[Federal Register Volume 63, Number 101 (Wednesday, May 27, 1998)]
[Rules and Regulations]
[Pages 28898-28904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13984]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[AZ-005-ROP FRL-6101-9]


Approval and Promulgation of Implementation Plans; Phoenix, 
Arizona Ozone Nonattainment Area, 15 Percent Rate of Progress Plan and 
1990 Base Year Emission Inventory

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is determining, pursuant to its federal planning authority 
in Clean Air Act (CAA) section 110(c), that the Phoenix, Arizona ozone 
nonattainment area has in place sufficient control measures to meet the 
15 percent rate of progress (ROP) requirement in Clean Air Act (CAA) 
section 182(b)(2). EPA is also approving, under CAA sections 110(k) and 
182(a)(1), the 1990 base year emissions inventory for the Phoenix 
metropolitan area that was submitted to EPA by the State of Arizona on 
April 1, 1993.

EFFECTIVE DATE: June 26, 1998.

ADDRESSES: Copies of the documents relevant to this action, including 
the technical support document (TSD), are contained in the docket for 
this rulemaking. 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. Phone: (415) 744-1248.
Arizona Department of Environmental Quality, Library, 3033 N. Central 
Avenue, Phoenix, Arizona 85012. (602) 207-2217.

    Copies of this notice and the TSD are also available in the air 
programs section of EPA Region 9's website, http://www.epa.gov/
region09.

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. Phone: (415) 744-1248. Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

A. Clean Air Act Requirements

    The Phoenix metropolitan area was originally classified as a 
moderate ozone nonattainment area on November 6, 1991.1 
Section 182(b) of the Clean Air Act (CAA or Act) requires that each 
state in which all or part of a moderate ozone nonattainment area is 
located submit, by November 15, 1992, an inventory of actual emissions 
from all sources, as described in sections 172(c)(3) and 182(a)(1), in 
accordance with guidance provided by the Administrator. Section 
182(b)(1)(A) of the CAA also requires states with moderate and above 
ozone nonattainment areas to develop plans to reduce volatile organic 
compounds (VOC) emissions by 15 percent, net of growth, from the 1990 
baseline. The 15 percent rate of progress (ROP) plans were to be 
submitted by November 15, 1993, and the reductions were required to be 
achieved by November 15, 1996.
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    \1\ The Phoenix metropolitan area was recently reclassified from 
moderate to serious for ozone. 62 FR 60001 (November 6, 1997). 
Today's action relates to the moderate area CAA requirements for a 
1990 base year inventory and a 15 percent ROP demonstration. The 
reclassification does not affect the area's continuing obligation to 
meet these requirements.
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    Although the November 15, 1996 deadline has now passed, the 15 
percent ROP requirement remains. Once a statutory deadline has passed 
and has not been replaced by a later one, the deadline then becomes 
``as soon as possible.'' Delaney v. EPA, 898 F.2d 687, 691 (9th Cir. 
1990). EPA has interpreted this requirement to be ``as soon as 
practicable.'' See the proposed rule for this final action at 63 FR 
3687 (January 26, 1998).2 This requirement is discussed 
further in section II below.
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    \2\ The reader should consult this proposed rule for a more 
detailed discussion of the CAA requirements applicable to today's 
final action, the State's 15 percent ROP plans and EPA's evaluation 
of them, and EPA's proposed 15 percent demonstration.
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B. Phoenix's 15 Percent Plan

    The State of Arizona submitted its initial 15 percent rate of 
progress plan for the metropolitan Phoenix area on November 15, 1993 
and supplemented it on April 8, 1994. On April 13, 1994 EPA found the 
initial plan incomplete because it failed to include, in fully adopted 
and enforceable form, all of the measures relied upon in the 15 percent 
demonstration. This incompleteness finding started the 18-month 
sanction ``clock'' in CAA section 179 and the two-year clock under 
section 110(c) for EPA to promulgate a federal implementation plan 
(FIP) covering the 15 percent ROP requirement. Subsequently, in 
November 1994 and April 1995, Arizona submitted an attainment plan for 
the Phoenix area which updated the 15 percent ROP demonstrations.
    On May 12, 1995, EPA found the revised 15 percent plan and the 
attainment plan complete, turning off the sanctions clock; however, 
under section 110(c), the FIP clock continues until EPA approves the 15 
percent plan. Since 1995, EPA has acted to approve many of the control 
measures relied upon in this plan but has not yet acted on the overall 
15 percent plan.
    The 15 percent ROP demonstration in the State's plan relied 
primarily on improvements to the State's vehicle emissions inspection 
and maintenance (I/M) program. Not all the emission reductions 
attributed to the program have been realized because of technical 
problems with implementing certain parts of the I/M program. In part to 
replace these lost emission reductions

[[Page 28899]]

and in part to ensure continued progress toward attainment of the ozone 
standard in the Phoenix area, the State opted into EPA's federal 
reformulated gasoline (RFG) program in 1997 (60 FR 30260 (June 3, 
1997)) and EPA recently approved the State's own, more stringent 
Cleaner Burning Gasoline (CBG) program which is intended to replace the 
federal program. 63 FR 6653 (February 10, 1998).

C. EPA's 15 Percent ROP Plan

    In August 1996, EPA was sued by the American Lung Association of 
Arizona and others, American Lung Association of Arizona, Inc. et al. 
v. Browner, No. CIV 96-1856 PHX ROS (D. Ariz.) to enforce EPA's 
obligation under CAA section 110(c) to promulgate a federal plan for 
the 15 percent ROP requirement. On July 8, 1997 a consent decree was 
filed in the case establishing a schedule of January 20, 1998 for 
proposing and May 18, 1998 for promulgating a 15 percent ROP plan. 
EPA's obligation to promulgate a federal plan is relieved to the extent 
that it has approved State measures.
    The State's 15 percent plan as revised and submitted in 1993 
through 1995 does not reflect the changes to the control strategy 
necessitated by the problems with the enhanced I/M program and the 
implementation of the federal RFG program, nor does it include the 
recalculation of the target emission level that EPA guidance requires 
if post-1996 emissions reductions (such as those from the RFG program) 
are to be credited to the 15 percent plan. As a result, EPA has not 
received a complete state submittal containing a revised 15 percent ROP 
demonstration that it could act on without additional analysis, public 
hearing and adoption by the State. Thus, EPA is complying with the ALAA 
consent decree today by promulgating, pursuant to its CAA section 
110(c) FIP authority, a federal 15 percent ROP plan for the Phoenix 
area.

D. Proposed Action

    On January 26, 1998 (63 FR 3687), EPA proposed to determine that 
the Phoenix area will have sufficient controls in place by no later 
than April 1, 1999 to meet the 15 percent rate of progress requirement 
and that this date is the most expeditious date practicable for 
achieving the 15 percent target, based on the set of controls EPA has 
proposed for crediting in the 15 percent demonstration and the 
unavailability of any other practicable controls that could advance the 
date. The technical basis for this determination and the list of 
control measures that provide the required 15 percent VOC reduction are 
summarized in the proposal and are fully documented in the technical 
support document (TSD) that accompanies this rulemaking.
    EPA also proposed to approve the 1990 base year emissions inventory 
for the Phoenix metropolitan area that was submitted to EPA by the 
State of Arizona on April 1, 1993. EPA's review of this inventory is 
also summarized in the proposal and fully documented in the TSD.

II. Public Comment and EPA Responses

    EPA received only one set of comments on its proposed determination 
that the Phoenix, Arizona ozone nonattainment area has in place 
sufficient control measures to meet the 15 percent ROP requirement in 
CAA section 182(b)(2). These comments were submitted by the Arizona 
Center for Law in the Public Interest (ACLPI) on behalf of the 
plaintiffs in ALAA.
    EPA has responded to most significant comments below and has 
provided full responses to all comments in the TSD that accompanies 
this rulemaking.
    Comment: ACLPI claims that EPA's proposal is flawed because it does 
not propose FIP measures as an alternative to approving a State 15 
percent plan, and without such an alternative proposal, EPA's decision 
making process here will be inherently biased, unfair and violative of 
the Administrative Procedures Act. ACLPI states that the only way to 
negate this bias and prejudgment is for EPA to immediately propose a 
FIP, so that it has an alternative to approval of the State's 
demonstration.
    Response: This comment, as well as others discussed below, reflects 
a basic misapprehension of the nature of EPA's January 26, 1998 
proposal. Contrary to ACLPI's claims, EPA did not propose to approve or 
otherwise act on Arizona's 15 percent SIP. Rather, the Agency proposed 
a 15 percent ROP FIP under its federal planning authority in CAA 
section 110(c).3
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    \3\ EPA did at the same time propose to approve under CAA 
section 110(k) the State's 1990 Base Year Emission Inventory. This 
inventory was required by CAA section 182(a)(1) and was submitted 
separately from the 15 percent plan. See 63 FR 3688.
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    Nowhere in the proposal did EPA state or otherwise indicate that it 
was proposing to approve the State's 15 percent plan. In fact, in the 
section discussing its FIP obligation under ALAA, EPA concluded that it 
did ``not have in front of it a complete state submittal containing a 
revised 15 percent ROP demonstration that it could act on without 
additional analysis, public hearing and adoption by the State.'' 
Emphasis added. 63 FR 3688. In the conclusion section of the proposal, 
EPA stated that it was acting pursuant to its CAA section 110(c) 
authority in proposing a determination that the Phoenix metropolitan 
area has in place sufficient control measures to meet the 15 percent 
ROP requirement. See 63 FR 3692. CAA section 110(c) provides EPA's 
authority to promulgate FIPs. In contrast, EPA's SIP approval authority 
resides in section 110(k).
    The proposed FIP consists of a federal demonstration that already-
approved State and federal control measures, combined with already-
proposed federal measures, are sufficient to provide for a 15 percent 
ROP in the Phoenix area as required by CAA section 182(b)(1)(A)(i) and 
that there are no other measures which would meaningfully advance the 
date by which the 15 percent ROP will be met. See 63 FR 3692. As a 
consequence of this finding, EPA did not, and was not required to, 
propose any additional federal measures.
    EPA notes that this is not the first time it has promulgated an 
Arizona FIP that consists only of a demonstration that existing State 
and federal measures were adequate. In 1991, EPA promulgated attainment 
and maintenance demonstrations for the Pima County (Tucson), Arizona 
carbon monoxide (CO) nonattainment area that consisted solely of a 
demonstration that existing approved State and federal measures were 
adequate for expeditious attainment and long-term maintenance of the CO 
standard in the area and that no additional federal measures were 
necessary. See 56 FR 5458, 5470 (February 11, 1991).
    Comment: ACLPI asserts that if EPA found that the State has not 
submitted a complete 15 percent ROP demonstration, it should have 
disapproved it on that basis instead of proceeding to supply its own 
data and analysis to produce a showing on the State's behalf, an 
approach which conflicts with the Act. ACLPI states that EPA's 
statutory duty is to approve or disapprove what the state submits and 
that EPA cannot write a plan and pretend it is the State's. Finally, 
ACLPI states that Arizona has had more than ample time to submit its 15 
percent plan and if the State's demonstration is inadequate, then EPA 
must disapprove it and adopt a FIP.
    Response: As discussed above, EPA proposed a 15 percent ROP 
demonstration under its federal planning authority in CAA section 
110(c) and did not propose any action on Arizona's 15 percent SIP. When

[[Page 28900]]

acting in place of the State pursuant to a FIP under section 110(c), 
EPA ``stands in the shoes of the defaulting State, and all the rights 
and duties that would otherwise fall to the State accrue instead to 
EPA.'' Central Arizona Water Conservation District v. EPA, 990 F.2d 
1531, 1541 (9th Cir. 1993). Thus, in preparing this FIP demonstration, 
it is EPA's responsibility to supply its own data and analyses of that 
data and to produce the required showing that would otherwise be the 
responsibility of the State. Thus, the approach EPA took in this 
rulemaking is fully consistent with the Act.
    EPA did base its proposed determination in part on a reanalysis of 
the State's plan. This approach is reasonable given that the State had 
already prepared an extensive and competent technical evaluation of 
emission sources in the Phoenix area and the effect of controls on 
reducing emissions from those sources. In preparing its own 
demonstration, EPA did modify some of the information in the State's 
plan to reflect the actual implementation status of the State's I/M 
program and the implementation of new federal and state controls. 
However, a federal plan based on technical information contained in a 
State plan does not constitute or imply approval of that State plan.
    Since no action was proposed in regard to the State's 15 percent 
ROP plan, comments relating to the appropriate disposition of that plan 
are not relevant to this rulemaking. EPA notes that it is not required 
in this instance to disapprove the State plan prior to promulgating a 
replacement FIP under CAA section 110(c).
    EPA acknowledges that it is required by the Act to take action on 
submitted SIPs. However, at this time inaction on the State's 15 
percent plan in no way affects EPA's promulgation of this FIP.
    Comment: ACLPI comments that EPA is extending until April 1, 1999 
the time for achieving the 15 percent reduction that was supposed to 
have been achieved by November 15, 1996 and has justified this lengthy 
extension by adopting several policies that ACLPI asserts are not 
consistent with applicable case law or the Clean Air Act.
    First, ACLPI states that although it agrees with EPA that Delaney 
v. EPA, 898 F.2d 687, 691 (9th Cir. 1990) supplies the relevant test 
for compliance once a statutory deadline has passed, it disagrees with 
the Agency's interpretation that under the Delaney case, the 
appropriate standard is ``as soon as practicable.'' ACLPI notes that 
the actual phrase used by the Delaney court was ``as soon as 
possible,'' using every available control measure and asserts that the 
difference between ``practicable'' and ``possible'' is not merely 
semantic. According to ACLPI, ``practicability,'' as used in the Act, 
allows for consideration of various economic and social factors in 
determining the required speed of progress. ACLPI believes that to say 
that the pace for compliance after the Clean Air Act deadline has 
passed is still as soon as ``practicable'' is to read the deadline out 
of the statute which is why the Delaney court allegedly set a much more 
stringent test--compliance as soon as possible--for areas that miss a 
statutory deadline.
    Response: In Delaney, the Ninth Circuit interpreted the Clean Air 
Act requirement for EPA to develop a CO federal implementation 
attainment plan for two Arizona areas after the passage of the then 
applicable statutory attainment date of December 31, 1987. The Court 
concluded that after the passage of that date, ``the national ambient 
air quality standards must be attained as soon as possible with every 
available measure * * *.'' 898 F.2d at 691. The Delaney Court arrived 
at this test by relying on a statement in an EPA guidance document 
providing that if a state plan's ``control measures are not adequate to 
demonstrate attainment by 1987, additional measures which can be 
implemented after 1987 must be identified and adopted and attainment 
must be demonstrated by the earliest possible date * * *. 46 Fed. Reg. 
7186 (January 22, 1981).'' 4 In another part of the opinion 
concerning reasonably available control measures, the Court noted 
another EPA guidance document specifying that a control measure would 
be deemed not reasonably available if it would not advance attainment, 
would cause substantial widespread and long-term adverse impact, or 
would take too long to implement. 898 F.2d at 692.
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    \4\ Following the Delaney opinion, EPA revoked certain portions 
of this guidance document in order to clarify that the Agency did 
not intend to require post-1987 plans to include every conceivable 
control measure. 55 FR 38326 (September 18, 1990).
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    EPA believes that the appropriate interpretation of Delaney's ``as 
soon as possible'' test is informed by the Court's acknowledgment of 
certain limitations on the speed of compliance as expressed in its 
citation of the guidance related to the scope of reasonably available 
measures. Therefore, consistently since the Ninth Circuit's opinion, 
EPA has framed the ``as soon as possible'' Delaney test, in the post-
statutory attainment deadline context, to mean `` `as expeditiously as 
practicable,' by a fixed date,'' and has stated that ``[t]he statute 
does not require measures that are absurd, unenforceable, or 
impracticable.'' 55 FR 36458, 36505 (Sept. 5, 1990).5 In 
addition to applying this interpretation of the Delaney test to 
attainment plans after the passage of the statutory attainment 
deadline, the Agency has also consistently applied it in its actions on 
plans that address the 15 percent requirement following the November 
15, 1996 statutory deadline for these plans. See, e.g., 62 FR 31343, 
31345-31346 (June 9, 1997) approving the 15 percent ROP SIP for 
Philadelphia; 62 FR 33999, 34000-34001 (June 24, 1997) approving the 15 
percent ROP SIP for the northern Virginia.
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    \5\ In its proposal of an attainment CO FIP for Arizona, EPA 
restated its interpretation of the Delaney test as requiring ``a 
demonstration of attainment as expeditiously as practicable 
utilizing all measures available to the federal government that are 
capable of advancing the attainment date, short of those producing 
absurd results, such as severe socioeconomic disruptions.'' 55 FR 
41204, 41210 (October 10, 1990).
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    Moreover, EPA notes that one court, while finding Delaney not 
precisely on point for its purpose of fashioning a remedy in a 
citizen's enforcement action, nevertheless made some instructive 
observations on the relationship between the two standards. The Court 
noted that:

    although the Delaney opinion utilized the `as soon as possible' 
standard employed by EPA guidelines, it did not do so out of 
rejection of the `practicable' standard or out of concern that the 
two standards differed. Rather it simply had no occasion to compare 
them. Indeed the Delaney court appeared to blur them when it 
criticized Arizona for rejecting measures without demonstrating that 
such measures were `impracticable' or unreasonable.

Citizens for a Better Environment v. Deukmejian, 746 F. Supp. 976, 985 
(N.D. Cal. 1990). The Court went on to observe that:

    [a]s a practical matter, however, no Court will use its 
equitable powers to impose remedies that are irrational, albeit 
``possible.'' Thus as long as time is considered paramount, and the 
term ``practical'' is strictly construed in keeping with the 
purposes of the Act, the ``as expeditiously as practicable'' 
standard should yield no less results than an ``as soon as 
possible'' standard.

The Court concluded that ``when properly interpreted, there is no 
practical difference between the two standards.'' Id. EPA agrees with 
this assessment.
    Furthermore, while EPA believes that it is consistent with the 
Delaney test to take into account socioeconomic factors as described 
above, the issue is effectively moot with regard to this

[[Page 28901]]

rulemaking. In proposing, for the purposes of its 15 percent 
demonstration, that ``as soon as practicable'' is April 1, 1999, the 
Agency did not consider any economic or social factors. Rather the 
factors EPA considered were the Agency's authority and resources to 
implement a measure, whether the measure provided a significant 
emission reduction, and whether the measure could be implemented soon 
enough to meaningfully advance the date by which the 15 percent 
reduction could be demonstrated. The Agency believes, as discussed 
above and in response to an additional comment below, that the 
consideration of these factors is entirely appropriate and consistent 
with both the Clean Air Act and the Delaney opinion.
    Comment: ACLPI comments that in its proposed action, EPA asserted 
that the 15 percent ROP need not be achieved until April 1, 1999 
because (a) that is the soonest such reductions will be achieved under 
the State's adopted programs and various adopted and proposed EPA 
programs and (b) no other measures are available that would reduce VOC 
emissions by more than 0.5 percent or advance achievement of the 15 
percent ROP by three or more months. ACLPI asserts that there is 
nothing in the Clean Air Act or Delaney that allows de minimis 
exemptions for percent reductions or months of delay.
    Response: The inherent authority of administrative agencies to 
exempt de minimis situations from a statutory requirement has been 
upheld in contexts where an agency is invoking a de minimis exemption 
as ``a tool to be used in implementing the legislative design when 
``the burdens of regulation yield a gain of trivial or no value.'' 
Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1979).
    In this rulemaking, EPA has invoked this de minimis doctrine for 
gauging when the promulgation of a new control would or would not 
contribute to meeting the statutory requirement for a 15 percent ROP in 
the Phoenix area as soon as is practicable. EPA has interpreted the 
``as soon as practicable'' test to require a showing that the 
applicable implementation plan contains all VOC control measures that 
are practicable for the area and that meaningfully accelerate the date 
by which the 15 percent level is achieved. Measures that provide only 
an insignificant additional amount of reductions or could not be 
implemented soon enough to meaningfully advance the date by which the 
15 percent is demonstrated are not required to be implemented. See 
Memorandum, John S. Seitz, Director of the Office of Air Quality 
Planning and Standards, and Richard B. Ossias, Deputy Associate General 
Counsel to Regional Air Division Directors; ``15 Percent VOC SIP 
Approvals and the `As Soon As Practicable' Test;'' February 12, 1997.
    For determining whether additional measures were necessary for this 
demonstration, EPA proposed to define ``significant emission 
reduction'' to be equal to or more than one-half of one percent (0.5 
percent) of the total emission reductions needed to meet the 15 percent 
ROP requirement in 1999 for the Phoenix nonattainment area, the 
equivalent of 0.5 metric tons per day (mtpd). Thus any measures that 
would result in less than a 0.5 mtpd reduction by April 1, 1999 were 
considered to yield de minimis reductions and were rejected from 
further review.
    In the context of this rulemaking where the 15 percent ROP will be 
achieved within one year, 0.5 mtpd is truly de minimis, representing 
one two-hundredths of the emission reductions needed to show the 15 
percent ROP. In terms of control requirements, more than 200 of these 
``de minimis'' measures would be needed to demonstrate 15 percent ROP 
in Phoenix. The federal imposition of a measure or group of measures 
with so little impact on the ROP demonstration would be nonsensical. 
Thus a regulation imposing one of these de minimis measures would 
indeed yield ``a gain of trivial or no value.'' As such, a de minimis 
exemption is an entirely ``appropriate tool to be used in implementing 
the legislative design'' of the CAA's rate of progress and general FIP 
requirements. Alabama Power at 360.
    EPA proposed to define ``meaningfully accelerate the date by which 
the 15 percent is demonstrated'' as three or more months. EPA has 
projected that the 15 percent ROP will be demonstrated in the Phoenix 
area by April 1, 1999. Therefore, if a measure could advance that 
demonstration date to on or before January 1, 1999, then EPA would 
consider that the measure meaningfully accelerated the 15 percent ROP. 
In the proposal, EPA explained its selection of three months as a 
balance between the environmental benefit of advancing the date and the 
potential to trivialize the ``as soon as practicable'' demonstration. 
63 FR 3687, 3691.
    The 15 percent ROP progress requirement is part of the Act's 
overall scheme for ozone attainment. In Phoenix, ozone exceedances 
occur during the hot-weather months of May through October. EPA's 
proposed three month ``de minimis'' period (January 1 to April 1) falls 
well before the beginning of this season and as a result the ozone 
benefit of additional controls during this period would be at best, 
exceedingly small. Thus, the federal implementation of a measure or 
measures whose sole effect would be to advance by less than 3 months 
from the April 1, 1999 date on which the 15 percent ROP is met, would 
clearly yield ``a gain of trivial or no value.''
    EPA does not agree that Delaney bars the use of de minimis 
exemptions. As discussed previously, the Delaney court itself 
recognized limits on its conclusion that once a statutory deadline has 
passed the new deadline becomes ``as soon as possible with all 
available measures.'' These limits include not requiring measures that 
would not advance attainment, would cause substantial widespread and 
long-term adverse impact, or would take too long to implement. These 
limits clearly indicate that the Delaney court did not expect EPA to 
impose controls that yield no benefit or a benefit that is outweighed 
by the implementation burden. Thus, EPA's use of de minimis exemptions 
is consistent with Delaney.
    Comment: ACLPI notes that EPA predicts that the State will meet the 
15 percent reduction target by April 1, 1999 with just 0.3 tons per day 
to spare and argues that this is not a credible demonstration given the 
size of the inventory and the many uncertainties in EPA's emission 
reduction predictions. ACLPI asserts that the record here shows that 
emission reductions expected from control measures do not always 
materialize.
    Response: The statutory requirement for 15 percent ROP 
demonstrations is met when the plan demonstrates that it achieves ``at 
least a 15 percent'' reduction. See section 182(b)(1)(A)(i). Neither 
the Act nor EPA guidance requires 15 percent ROP demonstrations to 
include a margin of safety; therefore, reductions greater than the 
exact amount needed to demonstrate the 15 percent ROP are not required. 
As a result, the amount of excess emissions in the 15 percent 
demonstration is immaterial.
    Both the base year inventory used to calculate the 15 percent 
target emission level and the projected emission inventories and 
emission reduction calculations were prepared using generally-accepted 
methodologies consistent with Agency guidance. See the TSD for this 
rulemaking. As such, they provide a credible and appropriate basis for 
the 15 percent demonstration and additional adjustments to account for 
uncertainties are not warranted or required. EPA notes that it already 
factored into its 15 percent ROP

[[Page 28902]]

demonstration available information on the implementation status of the 
control measures.
    Because ACLPI neither explains how the size of the inventory 
relates to the credibility of the demonstration nor provides specifics 
on the ``many uncertainties in EPA's emission reduction predictions'' 
or instances where the emission reductions may not materialize, EPA is 
not able to further respond to this comment.
    Comment: ACLPI comments that EPA proposed to credit 4.4 tons per 
day in emission reductions from three federal rulemakings that are 
still at the proposal stage and asserts that such an approach violates 
the Act and EPA policy. ACLPI supports that assertion by stating that 
under section 182(b)(1)(c) of the Act, credit can be claimed only for 
rules ``promulgated'' by EPA and that EPA policy and the Act also 
forbid the granting of emission reduction credit for measures that have 
not been legally adopted. ACLPI further argues that there is no 
assurance whatsoever that the proposed rules will be adopted in a form 
and on a schedule that will assure the projected emission reductions 
and without the credit claimed for these measures, the ROP plan does 
not demonstrate the required 15 percent reduction and therefore is 
legally deficient.
    Response: Consistent with the Clean Air Act, its policies and its 
actions on other 15 percent plans, EPA is crediting three proposed 
national rules in this 15 percent demonstration: consumer products, 
autobody refinishing and architectural and industrial maintenance 
coatings. As noted in the proposal, each of these rules are required 
under CAA section 183(e) and the Agency had recently been sued to 
enforce the requirement to promulgate these rules. Since the proposal 
the Agency has agreed to a schedule for their promulgation by August 
15, 1998. See lodged consent decree in Sierra Club v. Browner, CIV No. 
97-984 PLF (D.D.C.).
    CAA section 182(b)(1)(A) requires states to submit their 15 percent 
SIP revisions by November, 1993. Section 182(b)(1)(C) provides the 
following general rule for creditability of emissions reductions 
towards the 15 percent requirement: ``emissions reductions are 
creditable toward the 15 percent required * * * to the extent they have 
actually occurred, as of [November, 1996], from the implementation of 
measures required under the applicable implementation plan, rules 
promulgated by the Administrator, or a permit under Title V.'' CAA 
section 182(b)(1)(D) further states that certain emissions reductions 
are not creditable, including reductions from certain control measures 
required prior to the 1990 Amendments.
    These creditability provisions are ambiguous. Read literally, they 
provide that, although the 15 percent SIPs are required to be submitted 
by November 1993, emissions reductions are creditable as part of those 
SIPs only if ``they have actually occurred, as of [November 1996]''. 
This literal reading renders the provision internally inconsistent. 
Accordingly, EPA believes that the provision should be interpreted to 
provide, in effect, that emissions reductions are creditable ``to the 
extent they will have actually occurred, as of [November, 1996], from 
the implementation of [the specified measures]'' (the term ``will'' is 
added). This interpretation renders the provision internally 
consistent.
    CAA section 182(b)(1)(C) explicitly includes as creditable 
reductions those resulting from ``rules promulgated by the 
Administrator.'' This provision does not state the date by which those 
measures must be promulgated, i.e., does not indicate whether the 
measures must be promulgated by the time the 15 percent SIPs were due 
(November, 1993), or whether the measures may be promulgated after this 
due date.
    Because the statute is silent on this point, EPA has discretion to 
develop a reasonable interpretation under Chevron U.S.A. Inc. v. NRDC, 
467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). EPA believes it 
reasonable in the first instance to interpret CAA section 182(b)(1)(C) 
to allow areas to credit reductions from federal measures as long as 
those reductions are expected to occur by November, 1996, the date for 
achieving the 15 percent ROP, even if the federal measures are not 
promulgated by the November, 1993 due date for the 15 percent SIPs.
    EPA's interpretation is consistent with the Congressionally-
mandated schedule for promulgating regulations for consumer and 
commercial products, under section 182(e) of the Act. This provision 
requires EPA to promulgate regulations controlling emissions from 
consumer and commercial products that generate emissions in 
nonattainment areas. Under the statutory schedule, by November, 1993--
the same date that the States were required to submit the 15 percent 
SIPs--EPA was to issue a report and establish a rulemaking schedule for 
consumer and commercial products. Further, EPA was to promulgate 
regulations for the first set of consumer and commercial products by 
November, 1995. It is reasonable to conclude that Congress anticipated 
that reductions from these measures would be creditable as part of the 
15 percent SIPs, as long as those reductions were to occur by November, 
1996.
    EPA has also established specific policies interpreting the Act 
that allow crediting of these proposed national measures in 15 percent 
plans. See Memorandum, John S. Seitz, Director, OAQPS to Regional Air 
Division Directors; ``Credit for the 15 Percent Rate-of-Progress Plans 
for Reductions from the Architectural and Industrial Maintenance 
Coating Rule and the Autobody Refinishing Rule;'' November 29, 1994; 
Memorandum, John S. Seitz, Director, OAQPS to Regional Air Division 
Directors; ``Credit for the 15 Percent Rate-of-Progress Plans for 
Reductions from the Architectural and Industrial Maintenance (AIM) 
Coating Rule;'' March 22, 1995; Memorandum, John S. Seitz, Director, 
OAQPS to Regional Air Division Directors; ``Regulatory Schedule for 
Consumer and Commercial Products under Section 182(e) of the Clean Air 
Act;'' June 22, 1995; and Memorandum, John S. Seitz, Director of the 
Office of Air Quality Planning and Standards, and Richard B. Ossias, 
Deputy Associate General Counsel to Regional Air Division Directors; 
``15 Percent VOC SIP Approvals and the `As Soon As Practicable' Test;'' 
February 12, 1997.
    While this analysis focuses on SIPs, it applies equally to FIPs. As 
noted before, EPA ``stands in the shoes of the State'' when 
promulgating a FIP and all the rights and duties available to a state 
under the Act become available to EPA in a FIP.
    The above analysis also describes statutory provisions that include 
specific dates for 15 percent SIP submittals (November 15, 1993) and 
implementation (November 15, 1996). While these dates have expired and 
new dates for submittal (in this case, promulgation) and implementation 
have been developed, EPA does not believe that the expiration of the 
statutory dates, and the development of new ones, invalidates the 
conclusion that reductions from federal measures promulgated after the 
date the 15 percent plan is submitted (or promulgated) can be counted 
toward the ROP demonstration.
    Because it has agreed to a schedule in a proposed consent decree to 
promulgate these national rules by August 15, 1998, EPA intends to 
promulgate the rules within 3 months of this FIP promulgation and well 
before the April 1, 1999 15 percent ROP demonstration date. As a 
result, crediting reductions from these federal measures is also 
sensible from an

[[Page 28903]]

administrative standpoint. If it did not credit these national 
measures, EPA would need to promulgate compensating rules, applicable 
only to Phoenix, to replace their 4.4 mtpd benefit. EPA has already 
shown that there are no other measures available that would 
meaningfully advance the April 1999 date by which the 15 percent ROP is 
demonstrated in the Phoenix area, thus any additional measures would 
not result in reductions any sooner than the proposed national rules. 
Nor would these potential Phoenix-only measures result in any greater 
reductions creditable to the 15 percent plan since they would simply 
substitute for the reductions from the national rules.6 
Thus, if it did not credit the national measures, EPA would simply be 
engaging in a wasteful rulemaking exercise to promulgate measures in 
May, 1998 that it could almost immediately withdraw when the national 
rules are promulgated in August, 1998.7
---------------------------------------------------------------------------

    \6\ The statutory requirement EPA is fulfilling here is to 
demonstrate a fixed emission reduction of 15 percent from 1990 base 
year levels. Emission reductions in excess of this fixed amount are 
unnecessary. Since EPA has already concluded that the proposed 
national measures combined with other adopted state and federal 
measures will result in the required 15 percent ROP as soon as 
practicable, additional Phoenix-only federal measures are not 
necessary.
    \7\ In its rulemakings, EPA strives to take the least intrusive 
and most sensible regulatory approach that achieves the statutory 
requirements. In this situation, it made no regulatory sense to 
ignore these pending national measures (which have already been 
proposed and have near-term date for promulgation) that will apply 
automatically to Phoenix in favor of promulgating wholly new 
Phoenix-specific measures.
---------------------------------------------------------------------------

    The fact that EPA cannot determine precisely the amount of credit 
available for the proposed national measures does not preclude granting 
them credit. The credit can be granted as long as EPA is able to 
develop reasonable estimates of the amount of VOC reductions from the 
measures EPA expects to promulgate. EPA believes that it is able to 
develop reasonable estimates, particularly because it has already 
proposed and taken comment on the measures at issue, and is expecting 
to promulgate final rules in little less than 3 months. Moreover, the 
use of estimated emissions and emission reductions rather than actual 
measurements is a common and necessary practice in attainment and 
reasonable further progress demonstrations because actual measurements, 
even for promulgated measures, are seldom available. For example, EPA's 
document to estimate emissions, ``Compilation of Air Pollutant Emission 
Factors'', January 1995, AP-42), provide emission factors used to 
estimate emissions from various sources and source processes. AP-42 
emission factors have been used, and continue to be used, by states and 
EPA to determine base year emission inventory figures for sources and 
to estimate emissions from sources where such information is needed.
    This rulemaking is based on the best information currently 
available to the Agency on the projected reductions from these proposed 
national rules. If these projected reductions turn out to be greater 
than the amount it determines to be appropriate after promulgation of 
the final rules, then EPA will take appropriate action to revise this 
15 percent demonstration.
    Comment: ACLPI argues that contrary to EPA's assertion there are a 
number of additional control measures that are currently available to 
advance the time for achieving the 15 percent ROP including the use of 
California's diesel fuel standards (``CARB diesel'') and additional 
controls on consumer products, both of which are identified in the 
Report of the Arizona Governor's Air Quality Strategies Task Force 
(1998) (``1998 Task Force Report'') as are a number of other measures.
    Response: ACLPI is correct that the 1998 Task Force Report shows 
that adoption of the CARB diesel fuel standards would reduce Phoenix 
VOC emissions by 7.1 mtpd in 1999. The report, however, also states 
that implementation of this measure would require at least two years 
and thus could not occur prior to mid-2000, more than a year after the 
April 1, 1999 demonstration date for the 15 percent ROP. The State's 
consultant concluded that the two-year implementation schedule was the 
minimum necessary after reviewing the refining capacity available to 
produce CARB diesel fuel for the Phoenix market. See 1998 Task Force 
Report, p. 77. Since EPA has no grounds to dispute the consultant's 
conclusions (which were endorsed by the Task Force) regarding the 
minimum implementation schedule for CARB diesel, it finds the measure 
would not advance the date by which the 15 percent ROP would be met.
    The Task Force recommended adoption of California's phase I and 
phase II consumer product standards. These standards are more stringent 
than EPA's proposed national standards for 13 product categories not 
currently regulated in Phoenix: single phase aerosol air fresheners, 
engine degreasers, solid or paste forms of furniture maintenance 
products, non-aerosol forms of glass cleaners, hairsprays, aerosol 
insect repellants, nail polish removers, automotive brake cleaners, 
aerosol dust aids, fabric protectants, crawling bug insecticides, and 
personal fragrance products.
    Except for hairsprays, California's more stringent limits are 
already in place. The compliance date for the final VOC limit for 
hairsprays is June 1, 1999, two months after the April 1, 1999 
demonstration date for 15 percent ROP in Phoenix. The majority of the 
emission reductions (or approximately 0.9 metric tons per day) that 
would result from implementing CARB's consumer products rule in Phoenix 
come from the final hairspray standard. The balance of the tighter CARB 
limits produce only a 0.23 mtpd reduction, which EPA finds to be de 
minimis.
    The 1998 Governor's Task Force evaluated and recommended controls 
for not only VOC but also nitrogen oxides, carbon monoxide, particulate 
matter and regional haze. These controls range from I/M program 
improvements to improved compliance with the area's fugitive dust rules 
and include numerous study proposals (e.g., Transit Task Force). Since 
ACLPI was not specific about what additional control measures EPA 
should evaluate for this plan, it is not possible for EPA to respond in 
more detail to this comment.

III. Conclusion

    Pursuant to its federal planning authority under CAA section 110(c) 
and for the reasons discussed above, EPA is determining that the 
Phoenix metropolitan area has in place or will have in place sufficient 
control measures to meet the 15 percent ROP requirement for VOCs in CAA 
section 182(b)(1)(A) as soon as practicable.
    EPA is also approving the State's 1990 base year inventory for the 
Phoenix area under CAA sections 110(k)(2) and 182(a)(1).
    Under 40 CFR 93.118(e), this final action establishes a VOC 
conformity budget of 76.7 metric tons per average summer day based on 
the inventory methodology and mobile source emissions model used for 
this 15 percent ROP demonstration. This conformity budget is in 
addition to, and not in lieu of, the conformity budget established in 
the MAG 1993 Ozone Plan for the Maricopa County Area, Modeling 
Attainment Demonstration (October 1994).

IV. Administrative Requirements

A. Executive Order (E.O.) 12866

    The Office of Management and Budget has exempted this action from 
E.O. 12866 review.

[[Page 28904]]

B. Regulatory Flexibility Act

    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.
    This action simply presents the analysis of the emission impacts on 
the Phoenix metropolitan area of already adopted or proposed State and 
federal rules. This action neither promulgates additional measures nor 
requires Arizona or its local jurisdictions to adopt or implement 
additional measures beyond those that they currently have adopted and 
implemented or have been proposed or implemented at the federal level. 
As such, it does not regulate any entities. Therefore, pursuant to 5 
U.S.C. 605(b), EPA certifies that today's 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 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 section 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 section] 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.
    As explained above, sections 202, 203, 204, and 205 of UMRA do not 
apply to today's action because it does not impose an enforceable duty 
on or otherwise affect any entity. Therefore, EPA is not required, and 
has not taken, any actions under UMRA.

D. E.O. 13045: Protection of Children From Environmental Health Risks 
and Safety Risks

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks (62 FR 19885 (April 23, 
1997)), applies to any rule that EPA determines (1) ``economically 
significant'' as defined under E.O. 12866 and (2) the environmental 
health or safety risk addressed by the rule has a disproportionate 
effect on children. If the regulatory action meets both criteria, the 
Agency must evaluate the environmental health or safety effects of the 
planned rule on children; and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    Today's final action promulgating a demonstration that the Phoenix 
area meets the 15 percent VOC ROP requirement in CAA section 
182(b)(1)(A)(i) is not subject to E.O. 13045 because it is not an 
economically significant regulatory action as defined by E.O and 
because it does not involve decisions on environmental health risks or 
safety risks that may disproportionately affect children.

E. Submission to Congress and the General Accounting Office

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. This rule is not a 
``major'' rule as defined by 5 U.S.C. 804(2).

F. 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 July 27, 1998. 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, Intergovernmental 
relations, Ozone.

    Dated: May 18, 1998.
Carol M. Browner,
Administrator.

    Title 40, Chapter I of the Code of Federal Regulations is amended 
as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart D--Arizona

    2. Section 52.123 is amended by adding paragraph (g) to read as 
follows:


Sec. 52.123  Approval status.

* * * * *
    (g) Pursuant to the federal planning authority in section 110(c) of 
the Clean Air Act, the Administrator finds that the applicable 
implementation plan for the Maricopa County ozone nonattainment area 
demonstrates the 15 percent VOC rate of progress required under section 
182(b)(1)( A)(i).

[FR Doc. 98-13984 Filed 5-26-98; 8:45 am]
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