[Federal Register Volume 62, Number 139 (Monday, July 21, 1997)]
[Rules and Regulations]
[Pages 38922-38932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19090]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[SIPTRAX No.VA062-5019; FRL-5861-2]


Approval and Promulgation of Air Quality Implementation Plans; 
Richmond, Virginia--NOX Exemption Petition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is issuing final approval of a petition from the 
Commonwealth of Virginia requesting that the Richmond moderate ozone 
nonattainment area be exempt from applicable nitrogen oxides 
(NOX) reasonably available control technology (RACT) control 
requirements of section 182(f) of the Clean Air Act (Act). This 
exemption request, submitted by the Virginia Department of 
Environmental Quality, is 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 the Richmond area 
without additional reductions of NOX. The effect of this 
action is to remove the requirement for NOX RACT contingent 
upon continued monitoring of attainment in the Richmond area. The 
action will also stop application of the offset sanction imposed on 
January 8, 1996 and defer application of future sanctions as of the 
effective date of the exemption approval. This action is being taken 
under section 182(f) of the Clean Air Act.

EFFECTIVE DATE: This final rule is effective on August 20, 1997.

ADDRESSES: Copies of the documents relevant to this action are 
available for public inspection during normal business hours at the 
Air, Radiation, and Toxics Division, U.S. Environmental Protection 
Agency, Region III, 841 Chestnut Building, Philadelphia, Pennsylvania 
19107; Virginia Department of Environmental Quality, 629 East Main 
Street, Richmond, Virginia, 23219.

FOR FURTHER INFORMATION CONTACT: Christopher H. Cripps, (215) 566-2179, 
at the EPA Region III address above (or via e-mail at 
[email protected]).

SUPPLEMENTARY INFORMATION: On December 18, 1995, the Commonwealth of 
Virginia's Department of Environmental Quality submitted a 
NOX exemption petition that would exempt the Richmond ozone 
nonattainment area from the NOX RACT requirement under 
section 182(f) of the Act. The exemption request was based upon ambient 
air monitoring data for 1993, 1994, and 1995, which demonstrated that 
the NAAQS for ozone has been attained in the area without additional 
reductions of NOX. Subsequent to the original request for an 
exemption, additional ambient data for 1996 became available. The EPA 
has reviewed the ambient air monitoring data for 1994, 1995, and 1996 
and concludes that the area is still attaining the ozone standard.
    The current design value for the Richmond nonattainment area, 
computed using ozone monitoring data for 1994 through 1996, is 116 
parts per billion (ppb). The average annual number of expected 
exceedances is 0.7 for that same time period. For the 1993 to 1995 time 
period, the average annual number of expected exceedances was 1.0, and 
the corresponding design value was 124 ppb. An area is considered in 
attainment of the standard if the average annual number of expected 
exceedances is less than or equal to 1.0.
    On July 26, 1996, the Commonwealth of Virginia submitted a 
redesignation request and complete maintenance plan for the Richmond 
ozone nonattainment area based on the 1993 to 1995 air quality 
monitoring data. The EPA will be acting on this submittal in a separate 
rulemaking document.
    On March 19, 1996, the EPA proposed approval of the NOX 
exemption petition for the Richmond ozone nonattainment area (61 FR 
11170). Also, in a March 19, 1996 interim final rule, EPA made a 
determination that the Commonwealth, contingent on continued monitored 
attainment of the ozone NAAQS, had corrected the deficiency of failing 
to submit NOX RACT rules (61 FR 11162). This interim final 
rule did not stop the sanction clock that started under section 179 for 
this area on July 8, 1994. However, this interim final rule did stay 
the application of the offset sanction and has deferred the application 
of the highway sanction. The EPA provided

[[Page 38923]]

the public with an opportunity to comment on the proposed action and on 
the interim final rule.

Response to Public Comment

    Adverse comments to the proposed exemption and the interim final 
rule were received from six commenters. In addition, three 
environmental groups submitted joint adverse comments on the proposed 
approvals of NOX exemptions for the Ohio and Michigan ozone 
nonattainment areas in August of 1994. These comments addressed the 
EPA's general policy regarding NOX exemptions. The 
commenters requested that these comments be addressed in all EPA 
rulemakings dealing with section 182(f) exemptions. Even though some of 
these August 1994 comments are not pertinent to the proposed action, 
EPA has addressed them for completeness.
    In addition to commenters who fully opposed the exemption, two 
letters were received that either conditionally supported the exemption 
or that fully supported the exemption but commented adversely on 
supplemental information in the preamble of the notice of proposed 
rulemaking. One of these two comment letters supported the proposed 
exemption only if no further controls on volatile organic compounds 
(VOC) would be required in lieu of NOX RACT. The second of 
these two comment letters fully supported the exemption and provided 
urban airshed modeling results to show further reduction of 
NOX would not contribute to attainment although EPA's action 
to grant the exemption is based upon ambient air quality data 
indicating that the Richmond area has attained the ozone NAAQS and not 
upon a modeled demonstration. The following discussion summarizes the 
comments received regarding the Commonwealth's petition and EPA's 
proposed rulemaking and presents the EPA's responses to these comments.
    Comment #1 Certain commenters argued that all 
NOX exemption determinations by the EPA, including exemption 
actions taken under the petition process established by subsection 
182(f)(3), must occur during consideration of a state implementation 
plan (SIP) revision. These commenters argued that NOX 
exemptions are provided for in two separate parts of the Act, section 
182(b)(1) and section 182(f). Because the NOX 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 
NOX 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 SIP 
revision such as attainment demonstrations or maintenance plans, unless 
the area has been redesignated as attainment. Several commenters stated 
NOX exemptions should only be considered in conjunction with 
attainment or maintenance plans whereas one commenter stated 
NOX exemptions should only be considered in conjunction with 
any implementation plans containing control measures.
    Response #1 Section 182(f) contains very few details 
regarding the administrative procedures for acting on NOX 
exemption requests. The absence of specific guidelines by Congress 
leaves the EPA with discretion to establish reasonable procedures 
consistent with the requirements of the Administrative Procedures Act 
(APA).
    The EPA disagrees with the commenters regarding the process for 
considering NOX exemption requests under section 182(f) and 
instead, believes that sections 182(f)(1) and 182(f)(3) provide 
independent procedures by which the EPA may act on NOX 
exemption requests. The language in section 182(f)(1), which indicates 
that the EPA should act on NOX exemptions in conjunction 
with action on a plan or a plan revision, does not appear in section 
182(f)(3). While section 182(f)(3) references section 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 SIP 
revisions. Additionally, section 182(f)(3) provides that ``a person'' 
(which section 302(e) of the Act defines to include a State) may 
petition for NOX exemptions ``at any time,'' and requires 
the EPA to make its determination within 6 months of the petition's 
submission. These key differences lead the 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 
marginal areas to adopt new source review (NSR) rules, unless exempted. 
These rules were generally due to be submitted to the EPA by November 
15, 1992. Thus, in order to avoid the Act's sanctions, areas seeking a 
NOX exemption would have needed to submit this exemption 
request for EPA review and rulemaking action several months before 
November 15, 1992. In contrast, the Act specifies that the attainment 
demonstrations were not due until November 1993 or 1994 (and the EPA 
may take up to 12 months to approve or disapprove the demonstrations). 
For marginal ozone nonattainment areas (subject to NOX NSR), 
no attainment demonstrations are called for in the Act. For areas 
seeking redesignation to attainment of the ozone NAAQS, the Act does 
not specify a deadline for submittal of maintenance demonstrations (in 
reality, the EPA would generally consider redesignation requests 
without accompanying maintenance plans to be unacceptable). Clearly, 
the Act envisions the submittal of an EPA action on NOX 
exemption requests, in some cases, prior to submittal of attainment or 
maintenance demonstrations.
    Comment #2 Commenters argued that for various reasons 
three years of ``clean'' data fail to demonstrate that NOX 
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''. Two commenters argued that three years of 
violation-free data could be reflecting an economic downturn that 
resulted in temporarily lower than normal emissions.
    Several of these commenters argued that three years of data without 
a violation might be only the result of favorable weather conditions. 
One commenter argued that the weather in 1995 was in fact abnormal in 
that the Richmond area experienced high-altitude winds which prevented 
stagnation.
    Response #2 The EPA does not agree with the comment that 
three years of air quality monitoring data is an insufficient basis to 
grant an exemption under section 182(f). In cases where a nonattainment 
area outside an ozone transport region is demonstrating attainment with 
3 consecutive years of air quality monitoring data without having 
implemented the section 182(f) NOX provisions, the EPA 
believes that the section 182(f) test is met since ``additional 
reductions of [NOX] would not contribute to attainment'' of 
the NAAQS in that area. In all cases, in the absence of approved 
maintenance and contingency plans and an approved redesignation 
request, EPA'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).
    The EPA has separate criteria for determining if an area should be 
officially redesignated to attainment under section 107(d)(3)(E) of the 
Act. The section 107 criteria are more

[[Page 38924]]

comprehensive than the Act requires with respect to NOX 
exemptions under section 182(f). If all the criteria, other than that 
related to air quality data, for redesignation are met, EPA would act 
to redesignate an area to attainment of the ozone NAAQS based upon only 
(and at least) three years of violation-free data.
    In addition to air quality monitoring data showing attainment, 
under section 107, EPA can only redesignate an area to attainment if 
EPA has fully approved a maintenance plan. One of EPA's criteria for an 
approvable maintenance plan is that the plan demonstrate maintenance 
with the standard for a period of twelve years after the submission of 
the maintenance plan. One method of demonstrating maintenance is a 
showing that future year emissions of each of the ozone precursors 
including NOX will remain stable or decline over the twelve-
year period. In the absence of such redesignation with an approved 
maintenance plan, EPA's approval of the exemption is granted on a 
contingent basis.
    EPA must, as a legal matter, use the ambient air quality monitoring 
data and related evaluation methodologies to determine if an area is 
attaining or violating the ozone NAAQS and base its action on the 
particular facts of each exemption petition. Therefore, the EPA cannot 
require that states seeking exemption from NOX provisions 
based on monitoring data estimate what emissions might have been under 
different economic conditions. The EPA cannot require that states 
seeking exemptions from NOX provisions based on monitoring 
data estimate what ozone concentrations might have been under different 
meteorological conditions. Furthermore, the determination of compliance 
with the ozone NAAQS uses air quality monitoring data over a three year 
period and therefore accounts for fluctuations in meteorology.
    Comment #3 One commenter stated that because the 
Virginia petition did not take into account meteorological fluctuations 
any perceived trends in ambient ozone monitoring data are a poor basis 
for an exemption, and cited the conclusions in the report of the 
National Academy of Sciences (NAS) ``Rethinking the Ozone Problem in 
Urban and Regional Air Pollution'' [National Academy Press, Wash., DC, 
1991] by the National Research Council that year-to-year variability in 
ozone concentrations are attributable to meteorological fluctuations. 
This commenter also cited the conclusion in this NAS report that the 
current use of the second-highest daily maximum 1-hour concentration in 
a given year as the principal measure to assess ozone trends is not a 
reliable measure of progress in reducing ozone and that more 
statistically robust methods should be used. This commenter noted that 
there were seven ozone nonattainment areas (Kansas City, San Francisco, 
Memphis, Detroit, Cincinnati, Pittsburgh and Muskegon) which violated 
the ozone NAAQS in 1995 that had been redesignated to attainment since 
1990 or had redesignation requests pending. The commenter also argued 
that a conclusion based solely upon three years of ``clean'' data fails 
to demonstrate that NOX reductions would not contribute to 
attainment because in the absence of reliable methods for monitoring 
reductions in precursor emissions EPA cannot conclude that real 
progress in reducing ozone has been made.
    Response #3 EPA does not agree with the comment. As 
noted in the response to an earlier comment, EPA must, as a legal 
matter, use the current ozone standard and related evaluation 
methodologies to determine if an area is attaining or violating the 
ozone NAAQS and base its action on the particular facts of each 
exemption petition. The cited NAS report and EPA's companion report 
both support the conclusion that, as a general matter for ozone 
nonattainment areas across the country, NOX reductions in 
addition to VOC reductions will be needed to achieve attainment. 
However, as stated in the response to an earlier comment, EPA believes 
that an area outside an ozone transport region qualifies for an 
exemption under section 182(f) when the area is demonstrating 
attainment with 3 consecutive years of air quality monitoring data 
without having implemented the section 182(f) NOX 
provisions. For the Richmond area the issue is whether the additional 
reductions from the requirements of section 182(f) would contribute to 
attainment of the ozone NAAQS in the Richmond area. The reductions 
required under section 182(f) are ``additional'' in the sense that 
these reductions will occur in addition to other requirements of the 
Act. For example, the Clean Air Act mandated a number of new control 
measures such as those required under Title II concerning national 
standards for new motor vehicles which will reduce both NOX 
and VOC emissions as cars built prior to these standards are replaced 
by those required to meet these standards. For the reasons stated in 
the previous response, EPA believes there is a basis for granting a 
NOX exemption for the Richmond area on a contingent basis 
(in the absence of approved maintenance and contingency plans and an 
approved redesignation request).
    Comment #4 One of these commenters provided newspaper 
articles which reported that the Richmond area was slated for 
construction of one major new manufacturing facility and was one of a 
few areas under consideration for location of another major new 
manufacturing facility. This commenter noted that future ozone 
precursor emissions growth is likely.
    Response #4 The EPA's decisions on whether or not to 
grant a NOX waiver are not dependent on estimates of what emissions may 
be in future years. As explained in the response to a previous comment, 
EPA must, as a legal matter, use the ambient air quality monitoring 
data and related evaluation methodologies to determine if an area is 
attaining or violating the ozone NAAQS and base its action on the 
particular facts of each exemption petition. As also explained in the 
response to a previous comment, a determination that an area is in 
``attainment'' based on three years of clean data does not result in 
official redesignation to attainment until the other requirements of 
section 107(d)(3)(E) of the Act are met. These other requirements 
include a demonstration of continued maintenance for twelve years after 
submittal of the redesignation request and maintenance plan. Such a 
demonstration may be based upon a showing that emissions of ozone 
precursors will remain stable or decline relative to the emissions in 
the attainment year inventory or be based upon photochemical modeling 
that a future year mix of ozone precursor emissions will not result in 
violation of the ozone NAAQS. Either method for a demonstration of 
maintenance sets emission budgets for ozone precursors. In all cases, 
in the absence of approved maintenance and contingency plans and an 
approved redesignation request, EPA'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).
    Comment #5 Many commenters opposed the exemption based 
on 3 years of clean data where there is evidence that shows the 
exemption interferes with attainment or maintenance in downwind areas. 
Several commenters noted that either one or both of EPA's December 1993 
guidance and May 27, 1994 policy prohibits granting a section 182(f) 
exemption based on 3 years of clean data if evidence exists showing 
that the exemption would interfere with attainment or maintenance in

[[Page 38925]]

downwind areas. Such conditions should also apply to exemption requests 
based on modeling.
    One commenter provided evidence that shows NOX 
reductions in the Richmond area provide ozone benefits in large areas 
of the ozone transport region. Several commenters referenced results of 
regional oxidant modeling (ROM) performed by the EPA and mentioned in 
the notice of proposed rulemaking for this action that show regional 
NOX control is needed in combination with localized VOC 
control in order to attain the ozone NAAQS throughout the Ozone 
Transport Region (OTR); thus, control of NOX emissions 
throughout the eastern United States will contribute to significant 
reductions in peak ozone levels within the OTR. Several commenters 
asked EPA to re-evaluate the February 8, 1995 memorandum from John S. 
Seitz, Director, Office of Air Quality and Standards, entitled 
``Section 182(f) Nitrogen Oxides (NOX) Exemptions--Revised 
Process and Criteria'' to require that exemptions only be granted to 
areas that do not interfere with attainment or maintenance in downwind 
areas. Three of these commenters contend that EPA cannot segregate 
action under section 182(f) from the requirements of section 
110(a)(2)(D).
    One of these commenters also opposed the interim final rule to stay 
sanctions because it ignores the detrimental effects on air quality on 
areas downwind.
    Response #5 As a result of comments on previous NOX 
exemptions, the EPA reevaluated its position on this issue and has 
revised previously-issued guidance. See the Memorandum, ``Section 
182(f) Nitrogen Oxides (NOX) Exemptions--Revised Process and 
Criteria,'' dated February 8, 1995, from John Seitz. As described in 
this memorandum, the EPA intends to use its authority under section 
110(a)(2)(D) to require a State to reduce NOX emissions from 
stationary and/or mobile sources where there is evidence, such as 
photochemical grid modeling, showing that the NOX emissions 
would contribute significantly to nonattainment in, or interfere with 
maintenance by, any other State or in another nonattainment area within 
the same State. This action would be independent of any action taken by 
the EPA on a NOX exemption request under section 182(f). 
That is, the EPA's action to grant or deny a NOX exemption 
request under section 182(f) for any area would not shield that State's 
need in response to a call by EPA for revisions to state implementation 
plans (SIP call), for example, area from the EPA's action to require 
additional NOX emission reductions from sources in that 
area, if necessary, under section 110.
    Recent modeling data suggest that certain ozone nonattainment areas 
may benefit from reductions in NOX emissions upwind of the 
nonattainment areas. The EPA is working with the States and other 
organizations to design and complete studies which consider upwind 
sources and quantify their impacts. At the same time, States have 
requested exemptions from NOX requirements under section 
182(f) for certain nonattainment areas in the modeling domains. Some of 
these nonattainment areas may impact downwind nonattainment areas. The 
EPA intends to address the transport issue under section 110(a)(2)(D), 
based on a regional modeling analysis.
    Under section 182(f)(1)(A) of the Act, an exemption from 
NOX requirements may be granted for nonattainment areas 
outside of an ozone transport region if the EPA determines that 
``additional reductions of (NOX) would not contribute to 
attainment of the national ambient air quality standard for ozone in 
the area.'' There are three NOX exemption tests specified in 
section 182(f). Of these, two are applicable for areas outside of an 
ozone transport region: the ``contribute to attainment'' test described 
above, and the ``net air quality benefits'' test. The EPA must 
determine, under the latter test, that the net benefits to air quality 
in an area ``are greater in the absence of NOX 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 NOX 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) NOX requirements would not 
apply or, under the excess reductions provision, a portion of these 
requirements would not apply.

    As described in section 4.3 of the December 13, 1993, EPA guidance 
document, ``Guideline for Determining the Applicability of Nitrogen 
Oxides Requirements Under Section 182(f),'' the EPA encourages, but 
does not require, States/petitioners to consider the impacts on the 
entire modeling domain since the effects of an attainment strategy may 
extend beyond a designated nonattainment area. Specifically, the 
guidance encourages States to consider imposition of the NOX 
requirements if needed to avoid adverse impacts in downwind areas, 
either intra- or interstate. States need to consider such impacts since 
they are ultimately responsible for achieving attainment in all 
portions of their State 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) of the Act.
    In contrast, section 4.4 of the December 16, 1993, guidance states 
that the section 182(f) demonstration would not be approved if there is 
evidence, such as photochemical grid modeling, showing that the 
NOX exemption would interfere with attainment or maintenance 
in downwind areas. The guidance further explains that section 
110(a)(2)(D) [not section 182(f)] prohibits such impacts. Consistent 
with section 4.3 of the guidance, the EPA believes that the section 
110(a)(2)(D) and 182(f) provisions must be considered independently, 
and hence, has revised section 4.4 of the December 16, 1993, guidance 
document. Thus, if there is evidence that NOX emissions in 
an upwind area would interfere with attainment or maintenance in a 
downwind area, that problem should be separately addressed by the 
State(s) or, if necessary, by the EPA in a section 110(a)(2)(D) action. 
In addition, a section 182(f) exemption request should be independently 
considered by the EPA.
    The Commonwealth of Virginia is being included in modeling analyses 
being conducted by the EPA, States, and other agencies as part of the 
Ozone Transport Assessment Group (OTAG). The OTAG process is a 
consultative process among the eastern States and the EPA. The OTAG 
assessment process will evaluate regional and national emission control 
strategies using improved regional modeling analyses. The goal of the 
OTAG process is to reach consensus on additional regional and national 
emission reductions that are needed to support efforts to attain the 
ozone standard in the eastern United States.
    On January 10, 1997 (62 FR 1420) EPA issued a notice of intent to 
issue a SIP call to reduce regional transport of ozone. In this notice, 
in accordance with section 110(k)(5) and 110(a)(2)(D) of the Clean Air 
Act (Act), the EPA announced its plans to require States to submit SIP 
measures to ensure that emission reductions are achieved as needed to 
allow current nonattainment areas to prepare attainment demonstrations 
for the current NAAQS. This action will reflect the technical work done 
by OTAG and other pertinent regional and urban scale analyses of ozone 
transport.

[[Page 38926]]

    Furthermore, this exemption in no way insulates or alleviates the 
Commonwealth of Virginia from any future obligations to secure 
additional NOX reductions, perhaps even from among sources 
in the Richmond area, should technical evidence, including but not 
limited to that which may result from the OTAG process, indicate that 
such reductions are required because NOX emissions generated 
in Virginia interfere with the ability of another state or legally 
responsible jurisdiction to attain and maintain the NAAQS for ozone, 
and EPA makes such a finding.
    Comment #6 One commenter asked EPA to require NOX RACT 
immediately under section 110(a)(2)(D) if the Commonwealth's petition 
for an exemption from NOX RACT is approved.
    Response #6 The EPA does not agree with this comment for two 
reasons. First, EPA noted in the Technical Support Document for this 
action that the level of reductions required under section 110 may be 
greater or less than that required by RACT, depending upon the 
circumstances. The EPA established general policy for NOX 
RACT in the ``NOX Supplement to the General Preamble for 
Implementation of Title I'' (57 FR 55620, November 25, 1992) and 
established NOX RACT presumptive emission limits for four 
categories of utility boilers. These limits require reductions on the 
order of 25 to 50 percent from emission rates prior to control. The 
ozone transport assessment process described previously has evaluated 
regional and national emission control strategies for NOX 
that considered levels of reductions well in excess of 50 percent. 
Therefore RACT alone may not be a significant level of control. 
Secondly, the geographic scope of the January 10, 1997 notice of intent 
to issue SIP calls for areas throughout the OTAG domain that are 
contributing significantly to ozone pollution in downwind areas 
includes Virginia. The SIP call process will therefore address the 
transport of ozone from all areas influencing the various ozone 
nonattainment areas in the eastern half of the United States. As noted 
in the response to an earlier comment, EPA's position is that an action 
to grant or deny a NOX exemption request under section 
182(f) for any area would not shield that area if additional 
NOX emission reductions are determined to be necessary to 
meet the requirements of section 110(a)(2)(D).
    Comment #7 One commenter stated it was inappropriate to issue the 
NOX exemption and interim final rule prior to final action 
on the request that EPA exercise its authority under section 
110(a)(2)(D) made by the State of New York in the November 1994 SIP 
revision for an attainment demonstration for the New York City 
metropolitan area.
    Response #7 The EPA does not agree with this comment for the 
reasons discussed in the previous two responses. The EPA continues to 
believe that actions under section 110(a)(2)(D) are independent of any 
action taken by the EPA on a NOX exemption request under 
section 182(f). However, the EPA's action to grant or deny a 
NOX exemption request under section 182(f) for any area 
would not shield that area if additional NOX emission 
reductions are determined to be necessary to meet the requirements of 
section 110(a)(2)(D). In the January 10, 1997 notice of intent, the EPA 
announced its plans to require certain States to submit additional SIP 
measures to ensure that emission reductions are achieved as needed to 
allow current nonattainment areas to prepare attainment demonstrations 
for the current NAAQS. This action will reflect the technical work done 
by OTAG and other pertinent regional and urban scale analyses of ozone 
transport.
    Comment #8 One commenter asserted that exemptions should be granted 
considering transport issues under section 110(2)(2)(D) and referenced 
a ``limited exemption'' granted for the State of Maine. The limited 
exemption was ``based upon a demonstration that NOX 
emissions in the Northern Maine area are not impacting Maine's moderate 
ozone nonattainment areas or any other area in the Ozone Transport 
Region during the time periods when elevated ozone levels are monitored 
in these areas.''
    Response #8 As noted in the response to an earlier comment, EPA 
does not agree that exemptions granted under section 182(f) for areas 
outside an ozone transport region must consider transport under section 
110(a)(2)(D). The EPA believes, as described in the EPA's December 1993 
guidance, that section 182(f)(1) of the Act provides that the new 
NOX 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 NOX reductions from the sources concerned;
    (2) In nonattainment areas not within an ozone transport region, 
additional NOX reductions would not contribute to ozone 
attainment in the area; or
    (3) In nonattainment areas within an ozone transport region, 
additional NOX reductions would not produce net ozone air 
quality benefits in the transport region.
    Only the first and third tests are applicable for areas inside an 
ozone transport region; the ``net air quality benefits test'' and the 
``net ozone air quality benefit'' test. The EPA must determine, under 
the first test, that the net benefits to air quality in an area ``are 
greater in the absence of NOX reductions'' from relevant 
sources. Under the third test, EPA must determine ``that additional 
NOX reductions would not produce net ozone benefits in the 
transport region.'' The exemption for Northern Maine was granted under 
the third test (60 FR 66749, December 26, 1995). Therefore, the 
exemption petition for Northern Maine had to consider net ozone 
benefits in areas within the transport region that are downwind of that 
State.
    Comment #9 In addition to stating that perceived trends are a poor 
basis for a conclusion and three years of data fail to consider 
meteorological fluctuations, one commenter said that sections 
110(a)(2), 161 and 162 of the Act, obligate EPA to protect the public 
health by ensuring that the air quality standards are attained and then 
maintained, not simply to respond after a violation has occurred. 
(EPA's response to the interplay of section 182(f) and section 
110(a)(2) of the Act is also noted in the response to previous 
comments.)
    Response #9 The EPA does not agree with this comment since it 
ignores the 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 NOX exemption policies, the EPA has sought 
an approach that reasonably accords with that intent. In addition to 
imposing control requirements on major stationary sources of 
NOX similar to those that apply for sources of VOC, section 
182(f) also provides for an exemption (or limitation) from application 
of these requirements if, under one of several tests, the EPA 
determines that, in certain areas, NOX reductions would 
generally not be beneficial towards attainment of the ozone standard.
    Sections 161 and 162 deal with requirements for areas designated 
``attainment'' of the ozone (and any other) NAAQS. Section 182(f) 
authorizes when a nonattainment area may be exempted from the 
NOX RACT requirement for purposes of attaining the ozone 
NAAQS; however, the exemption does not preclude future NOX 
controls needed for maintenance of

[[Page 38927]]

the ozone NAAQS that may be required once the area has been 
redesignated to attainment. The EPA has not interpreted the 
``contribute to attainment'' language in the section 182(f)(1)(A) test 
to mean ``contribute to attainment and maintenance.'' (Refer to the May 
27, 1994, John S. Seitz, Director, Office of Air Quality Planning and 
Standards, memorandum entitled ``Section 182(f) Nitrogen Oxides 
(NOX) Exemptions--Revised Process and Criteria''.)
    In section 182(f)(1), Congress explicitly conditioned action on 
NOX exemptions on the results of an ozone precursor study 
required under section 185B of the Act. Because of the possibility that 
reducing NOX in an 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 Title 
I of the Act, to avoid requiring NOX reductions where such 
reductions would not be necessary. In describing these various ozone 
provisions, including section 182(f), the House Conference Committee 
Report states in the pertinent part:

    [T]he Committee included a separate NOX/VOC (volatile 
organic compound) study provision in section (185B) to serve as the 
basis for the various findings contemplated in the NOX 
provisions. The Committee does not intend NOX reduction 
for reduction's sake, but rather as a measure scaled to the value of 
NOX reductions for achieving attainment in the particular 
ozone nonattainment area. See H.R. Rep. No. 490, 101st Cong., 2d 
Sess. 257-258 (1990).

Therefore, EPA has concluded that the determination of the benefits of 
NOX reductions required under section 182(f)(1)(A) is 
limited to a determination of whether such reductions would contribute 
only to ``attainment'' of the ozone NAAQS and need not consider the 
benefits for maintenance in areas that have been redesignated to 
attainment of the ozone NAAQS.
    Comment #10 Several commenters stated that the exemption should not 
be granted because the Act does not authorize any exemption of the 
NOX reduction requirements until conclusive evidence exists 
that such reductions are counter-productive.
    Response #10 The EPA does not agree with this comment since it 
ignores the 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 NOX exemption policies, the EPA has sought 
an approach that reasonably accords with that intent. In addition to 
imposing control requirements on major stationary sources of 
NOX similar to those that apply for sources of VOC, section 
182(f) also provides for an exemption (or limitation) from application 
of these requirements if, under one of several tests, the EPA 
determines that, in certain areas, NOX reductions would 
generally not be beneficial towards attainment of the ozone standard. 
In section 182(f)(1), Congress explicitly conditioned action on 
NOX exemptions on the results of an ozone precursor study 
required under section 185B of the Act. Because of the possibility that 
reducing NOX in an 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 Title 
I of the Act, to avoid requiring NOX reductions where such 
reductions would not be beneficial or would be counterproductive. In 
describing these various ozone provisions, including section 182(f), 
the House Conference Committee Report states in the pertinent part:

    [T]he Committee included a separate NOX/VOC [volatile 
organic compound] study provision in section (185B) to serve as the 
basis for the various findings contemplated in the NOX 
provisions. The Committee does not intend NOX reduction 
for reduction's sake, but rather as a measure scaled to the value of 
NOX reductions for achieving attainment in the particular 
ozone nonattainment area. See H.R. Rep. No. 490, 101st Cong., 2d 
Sess. 257-258 (1990).

    As noted in the response to an earlier comment, the command in 
section 182(f)(1) that the EPA ``shall consider'' the section 185B 
report taken together with the time period the Act provides for 
completion of the report and for acting on NOX exemption 
petitions clearly demonstrate that Congress believed the information in 
the completed section 185B report would provide a sufficient basis for 
the EPA to act on NOX exemption requests, even in the 
absence of the additional information that would be included in 
affected areas' attainment or maintenance demonstrations. While there 
is no specific requirement in the Act that EPA actions granting 
NOX exemption requests must await ``conclusive evidence,'' 
as the commenters argue, there is also nothing in the Act to prevent 
the EPA from revisiting an approved NOX exemption if 
warranted by additional, current information.
    In addition, the EPA believes, as described in the EPA's December 
1993 guidance, that section 182(f)(1) of the Act provides that the new 
NOX 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 NOX reductions from the sources concerned;
    (2) In nonattainment areas not within an ozone transport region, 
additional NOX reductions would not contribute to ozone 
attainment in the area; or
    (3) In nonattainment areas within an ozone transport region, 
additional NOX reductions would not produce net ozone air 
quality benefits in the transport region.
    Based on the plain language of section 182(f), the EPA believes 
that each test provides an independent basis for a full or limited 
NOX exemption.
    Only the first test listed above is based on a showing that 
NOX reductions are ``counterproductive.'' If any one of the 
tests is met, the section 182(f) NOX requirements would not 
apply or, under the excess reductions provision, a portion of these 
requirements would not apply.
    Comment #11 Many commenters opposed the exemption because it 
ignored the other benefits of NOX reductions. Other benefits 
noted were reduction of nitrogen loading to waterways, bays and 
estuaries, especially noted was the Chesapeake Bay, reduction of other 
(non-ozone) secondary pollution, such as fine particulate matter, 
formed from NOX-VOC mixtures, and reduction of acid 
deposition. One of these commenters wondered if EPA can relieve an 
ozone nonattainment area of the NOX RACT requirement where 
the Commonwealth is not meeting alternative requirements for nitrogen 
controls in water discharges.
    Response #11 The EPA does not agree nor does the Act require that 
decisions regarding granting of a NOX exemption be made 
contingent on addressing other environmental benefits such as those 
raised by the commenters. As noted in the responses to the two previous 
comments, based upon the plain language of section 182(f) and relevant 
legislative history, the EPA believes that each of the three tests 
discussed in section 182(f) provides an independent basis for a full or 
limited NOX exemption. Only the ``net air quality test'' is 
based on a showing that NOX reductions provide environmental 
benefits beyond attainment of the ozone NAAQS. In addition, based upon 
the language, not just in section 182(f), but throughout Title I of the 
Act regarding NOX reductions and upon the relevant

[[Page 38928]]

legislative history, EPA has concluded that the determination of the 
benefits of NOX reductions required under the ``contribute 
to attainment'' test is limited to a determination of whether such 
reductions would contribute only to ``attainment'' of the ozone NAAQS 
and need not consider the benefits in relation to other environmental 
media. Moreover, some of the pollution problems to which NOX 
emissions contribute are addressed by separate Titles of the Clean Air 
Act or other environmental statutes.
    Comment #12 One commenter contended that the air quality monitoring 
data alone does not support this exemption proposal. The commenter 
stated the actual measured ozone concentrations reflect the Richmond 
nonattainment area's failure to consistently attain the federal 
standard. The air quality levels are below EPA's definition of an 
exceedance of the ozone NAAQS at 0.125 parts per million (ppm), but are 
greater than the ozone NAAQS of 0.12 ppm. The commenter protested 
rounding of ozone concentration measurements less than or equal to 124 
ppb down to 120 ppb. The commenter stated that had the EPA adhered to a 
``brightline'' 120 ppb standard the Richmond area would be in violation 
of the ozone NAAQS. The commenter stated that more control of 
NOX should be required in the Richmond area because the 
ozone concentrations are routinely at or above the current ozone NAAQS. 
The commenter contended that the ozone readings for 1995 were more than 
``twice'' the current standard.
    Response #12 For the reasons provided below, EPA does not agree 
with the commenter's conclusions. 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 ug/m\3\) is equal to or less than 1, as determined by 
Appendix H. Appendix H references EPA'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. Likewise, the calculated expected 
exceedances are rounded to zero decimal places. Thus, the smallest sum 
of expected exceedances for any one monitor that cause the 3-year 
average to exceeds 1 would be 3.2. Before proposing the exemption, EPA 
had analyzed the 1993 to 1995 air quality monitoring data in accordance 
with Appendix H and had determined that the expected number of days per 
calendar year maximum hourly average concentrations above 0.12 parts 
per million (235 ug/m\3\) did not exceed 1. Because the largest sum of 
expected exceedances for the 1993 to 1995 data at any one monitor was 
3.1, the standard was not exceeded. The largest recorded one-hour, 
maximum ozone concentration recorded in the 1993 to 1995 period was 
0.154 ppm which is well less than twice the standard of 0.12 ppm. It is 
true that during 1995 three monitoring locations in the Richmond area 
each recorded one valid monitored exceedance of the 0.12 ppm standard 
during 1995. However, the form of the ozone NAAQS requires the use of a 
3-year period to determine the average number of exceedances per year. 
The determination of expected number of exceedances is performed on a 
monitor by monitor basis. An area with more than one monitor would 
violate the standard if the expected number of days per calendar year 
maximum hourly average concentrations above 0.12 parts per million 
exceeds 1 at any one monitor. The EPA has determined that the Richmond 
area did not violate the ozone NAAQS based upon monitoring data for 
1993 to 1995 and has continued without violation through 1996.
    Comment #13 One commenter said that NOX reductions would 
benefit the Richmond area as demonstrated by the Urban Airshed Modeling 
performed by the Virginia Department of Environmental Quality for the 
May 15, 1995, Virginia Attainment Demonstration SIP submittal for 
Richmond.
    Response #13 The EPA does not agree with this comment. The EPA 
considered the Attainment Demonstration submittal for Richmond in the 
Technical Support Document (TSD) for the notice of proposed rulemaking. 
The EPA's evaluation weighed the air quality monitoring more heavily 
than the attainment demonstration. The reason for doing so was 
discussed in the TSD and is summarized and clarified below.
    In section 4.3 of the December 1993 EPA applicability guidance, the 
``contribute to attainment'' test is described for the case where an 
exemption request is submitted with a redesignation request with 
violation-free monitoring data for the most recent three years. This 
policy was amended in the May 27, 1994 Seitz memo to allow a petition 
for a section 182(f) exemption to be submitted prior to a redesignation 
request. The same section of the guidance (since amended as discussed 
above under transport) requires EPA to deny the petition if creditable 
modeling shows that NOX reduction in the area seeking the 
section 182(f) is necessary for a downwind area to attain or maintain 
the ozone NAAQS. The guidance is silent on the case where modeling and 
monitoring results in the area are at odds.
    Under the policy set forth in a May 10, 1995 memorandum from John 
S. Seitz, Director, OAQPS, entitled ``Reasonable Further Progress, 
Attainment Demonstration, and Related Requirements for Ozone 
Nonattainment Areas Meeting the Ozone National Ambient Air Quality 
Standard'', EPA concluded that the requirements for reasonable further 
progress towards attainment, the attainment demonstration itself, and 
certain attainment-related requirements are moot when an area is 
monitoring attainment of the NAAQS. The determination that these 
requirements are waived would remain effective as long as the area 
remains free of violations of the ozone NAAQS. In a recent Federal 
Register notice EPA has acted to waive these requirements for the 
Richmond area based upon air quality monitoring data for 1993 to 1996. 
See 62 FR 32204 (June 13, 1997). The reasonable further progress, 
attainment demonstration and related requirements become permanently 
moot if and when the area is redesignated to attainment. To redesignate 
an area to attainment, EPA must determine that, among other things, the 
area is free of violations of the ozone NAAQS, that attainment was the 
result of real, permanent, quantifiable reductions in precursor 
emissions and that maintenance of the standard is demonstrated. The EPA 
does not require the maintenance demonstration to be air quality 
modeling based where a demonstration is made that the future year 
emission inventories will remain at or below the inventory of the 
attainment year.
    The December 1993 guidance is silent on situations where EPA must 
consider an exemption petition based upon air quality monitoring data 
that is not consistent with air quality modeling. The EPA has 
determined nonattainment areas can be exempted from certain other 
nonattainment requirements contingent upon continued monitoring of 
attainment. The EPA therefore has granted greater weight to the air 
quality monitoring data than the air quality modeling data when 
considering this exemption petition.

[[Page 38929]]

    Comment #14 Several commenters argued that the monitoring network 
in Richmond does not adequately cover this large airshed. All argued 
that the four monitors cannot reflect all areas where an exceedance of 
the ozone NAAQS may occur. One stated that according to the Virginia 
Department of Environmental Quality the four monitors are not placed in 
high-activity areas in order to more ``accurately reflect consistent 
ambient concentrations,'' that is, the monitors are placed to measure 
``background'' or ``diluted'' concentrations. One commenter argued that 
to address the inadequacies of the monitoring networks the Act 
establishes several prerequisites before an area can be redesignated to 
attainment and that three-years of data do not address any potential 
increases in NOX emissions.
    Response #14 The EPA does not agree with these comments because the 
current monitoring network meets EPA-specified regulatory requirements 
(see 40 CFR part 58), and adequately reflects air quality in the 
nonattainment area.
    Comment #15 Comments were received regarding the process 
by which the reapplication of the NOX RACT requirement and 
sanctions in the event a violation is monitored. One commenter stated 
the notice of proposed rulemaking and the interim final rule contained 
conflicting statements regarding staying and deferring imposition of 
sanctions. The commenter noted that the interim final rule mentions 
that the stay and deferment of sanctions will occur while the EPA 
completes the rulemaking process on the Commonwealth's petition. In 
contrast the commenter noted that the notice of proposed rulemaking 
stated the 2:1 offset sanction cannot be lifted until either a 
NOX RACT SIP is deemed complete by the EPA or the exemption 
under section 182(f) is granted. Another commenter asked EPA to clarify 
what steps will be taken regarding reapplication of NOX RACT 
in the event a violation of the ozone NAAQS occurs in the future.
    Response #15 The purpose of the interim final rule was to stay, for 
the duration of EPA's rulemaking process on the exemption petition, 
further application of the 2:1 offset sanction which went into effect 
in the Richmond ozone nonattainment area as of January 8, 1996 as a 
result of the July 8, 1994 finding of failure to submit. On July 8, 
1994, EPA sent a letter to the Governor of Virginia stating that, under 
section 179 of the Act, EPA made a finding that Virginia failed to 
submit a SIP revision for NOX RACT. This finding commenced 
the sanctions process outlined by section 179. The two to one (2:1) 
offset sanction went into effect 18 months later.
    The interim final rule also established the procedure by which 
sanctions would be reapplied if, based upon comments to the proposed 
and/or interim final rules, EPA determined that the petition was not 
approvable. The basis for staying and deferring sanctions in the 
interim final rule was that EPA had concluded that the Commonwealth was 
eligible for an exemption from the NOX RACT requirement, 
under section 182(f) and, therefore, was no longer subject to the 
requirement for which the July 8, 1994 finding of failure to submit was 
issued. If, based upon comment, EPA determined that the exemption 
petition was in fact unapprovable then the basis for the interim final 
rule would no longer exist. Therefore, the interim final rule provided 
that sanctions would be applied at the time of a final action 
disapproving the NOX exemption petition (or, if action is 
re-proposed, at the time of the proposed disapproval).
    The notice of proposed rulemaking also had to address how sanctions 
would be affected if EPA approved the exemption. Basically, the notice 
of proposed rulemaking proposed, on the effective date of the exemption 
approval, to stop application of the 2:1 offset sanction and to defer 
application of the highway sanction which was to take effect July 8, 
1996. In essence, final approval (contingent upon continued monitoring 
of attainment) of the exemption petition would continue the stay and 
deferment of sanctions initiated by the interim final rule. However, 
the stay would be lifted, should a monitored violation of the ozone 
NAAQS be recorded under the conditions set forth in the notice of 
proposed rulemaking. These conditions were:

    ``If there is a violation of the ozone NAAQS in any portion of 
the Richmond ozone nonattainment area while this area is designated 
nonattainment for ozone, the exemption will no longer be applicable 
as of the date of any such determination. Should this occur, EPA 
will provide notice both of the exemption revocation and of the date 
sanctions will re-apply in the Federal Register. A determination 
that the NOX exemption no longer applies would mean that 
the NOX requirements become once more applicable to the 
affected area, that the sanctions would be reinstated, and that 
deferred sanctions would be imposed on the date originally due or 
the effective date of the notice, whichever is later.'' See 61 FR 
11172.

    The contingent nature of the exemption lasts only as long as the 
Richmond area is designated nonattainment. If prior to redesignation to 
attainment, a violation of the ozone NAAQS is monitored in the Richmond 
area and recorded in AIRS, then the section 182(f) exemption would no 
longer apply. In the rulemaking action which removes the exempt status, 
the EPA would provide specific information regarding the reapplication 
of the NOX RACT requirement and sanctions. Because 
NOX RACT is a nonattainment area requirement, once the area 
is redesignated to attainment, NOX RACT is no longer 
required for purposes of attainment. Once the Richmond area is 
redesignated to attainment, then the response to a violation of the 
ozone NAAQS would be addressed in the manner prescribed by the approved 
maintenance plan. NOX RACT would be implemented to the 
extent as required under the approved maintenance plan.
    Because the sanctions were applied pursuant to a finding that the 
Commonwealth of Virginia failed to submit a state implementation plan 
(SIP) revision for NOX RACT, both the notice of proposed 
rulemaking and interim final rules noted that, even if the exemption 
were granted, a NOX RACT SIP for the Richmond ozone 
nonattainment area that meets the completeness criteria of section 
110(k) would permanently correct the July 8, 1994 finding of failure to 
submit and would permanently lift sanctions. If prior to redesignation 
to attainment, a violation of the ozone NAAQS is monitored in the 
Richmond area and recorded in AIRS, then the section 182(f) exemption 
would no longer apply, and the only way to lift sanctions would be 
through submittal of a complete NOX RACT SIP for the 
Richmond area.
    EPA acknowledges that the precise terminology regarding 
reapplication of sanctions after an approval of the exemption petition 
differed slightly in the interim final rule and the proposed rule. The 
EPA intended the description of the reapplication of sanctions after an 
exemption approval in the interim final rule to summarize the detailed 
proposal language contained in the notice of proposed rulemaking. In 
response to this comment, the final rule clarifies the process for 
reapplication of sanctions after an exemption approval in the event of 
a monitored violation as set forth in the notice of proposed rulemaking 
and defines the role of a complete NOX RACT SIP revision 
submittal in terminating sanctions.
    Comment #16   One commenter supported the exemption but 
expressed concerns that the exemption will result in stricter 
regulation on emissions of other pollutants, specifically on VOC. The 
commenter encouraged EPA not to approve any additional VOC control

[[Page 38930]]

regulations adopted by the Commonwealth that are needed in lieu of an 
exemption from NOX RACT. The commenter asked that any final 
approval address further VOC regulation and asked EPA to clarify that 
NOX RACT will be required before any additional VOC control.
    Response #16   The EPA does not agree with this comment. 
As explained in the response to previous comments (refer to responses 
to comments numbers 9 and 10) in section 182(f)(1), Congress included 
attenuating language, not just in section 182(f), but throughout Title 
I of the Act, to avoid requiring NOX reductions where such 
reductions would not provide net benefits or contribute to attainment. 
No such similar language is found concerning VOC reductions in section 
182(f) or elsewhere in Title I of the Act. Because today's action is 
taken under section 182(f) EPA has no basis for conditioning the 
exemption on future VOC regulation.
    Comment #17   One commenter fully supported the proposed 
action, but commented negatively on the portion of the preamble dealing 
with other possible benefits of NOX reductions in the 
Richmond area. One commenter stated that the proposal alleges several 
other environmental effects of additional NOX reductions. If 
such benefits exist, they should be addressed in the context of 
regulations dealing with those specific environmental effects, not in 
context of regulations dealing with attainment of the ozone NAAQS. The 
commenter said any conclusion regarding benefits on transport of ozone 
from reducing NOX emissions are premature pending the 
outcome of the studies underway by OTAG. The commenter also noted that 
the compensation for future growth in NOX emissions is an 
issue to be addressed in a maintenance plan.
    Response #17   The EPA included discussion of the 
potential other environmental effects of NOX reductions to 
inform the public that the action proposed could affect air quality in 
ways not related to attainment of the ozone NAAQS. Nowhere in the 
proposal did EPA state that the EPA's proposed action was based upon 
other than a determination that the NOX reductions required 
under section 182(f) would not contribute to attainment. As explained 
in the response to previous comments, EPA intends to use its authority 
under section 110(a)(2)(D) to require a State to reduce NOX 
emissions from stationary and/or mobile sources where there is evidence 
showing that the NOX emissions would contribute 
significantly to nonattainment in, or interfere with maintenance by, 
any other State, and this action would be independent of any action 
taken by the EPA on a NOX exemption request under section 
182(f). As noted in that earlier response, EPA began that process in a 
January, 10, 1997 Federal Register notice. Further in an earlier 
response, EPA noted it has not interpreted ``contribute to attainment'' 
in section 182(f)(1)(A) to mean ``contribute to attainment and 
maintenance.'' Therefore, the demonstration that an area qualifies for 
an exemption under section 182(f)(1)(A) is limited to the effects of 
the section 182(f) requirements on attainment.
    Comment #18   Some commenters stated that the modeling 
required by EPA is insufficient to establish that NOX 
reductions would not contribute to attainment since only one level of 
NOX 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 NOX 
reductions will aid or undermine attainment.
    Response #18   As discussed in the Notice of Proposed 
rulemaking and in the responses to previous comments, the basis for 
granting this exemption on a contingent basis (i.e., the exemption 
would last for only as long as the area's monitoring data continue to 
demonstrate attainment) is ambient air monitoring data.
    Therefore this comment is not pertinent to the granting of the 
exemption for the Richmond area. But EPA has included this comment 
because it was one of the ``standing'' comments as discussed previously 
in the introduction to the ``Response to Public Comment'' portion of 
this notice.
    Comment #19 Commenters contended that section 182(b)(1) is the 
appropriate authority for granting interim period transportation 
conformity NOX exemptions.
    Response #19 The EPA agreed with the commenters and published an 
interim final rule that changed the transportation conformity rule to 
reference section 182(b)(1) as the correct authority under the Act for 
waiving the NOX ``build/no-build'' and ``less-than-1990 
emissions'' tests for certain areas. See 60 FR 44762, (August 29, 
1995). A related proposed rule (60 FR 44790), published on the same 
day, invited public comment on how the Agency plans to implement 
section 182(b)(1) transportation conformity NOX exemptions. 
The final rule for that proposal has since been promulgated. See 60 FR 
57179 (November 14, 1995). In that final rule, the EPA noted that 
section 182(b)(1), by its terms, only applies to moderate and above 
ozone nonattainment areas. Consequently, the EPA believes that the 
interim reduction requirements of section 176(c)(3)(A)(iii), and the 
authority provided in section 182(b)(1) to grant relief from those 
interim reduction requirements, apply only to those areas subject to 
section 182(b)(1). The EPA, however, is not granting a NOX 
exemption from the interim period transportation conformity 
requirements by today's action because the Commonwealth submitted its 
NOX petition pursuant to section 182(f).
    Comment #20 Comments were received regarding the scope of exemption 
of areas from the NOX requirements of the conformity rules. 
The commenters argued that such exemptions waive only the requirements 
of section 182(b)(1) to contribute to specific annual reductions during 
the period before submission of conformity SIPs, not the requirement 
that conformity SIP revisions contain information showing the maximum 
amount of motor vehicle NOX emissions allowed under the 
transportation conformity rules, and similarly, the maximum allowable 
amounts of any such NOX emissions under the general 
conformity rules. The commenters admitted that, in prior guidance, the 
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 NOX, but have wanted the EPA, 
in actions on NOX exemptions, to explicitly affirm this 
obligation and to also avoid granting exemptions until a budget 
controlling future NOX increases is in place.
    Response #20 The EPA's transportation conformity rule originally 
provided a NOX transportation conformity exemption if an 
area received a section 182(f) exemption. See 58 FR 62188 (November 24, 
1993). As indicated in a previous response, the EPA has changed the 
reference from section 182(f) to section 182(b)(1) in the 
transportation conformity rule since that section is specifically 
referenced by the transportation conformity provisions of the Act. See 
60 FR 44762 (August 29, 1995). The EPA has also consistently held the 
view that, in order to conform, nonattainment and maintenance areas 
must demonstrate that the transportation plan and the Transportation 
Improvement Program are consistent with the motor vehicle emissions 
budget for NOX even where a conformity NOX 
exemption has been granted. Due to a drafting error, that view was not 
reflected in the transportation conformity rule. The EPA

[[Page 38931]]

has amended the rule to correct this error. See 60 FR 57179 (November 
14, 1995).

Final Action

    EPA approves the 182(f) NOX exemption petition submitted 
by the Commonwealth of Virginia for the Richmond ozone nonattainment 
area. Approval of the exemption waives the Federal requirements for 
NOX RACT applicable to the Richmond ozone nonattainment 
area. 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 NOX Supplement to the General Preamble (57 FR 
55628, November 25, 1992), the EPA would rescind a NOX 
exemption in cases where NOX reductions were later found to 
be beneficial for attainment of the ozone NAAQS in an area's attainment 
plan. That is, if an area that received an exemption based on clean air 
quality data which shows that the area is attaining the ozone standard 
experiences a violation prior to redesignation of the area to 
attainment, the exemption would no longer be applicable.
    If, prior to redesignation of the area to attainment, a violation 
of the ozone NAAQS is monitored in Richmond (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. The 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 NOX requirements set forth in the Act. The 
NOX 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 EPA believes that the Commonwealth may provide 
sources a reasonable time period after the EPA determination to 
actually meet the RACT emission limits. The EPA expects such time 
period to be as expeditious as practicable, but in no case longer than 
24 months.
    This action stops application of the offset sanction imposed on 
January 8, 1996 and defers application of future sanctions on the 
effective date of the exemption approval. Sanctions would then remain 
stopped or deferred contingent upon continued monitoring that 
demonstrates continued attainment of the ozone NAAQS in the entire 
Richmond ozone nonattainment area. If there is a violation of the ozone 
NAAQS in any portion of the Richmond ozone nonattainment area while 
this area is designated nonattainment for ozone, the exemption will no 
longer be applicable as of the date of any such determination. Should 
this occur, EPA will provide notice both of the exemption revocation 
and of the date sanctions will re-apply in the Federal Register. A 
determination that the NOX exemption no longer applies would 
mean that the NOX requirements become once more applicable 
to the affected area, that the sanctions would be reinstated, and that 
deferred sanctions would be imposed on the date originally due or the 
date specified in the notice, whichever is later.
    The sanctions were applied pursuant to a finding that the 
Commonwealth of Virginia failed to submit a state implementation plan 
(SIP) revision for NOX RACT. Therefore, if prior to 
redesignation to attainment, the sanctions have been reapplied, they 
then can only be permanently lifted by submittal of a NOX 
RACT SIP for the Richmond ozone nonattainment area that meets the 
completeness criteria of section 110(k).
    If Richmond is redesignated to attainment of the ozone NAAQS, 
NOX 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.

Administrative Requirements

A. Executive Order 12866

    This action is not a SIP revision and is not subject to the 
requirements of section 110 of the Act. The authority to approve or 
disapprove exemptions from NOX requirements under section 
182 of the Act was delegated to the Regional Administrator from the 
Administrator in a memo dated July 6, 1994, from Jonathan Cannon, 
Assistant Administrator, to the Administrator, titled, ``Proposed 
Delegation of Authority: `Exemptions from Nitrogen Oxide Requirements 
Under Clean Air Act section 182(f) and Related Provisions of the 
Transportation and General Conformity Rules'--Decision Memorandum.'' 
The Office of Management and Budget (OMB) has exempted this regulatory 
action from E.O. 12866 review.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA 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 determination does not create any new requirements, but 
suspends the indicated requirements. Therefore, because this action 
does not impose any new requirements, I certify that it does not have a 
significant impact on any small entities affected.

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
private sector, of $100 million or more. Under section 205, EPA must 
select the most cost-effective and least burdensome alternative that 
achieves the objectives of the rule and is consistent with statutory 
requirements. Section 203 requires EPA to establish a plan for 
informing and advising any small governments that may be significantly 
or uniquely impacted by the rule. The EPA has determined that the 
action promulgated does not include a Federal 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. This 
Federal action does not create any new requirements, but suspends the 
indicated requirements. Accordingly, no additional costs to State, 
local, or tribal governments, or to the private sector, result from 
this action.

D. Submission to Congress and the General Accounting Office

    Under section 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives and the Comptroller

[[Page 38932]]

General of the General Accounting Office prior to publication of the 
rule in today's Federal Register. This rule is not a ``major rule'' as 
defined by section 804(2).

E. Petitions for Judicial Review

    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 September 19, 1997. 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

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
oxides.

    Dated: July 8, 1997.
W. Michael McCabe,
Regional Administrator, Region III.

    40 CFR part 52, subpart VV of chapter I, title 40 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 VV--Virginia

    2. Section 52.2428 is amended by redesignating the existing text as 
paragraph (a) and adding paragraph (b) to read as follows:


Sec. 52.2428  Control Strategy: Carbon monoxide and ozone.

    (a) * * *
    (b) EPA is approving an exemption request submitted by the Virginia 
Department of Environmental Quality on December 18, 1995 for the 
Richmond ozone nonattainment area, which consists of the counties of 
Charles City, Chesterfield, Hanover and Henrico, and of the cities of 
Richmond, Colonial Heights and Hopewell, from the oxides of nitrogen 
(NOX) requirements for reasonably available control 
technology (RACT). This approval exempts the Richmond ozone 
nonattainment area from implementing the NOX RACT 
requirements contained in section 182(f) of the Clean Air Act. The 
exemption is based on ambient air monitoring data. The exemption is 
applicable during the period prior to redesignation of the Richmond 
area to attainment of the National Ambient Air Quality Standard for 
ozone only as long as ambient air quality monitoring data for the 
Richmond ozone nonattainment area continue to demonstrate attainment 
without NOX reductions from major stationary sources of 
NOX.

[FR Doc. 97-19090 Filed 7-18-97; 8:45 am]
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