To amend the Clean Air Act to provide needed flexibility to States regarding the designation of certain counties as nonattainment areas for ozone under the 8-hour ozone standard, and for other purposes.

SECTION 1. REDESIGNATION OF TRANSITIONAL AREAS FOR 8-HOUR OZONE 
              STANDARD.

    Section 107(d) of the Clean Air Act (42 U.S.C. 7407(d)) is amended 
by adding the following new subparagraph at the end of paragraph (3):
                    ``(G) In addition to the authority to redesignate 
                areas under other provisions of this paragraph, the 
                Administrator shall redesignate as transitional any 
                area that has been designated as nonattainment for the 
                8-hour ozone national primary or secondary ambient air 
                quality standard if--
                            ``(i) the area consists of a single county;
                            ``(ii) the county does not qualify as a 
                        rural transport area under section 182(h) 
                        solely by reason of the presence of an adjacent 
                        standard metropolitan statistical area or 
                        consolidated metropolitan statistical area;
                            ``(iii) the county is not in the ozone 
                        transport region established under section 
                        184(a);
                            ``(iv) the Governor of the State in which 
                        the county is located, after consultation with 
                        the State air pollution control agency (as 
                        defined in section 302(b)), provides to the 
                        Administrator a demonstration that ozone 
                        control measures in effect for such county will 
                        provide that such standard will be attained in 
                        such county on or before the date on which 
                        State implementation plan provisions are 
                        required to be submitted for the attainment and 
                        maintenance of such standard in the 
                        nonattainment area; and
                            ``(v) the Governor of the State in which 
                        the county is located, after consultation with 
                        the State air pollution control agency (as 
                        defined in section 302(b)), makes a binding 
                        commitment to the Administrator that--
                                    ``(I) the air pollution control 
                                agency will (in addition to any other 
                                analysis required under other 
                                provisions of this Act) make a 
                                determination regarding the lowest 
                                achievable emission rate (LAER) that 
                                would have applied to each major 
                                stationary source constructed or 
                                modified in the county concerned after 
                                the date of the redesignation of the 
                                county under this subparagraph if such 
                                redesignation had not taken place; and
                                    ``(II) the air pollution control 
                                agency will obtain emission offsets in 
                                accordance with section 110(q)(2) for 
                                ozone and ozone precursors emitted from 
                                each source referred to in subclause 
                                (I) if the county fails to attain the 
                                8-hour ozone national primary or 
                                secondary ambient air quality standard 
                                on or before the date on which State 
                                implementation plan provisions are 
                                required to be submitted as provided in 
                                clause (iv).
                The Administrator shall make such redesignation 
                effective within 30 days after receiving such notice 
                from the Governor.''.

SEC. 2. STATE IMPLEMENTATION PLANS FOR TRANSITIONAL AREAS.

    Section 110 of the Clean Air Act (42 U.S.C. 77410) is amended by 
adding the following new subsection at the end thereof:
    ``(q) Transitional Areas.--
            ``(1) Subtitle C.--Each county redesignated as transitional 
        pursuant to section 107(d)(1)(G) shall be treated as an 
        attainment or unclassifiable area for purposes of the 
        prevention of significant deterioration provisions of part C of 
        this title.
            ``(2) Failure to attain.--No later than 3 years after the 
        redesignation of a county as transitional pursuant to 
        subparagraph (G) of section 107(d)(1), the Administrator shall 
        determine whether the county has attained the 8-hour national 
        primary and secondary standards for ozone. If the Administrator 
        determines that a county has not attained such standards--
                    ``(A) the county shall be redesignated as 
                nonattainment within 1 year of the determination and 
                the State shall be required to submit, within 2 years 
                of such redesignation as nonattainment, a State 
                implementation plan revision for such county satisfying 
                the provisions of part D of this title; and
                    ``(B) such plan revision shall require, in addition 
                to requirements applicable under other provisions of 
                this Act, that the State air pollution control agency 
                will provide offsets (for periods after the 
                redesignation of the county) in accordance with 
                paragraph (3) for emissions of ozone and ozone 
                precursors from each major stationary source 
                constructed or modified in the county after the date of 
                the redesignation of the county as transitional under 
                such subparagraph (G).
            ``(3) Amount and location of offsets.--The offsets required 
        under subparagraph (B) of paragraph (2) for each major 
        stationary source may be obtained from sources in proximity to 
        the area, in accordance with applicable guidance published by 
        the Administrator. Such offsets shall be equivalent in amount 
        to the difference between the following:
                    ``(A) The emissions from the major stationary 
                source concerned.
                    ``(B) The maximum emissions that would have been 
                emitted from that source under the applicable 
                requirments of this Act (including new source review) 
                if the county had not been redesignated as a 
                transitional area under section 107(d)(1)(G) for 
                purposes of the 8-hour national primary and secondary 
                standards for ozone.''.

Summary: Amends the Clean Air Act to require the Administrator of the Environmental Protection Agency to redesignate as transitional any area designated as a nonattainment area for the eight-hour ozone national primary or secondary ambient air quality standard (the standard) if: (1) the area is a single county; (2) the county does not qualify as a rural transport area because of an adjacent standard metropolitan statistical area or consolidated metropolitan statistical area; (3) the county is not in an established ozone transport region; (4) the Governor of the State demonstrates that ozone control measures in effect for the county will provide for attainment of the standard by the deadline for submission of applicable State Implementation Plan (SIP) provisions; and (5) the Governor makes a binding commitment that the State air pollution control agency will apply lowest achievable emission rate determinations to stationary sources as if the redesignation had not occurred and obtain emission offsets for ozone and ozone precursors for each such source if the standard is not met by the SIP deadline.

Requires each county redesignated as transitional to be treated as an attainment or unclassifiable area for purposes of provisions addressing the prevention of significant deterioration of air quality.

Directs the Administrator to review transitional counties within three years of redesignation and to redesignate as nonattainment those counties that have failed to attain the standard. Requires States to submit SIP revisions for such counties that provide for the emission offsets mandated by this Act.