[Federal Register Volume 60, Number 12 (Thursday, January 19, 1995)]
[Rules and Regulations]
[Pages 3760-3766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1254]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH71-1-6781, OH72-1-6782; FRL-5140-7]


Approval and Promulgation of Implementation Plans; Ohio

AGENCY: Environmental Protection Agency (USEPA).

ACTION: Final rule.

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SUMMARY: The USEPA is approving, in final, two exemption requests from 
the requirements contained in section 182(f) of the Clean Air Act (Act) 
for the Toledo and Dayton ozone nonattainment areas in Ohio. These 
exemption requests, submitted by the State of Ohio, are based upon 
three years of ambient air monitoring data which demonstrate that the 
National Ambient Air Quality Standard (NAAQS) for ozone has been 
attained in each of these areas without additional reductions of 
nitrogen oxides (NO<INF>X). Section 182(f) of the Act requires States 
with areas designated nonattainment of the NAAQS for ozone, and 
classified as moderate nonattainment and above, to adopt reasonably 
available control technology (RACT) rules for major stationary sources 
of NO<INF>X, and to provide for nonattainment area new source review 
(NSR) for new sources and modifications that are major for NO<INF>X. 
Section 182(f) provides that these requirements do not apply for areas 
outside an ozone transport region if USEPA determines that additional 
reductions of NO<INF>X would not contribute to attainment of the NAAQS 
for ozone in the area.
EFFECTIVE DATE: This action will be effective February 21, 1995.

ADDRESSES: Written comments should be addressed to:

William MacDowell, Chief, Regulation Development Section, Air 
Enforcement Branch (AE-17J), U.S. Environmental Protection Agency, 
Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

    A copy of the exemption requests are available for inspection at 
the following location (it is recommended that you contact Richard 
Schleyer at (312) 353-5089 before visiting the Region 5 office):

United States Environmental Protection Agency, Region 5, Air 
Enforcement Branch, Air and Radiation Division, 77 West Jackson 
Boulevard, Chicago, Illinois, 60604.

FOR FURTHER INFORMATION CONTACT: Richard Schleyer, Regulation 
Development Section, Air Enforcement Branch (AE-17J), Region 5, United 
States Environmental Protection Agency, 77 West Jackson Boulevard, 
Chicago, Illinois, 60604, (312) 353-5089.

SUPPLEMENTARY INFORMATION:

I. Background

    The air quality planning requirements for the reduction of NO<INF>X 
emissions are set out in section 182(f) of the Act. Section 182(f) of 
the Act requires States with areas designated nonattainment of the 
NAAQS for ozone, and classified as moderate nonattainment and above, to 
impose the same control requirements for major stationary sources of 
NO<INF>X as apply to major stationary sources of volatile organic 
compounds (VOC). These requirements include the adoption of RACT rules 
for major stationary sources and nonattainment area NSR for major new 
sources and major modifications. Section 182(f) provides further that 
these NO<INF>X requirements do not apply for areas outside an ozone 
transport region if USEPA determines that additional reductions of 
NO<INF>X would not contribute to attainment. Also, the NO<INF>X-related 
general and transportation conformity provisions (see 58 FR 63214 and 
58 FR 62188) would not apply in an area that is granted a section 
182(f) exemption. In an area that did not implement the section 182(f) 
NO<INF>X requirements, but did achieve attainment of the ozone 
standard, as demonstrated by ambient air monitoring data (consistent 
with 40 CFR Part 58 and recorded in the USEPA's--Aerometric Information 
Retrieval System (AIRS)), it is clear that the additional NO<INF>X 
reductions required by section 182(f) would not contribute to 
attainment.

II. Criteria for Evaluation of Section 182(f) Exemption Requests

    The criteria established for the evaluation of an exemption request 
from the section 182(f) requirements are set forth in a memorandum from 
John S. Seitz, Director, Office of Air Quality Planning and Standards, 
dated May 27, 1994, entitled ``Section 182(f) Nitrogen Oxides 
(NO<INF>X) Exemptions--Revised Process and Criteria.'' Additional 
guidance is provided in a document entitled ``Guideline for Determining 
the Applicability of Nitrogen Oxides Requirements Under Section 
182(f),'' dated December 1993, from USEPA, Office of Air Quality 
Planning and Standards, Air Quality Management Division.

III. State Submittals

    On September 20, 1993, and November 8, 1993, the State of Ohio 
submitted requests to redesignate the Toledo (Lucas and Wood Counties) 
and Dayton (Montgomery, Greene, Miami, and Clark Counties) ozone 
nonattainment areas to attainment areas for the NAAQS for ozone. These 
redesignation requests are currently under review and will be evaluated 
in a separate rulemaking.
    Included as part of the redesignation submittals were requests that 
the Toledo and Dayton ozone nonattainment areas 

[[Page 3761]]
be exempt from the requirements contained in section 182(f) of the Act. 
These exemption requests are based upon three years of ambient air 
monitoring data (1991-1993) which demonstrate that the NAAQS for ozone 
has been attained in each of these areas without additional reductions 
of NO<INF>X.

IV. Analysis of State Submittals

    The USEPA has reviewed the ambient air monitoring data for ozone 
(consistent with the requirements contained in 40 CFR part 58 and 
recorded in AIRS) submitted by the OEPA in support of these exemption 
requests.
    For ozone, an area is considered attainment of the NAAQS if there 
are no violations, as determined in accordance with 40 CFR Part 50.9, 
based on quality assured monitoring data from three complete 
consecutive calendar years. A violation of the ozone NAAQS occurs when 
the annual average number of expected exceedances is greater than 1.0 
at any site in the area at issue. An exceedance occurs when the daily 
maximum hourly ozone concentration exceeds 0.124 parts per million 
(ppm).
    The following ozone exceedances were recorded for the period from 
1991 to 1993:

Toledo: Lucas County, 306 N. Yondota (1991)--0.127 ppm and (1993)--
0.126 ppm; average expected exceedances: 0.7. Friendship Park (1993)--
0.136 ppm; average expected exceedances: 0.3.
Dayton: Montgomery County, 2100 Timberlane (1993)--0.125 ppm; average 
expected exceedances: 0.3.

    Thus, the annual average expected exceedances in a three year 
period were less than 1.0 and both areas are meeting the air quality 
standard for ozone.
    A more detailed summary of the ozone monitoring data for both areas 
is provided in the USEPA technical support document dated April 20, 
1994.

V. NO<INF>X RACT Rules

    The State of Ohio submitted adopted NO<INF>X RACT rules to USEPA on 
July 1, 1994, for the Toledo, Dayton, and Cleveland ozone nonattainment 
areas. These rules are currently under review and will be evaluated in 
a separate rulemaking. These rules, when approved by USEPA, may be 
suspended by the State for the Toledo and Dayton areas upon the final 
approval effective date of the Section 182(f) exemption requests 
addressed in this Notice.

VI. Inspection and Maintenance (I/M) Programs

    The I/M Final Rule (57 FR 52950) requires States to submit to USEPA 
a fully adopted I/M program by November 15, 1993. At this time, 
however, the preliminary interpretive guidance on basic I/M, is 
discussed in the USEPA policy memorandum dated September 17, 1993, from 
Michael H. Shapiro, Acting Assistant Administrator for Air and 
Radiation, entitled ``State Implementation Plan Requirements for Areas 
Submitting Requests for Redesignation to Attainment of the Ozone and 
Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) on 
or after November 15, 1992,'' (Shapiro Memorandum). The Shapiro 
Memorandum provides that, for areas where maintenance plans do not rely 
on implementation of a basic I/M program immediately following 
redesignation, upon revision to the I/M rule, if a State adopts and 
submits as a revision to its SIP the following:
    <bullet> The legislative authority for a basic I/M program;
    <bullet> A provision in the SIP providing that basic I/M be placed 
in the contingency measure portion of the maintenance plan upon 
redesignation; and
    <bullet> An enforceable schedule and commitment by the Governor or 
his/her designee for adoption and implementation of a basic I/M program 
upon a specified, appropriate triggering event;
    The State would have met the minimum requirements for I/M as they 
relate to USEPA's consideration of the State's redesignation request 
submitted for a nonattainment area. The USEPA is presently proceeding 
to establish this interpretation through regulatory action (see 59 FR 
33237).
    The State of Ohio is required to adopt a basic I/M program for the 
Toledo ozone nonattainment area (encompassing Lucas and Wood Counties). 
However, the State has submitted a redesignation request (SIP revision) 
to attainment of the NAAQS for ozone for the Toledo area. This SIP 
revision includes legislative authority for the adoption of a basic I/M 
program; a basic I/M program as a contingency measure in the 
maintenance plan upon redesignation; and an enforceable schedule for 
the implementation of the basic I/M program upon a specified triggering 
event. Under the approach set forth in the Shapiro Memorandum, the 
State has met the requirements for an area requesting redesignation 
that is required to adopt a basic I/M program.
    For the Dayton ozone nonattainment area (encompassing Clark, 
Greene, Miami, and Montgomery Counties), the Dayton local area has 
opted for an enhanced I/M program. This requires the Dayton area to 
comply with all applicable enhanced I/M program requirements. The I/M 
Final Rule (57 FR 52950) provides that if the USEPA Administrator 
determines that NO<INF>X emission reductions are not beneficial in a 
given ozone nonattainment area, then NO<INF>X emission reductions are 
not required of the enhanced I/M program, but the program shall be 
designed to offset NO<INF>X increases resulting from the repair of 
hydrocarbon (HC) and carbon monoxide (CO) failures.\1\

    \1\Additional clarification concerning the I/M requirements and 
areas with no NO<INF>X exemptions is provided in a memorandum from 
Mary T. Smith, Acting Director, Office of Mobile Sources, dated 
October 14, 1994, entitled ``I/M Requirements in NO<INF>X RACT 
Exempt Areas.''
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    Upon the effective date of this action, the Dayton area shall not 
be required to demonstrate compliance with the enhanced I/M performance 
standard for NO<INF>X. However, the Dayton area shall be required to 
demonstrate, using USEPA's Mobile Source Emissions Model, Mobile 5a (or 
its successor), that NO<INF>X emissions will be no higher than in the 
absence of any I/M program.

VII. Withdrawal of the Exemptions

    Continuation of the Section 182(f) exemptions granted herein is 
contingent upon continued monitoring and continued attainment and 
maintenance of the ozone NAAQS in the affected areas. If a violation of 
the ozone NAAQS is monitored in the Toledo or Dayton area(s) 
(consistent with the requirements contained in 40 CFR part 58 and 
recorded in AIRS), USEPA will provide notice to the public in the 
Federal Register. A determination that the NO<INF>X exemption no longer 
applies would mean that the NO<INF>X NSR and the NO<INF>X-related 
general and transportation conformity provisions would immediately be 
applicable (see 58 FR 63214 and 58 FR 62188). The NO<INF>X RACT 
requirements would also be applicable, with a reasonable time provided 
as necessary to allow major stationary sources subject to the RACT 
requirements to purchase, install and operate the required controls. 
The USEPA believes that the State may provide sources a reasonable time 
period after the USEPA determination to actually meet the RACT emission 
limits. The USEPA expects such time period to be as expeditious as 
practicable, but in no case longer than 24 months. If a nonattainment 
area is redesignated to attainment of the ozone NAAQS, NO<INF>X RACT 
shall be implemented as stated in the USEPA-approved maintenance plan.

VIII. Notice of Proposed Rulemaking and Responses to Comments

    The USEPA published a notice proposing to approve the exemption 

[[Page 3762]]
    requests for the Toledo and Dayton nonattainment areas in the July 26, 
1994 Federal Register (59 FR 37947). The USEPA received comments 
supporting and adverse to this proposed action. Copies of all comments 
have been placed in the docket file. The following entities submitted 
adverse or supporting comments. Some of the comments addressed similar 
points. The USEPA has responded to the adverse comments by issue as set 
forth below.

Submitting Entity (Date Received by USEPA)

    Citizens Campaign for the Environment (7-27-94); Natural Resources 
Defense Council (8-9-94 and 8-24-94); New York State Electric and Gas 
Corporation (8-10-94); Northeast States for Coordinated Air Use 
Management (8-15-94 and 9-28-94); State of New York Department of 
Environmental Conservation (8-16-94 and 10-05-94); Commonwealth of 
Pennsylvania Department of Environmental Resources (8-31-94); Southern 
Environmental Law Center (10-3-94); Pollution Probe (10-03-94); Ohio 
Sierra Club (10-03-94); Conservation Law Foundation (10-03-94); The 
Lung Association (Ontario, 10-11-94); Ohio Environmental Protection 
Agency (10-26-94); Fuller & Henry (10-26-94); and Individual Residents 
from the State of Ohio (various dates between 8/31/94 and 10/13/94).
    A summary of the adverse comments and USEPA's responses follows:
    Procedural Comments: Several commenters argued that USEPA should 
not approve the waiver requests at issue on procedural grounds. 
NO<INF>X exemptions are provided for in two separate parts of the Act, 
section 182(b)(1) and section 182(f). Commenters took the position that 
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,'' that 
all NO<INF>X exemption determinations by USEPA, 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 to 
attainment for the ozone NAAQS. 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), in the Act's conformity provisions.
    USEPA Response: Section 182(f) contains very few details regarding 
the administrative procedure for USEPA action on NO<INF>X exemption 
requests. The absence of specific guidelines by Congress leaves USEPA 
with discretion to establish reasonable procedures, consistent with the 
requirements of the Administrative Procedure Act (APA).
    Despite the interpretation of the commenters regarding the process 
for considering exemption requests under section 182(f), USEPA believes 
that subsections 182(f)(1) and 182(f)(3) provide independent procedures 
for USEPA to act on NO<INF>X exemption requests. The language in 
subsection 182(f)(1), which indicates that USEPA 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). While subsection 182(f)(3) 
references subsection 182(f)(1), USEPA believes that this reference 
encompasses only the substantive tests in paragraph (1) [and, by 
extension, paragraph (2)], and not the procedural requirement that 
USEPA act on exemptions only when acting on SIPs. Additionally, 
paragraph (3) provides that ``person[s]'' (which section 302(e) of the 
Act defines to include States) may petition for NO<INF>X exemptions 
``at any time,'' and requires USEPA to make its determination within 
six months of the petition's submission. These key differences lead 
USEPA 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).
    Section 182(f)(1) appears to contemplate that exemption requests 
submitted under these paragraphs are limited to States, since States 
are the entities authorized under the Act to submit plans or plan 
revisions. By contrast, section 182(f)(3) provides that 
``person[s]''\2\ may petition for a NO<INF>X determination ``at any 
time'' after the ozone precursor study required under section 185B of 
the Act is finalized,\3\ and gives USEPA a limit of 6 months after 
filing to grant or deny such petitions. Since individuals may submit 
petitions under paragraph (3) ``at any time'' this must include times 
when there is no plan revision from the State pending at USEPA. The 
specific timeframe for USEPA action established in paragraph (3) is 
substantially shorter than the timeframe usually required for States to 
develop and for USEPA to take action on revisions to a SIP. These 
differences strongly suggest that Congress intended the process for 
acting on petitions under paragraph (3) to be distinct--and more 
expeditious--from the plan revision process intended under paragraph 
(1). Thus, USEPA believes that paragraph (3)'s reference to paragraph 
(1) encompasses only the substantive tests in paragraph (1) (and, by 
extension, paragraph (2)), not the requirement in paragraph (1) for 
USEPA to grant exemptions only when acting on plan revisions.

    \2\Section 302(e) of the Act defines the term ``person'' to 
include States.
    \3\The final section 185B report was issued July 30, 1993.
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    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 USEPA by November 15, 1992. 
Thus, in order to avoid sanctions under the Act, areas seeking a 
NO<INF>X exemption would have needed to submit their exemption request 
for USEPA review and rulemaking action several months before November 
15, 1992. In contrast, the Act specifies that the attainment 
demonstrations are not due until November 1993 or 1994 (and USEPA 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 Act. For maintenance 
plans, the Act does not specify a deadline for submittal of maintenance 
demonstrations. Clearly, the Act envisions the submittal of, and USEPA 
action on, exemption requests, in some cases, prior to submittal of 
attainment or maintenance demonstrations.
    The Act requires conformity with regard to federally-supported 
NO<INF>X generating activities in relevant nonattainment and 
maintenance areas. However, USEPA's conformity rules explicitly provide 
that these NO<INF>X requirements would not apply if USEPA 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, USEPA notes that this issue has 
previously been raised in a formal petition for reconsideration of 
USEPA'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. Thus the issue is under further consideration, but at this time 
the Agency's position is as stated above.

[[Page 3763]]

    Additionally, subsection 182(f)(3) requires that NO<INF>X exemption 
petition determinations be made by USEPA within six months. The USEPA 
has stated in previous guidance that it intends to meet this statutory 
deadline as long as doing so is consistent with the APA. The USEPA 
believes that the applicable rules governing this issue are those that 
appear in USEPA's final conformity regulations, and that USEPA remains 
bound by their existing terms.
    Modeling Comments: Some commenters stated that the modeling 
required by USEPA 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 explain that an area must submit an approvable attainment 
plan before USEPA can know whether NO<INF>X reductions will aid or 
undermine attainment.
    USEPA Response: As described in USEPA's December 1993 NO<INF>X 
exemption guidance,\4\ photochemical grid modeling is generally needed 
to document cases where NO<INF>X reductions are counterproductive to 
net air quality, do not contribute to attainment, do not show a net 
ozone benefit, or include excess reductions. The Urban Airshed Model 
(UAM) or, in the Ozone Transport Region (OTR), the Regional Oxidant 
Model (ROM), are acceptable methods for these purposes. The December 
guidance also provides that, under the ``not contribute to attainment 
test,'' an area may qualify for a NO<INF>X exemption by attaining the 
ozone standard, as demonstrated by three years of ambient air 
monitoring data. The exemption requests submitted by the State for the 
Toledo and Dayton areas are based upon ambient air monitoring data. 
Therefore, adverse comments submitted concerning modeling are not 
relevant to this action, and are not being further addressed.

    \4\``Guideline for Determining the Applicability of Nitrogen 
Oxide Requirements under section 182(f),'' from John S. Seitz, 
Director, Office of Air Quality Planning and Standards, dated 
December 19, 1993.
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    Public Hearing Request: Some commenters requested that a public 
hearing be held on this action.
    USEPA Response: This action is not considered a SIP revision and 
therefore the requirement for a public hearing under section 110(a) of 
the Act is not applicable.
    Environmental Impact Statement (EIS) Request: Some commenters 
requested that an EIS be prepared regarding this action.
    USEPA Response: All Clean Air Act programs are exempted from the 
procedural requirements of the National Environmental Policy Act (NEPA) 
under section 7(c)(1) of the Energy Supply and Environmental 
Coordination Act, 15 U.S.C. 793(c)(1). Therefore, USEPA is not 
preparing an EIS for this action.
    SIP Status Request: One commenter requested the status of other SIP 
revisions (i.e., the 15% rate-of-progress plan and the redesignation 
request) required to be submitted by the State.
    USEPA Response: This action only addresses the section 182(f) 
exemption requests submitted by the State of Ohio for the Toledo and 
Dayton areas and USEPA final action on such requests are not dependent 
on final actions on other required SIP submittals, such as the ones 
mentioned. Non-related SIP revisions will be dealt with separately.
    Toledo Transportation Improvement Program (TIP): One commenter 
provided comments on the basis of the determination of the conformity 
of the Toledo TIP and analysis of other Ohio TIPs.
    USEPA Response: This action only addresses the section 182(f) 
exemption requests submitted by the State of Ohio for the Toledo and 
Dayton areas. Therefore, the comment is not being further addressed.
    Attainment Data Comments: Three years of ``clean'' data fail to 
demonstrate that NO<INF>X reductions would not contribute to attainment 
of the NAAQS for ozone. The USEPA's policy erroneously equates the 
absence of a violation for one three-year period with ``attainment.''
    USEPA Response: The USEPA has separate criteria for determining if 
an area should be redesignated to an ozone attainment area under 
section 107 of the Act. The section 107 redesignation criteria are more 
comprehensive than the Act 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 OTR if 
USEPA 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.
    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, USEPA believes 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. In cases where it is warranted, USEPA's approval of the exemption 
is 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).
    Downwind Area Comments: Several commenters argued that USEPA's 
December 1993 guidance prohibits granting a section 182(f) waiver based 
on 3 years of clean data if evidence exists showing that the waiver 
would interfere with attainment or maintenance in downwind areas. The 
commenters argued that such condition should also apply to waiver 
requests based on modeling. Exemptions in Ohio cities, they claim, are 
likely to exacerbate ozone nonattainment downwind, and therefore are 
not consistent with the Act. If the exemptions are granted, emissions 
from new stationary sources and the transportation sector in Ohio, 
which are projected to increase, could delay attainment of the ozone 
standard in areas in the northeastern United States.
    These commenters further claim that USEPA modeling has demonstrated 
that Ohio is a significant contributor to atmospheric transport of 
ozone precursors to the OTR. Since this modeling indicates that 
emissions of NO<INF>X from stationary sources west of the OTR 
contribute to increased ozone levels in the northeast, they argued that 
control of NO<INF>X emissions in the OTR and in States west of the OTR 
will contribute to significant reductions in peak ozone levels within 
the OTR.
    USEPA Response: As a result of such comments, USEPA has re-
evaluated its position on this issue and decided to revise the 
previously-issued guidance. As described below, USEPA 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 USEPA on a NO<INF>X exemption 
request for stationary sources under section 182(f). That is, USEPA 
action to grant or deny a NO<INF>X exemption request under section 
182(f) would not shield that area from USEPA action to require NO<INF>X 
emission reductions, if necessary, under section 110(a)(2)(D).
    Modeling analyses are underway in many areas for the purpose of 
demonstrating attainment in the 1994 

[[Page 3764]]
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 miles upwind. The USEPA 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, USEPA 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 that are located in the area 
being modeled, have requested exemptions from NO<INF>X requirements 
under section 182(f). Some areas requesting an exemption may impact 
upon downwind nonattainment areas. The USEPA 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 USEPA 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.''\5\ As described in 
section 4.3 of the December 16, 1993 guidance document, USEPA believes 
that the term ``area'' means the ``nonattainment area,'' and that 
USEPA'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.

    \5\There are three NO<INF>X exemption tests specified in section 
182(f). Of these, two are applicable for areas outside an ozone 
transport region; the ``contribute to attainment'' test described 
above, and the ``net air quality benefits'' test. The USEPA 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), USEPA 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 USEPA 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, USEPA believes that 
the section 110(a)(2)(D) and 182(f) provisions must be considered 
independently. 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 USEPA in a section 110(a)(2)(D) action. A 
section 182(f) exemption request should be independently considered by 
USEPA. In some cases, then, USEPA 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. Consistent with 
these principles, USEPA is approving these exemption requests under 
182(f) of the Act. If evidence appears that NO<INF>X emissions in an 
upwind area would interfere with attainment or maintenance in a 
downwind area, appropriate action shall be taken by the State(s) or, if 
necessary, by USEPA under section 110(a)(2)(D).
    Scope of Exemption Comments: Comments were received regarding 
exemption of areas from the NO<INF>X requirements of the conformity 
rules. Several commenters argue that the exemptions should 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, 
similarly, the maximum allowable amounts of any such NO<INF>X emissions 
under the general conformity rules. The commenters admit that, in prior 
guidance, USEPA 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 USEPA, 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.
    USEPA Response: With respect to conformity, USEPA's conformity 
rules\6\ provide a NO<INF>X waiver if an area receives a section 182(f) 
exemption. In rulemaking on ``Conformity; General Preamble for 
Exemption From Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 
17, 1994), USEPA reiterated its view that in order to conform, 
nonattainment and maintenance areas must demonstrate that both the 
transportation plan and the 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, 
USEPA 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, USEPA also 
intends to require consistency with the attainment demonstration's 
NO<INF>X motor vehicle emissions budget. However, the exemptions at 
issue were submitted pursuant to section 182(f)(3), and USEPA does not 
believe it is appropriate to delay action on these petitions, 
especially in light of the six-month statutory deadline provided for 
such action, until the conformity rule is amended. As noted above, 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 

[[Page 3765]]
transportation and general conformity rules. Thus this issue is under 
consideration, but at this time the Agency's position remains as 
stated. The USEPA, therefore, believes that until the issue is 
resolved, 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.

    \6\``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); ``Determining 
Conformity of General Federal Actions to State or Federal 
Implementation Plans; Final Rule,'' November 30, 1993 (58 FR 63214).
---------------------------------------------------------------------------

    Conclusive Evidence Comment: The Act does not authorize any waiver 
of the NO<INF>X reduction requirements until conclusive evidence exists 
that such reductions are counter-productive.
    USEPA Response: The USEPA does not agree with this comment since it 
is contrary to 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. In developing and implementing 
its NO<INF>X exemption policies, USEPA has sought an approach that 
reasonably accords with that 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, 
USEPA 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 they 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 a comment discussed above, the command in 
subsection 182(f)(1) that USEPA ``shall consider'' the section 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 
USEPA 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 USEPA actions granting NO<INF>X exemption 
requests must await ``conclusive evidence,'' as the commenters argue, 
there is also nothing in the Act to prevent USEPA from revisiting an 
approved NO<INF>X exemption if warranted due to subsequent ambient 
monitoring information.
    In addition, USEPA believes (as described in USEPA's December 1993 
guidance) that section 182(f)(1) of the Act provides that the new 
NO<INF>X requirements shall not apply (or may by limited to the extent 
necessary to avoid excess reductions) if the USEPA 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), USEPA believes that 
each test provides an independent basis for the granting of 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 
even one of the tests is met, 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.
    Transboundary Pollution Comment: Several commenters noted that the 
Canada-U.S. Air Quality Agreement signed by the two countries on March 
13, 1991, calls for each Party to notify the other of a proposed 
action, activity or project likely to cause significant transboundary 
air pollution, and, as appropriate, to take measures to avoid or 
mitigate the potential risk.
    USEPA Response: The USEPA takes seriously international agreements 
entered into by our government. However, USEPA does not believe that 
the action of granting a NO<INF>X exemption request would likely cause 
significant transboundary air pollution. The action to grant or deny 
these exemption requests will determine the amount of emission 
reductions, but not cause new or additional transboundary air 
pollution.
    Air Quality Comment: Several commenters stated that the air quality 
monitoring data alone does not support this exemption proposal. The air 
quality levels are below USEPA's definition of an exceedance of the 
ozone NAAQS at 0.125 ppm, but are greater than the ozone NAAQS of 0.120 
ppm.
    USEPA Response: For the reasons provided below, USEPA does not 
agree with the commenter's conclusion. As stated in 40 CFR 50.9, the 
ozone ``standard is attained when the expected number of days per 
calendar year with maximum hourly average concentrations above 0.12 
parts per million (235 <greek-m>g/m<SUP>3) is equal to or less than 1, 
as determined by Appendix H.'' Appendix H references USEPA's 
``Guideline for Interpretation of Ozone Air Quality Standards'' (EPA-
450/4-79-003, January 1979), which notes that the stated level of the 
standard is taken as defining the number of significant figures to be 
used in comparison with the standard. For example, a standard level of 
0.12 ppm means that measurements are to be rounded to two decimal 
places (0.005 rounds up to 0.01). Thus, 0.125 ppm is the smallest 
concentration value in excess of the level of the ozone standard 
(please refer to ``Section IV. Analysis of the State Submittal'' in 
this notice for monitored ozone concentrations in the Toledo and Dayton 
areas). The ambient air monitoring data shows that no violation of the 
ozone standard has occurred for the Toledo and Dayton areas during the 
1991-1993 ozone seasons.

IX. Final Action

    The USEPA is approving the exemption requests for the Toledo and 
Dayton ozone nonattainment areas from the section 182(f) NO<INF>X 
requirements based upon the evidence provided by the State and the 
State's compliance with the requirements outlined in the applicable 
USEPA guidance. This action exempts the Lucas, Wood, Clark, Greene, 
Miami, and Montgomery counties from the requirements to implement 
NO<INF>X RACT, nonattainment area NSR for new sources and modifications 
that are major for NO<INF>X, and the NO<INF>X-related general and 
transportation conformity provisions. Also, the Clark, Greene, Miami, 
and Montgomery counties shall not be required to demonstrate compliance 


[[Page 3766]]
with the enhanced I/M performance standard for NO<INF>X. If a violation 
of the ozone NAAQS occurs in the Toledo or Dayton area(s), the 
exemption from the requirements of section 182(f) of the Act in the 
applicable area(s) shall no longer apply.

X. Procedural Background

    Nothing in this action shall be construed as permitting or allowing 
or establishing a precedent for any future request for a 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.
    This action has been classified as a Table 2 action by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993 
memorandum from Michael H. Shapiro, Acting Assistant Administrator for 
Air and Radiation. The Office of Management and Budget exempted this 
regulatory action from Executive Order 12866 review.

XI. Regulatory Process

    Under the Regulatory Flexibility Act, 5 U.S.C. 600  et seq., USEPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities (5 U.S.C. 603 and 604). 
Alternatively, USEPA may certify that the rule will not have a 
significant 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. Today's exemptions do not create any new requirements, but 
allow suspension of the indicated requirements for the life of the 
exemptions. Therefore, because the approval does not impose any new 
requirements, I certify that it does not have a significant impact on 
any small entities affected.
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by March 20, 1995. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See Section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Air pollution control, Intergovernmental relations, Nitrogen 
oxides, Ozone, Reporting and record keeping requirements, Volatile 
organic compounds.

    Dated: January 5, 1995.
Valdas V. Adamkus,
Regional Administrator.

    Part 52, chapter 1, 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.

Supart KK--Ohio

    2. Section 52.1879 is amended by adding new paragraph (f) to read 
as follows:


Sec. 52.1879  Review of new sources and modifications.

* * * * *
    (f) Approval--USEPA is approving two exemption requests submitted 
by the Ohio Environmental Protection Agency on September 20, 1993, and 
November 8, 1993, for the Toledo and Dayton ozone nonattainment areas, 
respectively, from the requirements contained in Section 182(f) of the 
Clean Air Act. This approval exempts the Lucas, Wood, Clark, Greene, 
Miami, and Montgomery Counties from the requirements to implement 
reasonably available control technology (RACT) for major sources of 
nitrogen oxides (NO<INF>X), nonattainment area new source review (NSR) 
for new sources and modifications that are major for NO<INF>X, and the 
NO<INF>X-related requirements of the general and transportation 
conformity provisions. For the Dayton ozone nonattainment area, the 
Dayton local area has opted for an enhanced inspection and maintenance 
(I/M) programs. Upon final approval of this exemption, the Clark, 
Greene, Miami, and Montgomery Counties shall not be required to 
demonstrate compliance with the enhanced I/M performance standard for 
NO<INF>X. If a violation of the ozone NAAQS is monitored in the Toledo 
or Dayton area(s), the exemptions from the requirements of Section 
182(f) of the Act in the applicable area(s) shall no longer apply.
    3. Section 52.1885 is amended by adding new paragraph (r) to read 
as follows:


Sec. 52.1885  Control Strategy: Ozone.

* * * * *
    (r) Approval--USEPA is approving two exemption requests submitted 
by the Ohio Environmental Protection Agency on September 20, 1993, and 
November 8, 1993, for the Toledo and Dayton ozone nonattainment areas, 
respectively, from the requirements contained in Section 182(f) of the 
Clean Air Act. This approval exempts the Lucas, Wood, Clark, Greene, 
Miami, and Montgomery Counties from the requirements to implement 
reasonably available control technology (RACT) for major sources of 
nitrogen oxides (NO<INF>X), nonattainment area new source review (NSR) 
for new sources and modifications that are major for NO<INF>X, and the 
NO<INF>X-related requirements of the general and transportation 
conformity provisions. For the Dayton ozone nonattainment area, the 
Dayton local area has opted for an enhanced inspection and maintenance 
(I/M) program. Upon final approval of this exemption, the Clark, 
Greene, Miami, and Montgomery Counties shall not be required to 
demonstrate compliance with the enhanced I/M performance standard for 
NO<INF>X. If a violation of the ozone NAAQS is monitored in the Toledo 
or Dayton area(s), the exemptions from the requirements of Section 
182(f) of the Act in the applicable area(s) shall no longer apply.

[FR Doc. 95-1254 Filed 1-18-95; 8:45 am]
BILLING CODE 6560-50-P