[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Proposed Rules]
[Pages 46229-46234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23234]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[AZ-001-BU; FRL-5886-7]


Clean Air Act Reclassification; Arizona--Phoenix Nonattainment 
Area; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA proposes to determine that the Phoenix, Arizona moderate 
ozone nonattainment area has not attained the 1-hour ozone national 
ambient air quality standard (NAAQS) by the Clean Air Act (CAA) 
mandated attainment date for moderate nonattainment areas, November 15, 
1996. EPA also proposes to deny the State of Arizona's application for 
a one-year extension of the November 15, 1996 attainment date for the 
Phoenix area. The proposed determination and denial are based in whole 
or in part on EPA's review of monitored air quality data from 1994 
through 1996 for compliance with the 1-hour ozone NAAQS. If EPA takes 
final action on the determination and denial as proposed, the Phoenix 
ozone nonattainment area will be reclassified by operation of law as a 
serious nonattainment area. The effect of such a reclassification would 
be to continue progress toward attainment of the 1-hour ozone NAAQS 
through the development of a new State implementation plan (SIP) 
addressing attainment of that standard by November 15, 1999.

DATES: Comments on this proposal must be received in writing by October 
2, 1997. Comments should be addressed to the contact listed below.

ADDRESSES: Copies of the State extension request, EPA's draft technical 
support document for this rulemaking, and EPA's policies governing 
attainment findings and extension requests are contained in the docket 
for this rulemaking. A copy of this notice is also

[[Page 46230]]

available in the air programs section of EPA Region 9's website, http:/
/www.epa.gov/region09. The docket is available for inspection during 
normal business hours at the following locations:

U.S. Environmental Protection Agency, Region 9, Office of Air 
Planning, Air Division, 17th Floor, 75 Hawthorne Street, San 
Francisco, California 94105. (415) 744-1248;
Arizona Department of Environmental Quality, Office of Outreach and 
Information, First Floor, 3033 N. Central Avenue, Phoenix, Arizona 
85012. (602) 207-2217; and
Maricopa County Environmental Services Department, Technical 
Services Division, 1001 N. Central Avenue, Suite 201, Phoenix, 
Arizona 85004 (602) 506-6010.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, Office of Air Planning 
(AIR-2), U.S. Environmental Protection Agency, Region 9, 75 Hawthorne 
Street, San Francisco, California 94105. (415) 744-1248.

SUPPLEMENTARY INFORMATION:

I. Background

A. CAA Requirements and EPA Actions Concerning Designation and 
Classifications

    The Clean Air Act Amendments of 1990 (CAA) were enacted on November 
15, 1990. Under section 107(d)(1)(C) of the CAA, each ozone area 
designated nonattainment for the 1-hour ozone NAAQS prior to enactment 
of the 1990 Amendments, such as the Phoenix area, was designated 
nonattainment by operation of law upon enactment of the 1990 
Amendments.1 Under section 181(a) of the Act, each ozone 
area designated nonattainment under section 107(d) was also classified 
by operation of law as ``marginal,'' ``moderate,'' ``serious,'' 
``severe,'' or ``extreme'' depending on the severity of the area's air 
quality problem. Ozone nonattainment areas with design values between 
0.138 and 0.16 parts per million (ppm), such as the Phoenix area, were 
classified as moderate. These nonattainment designations and 
classifications were codified in 40 CFR part 81. See 56 FR 56694 
(November 6, 1991).
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    \1\ On July 18, 1997 (62 FR 38856), EPA revised the ozone NAAQS 
to establish a 8-hour standard; however, in order to ensure an 
effective transition to the new 8-hour standard, EPA also retained 
the 1-hour NAAQS for an area until such time as it determines that 
the area meets the 1-hour standard. See revised 40 CFR Sec. 50.9 at 
62 FR 38894. As a result of retaining the 1-hour standard, CAA part 
D, subpart 2 Additional Provisions for Ozone Nonattainment Areas, 
including the reclassification provisions of section 181(b), remain 
applicable to areas that are not attaining the 1-hour standard. 
Unless otherwise indicated, all references in this notice are to the 
1-hour ozone NAAQS.
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    States containing areas that were classified as moderate 
nonattainment by operation of law under section 107(d) were required to 
submit State implementation plans (SIPs) designed to show progress 
towards attainment, and attainment of the ozone NAAQS as expeditiously 
as practicable but no later than November 15, 1996. Moderate area SIP 
requirements are found primarily in section 182(b) of the CAA.

B. Reclassification to Serious

    EPA has the responsibility, pursuant to section 181(b)(2)(A) of the 
CAA, of determining, within six months of the applicable attainment 
date (including any extension of that date) whether an ozone 
nonattainment area has attained the ozone NAAQS. Under section 
181(b)(2)(A), if EPA finds that a moderate area has not attained the 
ozone NAAQS, it is reclassified by operation of law to the higher of 
the next higher classification or to the classification applicable to 
the area's design value at the time of the finding. Pursuant to section 
181(b)(2)(B) of the Act, EPA must publish a notice in the Federal 
Register identifying areas which failed to attain the standard and 
therefore must be reclassified by operation of law.
    The 1-hour ozone NAAQS is 0.12 ppm not to be exceeded on average 
more than one day per year over any three year period. 40 CFR 50.9 and 
Appendix H. EPA makes attainment determinations for ozone nonattainment 
areas using the most recently available, quality-assured air quality 
data covering the 3-year period up to and including the attainment 
date.2 Consequently, EPA will determine whether the Phoenix 
area's air quality has met the moderate area attainment deadline of 
November 15, 1996 based upon all 1994, 1995, and 1996 (through November 
15) quality-assured air quality data available to the 
Agency.3 From the available data, EPA determines the average 
number of exceedances per year at each ozone monitor during this 
period. If this number is greater than one at any monitor, then the 
area is determined to have not attained by November 15, 1996. EPA then 
calculates the design value for the area to determine the correct new 
classification.4 A design value is an air quality 
concentration and is a measure of the severity of an area's air 
quality. Ozone design values are used to determine the correct 
classification of an area and to determine the level of controls needed 
for attainment.
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    \2\ See generally 57 FR 13506 (April 16, 1992) and Memorandum 
from D. Kent Berry, Acting Director, Air Quality Management 
Division, EPA, to Regional Air Office Directors; ``Procedures for 
Processing Bump Ups and Extensions for Marginal Ozone Nonattainment 
Areas,'' February 3, 1994 (Berry memorandum). While explicitly 
applicable only to marginal areas, the general procedures for 
processing reclassifications and extension requests described in 
this memorandum apply regardless of the initial classification of an 
area because all reclassifications are made pursuant to the same 
Clean Air Act requirements in section 181(b)(2).
    \3\ All quality-assured available data includes all data 
available from the state and local/national air monitoring (SLAMS/
NAMS) network as submitted to EPA's AIRS system and all data 
available to EPA from special purpose monitoring (SPM) sites that 
meet the requirements of 40 CFR 58.13. See Memorandum John Seitz, 
Director, OAQPS, to Regional Air Directors; ``Agency Policy on the 
Use of Ozone Special Purpose Monitoring Data,'' August 22, 1997 and 
section I.D. of this notice.
    \4\ See Memorandum from William G. Laxton, Director, Technical 
Support Division to the Regional Air Directors; ``Ozone and Carbon 
Monoxide Design Value Calculations,'' June 18, 1990.
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C. Attainment Date Extensions

    If a state does not have the clean data necessary to show 
attainment of the NAAQS, it may apply, under section 181(a)(5) of the 
CAA, for a one year attainment date extension. Issuing an extension is 
discretionary, but EPA can exercise that discretion only if the state 
has: (1) Complied with the requirements and commitments pertaining to 
the applicable implementation plan for the area, and (2) the area has 
measured no more than one exceedance of the ozone NAAQS at any 
monitoring site in the nonattainment area in the year preceding the 
extension year. Section 181(a)(5) and Berry memorandum. Under section 
181(a)(5), EPA may issue up to two such extensions if these conditions 
have been met. The CAA's extension provision is intended to grant areas 
close to attainment a short additional period in which to demonstrate 
that they are in fact attaining the standard. The underlying premise of 
an extension is that an area already has in place a control strategy 
adequate to attain the ozone standard and that no additional measures 
are necessary.
    Areas that apply for an extension should document that they have 
initiated rule development activities in order to meet the Act's 
requirements associated with the new classification. Berry memorandum.

D. The Use of Special Purpose Monitoring Data

    EPA's policy on the use of ozone special purpose monitoring data is 
discussed briefly below and is described in the Memorandum entitled 
``Agency

[[Page 46231]]

Policy on the Use of Ozone Special Purpose Monitoring Data'' from John 
Seitz, Director, Office of Air Quality Planning and Standards, to the 
Regional Air Directors, August 22, 1997.
    40 CFR 50.9 and Appendix H set forth the method for determining 
whether the ozone standard has been met. Section 50.9 provides:

    The standard is attained when the expected number of days with 
maximum hourly average concentrations above 0.12 ppm is equal to or 
less than 1, as determined by Appendix H.

    Monitoring to determine attainment under section 50.9 and Appendix 
H is governed by 40 CFR part 58. As the Agency charged with 
implementing the Clean Air Act, EPA has the authority to establish the 
mechanisms necessary to monitor air quality. See CAA sections 103(c), 
110(a)(2)(B), 301(a), and 319. Pursuant to this authority, EPA has 
required that each state's implementation plan ensure the establishment 
of an official network of air pollution monitors, as set forth in 40 
CFR part 58. The official network is referred to as the State and Local 
Air Monitoring Stations (SLAMS) network.
    Data from SLAMS monitors are quality assured by the state and local 
agencies prior to submission to EPA, and again by EPA when the data are 
entered into EPA's database. Through this system, EPA ensures that its 
regulatory decisions are based on scientific data that meet a 
consistent standard of reliability.
    For data from monitors that are not part of the SLAMS network 
required by part 58, EPA regulations provide that EPA will exclude the 
data when they do not meet the terms of 40 CFR 58.14 Special purpose 
monitors. Section 58.14(a) provides:

    Any ambient air quality monitoring station other than a SLAMS or 
[prevention of significant deterioration] station from which the 
State intends to use the data as part of a demonstration of 
attainment or nonattainment or in computing a design value for 
control purposes of the [NAAQS] must meet the requirements for SLAMS 
described in section 58.22 and, after January 1, 1983, must also 
meet the requirements for SLAMS as described in section 58.13 and 
appendices A and E to this part.

    Sections 58.13 and 58.22 prescribe the operating schedule and 
monitoring methodology, respectively, for SLAMS monitors. Appendix A 
contains quality assurance criteria to be followed by SLAMS monitors, 
and Appendix E contains siting criteria for monitoring instruments.
    Section 58.14(b) further provides:

    Any ambient air quality monitoring station other than a SLAMS or 
PSD station from which the State intends to use the data for SIP-
related functions other than as described in paragraph (a) of this 
section is not necessarily required to comply with the requirements 
for a SLAMS station under paragraph (a) but must be operated in 
accordance with a monitoring schedule, methodology, quality 
assurance procedures, and probe or instrument-siting specifications 
approved by the Regional Administrator.

    Thus, under its current regulations, if data recorded at special 
purpose monitors meet the criteria of section 58.14, there is no basis 
for EPA to exclude those data from consideration. Data which meet the 
requirements of section 58.14(a) have been demonstrated to be of 
equivalent reliability as official network monitors, and absent an 
explicit regulatory basis for exclusion, must be taken into account. 
Since the reliability of these data is based solely on technical and 
scientific considerations, EPA has concluded that a state's intended 
use of the SPM data is not an appropriate factor in determining whether 
data from SPMs that otherwise meet the requirements of section 58.14 
may be excluded from consideration in ozone designation and 
classification determinations, in computing an ozone design value for 
control purposes, or for other ozone SIP-related purposes.

II. Proposal in Regard to the Phoenix Ozone Nonattainment Area

A. The State of Arizona's Extension Application

    On May 2, 1997, the Arizona Department of Environmental Quality 
(ADEQ) requested a one-year extension of the ozone attainment date for 
the Phoenix area. Letter, Russell F. Rhoades, Director, ADEQ to Felicia 
Marcus, Regional Administrator, U.S. EPA Region 9, May 2, 1997. In the 
letter, the State discusses the Phoenix area's compliance with the 
Clean Air Act's two minimum criteria for an extension and also 
describes the State's continuing efforts to ensure progress toward 
ozone attainment. Attached to the letter is a table listing all 1996 
exceedances of the 1-hour ozone standard in and around the Phoenix 
area. This table listed not only the one exceedance recorded at a SLAMS 
site (the Mesa site) but also the nine exceedances recorded at special 
purpose monitoring (SPM) sites in the area. This list of exceedances is 
reproduced in Table 1.

                              Table 1.--Ozone Exceedances in Maricopa County--1996                              
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                   Site                             Type of site                      Date                PPM   
----------------------------------------------------------------------------------------------------------------
Blue Point...............................  SPM                            July 23, 1996..............      0.140
Blue Point...............................  SPM                            August 16, 1996............      0.132
Falcon Field.............................  SPM                            July 23, 1996..............      0.129
Fountain Hills...........................  SPM                            May 21, 1996...............      0.128
Fountain Hills...........................  SPM                            June 4, 1996...............      0.126
Fountain Hills...........................  SPM                            July 23, 1996..............      0.129
Fountain Hills...........................  SPM                            August 28, 1996............      0.132
Mesa.....................................  SLAMS                          July 23, 1996..............      0.127
Mt. Ord..................................  SPM                            May 21, 1996...............      0.130
Salt River Pima..........................  SPM                            July 23, 1996..............      0.130
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    The Falcon Field and Fountain Hills monitoring sites are operated 
by the Maricopa County Environmental Services Department (MCESD) and 
are located along the rapidly-growing eastern edge of the metropolitan 
Phoenix area.5 These sites were established in 1989 and 
1996, respectively, and have been operated since as SPMs.6 
The sites were

[[Page 46232]]

established in response to several audits (including one by EPA) that 
found the County's monitoring network inadequate to meet minimum 
monitoring requirements in EPA's regulations. EPA's monitoring 
regulations require siting monitors in areas of maximum expected ozone 
concentrations and maximum expected population exposure. Evaluation of 
the ozone situation in the Phoenix area has indicated that the eastern 
edge of the area is the most likely region for both maximum ozone 
concentrations and, because of its high population growth rate, maximum 
population exposure.
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    \5\ The Blue Point and Mount Ord monitors are located outside 
the boundaries of the Phoenix ozone nonattainment area but are 
clearly influenced by emissions from the nonattainment area. For the 
purposes of this notice, however, EPA has not considered data from 
these monitors but may do so in future notices.
    \6\ EPA has requested the conversion of these sites to SLAMS. 
See letter, John Kennedy, U.S. EPA--Region 9 to Al Brown and 
Violette Brown, MCESD, February 10, 1997. The County has requested 
until conclusion of the State's air monitoring task force late this 
fall before responding to EPA's request.
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    EPA has evaluated the operation of each site in 1996 by reviewing 
documentation prepared by MCESD and/or by independently auditing each 
monitor. See Memorandum, Bob Pallarino, EPA, to John Kennedy, EPA; 
``Adequacy of Maricopa County Ozone Monitoring network,'' July 31, 1997 
and Memorandum, John Kennedy and Bob Pallarino, EPA, to Debbie Jordan 
and Frances Wicher, EPA; ``Site Evaluation and Quality Control/Quality 
Assurance Review of Selected Maricopa County Ozone Monitoring Sites,'' 
July 25, 1997. Based on its evaluation, EPA has determined that these 
monitors are sited, equipped, and operated consistent with EPA's 
regulations at 40 CFR part 58, subpart B and Appendices C and E and 
that the 1996 data given in Table 1 meets EPA's quality assurance 
requirements at 40 CFR part 58, Appendix A. Therefore, EPA has 
considered the ozone exceedances from these SPMs in deciding whether to 
issue an extension.
    EPA is proposing to deny the State of Arizona's application for a 
one-year extension of the moderate area ozone attainment date for the 
Phoenix metropolitan nonattainment area. EPA is proposing this denial 
because the Phoenix area had more than one exceedance at a monitor in 
1996 (4 at Fountain Hills) and thus does not meet the second statutory 
criterion for granting an extension, that is, the area has no more than 
one exceedance in 1996.
    Over the past year, the State of Arizona has been extensively 
evaluating the Phoenix ozone problem. ADEQ has developed and continues 
to refine an urban airshed model for the Phoenix area. In early 1996, 
Governor Symington convened an Air Quality Strategies Task Force to 
recommend both short- and long-term strategies for improving Phoenix's 
air quality. The Task Force, which included business, environmental, 
and local governmental representatives, recommended in December 1996, a 
number of additional ozone reduction strategies for the area. Many of 
these strategies are contained in legislation passed in the 1997 
Arizona legislative session and were submitted to EPA on April 21, 1997 
as part of the State's Voluntary Early Ozone Plan (VEOP). Additionally, 
on June 3, 1997 (62 FR 30260), EPA approved Governor Symington's 
request to extend the federal reformulated gasoline (RFG) program to 
the Phoenix area and RFG is now available there. The State is currently 
developing its own clean burning gasoline program. These measures are 
in addition to the existing ozone control strategy that includes the 
State's premier centralized enhanced vehicle inspection program 
(approved by EPA on May 8, 1995) that already exceeds the CAA's vehicle 
inspection and maintenance program requirement for serious areas.
    Unfortunately, initial results from the air quality modelling 
undertaken for the VEOP showed that the existing control strategy even 
when combined with the additional measures contained in the VEOP were 
not enough to demonstrate attainment of the ozone standard. Draft VEOP, 
p. E-8. There were, however, significant technical concerns with these 
initial modelling results and ADEQ continues to refine the UAM. 
Preliminary results from this additional work support the draft VEOP's 
basic finding that the Phoenix area will need additional emission 
reductions in order to attain the ozone standard. See Memorandum, 
Frances Wicher, EPA, to Docket AZ-001-BU; ``Record of Communication,'' 
August 8, 1997.
    As noted before, the underlying premise of an extension is that an 
area is close to attainment and already has in place the control 
strategy needed for attainment. All evidence in front of the Agency 
indicates that the Phoenix area is not close to attainment of the 1-
hour ozone standard and that, despite the State's dedicated efforts to 
adopt and implement controls, the area will need to continue its on 
going planning and control efforts. Thus, even if the Phoenix area met 
the statutory requirements for granting an extension, EPA believes that 
such an extension would not be appropriate at this time.

B. Proposed Nonattainment Determination

    Attainment of the 1-hour ozone NAAQS is demonstrated in an area 
when the expected number of days per calendar year with maximum hourly 
average ozone concentrations above 0.12 ppm is equal to or less than 
one. 40 CFR 50.9. The average number of days is calculated for a three-
year period. 40 CFR part 50, Appendix H and Laxton memo. The 1994-1996 
period is used to demonstrate attainment by November 15, 1996.
    Table 2 lists the 3-year average number of days over the 1-hour 
ozone standard at each SLAMS monitoring site in the Phoenix 
metropolitan area for the period 1994 to 1996 and each monitor's design 
value for that period.7 Design values are calculated 
following the procedures in the Laxton memo. A complete listing of the 
ozone exceedances at each monitor as well as EPA's calculations of the 
design values can be found in the TSD.
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    \7\ EPA does not have compete 1994 and 1995 data from the SPM 
sites and thus is not listing those sites in Table 2. However, based 
on the limited data available to the Agency, six SPM sites (Papago 
Park, Phoenix Supersite, Phoenix VEI, Falcon Field, Fountain Hills, 
and Salt River Pima) averaged more than one ozone exceedance per 
year in the 1994-1996 period. Thus, the limited SPM data EPA does 
have confirm its proposed determination that the Phoenix area failed 
to attain the 1-hour ozone standard by November 15, 1996.

   Table 2.--Average Number of Ozone Exceedances Days per Year in the   
                        Phoenix Metropolitan Area                       
                               [1994-1996]                              
------------------------------------------------------------------------
                                          Number of     Average         
                                          days over    number of   Site 
                  Site                       the      exceedance  design
                                           standard    days per    value
                                         (1994-1996)     year      (PPM)
------------------------------------------------------------------------
South Phoenix..........................          1          0.3    0.110
West Phoenix...........................          0          0.0    0.110
Mesa...................................          4          1.3    0.126
North Phoenix..........................          4          1.3    0.125
Glendale...............................          0          0      0.109
Pinnacle Peak..........................          1          0.3    0.119
Central Phoenix........................          0          0      0.113
South Scottsdale.......................          1          0.3    0.121
------------------------------------------------------------------------

    As can be seen from Table 2, two monitoring sites (Mesa and North 
Phoenix) have averaged more than 1 exceedance day per year in the 1994-
1996 period. EPA is, therefore, proposing to find that the Phoenix 
metropolitan area did not attain the 1-hour ozone NAAQS by the 
statutory deadline for moderate area of November 15, 1996.
    EPA is also proposing that the appropriate reclassification of the 
area is to serious. Section 181(b)(2) requires the area to be 
reclassified to the higher of the next higher classification or the

[[Page 46233]]

classification appropriate to the design value at the time of the 
nonattainment finding. The next highest classification for Phoenix is 
serious. The other potential classification is severe. Based on the 
design value calculated using data solely from the SLAMS/NAMS network, 
the area's design value is 0.126 ppm. Using the limited data set from 
the SPMs, the area's maximum-possible design value is 0.132 ppm. Both 
of these design values are well below the range required for a severe 
classification, that is 0.180 to 0.280 ppm.

C. SIP Requirements for Serious Ozone Areas

    Under section 181(a)(1) of the Act, the attainment deadline for 
moderate area ozone nonattainment areas reclassified to serious under 
section 181(b)(2) will be as expeditiously as practicable but no later 
than November 15, 1999. Under section 182(i), these reclassified areas 
are required to submit SIP revisions addressing the serious area 
requirements for the 1-hour ozone NAAQS in section 182(c). Section 
182(i) further provides that the Administrator may adjust the statutory 
schedules for submittal of these SIP revisions. Accordingly, EPA is 
exercising this authority to require submittal of the serious area SIP 
revisions no later than 12 months from the effective date of the area's 
reclassification. EPA believes that a 12 months schedule is appropriate 
because attainment date for serious areas, November 15, 1999, is little 
more than 2 years away and the State will need to expedite adoption and 
implementation of controls to meet that deadline. EPA is requesting 
comments on this schedule.
    Under section 182(c), the requirements for serious ozone 
nonattainment areas include, but are not limited to, the following: (1) 
Attainment and reasonable further progress demonstrations; (2) an 
enhanced vehicle inspection and maintenance program; (3) clean-fuel 
vehicle programs; (4) a 50 ton-per-year major source threshold; (5) 
more stringent new source review requirements; (6) an enhanced 
monitoring program; and (7) contingency provisions.
    EPA has issued a ``General Preamble for the Implementation of Title 
I of the Clean Air Act Amendments of 1990'' that sets forth the 
Agency's preliminary views on how it will act on SIPs submitted under 
Title I of the Act. See generally 57 FR 13498 (April 16, 1992) and 57 
FR 18070 (April 28, 1992).
    EPA has recently promulgated an 8-hour ozone standard (62 FR 38856, 
July 18, 1997). In order to facilitate the transition from the 1-hour 
to the 8-hour NAAQS, EPA may issue additional guidance to assist states 
in meeting the serious area requirements.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future action. Each 
finding of failure to attain or request for an extension of an 
attainment date shall be considered separately and shall be based on 
the factual situation of the area under consideration and in relation 
to relevant statutory and regulatory requirements.

III. Administrative Requirements

A. Executive Order (E.O.) 12866

    Under E.O. 12866, (58 FR 51735, October 4, 1993), EPA is required 
to determine whether today's proposal is a ``significant regulatory 
action'' within the meaning of the E.O., and therefore should be 
subject to OMB review, economic analysis, and the requirements of the 
E.O. See E.O. 12866, sec. 6(a)(3). The E.O. defines, in sec. 3(f), a 
``significant regulatory action'' as a regulatory action that is likely 
to result in a rule that may meet at least one of four criteria 
identified in section 3(f), including,
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    EPA has determined that the finding of failure to attain proposed 
today, as well as the establishment of SIP submittal schedules 
resulting from a bump-up, would result in none of the effects 
identified in E.O. 12866 sec. 3(f). Under section 181(b)(2) of the Act, 
findings of failure to attain are based upon air quality 
considerations, and reclassifications must occur by operation of law in 
light of certain air quality conditions. These findings do not, in-and-
of-themselves, impose any new requirements on any sectors of the 
economy. In addition, because the statutory requirements are clearly 
defined with respect to the differently classified areas, and because 
those requirements are automatically triggered by classifications that, 
in turn, are triggered by air quality values, findings of failure to 
attain and reclassification cannot be said to impose a materially 
adverse impact on State, local, or tribal governments or communities. 
The same is true of the determination not to grant a one-year 
extension, in light of the fact that this determination is also based 
in part on air quality values. Similarly, the establishment of new SIP 
submittal schedules merely establishes the dates by which SIPs must be 
submitted, and does not adversely affect entities.

B. Regulatory Flexibility

    Under the Regulatory Flexibility Act, 5 U.S.C. Section 601 et. 
seq., EPA must prepare a regulatory flexibility analysis assessing the 
impact of any proposed or final rule on small entities. 5 U.S.C. 
sections 603 and 604. Alternatively, EPA may certify that the rule will 
not have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    A finding of failure to attain (and the consequent reclassification 
by operation of law of the nonattainment area) under section 181(b)(2) 
of the Act, a denial of a one-year extension request, and the 
establishment of a SIP submittal schedule for a reclassified area, do 
not, in-and-of-themselves, directly impose any new requirements on 
small entities. See Mid-Tex Electric Cooperative, Inc. v. FERC, 773 
F.2d 327 (D.C. Cir. 1985) (agency's certification need only consider 
the rule's impact on entities subject to the requirements of the rule). 
Instead, this rulemaking simply proposes to make a factual 
determination and to establish a schedule to require States to submit 
SIP revisions, and does not propose to directly regulate any entities. 
Therefore, pursuant to 5 U.S.C. 605(b), EPA certifies that today's 
proposed action does not have a significant impact on a substantial 
number of small entities within the meaning of those terms for RFA 
purposes.

C. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, when EPA promulgates ``any general notice of proposed 
rulemaking that is likely to result in promulgation

[[Page 46234]]

of any rule that includes any Federal mandate that may result in the 
expenditures by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more'' in any one year. A 
``Federal mandate'' is defined, under section 101 of UMRA, as a 
provision that ``would impose an enforceable duty'' upon the private 
sector or State, local, or tribal governments'', with certain 
exceptions not here relevant. Under sec. 203 of UMRA, EPA must develop 
a small government agency plan before EPA ``establish[es] any 
regulatory requirements that might significantly or uniquely affect 
small governments''. Under section 204 of UMRA, EPA is required to 
develop a process to facilitate input by elected officers of State, 
local, and tribal governments for EPA's ``regulatory proposals'' that 
contain significant Federal intergovernmental mandates. Under section 
205 of UMRA, before EPA promulgates ``any rule for which a written 
statement is required under [UMRA sec.] 202'', EPA must identify and 
consider a reasonable number of regulatory alternatives and either 
adopt the least costly, most cost-effective or least burdensome 
alternative that achieves the objectives of the rule, or explain why a 
different alternative was selected.
    Sections 202, 204, and 205 of UMRA do not apply to today's action 
because the proposed factual determination that Phoenix failed to reach 
attainment does not, in-and-of-itself, constitute a Federal mandate 
because it does not impose an enforceable duty on any entity. Although 
the establishment of a SIP submission schedule may impose such a duty 
on the State, this requirement merely establishes due dates, does not 
set out any requirements not otherwise already present, and thus cannot 
be considered to cost $100 million or more. Finally, section 203 of 
UMRA does not apply to today's action because the regulatory 
requirements proposed today--the SIP submittal schedule--affect only 
the State of Arizona, which is not a small government under UMRA.

D. Rule vs. Adjudication

    It should be noted that each of the three administrative 
requirements described above--E.O. 12866, the Regulatory Flexibility 
Act, and UMRA--apply only with respect to agency actions that fall into 
the category of ``rules'', as defined under those provisions or under 
the Administrative Procedures Act. E.O. 12866 sec. 3 (d)-(e); 
Regulatory Flexibility Act, 5 U.S.C. sec. 603(a), 601(2); Unfunded 
Mandates Reform Act, secs. 202-205, 421. EPA is considering the 
possibility that today's action, to the extent it consists of a 
determination that the Phoenix area failed to attain the ozone NAAQS as 
of the end of 1996, might not be considered a ``rule'' as defined under 
these provisions, and instead might be considered an informal 
adjudication. The basis for this distinction could be that today's 
action constitutes a specific factual determination applicable only to 
the area in question, based on pre-existing facts. Under these 
circumstances, the administrative requirements discussed above might 
not apply. However, EPA is taking this approach under consideration, it 
is not today proposing this approach.

List of Subjects in 40 CFR Part 81

    Environmental protection, Air pollution control, Intergovernmental 
relations, Ozone.

    Authority: 42 U.S.C. sections 7401-7671q.

    Dated: August 25, 1997.
Felicia Marcus,
Regional Administrator.
[FR Doc. 97-23234 Filed 8-29-97; 8:45 am]
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