

areas (Detroit-Ann Arbor, Grand Rapids,

and Dayton -Springfield) already meet

the test for attainment of the 1-hour

ozone NAAQS based on 1995-1997 data

and are therefore proposed for

revocation of the 1-hour ozone standard

(63 FR 27247, May 18, 1998). The

remaining 2 areas, Kansas City and

Memphis, could meet that test at the

end of 1998, assuming that no more

than 2 exceedances are recorded at the

peak monitor during 1998. Because the

peak monitor in the Bay Area recorded

8 exceedances in 1996, the Bay Area

would still violate the 1-hour ozone

NAAQS even if no exceedances occur in

1998, since the average number of

exceedances for the 3-year period 1996-

1998 would exceed 1 per year.

b. Legal Authority

(i) General Comments on Mandatory

and Discretionary Authorities To

Redesignate

Comment: A number of commenters

felt that EPA should not redesignate the

Bay Area to nonattainment because the

Clean Air Act contains no mandatory

duty to do so.

Response: EPA agrees that section

107(d)(3)(A) does not require EPA to

redesignate the Bay Area. However,

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section 107(d)(3) of the Act grants the

Administrator broad discretion to

redesignate areas when she determines

that it is appropriate. For the reasons

discussed at length in the proposal and

in today's final notice, the

Administrator believes that it is

necessary to redesignate the Bay Area.

(ii) Authority To Redesignate Without

Classification

Comment: The BAAQMD commented

that it disagrees with EPA's

interpretation of section 181(b)(1) of the

Act, and believes that the ambiguity

contained in the language of this section

argues in favor of a SIP call to

strengthen the maintenance plan, rather

than redesignation without

classification.

Response: As EPA explained at length

in its proposal, section 181(b)(1), which

provides for new designations to

nonattainment, does not on its face

apply to the Bay Area. (Please refer to

62 FR 66580, December 19, 1997, for

EPA's analysis of the applicability of

section 181.) Section 181(b)(1) explicitly

sets forth which areas it governs.

Specifically, section 181(b)(1) covers

only those areas that were originally

designated attainment or unclassifiable

pursuant to section 107(d)(4) of the 1990

amendments. This section is silent with

regard to areas, like the Bay Area, that

were designated nonattainment under

the 1990 amendments, redesignated to

attainment, and that subsequently

returned to nonattainment.

In its comments on the proposal, the

BAAQMD cautions EPA against

inferring anything from Congress'

silence with regard to areas like the Bay

Area. However, because Congress was

silent on this point, some inference

must be made in order to decide how an

area like the Bay Area is to be treated

under the Act. The BAAQMD would

like us to infer that we cannot

redesignate an area back to

nonattainment once it has attained the

standard, but must instead issue a SIP

call to address the inadequacies in the

maintenance plan and contingency

measures. While a SIP call is one

possible option, it is clearly not the only

option authorized by the Act. There is

no ambiguity in the language of section

107(d)(3), which grants the

Administrator the authority to

redesignate an area "any time" she

deems it is appropriate based on air

quality data, planning and control

considerations, or any other air qualityrelated considerations. 8 EPA continues

8The Bay Area recorded 43 exceedances of the

ozone standard in the two-year period 1995 1996.

The standard allows no more than three

to believe that redesignation, rather than

a SIP call, is the appropriate action in

this instance. Given the broad discretion

granted the Administrator under section

107(d)(3), EPA is exercising that

discretion today to redesignate the area

to nonattainment. Moreover, we also

continue to believe that the ambiguity

contained in the language of section

181(b)(1) is best interpreted as placing

the Bay Area under subpart 1 of the Act

for the following reasons. The plain

language of section 181(b)(1) applies

only to areas designated attainment

under section 107(d)(4) and excludes

areas like the Bay Area. Second, as an

area that was previously designated

nonattainment, the Bay Area has already

done much of the work required for a

nonattainment area SIP and should not

need the lengthy time period granted to

new nonattainment areas to complete its

planning process. The Bay Area has

already implemented the section 181

requirements applicable to its previous

moderate classification. Finally,

sections 172(a)(1) and (2) contain

express statements that they do not

apply to nonattainment areas that are

specifically covered by other provisions

of Part D of the Act, thereby

demonstrating that the Act contemplates

that some areas will fall under subpart

1, rather than subpart 2.

c. Policy Issues

(i) Public Notification and Public

Perception

Comment: Some commenters

considered redesignation to be simply a

labeling exercise that will have a

negative impact on public support for

existing air quality programs by

emphasizing redundant and

counterproductive procedural and

paperwork tasks above real progress in

emission reductions.

exceedances at any one monitor over three years.

In addition, the area recorded violations at special

purpose monitors (SPMs) from 1992 1993, prior to

being redesignated to attainment. While these

violations were not considered in EPA's original

decision to redesignate the area to attainment

because the monitors were not part of the official

monitoring network, the Agency has since issued a

policy that requires that any reliable monitoring

data be relied upon in such decisions. (August 22,

1997 memorandum entitled, "Agency Policy on the

Use of Special Purpose Monitoring Data," from John

Seitz, Director of the Office of Air Quality Planning

and Standards.) As we noted in the proposal (62 FR

66579, December 19, 1997), EPA has determined

that the SPMs data should have been considered in

the 1995 redesignation action. With the advantage

of hindsight, these violations can be viewed as an

indicator that the air quality problem in the Bay

Area has not been solved at the time the area was

redesignated, as was borne out by the high number

of exceedances during 1995 1996. As we have

discussed at length herein and in the notice of

proposed rulemaking, the severity of the air quality

problem makes redesignation the appropriate action

in this case.

Other commenters noted that the

redesignation debate in the Bay Area

shows that labels are significant, and

that "nonattainment" accurately

conveys the message that making the

Bay Area's air safe to breathe is a task

still unfinished; there needs to be a clear

and consistent signal to the affected

sources and the public about why new

measures are necessary. These

commenters concluded that, to win

approval of additional reductions in air

pollution, the public needs to know the

actual status of air quality in the Bay

Area. The broader public will not

support efforts to reduce pollution if air

quality is deemed to be in attainment of

health standards. If local regulators

maintain that air quality is fine and if

there is no public accountability

through EPA oversight or the right of

public interest groups to enforce

attainment plans, the regulators will not

take on the difficult task of requiring

polluters to invest further in pollution

prevention or control technology.

Response: The large number of Bay

Area exceedances in 1995 and 1996

indicates that we do not have a

convincing basis for predicting an end

to ozone violations without further

reductions. Designations of attainment

are intended to apply to areas that have

demonstrated clean air over a 3-year

period.

Moreover, EPA does not believe that

the Bay Area's current attainment

designation is appropriate since it tells

the affected public, the regulated

community, local agencies, and the

District that ozone pollution is no longer

a problem. This inaccurate message

tends to undercut collaborative and

progressive actions in the near term, and

contributes to confusion and dissension

both within the Bay Area and in

downwind populations.

EPA remains convinced that nearterm action is needed to protect the

health and welfare of the State's

residents. Emission reduction strategies

will be evaluated and put in place 4-5

years sooner through a redesignation

under the 1-hour standard than is

expected under a plan to meet the

revised ozone standard (new plans are

not expected to be due under the

revised standard until 2003 and the

attainment date for an area such as the

Bay Area for the 8-hour standard is

expected to be 2005 at the earliest). That

is at least 4-5 years during which

Californians would be breathing dirtier

air than they should be.

Finally, EPA continues to believe that

a redesignation to nonattainment not

only accurately describes air quality in

the Bay Area but also provides an

opportunity for reevaluating the causes

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of the Bay Area's ozone violations, the

quantity of emission reductions needed

to attain the health-based standard, and

the measures that will achieve those

reductions expeditiously.

(ii) Impact of Bay Area Emissions on

Downwind Nonattainment Areas and

Issues of Equity

Comment: Commenters from

downwind areas and environmental

groups referenced a CARB study

indicating that pollution transported

from the Bay Area produces up to 27%

of the smog in the Central Valley.

Monterey Bay Unified Air Pollution

Control District noted that CARB has

found that half of the exceedances of the

State 1-hour ozone standard in the

North Central Coast Air Basin result

from overwhelming transport from the

Bay Area (i.e., the exceedances would

have occurred even in the absence of

local emissions). Commenters expressed

the belief that continued Bay Area

progress toward meeting federal

requirements is key to achieving air

quality in these downwind areas, and

that further NOx reductions in the Bay

Area are especially important.

Commenters noted high pollution levels

in areas downwind of the Bay Area, and

argued that redesignation would help

ensure that the Bay Area pays the price

of controlling its pollution rather than

passing it on in the form of health

impacts and added regulatory

requirements for downwind areas.

Downwind areas stated that enhanced

motor vehicle inspection and

maintenance (or enhanced I/M, which is

known in California as Smog Check 2)

should be required in the Bay Area, just

as it is in urbanized portions of the

Central Valley.

The BAAQMD argued that

redesignation without classification

would not ensure implementation of

Smog Check 2 in the Bay Area under

existing State law. The State argued that

redesignation would hurt attainment

efforts in the Central Valley, since it

would distract the Bay Area from

achieving real emissions reductions.

Bay Area industry commented that

redesignation will not solve pollution

transport issues in California and that

any reliance on pollutant transport

concerns to support redesignation is

unfounded and legally impermissible.

Response: The basis for the

nonattainment designation is the large

number of recent violations of the 1-

hour ozone NAAQS in the Bay Area, not

any new evidence regarding the impact

of Bay Area pollution on downwind

areas within the State. EPA believes that

primary responsibility for addressing

transport to and from the Bay Area

resides with the State.

With respect to the importance of

Smog Check 2 in the Bay Area, EPA

strongly endorses enhanced I/M as one

of the most cost-effective measures that

could be added to the Bay Area's

existing controls, since the program has

the potential to achieve substantial

emissions reductions in the near term

and to ensure that the benefits of

California's stringent motor vehicle

standards are not diminished because of

poorly maintained vehicles.

(iii) Effect of Redesignation on Limited

Air Pollution Control Resources

Comment: Redesignation will trigger

an expensive, duplicative planning

process that will detract from effective

collaborative efforts to improve air

quality. Redesignation provides no new

funds, authority, or technology but

simply imposes paperwork and process

requirements.

Response: Redesignation should not

result in a burdensome and duplicative

planning effort. EPA wants the District

and its co-lead agencies to focus on

emission reductions, not paperwork.

EPA is asking, in fact, for only three

plan elements: the existing 1995

emissions inventory for VOC and NOx,

an assessment of emissions reductions

needed to attain the federal standard,

and control measures to achieve those

reductions. EPA is allowing the District

to use available data and technical

analyses to establish the emission

reduction targets. Finally, EPA expects

that most of the work to identify

potential control measures has also been

completed for the District's recently

adopted 1997 Clean Air Plan. EPA

expects that the District will analyze

which control measures from this plan

are needed to attain the standard and

which measures beyond those contained

in the plan are also needed. Making

these control measures federally

enforceable elements of the SIP provides

an important public safeguard since

only in this way can EPA and the public

ensure that the commitments in the plan

are fully implemented and the plan's

promised air quality benefits are

realized. This streamlined planning

effort also provides an opportunity for

the Bay Area to quickly determine

whether additional reductions from

transportation sources are appropriate,

in the event that attainment requires

more near-term reductions than the

Clean Air Plan currently identifies.

While EPA concedes that

redesignation may provide no new

funds, authority, or technology, the

Agency does not agree that the

redesignation, as finalized in this action,

simply imposes burdensome paperwork

and process requirements on the Bay

Area. EPA's proposed streamlined and

flexible set of requirements contrasts

with extensive and prescriptive

planning and control requirements that

apply to ozone nonattainment areas

with 1999 attainment deadlines. Most of

these areas, which were classified as "serious" under the Clean Air Act, have

far fewer ozone exceedances and far

fewer planning resources than does the

Bay Area. The following are examples of

"serious" ozone nonattainment area

mandates, which EPA does not propose

to require in the Bay Area: (1) A more

stringent definition of major stationary

source for purposes of Title V operating

permit requirements; (2) more stringent

applicability thresholds and offset ratios

for purposes of permitting new and

modified stationary sources; (3) a more

stringent definition of major stationary

source for purposes of applying

reasonably available control technology

requirements to existing stationary

sources; (4) specific, detailed plan

elements addressing rate-of-progress; (5)

an enhanced vehicle inspection and

maintenance program; and (6) specific,

detailed provisions relating to

transportation control.

Comment: Redesignation is

inconsistent with the President's

directive that the new federal air quality

standards be implemented in a flexible,

cost-effective and common-sense

manner; that EPA respect agreements

already made by States, communities,

and businesses to clean up the air; and

that EPA implement the standards with

the minimum amount of paperwork

necessary. Redesignation also fails to

promote the ideals of the President's

and Vice President's reinvention report

which calls for the building of

partnerships, the reduction of red tape,

and the use of sound science to set

priorities.

Response: A key component of the

President's implementation plan for the

new federal air quality standards is that

continued progress toward meeting the

1-hour standard will ensure a smooth

and effective transition to the 8-hour

standard. EPA's action to redesignate

the Bay Area as a nonattainment area for

the 1-hour ozone standard and the

simplified set of planning objectives

that accompany this action are

consistent with continuing progress

towards meeting the 1-hour standard.

They are also consistent with other

elements of the implementation plan

pertaining to respecting existing

agreements, reducing paperwork, and

maximizing common sense flexibility,

and cost-effectiveness. As discussed

above, EPA is asking for only 3 plan

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elements: the existing 1995 emissions

inventory for VOC and NOx, an

assessment of emissions reductions

needed to attain the federal standard,

and control measures to achieve those

reductions, without requiring expensive

new modeling or unnecessary

paperwork. The District has already

identified additional control measures

in its 1997 California Clean Air Act plan

that could be used for a new federal

plan. In addition, partnerships between

the private sector, environmental

groups, and regulators to promote

innovative methods for addressing the

air quality problem could be an

important part of the Bay Area's

response to the redesignation.

(iv) Alternatives to Redesignation

Comment: EPA should allow the Bay

Area to implement and supplement, if

necessary, the contingency measures in

the Bay Area's Maintenance Plan, as the

remedy to violations. The CAA

recognizes that attainment areas will

experience violations from time to time

and that contingency provisions should

be adequate to cure the problem. If EPA

determines that the existing Bay Area

Maintenance Plan is inadequate, the

CAA provides a remedy: EPA may issue

a SIP call under section 1 10(k)(5) to

strengthen the maintenance plan.

Response: EPA hoped and expected

that the Bay Area's maintenance plan

would be the means to prevent future

exceedances of the ozone standard.

Unfortunately, almost all of the

emission reductions from the Bay Area's

maintenance and contingency measures

were in effect at the time that the Bay

Area experienced so many violations of

the ozone standard in 1995 and 1996.

After completing a stakeholder process

over the past several years, EPA

concluded that additional public health

protections are needed beyond current

Bay Area plans. EPA evaluated all of the

options available under the Clean Air

Act to address the public health

problem and continues to believe that

redesignation is the most direct and

sensible outcome.

The proposal that EPA rely only on a

"SIP Call" would apparently involve

EPA using the authority of CAA section

1 10(k)(5) to mandate submission of a

strengthened maintenance plan. For the

reasons discussed above, EPA believes

that redesignation to nonattainment is a

more appropriate course under the

framework of the Act. While EPA

considered the "SIP Call" option, the

Agency concluded that a federal

nonattainment designation for the Bay

Area was important to provide the

public with accurate information and

the correct message: Pollution levels

must be reduced quickly in order to

eliminate unhealthy air quality within

the Bay Area. Since the amount of

reductions necessary to attain the

federal 1-hour ozone standard has not

yet been established, EPA believes that

the proper SIP remedy is twofold. First,

the BAAQMD must submit its existing

1995 emissions inventory for VOC and

NOx and an assessment, using available

data and technical analyses, of the

emissions reductions needed to attain

the standard. Second, the BAAQMD and

its co-lead agencies must identify,

adopt, and submit for incorporation in

the SIP all of those control measures

that are needed to meet the reduction

target expeditiously. EPA proposed and

is now finalizing this simplified SIP

remedy, which does not substantively

differ from the planning requirements

that would need to be addressed by the

State in revising the Bay Area's

maintenance plan so that it provides for

attainment.

Comment: The BAAQMD commented

that if redesignation is finalized EPA

should classify the Bay Area as a "marginal" ozone nonattainment area,

subject to the requirements specifically

delineated in CAA section 182(a). This

certainty would provide a more specific

and defensible foundation for the

responsibilities of the co-lead agencies,

CARB, and EPA. The BAAQMD

expressed the belief that areas

designated as "marginal" would have 3

years to develop a SIP submittal and 5

years to reach attainment. Other

commenters recommended a "moderate" classification as more

appropriate to the Bay Area's air quality.

Response: As discussed above and in

the proposal, EPA concluded that

subpart 2 of the Clean Air Act (which

includes the ozone classifications and

specific requirements for each

classification) applies, on its face, only

to: (1) Areas designated nonattainment

under 107(d)(4) at the time the 1990

amendments were passed, and (2) areas

designated nonattainment under

107(d)(3) for the first time after passage

of the 1990 amendments. See CAA

181(b)(1). Thus, the subpart 2 provisions

would not seem to apply to the Bay

Area, which was initially

nonattainment, redesignated to

attainment, and then redesignated back

to nonattainment.

In the proposed redesignation (62 FR

66580), EPA also presented two policy

reasons for not classifying the Bay Area

or requiring the District to meet all of

the subpart 2 requirements for a "moderate" ozone nonattainment area:

(1) Many of the classification

requirements served no purpose for the

Bay Area, because the requirements had

already been addressed previously

when the area was nonattainment or

because the requirements would

contribute no specific emission

reductions. For example, "moderate"

area requirements include the gasoline

vapor recovery program (which has

been approved as part of the Bay Area

SIP for many years) and the rate-ofprogress plan (which would be

superfluous given the compressed

attainment schedule for the Bay Area).

EPA's proposal stressed the Agency's

determination to eliminate paperwork

and focus the Bay Area's energies on

achieving the emission reductions

needed to attain the 1-hour NAAQS

quickly.

(2) It did not seem appropriate to

allow the Bay Area as much time as

subpart 2 gives to newly designated and

classified nonattainment areas. The

CAA allows newly designated

nonattainment areas the same amount of

time to meet subpart 2 requirements as

was given to areas initially

nonattainment under the 1990 CAA

amendments. This would mean that the

Bay Area would have either 3 years or

4 years from the effective date of the

final designation to make a "moderate"

SIP submittal, depending upon whether

sophisticated photochemical modeling

was employed (approximately 6/2001 or

6/2002, instead of the 6/1999 date for

SIP submittal set in this action). The

Bay Area would also have 6 years to

attain the 1-hour ozone NAAQS (2004,

instead of the 2000 date in this action).

The same analysis applies to an even

greater extent with respect to a "marginal" classification. The Bay Area

has previously addressed the CAA

"marginal" area requirements for

corrections to RACT rules, NSR rules,

basic I/M, and rules requiring sources to

report on their emissions. If EPA were

to classify the area as "marginal," in

fact, the Bay Area would only need to

submit a single new SIP element-an

updated emissions inventory-which

would not be due until 2 years from the

effective date of the final designation

(approximately 6/2000, instead of the

11/1998 informal submittal date agreed

to by the BAAQMD, and the 6/1999 SIP

deadline set in this action). The CAA

does not require "marginal" areas to

submit attainment assessments, but sets

an attainment deadline 3 years after the

effective date of the nonattainment

designation (i.e., 2001).

EPA does not believe that either the

"moderate" or "marginal" classification

requirements and schedule represent an

efficient, common-sense, or adequate

response to the urgent public health

concerns associated with the Bay Area's

large number of recent ozone NAAQS

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violations. EPA continues to conclude

that the proposed approach of

redesignation without classification,

setting near-term deadlines for SIP

revision and attainment, is not only

better supported by the terms of the

CAA but also better fits the goals of this

action: To provide the Act's clean air

protections to Bay Area residents as

quickly as possible, with minimal

process and paper, and with the greatest

flexibility afforded to the State and local

agencies.

Comment: The BAAQMD proposed

that, in lieu ofredesignation, the

BAAQMD, EPA, CARB, the

Metropolitan Transportation

Commission, the Association of Bay

Area Governments, the San Joaquin

Valley Unified Air Pollution Control

District, CBE, Earth Justice, and the

Sierra Club could enter into a binding

memorandum of understanding or

agreement that would result in

additional stationary and mobile source

control measures, with their

concomitant emission reductions, being

added to the BAAQMD's Maintenance

Plan or SIP. The BAAQMD argued that

this approach was supported by the

President's emphasis on regulatory

flexibility.

Response: EPA strongly supports

collaborative efforts between all

involved parties, and particularly

encourages consultation with

downwind air districts and

environmental groups. EPA does not

view broad cooperative efforts such as

the BAAQMD proposes as incompatible

with redesignation to nonattainment,

and notes that half of the parties named

by the BAAQMD support EPA's

proposed redesignation action. EPA is

unclear, however, regarding the scope of

the BAAQMD's proposed binding MOU

or MOA, whether all of the parties

would have the authority to enter into

a binding MOU or MOA, and whether

all necessary parties would be bound.

There are significant statutory

constraints, for example, on EPA's

authority to enter into binding

agreements. Nevertheless, EPA would

be pleased to participate in any process

established by the BAAQMD.

Comment: EPA should follow the

Clinton Administration's "Common

Sense" option, and allow the Bay Area

simply to focus on the 8-hour ozone

standard on the schedule established for

new ozone SIPs.

Response: This option apparently

involves no near-term actions by State

and local Bay Area agencies, since most

substantive requirements and deadlines

for SIPs addressing the 8-hour ozone

NAAQS will not come due for

approximately 5 years. The commenter

appears to conclude that we should

abandon efforts to reach a less stringent

ozone standard on our way to achieving

a more stringent ozone standard.

EPA's final promulgation of the

revised 8-hour ozone NAAQS and final

interim implementation policy,

"Guidance for Implementing the 1-Hour

Ozone and Pre-Existing PM1O NAAQS"

(December 29, 1997), responded to

commenters on the proposals, who

argued that abandonment of SIP

obligations to provide attainment plans

for the 1-hour ozone NAAQS would be

inconsistent with national public health

goals, in view of the fact that new plans

addressing the 8-hour ozone NAAQS

will not be due until mid-2003. In order

to ensure that momentum is maintained

by state and local agencies, the final

policy provides that the 1-hour standard

and applicable Clean Air Act

requirements will continue to apply to

an area until EPA makes a

determination that the area has met the

1-hour standard. As discussed

elsewhere in response to comments,

EPA believes that a compressed and

streamlined planning process is

necessary for the Bay Area to expedite

efforts to protect public health. EPA

agrees with commenters who concluded

that this process will benefit rather than

detract from eventual preparation of a

SIP addressing the 8-hour ozone

NAAQS.

2. Comments Relating to EPA's

Proposed SIP Requirements

a. Emissions Inventory

Comment: While the BAAQMD has

been maintaining and updating a

weekday inventory for many decades,

preparing a weekend day inventory, as

EPA proposes to require, would demand

extensive new data gathering and

compilation, several person-years of

effort, and one half-million dollars or

more. Although assumptions could be

made and best-judgment factors could

be applied to weekday data to generate

an estimate of weekend day data, the

resulting uncertainties would hamper

planning efforts based on their use.

Such an extensive new requirement

would be more appropriate for a SIP

submittal focused on the new 8-hour

NAAQS.

Response: Based on these comments

from the State and the BAAQMD, EPA

has decided to amend the proposed SIP

submittal schedule to delete the

weekend day emission inventory

requirement. Nevertheless, EPA

encourages BAAQMD and CARB to

work together with State and regional

planning and transportation agencies to

assess weekend emissions and develop

appropriate additional control measures

as may be necessary and appropriate to

ensure that weekend violations do not

persist.

Comment: EPA proposed to require an

updated carbon monoxide (CO)

emissions inventory. A commenter

noted that, although a CO inventory

may help shed light on sources of ozone

precursors, the CO inventory has no

direct bearing on ozone attainment

status and EPA should delete the

requirement from the final

redesignation.

Response: In order to minimize still

further the scope of the Bay Area SIP

obligation, EPA agrees to eliminate this

requirement. Consequently, EPA

finalizes in this action a SIP

requirement for the existing 1995

inventory for VOC and NOx emissions

only.

b. Attainment Assessment

Comment: Bay Area industry, the

State, and the BAAQMD argued that a

credible attainment assessment,

particularly one that takes into account

the 1995-6 meteorological conditions

and ambient concentrations, cannot be

performed by May 1, 1998, due to data

gaps and lack of modeling capability. If

the BAAQMD should attempt an

assessment, it would not be technically

defensible and would not be accepted

by the public or business community.

Reliable modeling cannot be performed

until the results of a new field study

(conducted in 1999 or 2000) are

available. Bay Area industry expressed

concern that EPA's unrealistic schedule

may lead the BAAQMD to prematurely

"lock in" a control strategy that

emphasizes counterproductive NOx

reductions.

On the other hand, environmental

groups and other commenters felt that

EPA's proposed schedule struck an

appropriate balance between the

competing concerns for acting quickly

and acting knowledgeably. These

commenters emphasized that the

BAAQMD cannot assure compliance

with the 1-hour NAAQS without first

knowing what emissions are and what

reductions are needed, and any extra

time and effort spent to understand the

problem now will pay double dividends

in the future, in helping the regulatory

agencies and affected industry comply

with the Federal 8-hour NAAQS and the

California 1-hour standard.

Response: EPA continues to believe

that available data and technical

analyses can be used to provide, within

a very short period of time, a reasonable

estimate of emission reductions needed

to attain. The BAAQMD's October 1997

report, Evaluation of the 1995 and 1996

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Ozone Seasons in the San Francisco Bay

Area, recommended such an

assessment. EPA remains willing to

work with the BAAQMD to ensure that

the exercise can be completed within

the established time limits and resource

constraints, and that the analysis will

comply with applicable federal

requirements. EPA notes that there is no

CAA requirement that the Bay Area use

Urban Airshed Modeling, and that other

approaches may be appropriate to target

the amount of emission reductions

needed to attain the NAAQS

expeditiously. The quality of technical

data and analyses techniques will

continually improve, but it does not

make sense to wait for the "perfect"

science to take action. Regulatory

agencies need to use the best

information available now to make

reasonable decisions about how to

protect public health. In order to allow

more time to assess the reductions

needed for attainment, EPA is extending

the formal SIP submittal deadline for

the attainment assessment from May 1,

1998 to June 15, 1999. The District has

committed to submit a draft attainment

assessment informally to EPA, and make

it available to the public, by November

25, 1998. (Letter from BAAQMD, ABAG,

and MTC dated June 23, 1998.) This

early informal submittal will allow EPA

to review the draft inventory and

assessment and work with the District to

address any deficiencies. Finally, with

respect to industry's contention that

EPA's schedule may lead the District to

"lock in" allegedly counterproductive

NOx controls, EPA does intend to allow

CARB and BAAQMD the flexibility to

select the appropriate mix of ozone

precursor controls to ensure attainment.

This issue is also discussed below in the

context of the NOx waiver.

c. Control Measures

(i) Suggested Measures

Comment: Several of the commenters

recommended particular control

measures that could be adopted to speed

Bay Area attainment. The most

frequently mentioned new measure was

the Smog Check 2 program. Sacramento

Valley air pollution control districts and

environmental groups also urged

implementation of two additional

reduction programs: (1) A heavy duty

mobile source NOx control strategy that

includes incentives for early

introduction of clean engine and fuel

technologies; and (2) a requirement for

permits and controls on smaller

stationary sources, including natural gas

fired boilers and internal combustion

engines, and regulation of stationary

diesel internal combustion engines,

which are now exempt. The Sierra Club

attached to their comment an extensive

list of control measures for inclusion

into the SIP, particularly suggestions for

specific improvements to the Bay Area

transportation control measures. CBE

provided detailed recommendations for

a variety of specific additional controls

at Bay Area refineries and chemical

plants. CBE also endorsed a public

comment on the proposed redesignation

from Chesapeake Environmental Group,

Inc., advocating further reductions in

VOC emissions from land fills by

prohibitions on the use of petroleumcontaminated soil as a landfill cover.

The Bay Area Environmental Justice

Community recommended tough rules

on oil refining and other polluting

manufacturing processes, control on the

movement of jobs to the outer suburbs,

and commitments to redirect public

funds to transit instead of highway

building.

Response: EPA believes that the

suggested control measures merit

serious attention by the responsible

agencies. EPA has forwarded the

comments to CARB, BAAQMD, MTC

and ABAG with encouragements to

these agencies to consider the

suggestions for incorporation into the

SIP, as appropriate. In order to allow

more time for evaluation of additional

control measures, EPA is extending the

SIP submittal deadline for adopted

regulations or enforceable commitments

to adopt regulations, from September 1,

1998, to June 15, 1999.

Comment: The Association of

International Automobile

Manufacturers, Inc., the New United

Motor Manufacturing, Inc. (NUMMI),

and Toyota Motor Manufacturing North

America, Inc., commented that the

adoption and implementation schedule

of rules in the Bay Area's 1997 Clean

Air Plan was coordinated with the

implementation schedule of CAA

section 183(e) rules for reducing VOC

emissions and the Federal schedule for

implementation of the maximum

achievable control technology (MACT)

standards for automobiles and light duty

trucks. The commenters noted that the

respective deadlines for these Federal

rules are 2003 and 2000, respectively.

The commenters emphasized that any

acceleration of the BAAQMD's current

schedule to meet EPA's proposed 1999

attainment deadline would likely result

in duplicative efforts and inconsistent

requirements, and thus increased costs

to affected industry.

Response: EPA has asked the State to

perform an assessment of reductions

needed to attain the 1-hour ozone

NAAQS expeditiously, in order to

prevent recurrence of the violations

experienced following the redesignation

to attainment. EPA wishes the State to

use its good judgment to determine

which new controls should be adopted

or expedited to meet attainment

requirements, assuming that the

attainment assessment identifies the

need for more reductions to prevent

exceedances by the attainment year

2000. EPA encourages the BAAQMD

and other responsible agencies to select

control approaches that maximize

common sense and cost effectiveness.

Comment: Industry commenters

questioned whether controls adopted to

meet the 1-hour ozone NAAQS would

necessarily be helpful in meeting the

new 8-hour ozone NAAQS. Other

commenters, however, noted that

controls adopted to meet the Federal 1-

hour ozone standard would contribute

to eventual attainment of California's

more stringent 1-hour ozone standard

and could be generally presumed to

benefit attainment of the new 8-hour

ozone NAAQS.

Response: While EPA believes that

the great majority of control possibilities

for meeting the 1-hour ozone NAAQS

will also advance attainment of the 8-

hour ozone NAAQS in the Bay Area,

EPA encourages CARB, BAAQMD,

MTC, and ABAG to assess any new

control measures that may be

considered for expeditious attainment of

the 1-hour ozone NAAQS, in order to

ensure that the measures will also

promote attainment of the 8-hour ozone

NAAQS.

Comment: The BAAQMD proposed

that new contingency measures be

added to the SIP to augment the ones

currently implemented. The BAAQMD

stated that the process for identifying

these measures "can occur quickly

through consultation among EPA,

CARB, and the co-lead agencies.

Through this process, we can commit

our energies and our limited resources

to pursuing our real shared goal-clean

air for all people all the time-through

common sense, flexible, cost-effective,

and coordinated actions."

In its comment letter, the BAAQMD

identified the following options for

supplementing the existing SIP controls:

(1) already adopted measures which

have not been submitted into the SIP,

such as controls on refinery fugitive

emissions and pressure relief valves,

NOx Best Available Retrofit Control

Technology (BARCT) controls on

refineries and utilities, $1 increase in

bridge tolls;

(2) measures that the BAAQMD will

be pursuing in the near term, such as an

aqueous solvents rule, new CMAQfunded projects);

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(3) State measures, such as further

improvements to the I/M program.

Response: EPA shares completely the

BAAQMD's goal statement to provide "clean air for all people all the timethrough common sense, flexible, cost

effective, and coordinated actions." EPA

also appreciates the BAAQMD's point

that additional control measures can be

identified quickly through consultation

with EPA, CARB, and the co-lead

agencies; and EPA would be happy to

consult on appropriate measures.

In terms of supplementing the current

SIP with additional control measures,

EPA agrees the example measures are

feasible. Depending on the outcome of

the attainment assessment, however,

additional controls may be needed. The

Bay Area has already identified several

feasible control measures in response to

the State requirement for a 1997 Clean

Air Plan. Upon review of the Bay Area's

1997 Clean Air Plan, CARB suggested a

number of modifications to existing Bay

Area regulations and transportation

control measures that could result in

additional emission reductions (See

letter from Lynn Terry, Assistant

Executive Officer, CARB to Ellen

Garvey, Air Pollution Control Officer,

BAAQMD, dated December 1, 1997.) In

addition, EPA's Office of Air Quality

Planning and Standards identified 42

cost effective control measures that may

be appropriate for the Bay Area. (E.H.

Pechan &Associates, Inc., "Control

Measure Analysis of Ozone and PM

Alternatives: Methodology and Results,"

prepared for Innovative Strategies and

Economics Group, Office of Air Quality

Planning and Standards, U.S. EPA, RTP,

NC July 17, 1997.) Whatever additional

SIP measures are pursued, they must

provide sufficient emission reductions

to ensure expeditious attainment of the

1-hour ozone NAAQS in the Bay Area.

(ii) NOx Waiver and the Efficacy of NOx

Controls

Comment: Industry commenters

stated that EPA provided no adequate

notice of its retroactive revocation of the

NOx waiver and the waiver remains

appropriate to avoid requirements for

expensive and counterproductive NOx

controls, since modeling evidence

shows that NOx reductions may elevate

ozone concentrations at locations within

the Bay Area under certain

meteorological conditions, and thus

could detract from attaining the ozone

NAAQS.

Earthjustice, on behalf of Sierra Club

and CBE, agreed with EPA's position

that no waiver of NOx control

requirements now applies, but

contended that the waiver continued

during the maintenance period.

Earthjustice considered that the waiver

expired by its own terms, however,

because it was explicitly conditional,

lasting only as long as the area's

monitoring data continue to

demonstrate attainment. Finally,

Earthjustice concluded that the Bay

Area is therefore now subject to CAA

section 182 requirements for NOx

control.

Response: Section 182(f) of the Act

extends the ozone nonattainment area

VOC requirements of subpart 2 of the

Act to emissions of NOx. This section

also provides that the Administrator

may, either on her own or in response

to a petition, waive these subpart 2 NOx

requirements if, for nonattainment areas

outside an ozone transport region, either

of 2 tests are met. The section 182(f)

NOx requirements would not apply if

the Administrator determines that (1)

for the sources concerned, net air

quality benefits are greater in the

absence of the NOx reductions, or (2)

additional NOx reductions would not

contribute to attainment of the ozone

NAAQS. Additionally, the NOx control

requirements, under the same tests,

could be relieved as to any portion of

the controls that are shown to result in

excess emissions reductions. On

December 16, 1993, EPA issued

guidance on obtaining NOx waivers. 9

This guidance was subsequently revised

on May 27, 1994.10

At the time the Bay Area submitted its

redesignation request, EPA guidance

governing redesignations required,

pursuant to section 107 of the Act, that

an area must meet all applicable

requirements of section 110 and part D

prior to redesignation. Thus, before EPA

could redesignate the Bay Area to

attainment, the Bay Area had to adopt

all required NOx RACT rules. However,

based on air quality data from official

SLAMS monitors, EPA determined that

the Bay Area had attained the NAAQS

without adopting all of these rules.

Based on the determination that the area

was attaining without benefit of

additional NOx reductions, it was

apparent that such reductions would

not contribute to attainment of the

ozone NAAQS. Thus, the Bay Area

qualified for a waiver under the test

provided in subsection 182(f)(1)(A).

Therefore, the Bay Area requested, and

EPA approved, a NOx waiver under that

subsection. One commenter points out

9 "Guideline for Determining the Applicability of

Nitrogen Oxide Requirements under Section

182(f)," John Seitz, Director, Office of Air Quality

Planning and Standards.

10 "Section 182(f) Nitrogen Oxides (No)

Exemptions Revised Process and Criteria," John

Seitz, Director, Office of Air Quality Planning and

Standards.

that the waiver was granted in the same

notice as the redesignation to

attainment, arguing that this fact

supports the position that the waiver

must remain in effect. However, the

waiver was acted on in the same notice

so that the area could be redesignated

without first meeting any remaining part

D NOx requirements. Because the

Agency was ready to act on both

requests at the same time, it saw no

reason to hold up the redesignation so

that it could grant the NOx waiver first.

The NOx waiver acts only to relieve

an ozone nonattainment area from

subpart 2 nonattainment area NOx

requirements. Once an area is

redesignated to attainment these

requirements no longer apply and a

NOx waiver is irrelevant. Moreover, as

the May 27, 1994 John Seitz guidance

memo cited above points out, the NOx

exemption test set forth in section

182(f)(1)(A) asks only if additional

reductions of NOx would contribute to

attainment of the ozone NAAQS, not

whether they would contribute to

maintenance of the standard once

attainment is confirmed through

redesignation to attainment. Recognition

of this by both the BAAQMD and EPA

is inherent in the fact that the Bay

Area's maintenance plan contingency

measures, approved as part of the

redesignation to attainment, are nearly

all NOx measures.

The commenters cite language in the

May 27, 1994, guidance to support their

position that EPA must notify the state

and provide notice in the Federal

Register in order to revoke NOx

exemptions. However, this language

deals with a situation where a

nonattainment area is granted a NOx

waiver based upon clean air quality

data, the area is not redesignated to

attainment, and the area subsequently

violates the ozone NAAQS. In this

situation the exemption must be

revoked because the area remains a

nonattainment area and, unless revoked,

the exemption would continue,

inappropriately, to apply. Such is not

the case with an area, such as the Bay

Area, which is redesignated to

attainment and thereby becomes a

maintenance area. In such areas the

exemption, which applies to

nonattainment areas, by its terms no

longer applies."

The commenters argue that EPA

should not take any action to revoke the

NOx exemption because it remains

appropriate due to the commenters'

11 Sections I.C. and II.A. of a later guidance

document entitled "Conformity: General Preamble

for Exemption from Nitrogen Oxides Provisions

expands on this point." See 59 FR at 31239 40,

including note 1 (June 17, 1994).

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position that the Bay Area is

"hydrocarbon limited, and * * * NOx

reduction measures may elevate ozone

concentrations * * *." Even assuming

that this is true, there is no legal basis

for retaining the NOx exemption. The

Bay Area's exemption was granted

based on three years of clean air quality

data. After 43 exceedances and 17

violations of the ozone NAAQS in two

years, the basis for the exemption no

longer exists.

The commenters' concerns regarding

the relationship between NOx emissions

and ozone formation in the Bay Area are

appropriately addressed through the

District's SIP revision process. Because

the Bay Area is being redesignated

under subpart 1 of the Act, there are no

mandatory NOx measures which must

be adopted. On the other hand, the Bay

Area may not eliminate from the SIP

any existing NOx controls without a

demonstration that such revision would

not interfere with progress, attainment,

or other applicable requirements of the

Act (CAA section 110(1)). In response to

the redesignation, EPA expects CARB

and BAAQMD to pursue whatever

combination of VOC and NOx

reductions is most consistent both with

expeditious attainment in the Bay Area

and with the State's determination of

appropriate and necessary emissions

levels in the Bay Area consistent with

the attainment and maintenance

requirements of downwind areas. In

view of the fact that nitrates appear to

constitute more than one third of the

Bay Area's fine particulate matter, EPA

also recommends that the Bay Area take

into account the role of NOx emissions

reductions in the control of fine

particulates.

d. Attainment Deadline

Comment: The 1999 attainment

deadline (assuming that attainment is to

be based on 1997-99 air quality) is

unrealistic, since most of the 1998

season will have passed before the

control measure SIP submittal to EPA;

consequently the plan will affect

emissions only for 1999.

Response: The commenters appear to

have misunderstood EPA's proposal. In

accordance with the Agency's

interpretation of the CAA requirement

that plans "provide for attainment,"

under a 1999 attainment deadline, the

State would need only show that its SIP

includes sufficient emission reductions

in effect by the start of the 1999 smog

season to ensure that no more than one

exceedance at any monitor will occur in

1999. Moreover, EPA's proposal noted

that, under the terms of CAA section

172(a)(2)(C), the area may be eligible for

up to 2 1-year extensions of the

attainment deadline if no more than 1

exceedance occurred in the year

preceding the extension and the SIP is

fully implemented. Finally, EPA notes

that the same commenters arguing

against a 1999 attainment deadline also

claim that there is already strong

evidence that the Bay Area will not

experience future violations, since no

exceedances were recorded in 1997 and

both CARB and BAAQMD project that

the emissions inventory will continue to

decline. EPA recognizes that the

proposed 1999 deadline may be difficult

to meet if the attainment assessment

demonstrates that substantial additional

control measures are needed. In an

effort to balance the time constraints

associated with SIP adoption and

submittal with the goal of protecting

public health as quickly as possible,

EPA has decided to extend the

attainment deadline by one year to

November 15, 2000.

Comment: Redesignation of the Bay

Area will have no effect on air quality

within the time frame proposed by EPA.

The time from the start of rule

development to achievement of the

reductions is generally well over 18

months. Consequently, implementation

of control measures would not occur

until after the end of the 1999 ozone

season. If EPA is seeking only to add

federal enforceability to existing state

air quality control requirements, then

redesignation is clearly nothing more

than a paperwork exercise since those

control requirements are already in

place.

Response: As discussed earlier, EPA

wants the District to focus on near-term

emission reductions, not paperwork.

Because the District has already

identified additional control measures

in its 1997 California Clean Air Act

plan, these measures could be used for

a new federal plan and implemented

sooner than initially planned to achieve

near term emission reductions.

Otherwise, under the California Clean

Air Act plan, the Bay Area would not

implement these measures until 2000 or

later. EPA also believes that it is

important to make federally enforceable

all of the control measures needed to

bring the Bay Area into attainment. This

provides further assurance to the public

that the control measures will be

implemented and the emission

reductions needed to protect public

health achieved.

e. Planning Schedule

Comment: EPA's SIP schedule

provides insufficient time to complete

planning processes, public involvement,

and adoption, since the co-lead agency

planning process normally requires 15

months, California Environmental

Quality Act (CEQA) requirements for

public review must be satisfied under

State law, at least 2 months are required

for CARB review prior to submittal, and

the regulated community needs

adequate lead time to change or install

new controls. The BAAQMD also

concluded that more time to prepare a

plan for the 1-hour ozone NAAQS

would not result in a better plan, better

air quality, or better health. The prudent

course, according to the BAAQMD, is to

focus on the new 8-hour NAAQS.

Response: EPA acknowledges the time

constraints associated with SIP

development, adoption, and submittal.

On the other hand, EPA does not expect

that the agencies will launch a wholly

new planning exercise but rather that

they will continue the 1997 Clean Air

Plan planning effort, adding only an

attainment assessment using available

data and technical analyses and

adjustments to the control measures that

may be necessary to ensure expeditious

attainment. In an effort to be responsive

to the District's scheduling concerns

without sacrificing near term public

health protections, EPA has agreed to

allow the State to submit only one

official SIP revision on June 15, 1999

based on the District's commitment to

submit a draft of the emissions

inventory and attainment assessment to

EPA by November 25, 1998. In

committing to submit a draft inventory

and assessment within 5 months after

signature of the final redesignation by

the Regional Administrator, the District

also agreed to hold an early public

workshop on the inventory and

assessment. (Letter from Ellen Garvey,

BAAQMD; Eugene Leong, ABAG; and

Lawrence Dahms, MTC to Felicia

Marcus dated June 23, 1998.) These

changes not only extend the time frames

contained in the proposal but also

enable the District to hold one public

hearing for all three elements of the SIP

revision.

3. Comments on Miscellaneous Issues

a. Conformity

Comment: Several commenters

questioned the effect of Bay Area

redesignation on transportation

conformity. One commenter argued that

it would be inconsistent with CAA

section 176(c) if EPA were to determine

that the emissions budget from a new

Bay Area SIP submittal applied

simultaneously with the emissions

budget in the currently-approved Bay

Area maintenance plan.

Response: Today's action does not

have an immediate effect on

transportation conformity in the Bay

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Area. The Bay Area currently has an

approved ozone maintenance plan and

the budgets in this plan continue to

apply. Any EPA action with potential

effects on transportation conformity will

take place in the context of EPA's

review of the Bay Area's June 15, 1999

SIP submittal.

The transportation conformity rule

does not directly address a situation,

like that in the Bay Area, where an

approved maintenance plan proves to be

inadequate and the area is redesignated

and required to submit a new plan.

However, EPA believes the correct

interpretation of the conformity rule

would require any new budgets

contained in the June 15, 1999 submittal

to become effective after a 45-day

review period unless EPA finds them

inadequate. EPA will continue to work

with the US Department of

Transportation (DOT) to resolve DOT's

concerns regarding the interpretation of

the rule and simultaneous applicability

of budgets and will make a final policy

decision in the future.

b. Congestion Mitigation and Air

Quality (CMAQ) Funding

Comment: Redesignation of the Bay

Area to nonattainment without a

classification could jeopardize the Bay

Area's continued eligibility for CMAQ

funding pursuant to either current law

or the pending bills for reauthorization

of the Intermodal Surface

Transportation Efficiency Act (ISTEA).

Response: Under the Transportation

Equity Act for the 21st Century (TEA21), the new transportation funding

legislation, signed recently by the

President, redesignation of the Bay Area

to nonattainment for ozone will not

affect CMAQ eligibility. In fact, the Bay

Area will be eligible for more CMAQ

funding than they were allocated under

ISTEA, the previous transportation

funding legislation.

c. Unfunded Mandates Reform Act

(UMRA)

Comment: Some commenters asserted

that EPA failed to comply with the

Unfunded Mandates Reform Act

(UMRA), and should have prepared a

statement in accordance with section

202 of UMRA. In the proposal, EPA

stated that the redesignation did not

trigger section 202, as it did not contain

any federal mandate because it did not

impose any enforceable duties, and that

even if it did contain a federal mandate,

the resulting expenditures would not

exceed $100 million in any one year.

Commenters argued that the

redesignation does impose an

enforceable duty upon California and

the BAAQMD, because failure to adopt

a SIP would result in loss of highway

funds and, in addition, result in more

stringent emissions offset requirements

for new and modified stationary

sources, result in loss of grants, and

trigger a duty for EPA to issue a federal

implementation plan (FIP).

One commenter also argued that the

redesignation constitutes a private

sector mandate under UMRA, because it

requires the District to submit

regulations or enforceable commitments

to adopt regulations imposing duties on

emissions sources. However, the test for

a private sector mandate under UMRA

is whether it "would impose an

enforceable duty upon the private

sector." Clearly the redesignation has

created no duty enforceable against any

private party. The commenter also states

that EPA is requiring that new source

review permitting requirements,

applicability thresholds and offset ratios

be set "by analogy" at the levels

otherwise applicable to moderate

nonattainment areas. These are the

levels currently in effect in the Bay Area

as a result of the area's previous status

as a moderate nonattainment area and

therefore present no new burdens on

private parties in any event.

Some commenters also asserted that

the redesignation will impose costs in

excess of $100 million. This estimate

was based on projected costs of

complying with the types of

requirements the commenter believes

would be imposed if the state were to

adopt a SIP.

Response: EPA does not believe that

it is necessary to resolve the issues of

whether the redesignation constitutes a

"federal mandate" or requires

consideration of costs to private parties,

as well as costs to the state, under

UMRA.

EPA believes that even if it were

construed as a federal mandate, with

costs to private parties to be considered

as well as costs to the state, those costs

could not reasonably be expected to

exceed $100 million in any one year.

EPA has conducted an analysis of

potential costs to private parties. In

terms of the impact on the private

sector, the BAAQMD has yet to

determine the amount of needed

reductions and the mix of VOC and NOx

measures to achieve the needed

reductions. EPA used cost data

developed for the July 1997 "Regulatory

Impact Analyses for the Particulate

Matter and Ozone National Ambient Air

Quality Standards and Proposed

Regional Haze Rule," as the basis of its

analysis. This data shows that the

national average cost for reasonably

available VOC control measures is

higher than the national average cost for

reasonably available NOx control

measures ($2,652 per ton per year for

VOC; $1,937 per ton per year for NOx,

expressed in 1990 dollars). EPA

assumes that reductions of both VOC

and NOx will be necessary to bring the

Bay Area back into attainment.

However, for the purpose of this

analysis EPA assumed that all the

needed reductions would come from

VOC measures because this approach

would over-estimate the actual costs. In

addition, EPA assumed that VOC

emissions may need to be reduced by as

much as 80 tons per day (approximately

28,800 tons per year) above and beyond

measures currently underway at the

State and local levels. This amount of

reductions is significantly greater than

that assumed to be needed by the

various interested parties. During the

extensive stakeholder process EPA has

heard that anywhere from 0 to 50 tons

per day in additional reductions will be

necessary. Thus, by assuming 80 tons

per day for the purposes of this analysis,

EPA believes that it is significantly

overestimating the costs. Even by

employing cost numbers and tons to be

reduced that are significantly higher

than what EPA believes the actual

results will be, the impacts would still

be less than $100 million (i.e.,

$76,377,600).

As previously discussed in Section

III.D.3.b. of this notice, one commenter

indicated that the redesignation without

classification under the Clean Air Act

would result in loss of highway funds

in excess of $100 million under ISTEA

and that this should be viewed as the

cost of the "mandate". The interplay of

these two distinct statutes, were it to

result in a significant decrease in

highway funding to the Bay Area, would

not be a mandate as it is defined in

UMRA, as it would impose no

enforceable duty on State, local or tribal

governments. Moreover, as discussed

above in section III.D.3.b., EPA, in

consultation with the Department of

Transportation, has determined that the

redesignation will not result in any

significant loss of highway funding to

the Bay Area under the recently passed

reauthorization of ISTEA.

d. Procedural Obligations Under CAA

Section 107 and the Administrative

Procedures Act (APA)

Comment: EPA has failed to follow

the procedure set forth in section

107(d)(3) of the Act for redesignating

areas, and consequently has failed to

follow procedural requirements of the

Administrative Procedure Act.

Response: The commenters

misinterpret both the plain language of

sections 107(d)(3) (A), (B) and (C), and

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the intent of these sections. As

described more fully below, the

exchange of correspondence between

EPA and a State provided for by section

107(d)(3) is intended to address

situations where there is agreement that

a redesignation is necessary, but

differing opinions concerning the

boundaries of the area, or portion

thereof, to be redesignated.

Section 107(d)(3) of the Act sets forth

the procedure for redesignation of areas

and provides that the Administrator

may at any time notify the Governor of

any state that available information

indicates that the designation of any

area should be revised. Section

107(d)(3)(B) provides that the Governor

has 120 days from receipt of this letter

to submit to the Administrator such

redesignation, if any, of the appropriate

area (or areas) or portion thereof as the

Governor considers appropriate.

Section 107(d)(3)(C) contemplates

four potential outcomes which flow

from a Governor's response to

notification from EPA that an area

should be redesignated:

(1) The Governor concurs with EPA's

notification and submits a redesignation

of the same area, or portion thereof, that

was proposed by EPA. In this event,

section 107(d)(3)(C) provides that EPA

must promulgate the redesignation no

later than 120 days after receipt of the

Governor's redesignation submittal. No

further correspondence with the

Governor is required.

(2) The Governor concurs with EPA's

notification that a redesignation is

necessary, but submits a redesignation

of the area with different boundaries, or

submits a redesignation of only a

portion of the area that was proposed by

EPA. If EPA agrees with the Governor's

redesignation submittal, section

107(d)(3)(C) provides that EPA must

promulgate the redesignation no later

than 120 days after receipt of the

Governor's redesignation submittal. No

further correspondence with the

Governor is required.

(3) The Governor concurs with EPA's

notification that a redesignation is

necessary, but submits a redesignation

of the area with different boundaries, or

submits a redesignation of only a

portion of the area that was proposed by

EPA. If EPA disagrees with the

Governor's submittal, section

107(d)(3)(C) provides that EPA may

make such modifications as it deems

necessary, but must notify the State 60

days before promulgation of the

redesignation in order to provide the

State with an opportunity to

demonstrate why any proposed

modification is inappropriate.

(4) The Governor does not submit a

redesignation for an area, or portion

thereof. Section 107(d)(3)(C) provides

that EPA "shall promulgate such

redesignation, if any, that the

Administrator deems appropriate." No

further correspondence with the

Governor is required.

In the instance at hand, EPA notified

the Governor of California by letter

dated August 21, 1997, that the Bay

Area should be redesignated to

nonattainment for ozone, based on

available air quality data demonstrating

43 exceedances and 17 violations of the

standard in the two-year period from

1995 through 1996. The Governor of

California did not submit a

redesignation of the Bay Area. Rather,

the Governor responded, by letter dated

December 10, 1997, that he does not

believe any redesignation is appropriate.

Thus, EPA's action is governed by the

last sentence of section 107(d)(3)(C),

which provides that EPA "shall

promulgate such redesignation, if any,

that the Administrator deems

appropriate."

EPA has complied with the

requirements of both the Clean Air Act

and the Administrative Procedure Act

in its action to redesignate the Bay Area.

EPA has conducted notice and comment

rulemaking, fully considering all

comments received, including those

provided by the Governor. Contrary to

the assertions of the commenter, there is

nothing in either statute which

precludes EPA from proposing a

redesignation at any time following

notification of the Governor. EPA is free

to solicit comment from the general

public simultaneously with the

Governor's notification, at any time

during the 120 day period for the

Governor's response, or at any time

following the Governor's response, so

long as EPA complies with the time

periods set forth in section 107(d)(3),

and its general duty to consider and

respond to all comments.

While it is true that EPA made minor

changes to the redesignation

requirements set out in the Governor's

notification when the Agency published

its proposal, the State was in no way

prejudiced by this fact. The changes did

not relate to area boundaries, or portions

thereof, and therefore did not invoke the

notification procedures. EPA's proposed

rulemaking provided a 60 day public

comment period and the State was

provided with a copy of the proposal on

December 11, 1997, 8 days before it was

published in the Federal Register. The

State provided EPA with comments on

its proposal on February 17, 1998. These

comments, as well as the Governor's

response letter, have been fully

considered in EPA's decision to

redesignate the Bay Area.

IV. Final Action

A. Overview

As discussed in the response to

comments, EPA remains convinced that

the Agency's appropriate action, in the

face of numerous and widespread

violations of the 1-hour ozone standard

in the Bay Area, is to finalize the

redesignation of the San Francisco Bay

Area to nonattainment for the 1-hour

ozone NAAQS. EPA takes this action

under CAA section 107(d), based

specifically on the Bay Area's 17

violations of the 1-hour ozone NAAQS

over the 3-year period, 1994-1996.

EPA also finalizes the Agency's

determination that the Bay Area should

not be classified under subpart 2 of the

CAA, but rather should be required to

meet applicable requirements of CAA

subpart 1.

B. SIP Requirements and Deadlines

In accordance with CAA sections 110

and 172, the State must submit by June

15, 1999 a SIP revision containing: (1)

The existing 1995 emissions inventory

for NOx and VOC in the Bay Area; (2)

an assessment, using available data and

technical analyses, of the emission

reductions needed to attain the federal

1-hour ozone standard; and (3) adopted

regulations and/or control measures

with enforceable commitments to adopt

and implement the control measures in

regulatory form by specified dates. The

extension for the emissions inventory

and attainment assessment submittal is

being granted in response to a

commitment made by the Air District

(Letter from Ellen Garvey, BAAQMD et

al. to Felicia Marcus, EPA Region IX,

dated June 23, 1998) to provide the

inventory and assessment to EPA in

draft within 5 months of the final

redesignation. This early, informal

submittal will allow EPA to review the

draft inventory and assessment and

work with the District to address any

deficiencies. The District also agreed to

hold an early public workshop on the

draft inventory and assessment. The

adopted regulations and control

measures, and the schedule for adoption

and implementation of such measures,

must be sufficient to meet reasonable

further progress and attain the 1-hour

NAAQS expeditiously but no later than

November 15, 2000. EPA emphasizes

that the submittal due on June 15, 1999

must include contingency measures that

go into effect if the Bay Area does not

attain the NAAQS by the prescribed

deadline in order to address the specific

requirement of CAA section 172(c)(9).

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For a more complete discussion of SIP submittals, the reader is referred to

subpart 1 elements applicable to these the proposal (62 FR 66580-66581).

SCHEDULE OF SUBMITTALS STATE IMPLEMENTATION PLAN FOR OZONE FOR THE SAN FRANCISCO BAY AREA

Action/SIP submittal Date

1995 em issions inventory for V O C and N O x .............................................................................................................................. D raft- 11/25/98

Final-6/15/99

Assessment, employing available data and technical analyses, of the level of emission reductions needed to attain the cur- Draft-11/25/98

rent 1-hour ozone National Ambient Air Quality Standard (NAAQS). This assessment should take into account the mete- Final-6/15/99

orological conditions and ambient concentrations associated with the violations of the ozone NAAQS in the period 1995-

6, and should be based on likely control measures for reducing VOC and NOx emissions.

Adopted regulations and/or control measures, with enforceable commitments to adopt and implement the control measures 6/15/99

in regulatory form by specified dates, sufficient to meet reasonable further progress and attain the 1-hour NAAQS expeditiously but no later than November 15, 2000.

C. Changes from Proposal proposed SIP requirements in response in section III.D.2. The changes are as

In this final action, EPA has amended to public comments, as discussed above follows:

both the schedule and content of the

Proposal-weekend emissions inventory and CO inventory required Final-weekend emissions inventory and CO inventory not required.

Emissions inventory and attainment assessment due to EPA 5/1/98 ..... Emissions inventory and attainment assessment due to EPA 6/15/99.

(Commitment to submit draft by 11/25/98.)

Adopted regulations and/or control measures with enforceable commit- Adopted regulations and/or control measures with enforceable commitments due 9/1/98. ments, and final emissions inventory and attainment assessment due

6/15/99.

Attainm ent date of 11/15/99 ..................................................................... Attainm ent date of 11/15/2000.

V. Emission Reduction Opportunities

Under EPA's final redesignation, the

Air District and its co-lead agencies are

responsible for determining the

appropriate mix of control measures

that will most effectively bring the Bay

Area into attainment with the 1-hour

ozone standard. The Bay Area, like

other major metropolitan areas, is

experiencing rapid economic growth

and an increasing population that may

lead to emission increases from both the

stationary and mobile source sectors.

Given these circumstances, the Air

District may wish to explore new and

innovative approaches for achieving

reductions from both source sectors.

EPA believes that traditional control

strategies aimed at reducing emissions

from stationary sources are essential to

any air pollution control program. At

the same time, EPA supports efforts to

develop alternative emission reduction

methods. Mobile source emissions, for

example, make up the majority of the

ozone precursor inventory in many

urban areas, including the Bay Area, but

air pollution control agencies often have

difficulty regulating these emissions.

Mobile sources are therefore good

candidates for non-traditional

approaches. EPA encourages the

BAAQMD and its co-lead agencies to

identify opportunities for innovation, in

addition to traditional control strategies,

as they develop measures to bring the

Bay Area into attainment ot the ozone

standard.

A. Stationary Sources

Stationary sources in the Bay Area

emit approximately 152 tons of VOC

and 157 tons of NOx per day (Bay Area

Clean Air Plan, Volume 1, p.21). This

current level of emissions reflects

tremendous progress in stationary

source reductions over the past 20 years.

Nonetheless, BAAQMD will need to

assess whether additional stationary

source measures are needed to help the

Bay Area attain the federal 1-hour ozone

standard. Recently, BAAQMD proposed

in its 1997 Clean Air Plan several

stationary source measures believed to

be both feasible to implement and

effective at reducing emissions. EPA

expects that the District will analyze

which control measures from this plan

are needed to attain the standard and

assess whether any measures beyond

those contained in the plan are also

needed. If additional measures are

needed, the District may want to

consider stationary source measures

suggested by public commenters on the

redesignation proposal such as

improving tank and flare design,

eliminating exemptions from certain

District rules, and improving controls

on energy sources (e.g., natural gas fired

boilers and privately owned and

operated power plants). However, EPA

is not requiring adoption of these or any

other specific controls; it is the

BAAQMD's authority and responsibility

to determine the appropriate mix of Bay

Area measures.

B. Transportation Control Measures

Given that on-road motor vehicles

emit 43% of the total VOC and 47% of

the total NOx emissions in the Bay Area

(Bay Area 1997 Clean Air Plan, Volume

1, p.7), that vehicle travel has been

steadily increasing, and that the

Metropolitan Transportation

Commission (MTC) directs the

allocation of billions of dollars of transit

funds, MTC plays an important role in

the Bay Area's overall strategy to attain

the 1-hour ozone standard. MTC is

currently updating its 20-year plan and

will continue to revise this plan every

two years. MTC's planning process

offers a good opportunity to incorporate

air quality goals into both long term

planning and short term projects. In

addition, MTC is required to identify

possible transportation control measures

(TCMs) as part of the California Clean

Air Plan (CAP). The Bay Area's 1997

CAP contained an estimated 7 tons per

day (3 tpd VOC, 4 tpd NOx) worth of

potential reductions from TCMs for the

year 2000 and even more for later years

(Bay Area 1997 Clean Air Plan, Volume

1, p.49). If these measures were adopted

and submitted for SIP approval, they

could make a measurable contribution

toward attainment of the 1-hour ozone

standard. Finally, MTC may be able to

help reduce emissions by reevaluating

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the way it distributes transportation

funds, the way it finances transportation

projects, its policies with respect to land

use and transportation and giving

priority to the most cost-effective (i.e.,

tons of emission reduction per dollar

spent) investments.

C. Voluntary Measures

EPA encourages the State, District and

co-lead agencies to explore innovative

approaches to achieving their air quality

goals. One possible area for innovation

is the mobile source arena. Mobile

sources emit 75% of the total NOx

emissions and 58% of the total VOC

emissions in the Bay Area (Bay Area

1997 Clean Air Plan, Volume 1, p. 7).

Though there have been great strides in

reducing vehicle emission rates,

transportation emissions continue to be

a problem due to large increases in

vehicle miles travelled (VMT).

Regulatory agencies and others are

therefore developing voluntary mobile

source strategies that promote changes

in local transportation sector activity

levels and changes in in-use vehicle and

engine fleet composition to complement

regulatory programs.

Voluntary mobile source control

measures have the potential to

contribute to, in a cost-effective manner,

emission reductions needed for

attainment of the NAAQS. EPA believes,

therefore, that SIP credit is appropriate

for voluntary mobile source emission

reduction programs (VMEPs) where we

have confidence that the measures can

achieve emission reductions. Consistent

with that belief, EPA issued its October

23, 1997 "Guidance on Incorporating

Voluntary Mobile Source Emission

Reduction Programs in State

Implementation Programs" (signed by

Richard Wilson, Acting Assistant

Administrator for Air and Radiation).

The guidance lays out the terms and

conditions for establishing and

implementing VMEPs and the

guidelines for SIP approval. In light of

the innovative nature of voluntary

measures and EPA's inexperience with

quantifying their emission reductions,

EPA's guidance limits the amount of

emission reductions allowed for VMEPs

in a SIP to 3% of the total projected

future year emission reductions

required to attain the appropriate

NAAQS. In addition, the guidance

requires that a state or local agency track

on an annual basis the resulting

emissions effect of the voluntary

measure and also commit to remedy any

shortfall if the VMEP does not achieve

projected emission reductions.

The BAAQMD and co-lead agencies

may wish to take advantage of the

flexibility provided by EPA's voluntary

mobile source measures policy as they

develop their SIP control strategies in

response to the redesignation. EPA

encourages the three co-lead agencies to

work with the business and

environmental communities that may

have an interest in developing or

participating in such innovative

strategies, as stakeholder involvement is

a critical factor in building community

acceptance and ultimate success. For

example, the Silicon Valley

Manufacturing Group has worked with

businesses to develop the ECOPASS

program; this is an employer-sponsored

alternative commute program that is

designed to get employees out of their

cars and onto public transit. Another

example is the BAAQMD's "Spare-theAir" Program, a public education

campaign that encourages citizens to

refrain from or reduce activities that

produce emissions of ozone precursors.

The program currently enjoys the

participation of 475 businesses and is

continuing to grow with the help of the

Bay Area business community. EPA

applauds BAAQMD and the business

community for successfully

implementing these innovative and

important programs. The BAAQMD has

not yet submitted to EPA its plan for

quantifying and tracking the impacts of

these programs on an on-going basis,

and therefore EPA has not yet evaluated

how the District will ensure that the

criteria presented in the VMEP guidance

will be met. However, EPA is currently

consulting with the BAAQMD regarding

quantification and tracking of emissions

associated with these programs and will

continue to work with the District to

clarify the VMEP policy. We encourage

the District and its co-lead agencies to

consider and pursue other innovative

approaches as they evaluate measures

needed to attain the ozone standard.

D. Enhanced Inspection and

Maintenance

While the Bay Area has both the

flexibility and the responsibility to

determine the appropriate mix of

control measures that are needed to

attain the federal 1-hour ozone standard,

EPA believes that emission reductions

from implementation of an enhanced

inspection and maintenance program

would make a substantial contribution

to attainment in the Bay Area. The

California Bureau of Automotive Repair

has indicated that implementation of

the California Smog Check 2 program

(California's enhanced IM program)

would result in an incremental benefit

of 12 tons per day VOC and 14 tons per

day NOx. EPA is hopeful that Bay Area

leaders will work together to pursue

authorization and expeditious

implementation of an enhanced I/M

program. Furthermore, implementation

of an enhanced I/M program in the Bay

Area would address some of the equity

concerns raised by Bay Area's

downwind neighbors who are impacted

by pollution from the Bay Area and are

required under federal and State law to

implement an enhanced I/M program.

EPA does not believe, however, that

enhanced I/M is the complete answer to

Bay Area's ozone nonattainment

problem. EPA believes that the

BAAQMD should evaluate measures

aimed at both the stationary and mobile

source sectors that will work together to

achieve healthy air in the Bay Area.

E. Mitigating Emissions Increases From

Oakland Seaport and Airport Expansion

Projects

The Port of Oakland is planning to

expand its operations over the next

several years. Dredging operations,

which will provide larger vessels with

access to the Port, will begin in

February 2000. Emissions of CO and

VOCs from dredging and related

construction activities are not expected

to be significant. Gas or diesel powered

dredging equipment, however, emits

significant quantities of NOx; the draft

EIS/EIR prepared by the U.S. Army

Corps of Engineers (COE) for the port

expansion estimates that total

construction -related NOx emissions, gas

or diesel powered dredging equipment,

would be in the range of 1500 to 1700

tons over the four-year period (2000-

2004) during which dredging will occur.

The COE, however, has subsequently

indicated that it plans to use electric

dredging equipment which would

reduce the potential constructionrelated NOx emissions to 330 tons over

four years, or an average of 83.5 tons per

year. The dredging and related

construction activities performed by the

COE are subject to the General

Conformity regulations (40 CFR 93.150),

which require federal agencies to

demonstrate that emissions from federal

projects conform to the approved State

Implementation Plan if the emissions

are above "de minimis" levels defined

in 40 CFR 93.153. Because the Corps of

Engineers will be employing electric

dredging equipment in its construction

activities, and limiting the number of

disposal trips per year, the emissions

will be below the 100 ton per year NOx

de minimis level established in the

conformity regulations and a conformity

determination is therefore not required.

The Corps' plan to use electric dredging

equipment will help to ensure cleaner

air for the surrounding community and

the Bay Area as a whole and contribute

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to efforts to achieve attainment with the

ozone standard.

Once construction of the Port

expansion project is complete,

operational emissions increases are

projected to be significant. Because the

long-term emissions from new vessels,

trucks, trains, terminal operations, and

employee vehicles are considered to be

indirect emissions that cannot be

practicably controlled by and are not

under a continuing program

responsibility of the COE, these

activities are exempt from the

conformity requirements. EPA believes

however, that mitigation of these longterm emissions may be an important

part of the Bay Area's strategy for

attaining and maintaining not only the

i-hour ozone NAAQS, but the revised 8-

hour and PM2.5 NAAQS as well. For

this reason, EPA encourages the Port to

work with BAAQMD and MTC to

identify opportunities to mitigate longterm emission increases from the

project. EPA also welcomes

opportunities to share information

regarding mitigation techniques that

have been identified during discussions

with the South Coast AQMD on ports

and airports.

Plans to expand the Oakland Airport

are also underway and EPA believes

that the project will be subject to the

General Conformity requirements. EPA

believes that there are opportunities to

mitigate emissions increases associated

with the expansion and again welcomes

the opportunity to share information

resulting from discussions with the

South Coast regarding reducing airport

emissions.

VI. Administrative Requirements

A. Executive Order (E.O.) 12866

Under E.O. 12866, (58 FR 51735,

October 4, 1993), EPA is required to

determine whether today's action is a "significant regulatory action" within

the meaning of the E.O., and therefore

should be subject to OMB review,

economic analysis, and the

requirements of the E.O. See E.O. 12866,

sec. 6(a)(3). The E.O. defines, in sec.

3(f), a "significant regulatory action" as

a regulatory action that is likely to result

in a rule that may meet at least one of

four criteria identified in section 3(f),

including,

(1) have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) raise novel legal or policy issues

arising out of legal mandates, the

President's priorities, or the principles

set forth in the Executive Order.

EPA has determined that the

redesignation to nonattainment

finalized today, as well as the

establishment of SIP submittal

schedules, would result in none of the

effects identified in E.O. 12866 sec. 3(f).

Under section 107(d)(3) of the Act,

redesignations to nonattainment are

based upon air quality considerations.

The finding, based on air quality data,

that the Bay Area is not attaining the

ozone NAAQS and should be

redesignated to nonattainment does not,

in and of itself, impose any new

requirements on any sectors of the

economy. Similarly, the establishment

of new SIP submittal schedules merely

establishes the dates by which SIPs

must be submitted, and does not

adversely affect entities.

B. Regulatory Flexibility

Under the Regulatory Flexibility Act,

5 U.S.C. section 601 et. seq., EPA must

prepare a regulatory flexibility analysis

assessing the impact of any proposed or

final rule on small entities. 5 U.S.C.

sections 603 and 604. Alternatively,

EPA may certify that the rule will not

have a significant economic impact on

a substantial number of small entities.

Small entities include small businesses,

small not-for-profit enterprises, and

government entities with jurisdiction

over populations of less than 50,000.

A redesignation to nonattainment

under section 107(d)(3), and the

establishment of a SIP submittal

schedule for a reclassified area, do not,

in and of themselves, directly impose

any new requirements on small entities.

See Mid-Tex Electric Cooperative, Inc. v.

FERC, 773 F.2d 327 (D.C. Cir. 1985)

(agency's certification need only

consider the rule's impact on entities

subject to the requirements of the rule).

Instead, this rulemaking simply makes a

factual determination and to establish a

schedule to require the State to submit

SIP revisions, and does not directly

regulate any entities. Because EPA is

applying the same permitting

applicability thresholds and offset ratios

applicable to moderate areas, no

additional sources will be subject to

these requirements as a result of EPA's

action. Therefore, pursuant to 5 U.S.C.

605(b), EPA certifies that today's action

does not have a significant impact on a

substantial number of small entities

within the meaning of those terms for

RFA purposes.

C. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Pub. L.

104-4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. Under section 202 of the UMRA,

EPA generally must prepare a written

statement, including a cost-benefit

analysis, when EPA promulgates "any

general notice of proposed rulemaking

that is likely to result in promulgation

of any rule that includes any Federal

mandate that may result in the

expenditures by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million or more"

in any one year. A "Federal mandate"

is defined, under section 101 of UMRA,

as a provision that "would impose an

enforceable duty" upon the private

sector or State, local, or tribal

governments," with certain exceptions

not here relevant. Under section 203 of

UMRA, EPA must develop a small

government agency plan before EPA

"establish[es] any regulatory

requirements that might significantly or

uniquely affect small governments."

Under section 204 of UMRA, EPA is

required to develop a process to

facilitate input by elected officers of

State, local, and tribal governments for

EPA's "regulatory proposals" that

contain significant Federal

intergovernmental mandates. Under

section 205 of UMRA, before EPA

promulgates "any rule for which a

written statement is required under

[UMRA sec.] 202," EPA must identify

and consider a reasonable number of

regulatory alternatives and either adopt

the least costly, most cost-effective or

least burdensome alternative that

achieves the objectives of the rule, or

explain why a different alternative was

selected.

EPA has concluded that this rule is

not likely to result in the promulgation

of any Federal mandate that may result

in expenditures of $100 million or more

for State, local or tribal governments in

the aggregate, or for the private sector,

in any one year. It is not necessary to

resolve here whether a redesignation

would constitute a federal mandate.

Even assuming that a redesignation

were considered a Federal mandate, and

it were appropriate to consider both

private and public sector costs, the

anticipated annual costs resulting from

the mandate would not exceed $100

million to the private sector, State, local

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and tribal governments. In terms of the

impact on the private sector, the

BAAQMD has yet to determine the

amount of needed reductions and the

mix of VOC and NOx measures to

achieve the needed reductions. EPA

used cost data developed for the July

1997 "Regulatory Impact Analyses for

the Particulate Matter and Ozone

National Ambient Air Quality Standards

and Proposed Regional Haze Rule," as

the basis of its analysis. This data shows

that the national average cost for

reasonably available VOC control

measures is higher than the national

average cost for reasonably available

NOx control measures ($2,652 per ton

per year for VOC; $1,937 per ton per

year for NOx, expressed in 1990

dollars). EPA assumes that reductions of

both VOC and NOx will be necessary to

bring the Bay Area back into attainment.

However, for the purpose of this

analysis EPA assumed that all the

needed reductions would come from

VOC measures because this approach

would over-estimate the actual costs. In

addition, EPA assumed that VOC

emissions may need to be reduced by as

much as 80 tons per day (approximately

28,800 tons per year) above and beyond

measures currently underway at the

State and local levels. This amount of

reductions is significantly greater than

that assumed to be needed by the

various interested parties. During the

extensive stakeholder process EPA has

heard that anywhere from 0 to 50 tons

per day in additional reductions will be

necessary. Thus, by assuming 80 tons

per day for the purposes of this analysis,

EPA believes that it is significantly

overestimating the costs. Even by

employing cost numbers and tons to be

reduced that are significantly higher

than what EPA believes the actual

results will be, the impacts would still

be less than $100 million (i.e.,

$76,377,600).

The cost to the State of California is

the cost of developing, adopting and

submitting any necessary SIP revision.

Because that cost, taken in combination

with private sector costs, will not

exceed $100 million, this action (even

assuming it is a federal mandate) is not

subject to the requirements of sections

202 and 205 of UMRA (2 U.S.C. 1532

and 1535). EPA has also determined that

this action would not result in

regulatory requirements that might

significantly or uniquely affect small

governments because only the State

would take any action as result of

today's rule, and thus the requirements

of section 203 (2 U.S.C. 1533) do not

apply.

D. Executive Order 13045: Protection of

Children From Environmental Health

Risks and Safety Risks

This final rule is not subject to E.O.

13045, entitled "Protection of Children

from Environmental Health Risks and

Safety Risks" (62 FR 19885, April 23,

1997) because this is not an

economically significant regulatory

action as defined by E.O. 12866, and

because it does not involve decisions on

environmental health risks or safety

risks that may disproportionately affect

children.

E. Submission to Congress and the

General Accounting Office

The Congressional Review Act, 5

U.S.C. 801 et seq., as added by the Small

Business Regulatory Enforcement

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. EPA will submit a

report containing this rule and other

required information to the U.S. Senate,

the U.S. House of Representatives, and

the Comptroller General of the United

States prior to publication of the rule in

the Federal Register. This rule is not a "major" rule as defined by 5 U.S.C.

804(2).

List of Subjects in 40 CFR Part 81

Environmental protection, Air

pollution control, National parks.

Dated: June 25, 1998.

Felicia Marcus,

Regional A dministrator, Region IX.

Part 81, chapter I, title 40 of the Code

of Federal Regulations is amended as

follows:

PART 81-[AMENDED]

1. The authority citation for part 81

continues to read as follows:

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

2. In § 81.305, the table for

California-Ozone, is amended by

revising the entry for the San Francisco

Bay Area to read as follows:

§81.305 California.

CALIFORNIA-OZONE

Designation Classification

Designated Area

Date1 Type Date 1 Type

San Francisco-Bay Area:

Alameda County ....................................................................... August 10, 1998 ..... Nonattainment.

Contra Costa County ................................................................ ...... do ...... do

Marin County ............................................................................. ...... do ...... do

Napa County ............................................................................. ...... do ...... do

San Francisco County .............................................................. ...... do ...... do

Santa Clara County .................................................................. ...... do ...... do

San Mateo County ......................................................................... do ...... do

Solano County (part) ................................................................. ...... do ...... do

Sonoma County (part) .............................................................. ..... do

1This date is November 15, 1990, unless otherwise noted.

37279

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