[Federal Register Volume 60, Number 79 (Tuesday, April 25, 1995)]
[Rules and Regulations]
[Pages 20233-20237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10104]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[CA-82-1-6926; FRL-5195-9]


Clean Air Act Section 182(f) NO<INF>X Exemption Petition; 
Monterey Bay Ozone Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is finalizing the approval of a petition submitted by 
the Monterey Bay Unified Air Pollution Control District (MBUAPCD) 
requesting that EPA grant an exemption for the Monterey Bay ozone 
nonattainment area (Monterey Bay) from the section 182(f) requirement 
to control major stationary sources of oxides of nitrogen (NO<INF>X) 
emissions. EPA published a proposed action to approve the Monterey Bay 
NO<INF>X exemption in the Federal Register on December 20, 1994. In 
accordance with the requirements of the Clean Air Act, as amended in 
1990 (the Act or CAA), the EPA has determined that additional NO<INF>X 
reductions from major stationary sources in Monterey Bay would not 
contribute to attainment of the national ambient air quality standard 
(NAAQS) for ozone. The approval of this action exempts Monterey Bay 
from implementing the NO<INF>X requirements for reasonably available 
control technology (RACT), new source review (NSR), and the applicable 
general and transportation conformity and inspection and maintenance 
(I/M) requirements of the CAA. The EPA is finalizing approval of this 
action under provisions of the Act regarding plan requirements for 
nonattainment areas.

EFFECTIVE DATE: This action is effective as of April 12, 1995. The 
Administrative Procedure Act (APA) 5 U.S.C. 553(d)(1), permits the 
effective date of a substantive rule to be less than thirty days after 
publication of the rule if the rule ``relieves a restriction''. Since 
the approval of the section 182(f) exemption for the Monterey Bay area 
is a substantive action that relieves the restrictions associated with 
the CAA title I requirements to control NO<INF>X emissions, the 
NO<INF>X exemption approval may be made effective upon signature by the 
EPA Administrator.

ADDRESSES: Copies of the petition and EPA's evaluation report are 
available for public inspection at EPA's Region IX office during normal 
business hours. Copies of the submitted petition are available for 
inspection at the following locations:

Rulemaking Section (A-5-3), Air and Toxics Division, U.S. Environmental 
Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
94105.
Environmental Protection Agency, Air Docket (6102), 401 ``M'' Street 
SW., Washington, DC 20460.
Monterey Bay Unified Air Pollution Control District, Rule Development 
Section, 24580 Silver Cloud Court, Monterey, CA 93940.

FOR FURTHER INFORMATION CONTACT: Wendy Colombo, Rulemaking Section, Air 
and Toxics Division, U.S. Environmental Protection Agency, Region IX, 
75 Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-
1202.

SUPPLEMENTARY INFORMATION:

Background

    On December 20, 1994, EPA proposed to approve the Monterey Bay 
NO<INF>X exemption petition, submitted by the MBUAPCD on April 26, 
1994. 59 FR 65523. The exemption petition is based on ambient 
monitoring data and demonstrates that additional NO<INF>X reductions in 
Monterey Bay would not contribute to attainment of the NAAQS for ozone. 
A detailed discussion of the background concerning the NO<INF>X 
requirements and the submitted petition is provided in the notice of 
proposed rulemaking (NPRM) cited above.
    EPA has evaluated the exemption petition for consistency with the 
requirements of the CAA, EPA regulations, and EPA interpretation of 
these requirements as expressed in the various EPA policy guidance 
documents referenced in the NPRM cited above. EPA believes that the 
petition satisfies the applicable EPA requirements and is, therefore, 
exempting the Monterey Bay area from implementing the NO<INF>X 
requirements for RACT, NSR, and the applicable general and 
transportation conformity and I/M requirements<SUP>1 of the CAA.

    \1\See ``Scope of Nitrogen Oxides (NO<INF>X) Exemptions,'' from 
G.T. Helms, Group Leader, Ozone/Carbon Monoxide Programs Branch (MD-
15), to the Air Branch Chiefs, January 12, 1995. ``I/M Requirements 
in NO<INF>X RACT Exempt Areas'', from Mary T. Smith, Acting 
Director, Office of Mobile Sources, to the Air Division Directors, 
October 14, 1994.
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    The proposal identifies two NO<INF>X RACT source categories MBUAPCD 
has identified which encompass the major stationary sources of NO<INF>X 
in the Monterey Bay nonattainment area.
    Rules have been developed and submitted for these two categories, 
entitled, Rule 431, Emissions From Utility Power Boilers, and Rule 435, 
Control of Nitrogen Oxides From Kilns. EPA indicated in the NPRM that 
once the final approval of the NO<INF>X waiver is granted, MBUAPCD 
would then rescind the two NO<INF>X rules submitted for inclusion into 
the California SIP. This is not the intention of MBUAPCD with respect 
to one of these rules. MBUAPCD, in subsequently applying to EPA for 
redesignation to attainment of the NAAQS for ozone, has indicated that 
the emissions reductions achieved by rule 431 will form part of its 
ozone [[Page 20234]] maintenance plan. Although NO<INF>X waivers may be 
granted for areas demonstrating that NO<INF>X reductions do not 
contribute to attainment of the ozone standard, areas may choose to 
impose NO<INF>X restrictions on other bases, such as ozone maintenance, 
visibility protection, PM-10 control, acid deposition, or other 
environmental protection purposes. MBUAPCD has indicated in its 
attainment plan its belief that the reductions achieved from rule 431 
are needed for maintenance of the ozone standard. Therefore, rule 431 
will not be rescinded, but instead will be evaluated for incorporation 
into the California SIP. However, rule 435 contains language within the 
rule which will make its applicability void upon final approval of the 
NO<INF>X waiver.

Response to Public Comments

    A 30-day public comment period was provided in 59 FR 65523. EPA 
received no comments specifically regarding the Monterey Bay exemption 
petition. However, in August 1994, three environmental groups submitted 
joint comments on the proposed approvals of NO<INF>X exemptions for the 
Ohio and Michigan ozone nonattainment areas. The comments address EPA's 
policy regarding NO<INF>X exemptions in general and apply to all 
actions EPA takes regarding section 182(f) NO<INF>X exemptions. 
Therefore, these comments are addressed below.
    Comment: The commenters argued that NO<INF>X exemptions are 
provided for in two separate parts of the CAA, section 182(b)(1) and 
section 182(f). Because the NO<INF>X exemption tests in subsections 
182(b)(1) and 182(f)(1) include language indicating that action on such 
requests should take place ``when [EPA] approves a plan or plan 
revision,'' these commenters conclude that all NO<INF>X exemption 
determinations by the EPA, including exemption actions taken under the 
petition process established by subsection 182(f)(3), must occur during 
consideration of an approvable attainment or maintenance plan, unless 
the area has been redesignated as attainment. These commenters also 
argue that even if the petition procedures of subsection 182(f)(3) may 
be used to relieve areas of certain NO<INF>X requirements, exemptions 
from the NO<INF>X conformity requirements must follow the process 
provided in subsection 182(b)(1), since this is the only provision 
explicitly referenced by section 176(c), the CAA's conformity 
provisions.
    Response: Section 182(f) contains very few details regarding the 
administrative procedure for acting on NO<INF>X exemption requests. The 
absence of specific guidelines by Congress leaves EPA with discretion 
to establish reasonable procedures, consistent with the requirements of 
the APA.
    The EPA disagrees with the commenters regarding the process for 
considering exemption requests under section 182(f), and instead 
believes that subsections 182(f)(1) and 182(f)(3) provide independent 
procedures by which the EPA may act on NO<INF>X exemption requests. The 
language in subsection 182(f)(1), which indicates that the EPA should 
act on NO<INF>X exemptions in conjunction with action on a plan or plan 
revision, does not appear in subsection 182(f)(3). And, while 
subsection 182(f)(3) references subsection 182(f)(1), the EPA believes 
that this reference encompasses only the substantive tests in paragraph 
(1) [and, by extension, paragraph (2)], not the procedural requirement 
that the EPA act on exemptions only when acting on SIPs. Additionally, 
paragraph (3) provides that ``person[s]'' (which section 302(e) of the 
CAA defines to include States) may petition for NO<INF>X exemptions 
``at any time,'' and requires the EPA to make its determination within 
six months of the petition's submission. These key differences lead EPA 
to believe that Congress intended the exemption petition process of 
paragraph (3) to be distinct and more expeditious than the longer plan 
revision process intended under paragraph (1).
    With respect to major stationary sources, section 182(f) requires 
States to adopt NO<INF>X NSR and RACT rules, unless exempted. These 
rules were generally due to be submitted to EPA by November 15, 1992. 
Thus, in order to avoid the CAA sanctions, areas seeking a NO<INF>X 
exemption would have needed to submit their exemption request for EPA 
review and rulemaking action several months before November 15, 1992. 
In contrast, the CAA specifies that the attainment demonstrations are 
not due until November 1993 or 1994 (and EPA may take 12-18 months to 
approve or disapprove the demonstration). For marginal ozone 
nonattainment areas (subject to NO<INF>X NSR), no attainment 
demonstration is called for in the CAA. For maintenance plans, the CAA 
does not specify a deadline for submittal of maintenance 
demonstrations. Clearly, the CAA envisions the submittal of and EPA 
action on exemption requests, in some cases, prior to submittal of 
attainment or maintenance demonstrations.
    The CAA requires conformity to the applicable SIP with regard to 
federally-supported NO<INF>X generating activities in relevant 
nonattainment and maintenance areas. However, EPA's conformity rules 
explicitly provide that these NO<INF>X requirements would not apply if 
EPA grants an exemption under section 182(f). In response to the 
comment that section 182(b)(1) should be the appropriate vehicle for 
dealing with exemptions from the NO<INF>X requirements of the 
conformity rule, EPA notes that this issue has previously been raised 
in a formal petition for reconsideration of EPA's final transportation 
conformity rule and in litigation pending before the U.S. Court of 
Appeals for the District of Columbia Circuit on the substance of both 
the transportation and general conformity rules. The issue, thus, is 
under consideration within EPA, but at this time remains unresolved. 
Additionally, subsection 182(f)(3) requires that NO<INF>X exemption 
petition determinations be made by the EPA within six months. The EPA 
has stated in previous guidance that it intends to meet this statutory 
deadline as long as doing so is consistent with the APA. The EPA, 
therefore, believes that until a resolution of this issue is achieved, 
the applicable rules governing this issue are those that appear in 
EPA's final conformity regulations, and EPA remains bound by their 
existing terms.
    Comment: The commenters stated that the modeling required by EPA 
guidance is insufficient to establish that NO<INF>X reductions would 
not contribute to attainment since only one level of NO<INF>X control, 
i.e., ``substantial'' reductions, is required to be analyzed. They 
further explained that an area must submit an approvable attainment 
plan before EPA can know whether NO<INF>X reductions will aid or 
undermine attainment.
    Response: The EPA does not believe that this comment is applicable 
to the Monterey Bay exemption because the demonstration is based on 
three years of ambient monitoring data and not modeling.
    Comment: The commenters provided a comment that three years of 
``clean'' data fail to demonstrate that NO<INF>X reductions would not 
contribute to attainment, and that EPA's policy erroneously equates the 
absence of a violation for one three-year period with ``attainment.''
    Response: The EPA has separate criteria for determining if an area 
should be redesignated to attainment under section 107 of the CAA. The 
section 107 criteria are more comprehensive than the CAA requires with 
respect to NO<INF>X exemptions under section 182(f).
    Under section 182(f)(1)(A), an exemption from the NO<INF>X 
requirements may be granted for nonattainment areas outside an ozone 
transport region if EPA [[Page 20235]] determines that ``additional 
reductions of (NO<INF>X) would not contribute to attainment'' of the 
ozone NAAQS in those areas. In some cases, an ozone nonattainment area 
might attain the ozone standard, as demonstrated by 3 years of adequate 
monitoring data, without having implemented the section 182(f) NO<INF>X 
provisions over that 3-year period. The EPA believes that, in cases 
where a nonattainment area is demonstrating attainment with 3 
consecutive years of air quality monitoring data without having 
implemented the section 182(f) NO<INF>X provisions, it is clear that 
the section 182(f) test is met since ``additional reductions of 
(NO<INF>X) would not contribute to attainment'' of the NAAQS in that 
area. The EPA's approval of the exemption, if warranted, would be 
granted on a contingent basis (i.e., the exemption would last for only 
as long as the area's monitoring data continue to demonstrate 
attainment).
    Comment: Some commenters provided a comment on all section 182(f) 
actions that a waiver of NO<INF>X controls is unlawful if such a waiver 
will impede attainment and maintenance of the ozone standard in 
separate downwind areas.
    Response: The EPA believes that while this comment may be 
applicable to proposed NO<INF>X exemption actions in other areas, it is 
not applicable to the Monterey Bay exemption action because the EPA is 
unaware of, and the comment itself does not specify, any downwind areas 
for which NO<INF>X transport is of concern.
    However, as a result of these comments and comments received 
regarding transport in NO<INF>X exemption requests for other areas in 
the United States, EPA reevaluated its position on this issue and 
decided to revise the previously issued guidance.<SUP>2 As described 
below, EPA intends to use its authority under section 110(a)(2)(D) to 
require a State to reduce NO<INF>X emissions from stationary and/or 
mobile sources where there is evidence, such as photochemical grid 
modeling, showing that NO<INF>X emissions would contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other State. This action would be independent of any action taken 
by EPA on a NO<INF>X exemption request for stationary sources under 
section 182(f). That is, EPA action to grant or deny a NO<INF>X 
exemption request under section 182(f) would not shield that area from 
EPA action to require NO<INF>X emission reductions, if necessary, under 
section 110(a)(2)(D).

    \2\See ``Section 182(f) Nitrogen Oxides (NO<INF>X) Exemptions--
Revised Process and Criteria'', issued February 8, 1995 by John S. 
Seitz, Director of EPA's Office of Air Quality Planning and 
Standards.
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    Modeling analyses are underway in many areas for the purpose of 
demonstrating attainment in the 1994 SIP revisions. Recent modeling 
data suggest that certain ozone nonattainment areas may benefit from 
reductions in NO<INF>X emissions far upwind of the nonattainment area. 
For example, the northeast corridor and the Lake Michigan areas are 
considering attainment strategies which rely in part on NO<INF>X 
emission reductions hundreds of kilometers upwind. The EPA is working 
with the States and other organizations to design and complete studies 
which consider upwind sources and quantify their impacts. As the 
studies progress, EPA will continue to work with the States and other 
organizations to develop mutually acceptable attainment strategies.
    At the same time as these large scale modeling analyses are being 
conducted, certain nonattainment areas in the modeling domain have 
requested exemptions from NO<INF>X requirements under section 182(f). 
Some areas requesting an exemption may be upwind of and impact upon 
downwind nonattainment areas. EPA intends to address the transport 
issue through section 110(a)(2)(D) based on a domain-wide modeling 
analysis.
    Under section 182(f) of the Act, an exemption from the NO<INF>X 
requirements may be granted for nonattainment areas outside an ozone 
transport region if EPA determines that ``additional reductions of 
[NO<INF>X] would not contribute to attainment of the national ambient 
air quality standard for ozone in the area.''<SUP>3 As described in 
section 4.3 of the December 16, 1993 guidance document, EPA believes 
that the term ``area'' means the ``nonattainment area'' and that EPA's 
determination is limited to consideration of the effects in a single 
nonattainment area due to NO<INF>X emissions reductions from sources in 
the same nonattainment area.

    \3\There are 3 NO<INF>X exemption tests specified in section 
182(f). Of these, 2 are applicable for areas outside an ozone 
transport region; the ``contribute to attainment'' test described 
above, and the ``net air quality benefits'' test. EPA must 
determine, under the latter test, that the net benefits to air 
quality in an area ``are greater in the absence of NO<INF>X 
reductions'' from relevant sources. Based on the plain language of 
section 182(f), EPA believes that each test provides an independent 
basis for receiving a full or limited NO<INF>X exemption. 
Consequently, as stated in section 1.4 of the December 16, 1993 EPA 
guidance, ``[w]here any one of the tests is met (even if another 
test is failed), the section 182(f) NO<INF>X requirements would not 
apply or, under the excess reductions provision, a portion of these 
requirements would not apply.''
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    Section 4.3 of the guidance goes on to encourage, but not require, 
States/petitioners to include consideration of the entire modeling 
domain, since the effects of an attainment strategy may extend beyond 
the designated nonattainment area. Specifically, the guidance 
encourages States to ``consider imposition of the NO<INF>X requirements 
if needed to avoid adverse impacts in downwind areas, either intra- or 
inter-State. States need to consider such impacts since they are 
ultimately responsible for achieving attainment in all portions of 
their State (see generally section 110) and for ensuring that emissions 
originating in their State do not contribute significantly to 
nonattainment in, or interfere with maintenance by, any other State 
[see section 110(a)(2)(D)(i)(I)].''
    In contrast, section 4.4 of the guidance states that the section 
182(f) demonstration would not be approved if there is evidence, such 
as photochemical grid modeling, showing that the NO<INF>X exemption 
would interfere with attainment or maintenance in downwind areas. The 
guidance goes on to explain that section 110(a)(2)(D) [not section 
182(f)] prohibits such impacts.
    Consistent with the guidance in section 4.3, EPA believes that the 
section 110(a)(2)(D) and 182(f) provisions must be considered 
independently, and hence, is withdrawing the guidance presently 
contained in section 4.4. Thus, if there is evidence that NO<INF>X 
emissions in an upwind area would interfere with attainment or 
maintenance in a downwind area, that action should be separately 
addressed by the State(s) or, if necessary, by EPA in a section 
110(a)(2)(D) action. In addition, a section 182(f) exemption request 
should be independently considered by EPA. In some cases, then, EPA may 
grant an exemption from across-the-board NO<INF>X RACT controls under 
section 182(f) and, in a separate action, require NO<INF>X controls 
from stationary and/or mobile sources under section 110(a)(2)(D). It 
should be noted that the controls required under section 110(a)(2)(D) 
may be more or less stringent than RACT, depending upon the 
circumstances.
    Comment: Comments were received regarding exemption of areas from 
the NO<INF>X requirements of the conformity rules. The commenters argue 
that such exemptions waive only the requirements of section 182(b)(1) 
to contribute to specific annual reductions, not the requirement that 
conformity SIPs contain information showing the maximum amount of motor 
vehicle NO<INF>X emissions allowed under the transportation conformity 
rules and, [[Page 20236]] similarly, the maximum allowable amounts of 
any such NO<INF>X emissions under the general conformity rules. The 
commenters admit that, in prior guidance, EPA has acknowledged the need 
to amend a drafting error in the existing transportation conformity 
rules to ensure consistency with motor vehicle emissions budgets for 
NO<INF>X, but want EPA in actions on NO<INF>X exemptions to explicitly 
affirm this obligation and to also avoid granting waivers until a 
budget controlling future NO<INF>X increases is in place.
    Response: With respect to conformity, EPA's conformity rules<SUP>45 
provide a NO<INF>X waiver if an area receives a section 182(f) 
exemption. In its ``Conformity; General Preamble for Exemption From 
Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 17, 1994), EPA 
reiterated its view that in order to conform, nonattainment and 
maintenance areas must demonstrate that the transportation plan and 
transportation improvement program (TIP) are consistent with the motor 
vehicle emissions budget for NO<INF>X even where a conformity NO<INF>X 
waiver has been granted. Due to a drafting error, that view is not 
reflected in the current transportation conformity rules. As the 
commenters correctly note, EPA states in the June 17th notice that it 
intends to remedy the problem by amending the conformity rule. Although 
that notice specifically mentions only requiring consistency with the 
approved maintenance plan's NO<INF>X motor vehicle emissions budget, 
EPA also intends to require consistency with the attainment 
demonstration's NO<INF>X motor vehicle emissions budget. However, the 
exemption for Monterey Bay was submitted pursuant to section 182(f)(3), 
and EPA does not believe it is appropriate to delay the statutory 
deadline for acting on this petition until the conformity rule is 
amended. As noted earlier in response to a previous issue raised by 
these commenters, this issue has also been raised in a formal petition 
for reconsideration of the Agency's final transportation conformity 
rule and in litigation pending before the U.S. Court of Appeals for the 
District of Columbia Circuit on the substance of both the 
transportation and general conformity rules. This issue, thus, is under 
consideration within the Agency, but at this time remains unresolved. 
The EPA, therefore, believes that until a resolution of this issue is 
achieved, the applicable rules governing this issue are those that 
appear in the Agency's final conformity regulations, and the Agency 
remains bound by their existing terms.

    \4\See ``Criteria and Procedures for Determining Conformity to 
State or Federal Implementation Plans of Transportation Plans, 
Programs, and Projects Funded or Approved under Title 23 U.S.C. of 
the Federal Transit Act,'' November 24, 1993 (58 FR 62188).
    \5\See ``Determining Conformity of General Federal Actions to 
State or Federal Implementation Plans; Final Rule,'' November 30, 
1993 (58 FR 63214).
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    Comment: The commenters argue that the CAA does not authorize any 
waiver of the NO<INF>X reduction requirements until conclusive evidence 
exists that such reductions are counter-productive.
    Response: EPA does not agree with this comment since it ignores 
Congressional intent as evidenced by the plain language of section 
182(f), the structure of the Title I ozone subpart as a whole, and 
relevant legislative history. By contrast, in developing and 
implementing its NO<INF>X exemption policies, EPA has sought an 
approach that reasonably accords with Congress' intent. Section 182(f), 
in addition to imposing control requirements on major stationary 
sources of NO<INF>X similar to those that apply for such sources of 
VOC, also provides for an exemption (or limitation) from application of 
these requirements if, under one of several tests, EPA determines that 
in certain areas NO<INF>X reductions would generally not be beneficial. 
In subsection 182(f)(1), Congress explicitly conditioned action on 
NO<INF>X exemptions on the results of an ozone precursor study required 
under section 185B. Because of the possibility that reducing NO<INF>X 
in a particular area may either not contribute to ozone attainment or 
may cause the ozone problem to worsen, Congress included attenuating 
language, not just in section 182(f) but throughout the Title I ozone 
subpart, to avoid requiring NO<INF>X reductions where it would be 
nonbeneficial or counterproductive. In describing these various ozone 
provisions (including section 182(f)), the House Conference Committee 
Report states in pertinent part: ``[T]he Committee included a separate 
NO<INF>X/VOC study provision in section [185B] to serve as the basis 
for the various findings contemplated in the NO<INF>X provisions. The 
Committee does not intend NO<INF>X reduction for reduction's sake, but 
rather as a measure scaled to the value of NO<INF>X reductions for 
achieving attainment in the particular ozone nonattainment area.'' H.R. 
Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990). As noted in 
response to an earlier comment by these same commenters, the command in 
subsection 182(f)(1) that EPA ``shall consider'' the 185B report taken 
together with the timeframe the Act provides both for completion of the 
report and for acting on NO<INF>X exemption petitions clearly 
demonstrate that Congress believed the information in the completed 
section 185B report would provide a sufficient basis for EPA to act on 
NO<INF>X exemption requests, even absent the additional information 
that would be included in affected areas' attainment or maintenance 
demonstrations. However, while there is no specific requirement in the 
Act that EPA actions granting NO<INF>X exemption requests must await 
``conclusive evidence'', as the commenters argue, there is also nothing 
in the Act to prevent EPA from revisiting an approved NO<INF>X 
exemption if warranted due to better ambient information.
    In addition, the EPA believes (as described in EPA's December 1993 
guidance) that section 182(f)(1) of the CAA provides that the new 
NO<INF>X requirements shall not apply (or may be limited to the extent 
necessary to avoid excess reductions) if the Administrator determines 
that any one of the following tests is met:
    (1) In any area, the net air quality benefits are greater in the 
absence of NO<INF>X reductions from the sources concerned;
    (2) In nonattainment areas not within an ozone transport region, 
additional NO<INF>X reductions would not contribute to ozone attainment 
in the area; or
    (3) In nonattainment areas within an ozone transport region, 
additional NO<INF>X reductions would not produce net ozone air quality 
benefits in the transport region.
    Based on the plain language of section 182(f), EPA believes that 
each test provides an independent basis for receiving a full or limited 
NO<INF>X exemption.
    Only the first test listed above is based on a showing that 
NO<INF>X reductions are ``counter-productive.'' If one of the tests is 
met (even if another test is failed), the section 182(f) NO<INF>X 
requirements would not apply or, under the excess reductions provision, 
a portion of these requirements would not apply.

EPA Action

    EPA is finalizing this action to exempt Monterey Bay from 
implementing the NO<INF>X requirements for RACT, NSR, the applicable 
general and transportation conformity requirements, and I/M.
    The EPA believes that all section 182(f) exemptions that are 
approved should be approved only on a contingent basis. As described in 
the EPA's NO<INF>X Supplement to the General Preamble (57 FR 55628, 
November 25, 1992) and further guidance issued by 
[[Page 20237]] EPA,<SUP>6 section 182(f) exemptions are granted on a 
contingent basis and last for only as long as the area's monitoring 
data continue to demonstrate attainment. Monterey Bay is required to 
continue to operate an appropriate air quality monitoring network, in 
accordance with 40 CFR part 58, to verify the attainment status of the 
area.

    \6\See ``Section 182(f) Nitrogen Oxides (NO<INF>X) Exemptions--
Revised Process and Criteria'', issued by John S. Seitz, Director, 
Office of Air Quality Planning and Standards (MD-10), May 27, 1994.
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    If, prior to redesignation of the area to attainment, a violation 
of the ozone NAAQS is monitored in Monterey Bay (consistent with the 
requirements contained in 40 CFR part 58 and recorded in AIRS), the 
section 182(f) exemption would no longer apply, as of the date EPA 
makes a determination that a violation has occurred. EPA would notify 
the area that the exemption no longer applies, and would also provide 
notice to the public in the Federal Register. If the exemption is 
revoked, the area must comply with any applicable NO<INF>X requirements 
set forth in the CAA. Thus, a determination that the NO<INF>X exemption 
no longer applies would mean that the applicable NO<INF>X NSR, general 
and transportation conformity, and I/M provisions would immediately be 
applicable (see 58 FR 63214 and 58 FR 62188) in Monterey Bay.
    If Monterey Bay is redesignated to attainment of the ozone NAAQS, 
NO<INF>X RACT is to be implemented as provided for as contingency 
measures in the maintenance plan.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any state implementation plan. Each request for revision to 
the state implementation plan shall be considered separately in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.

Regulatory Process

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the EPA 
must determine whether the regulatory action is ``significant'', and 
therefore subject to Office of Management and Budget (OMB) review and 
the requirements of the Executive Order. It has been determined that 
this action is not a ``significant regulatory action'' under the terms 
of Executive Order 12866, and is therefore not subject to OMB review.
    Under sections 202, 203, and 205 of the Unfunded Mandates Reform 
Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 
1995, EPA must assess whether various actions undertaken in association 
with proposed or final regulations include a Federal mandate that may 
result in estimated costs of $100 million or more to the private 
sector, or to State, local, or tribal governments in the aggregate.
    EPA's final action relieves requirements otherwise imposed under 
the CAA and, hence does not impose and Federal intergovernmental 
mandate, as defined in section 101 of the Unfunded Mandates Act. This 
action also will not impose a mandate that may result in estimated 
costs of $100 million or more to either State, local or tribal 
governments in the aggregate, or to the private sector.
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by May 25, 1995. Filing a petition for 
reconsideration by the Administrator of this 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 a rule. This 
action may not be challenged later in proceedings to enforce its 
requirements. Section 307(b)(2).

List of Subjects in 40 CFR Part 52

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

    Dated: April 12, 1995.
Felicia Marcus,
Regional Administrator.

    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. 7401-7671q.

Subpart D--California

    2. Subpart F is amended by adding Sec. 52.235 to read as follows:


Sec. 52.235  Control strategy for ozone: Oxides of nitrogen.

    EPA is approving an exemption request submitted by the Monterey Bay 
Unified Air Pollution Control District on April 26, 1994 for the 
Monterey Bay ozone nonattainment area from the NO<INF>X RACT 
requirements contained in section 182(f) of the Clean Air Act. This 
approval exempts the area from implementing the oxides of nitrogen 
(NO<INF>X) requirements for reasonably available control technology 
(RACT), new source review (NSR), the related requirements of general 
and transportation conformity regulations, and applicable inspection 
and maintenance (I/M). The exemption is based on ambient air monitoring 
data and lasts for only as long as the area's monitoring efforts 
continue to demonstrate attainment without NO<INF>X reductions from 
major stationary sources.

[FR Doc. 95-10104 Filed 4-24-95; 8:45 am]
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