[Federal Register Volume 69, Number 61 (Tuesday, March 30, 2004)]
[Rules and Regulations]
[Pages 16483-16494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6929]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 81

[TX-122-1-7612; FRL-7641-2]


Determination of Nonattainment as of November 15, 1996 and 
Reclassification of the Beaumont/Port Arthur Ozone Nonattainment Area; 
State of Texas; Final Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Pursuant to the U.S. Court of Appeals for the Fifth Circuit's 
(the Court) reversal, the EPA is withdrawing its final action that 
extended the attainment date to November 15, 2007, and approved the 
transport demonstration (66 FR 26914) for the Beaumont/Port Arthur 1-
hour ozone nonattainment area (the BPA area). The EPA finds that the 
BPA area has failed to attain the 1-hour ozone national ambient air 
quality standard (NAAQS or standard) by November 15, 1996, the 
attainment date for moderate nonattainment areas set forth in the 
Federal Clean Air Act (Act or CAA). As a result, the BPA area is 
reclassified by operation of law as a serious 1-hour ozone 
nonattainment area. The new serious area attainment date for the BPA 
area is as expeditiously as practicable but no later than November 15, 
2005. The State of Texas must submit a State Implementation Plan (SIP) 
revision that meets the serious area 1-hour ozone nonattainment area 
requirements of the Act on or before one year after the effective date 
of this final action. We are adjusting the dates by which the area must 
meet the rate-of-progress (ROP) requirements and adjusting contingency 
measure requirements as they relate to the ROP requirements. These 
final actions are in direct response and to comply with the Court's 
reversal.
    In response to the Court's remand, we are withdrawing our final 
approval of BPA's 2007 attainment demonstration SIP, the Mobile Vehicle 
Emissions Budget (MVEB), the mid-course review commitment (MCR), and 
our finding that BPA implemented all Reasonable Available Control 
Measures (RACM). The required revised SIP must include, among other 
things, a revised attainment demonstration SIP, a new MVEB, and a re-
analysis of RACM that complies with the Court's order.

DATES: This final rule is effective on April 29, 2004.

ADDRESSES: Copies of documents relevant to this action are available 
for public inspection during normal business hours at the following 
locations. Anyone 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), 1445 Ross Avenue, Dallas, Texas 75202-2733; and, the Texas 
Natural Resource Conservation Commission, Office of Air Quality, 12124 
Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Karla Ann Richardson, Air Planning 
Section (6PD-L), 1445 Ross Avenue, Dallas, Texas 75202-2733. Telephone 
Number (214) 665-8555, e-Mail Address: [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' and 
``our'' means EPA. This supplementary information section is organized 
as listed in the following Table of Contents:

I. What Is the Background for this Action?
II. What Are the National Ambient Air Quality Standards?
III. What Is the NAAQS for Ozone?
IV. What Is a SIP and How Does It Relate to the NAAQS for Ozone?
V. What Is the Beaumont/Port Arthur Nonattainment Area?
VI. What Is the Additional Context for This Rulemaking?
VII. Application of the CAA Provisions Regarding Determinations of 
Nonattainment and Reclassifications
    A. Serious Classification
    B. Selection of Option 2--Reclassification to Serious
VIII. What Is the New Attainment Date for the Beaumont/Port Arthur 
Area?
IX. What is the Date for Submitting a Revised SIP for the Beaumont/
Port Arthur Area?
X. Why Are We Withdrawing the Attainment Demonstration, MCR, and 
MVEB approvals and the RACM Finding, and What Are the Potential 
Impacts of the Withdrawals?
XI. How Does the Recent Release of MOBILE6 Interact With 
Reclassification?
    A. What is the Relationship Between MOBILE6 and the Attainment 
Year Motor Vehicle Emissions Budgets?
    B. What Is the Relationship Between MOBILE6 and the Post-1996 
Rate-of-Progress Requirement?
XII. What Are the Rate-of-Progress and Contingency Measure 
Schedules?
    A. Rate-of-Progress Milestones
    B. 2005 Rate-of-Progress
    C. Contingency for Failure To Achieve Rate-of-Progress by 
November 15, 1999, and November 15, 2002
XIII. What are the Impacts on the Title V Program?
XIV. What comments were received on the supplemental proposal 
approval, and how has the EPA responded to those?
XV. EPA Action
XVI. Statutory and Executive Order Reviews

I. What Is the Background for This Action?

    The BPA area was classified as a moderate 1-hour ozone 
nonattainment area and, therefore, was required to attain the 1-hour 
ozone standard of 0.12 ppm by November 15, 1996. On April 16, 1999, EPA 
proposed to reclassify the BPA area to a serious ozone nonattainment 
area, or, in the alternative to extend BPA's attainment date if the 
State submitted a SIP consistent with the criteria of the Transport 
Policy. 64 FR 18864. As part of the proposed alternative 
reclassification of the area to serious, the EPA proposed to find that 
the BPA area did not attain the 1-hour ozone NAAQS by November 15, 
1996, as required by the CAA. The proposed finding was based on 1994-
1996 air quality data that showed the area's air quality violated the 
standard and the area did not qualify for an attainment date extension 
under the provisions of section 181(a)(5).\1\ EPA also proposed that 
the appropriate reclassification of the area would be from moderate to 
serious.
---------------------------------------------------------------------------

    \1\ Section 181(a)(5) specifies that a state may request, and 
EPA may grant, up to two one-year attainment date extensions. EPA 
may grant an extension if: (1) the state has complied with the 
requirements and commitments pertaining to the applicable 
implementation plan for the area, and (2) the area has measured no 
more than one exceedance of the ozone standard at any monitoring 
site in the nonattainment area in the year in which attainment is 
required.
---------------------------------------------------------------------------

    Although the area was not eligible for an attainment date extension 
under

[[Page 16484]]

CAA section 181(a)(5), the April 16, 1999, proposal included a notice 
of the BPA area's eligibility for an attainment date extension, 
pursuant to the Transport Policy, which was published in a March 25, 
1999, Federal Register notice (64 FR 14441). This policy addressed 
circumstances where pollution from upwind areas interferes with the 
ability of a downwind area to attain the 1-hour ozone standard by its 
attainment date. EPA proposed to finalize its action on the 
determination of nonattainment and reclassification of the BPA area 
only after the area had received an opportunity to qualify for an 
attainment date extension under the Transport Policy.
    The State of Texas submitted a request for an extension of the 
attainment date for the BPA area, a transport demonstration, an 
attainment demonstration SIP and MVEB, an MCR enforceable commitment, 
and RACM analysis. We proposed on December 27, 2000, to approve the 
transport demonstration and to extend the attainment date without 
reclassifying the area, to approve the attainment demonstration SIP and 
MVEB, to approve the MCR commitment, and to find that BPA was 
implementing all RACM. (65 FR 81786)
    On May 15, 2001, EPA issued a final rule (66 FR 26914) in which EPA 
approved the transport demonstration and extended the attainment date 
for the BPA area to November 15, 2007, while retaining the area's 
classification as ``moderate.'' The rule also approved the attainment 
demonstration for the BPA area and MVEB, approved the State's 
enforceable commitment to perform a mid-course review and submit a SIP 
revision by May 1, 2004, found that the area was implementing all RACM, 
and took one other non-related action. The attainment demonstration SIP 
is addressed in the State of Texas submittals dated November 12, 1999, 
and April 25, 2000. Thus, the area would have had until no later than 
November 15, 2007, the attainment date for the upwind Houston-Galveston 
(HG) nonattainment area, to attain the 1-hour ozone standard. The final 
rule contains EPA's responses to the comments. (We also took one final 
action not relevant to today's action and the Court's remand: the 
finding that BPA met the Reasonably Available Control Technology (RACT) 
requirements for major sources of Volatile Organic Compounds (VOC) 
emissions.)
    A petition for review of the May 15, 2001, rulemaking was filed in 
the U.S. Court of Appeals for the Fifth Circuit. On December 11, 2002, 
the Court issued a decision in Sierra Club v. EPA, 314 F.3d 735 (5th 
Cir. 2002), reversing the portion of EPA's approval that extended BPA's 
attainment date to 2007 under the Transport Policy without 
reclassifying the area.\2\ The Court also remanded to EPA the final 
actions related to the reversal: our approval of the attainment 
demonstration SIP and MVEB, the MCR commitment, and our finding that 
the area was implementing all RACM. The Court affirmed the portion of 
EPA's final action that requires implementation only of control 
measures that contribute to attainment as expeditiously as practicable 
and considers implementation costs in rejecting control measures, but 
remanded EPA's specific determination regarding RACM in the BPA area so 
that any conclusions about the control measures may be adequately 
explained.
---------------------------------------------------------------------------

    \2\ Two other United States Circuit Courts of Appeals had 
previously issued decisions rejecting transport-based attainment 
date extensions that EPA had granted in other areas. Sierra Club v. 
EPA, 294 F.3d 155 (D.C. Cir. 2002) and Sierra Club v. EPA, 311 F.3d 
853 (7th Cir. 2002). In the wake of these decisions, EPA issued 
final rulemakings reclassifying the Washington, DC ozone 
nonattainment area, 68 FR 3410 (January 24, 2003), and the St. Louis 
ozone nonattainment area, 68 FR 4835 (January 30, 2003). (EPA 
subsequently redesignated the St. Louis area to attainment for the 
ozone standard 68 FR 25418 and 68 FR 25442 (May 12, 2003).) In 
addition, in light of the three circuit court decisions, EPA issued 
final rules withdrawing transport-based attainment date extensions 
and reclassifying the Baton Rouge and the Atlanta ozone 
nonattainment areas, (68 FR 20077 (April 24, 2003), and 68 FR 55469 
(September 26, 2003), respectively).
---------------------------------------------------------------------------

    EPA published a Supplemental Proposed rule dated June 19, 2003 (68 
FR 36756). In response to the Court's reversal, EPA proposed to 
withdraw its final action that extended the attainment date to November 
15, 2007, and approved the transport demonstration. We also proposed to 
issue a finding that BPA failed to attain the 1-hour ozone national 
ambient air quality standard (NAAQS or standard) by November 15, 1996, 
the attainment date for moderate nonattainment areas set forth in the 
Act, and to reclassify BPA as a serious 1-hour ozone nonattainment 
area. EPA also proposed that should we take final action on the 
reclassification to serious, we would also take one of two alternative 
options for identifying the appropriate attainment date for the area. 
Under Option 1, EPA proposed further to find that the area failed to 
attain the 1-hour ozone standard by November 15, 1999, the attainment 
date for serious nonattainment areas. If EPA took final action on that 
finding, the area would be reclassified as a severe 1-hour ozone 
nonattainment area, with an attainment date of no later than November 
15, 2005. Alternatively, under Option 2, if the area were reclassified 
as a serious 1-hour ozone nonattainment area, EPA proposed that it 
would retain that classification, but that it would have an attainment 
date of no later than November 15, 2005. Under either alternative, we 
proposed that the State of Texas submit the required SIP revision on or 
before one year after the effective date of a final action on this 
notice. We further proposed to adjust the dates by which the area must 
meet the rate-of-progress (ROP) requirements and adjust contingency 
measure requirements as they relate to the ROP requirements.
    In response to the Court's remand, we also proposed to withdraw our 
final approval of BPA's 2007 attainment demonstration SIP, the MVEB, 
the mid-course review commitment (MCR), and our finding that BPA 
implemented all RACM. We also proposed the schedule for Texas to submit 
a revised SIP, a new MVEB, and a re-analysis of RACM meeting the 
Court's order.

II. What Are the National Ambient Air Quality Standards?

    Since the CAA's inception in 1970, EPA has set NAAQS for six common 
air pollutants: carbon monoxide, lead, nitrogen dioxide, ozone, 
particulate matter, and sulfur dioxide. The CAA requires that these 
standards be set at levels that protect public health and welfare with 
an adequate margin of safety. These standards present state and local 
governments with the air quality levels they must meet to achieve clean 
air. Also, these standards allow the American people to assess whether 
or not the air quality in their communities is healthful.

III. What Is the NAAQS for Ozone?

    The NAAQS for ozone is expressed in two forms called the 1-hour and 
8-hour \3\ standards. Table 1 summarizes the 1-hour ozone standards.
---------------------------------------------------------------------------

    \3\ The 8-hour ozone standard value is 0.08 ppm and is the 
primary and secondary standard. The standard requires that the 
average of the annual fourth highest daily maximum 8-hour average 
ozone concentration measured at each monitor over any three-year 
period, be less than or equal to 0.08 ppm. EPA intends to designate 
areas under the 8-hour standard by April 15, 2004.

[[Page 16485]]



                                      Table 1.--Summary of Ozone Standards
----------------------------------------------------------------------------------------------------------------
          Standard                   Value                         Type                    Method of compliance
----------------------------------------------------------------------------------------------------------------
1-hour.....................  0.12 ppm............  Primary and Secondary...............  Must not be exceeded,
                                                                                          on average, more than
                                                                                          one day per year over
                                                                                          any three-year period
                                                                                          at any monitor within
                                                                                          an area.
8-hour.....................  0.08 ppm............  Primary and Secondary...............  Three year average of
                                                                                          the annual fourth
                                                                                          highest value at any
                                                                                          specific monitor must
                                                                                          not exceed the
                                                                                          standard.
----------------------------------------------------------------------------------------------------------------

    (Primary standards are designed to protect public health and 
secondary standards are designed to protect public welfare and the 
environment.) Eventually the 8-hour standard will replace the one hour 
standard. EPA is currently developing a transition policy from the one 
hour standard to the eight hour standard that will explain which one 
hour requirements must remain in place (68 FR 32802).
    At this time the 1-hour ozone standard continues to apply to the 
BPA area, and it is the classification of the BPA area with respect to 
the 1-hour ozone standard addressed in this document.

IV. What Is a SIP and How Does It Relate to the NAAQS for Ozone?

    Section 110 of the CAA requires states to develop air pollution 
regulations and control strategies to ensure that state air quality 
meet the NAAQS established by EPA. Each state must submit these 
regulations and control strategies to us for approval and incorporation 
into the Federally-enforceable SIP.
    Each Federally-approved SIP protects air quality primarily by 
addressing air pollution at its point of origin. These SIPs can be 
extensive. They may contain state regulations or other enforceable 
documents and supporting information such as emission inventories, 
monitoring networks, and modeling demonstrations.

V. What Is the Beaumont/Port Arthur Nonattainment Area?

    The Beaumont/Port Arthur 1-hour ozone nonattainment area is located 
in Southeast Texas, and consists of Hardin, Jefferson, and Orange 
Counties.

VI. What Is the Additional Context for This Rulemaking?

    The Transport Policy provided for an extension of an area's 
attainment date if it was adversely affected by transport, without 
having to reclassify the affected area. Consequently, when we granted 
the extension of the attainment date for BPA based upon the transport 
demonstration, we did not take action to finalize the April 16, 1999, 
proposed finding that BPA had not attained the 1-hour ozone standard by 
November 15, 1996. We therefore did not reclassify BPA from 
``moderate'' to ``serious.'' The Court's ruling means that BPA's 
attainment date extension while retaining the ``moderate'' 
classification, using the Transport Policy, is no longer valid.

VII. Application of the CAA Provisions Regarding Determinations of 
Nonattainment and Reclassifications

A. Serious Classification

    Section 181(b)(2) of the Act requires that we determine, based on 
the area's design value (as of the attainment date), whether an ozone 
nonattainment area attained the one-hour ozone standard by that date. 
If we find that the nonattainment area has failed to attain the one-
hour ozone standard by the applicable attainment date, the area is 
reclassified by operation of law to the higher of the next higher 
classification for the area, or the classification applicable to the 
area's design value as determined at the time of the required Federal 
Register notice.
    We make attainment determinations for ozone nonattainment areas 
using available quality-assured air quality data. For the BPA ozone 
nonattainment area, the attainment determination is based on 1994-1996 
air quality data. The data show that for 1994-1996, four monitoring 
sites averaged more than one exceedance day per year. This data 
calculates to a design value of .157 ppm. Therefore, pursuant to 
section 181(b) of the CAA, we find that the BPA area did not attain the 
1-hour ozone NAAQS by the November 15, 1996, deadline for moderate 
areas. Additional background for this finding may be found in the April 
16, 1999, proposal (64 FR 18864), the December 27, 2000, proposal (65 
FR 81786), and the May 15, 2001, final rule (66 FR 26914). A summary 
and discussion of the air quality monitoring data for the BPA area for 
1994 through 1996 can be found in the April 16, 1999, proposal and its 
technical support document (TSD). We received no adverse comments on 
our findings regarding these air quality data.
    Section 181(b)(2)(A) of the Act requires that, when we find that an 
area failed to attain by the applicable date, the area is reclassified 
by operation of law to the higher of: the next higher classification or 
the classification applicable to the area's ozone design value at the 
time the required notice is published in the Federal Register. The 
classification applicable to BPA's ozone design value at the time of 
today's notice is ``moderate'' since the area's 2003 calculated design 
value, based on quality-assured ozone monitoring data from 2001-2003, 
is 0.129 ppm. By contrast, the next higher classification for BPA is 
``serious.'' Because ``serious'' is a higher nonattainment 
classification than ``moderate'' under the statutory scheme, BPA is 
reclassified by operation of law as ``serious,'' for failing to attain 
the standard by the moderate area applicable attainment date of 
November 15, 1996.

B. Selection of Option 2--Reclassification to Serious

    In EPA's Supplemental Proposed rule dated June 19, 2003 (68 FR 
36756), we proposed two options for identifying the appropriate 
attainment date following a final action on the reclassification of the 
BPA area to serious. Under Option 1, EPA would make an additional 
determination of whether BPA attained the standard by November 15, 
1999. If we made a final determination that the area failed to attain 
by the 1999 date, the area would be reclassified as severe with an 
attainment date of no later than November 15, 2005. Under Option 2, if 
the area were reclassified as a serious area, EPA would retain the 
serious classification for the area but the attainment date would be no 
later than November 15, 2005.
    We have concluded that Option 2 is the better choice. We therefore 
have chosen not to finalize the additional determination of whether the 
BPA area attained the standard by November 15, 1999. We believe it is 
appropriate in these special BPA circumstances to retain the serious 
classification but with a prospective attainment date. Through 
discussions with representatives from the State, Industry, 
Environmental Groups, and commenting parties it seems that they agree 
Option 2 is the better choice considering the BPA area's particular 
circumstances, history, and facts.

[[Page 16486]]

VIII. What Is the New Attainment Date for the Beaumont/Port Arthur 
Area?

    The new attainment date for the BPA area is as expeditiously as 
practicable but no later than November 15, 2005. The as expeditiously 
as practicable attainment date will be determined as part of the action 
on the required SIP submittal.

IX. What Is the Date for Submitting a Revised SIP for BPA?

    EPA must address the schedule by which Texas is required to submit 
the SIP revision. We proposed the required SIP revision be submitted as 
expeditiously as practicable but no later than one year after the 
effective date of our final action. No adverse comments were received 
by the EPA on this issue. Today, we are requiring that Texas submit the 
SIP revision as expeditiously as practicable but no later than one year 
after the effective date of this final action.
    Additionally, the implementation of the failure to attain 
contingency measures in the current SIP is triggered automatically upon 
the effective date of this rule. Further, Texas is required to submit a 
revision to the SIP containing contingency measures under sections 
172(c)(9) and 182(c)(9) to meet ROP requirements and for failure to 
attain.
    The State's SIP revision submitted for an attainment date of 2007 
contained a commitment to perform and submit a mid-course review (MCR) 
by May 1, 2004. Due to the new time frame for SIP submittal and the 
attainment date of November 15, 2005, Texas is not required to submit 
an MCR for the BPA area.

X. Why Are We Withdrawing the Attainment Demonstration, MCR and MVEB 
Approvals and the RACM Finding, and What Are the Potential Impacts of 
the Withdrawals?

    We are withdrawing our final approval of BPA's 2007 attainment 
demonstration and the accompanying Motor Vehicle Emission Budget 
(MVEB), the MCR enforceable commitment, and the Reasonably Available 
Control Measures (RACM) finding. Having an attainment date earlier than 
2007 requires the submission of a revised attainment demonstration SIP, 
a new MVEB, and a re-analysis of the RACM determination.
    To be consistent with the Court's reversal of the 2007 attainment 
date extension, and to respond to the remand, we are withdrawing our 
May 15, 2001, approval of the 2007 attainment demonstration and MVEB, 
the MCR enforceable commitment, and the finding that the area was 
implementing all RACM. They are no longer applicable as they were based 
on a 2007 attainment date. A new attainment demonstration with a new 
MVEB, and a new RACM analysis, are required to be submitted for the BPA 
area. All are due on or before one year from the effective date of this 
Final Rule.
    As discussed in the June 19, 2003, supplemental proposal, the Court 
affirmed the portion of our May 15, 2001, final action that treats as 
potential RACMs only those measures that would advance the attainment 
date and considers implementation costs when rejecting certain control 
measures in its December 11, 2002, decision. However, the Court 
remanded the analysis and conclusions regarding RACM in the BPA area to 
the EPA. According to the Court's order, the analysis must: (1) 
demonstrate an examination of all relevant data; and (2) provide a 
plausible explanation for the rejection of proposed RACMs including why 
the measures, individually and in combination, would not advance the 
BPA area's attainment date.
    The State is responsible for performing and submitting a new RACM 
analysis for EPA use in determining SIP approval. Even though the State 
is responsible for developing the new analysis, when evaluating the use 
of RACM in the SIP approval process EPA will only consider as adequate 
an RACM analysis by the State containing the factors outlined in the 
Court's December 11, 2002, ruling. The RACM analysis is due on or 
before the attainment demonstration due date.
    Withdrawing approval of the MVEB results in reverting to the 
previously approved MVEBs for the purposes of transportation 
conformity. This would be the 1996 budget which was for VOCs only and 
did not include a NOX budget. Therefore, there will be no 
valid NOX budget in effect until a new NOX MVEB 
is submitted and found adequate. In order for transportation projects 
to proceed in the absence of an adequate NOX budget, an area 
must: (1) pass a ``build/no-build'' emissions test, meaning that 
projected future regional emissions from the transportation system 
after making proposed changes must be lower than the projected 
emissions from the existing transportation system; and (2) demonstrate 
that the estimated future emissions will not exceed 1990 levels. See 40 
CFR 93.119(b).

XI. How Does the Recent Release of MOBILE6 Interact With 
Reclassification?

A. What Is the Relationship Between MOBILE6 and the Attainment Year 
Motor Vehicle Emissions Budgets?

    In addition to the fact that the motor vehicle emissions budgets 
contained in the State's November 12, 1999, and April 25, 2000, 
submittals are based on the year 2007, which is no longer an allowable 
attainment date under the Court's decision, the current MVEB is not 
based upon the most recent mobile source emission factors model, 
MOBILE6.
    The motor vehicle emissions budgets submitted to fulfill the SIP 
revision requirements, including those of the attainment demonstration, 
must be prepared using the latest approved emissions model. See 40 CFR 
51.112. EPA approved the MOBILE6 emissions factor model in January 
2002. As a result, any new attainment SIP planning must now be based on 
the MOBILE6 model. The State should refer to applicable guidance and 
policy, such as ``Policy Guidance for the Use of MOBILE6 in SIP 
Development and Transportation Conformity'' (memorandum from John S. 
Seitz and Margo Tsirigotis Oge, January 18, 2002) in preparing the 
budgets. The revised SIP must contain budgets based on MOBILE6 
modeling.

B. What Is the Relationship Between MOBILE6 and the Post-1996 Rate-of-
Progress Requirement?

    The section 182(c)(2)(B) reasonable further progress requirement 
requires volatile organic compounds (VOC) or nitrogen oxides 
(NOX) reductions of 3 percent per year, averaged over a 3-
year period, until the attainment date, for serious and above ozone 
nonattainment areas designated and classified under the 1-hour ozone 
NAAQS. The EPA refers to these reductions as the rate-of-progress (ROP) 
requirement.
    The January 18 MOBILE6 policy indicates, among other things, that 
the motor vehicle emissions budgets in the post-1996 rate-of-progress 
plans will have to be developed using MOBILE6. In this policy we said:

    In general, EPA believes that MOBILE6 should be used in SIP 
development as expeditiously as possible. The Clean Air Act requires 
that SIP inventories and control measures be based on the most 
current information and applicable models that are available when a 
SIP is developed.\4\

    \4\ See Clean Air Act section 172(c)(3) and 40 CFR 51.112(a)(1).
---------------------------------------------------------------------------

    Texas has not submitted ROP plans other than the original 15% ROP 
plan

[[Page 16487]]

required for the BPA area as a moderate area, since under the Transport 
Policy the BPA area was not required to meet the post-1996 ROP 
requirements. The post-1996 until the attainment date ROP plans will 
need to be based upon MOBILE6.
    The post-1996 rate-of-progress requirement flows from section 
182(c)(2)(B) which requires serious and above areas to achieve a 3 
percent per year reduction in baseline VOC emissions (or some 
combination of VOC and NOX reductions from baseline 
emissions pursuant to section 182(c)(2)(C)) averaged over each 
consecutive three-year period after November 15, 1996, until the 
attainment date.\5\ Baseline emissions are the total amounts of actual 
VOC or NOX emissions from all anthropogenic sources in the 
area during the calendar year 1990, excluding emissions that would be 
eliminated under certain Federal programs and Clean Air Act mandates: 
phase 2 of the Federal gasoline Reid vapor pressure regulations (Phase 
2 RVP) promulgated on June 5, 1990 (see 55 FR 23666); the Federal motor 
vehicle control program in place as of January 1, 1990 (1990 FMVCP); 
and certain changes and corrections to motor vehicle inspection and 
maintenance (I/M) programs and corrections and reasonably available 
control technology (RACT) required under section 182(a)(2).\6\ We have 
issued guidance that provides detailed information for implementing the 
rate-of-progress provisions of section 182.\7\ Basically our guidance 
requires the calculation of a target level of emissions for each rate-
of-progress milestone year. The target level for any rate-of-progress 
milestone year is the 1990 baseline emissions decreased by the amount 
of baseline emissions that would be reduced by the 1990 FMVCP, the 
Phase 2 RVP program, and RACT fix-ups \8\ by that year and reduced by 
the amount of the mandated minimum reductions (15 percent VOC by 1996, 
and an additional nine (9) percent VOC, or VOC and NOX, by 
1999, an additional 9 percent VOC, or VOC and NOX, by 2002, 
and an additional 9 percent VOC, or VOC and NOX, by 2005). 
Under our guidance, the first rate-of-progress milestone year target 
level, for example, the 15 percent VOC reduction by 1996, starts with 
the 1990 base year emissions and then subtracts the effects of the 1990 
FMVCP and Phase 2 RVP and RACT fix-ups through 1996 and also subtracts 
the required 15 percent VOC reduction. The 1999 VOC target level starts 
with the 1996 target level and subtracts the effects between 1996 and 
1999 of the 1990 FMVCP and Phase 2 RVP and RACT fix-ups and subtracts 
the required 9 percent post-1996 reduction. For each target level, our 
guidance requires the preparation of a 1990 base year inventory 
``adjusted'' to the milestone year (the ``1990 adjusted base year 
inventory'') to account for the effects of the 1990 FMVCP and Phase 2 
RVP and RACT fix-ups by the milestone year. The adjusted inventory uses 
1990 motor vehicle activity levels but emission factors computed by 
MOBILE6 for the applicable milestone year. For example, preparation of 
a rate-of-progress plan for the ROP milestone year of 1999, with 
NOX substitution, requires a 1990 base year inventory for 
both VOC and NOX, a 1990 base year VOC inventory adjusted to 
1996, and 1990 base year VOC and NOX inventories adjusted to 
1999. Preparation of a rate-of-progress plan for 2005 with 
NOX substitution requires a 1990 base year inventory for 
both VOC and NOX plus the following seven ``adjusted'' 
inventories: 1996 VOC; 1999 VOC and NOX; 2002 VOC and 
NOX; and 2005 VOC and NOX.
---------------------------------------------------------------------------

    \5\ As a moderate area, BPA was not required to submit a ROP 
plan for a nine (9) percent reduction for the 3-year period November 
15, 1996, through November 15, 1999. However, the BPA area now is 
required to submit an ROP plan through November 15, 2005, the new 
attainment date.
    \6\ These requirements under section 182(a)(2) are known as I/M 
and RACT corrections or I/M and RACT ``fix-ups.'' For further 
explanation of these see 57 FR at 13503-13504, April 16, 1992.
    \7\ This includes: Guidance on the Post-1996 Rate-of-Progress 
Plan (RPP) and Attainment Demonstration, EPA-452/R-93-015 (Corrected 
version of February 18, 1994). An electronic copy may be found on 
EPA's Web site at http://www.epa.gov/ttn/oarpg/t1pgm.html (file 
name: ``post96--2.zip'').
    \8\ The BPA area has no I/M program and so has no I/M fix-ups to 
consider. A vehicle I/M program would normally be listed as a 
requirement for a 1-hour ozone moderate or above nonattainment area. 
However, the Federal I/M Flexibility Amendments of 1995 determined 
that urbanized areas with populations less than 200,000 for 1990 
(such as Beaumont/Port Arthur) are not mandated to participate in 
the I/M program (60 FR 48033, September 18, 1995).
---------------------------------------------------------------------------

    One consequence of the need to use MOBILE6 emission factors in the 
post-1996 rate-of-progress plans is that the area must recompute the 
1990 baseline emissions using the MOBILE6 emissions factor model to 
update the 1990 on-road mobile sources' portion of the 1990 base year 
emission inventory. The area must also calculate post-1996 rate-of-
progress target levels by reiterating the target levels for rate-of-
progress requirements for the 1996 milestone year.
    Thus, in addition to vehicle emissions budgets for any applicable 
milestone year, the post-1996 rate-of-progress requirement will also 
require the development of a revision to the 1990 base year emissions 
inventories and development of up to seven 1990 adjusted inventories 
(VOC for 1996, VOC and NOX for 1999, VOC and NOX 
for 2002, plus VOC and NOX for 2005).

XII. What Will Be the Rate-of-Progress and Contingency Measure 
Schedules?

A. Rate-of-Progress Milestones

    Section 182(c)(2)(B) requires serious and above areas to achieve a 
3 percent per year reduction in baseline VOC emissions (or some 
combination of VOC and NOX reductions from baseline 
emissions pursuant to section 182(c)(2)(C)) averaged over each 
consecutive three-year period after November 15, 1996, until the 
attainment date. Under the new attainment date, attainment must be 
achieved as expeditiously as practicable but no later than November 15, 
2005.
    Under the schedule for submittal of the new SIP, the rate-of-
progress plans for the 1999 and 2002 milestone years will be due well 
after the November 15, 1999, and November 15, 2002, milestone dates. If 
sufficient actual reductions occurring by the November 15, 1999, and 
November 15, 2002, milestone dates do not now exist, then Texas can 
only get reductions after the two milestone dates because, at this 
point, the State does not have the ability to require additional 
reductions for a period that has already passed. The passing of the 
deadlines does not relieve Texas from the requirement to achieve the 18 
percent reduction in emissions, but simply means that the 18 percent 
reduction must be achieved as expeditiously as practicable but no later 
than November 15, 2005.
    The approved SIP for the BPA area contains measures that generate 
additional benefits after November 15, 1996. Such measures include 
reduction requirements on large sources of NOX.
    As discussed elsewhere in this document in the section titled 
``What is the Relationship Between MOBILE6 and the Post-1999 Rate-of-
Progress,'' the CAA specifies the emissions ``baseline'' from which 
each emission reduction milestone is calculated. Section 182(c)(2)(B) 
states that the reductions must be achieved ``from the baseline 
emissions described in subsection (b)(1)(B).'' This baseline value is 
termed the ``1990 adjusted base year inventory.'' Section 182(b)(1)(B) 
defines baseline emissions (for purposes of calculating each milestone 
VOC/NOX emission reduction) as ``the total amount of actual 
VOC or NOX emissions from all anthropogenic sources in the 
area during the calendar year of enactment'' and excludes from the

[[Page 16488]]

baseline the emissions that would be eliminated by certain specified 
Federal programs and certain changes to state I/M and RACT rules.\9\ 
The 1990 adjusted base year inventory must be recalculated relative to 
each milestone and attainment date because the emission reductions 
associated with the FMVCP increase each year due to fleet turnover.\10\
---------------------------------------------------------------------------

    \9\ These are the 1990 FMVCP, Phase 2 RVP, and the I/M and RACT 
fix-ups.
    \10\ See U.S. EPA, (1994), Guidance on the Post-1996 Rate-of-
Progress Plan (RPP) and Attainment Demonstration, EPA-452/R-93-015 
(Corrected version of February 18, 1994). An electronic copy may be 
found on EPA's web site at http://www.epa.gov/ttn/oarpg/t1pgm.html 
(file name: ``post96--2.zip'').
---------------------------------------------------------------------------

    Therefore, since there are federal and state rules requiring 
reductions after November 15, 1996, EPA concludes that the BPA area has 
already implemented measures creditable toward the 1999 and 2002 rate-
of-progress milestones. However, we are not able to conclude that the 
area has sufficient measures to achieve the required 9 percent 
reduction by November 15, 1999, and an additional 9 percent reduction 
by November 15, 2002, in the absence of the rate-of-progress plans for 
both the 1999 and 2002 milestone years that document the calculations 
of the 1999 and 2002 target levels of emissions, account for expected 
growth in emissions related activities, and contain the requisite 
demonstration that sufficient creditable reductions have or were 
projected to occur by November 15, 1999, and November 15, 2002, 
respectively. We have insufficient data concerning what the levels of 
reductions would have been in the area by 1999 and 2002, since we do 
not know what the 1990 adjusted base year inventory for 1996, 1999, and 
2002 will be or the projected emissions growth for the periods of 
November 15, 1996, through November 15, 1999 and November 15, 1999, 
through November 15, 2002. Nor do we have sufficient information to 
allow us to determine what will be an expeditiously as practicable date 
for achievement of this post-1996 18 percent rate-of-progress 
requirement.
    EPA finds that the 1999 and 2002 rate-of-progress requirements are 
that Texas must submit a rate-of-progress plan that demonstrates that 
the SIP has sufficient measures to achieve the required 18 percent 
reductions by a date as expeditiously as practicable.\11\ This approach 
was recently upheld by the United States Court of Appeals for the 
District of Columbia Circuit in Sierra Club v. EPA, DC. Cir. No. 03-
1084 (Feb. 3, 2004), slip opinion at page 22 note 11. Texas must 
identify sufficient data and show why they meet the ``as expeditiously 
as practicable'' requirement. Such SIP revision will have to 
demonstrate that any date after November 15, 1999, by which the 1999 9 
percent ROP reduction is achieved, as well as any date after November 
15, 2002, by which the first post-1999 9 percent ROP reduction is 
achieved, is as expeditious as practicable.
---------------------------------------------------------------------------

    \11\ EPA believes that such date cannot be any later than 
November 15, 2005.
---------------------------------------------------------------------------

B. 2005 Rate-of-Progress

    There is no change to the date by which the 2003-2005 9 percent 
increment of the rate-of-progress must be achieved. If the currently 
adopted and approved SIP measures and the current suite of Federal 
measures will not achieve the required rate-of-progress reductions, we 
believe the State has sufficient time to adopt and implement measures 
to achieve the required reductions in the BPA area by November 15, 
2005.

C. Contingency For Failure To Achieve Rate-of-Progress by November 15, 
1999 and November 15, 2002

    The contingency measures' plan must identify specific measures to 
be undertaken if the area fails to meet any applicable milestone, to 
make rate-of-progress, or to attain the NAAQS. With respect to the 
November 15, 1999, and November 15, 2002, milestones, the EPA believes 
that the contingency plan will need to account for any adjustment to 
the milestone dates.
    With this final action determining that BPA has failed to attain 
the standard by November 15, 1996, the presently-approved 1996 ROP/
attainment contingency plan is automatically invoked. (See 63 FR 6659 
for the contingency measures.) Therefore, the State is required to 
``backfill'' these contingency measures. Since the BPA area did not 
attain by the moderate area attainment date, and in order to fulfill 
the contingency measures' plan requirements of sections 172(c)(9) and 
182(c)(9) of the CAA, implementation of the failure-to-attain 
contingency measures' plan in the current SIP is triggered 
automatically upon the effective date of this Final rule. Further, 
Texas is required to submit a revision to the SIP containing additional 
contingency measures to meet post-1996-2005 ROP requirements and for 
failure to attain by the 2005 attainment date. See 57 FR 13498, 13511 
(1992).

XIII. What Are the Impacts on the Title V Program?

    In accordance with a serious classification, the major stationary 
source threshold will now be lower than it was as a moderate 
classification. Consequently, the State's Title V operating permits 
program regulations need to cover existing sources that are now subject 
to the lower major stationary source threshold of serious (50 tons per 
year for volatile organic compounds (VOCs) and nitrogen oxide compounds 
(NOX)). Any newly major stationary sources must submit a 
timely Title V permit application. ``A timely application for a source 
applying for a part 70 permit for the first time is one that is 
submitted within 12 months after the source becomes subject to the 
permit program or on or before such earlier date as the permitting 
authority may establish.'' See 40 CFR 70.5(a)(1). The 12 month (or an 
earlier date set by the applicable permitting authority) time period to 
submit a timely application will commence on the effective date of this 
reclassification action.

XIV. What Comments Were Received on the Supplemental Proposal, and How 
Has the EPA Responded to Those?

    EPA received comments from the public on the Notice of Supplemental 
Proposed Rulemaking (NPR) published on June 19, 2003 (66 FR 36756). 
Comments were received from: South East Texas Regional Planning 
Commission; Clean Air and Water, Inc.; Orange County Judge, Carl K. 
Thibodeaux; Goodyear Tire and Rubber Company; Nederland Economic 
Development Corp.; City of Orange; Bridge City Chamber of Commerce; 
City of Lumberton; City of Vidor; City of Nederland; City of West 
Orange; Greater Orange Area Chamber of Commerce; City of Bridge City; 
City of Beaumont; Greater Port Arthur Chamber of Commerce; City of Port 
Neches; Beaumont Chamber of Commerce; City of Port Arthur; Golden 
Triangle Business Roundtable; Jefferson County Judge Carl R. Griffith, 
Jr.; City of Pinehurst; Southeast Texas Plant Managers' Forum; Texas 
Commission on Environmental Quality; A joint letter from Sierra Club, 
Clean Air and Water, Inc., and Community InPowerment Development 
Association; and twelve individuals.
    The following discussion summarizes and responds to relevant 
comments.

A. Comments in Support of Option 1: About Half of Comments From Private 
Citizens Supported Reclassification to Severe, Including Comment 
Letters From Two of the Three Litigants in the 5th Circuit Sierra Club 
v. EPA Court Case

    The following summarizes these comments and EPA's responses.

[[Page 16489]]

    Comment 1: Commenters believe that the air must be cleaned up and 
that the EPA and industry should take the steps necessary to protect 
the life, health, welfare, safety and environment for citizens. They 
argued that classification to severe is required by the CAA in this 
circumstance and is long overdue. More monitoring, better regulations, 
and specific measures required for BPA will protect the public.
    Response 1: The EPA agrees that it is necessary to reclassify the 
BPA area to ensure that the court ruling regarding our extension of the 
BPA attainment date based upon the Transport Policy is adequately 
addressed. We do not, however, agree that it is necessary to reclassify 
the area as severe to ensure the BPA area attains in the most timely 
manner. Option 1 or Option 2 both result in attainment as expeditiously 
as practicable but no later than November 2005. Therefore, as explained 
in later comments we believe that the choice of Option 2 will yield air 
quality that complies with the NAAQS for ozone as expeditiously as 
Option 1.
    Comment 2: Some of the commenters voiced skepticism that there is a 
HG transport problem and believe the pollution problem is created 
within the BPA area. Others commented that the State must account for 
and overcome problems caused by intrastate air pollution. Texas has the 
duty under the Act to ensure that its overall statewide SIP (i.e., the 
amalgamation of regional and area SIPs) quantifies and compensates, 
through additional emissions reductions, for the effects of upwind 
areas' air pollution on downwind areas, as the State explains is one 
reason compromising the BPA area's ability to demonstrate attainment.
    Response 2: The Court's December 11, 2002, decision invalidated the 
EPA's application of the Transport Policy to the BPA area and Texas' 
ability to rely on it. As a result, the State will need to take 
whatever measures are required for the BPA area to attain no later than 
November 15, 2005. This will include measures to address any transport 
from the HG area and any measures required to address the local sources 
in the BPA area. Since the EPA believes that both situations, local 
emissions or transport from the HG area, can result in exceedances in 
the BPA area, we will expect the State's attainment modeling 
demonstration to encompass both types of events.
    Comment 3: The BPA area's emissions inventory must be updated to 
reflect current actual emissions, including incorporation of MOBILE6 
emissions factors, consideration of the effect of the failure of the 
heavy duty diesel engine manufacturers' settlement agreement to 
accomplish the anticipated levels of diesel engine retrofits (EMA v. 
EPA, DC Cir. Nos. 01-1129 and 02-1080), the State's awareness of 
considerably higher actual emissions from many refineries and chemical 
plants from malfunctions and other conditions. Moreover, the EPA should 
identify in this final rulemaking BPA's planning inventory, versus the 
``overall'' emissions inventory described in the Supplemental Proposal 
notice.
    Response 3: The EPA agrees that the required attainment 
demonstration SIP revision and the revised MVEB, as well as the ROP 
plans, must incorporate MOBILE6 emissions factors. Further, the State 
must consider the impact of revised or current information, e.g., the 
most accurate mobile source emissions estimates (including any 
variation due to underestimations such as those for the long-haul truck 
reflashing), present growth predictions, effectiveness of control 
measures, etc., when developing the revised SIP for BPA. Whatever data 
is presently available to the State concerning the impact of upset/
malfunctions and other conditions on the emissions from refineries and 
chemical plants must also be addressed.
    The motor vehicle emissions budgets submitted by the State with the 
BPA transport attainment demonstration are no longer valid as they were 
based on a November 15, 2007, attainment date. Therefore, the budgets 
submitted for the new SIP must be prepared using the MOBILE6 emissions 
factor model and the revised SIP must contain budgets based on MOBILE6 
modeling. The Clean Air Act section 172(c)(3) and 40 CFR 51.112(a)(1) 
require that the inventories and control measures be based on the most 
current information available when a SIP is developed.
    We agree that the planning inventory the State uses in developing 
the required SIP revision must include all sources of emissions, 
including biogenic emissions. In our supplemental notice, we did not 
mean to imply the figures in our supplemental notice were acceptable 
for SIP planning purposes. Our comment accurate estimates of biogenic 
emissions generally are not available, and that rough estimates 
typically relied on can inflate and distort SIP emissions inventories, 
is not relevant to this rulemaking. Texas will need to incorporate the 
best available estimate of biogenic emissions in its revised SIP. There 
will be an opportunity for the public to comment on the State's 
estimates during the State's comment period. There will also be the 
opportunity to comment on the EPA's action approving or disapproving 
the State's Plan including any emissions estimates.
    Comment 4: The EPA failed adequately to explain the basis for its 
RACM conclusion in the rulemaking. The prior RACM analysis is now stale 
and must be completely revised, both to address changed circumstances 
(i.e., newly available control measures) and the advanced attainment 
date and concomitant additional emissions reductions.
    Response 4: We agree that the previous RACM analysis must be 
revised. As a result of the Fifth Circuit's decision, the RACM analysis 
associated with the State's 2007 attainment date demonstration is no 
longer applicable since it was based on a 2007 attainment date. A new 
RACM analysis will be required to be submitted for the BPA area that 
addresses the 2005 attainment date and any other changed circumstances.
    The Court affirmed the portion of our May 15, 2001, final action 
that treats as potential RACMs only those measures that would advance 
the attainment date and that considers implementation costs when 
rejecting certain control. The Court agreed, however, with the 
commenters that the EPA failed adequately to explain the basis for its 
RACM conclusion, and remanded it to EPA. According to the Court's 
order, the EPA's analysis must: (1) demonstrate an examination of all 
relevant data; and (2) provide a plausible explanation for the 
rejection of proposed RACMs including why the measures, individually 
and in combination, would not advance the BPA area's attainment date.
    The State is responsible for performing and submitting a new RACM 
analysis for EPA use in determining SIP approval. EPA will consider as 
adequate an RACM analysis by the State containing the factors outlined 
in the Court's December 11, 2002, ruling, when evaluating the use of 
RACM in the SIP approval process.
    Comment 5: A Commenter asserted that Texas must expedite its one 
hour ozone SIP submittal to accomplish improved air quality as 
expeditiously as practicable. The commenter contended that if EPA had 
acted legally, there would already be an approved SIP with 
implementation of control measures. It appears that rather than 
expediting revision of the SIP, Texas is prolonging the period of 
unhealthful air quality by delaying action to identify and adopt 
necessary further controls to improve the area's air quality to meet 
the one hour ozone standard.
    Response 5: In this final action, the EPA finds a one year deadline 
is appropriate for the State of Texas to

[[Page 16490]]

submit the required revised SIP, a new MVEB, and a re-analysis of RACM. 
The State has already started efforts for re-analysis using MOBILE6, 
initiated other emission inventory and modeling activities, and intends 
to propose the new SIP this Spring, and the EPA believes that on or 
before one year after the effective date of this rule is as 
expeditiously as practicable and a reasonable time for submittal. 
Moreover, many of the more stringent NOX control measures in 
the current SIP were implemented in 2003. Therefore, local controls are 
continuing to be imposed in the area to reduce the ozone concentration 
levels.
    Comment 6: A commenter urged that EPA must not further delay 
issuing a SIP call for a revised one hour ozone SIP in accordance with 
the Court's direction. The 8-hour ozone standard will require a 
separate planning effort.
    Response 6: Today's final action serves a function similar to that 
of a SIP call in that it requires a revised 1-hour ozone SIP that must 
be submitted within one year of the effective date of this final 
action. Since we have not yet promulgated a final rule for 
implementation of the 8-hour ozone standard, we cannot speculate 
whether a state may combine its 1-hour ozone serious area CAA 
requirements with an 8-hour ozone planning effort. Please see Section 
XIV, B, response to comment 5 for further information.
    Comment 7: A commenter urges EPA to impose offset sanctions as a 
result of the inadequacy of the BPA area's submitted SIP.
    Response 7: EPA does not believe that discretionary sanctions are 
appropriate in this instance where the State has made submissions in 
reliance on EPA policies, and mandatory sanctions would not be imposed 
unless EPA disapproves a SIP submission. New SIP submission schedules 
for the requirements imposed as a result of the failure to attain 
determination for Beaumont, are just now being made. The State should 
have an opportunity to meet these new obligations before sanctions are 
imposed.
    Comment 8: A commenter argues that Congress provided EPA with 
authority to require the BPA SIP to ``include such additional measures 
as the Administrator may reasonably prescribe.'' 42 U.S.C. 7509(d)(2). 
The commenter asserts that EPA should require, among other things, 
control of flaring. See, for example, Santa Barbara County Air 
Pollution Control District Rule 359.
    Response 8: As long as the State submits a SIP that demonstrates 
attainment of the 1-hour ozone standard in the BPA area as 
expeditiously as practicable but no later than November 15, 2005, and 
meets all of the Act's requirements, Texas may select whatever mix of 
control measures it desires. Union Elec. Co. v. EPA, 427 U.S. 246 
(1976). With this rule, it is now the responsibility of the State of 
Texas to identify and adopt measures to enable attainment as 
expeditiously as practicable but no later than November 15, 2005, and 
meet the other requirements of the Act, including the serious area 
classification requirements, the requirements for the rate of progress, 
and RACM, contingency measures plan, demonstrating attainment as 
expeditiously as practicable, etc. EPA does not have the authority to 
require specific measures for the State at this time. If control of 
flares from source categories is not required for expeditious 
attainment or to meet RACT, the State must evaluate whether control of 
flares from source categories is an RACM. It is the role of the State, 
not EPA, to be the first to identify specific measures consistent with 
the BPA area's particular emissions inventory. The EPA will provide 
assistance and guidance to Texas in this effort.
    Comment 9: Commenters question whether Texas has already 
implemented measures creditable toward the 1999 and 2002 ROP 
milestones. Texas must make a detailed showing of what control measures 
are creditable for past ROP obligations, and for exactly what quantity 
of emissions reductions.
    Response 9: EPA agrees that Texas must submit 1999 and 2002 ROP 
plans that contain specifics and details to demonstrate clearly whether 
previously implemented control measures meet these ROP obligations. See 
Section XII for our discussion on these requirements.

B. Comments in Support of Option 2: The Remaining Letters From Private 
Citizens, and 23 other Letters From BPA Area Cities, Judges, Chambers 
of Commerce, Business/Industry Groups, Metropolitan Planning 
Organizations, and the Texas Commission on Environmental Quality (TCEQ) 
Commented in Opposition to Option 1

    These comments are summarized and discussed here.
    Comment 1: Many commenters supported Option 2, a reclassification 
to serious with an attainment date of November 15, 2005. Some of the 
commenters stated that the area should not be reclassified at all. 
Commenters argued that extensive emission reduction activities have 
already been implemented, and that since 1972 there has been a clear 
downward trend in ambient ozone measurements for the BPA area.
    Response 1: The EPA is required by the Fifth Circuit's decision to 
make a determination as to whether BPA attained by November 15, 1996. 
Since the BPA area failed to attain by 1996, BPA cannot remain 
classified as ``moderate.''
    While there has been general improvement in the ozone design values 
throughout the years, the area has yet to attain the one hour NAAQS. 
This final rule is making a final determination that the BPA area 
failed to attain by November 15, 1996, thereby reclassifying by 
operation of law the BPA area to serious, and is establishing an 
attainment date of as expeditiously as practicable but no later than 
November 15, 2005.
    Comment 2: EPA is authorized to adopt Option 2 and should do so 
because it is fair. Commenters contended that because EPA did not 
timely issue a determination for attainment, it is empowered to extend 
the attainment date when it reclassifies an area. Commenters also 
asserted that a second reclassification to severe would unfairly punish 
an area, whose air quality has improved over the years. A commenter 
argued that the Clean Air Act contemplates that states will have a 
prospective opportunity to bring reclassified areas into attainment. A 
petitioner stated that ``where EPA's failure to meet its own deadline 
impacts the lead time Congress intended to provide states to obtain the 
standard after reclassification, then EPA may also extend the 
attainment date.''
    Response 2: EPA believes that a further determination for failure 
to attain by November 25, 1999 and reclassification by operation of law 
to severe is not appropriate in light of the specific history, facts, 
and circumstances for the BPA area. Option 2 is fair for the unique 
circumstances presented by the BPA area. From discussions we believe 
that a unique plan will be developed for the BPA area that will still 
expeditiously attain the standard yet not unduly ``punish'' the area.
    Comment 3: The BPA area should not be reclassified as severe, as 
this classification would create unnecessary economic burdens for the 
BPA area, as well as being unfair to the BPA area.
    Response 3: Since the BPA area is not being reclassified to severe, 
the perceived unnecessary economic burdens will not occur. 
Nevertheless, under the provisions of the CAA the EPA does not have the 
authority to consider any potential economic

[[Page 16491]]

consequences arising from a reclassification for nonattainment of an 
NAAQS. Under section 181(b)(2)(A), the attainment determination is made 
solely on the basis of air quality data, and any reclassification is by 
operation of law. If an area is reclassified, the more stringent 
requirements apply irrespectively of economic considerations.
    It is, however, appropriate for a state to consider specific 
economic impacts in meeting the new requirements and in developing 
specific regulatory requirements for specific sources. For example, an 
entity proposed to be regulated by Texas to meet RACT, may seek a case-
specific RACT determination by the State, based on economic or 
technical hardship. Texas may also consider implementation costs when 
rejecting certain control measures in its proposed RACM analysis. This 
consideration for RACM was specifically upheld in the Court's ruling. 
EPA must approve a SIP revision if it meets the requirements of the 
Act, even if it is more stringent. Union Elec. Co. v. EPA, 427 U.S. 246 
(1976). Additionally, actions (such as the approval of a SIP revision) 
that merely approve state law as meeting federal requirements and 
impose no additional requirements beyond those imposed by state law, 
are not subject to economic impact analysis under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.). Such consideration is up to the 
state under applicable state administrative procedure laws. Details on 
the State's assessments of financial impact flowing from the required 
new SIP revision will be found in the Texas proposed SIP documents, and 
must be made available by Texas to the public when Texas conducts its 
public participation.
    Comment 4: EPA should waive Texas' obligation to submit a 1-hour 
attainment demonstration SIP for BPA. This would be consistent with 
options EPA proposed in the June 2, 2003 Federal Register for 
transitioning from the 1-hour to the 8-hour ozone standard and would 
allow Texas to focus its limited air quality planning resources on the 
more protective 8-hour standard. If EPA requires Texas to submit a 1-
hour attainment demonstration SIP, the SIP should be due no earlier 
than one year after EPA's final reclassification action.
    Response 4: The June 2, 2003 Federal Register proposal notice for 
transitioning from the 1-hour to the 8-hour ozone standard solicits 
comment on whether to retain the 1-hour ozone attainment demonstration 
requirement for areas like BPA.
    The June 2, 2003 Federal Register notice for transitioning from the 
1-hour to the 8-hour ozone standard is only a proposal. The EPA 
presently has no authority to waive the State's obligation to submit a 
1-hour SIP and to meet the CAA requirements to attain the 1-hour ozone 
NAAQS. It is currently the State's responsibility to perform planning 
and SIP activities and submittals to meet the 1-hour NAAQS for ozone. 
EPA is in the process of evaluating comments on its June 2 proposal, 
and will address these issues in its final action.
    Comment 5: A number of the commenters state that pollutants 
transported into Southeast Texas from the HG area, which cannot be 
locally controlled, are prohibiting the BPA area from attaining. 
Commenters believe that the BPA area already has sufficient controls in 
place, or that will take effect shortly (e.g., 44% NOX 
controls), and due to transport it is unlikely that any new local 
control measures would lead to more expeditious attainment. They 
request the EPA to validate the transport of air from the HG area.
    Response 5: While EPA agrees that the BPA area is affected by 
transport from outside the area by the upwind HG area, the U.S. Court 
of Appeals for the Fifth Circuit ruled on December 11, 2002 that EPA is 
precluded from extending the BPA area's attainment date using the 
Transport Policy. At the time the State's current SIP revision was 
submitted, the Transport Policy was used to analyze the SIP revisions, 
and EPA believes that Texas demonstrated that during some exceedances 
in the BPA area, ozone levels are affected by emissions from the HG 
area, and that the HG area emissions affect BPA's ability to meet 
attainment of the 1-hour ozone standard. The Court's ruling, however, 
invalidated the EPA's interpretation of the Act reflected in the policy 
by which an attainment date extension based on transport was granted to 
the BPA area.

XV. EPA Action

    EPA is taking the following actions:
     We are withdrawing our final action that 
extended the attainment date to November 15, 2007, and approved the 
transport demonstration (66 FR 26914).
     We are withdrawing our final approval of BPA's 
2007 attainment demonstration SIP, the Mobile Vehicle Emissions Budget 
(MVEB), the mid-course review commitment (MCR), and our finding that 
BPA implemented all Reasonable Available Control Measures (RACM).
     Pursuant to section 181 (b), we find that BPA 
has failed to attain the 1-hour ozone national ambient air quality 
standard (NAAQS or standard) by November 15, 1996, the attainment date 
for moderate nonattainment areas set forth in the Act.
     The area is reclassified by operation of law as 
a serious 1-hour ozone nonattainment area,
     We are establishing an attainment date of as 
expeditiously as practicable but no later than November 15, 2005.
     The contingency measures plan for failure to 
attain is triggered upon the effective date of this final action.
     The State of Texas must backfill this 
contingency measures plan for failure to attain.
     We are adjusting the dates by which the area 
must meet the 1999 and 2002 rate-of-progress (ROP) requirements and 
adjusting contingency measure requirements as they relate to the ROP 
requirements.
     The State of Texas is no longer required to 
submit an MCR by May 1, 2004.
     The State of Texas is to submit the required 
revised SIP, a new MVEB, and a re-analysis of RACM, on or before one 
year after the effective date of this Final action.

XVI. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA is 
required to determine whether regulatory actions are significant and 
therefore should be subject to Office of Management and Budget (OMB) 
review, economic analysis, and the requirements of the Executive Order. 
The Executive Order defines a ``significant regulatory action'' as one 
that is likely to result in a rule that may meet at least one of the 
four criteria identified in section 3(f), including, under paragraph 
(1), that the rule may ``have an annual effect on the economy of $100 
million or more or adversely affect, in a material way, the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local or tribal 
governments or communities.''
    The Agency has determined that findings of nonattainment would 
result in none of the effects identified in section 3(f) of the 
Executive Order. Under section 181(b)(2) of the CAA, determinations of 
nonattainment are based upon air quality considerations and the 
resulting reclassifications must occur by operation of law. They do 
not, in and of themselves, impose any new requirements on any sectors 
of the economy. In addition, because the statutory requirements are 
clearly defined with respect to the differently

[[Page 16492]]

classified areas, and because those requirements are automatically 
triggered by the resulting classifications that, in turn, are triggered 
by air quality values, determinations of nonattainment and 
reclassifications cannot be said to impose a materially adverse impact 
on state, local, or tribal governments or communities.

B. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    This final action to reclassify the BPA area as a serious ozone 
nonattainment area and to adjust applicable deadlines does not involve 
technical standards. Therefore, EPA did not consider the use of any 
voluntary consensus standards.

C. Paperwork Reduction Act

    This final action to reclassify the BPA area as a serious ozone 
nonattainment area and to adjust applicable deadlines does not impose 
an information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 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.
    Determinations of nonattainment and the resulting reclassifications 
of nonattainment areas by operation of law under section 181(b)(2) of 
the CAA do not in and of themselves create any new requirements. 
Instead, this rulemaking only makes a factual determination, and does 
not directly regulate any entities. See 62 FR 60001, 60007-8, and 60010 
(November 6, 1997) for additional analysis of the RFA implications of 
attainment determinations. Therefore, pursuant to 5 U.S.C. 605(b), I 
certify that this final action does not have a significant impact on a 
substantial number of small entities within the meaning of those terms 
for RFA purposes.

E. Unfunded Mandates Reform Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(UMRA), 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 the 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 believes, as discussed previously in this document, that the 
findings of nonattainment are a factual determination based upon air 
quality considerations and that the resulting reclassifications occur 
by operation of law. Thus, EPA believes that the findings do not 
constitute a Federal mandate, as defined in section 101 of the UMRA, 
because they do not impose an enforceable duty on any entity.

F. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    Executive Order 13045, Protection of Children from Environmental 
Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to 
any rule that: (1) Is determined to be economically significant as 
defined under Executive Order 12866, and (2) concerns an environmental 
health or safety risk that EPA has reason to believe may have 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. This final 
action is not subject to Executive Order 13045 because this is not an 
economically significant regulatory action as defined by Executive 
Order 12866.

G. Executive Order 13132, Federalism

    Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 
1999) 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. Determinations of nonattainment and 
the resulting reclassifications of nonattainment areas by operation of 
law 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 such an action does not, in and of itself, impose 
any new requirements on any sectors of the economy, and does not alter 
the relationship or the distribution of power and responsibilities 
established in the CAA. Thus, the requirements of section 6 of the 
Executive Order do not apply to these actions.

H. Executive Order 13175, Coordination With Indian Tribal Governments

    This final rule also does not have tribal implications because it 
will not have a substantial direct effect on one or more Indian tribes, 
on the relationship between the Federal Government and Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal Government and Indian tribes, as specified by Executive Order 
13175 (65 FR 67249, November 9, 2000).

[[Page 16493]]

I. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    Under Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001), EPA must prepare for those matters identified as 
significant energy actions. A ``Significant energy action'' is any 
action by an agency (normally published in the Federal Register) that 
promulgates or is expected to lead to the promulgation of a final rule 
or regulation, including notices of inquiry, advance notices of 
proposed rulemaking, and notices of proposed rulemaking, that is a 
significant regulatory action under Executive Order 12866 and is likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy. Under Executive Order 12866, this action is not a 
``significant regulatory action.'' For this reason, findings of 
nonattainment and the resulting reclassifications of nonattainment 
areas are also not subject to Executive Order 13211.

J. Congressional Review Act

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

K. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by June 1, 2004. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action to reclassify the BPA area as a serious 
ozone nonattainment area and to adjust applicable deadlines may not be 
challenged later in proceedings to enforce its requirements. (See 
section 307(b)(2).)

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Intergovernmental relations, Nitrogen oxides, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

40 CFR Part 81

    Environmental protection, Air pollution control, National parks, 
Wilderness areas.

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

    Dated: March 18, 2004.
Richard E. Greene,
Regional Administrator, Region 6.

0
Parts 52 and 81, chapter I, title 40 of the Code of Federal Regulations 
are amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart SS--Texas


Sec.  52.2270  [Amended]

0
2. In Sec.  52.2270(e), the table entitled ``EPA Approved Nonregulatory 
Provisions and Quasi-Regulatory Measures in the Texas SIP'' is amended 
by removing the following four entries for the Beaumont/Port Arthur, 
Texas, area approved by EPA 5/15/01, 66 FR 26939: Attainment 
Demonstration for the 1-hour Ozone NAAQS; Ozone Attainment Date 
Extension to 11/15/07; Commitment by Texas to perform a mid-course 
review and submit a SIP revision by 05/01/04; and Finding that BPA area 
is implementing all Reasonably Available Control Measures.

PART 81--[AMENDED]

0
1. The authority citation for part 81 continues to read as follows:

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

0
2. In Sec.  81.344 the table entitled ``Texas--Ozone (1-hour 
standard)'' is amended by revising the entries for the Beaumont/Port 
Arthur area to read as follows:


Sec.  81.344  Texas.

* * * * *

                                         Texas--Ozone (1-Hour Standard)
----------------------------------------------------------------------------------------------------------------
                                                    Designation                            Classification
         Designated area         -------------------------------------------------------------------------------
                                    Date \1\                  Type                   Date \1\         Type
----------------------------------------------------------------------------------------------------------------
Beaumont/Port Arthur Area:
Hardin County...................   11/15/1990  Nonattainment.....................    4/29/2004  Serious.
Jefferson County................   11/15/1990  Nonattainment.....................    4/29/2004  Serious.
Orange County...................   11/15/1990  Nonattainment.....................    4/29/2004  Serious.
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
\1\ This date is October 18, 2000, unless otherwise noted.


[[Page 16494]]

[FR Doc. 04-6929 Filed 3-29-04; 8:45 am]
BILLING CODE 6560-50-P