[Federal Register Volume 64, Number 241 (Thursday, December 16, 1999)]
[Proposed Rules]
[Pages 70548-70562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31723]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX101-2-7421; FRL-6503-4]


Approval and Promulgation of Implementation Plans; Texas; 
Proposed Conditional Approval or Proposed Disapproval of the Attainment 
Demonstration State Implementation Plan for the Houston/Galveston Ozone 
Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to conditionally approve the State 
Implementation Plan (SIP) revision for the Houston/Galveston 
nonattainment area submitted by the State of Texas on May 19, 1998. 
This submission was supplemented by a modeled control strategy and a 
transportation conformity budget on November 15, 1999. The EPA is also 
proposing, in the alternative, to disapprove the Attainment 
Demonstration SIP submittal for the HGA area.

DATES: Comments must be received on or before February 14, 2000.

ADDRESSES: Written comments on this action should be addressed to Mr. 
Thomas Diggs, Chief, Air Planning Section (6PD-L), at the EPA Region 6 
Office listed below.
    Copies of the documents relevant to this action, including the 
technical support document, are available for public inspection during 
normal business hours at the following locations. Interested persons 
wanting to examine these documents should make an appointment with the 
appropriate office at least two working days in advance.

Environmental Protection Agency, Region 6, Air Planning Section (6PD-
L), Multimedia Planning and Permitting Division, 1445 Ross Avenue, 
Dallas, Texas 75202-2733, telephone: (214) 665-7214.
Texas Natural Resource Conservation Commission, Office of Air Quality, 
12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Guy R. Donaldson, Air Planning 
Section (6PD-L), Multimedia Planning and Permitting Division, 
Environmental Protection Agency, Region 6, 1445 Ross Avenue, Dallas, 
Texas 75202-2733, telephone: (214) 665-7242.

SUPPLEMENTARY INFORMATION: This section provides background information 
on attainment demonstration SIPs for the 1-hour ozone national ambient 
air quality standard (NAAQS) and an analysis of the 1-hour ozone 
attainment demonstration SIP submittal for the Houston/Galveston area.

Table of Contents

I. Background Information
II. EPA's Review and Technical Information
III. Administrative Requirements

I. Background Information

A. What Is the Basis for the State's Attainment Demonstration SIP?

1. Clean Air Act (CAA) Requirements
    The CAA requires EPA to establish national ambient air quality 
standards (NAAQS or standards) for certain widespread pollutants that 
cause or contribute to air pollution that is reasonably anticipated to 
endanger public health or welfare. CAA Secs. 108 and 109. In 1979, EPA 
promulgated the 1-hour 0.12 parts per million (ppm) ground-level ozone 
standard. 44 FR 8202 (Feb. 8, 1979). Ground-level ozone is not emitted 
directly by sources. Rather, emissions of nitrogen oxides 
(NOX) and volatile organic compounds (VOCs) react in the 
presence of sunlight to form ground-level ozone. NOX and VOC 
are referred to as precursors of ozone.

[[Page 70549]]

    An area exceeds the 1-hour ozone standard each time an ambient air 
quality monitor records a 1-hour average ozone concentration above 
0.124 ppm. An area is violating the standard if, over a consecutive 
three-year period, more than three exceedances occur, or would have 
been expected to occur, at any one monitor. The CAA, as amended in 
1990, required EPA to designate as nonattainment any area that was 
violating the 1-hour ozone standard, generally based on air quality 
monitoring data from the three-year period from 1987-1989. CAA 
Sec. 107(d)(4); 56 FR 56694 (Nov. 6, 1991). The CAA further classified 
these areas, based on the area's design value, as marginal, moderate, 
serious, severe or extreme. CAA Sec. 181(a). Marginal areas were 
suffering the least significant air pollution problems while the areas 
classified as severe and extreme had the most significant air pollution 
problems.
    The control requirements and dates by which attainment needs to be 
achieved vary with the area's classification. Marginal areas are 
subject to the fewest mandated control requirements and have the 
earliest attainment date. Severe and extreme areas are subject to more 
stringent planning requirements but are provided more time to attain 
the standard. Under section 181(a)(1) and (2),serious areas are 
required to attain the 1-hour standard by November 15, 1999, and severe 
areas are required to attain by November 15, 2005 (Severe-15) or 
November 15, 2007 (Severe-17). The Houston/Galveston area is classified 
as severe-17 and its attainment date is November 15, 2007.
    Under section 182(c)(2) and (d) of the CAA, serious and severe 
areas were required to submit by November 15, 1994, demonstrations of 
how they would attain the 1-hour standard and how they would achieve 
reductions in VOC emissions of 9 percent for each three-year period 
until the attainment year (rate-of-progress or ROP). (In some cases, 
NOX emission reductions can be substituted for the required 
VOC emission reductions.) Today, EPA is proposing action on the 
attainment demonstration SIP submitted by Texas for the Houston/
Galveston area, including the State's commitment to submit by December 
2000 the adopted measures necessary for attainment by 2007. The EPA is 
also proposing action on the State's commitment to submit by December 
2000 ROP target calculations and the adopted measures to achieve ROP 
until the attainment year. (Note, EPA will be taking action on the 
emission reduction plan for the three year period from 1996-1999 in a 
separate action.) In addition, elsewhere in this Federal Register, EPA 
is today proposing to take action on nine other serious or severe 1-
hour ozone attainment demonstration and in some cases ROP SIPs. The 
additional nine areas are Greater Connecticut, Springfield (Western 
Massachusetts), New-York-North New Jersey-Long Island, Baltimore, 
Philadelphia-Wilmington-Trenton, Metropolitan Washington, D.C., 
Atlanta, Milwaukee-Racine, and Chicago-Gary-Lake County.
    In general, an attainment demonstration SIP includes a modeling 
analysis component showing how the area will achieve the standard by 
its attainment date and the control measures necessary to achieve those 
reductions. Another component of the attainment demonstration SIP is a 
motor vehicle emissions budget for transportation conformity purposes. 
Transportation conformity is a process for ensuring that States 
consider the effects of emissions associated with new or improved 
federally-funded roadways on attainment of the standard. As described 
in section 176(c)(2)(A), attainment demonstrations necessarily include 
the estimates of motor vehicle emissions that are consistent with 
attainment, which then act as a budget or ceiling for the purposes of 
determining whether transportation plans and projects conform to the 
attainment SIP.
2. History and Time Frame for the State's Attainment Demonstration SIP
    Notwithstanding significant efforts by the States, in 1995 EPA 
recognized that many States in the eastern half of the United States 
could not meet the November 1994, time frame for submitting an 
attainment demonstration SIP because emissions of NOX and 
VOCs in upwind States (and the ozone formed by these emissions) 
affected these nonattainment areas and the full impact of this effect 
had not yet been determined. This phenomenon is called ozone transport.
    On March 2, 1995, Mary D. Nichols, EPA's then Assistant 
Administrator for Air and Radiation, issued a memorandum to EPA's 
Regional Administrators acknowledging the efforts made by States but 
noting the remaining difficulties in making attainment demonstration 
SIP submittals.1 Recognizing the problems created by ozone 
transport, the March 2, 1995 memorandum called for a collaborative 
process among the States in the eastern half of the country to evaluate 
and address transport of ozone and its precursors. This memorandum led 
to the formation of the Ozone Transport Assessment Group (OTAG) 
2 and provided for the States to submit the attainment 
demonstration SIPs based on the expected time frames for OTAG to 
complete its evaluation of ozone transport.
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    \1\ Memorandum, ``Ozone Attainment Demonstrations,'' issued 
March 2, 1995. A copy of the memorandum may be found on EPA's web 
site at http://www.epa.gov/ttn/oarpg/t1pgm.html
    \2\ Letter from Mary A. Gade, Director, State of Illinois 
Environmental Protection Agency to Environmental Council of States 
Members, dated April 13, 1995.
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    In June 1997, OTAG concluded and provided EPA with recommendations 
regarding ozone transport. The OTAG generally concluded that transport 
of ozone and the precursor NOX is significant and should be 
reduced regionally to enable States in the eastern half of the country 
to attain the ozone NAAQS.
    In recognition of the length of the OTAG process, in a December 29, 
1997, memorandum, Richard Wilson, EPA's then Acting Assistant 
Administrator for Air and Radiation, provided until April 1998 for 
States to submit the following elements of their attainment 
demonstration SIPs for serious and severe nonattainment areas: (1) 
Evidence that the applicable control measures in subpart 2 of part D of 
title I of the CAA were adopted and implemented or were on an 
expeditious course to being adopted and implemented; (2) a list of 
measures needed to meet the remaining ROP emissions reduction 
requirement and to reach attainment; (3) for severe areas only, a 
commitment to adopt and submit target calculations for post-1999 ROP 
and the control measures necessary for attainment and ROP plans through 
the attainment year by the end of 2000 3; (4) a commitment 
to implement the SIP control programs in a timely manner and to meet 
ROP emissions reductions and attainment; and (5) evidence of a

[[Page 70550]]

public hearing on the State submittal.4 5 This 
submission is sometimes referred to as the Phase 2 submission. Motor 
vehicle emissions budgets can be established based on a commitment to 
adopt the measures needed for attainment and identification of the 
measures needed. Thus, State submissions due in April 1998 under the 
Wilson policy should have included a motor vehicle emissions budget.
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    \3\ [Severe areas only] In general, a commitment for severe 
areas to adopt by December 2000 the control measures necessary for 
attainment and ROP plans through the attainment year applies to any 
additional measures that were not otherwise required to be submitted 
earlier. (For example, this memorandum was not intended to allow 
States to delay submission of measures required under the CAA, such 
as inspection and maintenance (I/M) programs or reasonable available 
control technology (RACT) regulations, required at an earlier time.) 
Thus, this commitment applies to any control measures or emission 
reductions on which the State relied for purposes of the modeled 
attainment demonstration or for ROP. To the extent Texas has relied 
on a commitment to submit these measures by December 2000 for the 
Houston nonattainment area, EPA is proposing a conditional approval 
of the area's attainment demonstration. Some severe areas submitted 
the actual adopted control measures and are not relying on a 
commitment.
    \4\ Memorandum, ``Guidance for Implementing the 1-Hour Ozone and 
Pre-Existing PM 10 NAAQS,'' issued December 29, 1997. A copy of this 
memorandum may be found on EPA's web site at http://www.epa.gov/ttn/
oarpg/t1pgm.html.
    \5\ In general, a commitment for severe areas to adopt by 
December 2000 the control measures necessary for attainment and ROP 
plans through the attainment year applies to any additional measures 
necessary for attainment that were not otherwise required to be 
submitted earlier. (For example, this memorandum was not intended to 
allow States to delay submission of measures required under the CAA, 
such as inspection and maintenance (I/M) programs or reasonable 
available control technology (RACT) regulations, required at an 
earlier time.) Thus, this commitment applies to any control measures 
or emission reductions on which the State relied for purposes of the 
modeled attainment demonstration. To the extent Houston has relied 
on a commitment to submit these measures by December 2000, EPA is 
proposing a conditional approval of the area's attainment 
demonstration. Some severe areas submitted the actual adopted 
control measures and are not relying on a commitment.
    The EPA recognizes that motor vehicle emissions budgets can be 
established from the items listed in the Wilson memorandum.
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    Building upon the OTAG recommendations and technical analyses, in 
November 1997, EPA proposed action addressing the ozone transport 
problem. In its proposal, the EPA found that current SIPs in 22 States 
and the District of Columbia (23 jurisdictions) were insufficient to 
provide for attainment and maintenance of the 1-hour standard because 
they did not regulate NOX emissions that significantly 
contribute to ozone transport. 62 FR 60318 (Nov. 7, 1997). The EPA 
finalized that rule in September 1998, calling on the 23 jurisdictions 
to revise their SIPs to require NOX emissions reductions 
within the State to a level consistent with a NOX emissions 
budget identified in the final rule. 63 FR 57356 (Oct. 27, 1998). This 
final rule is commonly referred to as the NOX SIP Call. 
Texas participated in the OTAG but was not included in the SIP call.
3. Time Frame for Taking Action on Attainment Demonstration SIPs for 10 
Serious and Severe Areas
    The States generally submitted the SIPs between April and October 
of 1998; some States are still submitting additional revisions as 
described below. Under the CAA, EPA is required to approve or 
disapprove a State's submission no later than 18 months following 
submission. (The statute provides up to six months for a completeness 
determination and an additional 12 months for approval or disapproval.) 
The EPA believes that it is important to keep the process moving 
forward in evaluating these plans and, as appropriate, approving them. 
Thus, in today's Federal Register, EPA is proposing to take action on 
the 10 serious and severe 1-hour ozone attainment demonstration SIPs 
(located in 13 States and the District of Columbia) and intends to take 
final action on these submissions over the next 6-12 months. The reader 
is referred to individual dates in this document for specific 
information on actions leading to EPA's final rulemaking on these 
plans.
4. Options for Action on a State's Attainment Demonstration SIP
    Depending on the circumstances unique to each of the 10 area SIP 
submissions on which EPA is proposing action today, EPA is proposing 
one or more of these types of approval or disapproval in the 
alternative. In addition, these proposals may identify additional 
action that will be necessary from the State.
    The CAA provides for EPA to approve, disapprove, partially approve 
or conditionally approve a State's plan submission. CAA section 110(k). 
The EPA must fully approve the submission if it meets the attainment 
demonstration requirement of the CAA. If the submission is deficient in 
some way, EPA may disapprove the submission. In the alternative, if 
portions of the submission are approvable, EPA may partially approve 
and partially disapprove, or may conditionally approve based on a 
commitment to correct the deficiency by a date certain, which can be no 
later than one year from the date of EPA's final conditional approval.
    The EPA may partially approve a submission if separable parts of 
the submission, standing alone, are consistent with the CAA. For 
example, if a State submits a modeled attainment demonstration, 
including control measures, but the modeling does not demonstrate 
attainment, EPA could approve the control measures and disapprove the 
modeling for failing to demonstrate attainment.
    The EPA may issue a conditional approval based on a State's 
commitment to expeditiously correct a deficiency by a date certain that 
can be no later than one year following EPA's conditional approval. 
Such commitments do not need to be independently enforceable because, 
if the State does not fulfill its commitment, the conditional approval 
is converted to a disapproval. For example, if a State commits to 
submit additional control measures and fails to submit them or EPA 
determines the State's submission of the control measures is 
incomplete, the EPA will notify the State by letter that the 
conditional approval has been converted to a disapproval. If the State 
submits control measures that EPA determines are complete or that are 
deemed complete, EPA will determine through rulemaking whether the 
State's attainment demonstration is fully approvable or whether the 
conditional approval of the attainment demonstration should be 
converted to a disapproval.
    Finally, EPA has recognized that in some limited circumstances, it 
may be appropriate to issue a full approval for a submission that 
consists, in part, of an enforceable commitment. Unlike the commitment 
for conditional approval, such an enforceable commitment can be 
enforced in court by EPA or citizens. In addition, this type of 
commitment may extend beyond one year following EPA's approval action. 
Thus, EPA may accept such an enforceable commitment where it is 
infeasible for the State to accomplish the necessary action in the 
short term.

B. What Are the Components of a Modeled Attainment Demonstration?

    The EPA provides that States may rely on a modeled attainment 
demonstration supplemented with additional evidence to demonstrate 
attainment. 6 In order to have a complete modeling 
demonstration submission, States should have submitted the required 
modeling analysis and identified any additional evidence that EPA 
should consider in evaluating whether the area will attain the 
standard.
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    \6\ The EPA issued guidance on the air quality modeling that is 
used to demonstrate attainment with the 1-hour ozone NAAQS. See U.S. 
EPA, Guideline for Regulatory Application of the Urban Airshed 
Model, EPA-450/4-91-013, (July 1991). A copy may be found on EPA's 
web site at http://www.epa.gov/ttn/scram/ (file name: ``UAMREG''). 
See also U.S. EPA, Guidance on Use of Modeled Results to Demonstrate 
Attainment of the Ozone NAAQS, EPA-454/B-95-007, (June 1996). A copy 
may be found on EPA's web site at http://www.epa.gov/ttn/scram/ 
(file name: ``O3TEST'').
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1. Modeling Requirements
    For purposes of demonstrating attainment, the CAA requires serious 
and severe areas to use photochemical grid modeling or an analytical 
method EPA determines to be as effective. The photochemical grid model 
is set up

[[Page 70551]]

using meteorological conditions conducive to the formation of ozone. 
Emissions for a base year are used to evaluate the model's ability to 
reproduce actual monitored air quality values and to predict air 
quality changes in the attainment year due to the emission changes 
which include growth up to and controls implemented by the attainment 
year. A modeling domain is chosen that encompasses the nonattainment 
area. Attainment is demonstrated when all predicted concentrations 
inside the modeling domain are at or below the NAAQS or at an 
acceptable upper limit above the NAAQS permitted under certain 
conditions by EPA's guidance. When the predicted concentrations are 
above the NAAQS, an optional weight of evidence determination which 
incorporates, but is not limited to, other analyses such as air quality 
and emissions trends may be used to address uncertainty inherent in the 
application of photochemical grid models.
    The EPA guidance identifies the features of a modeling analysis 
that are essential to obtain credible results. First, the State must 
develop and implement a modeling protocol. The modeling protocol 
describes the methods and procedures to be used in conducting the 
modeling analyses and provides for policy oversight and technical 
review by individuals responsible for developing or assessing the 
attainment demonstration (State and local agencies, EPA Regional 
offices, the regulated community, and public interest groups). Second, 
for purposes of developing the information to put into the model, the 
State must select air pollution days, i.e., days in the past with bad 
air quality, that are representative of the ozone pollution problem for 
the nonattainment area. Third, the State needs to identify the 
appropriate dimensions of the area to be modeled, i.e., the domain 
size. The domain should be larger than the designated nonattainment 
area to reduce uncertainty in the boundary conditions and should 
include large upwind sources just outside the nonattainment area. In 
general, the domain is considered the local area where control measures 
are most beneficial to bring the area into attainment. Fourth, the 
State needs to determine the grid resolution. The horizontal and 
vertical resolutions in the model affect the dispersion and transport 
of emission plumes. Artificially large grid cells (too few vertical 
layers and horizontal grids) may dilute concentrations and may not 
properly consider impacts of complex terrain, complex meteorology, and 
land/water interfaces. Fifth, the State needs to generate 
meteorological data that describe atmospheric conditions and emissions 
inputs. Finally, the State needs to verify that the model is properly 
simulating the chemistry and atmospheric conditions through diagnostic 
analyses and model performance tests. Once these steps are 
satisfactorily completed, the model is ready to be used to generate air 
quality estimates to support an attainment demonstration.
    The modeled attainment test compares model predicted 1-hour daily 
maximum concentrations in all grid cells for the attainment year to the 
level of the NAAQS. A predicted concentration above 0.124 ppm ozone 
indicates that the area is expected to exceed the standard in the 
attainment year and a prediction at or below 0.124 ppm indicates that 
the area is expected to attain the standard. This type of test is often 
referred to as an exceedance test. The EPA's guidance recommends that 
States use either of two modeled attainment or exceedance tests for the 
1-hour ozone NAAQS, a deterministic test or a statistical test.
    The deterministic test requires the State to compare predicted 1-
hour daily maximum ozone concentrations for each modeled day 
7 to the attainment level of 0.124 ppm. If none of the 
predictions exceed 0.124 ppm, the test is passed.
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    \7\ The initial, ``ramp-up'' days for each episode are excluded 
from this determination.
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    The statistical test takes into account the fact that the form of 
the 1-hour ozone standard allows exceedances. If, over a three-year 
period, the area has an average of one or fewer exceedances per year, 
the area is not violating the standard. Thus, if the State models a 
very extreme day, the statistical test provides that a prediction above 
0.124 ppm up to a certain upper limit may be consistent with attainment 
of the standard. (The form of the 1-hour standard allows for up to 
three readings above the standard over a three-year period before an 
area is considered to be in violation.)
    The acceptable upper limit above 0.124 ppm is determined by 
examining the size of exceedances at monitoring sites which meet the 1-
hour NAAQS. For example, a monitoring site for which the four highest 
1-hour average concentrations over a three-year period are 0.136 ppm, 
0.130 ppm, 0.128 ppm and 0.122 ppm is attaining the standard. To 
identify an acceptable upper limit, the statistical likelihood of 
observing ozone air quality exceedances of the standard of various 
concentrations is equated to the severity of the modeled day. The upper 
limit generally represents the maximum ozone concentration observed at 
a location on a single day and it would be the only reading above the 
standard that would be expected to occur no more than an average of 
once a year over a three-year period. Therefore, if the maximum ozone 
concentration predicted by the model is below the acceptable upper 
limit, in this case 0.136 ppm, then EPA might conclude that the modeled 
attainment test is passed. Generally, exceedances well above 0.124 ppm 
are very unusual at monitoring sites meeting the NAAQS. Thus, these 
upper limits are rarely substantially higher than the attainment level 
of 0.124 ppm.
2. Additional Analyses Where Modeling Fails to Show Attainment
    When the modeling does not conclusively demonstrate attainment, 
additional analyses may be presented to help determine whether the area 
will attain the standard. As with other predictive tools, there are 
inherent uncertainties associated with modeling and its results. For 
example, there are uncertainties in some of the modeling inputs, such 
as the meteorological and emissions data bases for individual days and 
in the methodology used to assess the severity of an exceedance at 
individual sites. The EPA's guidance recognizes these limitations, and 
provides a means for considering other evidence to help assess whether 
attainment of the NAAQS is likely. The process by which this is done is 
called a weight of evidence (WOE) determination.
    Under a WOE determination, the State can rely on and EPA will 
consider factors such as other modeled attainment tests, e.g., a 
rollback analysis; other modeled outputs, e.g., changes in the 
predicted frequency and pervasiveness of exceedances and predicted 
changes in the design value; actual observed air quality trends; 
estimated emissions trends; analyses of air quality monitored data; the 
responsiveness of the model predictions to further controls; and, 
whether there are additional control measures that are or will be 
approved into the SIP but were not included in the modeling analysis. 
This list is not an exclusive list of factors that may be considered 
and these factors could vary from case to case. The EPA's guidance 
contains no limit on how close a modeled attainment test must be to 
passing to conclude that other evidence besides an attainment test is 
sufficiently compelling to suggest attainment. However, the further a 
modeled attainment test is from being passed, the more compelling the 
WOE needs to be.

[[Page 70552]]

    The EPA's 1996 modeling guidance also recognizes a need to perform 
a mid-course review as a means for addressing uncertainty in the 
modeling results. Because of the uncertainty in long term projections, 
EPA believes a viable attainment demonstration that relies on WOE needs 
to contain provisions for periodic review of monitoring, emissions, and 
modeling data to assess the extent to which refinements to emission 
control measures are needed. The mid-course review is discussed in 
Section C.6.

C. What Is the Frame Work for Proposing Action on the Attainment 
Demonstration SIPs?

    In addition to the modeling analysis and WOE support demonstrating 
attainment, the EPA has identified the following key elements which 
must be present in order for EPA to approve or conditionally approve 
the 1-hour attainment demonstration SIPs. These elements are listed 
below and then described in detail.
     CAA measures and measures relied on in the modeled 
attainment demonstration SIP. This includes adopted and submitted rules 
for all previously required CAA mandated measures for the specific area 
classification. This also includes measures that may not be required 
for the area classification but that the State relied on in the SIP 
submission for attainment and ROP plans on which EPA is proposing to 
take action on today.
     NOX reductions affecting boundary conditions.
     A motor vehicle emissions budget which can be determined 
by EPA to be adequate for conformity purposes.
     Tier 2/Sulfur program benefits where needed to demonstrate 
attainment. Inclusion of reductions expected from EPA's Tier 2 tailpipe 
and low sulfur-in-fuel standards in the attainment demonstration and 
the motor vehicle emissions budget.
     In certain areas, additional measures to further reduce 
emissions to support the attainment test. Additional measures may be 
measures adopted regionally such as in the Ozone Transport Region, or 
locally (intrastate) in individual States.
     Mid-course review. An enforceable commitment to conduct a 
mid-course review and evaluation based on air quality and emission 
trends. The mid-course review would show whether the adopted control 
measures are sufficient to reach attainment by the area's attainment 
date, or that additional control measures are necessary.
1. CAA Measures and Measures Relied on in the Modeled Attainment 
Demonstration SIP
    The States should have adopted the control measures already 
required under the CAA for the area classification. Since these 10 
serious and severe areas need to achieve substantial reductions from 
their 1990 emissions levels in order to attain, EPA anticipates that 
these areas need all of the measures required under the CAA to attain 
the 1-hour ozone NAAQS.
    In addition, the States may have included control measures in its 
attainment strategy that are in addition to measures required in the 
CAA. (For serious areas, these should have already been identified and 
adopted, whereas severe areas have until December 2000 to submit 
measures necessary to achieve ROP through the attainment year and to 
attain.) For purposes of fully approving the State's SIP, the State 
will need to adopt and submit all VOC and NOX controls 
within the local modeling domain that were relied on for purposes of 
the modeled attainment demonstration.
    The following tables present a summary of the CAA requirements that 
need to be met for each serious and severe nonattainment area for the 
1-hour ozone NAAQS. These requirements are specified in section 182 of 
the CAA. Information on more measures that States may have adopted or 
relied on in their current SIP submissions is not shown in the tables. 
The EPA will need to take final action approving all measures relied on 
for attainment, including the required ROP control measures and target 
calculations, before EPA can issue a final full approval of the 
attainment demonstration as meeting CAA section 182(c)(2) (for serious 
areas) or (d) (for severe areas).

                   CAA Requirements for Serious Areas
 
 
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--NSR for VOC and NOX**, including an offset ratio of 1.2:1 and a major
 VOC and NOX source cutoff of 50 tons per year (tpy)
--Reasonable Available Control Technology (RACT) for VOC and NOX**
--Enhanced Inspection and Maintenance (I/M) program
--15% volatile organic compound (VOC) plans
--Emissions inventory
--Emission statements
--Attainment demonstration
--9 percent ROP plan through 1999
--Clean fuels program or substitute
--Enhanced monitoring--Photochemical Assessment Monitoring Stations
 (PAMS)
--Stage II vapor recovery
------------------------------------------------------------------------
**Areas that are currently attaining the standard or can demonstrate
  that NOX controls are not needed can request a NOX waiver under
  section 182(f). Houston/Galveston Area is not such an area.


                    CAA Requirements for Severe Areas
 
 
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--All of the nonattainment area requirements for serious areas
--NSR, including an offset ratio of 1.3:1 and a major VOC and NOX source
 cutoff of 25 tons per year (tpy)
--Reformulated gasoline
--9% ROP plan through attainment year
--Measures to offset VMT growth
--Requirement for fees for major sources for failure to attain
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2. NOX Reductions Consistent With the Modeling Demonstration
    The EPA completed final rulemaking on the NOX SIP call 
on October 27, 1998, which required States to address transport of 
NOX and ozone to other States. To address transport, the 
NOX SIP call established emissions budgets for 
NOX that 23 jurisdictions were required to show they would 
meet through enforceable SIP measures adopted and submitted by 
September 30, 1999. The NOX SIP call is intended to reduce 
emissions in upwind States that significantly contribute to 
nonattainment problems. The EPA did not identify specific sources that 
the States must regulate nor did EPA limit the States' choices 
regarding where to achieve the emission reductions. Subsequently, a 
three-judge panel of the Court of Appeals for the District of Columbia 
Circuit issued an order staying the portion of the NOX SIP 
call rule requiring States to submit rules by September 30, 1999.
    The NOX SIP call rule establishes budgets for the States 
in which nine of the nonattainment areas for which EPA is proposing 
action today are located. The nine areas are: Greater Connecticut, 
Springfield, MA, New York-North New Jersey-Long Island (NY-NJ-CT), 
Baltimore, MD, Philadelphia-Wilmington-Trenton (PA-NJ-DE-MD), 
Metropolitan Washington, D.C. (DC-MD-VA), Atlanta, GA, Milwaukee-Racine 
WI, and Chicago-Gary-Lake County (IL-IN).
    Emission reductions that will be achieved through EPA's 
NOX SIP call will reduce the levels of ozone and ozone 
precursors entering nonattainment areas at their boundaries. For 
purposes of developing attainment

[[Page 70553]]

demonstrations, States define local modeling domains that include both 
the nonattainment area and nearby surrounding areas. The ozone levels 
at the boundary of the local modeling domain are reflected in modeled 
attainment demonstrations and are referred to as boundary conditions. 
With the exception of Houston, the 1-hour attainment demonstrations on 
which EPA is proposing action have relied, in part, on the 
NOX SIP Call reductions for purposes of determining the 
boundary conditions of the modeling domain. Emission reductions assumed 
in the attainment demonstrations are modeled to occur both within the 
State and in upwind States; thus, intrastate reductions as well as 
reductions in other States impact the boundary conditions. Although the 
court has indefinitely stayed the SIP submission deadline, the 
NOX SIP Call rule remains in effect. Therefore, EPA believes 
it is appropriate to allow States to continue to assume the reductions 
from the NOX SIP call in areas outside the local 1-hour 
modeling domains. If States assume control levels and emission 
reductions other than those of the NOX SIP call within their 
State but outside of the modeling domain, States must also adopt 
control measures to achieve those reductions in order to have an 
approvable plan.
    Accordingly, States in which the nonattainment areas are located 
will not be required to adopt measures outside the modeling domain to 
achieve the NOX SIP call budgets prior to the time that all 
States are required to comply with the NOX SIP call. If the 
reductions from the NOX SIP call do not occur as planned, 
States will need to revise their SIPs to add additional local measures 
or obtain interstate reductions, or both, in order to provide 
sufficient reductions needed for attainment.
    As provided in section 1 above, any controls assumed by the State 
inside the local modeling domain 8 for purposes of the 
modeled attainment demonstration must be adopted and submitted as part 
of the State's 1-hour attainment demonstration SIP. It is only for 
reductions occurring outside the local modeling domain that States may 
assume implementation of NOX SIP call measures and the 
resulting boundary conditions.
---------------------------------------------------------------------------

    \8\ For the purposes of this document, ``local modeling domain'' 
is typically an urban scale domain with horizontal dimensions less 
than about 300 km on a side, horizontal grid resolution less than or 
equal to 5  x  5 km or finer. The domain is large enough to ensure 
that emissions occurring at 8 am in the domain's center are still 
within the domain at 8 pm the same day. If recirculation of the 
nonattainment area's previous day's emissions is believed to 
contribute to an observed problem, the domain is large enough to 
characterize this.
---------------------------------------------------------------------------

3. Motor Vehicle Emissions Budget
    The EPA believes that attainment demonstration SIPs must 
necessarily estimate the motor vehicle emissions that will be produced 
in the attainment year and demonstrate that this emissions level, when 
considered with emissions from all other sources, is consistent with 
attainment. The estimate of motor vehicle emissions is used to 
determine the conformity of transportation plans and programs to the 
SIP, as described by CAA section 176(c)(2)(A). For transportation 
conformity purposes, the estimate of motor vehicle emissions is known 
as the motor vehicle emissions budget. The EPA believes that 
appropriately identified motor vehicle emissions budgets are a 
necessary part of an attainment demonstration SIP. A SIP cannot 
effectively demonstrate attainment unless it identifies the level of 
motor vehicle emissions that can be produced while still demonstrating 
attainment.
    The EPA has determined that except for the Western MA (Springfield) 
attainment demonstration SIP, the motor vehicle emission budgets for 
all areas in today's proposals are inadequate or missing from the 
attainment demonstration. Therefore, EPA is proposing to disapprove the 
attainment demonstration SIPs for those nine areas if the States do not 
submit motor vehicle emissions budgets that EPA can find adequate by 
May 31, 2000.9 In order for EPA to complete the adequacy 
process by the end of May, States should submit a budget no later than 
December 31, 1999.10 If an area does not have a motor 
vehicle emissions budget that EPA can determine adequate for conformity 
purposes by May 31, 2000, EPA plans to take final action at that time 
disapproving in full or in part the area's attainment demonstration. 
The emissions budget should reflect all the motor vehicle control 
measures contained in the attainment demonstration, i.e., measures 
already adopted for the nonattainment area as well as those yet to be 
adopted.
---------------------------------------------------------------------------

    \9\ For severe areas, EPA will determine the adequacy of the 
emissions budgets associated with the post-1999 ROP plans once the 
States submit the target calculations, which are due no later than 
December 2000.
    \10\ A final budget is preferred; but, if the State public 
process is not yet complete, then a draft budget for public hearing 
may be submitted. The adequacy process generally takes at least 90 
days. Therefore, in order for EPA to complete the adequacy process 
no later than the end of May, EPA must have by February 15, 2000, 
the final budget or a draft that is substantially similar to what 
the final budget will be. The State must submit the final budget by 
April 15, 2000.
---------------------------------------------------------------------------

4. Tier 2/Sulfur Program Benefits
    On May 13, 1999, EPA published a Notice of Proposed Rulemaking 
proposing a major, comprehensive program designed to significantly 
reduce emissions from passenger cars and light trucks (including sport-
utility vehicles, minivans, and pickup trucks) and to reduce sulfur in 
gasoline. Under the proposed program, automakers would produce vehicles 
designed to have very low emissions when operated on low-sulfur 
gasoline, and oil refiners would provide that cleaner gasoline 
nationwide. The EPA subsequently issued two supplemental notices. 64 FR 
35112 (June 30, 1999); 64 FR 57827 (October 27, 1999).
    These notices provide 1-hour ozone modeling and monitoring 
information that support EPA's belief that the Tier 2/Sulfur program is 
necessary to help areas attain the 1-hour NAAQS. Under the proposed 
rule, NOX and VOC emission reductions (as well as other 
reductions not directly relevant for attainment of the 1-hour ozone 
standard) would occur beginning in the 2004 ozone season although 
incentives for early compliance by vehicle manufacturers and refiners 
will likely result in some reductions prior to 2004. Nationwide, the 
Tier 2/Sulfur program is projected to result in reductions of 
approximately 800,000 tons of NOX per year by 2007 and 
1,200,000 tons by 2010.
    In the October 27, 1999, supplemental notice, EPA reported in Table 
1 that EPA's regional ozone modeling indicated that 17 metropolitan 
areas for which the 1-hour standard applies need the Tier 2/Sulfur 
program reductions to help attain the 1-hour ozone standard. The 
Houston area is included on that list.
    The EPA issued a memorandum that provides estimates of the 
emissions reductions associated with the Tier 2/Sulfur program 
proposal.11 The memorandum provides the NOX and 
VOC tonnage benefits for the Tier 2/Sulfur program in 2007 on a county-
by-county basis for all counties within the 10 serious and severe 
nonattainment areas for which EPA is proposing to take action today and 
the 2005 tonnage

[[Page 70554]]

benefits for the Tier 2/Sulfur program for each county for three areas.
---------------------------------------------------------------------------

    \11\ Memorandum, ``1-Hour Ozone Attainment Demonstrations and 
Tier 2/Sulfur Rulemaking'' from Lydia Wegman, Office of Air Quality 
Planning and Standards and Merrylin Zaw-Mon, Office of Mobile 
Sources to the Air Division Directors, Regions I-VI, issued November 
8, 1999. A copy of this memorandum may be found on EPA's web site at 
http://www.epa.gov/oms/transp/traqconf.htm.
---------------------------------------------------------------------------

    The EPA also issued a memorandum which explains the connection 
between the Tier 2/Sulfur program, motor vehicle emissions budgets for 
conformity determinations, and timing for SIP revisions to account for 
the Tier 2/Sulfur program benefit.12 This memorandum 
explains that conformity analyses in serious and severe ozone 
nonattainment areas can begin including Tier 2/Sulfur program benefits 
once EPA's Tier 2 rule is promulgated, provided that the attainment 
demonstration SIPs and associated motor vehicle emissions budgets 
include the Tier 2 benefits. For areas that require all or some portion 
of the Tier 2 benefits to demonstrate attainment but have not yet 
included the benefits in the motor vehicle emissions budgets, EPA's 
adequacy finding will include a condition that conformity 
determinations may not take credit for Tier 2 until the SIP budgets are 
revised to reflect Tier 2 benefits. See EPA's memorandum for more 
information.
---------------------------------------------------------------------------

    \12\ Memorandum, ``Guidance on Motor Vehicle Emissions Budgets 
in One-Hour Ozone Attainment Demonstrations,'' from Merrylin Zaw-
Mon, Office of Mobile Sources, to Air Division Directors, Regions I-
VI, issued November 3, 1999. A copy of this memorandum may be found 
on EPA's web site at http://www.epa.gov/oms/transp/traqconf.htm.
---------------------------------------------------------------------------

    For the New York-North New Jersey-Long Island area, Philadelphia-
Wilmington-Trenton, Baltimore, Atlanta and Houston/Galveston 
nonattainment areas, the EPA is proposing to determine that additional 
emission reductions beyond those provided by the SIP submission are 
necessary for attainment. With the exception of the Atlanta 
nonattainment area, a portion of that reduction will be achieved by 
EPA's Tier 2/Sulfur program, which EPA expects to finalize shortly. In 
the case of the Houston/Galveston area, Texas has already included a 
preliminary estimate of the reductions for Tier II in their air quality 
modeling in the November 15, 1999 supplemental SIP submission. Our 
preliminary analysis of Texas' November 15, 1999 submission indicates 
that further additional emission reductions beyond Tier II will be 
necessary for the area to attain.
    States that need to rely in whole or in part on the Tier 2 benefits 
to help demonstrate attainment will need to adjust the demonstration 
for their SIP submission, emission inventories and motor vehicle 
emissions budgets to include the Tier 2/Sulfur program reductions in 
order for EPA to approve the SIP submittal. The submittal requirement 
including the analysis to make that submission is described in the two 
memoranda cited. States may use the tonnage benefits and guidance in 
these memoranda to make these adjustments to the SIP submission and 
motor vehicle emission budgets. The EPA encourages States to submit 
these SIP revisions by December 31, 1999 to allow EPA to include them 
in the motor vehicle emissions budget adequacy determinations which 
need to be completed by May 31, 2000. Alternatively, these revisions 
should be submitted by July 2000 for serious nonattainment areas, as 
EPA anticipates completing rulemaking on these SIPs in the fall of 
2000. For severe nonattainment areas, these revisions should be 
submitted by December 31, 2000.
    A number of areas for which the EPA is not proposing to determine 
that additional emission reductions beyond those provided by the SIP 
submission are necessary for attainment will be taking a partial credit 
for Tier 2 when they use credit from national low emissions vehicles 
(NLEV) in their attainment demonstration. These nonattainment areas are 
the Milwaukee-Racine, Chicago-Gary-Lake County and Metropolitan 
Washington, D.C. areas. By regulation, the NLEV standards do not extend 
beyond the 2003 model year unless EPA promulgates Tier 2 vehicle 
standards at least as stringent as the NLEV standards. See 40 CFR 
86.1701-99(c). Thus, the emission reductions relied upon from 2004 and 
later model year NLEV vehicles will actually be due to the promulgation 
of the Tier 2 standards, either through the extension of the NLEV 
program or a portion of the reduction from vehicles meeting the Tier 2 
standards.
    Like all the other SIPs that rely on Tier 2 reductions in order to 
demonstrate attainment, the attainment demonstrations for the 
Milwaukee-Racine, Chicago-Gary-Lake County and Metropolitan Washington, 
D.C. areas must be revised to estimate the effects of Tier 2 according 
to our policy before EPA can take final action approving such 
attainment demonstrations. Until the SIPs are revised to include full 
Tier 2 credit, EPA can determine by May 31, 2000 that a motor vehicle 
emissions budget is adequate if the budget would be otherwise adequate. 
No conditions need be placed on such adequacy determinations since the 
budgets in such SIPs already include reductions equivalent to the 
amount of emission reductions the areas will be relying on from Tier 2 
by virtue of the NLEV reductions included in the budgets.
    a. Revisions to the Motor Vehicle Emissions Budget and the 
Attainment Demonstration When EPA Issues the MOBILE6 Model. Within one 
year of when EPA issues the MOBILE6 model for estimating mobile source 
emissions which takes into account the emissions benefit of EPA's Tier 
2/Sulfur program, States will need to revise their motor vehicle 
emissions budgets in their attainment demonstration SIPs if the Tier 2/
Sulfur program is necessary for attainment. In addition, the budgets 
will need to be revised using MOBILE6 in those areas that do not need 
the Tier 2/Sulfur program for attainment but decide to include its 
benefits in the motor vehicle emissions budget anyway. The EPA will 
work with States on a case-by-case basis if the new emission estimates 
raise issues about the sufficiency of the attainment demonstration.
    States described in the paragraph above will need to submit an 
enforceable commitment in the near term to revise their motor vehicle 
emissions budget within one year after EPA's release of MOBILE6. This 
commitment should be submitted to EPA along with the other commitments 
discussed elsewhere in this notice, or alternatively, as part of the 
SIP revision that modifies the motor vehicle emission inventories and 
budgets to include the Tier 2/Sulfur program benefits needed in order 
for EPA to approve the SIP submittal.13
---------------------------------------------------------------------------

    \13\ For purposes of conformity, the State needs a commitment 
that has been subject to public hearing. If the State has submitted 
a commitment that has been subject to public hearing and that 
provides for the adoption of all measures necessary for attainment, 
the State should submit a letter prior to December 31, 1999, 
amending the commitment to include the revision of the budget after 
the release of MOBILE6.
---------------------------------------------------------------------------

5. Additional Measures To Further Reduce Emissions
    The EPA is proposing to find that the attainment demonstrations for 
New York-North New Jersey-Long Island; Baltimore; Philadelphia-
Wilmington-Trenton; Houston-Galveston-Brazoria and Atlanta, even 
considering the Tier II/Sulfur program reductions and the WOE, will not 
achieve attainment without the application of additional emission 
control measures to achieve additional emission reductions. Our 
proposal for Houston is based on a preliminary analysis of the Houston 
November 15, 1999 submission which indicates even considering Tier II/
Sulfur program reductions and WOE, sufficient measures have not been 
identified to achieve attainment. The EPA is also proposing to find 
that additional emission control measures are needed for the Atlanta 
area. Thus, for each of

[[Page 70555]]

these areas, EPA has identified specific tons per day emissions of 
NOX and/or VOC that must be reduced through additional 
control measures in order to demonstrate attainment and to enable EPA 
to approve the demonstration. The need for additional emission 
reductions is generally based on a lack of sufficient compelling 
evidence that the demonstration shows attainment at the current level 
of adopted or planned emission controls.
    The method used by EPA to calculate the amount of additional 
reductions is described in a technical support document for this 
proposed rule. Briefly, the method makes use of the relationship 
between ozone and its precursors (VOC and NOX) to identify 
additional reductions that, at a minimum, would bring the model 
predicted future ozone concentration to a level at or below the 
standard. The relationship is derived by comparing changes in either 
(1) The model predicted ozone to changes in modeled emissions or (2) in 
observed air quality to changes in actual emissions.
    The EPA is not requesting that States perform new photochemical 
grid modeling to assess the full air quality impact of the additional 
measures that would be adopted. Rather, as described above, one of the 
factors that EPA can consider as part of the WOE analysis of the 
attainment demonstration is whether there will be additional emission 
reductions anticipated that were not modeled. Therefore, EPA will 
consider the reductions from these additional measures as part of the 
WOE analysis if the State adopts the measures or, as appropriate, 
submits an enforceable commitment to adopt the measures.
    As an initial matter, for areas that need additional measures, the 
State must submit a commitment to adopt additional control measures to 
meet the level of reductions that EPA has identified as necessary for 
attainment. For purposes of conformity, if the State submitted a 
commitment, which has been subject to public hearing, to adopt the 
control measures necessary for attainment and ROP through the area's 
attainment date in conformance with the December 1997 Wilson policy, 
the State will not need an additional commitment at this time. However, 
the state will need to amend its commitment by letter to provide two 
things concerning the additional measures.
    First, the State will need to identify a list of potential control 
measures (from which a set of measures could be selected) that, when 
implemented, would be expected to provide sufficient additional 
emission reductions to meet the level of reductions that EPA has 
identified as necessary for attainment. States need not commit to adopt 
any specific measures on their list at this time, but if they do not do 
so, they must identify sufficient additional emission reductions to 
attain the standard with the submitted motor vehicle emissions budget. 
These measures may not involve additional limits on highway 
construction beyond those that could be imposed under the submitted 
motor vehicle emissions budget. (See memorandum, ``Guidance on Motor 
Vehicle Emissions Budgets in One-Hour Ozone Attainment 
Demonstrations,'' from Merrylin Zaw-Mon, Office of Mobile Sources, to 
Air Division Directors, Regions I-VI 14.) States may, of 
course, select control measures that do impose limits on highway 
construction, but if they do so, they must revise the budget to reflect 
the effects of specific, identified measures that were either committed 
to in the SIP or were actually adopted. Otherwise, EPA could not 
conclude that the submitted motor vehicle emissions budget would be 
providing for attainment, and EPA could not find it adequate for 
conformity purposes.
---------------------------------------------------------------------------

    \14\ Memorandum, ``Guidance on Motor Vehicle Emissions Budgets 
in One-Hour Ozone Attainment Demonstrations'', from Merrylin Zaw-
Mon, Office of Mobile Sources, to Air Division Directors, Regions I-
VI, issued November 3, 1999. A copy of this memorandum may be found 
on EPA's web site at http://www.epa.gov/oms/transp/traqconf.htm.
---------------------------------------------------------------------------

    Second, the letter should provide that the State will recalculate 
and submit a revised motor vehicle emissions budget that includes the 
effects, if any, of the measure or measures that are ultimately adopted 
when those measures are submitted as SIP revisions should any of the 
measures pertain to motor vehicles.
    For purposes of approving the SIP, the State will need an 
enforceable commitment that identifies the date by which the additional 
measures will be submitted, identifies the percentage reductions needed 
of VOC and NOX, and provides that the State will recalculate 
and submit a revised motor vehicle emissions budget that includes the 
effects, if any, of the measure or measures that are ultimately adopted 
when these measures are submitted as SIP revisions should any of the 
measures pertain to motor vehicles. To the extent the State's current 
commitment does not include one of the above items or to the extent 
that a State plans to revise one of the above items in an existing 
commitment, the State will need a new public hearing.
    Texas already provided in its May 18, 1998 submission an 
enforceable commitment to adopt, by December 31, 2000, all measures 
necessary for attainment in Houston without identifying any specific 
measure. This commitment was reaffirmed in the November 15, 1999 
submission with specific measures identified and modeled. 
Unfortunately, the measures identified in the November 15, 1999 
submission were not sufficient to demonstrate attainment. Therefore, 
Texas needs to send a list of additional measures beyond those 
identified in the November 15, 1999 submission that can be used to 
achieve the additional reductions needed to achieve attainment. If 
Texas determines that it needs additional time beyond December 31, 2000 
to adopt some or all of the additional measures not identified in the 
November 15, 1999 submission, it must submit an enforceable commitment 
to adopt these measures by a date certain that is as expeditiously as 
practicable. Moreover, the commitment must specify the necessary 
additional percentage reduction. The EPA will work with Texas on what 
constitutes an expeditious schedule for adoption.
    a. Guidance on Additional Control Measures. Much progress has been 
made over the past 25 years to reduce VOC emissions and over the past 9 
years to reduce NOX emissions. Many large sources have been 
controlled to some extent through RACT rules or other emission 
standards or limitations, such as maximum achievable control technology 
(MACT), new source performance standards (NSPS) and the emission 
control requirements for NSR--lowest achievable emissions rate (LAER) 
and best achievable control technology (BACT). However, there may be 
controls available for sources that have not yet been regulated as well 
as additional means for achieving reductions from sources that have 
already been regulated. The EPA has prepared a report to assist States 
in identifying additional measures. This report is called ``Serious and 
Severe Ozone Nonattainment Areas: Information on Emissions, Control 
Measures Adopted or Planned and Other Available Control Measures''. The 
purpose of this report is to provide information to State and local 
agencies to assist them in identifying additional control measures that 
can be adopted into their SIPs to support the attainment demonstrations 
for the serious and severe nonattainment areas under consideration. 
This report has been added to the record for this proposal.
    In Summary, the report provides information in four areas. First, 
the report contains detailed information on emissions for ozone 
precursor emissions

[[Page 70556]]

of NOX and VOCs. This inventory data gives an indication of 
where the major emissions are coming from in a particular geographic 
area and may indicate where it will be profitable to look for further 
reductions. Second, the report contains information on control measures 
for emission sources of NOX and VOC (including stationary, 
area and mobile source measures) for which controls may not have been 
adopted by many jurisdictions. This would include many measures listed 
among the control measures EPA considered when developing the 
Regulatory Impact Analysis (RIA) for promulgation of the 8-hour ozone 
NAAQS. Third, the report includes information on standards EPA has 
issued for the NSPS and MACT programs as well as information on 
alternative control techniques (ACT) documents. This may be useful to 
States who may already specify emission limits on existing source 
categories to which NSPS and MACT for new sources apply, but the 
current RACT level of control for these existing sources may not match 
the level specified in the NSPS or MACT standards for new sources or 
sources which emit hazardous air pollutants. Finally, the report 
includes information on the control measures not already covered 
elsewhere that States have adopted, or have proposed to adopt at the 
date of the report, into their SIPs. Comparison of information on 
measures already adopted into others' SIPs may help inform States about 
reductions that may be available from their sources whose emissions are 
currently not regulated.
    Another source of information is the BACT and LAER determinations 
that States have made for individual new sources. Information on BACT/
LAER determinations is available through EPA's RACT/BACT/LAER 
Clearinghouse (RBLC) which may be accessed on EPA's web site on the 
internet at the following address: www.epa.gov/ttn/catc/.
    The ACT documents for VOC and NOX are valuable because 
EPA has not issued control technique guidelines (CTGs) that specify the 
level of RACT for several categories of sources. For some of these 
source categories, EPA has prepared ACT documents which describe 
various control technologies and associated costs for reducing 
emissions. While States were required to adopt RACT for major sources 
within these source categories, the ACT documents may identify an 
additional level of control for regulated sources or may provide 
control options for non-major sources within these source categories. 
States are free to evaluate the various options given and use the 
results to assist in formulating their own regulations.
    The EPA report lists the various sources EPA used to develop the 
lists of additional measures. These sources include an EPA draft 
control measure data base, State and Territorial Air Pollution 
Administrators and the Association of Local Air Pollution Control 
Official's (STAPPA/ALAPCO's) books ``Controlling Nitrogen Oxides under 
the Clean Air Act: A Menu of Options'', and ``Meeting the 15-Percent 
Rate-of-Progress Requirement Under the Clean Air Act: A Menu of 
Options'', California's ozone SIP for the South Coast and various ACT 
documents.
    There is one control approach which bears special mention because 
it is broader in application than any one specific control measure. 
This is the approach of ``cap and trade.'' In this approach, a cap is 
placed on emissions, and existing sources are given emission 
allotments. Under a declining cap, emissions would be decreased each 
year. Sources may over-control and sell part of their allotments to 
other sources which under-control. Overall, the percentage decrease in 
emissions is maintained, but the reductions are made where they are 
most economical. A cap and trade program has been in operation in the 
South Coast Air Quality Management District in California since about 
1992.
    The State of Illinois has adopted a declining cap and trade 
program. The Illinois program will set a cap on future emissions of 
major sources in the Chicago area that in most cases is 12 percent 
lower than baseline emissions. Illinois will issue a number of emission 
allotments corresponding to the cap level and will require each source 
to have VOC emissions at or below the level for which it holds emission 
allotments. Trading of emission allotments will be allowed, so that 
sources that reduce VOC emissions more than 12 percent may sell 
emission allotments, and sources that reduce VOC emissions less than 12 
percent must buy emission allotments. The proposed reductions are 
planned to begin in the next ozone season, May 2000.
    In addition, EPA's draft economic incentives program guidance (EIP) 
was proposed in September 1999. This encourages cost-effective and 
innovative approaches to achieving air pollution goals through 
emissions trading. Such an approach has been demonstrated to be 
successful and cost-effective in reducing air pollution in EPA's acid 
rain emissions trading program. These and other similar programs should 
allow cost-effective implementation of additional control measures.
    Finally, a reduction in VOC and NOX emissions can be 
achieved through a wide range of control measures. These measures range 
from technology based actions such as retrofitting diesel trucks and 
buses, and controlling ground service equipment at airports to activity 
based controls such as increased use of transit by utilizing existing 
Federal tax incentives, market and pricing based programs, and ozone 
action days. States can also achieve emission reductions by 
implementing programs involving cleaner burning fuels. The State of 
Texas is also considering a rule to change the times during the day in 
which construction can occur to reduce ozone precursor emissions during 
periods when ozone formation is occurring. There are a wide range of 
new and innovative programs beyond the few examples listed here. These 
measures, if taken together, can provide significant emission 
reductions for attainment purposes. In addition, a variety of mobile 
source measures could be considered as part of the commitment to meet 
the need for additional emission reduction measures.
6. Mid-Course Review
    A mid-course review (MCR) is a reassessment of modeling analyses 
and more recent monitored data to determine if a prescribed control 
strategy is resulting in emission reductions and air quality 
improvements needed to attain the ambient air quality standard for 
ozone as expeditiously as practicable but no later than the statutory 
dates.
    The EPA believes that a commitment to perform a MCR is a critical 
element of the WOE analysis for the attainment demonstration on which 
EPA is proposing to take action today. In order to approve the 
attainment demonstration SIP for the Houston/Galveston area, EPA 
believes that Texas must submit an enforceable commitment to perform a 
MCR as described here.15
---------------------------------------------------------------------------

    \15\ For purposes of conformity, the State needs a commitment 
that has been subject to public hearing. If the State has submitted 
a commitment that has been subject to public hearing and that 
provides for the adoption of all measures necessary for attainment, 
the State should submit a letter prior to December 31, 1999, 
amending the commitment to include the MCR.
---------------------------------------------------------------------------

    As part of the commitment, the State should commit to work with EPA 
in a public consultative process to develop a methodology for 
performing the MCR and developing the criteria by which adequate 
progress would be judged.

[[Page 70557]]

    For severe areas, the States must have an enforceable commitment to 
perform the MCR, preferably following the 2003 ozone season, and to 
submit the results to EPA by the end of the review year (e.g., by 
December 31, 2003). The EPA believes that an analysis in 2003 would be 
most robust since some or all of the regional NOX emission 
reductions should be achieved by that date. The EPA would then review 
the results and determine whether any States need to adopt and submit 
additional control measures for purposes of attainment. The EPA is not 
requesting that States commit now to adopt new control measures as a 
result of this process. It would be impracticable for the States to 
make a commitment that is specific enough to be considered enforceable. 
Moreover, the MCR could indicate that upwind States may need to adopt 
some or all of the additional controls needed to ensure an area attains 
the standard. Therefore, if EPA determines additional control measures 
are needed for attainment, EPA would determine whether additional 
emission reductions are necessary from States in which the 
nonattainment area is located or upwind States, or both. The EPA would 
require the affected State or States to adopt and submit the new 
measures within a period specified at the time. The EPA anticipates 
that these findings would be made as calls for SIP revisions under 
section 110(k)(5) and, therefore, the period for submission of the 
measures would be no longer than 18 months after the EPA finding. A 
draft guidance document regarding the MCR process is located in the 
docket for this proposal and may also be found on EPA's web site at 
http://www.epa.gov/ttn/scram/.

D. In Summary, What Does EPA Expect To Happen With Respect to 
Attainment Demonstrations for the Houston-Galveston Area 1-Hour Ozone 
Nonattainment Area?

    The following table shows a summary of information on what EPA 
expects from Texas to allow EPA to approve the 1-hour ozone attainment 
demonstration SIP.

 Summary Schedule of Future Actions Related to Attainment Demonstration
      for the Houston-Galveston Severe Nonattainment Area in Texas
------------------------------------------------------------------------
   Required no later than:                       Action
------------------------------------------------------------------------
12/31/99.....................  State submits the following to EPA:
                               --Motor vehicle emissions budget. 1
                               --Commitments 2 to do the following:
                                  --Submit by 12/31/00 measures for
                                   additional emission reductions as
                                   required in the attainment
                                   demonstration test.
                                  --Submit revised SIP & motor vehicle
                                   emissions budget by 12/31/00 if
                                   additional measures (due by 12/31/00)
                                   affect the motor vehicle emissions
                                   inventory.
                                  --Submit revised SIP & motor vehicle
                                   emissions budget 1 year after MOBILE6
                                   issued.3
                                  --Perform a mid-course review.
                               --A list of potential control measures
                                that could provide additional emission
                                reductions needed to attain the
                                standard. 4
4/15/00......................  State submits in final any submissions
                                made in draft by 12/31/99.
Before EPA final rulemaking..  State submits enforceable commitments for
                                any above-mentioned commitments that may
                                not yet have been subjected to public
                                hearing.
12/31/00.....................  --State submits adopted rules that
                                reflect measures that are needed for ROP
                                and attainment.
                               --State revises & submits SIP & motor
                                vehicle emissions budget if changes in
                                the adopted control measures affect the
                                motor vehicle category.
                               --State revises & submits SIP & motor
                                vehicle emissions budget to account for
                                Tier 2 reductions as needed.5
Within 1 yr. after release of  State submits revised motor vehicle
 MOBILE6 model.                 emissions budget based on MOBILE6.
12/31/03.....................  State submits to EPA results of mid-
                                course review.
------------------------------------------------------------------------
\1\ Final budget preferable; however, if public process is not yet
  complete, then a ``draft'' budget (the one undergoing public process)
  may be submitted at this time with a final budget by 4/15/00. However,
  if a final budget is significantly different from the draft submitted
  earlier, the final budget must be submitted by 2/15/00 to accommodate
  the 90 day processing period prior to the 5/31/00 date by which EPA
  must find the motor vehicle emissions budget adequate. Note that the
  budget can reflect estimated Tier 2 emission reductions--see
  memorandum from Lydia Wegman and Merrylin Zaw-Mon, ``1-Hour Ozone
  Attainment Demonstrations and Tier 2/Sulfur Rulemaking.'' Note, Texas
  provided a budget for Houston in its November 15, 1999 submission.
\2\ As provided in the preamble text, the State may clarify by letter an
  existing commitment, which has been subject to public hearing, to
  submit the control measures needed for attainment. if the State has
  not yet submitted such a commitment, the State should adopt a
  commitment after public hearing. if the public hearing process is not
  yet complete, then draft commitments may be submitted at this time.
  The final commitment should be submitted no later than 4/15/00. Note,
  Texas provides in its May 19, 1998 SIP revision a commitment to adopt
  all necessary measures. Texas will need to provide public notice and
  comment if it wishes to revise this commitment.
\3\ The revision for MOBILE6 is only required for SIPs that include the
  effects of Tier 2. The commitment to revise the SIP after MOBILE6 may
  be submitted at the same time that the state submits the budget that
  includes the effects of Tier 2 (no later than 12/31/00). Note that
  Texas included the effects of Tier 2 in the SIP and associated
  attainment budget submitted in November 1999.
\4\ The State is not required to commit to adopt any specific measures.
  However, if the State does not do so, the list cannot include any
  measures that place limits on highway construction.
\5\ If the State submits such a revision, it must be accompanied by a
  commitment to revise the SIP and motor vehicle emissions budget 1 year
  after MOBILE6 is issued (if the commitment has not already been
  submitted).

A. What Are Some Significant Policy and Guidance Documents?

    This proposal has cited several policy and guidance memoranda. The 
EPA has also developed several technical documents related to the 
rulemaking action in this proposal. Some of the documents have been 
referenced above. Some other documents and their location on EPA's web 
site are listed below; these documents will also be placed in the 
docket for this proposal action.
Recent Documents
    1. ``Guidance for Improving Weight of Evidence Through 
Identification of Additional Emission Reductions, Not Modeled.'' U.S. 
Environmental Protection Agency, Office of Air Quality Planning and 
Standards, Emissions,

[[Page 70558]]

Monitoring, and Analysis Division, Air Quality Modeling Group, Research 
Triangle Park, NC 27711. November 1999. Web site: http://www.epa.gov/
ttn/oarpg/t1pgm.html.
    2. ``Serious and Severe Ozone Nonattainment Areas: Information on 
Emissions, Control Measures Adopted or Planned and Other Available 
Control Measures.'' Draft Report. November 3, 1999. Ozone Policy and 
Strategies Group. U.S. EPA, RTP, NC.
    3. Memorandum, ``Guidance on Motor Vehicle Emissions Budgets in 
One-Hour Attainment Demonstrations,'' from Merrylin Zaw-Mon, Office of 
Mobile Sources, to Air Division Directors, Regions I-VI. November 3, 
1999. Web site: http://www.epa.gov/oms/transp/traqconf.htm.
    4. Memorandum from Lydia Wegman and Merrylin Zaw-Mon to the Air 
Division Directors, Regions I-VI, ``1-Hour Ozone Attainment 
Demonstrations and Tier 2/Sulfur/Sulfur Rulemaking.'' November 8, 1999. 
Web site: http://www.epa.gov/oms/transp/traqconf.htm.
    5. Draft Memorandum, ``1-Hour Ozone NAAQS--Mid-Course Review 
Guidance.'' From John Seitz, Director, Office of Air Quality Planning 
and Standards. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.
    6. Memorandum, ``Guidance on Reasonably Available Control Measures 
(RACM) Requirement and Attainment Demonstration Submissions for Ozone 
Nonattainment Areas.'' John S. Seitz, Director, Office of Air Quality 
Planning and Standards. November 30, 1999. Web site: http://
www.epa.gov/ttn/oarpg/t1pgm.html.
Previous Documents
    1. U.S. EPA, (1991), Guideline for Regulatory Application of the 
Urban Airshed Model, EPA-450/4-91-013, (July 1991). Web site: http://
www.epa.gov/ttn/scram/ (file name: ``UAMREG'').
    2. U.S. EPA, (1996), Guidance on Use of Modeled Results to 
Demonstrate Attainment of the Ozone NAAQS, EPA-454/B-95-007, (June 
1996). Web site: http://www.epa.gov/ttn/scram/ (file name: ``O3TEST'').
    3. Memorandum, ``Ozone Attainment Demonstrations,'' from Mary D. 
Nichols, issued March 2, 1995. Web site: http://www.epa.gov/ttn/oarpg/
t1pgm.html.
    4. Memorandum, ``Extension of Attainment Dates for Downwind 
Transport Areas,'' issued July 16, 1998. Web site: http://www.epa.gov/
ttn/oarpg/t1pgm.html .
    5. December 29, 1997 Memorandum from Richard Wilson, Acting 
Assistant Administrator for Air and Radiation ``Guidance for 
Implementing the 1-Hour Ozone and Pre-Existing PM10 NAAQS.'' Web site: 
http://www.epa.gov/ttn/oarpg/t1pgm.html.

II. EPA's Review and Technical Information

A. What Action Is EPA Taking for the Houston/Galveston Ozone Attainment 
Demonstration SIP revision?

    EPA's options for acting on a SIP revision are described in Section 
I.A.4. We are proposing to conditionally approve the 1-hour ozone 
Attainment Demonstration SIP revision for the Houston/Galveston 
nonattainment area, which was submitted by the Governor in a letter 
dated May 19, 1998, and as supplemented by a modeled control strategy 
and a budget submitted by the Governor on November 15, 1999. Based on 
our preliminary review of the November 15, 1999 submission, to meet the 
framework described in Section I.C., Texas should provide the elements 
discussed later in this notice. Please note, this action is based on 
only a preliminary analysis of the November 15, 1999 submission.
    Alternatively, we are proposing to disapprove the May 19, 1998 SIP 
submission as supplemented by the November 15, 1999 modeled control 
strategy and an attainment motor vehicle emissions budget if EPA 
determines there is not an adequate motor vehicle emissions budget.
    With the May 19, 1998, letter from the Governor, Texas also 
submitted revisions to address the requirement for Post `96 Rate of 
Progress (ROP) Reductions. In this action, we are not addressing the 
portions of the May 19, 1998, SIP revision pertaining to the Post-96 
ROP Plan. However, EPA will propose and take final action on the Post-
96 ROP Plan before issuing a final full approval of the area's 
attainment demonstration as meeting the requirement of section 
182(c)(2) and (d).
What About the November 15, 1999 SIP Revision?
    The Governor of Texas has submitted on November 15, 1999 a revision 
to the SIP intended to correct deficiencies in the May 19, 1998 SIP 
revision. As previously discussed, we are proposing action on the May 
19, 1998 SIP submittal at this time, as supplemented by the modeled 
control strategy and the budget in the November 15, 1999 SIP revision. 
Our review of the November 15, 1999 submission, to date, has been a 
cursory review of the modeled control strategy and the adequacy of the 
related motor vehicle emissions budget, because we believe an adequate 
motor vehicle emissions budget is necessary before we can finalize 
conditional approval of the May, 1998 SIP revision. We will perform a 
detailed review of the November 15, 1999 submission to determine its 
approvability (e.g., the modeling, the weight of evidence analysis, 
etc.) in an expeditious manner but we have not had sufficient time to 
include an evaluation of the approvability of the more recent 
submission in this action.
    The November 15, 1999 submission does include a modeled control 
strategy and an associated motor vehicle emissions budget. 
Unfortunately, the modeled control strategy in the November 15, 1999 
submission, while calling for significant emission reductions in 
NOX, does not project attainment of the ozone standard. In 
fact, the control strategy modeling indicates additional emissions 
reductions are necessary to demonstrate attainment by 2007.
Why Is EPA Proposing To Conditionally Approve the May 19, 1998 SIP 
Revision as Supplemented by the 1999 SIP Revision?
    We cannot fully approve the May 19, 1998, SIP revision because it 
did not include control strategy modeling showing how the area will 
attain the one-hour ozone standard and an explicit motor vehicle 
emissions budget. In the May 19, 1998 SIP revision, Texas committed to 
provide by the end of 2000 the adopted measures to achieve the needed 
emission reductions for Post-99 Rate of Progress and 2007 attainment. 
On January 5, 1999, Texas committed to submit by November 15, 1999, a 
control strategy modeled to show attainment. On July 19, 1999, Texas 
committed to submit by November 15, 1999, an adequate motor vehicle 
emissions budget.
    Texas provided a modeled control strategy and a motor vehicle 
emissions budget by November 15, 1999. We will post the availability of 
this SIP revision on the EPA's conformity web page (http://www.epa.gov/
oms/transp/conform/currsips.htm) to start EPA's adequacy determination 
process and to receive comment on the adequacy of the budget.
What Must Texas Do Before EPA Can Finalize This Conditional Approval?
    We will have to determine that the motor vehicle emissions budget 
is adequate. Our preliminary analysis indicates, that the November 15, 
1999 submitted budget is derived from attainment demonstration modeling 
that does not have sufficient emission reductions identified to result 
in attainment of the 1-hour ozone standard

[[Page 70559]]

by 2007. This modeling and associated motor vehicle emissions budget 
included estimates of Tier II emission reductions. Therefore, in order 
for the budget to be determined by the EPA to be adequate, Texas must 
submit the following: (1) A list of measures that could be used to 
achieve the needed additional emissions reductions; (2) A commitment to 
recalculate and resubmit a motor vehicle emissions budget that includes 
the effects (if any) of the measures that are ultimately adopted should 
any of these measures pertain to motor vehicles; (3) A commitment to 
submit a revised motor vehicle budget 1 year after MOBILE 6 is issued; 
and (4) A commitment to perform a mid-course review.
    Texas provided a commitment to adopt the measures necessary for 
attainment and ROP in its May 19, 1998, SIP revision. For purposes of 
finding the budget adequate, Texas can amend this commitment in a 
letter to add the above items. However, before EPA can finalize this 
conditional approval, Texas will have to provide for notice and comment 
on these additional elements. We expect that Texas will submit the list 
of measures and enforceable commitments in draft by 12/31/99 and in 
final by 
4/15/00. The list of additional control measures should be submitted in 
the same time frame as the enforceable commitments. We will include any 
additional submission of additional commitments or list of measures in 
the administrative record for this rule. Please note, if the final list 
of additional measures and commitments is significantly different than 
the draft submitted earlier, the final list and commitments should be 
submitted by February 15, 2000 to accommodate the 90 day processing 
period so the budget can be determined adequate by May 31, 2000.
What Are the Proposed Conditions?
    We are proposing the following conditions:
    (1) Texas must submit target calculations and adopted rules that 
meet the Post-99 Rate of Progress requirements of the Act by December 
31, 2000.
    (2) Texas must submit by, December 31, 2000, adopted rules that are 
needed for attainment by 2007.
How Can Texas Receive Full Approval of the Attainment Plan?
    EPA will have to complete its analysis of the modeling in the 
November 15, 1999 SIP modeling demonstration to determine if it meets 
the requirements of the Act, rules, and policies. Then, Texas must 
submit the adopted control measures to achieve rate of progress and 
attainment. If EPA determines they are complete, or they are deemed 
complete, the EPA will determine through additional rulemaking action 
whether the State's submittals meet requirements of the Act, rules and 
policies.
Is the May 19, 1998, SIP Revision Consistent With the December 27, 1997 
Policy?
    The provisions of the December 27, 1997 policy are discussed in 
section I.A.2. The May 19, 1998 SIP revision included modeling that 
shows that a 65-85 percent, across the board, reduction in 
NOX emissions would be needed for the area to attain the 
ozone standard. Texas submitted documentation and information to 
support the analysis. The modeling shows the sensitivity of ozone 
levels to overall emission reductions. Texas did not, however, model a 
specific control strategy that would achieve the needed reductions. It 
is necessary to model the specific control strategy being considered to 
make sure the planned controls on specific sources will be effective in 
reducing ozone. This cannot be ascertained by modeling across the board 
reductions of all sources.
    Texas also has provided SIP revisions to address all of the 
measures and regulations required for a severe-17 ozone nonattainment 
area by subpart 2 of the Act. We are reviewing SIP revisions for the 
97-99 (9%) ROP plan, the Vehicle Miles Traveled Offset SIP, Industrial 
Wastewater RACT, and Batch Processing RACT. We will take action to 
address these submissions in separate Federal Register notices.
    Texas also provided a list of potential control measures in the May 
19, 1998, SIP revision. These measures have not, however, been modeled 
to determine, if implemented, whether attainment of the one-hour 
standard would be demonstrated.
    The May 19, 1998, SIP submission also contained a commitment to 
submit a SIP revision with the remaining components by December 30, 
2000. These items must include a Post-1999 ROP Plan, and adopted 
regulations to achieve the required ROP reductions through 2007 and to 
attain the 1-hour NAAQS.
    Finally, Texas also included evidence that public hearings were 
held on the May 19, 1998, SIP revision.
    We acknowledge that Texas attempted to address the elements due 
under the December 1997, policy. Texas, however, still needed to 
provide a specific control strategy that has been modeled and shown to 
achieve the NAAQS for ozone to fully address all of the requirements 
due April 1998, under the policy. Further, Texas needed to provide an 
adequate motor vehicle emissions budget based on that modeled control 
strategy. Texas submitted a specific modeled control strategy and an 
associated motor vehicle emissions budget in the November 15, 1999 
submission.
Why Is EPA Alternatively Proposing Disapproval?
    We are taking comment on this alternative because the Attainment 
Demonstration SIP for HGA should be disapproved if there is not an 
adequate motor vehicle emissions budget.
Under What Circumstances Would EPA Expect To Finalize the Disapproval?
    In addition to proposing conditional approval, we are also 
proposing as an alternative disapproval of the May 19, 1998, attainment 
SIP submission, as supplemented by the SIP on November 15, 1999. We 
propose to finalize the disapproval if the motor vehicle emissions 
budget in the November 15, 1999 submission is inadequate. As discussed 
previously, we cannot find the budget adequate unless Texas provides 
the following: a list of additional measures that can be used to 
achieve the needed additional reductions, a commitment to revise the 
motor vehicle emissions budget if later measures affect the motor 
vehicle emissions inventory, a commitment to submit a revised motor 
vehicle emissions budget 1 year after MOBILE 6 is released, and a 
commitment to perform a mid-course review.
What Are the Consequences if the Plan Is Disapproved?
    If the plan is disapproved, either by converting the final 
conditional approval to a disapproval or by finalizing the proposed 
disapproval in this notice, there are certain consequences.
    A disapproval can lead to the imposition of sanctions under section 
179 of the Act. Also, a disapproval can lead to the promulgation under 
section 110(c) of a Federal Implementation Plan (FIP) to address the 
Houston air quality problem. Furthermore, upon disapproval, only 
projects in the first three years of the currently conforming plan and 
TIP can be approved. No new transportation plan or transportation 
improvement program (TIP) may be found to conform until another 
attainment demonstration with an explicit motor vehicle emissions 
budget is submitted and the motor vehicle emissions budget is 
determined adequate.

[[Page 70560]]

    If Texas does not submit an approvable plan that meets the 
conditions within 18 months of the disapproval action, then the 
emission offset requirement for new and modifying sources in the 
Houston/Galveston nonattainment area would be increased. Six months 
later, if an approvable plan still has not been received, highway 
funding limitations would go into place and conformity would lapse. We 
are also required to promulgate a FIP no later than 2 years following 
disapproval of a SIP, if the State has not submitted and EPA has not 
approved a new submission in the interim.
What Does the Modeling in the May 19, 1998 SIP Submission Show?
    The modeling shows that NOX emissions must be reduced in 
the Houston area by 65-85 percent. Texas has also shown that emissions 
of VOC should be reduced by an additional 15 percent. These percentage 
reductions are based on an estimate of projected total emissions for 
the eight county nonattainment area in the year 2007. The Texas Natural 
Resource Conservation Commission also performed a large number of model 
runs to evaluate the sensitivity of the model to emission reductions in 
different locations and its sensitivity to controls on point, mobile or 
area sources. The State concluded from its analysis that controlling 
just point sources would not be sufficient to achieve attainment. 
Further, controlling just mobile sources would not achieve attainment. 
Emission reductions will have to be achieved in all source categories 
to achieve the goal of attainment.
What Does Preliminary Examination of the Modeling in the November 15, 
1999 Modeling and Control Strategy Show?
    Texas has modeled control strategies of increasing stringency. The 
scenario that gets closest to attaining the one hour standard still has 
peak values of in the range of 0.140-0.152 ppm, still well above the 
standard of 0.124 ppm, the modeling attainment test cut-off. This 
strategy includes:

Federal Measures:
    Heavy Duty Diesel Standards
    Phase II Reformulated Gasoline
    National Low emitting vehicle
    Tier II motor vehicle standards
    Heavy Duty diesel equipment standard
    Locomotive standards
    Spark ignition standards for off-road equipment
    Commercial marine vessel standards
    Recreational marine standards
State Measures:
    Tier III point source controls (approx. 90% reduction)
    Reductions in East Texas: Utilities 50%, grandfathered 30%
    Cleaner burning gasoline in East Texas
    California Reformulated Gasoline
    California Reformulated Diesel
    Acceleration Simulation Mode equivalent I/M program 8 counties
How Does Texas Compare to the Framework for Proposing Action Discussed 
in Section I.C.?
    As previously discussed, Texas submitted a SIP on May 19, 1998, and 
then submitted a SIP to correct the deficiencies on November 15, 1999. 
EPA must determine if the November 15, 1999 SIP submittal is complete. 
If EPA determines the November 15, 1999 SIP submittal is complete, we 
will publish a notice of proposed action on the approvability of that 
SIP. As discussed in section I.C., the EPA has identified the key 
elements, in addition to the modeling and WOE support, which must be 
present for EPA to approve or conditionally approve the attainment 
demonstration SIP. A preliminary comparison of the November 15, 1999 
SIP submission to these key elements follows. Regional NOX 
reductions consistent with the modeling demonstration: This element 
does not strictly apply to the Houston area because Texas was outside 
of the area covered by the NOX SIP call. It is worth noting 
that Regional NOX reductions at power plants in the eastern 
portion of Texas have been included in the modeling submitted November 
15, 1999. Texas will have to adopt and submit rules by December 2000 
that achieve these reductions to continue to rely on these reductions.
    Clean Air Act Measures: This refers to adopted and submitted rules 
for all previously required CAA mandated measures for a Severe area. 
Texas has provided SIP revisions to address all of the measures and 
regulations required for a severe-17 ozone nonattainment area by 
subpart 2 of the Act. We are reviewing SIP revisions for the 9% ROP 
plan, the Vehicle Miles Traveled Offset SIP, Industrial Wastewater 
RACT, and Batch Processing RACT. We will take action to address these 
submissions in separate Federal Register notices.
    Adequate Motor Vehicle Emissions Budget: The May 19, 1998 
submission did not contain an attainment motor vehicle emissions 
budget. Texas has submitted a motor vehicle emissions budget in its 
November 15, 1999 submission. As discussed above, we will be reviewing 
this budget for adequacy and posting notice of availability of the SIP 
for comment on the adequacy of the motor vehicle emissions budget on 
our website.
    Tier 2/Sulfur Program Benefits: Texas has estimated the benefits of 
the Tier 2/Sulfur program in their modeling submitted November 15, 
1999. We will have to review their estimates of emission reductions and 
propose in our action on the 1999 Attainment Demonstration SIP 
submittal whether those estimates are acceptable or not.16
---------------------------------------------------------------------------

    \16\ If EPA ultimately concludes that Texas has not properly 
estimated the Tier II emission reductions, Texas will have to 
resubmit their Tier II estimates, attainment demonstration and their 
motor vehicle emissions budget before we can take a final approval 
action.
---------------------------------------------------------------------------

    Additional Measures to further reduce emissions to support the 
attainment test: The modeling in the November 1999 submission does not 
appear to have sufficient emission reductions to demonstrate 
attainment. As discussed previously, Texas already has an enforceable 
commitment to adopt measures necessary for attainment by December 31, 
2000. They will need to provide a list of measures that can be used to 
achieve the needed additional reduction. This list of measures will 
need to receive public notice and comment. Further, if Texas determines 
that they need additional time to adopt some or all of these additional 
measures, they will need to revise their previous commitment contained 
in the May 19, 1998 SIP revision. In any case, the rules must be 
adopted as expeditiously as practicable and Texas should show a 
compelling reason why additional time is necessary.
    Mid-course Review: Texas will need to provide an enforceable 
commitment to perform a mid-course review.
What Is EPA's Preliminary Analysis of the Amount of Additional 
Reductions Needed To Demonstrate Attainment Beyond Those in the 
November Submission?
    We have performed a preliminary analysis of the November 15, 1999 
submission. We believe that an additional 11% NOX emission 
reduction beyond the reductions that have already been identified is 
necessary for the area to attain. To develop our estimate of the 
shortfall, we extrapolated the relationship between NOX 
emissions and peak ozone using three of Texas's modeling scenarios. 
Because this relationship is not linear, we used a polynomial curve 
fitting technique to extrapolate what level of NOX 
reductions would correspond to 0.124 ppm. A more detailed discussion of 
our analysis is contained in the TSD for this proposal. We will be 
working with the

[[Page 70561]]

Texas Natural Resource Conservation Commission to further refine this 
analysis. We also recognize that further modeling refinements could 
increase or decrease this estimate.
What Are the CAA's FIP Provisions if a State Fails To Submit a Plan?
    In addition to sanctions, if EPA finds that a State failed to 
submit the required SIP revision or disapproves the required SIP 
revision EPA must promulgate a FIP no later than 2 years from the date 
of the finding if the deficiency has not been corrected. The attainment 
demonstration SIPs on which EPA is taking action today were originally 
due in November 1994. However, through a series of policy memoranda, 
EPA recognized that States had not submitted attainment demonstrations 
and were constrained to do so until ozone transport had been further 
analyzed. As provided in the Background, above, EPA provided for States 
to submit the attainment demonstration SIPs in two phases. In June 
1996, EPA made findings that ten States and the District of Columbia 
had failed to submit the phase I SIPs for nine nonattainment areas. 61 
FR 36292 (July 10, 1996). In addition on May 19, 1997, EPA made a 
similar finding for Pennsylvania for the Philadelphia area. 62 FR 
27201. None of these findings included the Houston/Galveston area.
    In July 1998, several environmental groups filed a notice of 
citizen suit, alleging that EPA had outstanding sanctions and FIP 
obligations for the serious and severe nonattainment areas on which EPA 
is proposing action today. These groups filed a lawsuit in the Federal 
District Court for the District of Columbia on November 8, 1999.

III. Administrative Requirements

A. Executive Order (E.O.) 12866

    The Office of Management and Budget (OMB) has exempted these 
proposed regulatory actions from review under E.O. 12866, entitled 
``Regulatory Planning and Review.''

B. Executive Order 13045

    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 the EPA determines (1) is 
``economically significant,'' as defined under Executive Order 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.
    These proposed actions are not subject to E.O. 13045 because they 
do not involve decisions intended to mitigate environmental health and 
safety risks.

C. Executive Order 13084

    Under E.O. 13084, EPA may not issue a regulation that is not 
required by statute, that significantly affects or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments. If the mandate is unfunded, 
EPA must provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of regulatory policies on matters that significantly or 
uniquely affect their communities.'' Today's proposed actions do not 
significantly or uniquely affect the communities of Indian tribal 
governments. These proposed actions do not involve or impose any new 
requirements that affect Indian Tribes. Accordingly, the requirements 
of section 3(b) of E.O. 13084 do not apply to these proposed actions.

D. Executive Order 13132

    Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), 
revokes and replaces Executive Orders 12612 (Federalism) and 12875 
(Enhancing the Intergovernmental Partnership). Executive Order 13132 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by State and local officials in the development of 
regulatory policies that have federalism implications.'' ``Policies 
that have federalism implications'' is defined in the Executive Order 
to include regulations that have ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.'' Under Executive Order 13132, EPA may 
not issue a regulation that has federalism implications, that imposes 
substantial direct compliance costs, and that is not required by 
statute, unless the Federal government provides the funds necessary to 
pay the direct compliance costs incurred by State and local 
governments, or EPA consults with State and local officials early in 
the process of developing the proposed regulation. EPA also may not 
issue a regulation that has federalism implications and that preempts 
State law unless the Agency consults with State and local officials 
early in the process of developing the proposed regulation.
    These proposed rules will not have substantial direct effects on 
the States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132 (64 
FR 43255, August 10, 1999), because the proposed conditional approval 
merely approves a State rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. The proposed 
disapproval would not impose requirements directly upon the State, and 
does not alter the relationship or the distribution of power and 
responsibilities established in the Act. Thus, the requirements of 
section 6 of the Executive Order do not apply to these proposed rules.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 600 et seq., 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements unless the agency certifies 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 small governmental jurisdictions. This proposed rule 
will not have a significant impact on a substantial number of small 
entities because conditional SIP approvals under section 110 and 
subchapter I, part D of the Clean Air Act do not create any new 
requirements but simply approve requirements that the State is already 
imposing. Therefore, because the Federal SIP approval does not create 
any new requirements, I certify that this proposed action will not have 
a significant economic impact on

[[Page 70562]]

a substantial number of small entities. Moreover, due to the nature of 
the Federal-State relationship under the Clean Air Act, preparation of 
a flexibility analysis would constitute Federal inquiry into the 
economic reasonableness of state action. The Clean Air Act forbids EPA 
to base its actions concerning SIPs on such grounds. Union Electric Co. 
v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).
    If the conditional approval is converted to a disapproval under 
section 110(k), based on the State's failure to meet the commitment, it 
will not affect any existing State requirements applicable to small 
entities. Federal disapproval of the State submittal does not affect 
State-enforceability. Moreover, EPA's disapproval of the submittal does 
not impose any new requirements. Therefore, I certify that such a 
proposed disapproval action will not have a significant economic impact 
on a substantial number of small entities because it would not remove 
existing requirements nor would it substitute a new Federal 
requirement.
    The EPA's alternative proposed disapproval of the State request 
under section 110 and subchapter I, part D of the Act would not affect 
any existing requirements applicable to small entities. Any pre-
existing Federal requirements would remain in place after this 
disapproval. Federal disapproval of the State submittal does not affect 
State-enforceability. Moreover EPA's disapproval of the submittal would 
not impose any new Federal requirements. Therefore, I certify that the 
proposed disapproval would not have a significant impact on a 
substantial number of small entities.

F. 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 
annual 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.
    EPA has determined that the proposed conditional approval action 
does not include a Federal mandate that may result in estimated annual 
costs of $100 million or more to either State, local, or tribal 
governments in the aggregate, or to the private sector. This proposed 
Federal action approves pre-existing requirements under State or local 
law, and imposes no new requirements. Accordingly, no additional costs 
to State, local, or tribal governments, or to the private sector, 
result from this proposed action.
    Sections 202 and 205 do not apply to the proposed disapproval 
because the proposed disapproval of the SIP submittal would not, in and 
of itself, constitute a Federal mandate because it would not impose an 
enforceable duty on any entity. In addition, the Act does not permit 
EPA to consider the types of analyses described in section 202 in 
determining whether a SIP submittal meets the CAA. Finally, section 203 
does not apply to the proposed disapproval because it would affect only 
the State of Texas, which is not a small government.

G. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing new regulations. To comply with 
NTTAA, the EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    EPA believes that VCS are inapplicable to these proposed actions. 
Today's proposed actions does not require the public to perform 
activities conducive to the use of VCS.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental regulations, Nitrogen oxides, Ozone, Reporting and 
record keeping requirements, Volatile organic compounds.

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

    Dated: November 30, 1999.
David W. Gray,
Acting Regional Administrator, Region 6.
[FR Doc. 99-31723 Filed 12-15-99; 8:45 am]
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