[Federal Register Volume 70, Number 210 (Tuesday, November 1, 2005)]
[Proposed Rules]
[Pages 65984-66067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20455]



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Part II





Environmental Protection Agency





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40 CFR Parts 51 and 52



Proposed Rule To Implement the Fine Particle National Ambient Air 
Quality Standards; Proposed Rule

  Federal Register / Vol. 70, No. 210 / Tuesday, November 1, 2005 / 
Proposed Rules  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[FRL-7969-1]
RIN 2060-AK74


Proposed Rule To Implement the Fine Particle National Ambient Air 
Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rulemaking.

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SUMMARY: This proposed rule and preamble describe the requirements that 
States and Tribes must meet in their implementation plans for 
attainment of the fine particle (PM2.5) national ambient air 
quality standards (NAAQS). The health effects associated with exposure 
to PM2.5 are serious, including premature death, aggravation 
of heart and lung disease, and asthma attacks. Those particularly 
sensitive to PM2.5 exposure include older adults, people 
with heart and lung disease, and children.
    The EPA designated areas not attaining the PM2.5 
standards on December 17, 2004. The PM designations notice was 
published in the Federal Register on January 5, 2005 (70 FR 944) and 
became effective on April 5, 2005. On this same date, the Administrator 
signed a supplemental notice making certain changes to the designations 
based on 2002-2004 air quality data. The supplemental notice was 
published in the Federal Register on April 14, 2005 (70 FR 19844). A 
total of 39 areas with a population of 90 million were designated as 
nonattainment.
    Within 3 years, each State having a nonattainment area must submit 
to EPA an attainment demonstration (and associated air quality 
modeling), adopted State regulations to reduce emissions of 
PM2.5 and its precursors, and other supporting information 
demonstrating that the area will attain the standards as expeditiously 
as practicable. In order to address PM2.5 problems, EPA 
believes that States should implement a balanced program to reduce 
emissions from regional sources [such as power plants emitting sulfur 
dioxide (SO2) and nitrogen oxides (NOX)] and 
local sources (such as cars, trucks, industrial sources, and various 
other combustion or burning-related activities). States should take 
into account national, State, and local emission reduction programs 
that are already in place and projected to provide future air quality 
benefits.

DATES: The comment period on this proposal ends on January 3, 2006. 
Comments must be postmarked by the last day of the comment period and 
sent directly to the Docket Office listed in ADDRESSES (in duplicate 
form if possible).
    One public hearing will be held prior to the end of the comment 
period. The dates, times and locations will be announced separately. 
Please refer to SUPPLEMENTARY INFORMATION for additional information on 
the comment period and public hearings.

ADDRESSES: Comments may be submitted by mail to: Air Docket, 
Environmental Protection Agency, Mail code: 6102T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460, Attention Docket ID No. OAR-2003-0062.
    Comments may also be submitted electronically, by facsimile, or 
through hand delivery/courier. Follow the detailed instructions 
provided under SUPPLEMENTARY INFORMATION.
    Documents relevant to this action are available for public 
inspection at the EPA Docket Center, located at 1301 Constitution 
Avenue, NW., Room B102, Washington, DC between 8:30 a.m. and 4:30 p.m., 
Monday through Friday, excluding legal holidays. A reasonable fee may 
be charged for copying.

FOR FURTHER INFORMATION CONTACT: Regarding PM2.5 
implementation issues, contact Mr. Richard Damberg, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Mail 
Code C504-02, Research Triangle Park, NC 27711, phone number (919) 541-
5592 or by e-mail at: [email protected]. Regarding NSR issues, 
contact Mr. Raj Rao, U.S. Environmental Protection Agency, Office of 
Air Quality Planning and Standards, Mail Code C339-03, Research 
Triangle Park, NC 27711, phone number (919) 541-5344 or by e-mail at: 
[email protected].

SUPPLEMENTARY INFORMATION: Section I of the preamble provides an 
overview of the PM2.5 standards, health effects associated 
with PM2.5, legal history, and EPA's overall strategy for 
reducing PM2.5 pollution. Section II provides an overview of 
the pollutants and complex atmospheric chemistry that lead to 
PM2.5 formation, the sources of emissions, and a discussion 
of policy options for addressing PM precursors in the PM2.5 
implemention program and the new source review (NSR) program.
    Section III of the preamble describes the various core elements of 
the PM2.5 implementation program, based primarily on the 
subpart 1 requirements of section 172 of the Clean Air Act (CAA). 
Important topics discussed in section III include attainment dates, 
attainment demonstrations and modeling, local emission reduction 
measures [reasonably available control technology (RACT) and reasonably 
available control measures (RACM)], and reasonable further progress 
(RFP). Section III also includes a subsection describing options for 
revising the NSR program to specifically address PM2.5. A 
number of other topics are presented for informational purposes in 
section III, including innovative program guidance, emission inventory 
requirements, addressing PM2.5 under the transportation 
conformity program, stationary source test methods for 
PM2.5, and approaches for reducing emissions through 
improved monitoring techniques.
    Section IV addresses the various statutory requirements and 
executive orders applicable to this rule. The final section contains 
proposed regulatory text for implementation of the PM2.5 
NAAQS, in the form of a proposed subpart Y amending 40 CFR part 51.

Public Hearing

    The EPA will hold one public hearing on today's proposal during the 
comment period. The details of the public hearing, including the time, 
date, and location will be provided in a future Federal Register notice 
and announced on EPA's PM2.5 implementation Web site at 
http://www.epa.gov/ttn/naaqs/pm/pm25_index.html.
    The public hearing will provide interested parties the opportunity 
to present data, views, or arguments concerning the proposed rule. The 
EPA may ask clarifying questions during the oral presentations, but 
will not respond to the presentations or comments at that time. Written 
statements and supporting information submitted during the comment 
period will be considered with the same weight as any oral comments and 
supporting information presented at a public hearing.

How Can I Get Copies of This Document and Other Related Information?

    Docket. The EPA has established an official public docket for this 
action under Docket ID No. OAR-2003-0062. The official public docket 
consists of the documents specifically referenced in this action, any 
public comments received, and other information related to this action. 
Although a part of the official docket, the public docket does not 
include Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. The official public docket 
is the collection of materials that is available

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for public viewing at the Air Docket in the EPA Docket Center, (EPA/DC) 
EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The 
EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 
p.m., Monday through Friday, excluding legal holidays. The telephone 
number for the Public Reading Room is (202) 566-1744, and the telephone 
number for the Air Docket is (202) 566-1742. A reasonable fee may be 
charged for copying.
    Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the ``Federal Register'' 
listings at http://www.epa.gov/fedrgstr/.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public 
comments, access the index listing of the contents of the official 
public docket, and to access those documents in the public docket that 
are available electronically. Once in the system, select ``search,'' 
then key in the appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. The EPA's policy is that copyrighted material will not 
be placed in EPA's electronic public docket but will be available only 
in printed, paper form in the official public docket. To the extent 
feasible, publicly available docket materials will be made available in 
EPA's electronic public docket. When a document is selected from the 
index list in EPA Dockets, the system will identify whether the 
document is available for viewing in EPA's electronic public docket. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the docket facility identified above. The EPA intends to work towards 
providing electronic access to all of the publicly available docket 
materials through EPA's electronic public docket.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.
    For additional information about EPA's electronic public docket, 
visit EPA Dockets online or see 67 FR 38102; May 31, 2002.

How and To Whom Do I Submit Comments?

    You may submit comments electronically, by mail, by facsimile, or 
through hand delivery/courier. To ensure proper receipt by EPA, 
identify the appropriate docket identification number, OAR-2003-0062, 
in the subject line on the first page of your comment. Please ensure 
that your comments are submitted within the specified comment period. 
Comments received after the close of the comment period will be marked 
``late.'' The EPA is not required to consider these late comments. If 
you wish to submit CBI or information that is otherwise protected by 
statute, please follow the instructions below under, ``How Should I 
submit CBI to the Agency?'' Do not use EPA Dockets or e-mail to submit 
CBI or information protected by statute.
    Electronically. If you submit an electronic comment as prescribed 
below, EPA recommends that you include your name, mailing address, and 
an e-mail address or other contact information in the body of your 
comment. Also include this contact information on the outside of any 
disk or CD ROM you submit, and in any cover letter accompanying the 
disk or CD ROM. This ensures that you can be identified as the 
submitter of the comment and allows EPA to contact you in case EPA 
cannot read your comment due to technical difficulties or needs further 
information on the substance of your comment. The EPA's policy is that 
EPA will not edit your comment, and any identifying or contact 
information provided in the body of a comment will be included as part 
of the comment that is placed in the official public docket, and made 
available in EPA's electronic public docket. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    EPA Dockets. Your use of EPA's electronic public docket to submit 
comments to EPA electronically is EPA's preferred method for receiving 
comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and 
follow the online instructions for submitting comments. To access EPA's 
electronic public docket from the EPA Internet Home Page, select 
``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once in the 
system, select ``search,'' and then key in Docket ID No. OAR-2003-0062. 
The system is an ``anonymous access'' system, which means EPA will not 
know your identity, e-mail address, or other contact information unless 
you provide it in the body of your comment.
    Electronic mail. Comments may be sent by e-mail to [email protected], Attention Docket ID No. OAR-2003-0062. In contrast to 
EPA's electronic public docket, EPA's e-mail system is not an 
``anonymous access'' system. If you send an e-mail comment directly to 
the Docket without going through EPA's electronic public docket, EPA's 
e-mail system automatically captures your e-mail address. The e-mail 
addresses that are automatically captured by EPA's e-mail system are 
included as part of the comment that is placed in the official public 
docket, and made available in EPA's electronic public docket.
    Disk or CD ROM. You may submit comments on a disk or CD ROM that 
you mail to the mailing address identified under Docket above. These 
electronic submissions will be accepted in WordPerfect or ASCII file 
format. Avoid the use of special characters and any form of encryption.
    By Mail. Send your comments to Air Docket (in duplicate if 
possible), Environmental Protection Agency, Mail code: 6102T, 1200 
Pennsylvania Ave., NW., Washington, DC, 20460, Attention Docket ID No. 
OAR-2003-0062.
    By Hand Delivery or Courier. Deliver your comments to: Air Docket, 
Environmental Protection Agency, 1301 Constitution Avenue, NW., Room 
B108, Mail code: 6102T, Washington, DC 20004, Attention Docket ID No. 
OAR-2003-0062. Such deliveries are only accepted during the Docket's 
normal hours of operation as identified above under Docket.

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    By Facsimile. Fax your comments to (202) 566-1741, Attention Docket 
ID. No. OAR-2003-0062.

How Should I Submit CBI to the Agency?

    Do not submit information that you consider to be CBI 
electronically through EPA's electronic public docket or by e-mail. 
Send or deliver information identified as CBI only to the following 
address: Roberto Morales, U.S. EPA, Office of Air Quality Planning and 
Standards, Mail Code C404-02, Research Triangle Park, NC 27711, 
telephone (919) 541-0880, e-mail at [email protected], Attention 
Docket ID No. OAR-2003-0062. You may claim information that you submit 
to EPA as CBI by marking any part or all of that information as CBI (if 
you submit CBI on disk or CD ROM, mark the outside of the disk or CD 
ROM as CBI and then identify electronically within the disk or CD ROM 
the specific information that is CBI). Information so marked will not 
be disclosed except in accordance with procedures set forth in 40 CFR 
part 2.
    In addition to one complete version of the comment that includes 
any information claimed as CBI, a copy of the comment that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket and EPA's electronic public docket. If you submit 
the copy that does not contain CBI on disk or CD ROM, mark the outside 
of the disk or CD ROM clearly that it does not contain CBI. Information 
not marked as CBI will be included in the public docket and EPA's 
electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

What Should I consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:
    1. Explain your views as clearly as possible.
    2. Describe any assumptions that you used.
    3. Provide any technical information and/or data you used that 
support your views.
    4. If you estimate potential burden or costs, explain how you 
arrived at your estimate.
    5. Provide specific examples to illustrate your concerns.
    6. Offer alternatives.
    7. Make sure to submit your comments by the comment period deadline 
identified.
    8. To ensure proper receipt by EPA, identify the appropriate docket 
identification number in the subject line on the first page of your 
response. It would also be helpful if you provided the name, date, and 
Federal Register citation related to your comments.

Timing

    In a number of places, this document refers to time periods (e.g., 
x number of years) after designation or after the designation date. By 
this, we mean the number of years after the effective date of 
PM2.5 designations (April 5, 2005).

Table of Contents

I. What Is the PM2.5 Problem and EPA's Strategy for 
Addressing It?
    A. What are the fine particle standards and the health effects 
they address?
    B. What is the legal history of the PM2.5 standards?
    C. What was the process for designating PM2.5 
attainment and nonattainment areas?
    D. What is the geographic extent of the PM2.5 
problem?
    E. What is EPA's overall strategy for reducing PM2.5 
pollution?
    1. The State implementation plan (SIP) system
    2. National rules
II. Fine Particles: Overview of Atmospheric Chemistry, Sources of 
Emissions, and Ambient Monitoring Data
    A. Introduction
    B. Concentration, composition and sources of fine PM
    C. The role of ammonia in sulfate, nitrate & secondary organic 
aerosol formation
    D. Regional patterns of carbon, sulfate and nitrate, and 
indications of transport
    E. Policy for addressing PM2.5 precursors
    1. Legal Authority to Regulate Precursors
    2. Proposed policy options for addressing PM2.5 
precursors in nonattainment plan programs.
III. What Are the Specific Elements of EPA's PM2.5 
Implementation Program?
    A. What classification options are under consideration for 
PM2.5 nonattainment areas?
    1. Background
    2. Proposed options for PM2.5 classifications
    a. No classification system based on design values
    b. Two-tiered classification system
    c. Rural transport classification
    B. When are PM2.5 attainment demonstrations and SIPs 
due, and what requirements must they address?
    C. What are the attainment dates for PM2.5 
nonattainment areas?
    1. Background
    2. Consideration of existing measures in proposing an attainment 
date
    3. Areas may qualify for two 1-year attainment date extensions
    4. Areas may submit a SIP demonstrating that it is impracticable 
to attain by the 5-year attainment date
    5. Areas that fail to attain or do not qualify for an attainment 
date extension
    6. Determining attainment for the PM2.5 standards
    7. How do attainment dates apply to Indian country?
    D. What are the incentives for achieving early reductions of 
PM2.5 and its precursors?
    E. How should the States and EPA balance the need to address 
long-range transport of fine particle pollution with the need for 
local emissions reductions when implementing the PM2.5 
standards?
    1. Clean Air Act provisions for achieving local and regional 
emissions reductions
    2. Regional emission reduction strategies
    3. The role of local and State emission reduction efforts in 
reducing health risks and achieving the PM2.5 standards
    4. Addressing regionally transported emissions in local area 
attainment demonstrations
    F. How will EPA address requirements for modeling and attainment 
demonstration SIPs when implementing the 24-hour and annual average 
PM2.5 standards?
    1. Introduction
    2. Areas that need to conduct modeling
    3. Modeling guidance
    4. Modeled attainment test
    5. Multi-pollutant assessments and one-atmosphere modeling
    6. Which future year(s) should be modeled?
    7. Mid-course review
    G. What requirements for RFP apply under the PM2.5 
implementation program?
    1. Background
    2. What is the baseline year from which States will track 
emission reductions for meeting RFP requirements?
    3. How does EPA propose to address the pollutants associated 
with PM2.5 in these RFP requirements?
    4. What areas must submit an RFP plan?
    a. Areas projected to attain within 5 years of designation
    b. Areas projected to attain more than 5 years from the date of 
designation must submit a 2008 RFP plan
    i. For purposes of the 2008 RFP plan, how should a nonattainment 
area define its emission reduction milestones?
    ii. For what pollutants must States reduce emissions?
    iii. How should States assess the equivalence of alternative 
combinations of pollutant emissions reductions?
    iv. How would RFP be evaluated for a sample 2008 RFP plan?
    v. What potential RFP requirements could apply for ``serious'' 
areas under the two-tiered classification option?
    5. Other RFP issues
    a. How should States account for regional control strategies in 
evaluating RFP?
    b. What geographic area should States address in RFP plans?
    c. How should RFP be addressed in multi-state nonattainment 
areas?
    d. How should States compile emission inventories for RFP plans?

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    e. What RFP requirements apply in Tribal areas?
    f. What must States submit to show whether they have met RFP 
milestones?
    H. What requirements for contingency measures should apply under 
the PM2.5 implementation program?
    I. What requirements should apply for RACM and RACT for PM2.5 
nonattainment areas?
    1. General background
    2. Background for RACT
    3. Emissions inventory analysis supporting RACT options
    4. Which PM2.5 precursors must be addressed by States 
in establishing RACT requirements?
    5. What are the proposed options for implementing the RACT 
requirement?
    6. What factors should States consider in determining whether an 
available control technology is technically feasible?
    7. What factors should States consider in determining whether an 
available control technology is economically feasible?
    8. How should condensable emissions be treated in RACT 
determinations?
    9. What are the required dates for submission and implementation 
of RACT measures?
    10. Under the PM2.5 implementation program, does a 
State need to conduct a RACT determination for an applicable source 
that already has a RACT determination in effect?
    11. What policies affect compliance with RACT for electric 
generating units?
    12. Is EPA developing PM2.5 controlled technique 
guidelines?
    13. Background for RACM
    14. What is the proposed approach for implementing RACM?
    15. What factors should States consider in determining whether 
control measures are reasonably available?
    16. What specific source categories and control measures should 
a State evaluate when determining RACM for a nonattainment area?
    17. What criteria should be met to ensure effective regulations 
or permits to implement RACT and RACM?
    J. What guidance is available to States and Tribes for 
implementing innovative programs to address the PM2.5 
problem?
    K. What aspects of transportation conformity and the 
PM2.5 standard are addressed in this proposal?
    1. What is transportation conformity?
    2. Why does transportation conformity apply to PM2.5?
    3. Why is EPA discussing transportation conformity in this 
proposal?
    4. What revisions have been made to the transportation 
conformity rule to address the PM2.5 standard?
    5. Does EPA plan to revoke the PM10 standard?
    6. Will some areas be demonstrating conformity for both 
PM10 and PM2.5 at the same time?
    7. When does transportation conformity apply to PM2.5 
nonattainment areas?
    8. How does the 1-year grace period apply in metropolitan areas?
    9. How does the 1-year grace period apply in ``donut'' areas?
    10. How does the 1-year grace period apply in isolated rural 
areas?
    L. What requirements for general conformity should apply to the 
PM2.5 standards?
    1. What is the purpose of the general conformity regulations?
    2. How is the general conformity program currently structured?
    3. Who runs the general conformity program?
    4. How does an agency demonstrate conformity?
    5. General conformity regulation revisions for the 
PM2.5 standards
    a. What de minimis emission levels will be set for pollutants 
that contribute to PM2.5 concentrations?
    b. What impact will the implementation of the PM2.5 
standards have on a State's general conformity SIP?
    c. Are there any other impacts on the SIPs related to general 
conformity based on implementation of the PM2.5 
standards?
    6. Is there a 1-year grace period which applies to general 
conformity determinations for the purposes of the PM2.5 
standards?
    M. How will the NSR program address PM2.5 and its 
precursors?
    1. Background
    2. What are the principal elements of the proposed major NSR 
program for PM2.5?
    3. Should precursors to the formation of ambient concentrations 
of PM2.5 be subject to regulation under NSR?
    a. Background
    b. Should NSR cover precursor emissions in addition to direct 
emissions of PM2.5?
    4. What is a major stationary source (major source) under the 
major NSR program for PM2.5?
    a. Background
    b. Proposed option
    c. What is the effect of this proposed option?
    5. What should the significant emissions rate be for direct 
emissions of PM2.5?
    a. Background
    b. Proposed options
    6. What should be the significant emissions rates for 
PM2.5 precursors?
    a. Background
    b. Proposed options
    7. What is the role of condensible emissions in determining 
major NSR applicability?
    8. What are the requirements of the Prevention of Significant 
Deterioration (PSD) program for attainment areas?
    9. How should BACT be implemented?
    10. What is EPA's plan for preventing significant deterioration 
of air quality for PM2.5?
    11. How will the air quality analysis required under section 
165(a)(3) be implemented?
    12. How should the PSD pre-construction monitoring requirement 
be implemented for PM2.5?
    a. Background
    b. Options for PSD preconstruction monitoring
    13. Nonattainment New Source Review (NA NSR) requirements
    14. What are the offset requirements for NA NSR?
    a. What is the required offset ratio for PM2.5 direct 
emissions?
    b. Which precursors shall be subject to the offset requirement?
    c. What is the required offset ratio for PM2.5 
precursors?
    d. Should EPA allow interprecursor trading to comply with the 
offset requirement?
    15. What are the implementation and transition issues associated 
with this rule?
    16. Implementation of PSD provisions during the SIP Development 
period
    a. Background
    b. Proposed options
    c. Rationale
    17. Implementation of the nonattainment NSR provisions during 
the SIP development period
    a. Background
    b. Implementation of NSR under the Emissions Offset 
Interpretative Ruling (40 CFR part 51, Appendix S) with revisions.
    c. Legal basis for requiring States to issue nonattainment NSR 
permits during the SIP-development period
    18. NSR applicability to precursors during the interim period
    19. Are there any Tribal concerns?
    20. What must a State or local agency do about minor sources of 
PM2.5?
    21. Supplemental program option: rural transport areas
    a. What flexible implementation options should be available for 
Transport areas?
    b. Which nonattainment areas would be eligible for the transport 
program?
    c. What would be the basic requirements of a transport 
nonattainment NSR program?
    N. How will EPA ensure that the 8-hour ozone standard will be 
implemented in a way which allows an optimal mix of controls for 
PM2.5, ozone, and regional haze?
    1. Could an area's PM2.5 strategy affect its 8-hour 
ozone and/or regional haze strategy?
    2. What guidance has EPA provided regarding ozone, 
PM2.5 and regional haze interaction?
    3. What is EPA proposing?
    O. What emission inventory requirements should apply under the 
PM2.5 NAAQS?
    P. What stationary source test methods should States use under 
the PM2.5 implementation program?
    1. Will the existing stationary source test methods for 
particulate matter (PM) be acceptable for use in PM2.5 
SIPs?
    2. Why are the existing stationary source test methods for PM 
deficient?
    3. If the stationary source test methods are changed, will the 
existing emission limitations incorporated in SIPs need to be 
changed?
    4. The existing PM test methods and the emission limits based 
upon these methods have been acceptable since 1971, why do they need 
to be changed for PM2.5?
    5. What methods are available for measuring PM size and 
condensable PM from stationary sources?
    6. Why is a new dilution-based test method being developed by 
EPA?

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    7. What types of sources should use the new dilution-based test 
method?
    8. What are the main features of the new test method?
    9. What is the schedule for finalization of the new test method?
    10. How will use of this new method affect an areas emissions 
inventory and the emissions inventory for individual sources?
    11. How will use of this new method affect a State's 
implementation program more broadly?
    Q. How can potentially inadequate source monitoring in certain 
SIP rules be improved?
    1. How does improved PM2.5 monitoring relate to title 
V monitoring?
    2. Are instrumental techniques more appropriate than visual 
emissions (VE) techniques for monitoring compliance with PM 
emissions limits, for some situations and applications?
    3. What constitutes improved monitoring?
    R. What guidance should be provided that is specific to Tribes?
    S. Are there any additional requirements related to enforcement 
and compliance?
    T. What requirements should apply to emergency episodes?
    U. What ambient monitoring requirements will apply under the 
PM2.5 NAAQS?
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. What Is the PM2.5 Problem and EPA's Strategy for 
Addressing It?

A. What Are the Fine Particle Standards and the Health Effects They 
Address?

    Fine particles in the atmosphere are made up of a complex mixture 
of components. Common constituents include: Sulfate (SO4); 
nitrate (NO3); ammonium; elemental carbon; a great variety 
of organic compounds; and inorganic material (including metals, dust, 
sea salt, and other trace elements) generally referred to as 
``crustal'' material, although it may contain material from other 
sources. Airborne particulate matter (PM) with a nominal aerodynamic 
diameter of 2.5 micrometers or less (a micrometer is one-millionth of a 
meter, and 2.5 micrometers is less than one-seventh the average width 
of a human hair) are considered to be ``fine particles,'' and are also 
known as PM2.5. ``Primary'' particles are emitted directly 
into the air as a solid or liquid particle (e.g., elemental carbon from 
diesel engines or fire activities, or condensable organic particles 
from gasoline engines). ``Secondary'' particles (e.g., sulfate and 
nitrate) form in the atmosphere as a result of various chemical 
reactions. (See section II for a more detailed technical discussion on 
PM2.5, its precursors, formation processes, and emissions 
sources.)
    The health effects associated with exposure to PM2.5 are 
significant. Epidemiological studies have shown a significant 
correlation between elevated PM2.5 levels and premature 
mortality. Other important effects associated with PM2.5 
exposure include aggravation of respiratory and cardiovascular disease 
(as indicated by increased hospital admissions, emergency room visits, 
absences from school or work, and restricted activity days), lung 
disease, decreased lung function, asthma attacks, and certain 
cardiovascular problems. Individuals particularly sensitive to 
PM2.5 exposure include older adults, people with heart and 
lung disease, and children. On July 18, 1997, we revised the NAAQS for 
particulate matter to add new standards for fine particles, using 
PM2.5 as the indicator. We established health-based 
(primary) annual and 24-hour standards for PM2.5 (62 FR 
38652).\1\ The annual standard is a level of 15 micrograms per cubic 
meter, based on the 3-year average of annual mean PM2.5 
concentrations. The 24-hour standard is a level of 65 micrograms per 
cubic meter, based on the 3-year average of the 98th percentile of 24-
hour concentrations. The EPA established the standards based on 
significant evidence and numerous health studies demonstrating that 
serious health effects are associated with exposures to elevated levels 
of PM2.5. Estimates show that attainment of the 
PM2.5 standards would be likely to result in tens of 
thousands fewer premature deaths each year, would be likely to prevent 
tens of thousands of hospital admissions each year, and would be likely 
to prevent hundreds of thousands of doctor visits, absences from work 
and school, and respiratory illnesses in children annually. The 
research on which EPA based the 1997 standards did not identify a 
specific threshold concentration below which individuals have no PM-
related health effects, meaning that emissions reductions resulting in 
reduced concentrations below the level of the standards may continue to 
provide additional health benefits to the local population.\2\ At the 
time we established the primary standards in 1997, we also established 
welfare-based (secondary) standards identical to the primary standards. 
The secondary standards are designed to protect against major 
environmental effects of PM2.5 such as visibility 
impairment, soiling, and materials damage. The EPA also established the 
regional haze regulations in 1999 for the improvement of visual air 
quality in national parks and wilderness areas across the country. 
Because regional haze is caused primarily by light scattering and light 
absorption by fine particles in the atmosphere, EPA is encouraging the 
States to integrate their efforts to attain the PM2.5 
standards with those efforts to establish reasonable progress goals and 
associated emission reduction strategies for the purposes of improving 
air quality in our treasured natural areas under the regional haze 
program.
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    \1\ In the 1997 PM NAAQS revision, EPA also revised the standard 
for particles with a nominal aerodynamic diameter of 10 micrometers 
or less (also known as PM10). The original 
PM10 standard was established in 1987. The revised 
PM10 standard was later vacated by the court, and thus 
the 1987 PM10 standard remains in effect. Today's 
proposed implementation rule and guidance does not address 
PM10.
    \2\ Environmental Protection Agency. (1996) Air Quality Criteria 
for Particulate Matter. Research Triangle Park, NC: National Center 
for Environmental Assessment-RTP Office; report no. EPA/600/P-95/
001aF-cF. 3v.
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    The scientific assessment that resulted in the establishment of the 
PM2.5 standards included a scientific peer review and public 
comment process. We developed scientific background documents based on 
the review of hundreds of peer-reviewed scientific studies. The Clean 
Air Scientific Advisory Committee, a congressionally mandated group of 
independent scientific and technical experts, provided extensive review 
of these assessments, and found that EPA's review of the science 
provided an adequate basis for the EPA Administrator to make a 
decision. More detailed information on health effects of 
PM2.5 can be found on EPA's Web site at: http://www.epa.gov/air/urbanair/pm/index.html. Additional information on EPA's scientific 
assessment documents supporting the 1997 standards is available at: 
http://www.epa.gov/ttn/oarpg (see headings for ``Staff Papers'' and 
``Criteria Documents'').

[[Page 65989]]

B. What Is the Legal History of the PM2.5 Standards?

    After EPA promulgated the PM2.5 and 8-hour ozone 
standards in July 1997, several industry organizations and State 
governments challenged EPA's action in the U.S. Court of Appeals for 
the District of Columbia Circuit (the DC Circuit). This action 
initiated a long legal process, ending with a March 2002 decision by 
the DC Circuit upholding the standards and the authority on which they 
were established.
    On May 14, 1999, the three-judge panel of the DC Circuit held in a 
split decision that the CAA, as applied by EPA in setting the 1997 
standards for PM and ozone, was unconstitutional as an improper 
delegation of legislative authority to EPA. The ruling did not question 
the science or decision-making process used to establish the standards. 
The Court remanded the PM2.5 standards to EPA but did not 
vacate them. In June 1999, the Department of Justice (DOJ) and EPA 
petitioned the Court for a rehearing en banc with the entire DC Circuit 
Court. On October 29, 1999, the Court denied the petition for 
rehearing.
    The DOJ and EPA then filed a petition for certiorari with the 
United States Supreme Court in December 1999 to appeal the decision of 
the DC Circuit, and the Supreme Court issued its decision to hear the 
appeal in November 2000. The Supreme Court issued its decision on the 
merits of the appeal on February 27, 2001.\3\ In that decision, the 
Supreme Court held that EPA's approach to setting the NAAQS in 
accordance with the CAA did not constitute an unconstitutional 
delegation of authority. The Supreme Court unanimously affirmed the 
constitutionality of the CAA provision that authorizes the Agency to 
set national air quality standards, stating that this provision ``fits 
comfortably within the scope of discretion permitted by our 
precedent.'' The Supreme Court also affirmed that the CAA requires EPA 
to set standards at levels necessary to protect the public health and 
welfare, without considering the economic costs of implementing the 
standards. The Supreme Court remanded several other issues back to the 
DC Circuit, including the issue of whether EPA acted arbitrarily and 
capriciously in establishing the specific levels of the standards.
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    \3\ Whitman v. American Trucking Assoc., 121 S.Ct. 903, 911-914 
(2001) (Whitman).
---------------------------------------------------------------------------

    The DC Circuit heard arguments in this remanded case in December 
2001, and issued its decision on March 26, 2002. The DC Circuit found 
that the Agency had ``engaged in reasoned decision making,'' rejecting 
the claim that the Agency had acted arbitrarily and capriciously in 
setting the levels of the standards. This last decision by the DC 
Circuit gave EPA a clear path to move forward with implementation of 
the PM2.5 standards.
    The implementation rule we are proposing today provides specific 
requirements for State, local, and Tribal \4\ air pollution control 
agencies to address as they prepare implementation plans required by 
the CAA to attain and maintain the PM2.5 standards.\5\ Each 
State with an area that is not attaining the PM2.5 NAAQS 
will have to develop, as part of its State implementation plan (SIP), 
emission limits for appropriate sources and other requirements to 
attain the NAAQS within the timeframes set forth in the CAA.\6\ Tribes 
with jurisdiction over Indian country that is not attaining the 
PM2.5 NAAQS could voluntarily submit a Tribal implementation 
plan (TIP) but are not required to do so. However, in cases where 
Tribes elect not to submit a TIP, EPA, working with the Tribes, has the 
responsibility for developing an implementation plan in those areas.
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    \4\ The 1998 Tribal Authority Rule (TAR) (40 CFR part 49), which 
implements section 301(d) of the CAA, provides for Tribes to be 
treated in the same manner as a State in implementing sections of 
the CAA. It gives Tribes the option of developing tribal 
implementation plans (TIPs), but unlike States, Tribes are not 
required to develop implementation plans. See section III.Q. for 
further discussion of Tribal issues.
    \5\ When the term ``State'' is used hereafter, it will refer to 
States, local air agencies, and Tribal governments electing to be 
treated as States for the purposes of implementing the CAA.
    \6\ The CAA requires EPA to set ambient air quality standards 
and requires States to submit plans designed to attain those 
standards.
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C. What Was the Process for Designating PM2.5 Attainment and 
Nonattainment Areas?

    We issued guidance in April 2003 \7\ and February 2004 \8\ on the 
process for designating attainment and nonattainment areas for 
PM2.5 and on factors for States and Tribes to consider in 
defining boundaries for nonattainment areas. The guidance states that 
EPA believes the presumptive boundaries for nonattainment areas should 
be equal to the 1999 Office of Management and Budget (OMB) definitions 
of the combined metropolitan statistical area, where applicable, or the 
metropolitan statistical area. We also recognized the fact that in June 
2003, OMB released updated definitions of combined statistical areas 
and core-based statistical areas. We communicated to the States and 
Tribes that in evaluating potential nonattainment area boundaries, they 
should include any additional counties that were added in 2003 to the 
1999 metro area definitions, plus adjacent counties, in their review of 
data associated with the nine technical factors discussed in EPA 
guidance.
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    \7\ See ``Designations for the Fine Particle National Ambient 
Air Quality Standard,'' memorandum from Jeffrey R. Holmstead, 
Assistant Administrator, to EPA Regional Administrators, April 1, 
2003. Available at: http://www.epa.gov/pmdesignations/guidance.htm.
    \8\ See ``Additional Guidance on Defining Area Boundaries for 
PM2.5 Designations,'' memorandum from Lydia N. Wegman, 
Director of Air Quality Strategies and Standards Division, EPA 
Office of Air Quality Planning and Standards, to EPA Air Division 
Directors, February 12, 2004. Available at: http://www.epa.gov/pmdesignations/guidance.htm.
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    States were required to submit their recommendations to EPA by 
February 15, 2004.\9\ Tribes were encouraged, but not required, to 
submit designation recommendations to EPA for their reservations or 
other areas under their jurisdiction. In general, the recommendations 
were based on the most recent 3 years of air quality data available 
(e.g. 2001-2003). On June 29, we sent letters to the Governors and 
Tribal leaders notifying them of any modifications we intended to make 
to their recommendations. After considering additional comments and 
information from States and Tribes, EPA issues final PM2.5 
designations on December 17, 2004. They were published in the Federal 
Register on January 5, 2005 (70 FR 944).
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    \9\ The Consolidated Appropriations Bill for FY2004 (Pub. L. 
108-199), signed by President Bush on January 23, 2004, codifies the 
required State submittal date (February 15, 2004) and the date for 
EPA to finalize PM2.5 designations (December 31, 2004) 
that were originally included in EPA's April 2003 guidance on 
PM2.5 designations.
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    The nonattainment designation for an area starts the process 
whereby a State or Tribe must develop an implementation plan that 
includes, among other things, a demonstration showing how it will 
attain the ambient standards by the attainment dates required in the 
CAA. Under section 172(b), States have up to 3 years after EPA's final 
designations to submit their SIPs to EPA. These SIPs will be due in 
April 2008, three years from the effective date of the designations.

D. What Is the Geographic Extent of the PM2.5 Problem?

    The PM2.5 ambient air quality monitoring data for the 
2001-2003 period suggest that areas violating the standards are located 
across much of the eastern half of the United States and in much of 
central and southern California.

[[Page 65990]]

A total of 47 areas comprised of 224 counties and the District of 
Columbia were designated as nonattainment in December 2004. In April 
2005, EPA issued a supplemental notice which changed the designation 
status of eight areas (with 17 counties) from nonattainment to 
attainment based on newly updated 2002-2004 air quality data. In 
addition, four areas previously designated as unclassifiable were 
changed to attainment in this notice.
    The population of the 39 PM2.5 nonattainment areas is 
significant--about 90 million, or more than 30% of the U.S. population. 
Most areas violate only the annual standard, but a few violate both the 
annual and 24-hour standards. The 2001-2003 data show that no area 
violates just the 24-hour standard.\10\
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    \10\ A listing of counties and associated PM2.5 3-
year annual average concentrations, or ``design values,'' is 
available on EPA's Web site at: http://www.epa.gov/airtrends/values.html.
---------------------------------------------------------------------------

    The distribution of the 2001-2003 design values \11\ for the 39 
nonattainment areas is shown in the table below:
---------------------------------------------------------------------------

    \11\ The PM2.5 design value for a nonattainment area 
is the highest of the 3-year average concentrations calculated for 
the monitors in the area, in accordance with 40 CFR part 50, 
appendix N.

------------------------------------------------------------------------
                                                              Percent of
Design value range for PM2.5 nonattainment areas   Number of   all areas
                  (in [mu]g/m3)                      areas     (percent)
------------------------------------------------------------------------
15.1-16.0.......................................          10          26
16.1-17.0.......................................          12          31
17.1-18.0.......................................          12          31
18.1-19.0.......................................           1           3
19.1 +..........................................           4          10
                                                 -------------
    Total.......................................          39         100
------------------------------------------------------------------------

    More than 40% of the nonattainment areas, including many major 
metropolitan areas, have design values that are 2 [mu]g/m3 
or more above the annual standard.
    The EPA believes the PM2.5 problem has a substantial 
regional component because the formation and transport of secondarily 
formed particles, such as sulfates and nitrates, extends over hundreds 
of miles. The regional nature of PM2.5 is in contrast to the 
more localized nature of PM10.
    In addition, data suggests that ambient PM2.5 
concentrations tend to rise and fall in a consistent manner across very 
large geographic areas. The transport phenomena associated with 
PM2.5 and its precursors has been well-documented for many 
years. For example, one significant source of information on long-range 
transport is the National Acid Precipitation Assessment Program (NAPAP) 
research from the 1980's and its associated reports published in 
1991.\12\ Additional studies and air quality modeling analyses since 
that time have added to the body of information documenting the 
regional nature of PM2.5.\13\ Since the emissions from one 
State may contribute significantly to PM2.5 violations in 
several other States, we believe that plans to attain the 
PM2.5 standards will need to include a combination of 
national, regional, and local emission reduction strategies.
---------------------------------------------------------------------------

    \12\ National Acid Precipitation Assessment Program. Acid 
Deposition: State of the Science and Technology. Washington, DC. 
1991. See also: Environmental Protection Agency. (2004) Air Quality 
Criteria for Particulate Matter. Research Triangle Park, NC: Office 
of Research and Development; report no. EPA/600/P-99/002a,bF. 
October. The 2004 PM criteria document is available at: http://www.epa.gov/ttn/naaqs/standards/pm/s_pm_cr_cd.html.
    \13\ NARSTO (2004) Particulate Matter Assessment for Policy 
Makers: A NARSTO Assessment. P. McMurry, M. Shepherd, and J. 
Vickery, eds. Cambridge University Press, Cambridge, England. ISBN 0 
52 184287 5. For more information, see http://www.cgenv.com/NARSTO. 
See also supporting technical information for the Clear Skies Act, 
http://www.epa.gov/clearskies/, and for the Clean Air Interstate 
Rule, http://www.epa.gov/cleanairinterstaterule.
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E. What Is EPA's Overall Strategy for Reducing PM2.5 
Pollution?

    Our overall strategy for achieving the PM2.5 standards 
is based on the structure outlined in the CAA. The CAA outlines 
important roles for State and Tribal governments and for EPA in 
implementing national ambient air quality standards.
    States have primary responsibility for developing and implementing 
SIPs that contain local and in-State measures needed to achieve the air 
quality standards in each area. We assist States and Tribes by 
providing technical tools, assistance and guidance, including 
information on control measures. In addition, we set national emissions 
limits for some sources such as new motor vehicles, certain categories 
of major new sources, and existing stationary sources of toxic air 
pollutants. Where upwind sources (such as coal-fired power plants) 
contribute to downwind problems in other States or Tribes, we can also 
ensure that the upwind States address these contributing emissions, or 
we can put in place Federal regulations in situations where the upwind 
States fail to address these sources. We intend to work closely with 
States and Tribes to use an appropriate combination of national, 
regional, and local pollution reduction measures to meet the standards 
as expeditiously as practicable, as required by the CAA.
1. The State Implementation Plan (SIP) System
    A SIP is the compilation of regulations and programs that a State 
uses to carry out its responsibilities under the CAA, including the 
attainment, maintenance, and enforcement of NAAQS. (Only certain air 
quality programs and regulations implemented by States are required to 
be part of the SIP, however.) States use the SIP process to identify 
the emissions sources that contribute to the nonattainment problem in a 
particular area, and to select the emissions reduction measures most 
appropriate for that area, considering technical and economic 
feasibility, and a variety of local factors such as population 
exposure, enforceability, and economic impact. Under the CAA, SIPs must 
ensure that areas reach attainment as expeditiously as practicable. 
These plans need to take into consideration emission reductions 
resulting from national programs (such as mobile source regulations, 
the acid rain program, or maximum achievable control technology (MACT) 
standards for air toxics) as well as from State or local programs not 
directly mandated under the CAA.
    The SIP system for nonattainment areas is an important component of 
the CAA's overall strategy for meeting the PM2.5 standards, 
but it is not the only component. As noted below, the CAA also includes 
requirements for national rules or programs that will reduce emissions 
and help achieve cleaner air.
2. National Rules
    For the States to be successful in developing local plans showing 
attainment of standards, we must do our part to develop standards and 
programs to reduce emissions from sources that are more effectively and 
efficiently addressed at the national level. We also have the 
responsibility to ensure that interstate transport is addressed through 
SIPs or other means. As outlined below, we have issued final 
regulations that will achieve important emissions reductions from power 
plants, onroad and nonroad engine sources, and other sources that may 
enable some areas to meet the PM2.5 standards in the near 
term and make it easier for others to attain.
    The acid rain program, authorized under title IV of the 1990 CAA 
amendments, was projected to reduce annual SO2 emissions by 
10 million tons from 1980 levels by 2010, and to reduce annual 
NOX emissions by 2 million tons from 1980 levels by 2010. 
The EPA has implemented the acid rain

[[Page 65991]]

program in two phases: Phase I for SO2 began in 1995 and 
targeted the largest and highest-emitting coal-fired power plants. 
Phase I for NOX began in 1996. Phase II for both pollutants 
began in 2000 and sets restrictions on Phase I plants as well as many 
additional smaller coal-, gas-, and oil-fired plants. Over 2,000 
sources (mostly electricity generating facilities) are now affected by 
the Acid Rain Program. The acid rain emissions trading system had a cap 
of 8.95 million tons on the total amount of SO2 that may be 
emitted by power plants nationwide, about half the amount emitted in 
1980. Sulfate particles formed from SO2 emissions and 
nitrate particles formed from NOX emissions contribute 
significantly to total PM2.5 mass in the eastern U.S. 
(ranging from 30-50 percent), so the reductions already achieved under 
the Acid Rain Program have led to improvements in PM2.5 
concentrations across the region.
    Additional reductions in NOX emissions from power plants 
and large industrial sources were required by May 2004 under our rules 
to reduce interstate transport of ozone pollution in the eastern U.S. 
These rules are known as the NOX SIP Call, published October 
27, 1998 (63 FR 57356), and the Section 126 Rule, published May 25, 
1999 (64 FR 28250). We estimate that when fully implemented, this 
program will result in the reduction of more than one million tons of 
summertime NOX. While this program was established primarily 
to address the ground-level ozone problem in the East, it will also 
result in reduced ambient levels of nitrate, one of the main components 
of PM2.5.
    The Administration has proposed nationwide legislation--the Clear 
Skies Act \14\--to address health and environmental concerns associated 
with power plant emissions of sulfur dioxide, nitrogen oxides, and 
mercury. However, because passage of the CSA legislation is not 
assured, EPA has established the Clean Air Interstate Rule (CAIR),\15\ 
a regulatory approach to address interstate transport of pollution 
under section 110 of the CAA. Section 110 gives EPA the authority to 
require SIPs to ``prohibit * * * any source or other type of emission 
activity within the State from emitting any air pollutant in amounts 
which will contribute significantly to nonattainment in, or interfere 
with maintenance by, any other State with respect to'' any NAAQS, and 
to prohibit sources or emission activities from emitting pollutants in 
amounts which will interfere with measures required to be included in 
State plans to prevent significant deterioration of air quality or to 
protect visibility (such as the protection of 156 mandatory Federal 
class I areas under the regional haze rule \16\).
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    \14\ For more information on the proposed Clear Skies Act, see 
EPA's website: http://www.epa.gov/clearskies/.
    \15\ See http://www.epa.gov/cair.
    \16\ See 64 FR 35714, July 1, 1999.
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    CAIR, issued by EPA on March 10, 2005, employs the same emissions 
trading approach used to achieve cost-effective emission reductions 
under the acid rain program. It outlines a two-phase program with 
declining power plant emissions caps for 28 eastern states and the 
District of Columbia: SO2 caps of 3.6 million tons in 2010, 
and 2.5 million in 2015; NOX caps of 1.5 in 2009 and 1.3 in 
2015; and NOX ozone season caps of 580,000 tons in 2009 and 
480,000 tons in 2015. Emission caps are divided into State 
SO2 and NOX budgets. By the year 2015, the Clean 
Air Interstate Rule will result in:
--$85 to $100 billion in annual health benefits, annually preventing 
17,000 premature deaths, millions of lost work and school days, and 
tens of thousands of non-fatal heart attacks and hospital admissions.
--Nearly $2 billion in annual visibility benefits in southeastern 
national parks, such as Great Smoky and Shenandoah.
--Significant regional reductions in sulfur and nitrogen deposition, 
reducing the number of acidic lakes and streams in the eastern U.S.
    Current emissions standards for new cars, trucks and buses are 
reducing motor vehicle emissions of volatile organic compounds (VOCs, 
also referred to as hydrocarbons), NOX, and direct PM 
emissions (such as elemental carbon) as older vehicles are retired and 
replaced. Other existing rules are reducing emissions from several 
categories of nonroad engines. The Tier 2 motor vehicle emission 
standards, together with the associated requirements to reduce sulfur 
in gasoline, will provide additional benefits nationally beginning in 
2004.\17\ When the new tailpipe and sulfur standards are fully 
implemented, Americans will benefit from the clean-air equivalent of 
removing 164 million cars from the road.
---------------------------------------------------------------------------

    \17\ See Tier II emission standards at 65 FR 6698, February 10, 
2000.
---------------------------------------------------------------------------

    These new standards require passenger vehicles to have emissions 77 
to 95 percent cleaner than those on the road today and reduce the 
sulfur content of gasoline by up to 90 percent. In addition, the 2001 
heavy-duty diesel engine regulations \18\ will lead to continued 
emissions reductions as older vehicles in that engine class are retired 
and fleets turn over. New emission standards will begin to take effect 
in model year 2007 and will apply to heavy-duty highway engines and 
vehicles. These standards are based on the use of high-efficiency 
catalytic exhaust emission control devices or comparably effective 
advanced technologies. Because these devices are damaged by sulfur, the 
level of sulfur in highway diesel fuel will be reduced by 97 percent by 
mid-2006. We project a 2.6 million ton reduction of NOX 
emissions in 2030 when the current heavy-duty vehicle fleet is 
completely replaced with newer heavy-duty vehicles that comply with 
these emission standards. By 2030, we estimate that this program will 
reduce annual emissions of hydrocarbons by 115,000 tons and PM by 
109,000 tons. These emissions reductions are on par with those that we 
anticipate from new passenger vehicles and low sulfur gasoline under 
the Tier 2 program.
---------------------------------------------------------------------------

    \18\ See heavy-duty diesel engine regulations at 66 FR 5002, 
January 18, 2001.
---------------------------------------------------------------------------

    EPA also finalized national rules in May 2004 to significantly 
reduce PM2.5 and NOX emissions from nonroad 
diesel-powered equipment.\19\ These nonroad sources include 
construction, agricultural, and industrial equipment, and their 
emissions constitute an important fraction of the inventory for direct 
PM2.5 emissions (such as elemental carbon and organic 
carbon), and NOX. The EPA estimates that affected nonroad 
diesel engines currently account for about 44 percent of total diesel 
PM emissions and about 12 percent of total NOX emissions 
from mobile sources nationwide. These proportions are even higher in 
some urban areas. The diesel emission standards will reduce emissions 
from this category by more than 90 percent, and are similar to the 
onroad engine requirements implemented for highway trucks and buses. 
Because the emission control devices can be damaged by sulfur, EPA also 
established requirements to reduce the allowable level of sulfur in 
nonroad diesel fuel by more than 99 percent by 2010. In 2030, when the 
full inventory of older nonroad engines has been replaced, the nonroad 
diesel program will annually prevent up to 12,000 premature deaths, one 
million lost work days, 15,000 heart attacks and 6,000 children's 
asthma-related emergency room visits.
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    \19\ For more information on the proposed nonroad diesel engine 
standards, see EPA's website: http://www.epa.gov/nonroad/.

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[[Page 65992]]

II. Fine Particles: Overview of Atmospheric Chemistry, Sources of 
Emissions, and Ambient Monitoring Data

A. Introduction

    Particulate matter is a chemically and physically diverse mixture 
of discrete solid particles and liquid droplets. It exists in the air 
in a range of particle sizes, from submicrometer to more than 30 
micrometers in size. The composition of particles varies throughout 
this range of sizes, depending on the age of the particle, the nature 
of the source of pollutant emissions, and the source's operating 
characteristics.
    This regulation focuses on reducing ambient concentrations of the 
PM2.5 size fraction of PM. The term PM2.5 is used 
to describe the fraction of particles whose nominal aerodynamic 
diameter is less than or equal to 2.5 micrometers. PM2.5 in 
the ambient air is defined operationally as the set of particles 
measured (and associated concentration) by the Federal Reference Method 
sampling device. Since the cut point of this sampling device is not 
perfectly sharp, some particles smaller than 2.5 micrometers are not 
retained and some particles larger than 2.5 micrometers are captured by 
sampling devices. This is important because there are two relevant 
modes to the PM size distribution, fine PM (nominally PM2.5) 
and coarse PM (nominally from 2.5 to 10 micrometers aerodynamic 
diameter). These modes overlap slightly, but they are generally 
associated with distinctly different source types and formation 
processes.
    Fine particles emitted directly into the air in a stable solid or 
liquid chemical form are referred to as ``primary'' particles. 
Particles formed near their source by condensation processes in the 
atmosphere are also considered to be primary particles. 
PM2.5 that is formed by chemical reactions of gases in the 
atmosphere is considered to be ``secondarily'' formed particulate 
matter.
    PM2.5 in the atmosphere is composed of a complex mixture 
of constituents: Sulfate; nitrate; ammonium; particle-bound water; 
black carbon (also known as elemental carbon); a great variety of 
organic compounds; and miscellaneous inorganic material (sometimes 
called ``crustal material,'' which includes geogenic dust and metals). 
Atmospheric PM2.5 also contains a large number of elements 
in various compounds and concentrations. Some organic materials such as 
pollen, spores, and plant detritus are also found in both the fine and 
coarse particle modes but from different sources or mechanisms. Crustal 
materials such as calcium, aluminum, silicon, magnesium, and iron are 
found predominately in coarse mode particles. Nitrate is generally 
found in the fine particle mode, but it is also found in the coarse 
mode particles, coming primarily from the reaction of gas-phase nitric 
acid with preexisting coarse particles.
    Primary coarse particles are usually formed by mechanical 
processes. This includes material emitted from such sources as wind-
blown dust, road dust, and particles formed by abrasion, crushing, and 
grinding. Some combustion-generated particles such as fly ash and soot 
also are found in the coarse mode. Primary PM2.5 includes 
soot from diesel engines, a wide variety of organic compounds condensed 
from incomplete combustion or cooking operations, and compounds such as 
arsenic, selenium, and zinc that condense from vapor formed during 
combustion or smelting. The concentration of primary PM2.5 
in the air depends on source emission rates, transport and dispersion, 
and removal rate from the atmosphere.
    Secondary PM is formed by chemical reactions of gas-phase 
precursors in the atmosphere. These reactions form condensable vapors 
that either form new particles or condense onto other particles in the 
air. Most of the sulfate and nitrate and a portion of the organic 
compounds in the atmosphere are formed by such chemical reactions. 
Secondary PM formation depends on numerous factors including the 
concentrations of precursors; the concentrations of other gaseous 
reactive species such as ozone, hydroxyl radicals, peroxy radicals, or 
hydrogen peroxide; atmospheric conditions including solar radiation, 
temperature, and relative humidity (RH); and the interactions of 
precursors and pre-existing particles with cloud or fog droplets or in 
the liquid film on solid particles. Several atmospheric aerosol 
species, such as ammonium nitrate and certain organic compounds, are 
semivolatile and are found in both gas and particle phases. Given the 
complexity of PM formation processes, new information from the 
scientific community continues to emerge to improve our understanding 
of the relationship between sources of PM precursors and secondary 
particle formation.
    Certain particles, such as sulfates, nitrates, and certain 
organics, readily take up water and are considered to be hygroscopic. 
As a result of the equilibrium of water vapor with liquid water in 
hygroscopic particles, many ambient particles contain some amount of 
liquid water. When filter samples are weighed at lower relative 
humidity levels according to the PM2.5 Federal reference 
method specifications, the filters are desiccated and much of this 
water is removed, but some particle-bound water will be measured as a 
component of the particle mass. Particle-bound water in the ambient air 
increases with higher relative humidities. This phenomenon is important 
because it affects the size of certain particles, and in turn, their 
properties of light scattering and aerodynamics. Differences in 
relative humidity can result in different measured particle size 
distributions, mass concentrations, and resulting visibility impairment 
levels. Regional emission reduction strategies to reduce 
PM2.5, particularly hygroscopic particles such as sulfates 
and nitrates, should also provide significant visibility improvements, 
both in urban areas and in federal class I areas (national parks and 
wilderness areas).
    The following discussion elaborates on the relationship between 
source types and the composition of PM2.5. More information 
and references on the composition of PM may be found in the EPA 2004 PM 
Air Quality Criteria Document.\20\
---------------------------------------------------------------------------

    \20\ Environmental Protection Agency. (2004) Air Quality 
Criteria for Particulate Matter. Research Triangle Park, NC: Office 
of Research and Development; report no. EPA/600/P-99/002a,bF. 
October. The 2004 PM criteria document is available at: http://www.epa.gov/ttn/naaqs/standards/pm/s_pm_cr_cd.html.
---------------------------------------------------------------------------

B. Concentration, Composition and Sources of Fine PM

    The relative contribution of PM2.5 components varies 
significantly by region of the country. Data on PM2.5 
composition primarily in urban areas is available from the EPA 
Speciation Trends Network beginning in 2001. PM2.5 
composition data for primarily rural areas (e.g. national parks and 
wilderness areas) is available from the IMPROVE visibility monitoring 
network beginning in 1988. Speciation data from September 2001 to 
August 2002 are summarized for urban and rural areas in nine regions in 
table 2.
BILLING CODE 6560-50-U

[[Page 65993]]

[GRAPHIC] [TIFF OMITTED] TP01NO05.000

BILLING CODE 6560-50-C

    This discussion focuses on the eastern U.S. and California since 
most nonattainment areas will be located in those regions. In general, 
urban areas have higher annual average PM2.5 concentrations 
than nearby rural areas. In the eastern U.S. urban areas, ammonium 
sulfate and total carbon (comprised of black carbon and organic carbon) 
are the dominant species, each accounting for 30-40 percent of total 
reconstructed mass in most locations. (Reconstructed mass is the PM 
mass calculated by adding together the mass from each of the main 
components of PM as obtained from chemical composition monitoring.) 
Nitrate plus associated ammonium ion is a more significant component of 
PM mass in northern regions, such as the midwest and east coast, but is 
a less significant fraction in the southeast. In California, the main 
species contributing to urban PM2.5 mass are ammonium 
nitrate (35-40 percent) and total carbon (43 percent), while sulfate 
and associated ammonium accounts for approximately 10-15 percent.
    Table 3 compares chemical composition data for 13 pairs of urban 
and nearby non-urban sites in order to identify the primary components 
that make up the ``urban increment.'' To conduct this analysis, for 
each species the PM2.5 mass in the rural location is 
subtracted from the species mass for the urban location. The amount by 
which the urban site exceeds the nearby rural site is the ``urban 
increment.'' \21\
---------------------------------------------------------------------------

    \21\ V. Rao, N. Frank, A. Rush, F. Dimmick, ``Chemical 
Speciation of PM2.5 in Urban and Rural Areas,'' In the 
Proceedings of the Air & Waste Management Association Symposium on 
Air Quality Measurement Methods and Technology, San Francisco, 
November 13-15, 2002.

[[Page 65994]]



                           Table 3.--Urban Increment Analysis for 13 Urban/Rural Pairs
                                   [All values in micrograms per cubic meter]
----------------------------------------------------------------------------------------------------------------
                                                          West  (3 site pairs)          East  (10 site pairs)
                  Chemical species                   -----------------------------------------------------------
                                                        Min.      Max.      Avg.      Min.      Max.      Avg.
----------------------------------------------------------------------------------------------------------------
Sulfate.............................................       0.2       0.7       0.5      -0.5       1.1       0.3
Est. Ammonium.......................................       0.2       2.2       1.2       0.1       0.8       0.4
Nitrate.............................................       0.6       6.9       3.7       0.4       1.4       0.8
Total Carbon........................................       4.8       9.8       6.6       2.1       5.3       3.1
Crustal.............................................       0.1       0.6       0.4      -0.1       0.8       0.3
                                                     -----------
    Total Excess....................................       5.8      20.1      12.4       2.0       9.4       4.8
----------------------------------------------------------------------------------------------------------------

    Carbonaceous mass is the largest contributor to urban increments in 
all regions of the country. In east coast and midwestern urban areas, 
carbon can account for as much as 70-90 percent of the total urban 
increment. The highest local increment of carbon as calculated from 
available data appears to be about 10 [mu]g/m3 in Fresno, 
CA. Nonroad diesel, onroad diesel, gasoline highway vehicles, and fire 
related activities are regarded to be important major contributors to 
this urban excess of carbon. The relative amounts of primary versus 
secondary organic compounds in the ambient air vary with location and 
time of year. While it is difficult to generalize, it is clear that 
both primary and secondary organic compounds are significant 
contributors to ambient PM2.5 mass in many parts of the 
country.
    The urban increment for sulfate, on the other hand, appears to be 
fairly low in most locations. Rural and urban sulfate levels are often 
very similar, indicating that sulfate is a regional pollutant that can 
be transported long distances. This is consistent with the fact that 
power plants are the principal sources of SO2, the precursor 
to sulfate, and in general, these plants are located outside urban core 
areas. In some eastern cities, the small estimated urban excess (up to 
0.5 [mu]g/m3) may be attributed to a range of source types, 
including power plants located within the metro area, the combustion of 
sulfur-laden fuel oil used for commercial or institutional heating, and 
fuel combustion by diesel and gasoline motor vehicles.
    Excess nitrate concentrations are observed predominantly in 
northern, midwestern, and western locations, comprising a larger local 
contribution than sulfate or crustal material. Nitrate is particularly 
high in the winter time partly because it is less volatile at colder 
temperatures and partly because SO2 is less prone to react 
preferentially with ammonium in the winter as opposed to the summer. 
Local sources of NOX leading to excess urban nitrate likely 
include mobile sources and other types of fuel combustion.
    Some locations also show a small urban excess of crustal material 
(e.g. inorganic material including metals, dust, sea salt, and other 
trace elements). The estimation procedure used in the IMPROVE protocol 
includes the measurement of iron and other trace elements. Therefore, 
this difference also reflects oxidized particulate metals, some of 
which may be attributed to road dust or industrial sources in urban 
areas.
    We have developed a National Emissions Inventory (NEI) inventory 
for use in analyzing trends in emissions, conducting various regulatory 
analyses for PM, and for use in regional scale modeling.\22\ The NEI 
covers all 50 States plus some of the U.S. territories, and includes 
point, area, onroad and nonroad mobile sources, biogenic, and geogenic 
emissions. Large stationary sources are located individually in the 
inventory while county tallies are used for smaller stationary sources, 
and area and mobile source category groups. Spatial, temporal and 
compositional profiles are used to allocate these emissions to time-
resolved grids for chemical transport modeling. The inventory includes 
emissions of SO2, NOX, VOC, NH3, 
PM10, and PM2.5. A brief discussion of each 
particle type, their principal sources (based on the NEI), formation 
mechanisms, and spatial and temporal patterns follows.
---------------------------------------------------------------------------

    \22\ USEPA, National Air Quality and Emissions Trends Report: 
2003 Special Studies Edition, Report Number EPA-454/R-03-005, 
Research Triangle Park, NC, September 2003. USEPA, National Air 
Pollutant Emissions Trends, Report Number EPA-454/R-00-002, Research 
Triangle Park, NC, March 2000. See also: http://www.epa.gov/ttn/chief/trends/.
---------------------------------------------------------------------------

    Primary PM (Crustal and Carbonaceous). This section addresses 
inorganic and organic forms of primary PM. The main anthropogenic 
sources of inorganic (or crustal) particles are: Entrainment by 
vehicular traffic on unpaved or paved roads; mechanical disturbance of 
soil by highway, commercial, and residential construction; and 
agricultural field operations (tilling, planting and harvesting). 
However, much of these emissions are coarse PM rather than fine PM.
    Industrial processes such as quarries, minerals processing, and 
agricultural crop processing can also emit crustal materials, but their 
influence is most important close to the source and they are not 
generally significant contributors to regional scale PM problems. Even 
so, during certain high wind events, fine crustal PM has been shown to 
be transported over very long distances. Satellite data and other 
studies have shown that dust has been transported into the U.S. as a 
result of Asian or African dust storms.
    Emission estimates of mechanically suspended crustal PM from 
sources within the U.S. are often quite high. However, this PM is often 
released very close to the ground, and with the exception of windblown 
dust events, thermal or turbulent forces sufficient to lift and 
transport them very far from their source are not usually present. 
Thus, as shown in table 1, crustal material is only a minor part of 
PM2.5 annual average concentrations.
    Primary carbonaceous particles are largely the result of incomplete 
combustion of fossil or biomass fuels. This incomplete combustion 
usually results in emissions of both black carbon and organic carbon 
particles. High molecular weight organic molecules (i.e., molecules 
with 25 or more carbon atoms) are either emitted as solid or liquid 
particles, or as gases that rapidly condense into particle form. These 
heavy organic molecules sometimes are referred to as volatile organic 
compounds, but because their characteristics are most like direct PM 
emissions, they will be considered to be primary emissions for the 
purposes of this regulation. Primary organic carbon

[[Page 65995]]

also can be formed by condensation of semi-volatile compounds on the 
surface of other particles.
    The main combustion sources emitting carbonaceous PM2.5 
are mobile sources (both onroad and nonroad), managed burning, wildland 
fires, open burning of waste, residential wood combustion, certain 
industrial processes, and coal and oil-burning boilers (utility, 
commercial and industrial). Certain organic particles also come from 
natural sources such as decomposition or crushing of plant detritus. 
Most combustion processes emit more organic particles than black carbon 
particles. A notable exception to this are diesel engines, which 
typically emit more black carbon particles than organic carbon. Because 
photochemistry is typically reduced in the cooler winter months for 
much of the country, studies indicate that the carbon fraction of PM 
mass in the winter months is likely dominated by direct PM emissions as 
opposed to secondarily formed organic aerosol.
    Particles from the earth's crust may contain a combination of 
metallic oxides and biogenic derived organic matter. The combustion of 
surface debris will likely entrain some soil. Additionally, emissions 
from many processes and from the combustion of fossil fuels contain 
elements that are chemically similar to soil. Thus, a portion of the 
emissions from combustion activities may be classified as crustal in a 
compositional analysis of ambient PM2.5.
    Secondary PM. Although some sulfate and nitrate salts (i.e. calcium 
sulfate, calcium nitrate) and acids (i.e. sulfuric acid, nitric acid) 
are directly emitted by sources under certain circumstances, sulfates 
and nitrates are predominately formed as a result of chemical reactions 
with ammonia and other compounds in the atmosphere. (See next sections 
for more detail.) During combustion, very small combustion nucleation 
particles (ultrafine particles, less than 0.1[mu]m) are produced. These 
small particles act as nucleation sites where gases, water vapor, and 
other nucleation particles can condense or coagulate and therefore 
cause particle growth in both particle size and particle mass. Ammonium 
sulfate, ammonium nitrate, and secondarily formed organic aerosols, as 
well as agglomerating fine particles, all may use these ultrafine 
particles in their formation and growth in the atmosphere. The 
secondary organic aerosol (SOA) component of PM2.5 is a 
complex mixture of perhaps thousands of organic compounds. A brief 
discussion of the sources of SO2, NOX, 
NH3, and organic gases (including VOC and semi-volatile 
compounds), and the formation of sulfate, nitrate and secondary organic 
aerosol follows. More detailed discussions of the formation and 
characteristics of secondary particles can be found in the U.S. EPA 
Criteria Document,\23\ and in the NARSTO Fine Particle Assessment,\24\ 
on which much of the following discussion is based.
---------------------------------------------------------------------------

    \23\ USEPA, 2003. Air Quality Criteria for Particulate Matter 
(Fourth External Review Draft). EPA/600/P-99/002aD and bD. U.S. 
Environmental Protection Agency, Office of Research and Development, 
National Center For Environmental Assessment, Research Triangle Park 
Office, Research Triangle Park, NC. June 2003. Available 
electronically at http://cfpub.epa.gov/ncea/cfm/partmatt.cfm.
    \24\ North American Research Strategy for Tropospheric Ozone and 
Particulate Matter (NARSTO) (2004) Particulate Matter Assessment for 
Policy Makers: A NARSTO Assessment. P. McMurry, M. Shepherd, and J. 
Vickery, eds. Cambridge University Press, Cambridge, England. ISBN 0 
52 184287 5. For more information, see http://www.cgenv.com/NARSTO. 
See also supporting technical information for the Clear Skies Act, 
http://www.epa.gov/clearskies/, and for the Clean Air Interstate 
Rule, http://www.epa.gov/cleanairinterstaterule.
---------------------------------------------------------------------------

    Sulfate. SO2 is emitted mostly from the combustion of 
fossil fuels in boilers operated by electric utilities and other 
industry. Less than 20 percent of SO2 emissions nationwide 
are from other sources, mainly from other industrial processes 
including oil refining and pulp and paper production.
    The formation of sulfuric acid from the oxidation of SO2 
is an important process for most areas in North America. There are 
three different pathways for this transformation. First, gaseous 
SO2 can be oxidized by the hydroxyl radical (OH) to create 
sulfuric acid. This gaseous SO2 oxidation reaction occurs 
slowly and only in the daytime. The hydroxl radical is an important 
product of the atmospheric chemistry process that forms ozone through 
the oxidation of NOX to form nitric acid. It is also 
involved in the formation of secondary organics.
    Second, SO2 can dissolve in cloud water (or fog or rain 
water), and there it can be oxidized to sulfuric acid by a variety of 
oxidants, or through catalysis by transition metals such as manganese 
or iron. If ammonia is present and taken up by the water droplet, then 
ammonium sulfate will form as a precipitant in the water droplet. After 
the cloud changes and the droplet evaporates, the sulfuric acid or 
ammonium sulfate remains in the atmosphere as a particle. This aqueous-
phase production process involving oxidants can be very fast; in some 
cases all the available SO2 can be oxidized in less than an 
hour.
    Third, SO2 can be oxidized in reactions in the particle-
bound water in the aerosol particles themselves. This process takes 
place continuously, but only produces appreciable sulfate in alkaline 
(dust, sea-salt) coarse particles.\25\ Oxidation of SO2 has 
been also observed on the surfaces of black carbon and metal oxide 
particles. During the last twenty years, much progress has been made in 
understanding the first two major pathways, but some important 
questions still remain about the smaller third pathway. Models indicate 
that more than half of the sulfuric acid in the eastern United States 
and in the overall atmosphere is produced in clouds.\26\
---------------------------------------------------------------------------

    \25\ Sievering, H., Boatman, J., Gorman, E., Kim, Y., Anderson, 
L., Ennis, G., Luria, M., Pandis, S.N., 1992. Removal of sulfur from 
the marine boundary layer by ozone oxidation in sea-salt. Nature 
360, 571-573.
    \26\ McHenry, J.N., Dennis, R.L., 1994. The relative importance 
of oxidation pathways and clouds to atmospheric ambient sulfate 
production as predicted by the Regional Acid Deposition Model. 
Journal of Applied Meteorology 33, 890-905. Also: Langner, J., 
Rodhe, H., 1991. A global three dimensional model for the 
tropospheric sulfur cycle. Journal of Atmospheric Chemistry 13, 225-
263.
---------------------------------------------------------------------------

    The sulfuric acid formed from the above pathways reacts readily 
with ammonia to form ammonium sulfate, (NH4)2SO4. If there 
is not enough ammonia present to fully neutralize the produced sulfuric 
acid (one molecule of sulfuric acid requires two molecules of ammonia), 
part of it exists as ammonium bisulfate, NH4HSO4 (one 
molecule of sulfuric acid and one molecule of ammonia) and the 
particles are more acidic than ammonium sulfate. In extreme cases (in 
the absence of sufficient ammonia for neutralization), sulfate can 
exist in particles as sulfuric acid, H2SO4. Sulfuric acid 
often exists in the plumes of stacks where SO2, 
SO3, and water vapor are in much higher concentrations than 
in the ambient atmosphere, but these concentrations become quite small 
as the plume is cooled and diluted by mixing.
    Nitrate. The main sources of NOX are combustion of 
fossil fuel in boilers and onroad mobile sources. Together they account 
for more than 60 percent of NOX emissions in 
PM2.5 nonattainment areas (based on 2001 emission inventory 
information), with stationary and mobile source fuel combustion each 
accounting for about half of these emissions. Nitrates are formed from 
the oxidation of oxides of nitrogen into nitric acid either during the 
daytime

[[Page 65996]]

(reaction with OH) or during the night (reactions with ozone and 
water).\27\
---------------------------------------------------------------------------

    \27\ Wayne, R.P., et al., 1991. The nitrate radical: physics, 
chemistry and the atmosphere. Atmospheric Environment 25A, 1-203.27
---------------------------------------------------------------------------

    Nitric acid continuously transfers between the gas and the 
condensed phases through condensation and evaporation processes in the 
atmosphere. However, unless it reacts with other species (such as 
ammonia, sea salt, or dust) to form a neutralized salt, it will 
volatize and not be measured using standard PM2.5 
measurement techniques.\28\ The formation of aerosol ammonium nitrate 
is favored by the availability of ammonia, low temperatures, and high 
relative humidity. Because ammonium nitrate is not stable in higher 
temperatures, nitrate levels are typically lower in the summer months 
and higher in the winter months. The resulting ammonium nitrate is 
usually in the sub-micrometer particle size range. Reactions with sea-
salt and dust lead to the formation of nitrates in coarse particles. 
Nitric acid may be dissolved in ambient aerosol particles.
---------------------------------------------------------------------------

    \28\Seinfeld, J.H., Pandis, S.N., 1998. Atmospheric Chemistry 
and Physics: From Air Pollution to Climate Change. J. Wiley, New 
York.
---------------------------------------------------------------------------

    Secondary Organic Aerosol (SOA). The organic component of ambient 
particles is a complex mixture of hundreds or even thousands of organic 
compounds. These organic compounds are either emitted directly from 
sources (i.e. primary organic aerosol) or can be formed by reactions in 
the ambient air (i.e. secondary organic aerosol, or SOA).
    Volatile organic compounds\29\ are key precursors in both the SOA 
and ozone formation processes. The lightest organic molecules (i.e., 
molecules with six or fewer carbon atoms) occur in the atmosphere 
mainly as vapors and typically do not directly form organic particles 
at ambient temperatures due to the high vapor pressure of their 
products. However, they participate in atmospheric chemistry processes 
resulting in the formation of ozone and certain free radical compounds 
(such as the hydroxyl radical [OH]) which in turn participate in the 
oxidation of semivolatile organic compounds to form secondary organic 
aerosols, sulfates and nitrates. These VOCs include all alkanes with up 
to six carbon atoms (from methane to hexane isomers), all alkenes with 
up to six carbon atoms (from ethene to hexene isomers), benzene and 
many low-molecular weight carbonyls, chlorinated compounds, and 
oxygenated solvents. The relative importance of organic compounds in 
the formation of organic particles varies from area to area, depending 
upon local emissions sources, atmospheric chemistry, and season of the 
year. Intermediate weight organic molecules (i.e., compounds with 7 to 
24 carbon atoms) often exhibit a range of volatilities and can exist in 
both the gas and aerosol phase. For this reason they are also referred 
to as semivolatile compounds. Semivolatile compounds react in the 
atmosphere to form secondary organic aerosols. These chemical reactions 
are accelerated in warmer temperatures, and studies show that SOA 
typically comprises a higher percentage of carbonaceous PM in the 
summer as opposed to the winter.
---------------------------------------------------------------------------

    \29\ 29 As discussed earlier, high molecular weight organic 
molecules (i.e., molecules with 25 or more carbon atoms) are either 
emitted directly as particles or as liquids that rapidly condense 
onto existing particles. Because these condensable emissions act 
primarily as direct PM emissions, they are to be regulated as direct 
PM2.5 emissions, not as VOC precursors, for the purposes 
of this regulation.
---------------------------------------------------------------------------

    The production of SOA from the atmospheric oxidation of a specific 
VOC depends on four factors: Its atmospheric abundance, its chemical 
reactivity, the availability of oxidants (O3, OH, 
HNO3), and the volatility of its products. In addition, 
recent work by Jang and others suggests that the presence of acidic 
aerosols may lead to an increased rate of SOA formation.\30\
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    \30\ Jang, M.; Czoschke, N.; Lee, S.; Kamens, R. Heterogenous 
Atmospheric Aerosol Production by Acid-Catalyzed Particle-Phase 
Reactions, Science, vol. 298, p. 814-817, October 25, 2002.
---------------------------------------------------------------------------

    Aromatic compounds such as toluene, xylene, and trimethyl benzene 
are considered to be the most significant anthropogenic SOA precursors 
and have been estimated to be responsible for 50 to 70 percent of total 
SOA in some airsheds.\31\ As organic gases such as aromatics are 
oxidized in the gas phase by species such as the hydroxyl radical (OH), 
ozone (O3), and the nitrate radical (NO3) their 
oxidation products accumulate. Some of these products have low 
volatility and condense on available particles in an effort to 
establish equilibrium between the gas and condensed phases. Man-made 
sources of aromatics gases are mobile sources, petrochemical 
manufacturing and solvents. The experimental work of Odum and others 
\32\ showed that the secondary organic aerosol formation potential of 
gasoline could be accounted for solely in terms of its aromatic 
fraction.
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    \31\ Grosjean, D., Seinfeld, J.H., 1989. Parameterization of the 
formation potential of secondary organic aerosols. Atmospheric 
Environment 23, 1733-1747.
    \32\ Odum, J.R., Jungkamp, T.P.W., Griffin, R.J., Flagan, R.C., 
Seinfeld, J.H., 1997. The atmospheric aerosol-forming potential of 
whole gasoline vapor. Science 276, 97-99.
---------------------------------------------------------------------------

    Some of the biogenic hydrocarbons emitted by trees are also 
considered to be important precursors of secondary organic particulate 
matter. Terpenes ([alpha]- and [beta]-pinene, limonene, carene, etc.) 
and the sesquiterpenes are expected to be major contributors to SOA in 
areas with significant vegetation cover, but isoprene is not. Terpenes 
are very prevalent in forested areas, especially in the southeastern 
U.S. The rest of the anthropogenic hydrocarbons (higher alkanes, 
paraffins, etc.) have been estimated to contribute 5-20 percent to the 
SOA concentration depending on the area.

 Table 4.--Role of Organic Gases in Secondary Organic Aerosol Formation
------------------------------------------------------------------------
                               SOA-forming organic     Non SOA-forming
                                      gases             organic gases
------------------------------------------------------------------------
Anthropogenic...............  --Aromatics (esp.     --Lower alkanes <6 C
                               toluene, xylenes,     atoms, (ethane to
                               trimethyl-benzenes).  hexane isomers).
                              --Higher alkanes (>6  --Benzene.
                               C atoms).            --Lower MW
                                                     carbonyls,
                                                     chlorinated
                                                     compounds &
                                                     oxygenated
                                                     solvents.
Biogenic....................  --Terpenes (esp.      --Isoprene.
                               [alpha]- and [beta]-
                               pinene, limonene,
                               carene).
                              --Sesquiterpenes....
------------------------------------------------------------------------

    The contribution of the primary and secondary components of organic 
aerosol to the measured organic aerosol concentrations remains a 
controversial issue. Most of the research performed to date has been 
done in southern California, and more recently in central California, 
while fewer studies have been completed on other parts of North

[[Page 65997]]

America. Early studies suggested that the majority of the observed 
organic particulate matter was secondary in nature. Later investigators 
focusing on the emissions of primary organic material proposed that 80 
percent or so of the organic aerosol in Southern California on a 
monthly basis resulted from direct organic particle emissions.\33\ More 
recent studies suggest that the primary and secondary contributions are 
highly variable even during the same day. Studies of pollution episodes 
indicated that the contribution of SOA to the organic particulate 
matter varied from 20 percent to 80 percent during the same day.\34\
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    \33\ Hildemann, L.M., Cass, G.R., Mazurek, M.A., Simoneit, 
B.R.T., 1993. Mathematical modeling of urban organic aerosol 
properties measured by high resolution gas-chromatography. 
Environmental Science and Technology 27, 2045-2055.33
    \34\ Turpin, B.J., Lim, H.J., 2000. Species contributions to PM 
mass concentrations: Revisiting common assumptions for estimating 
organic mass, Aerosol Science and Technology, vol. 35, no. 1, p. 
602-610.
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    Despite significant progress that has been made in understanding 
the origins and properties of SOA, it remains the least understood 
component of PM2.5. The reactions forming secondary organics 
are complex and the number of intermediate and final compounds formed 
is voluminous. Some of the best efforts to unravel the chemical 
composition of ambient organic aerosol matter have been able to 
quantify the concentrations of hundreds of organic compounds 
representing only 10-20 percent of the total organic aerosol mass. For 
this reason, SOA continues to be a significant topic of research and 
investigation.

C. The Role of Ammonia in Sulfate, Nitrate & Secondary Organic Aerosol 
Formation

    Ammonia (NH3) is a gaseous pollutant that is emitted by 
natural and anthropogenic sources. Emissions inventories for ammonia 
are considered to be among the most uncertain of any species related to 
PM. One recent estimate shows, however, that livestock (73 percent) and 
fertilizer application (17 percent) are the two primary sources of 
emissions.\35\ (Note that these estimates do not include natural 
emissions from soil, which can be significant.)
---------------------------------------------------------------------------

    \35\ Anderson, N., R. Strader, and C. Davidson (2003) Airborne 
reduced nitrogen: Ammonia emissions from agriculture and other 
sources, Environment International, 29: 277-286.
---------------------------------------------------------------------------

    Ammonia serves an important role in neutralizing acids in clouds, 
precipitation and particles. In particular, ammonia neutralizes 
sulfuric acid and nitric acid, the two key contributors to acid 
deposition (acid rain). Deposited ammonia also can be an important 
nutrient, contributing to problems of eutrophication in water 
bodies.\36\ Ammonia would not exist in particles, if not for the 
presence of acidic species with which it can combine to form a 
particle. In the eastern U.S., sulfate, nitrate, and the ammonium 
associated with them can together account for between roughly 30 
percent and 75 percent of the PM2.5 mass. The ammonium 
itself roughly accounts for between 5 percent and 20 percent of the 
PM2.5.\37\
---------------------------------------------------------------------------

    \36\ Seinfeld, J.H., Pandis, S.N., 1998. Atmospheric Chemistry 
and Physics: From Air Pollution to Climate Change. J. Wiley, New 
York.
    \37\ NARSTO, 2003. Particulate Matter Science for Policy 
Makers--A NARSTO Assessment. Parts 1 and 2. NARSTO Management Office 
(Envair), Pasco, Washington. http://www.cgenv.com/NARSTO.
---------------------------------------------------------------------------

    The NARSTO Fine Particle Assessment indicates that sulfates form 
preferentially over nitrates and that particle nitrate formation is 
affected by a number of factors, including the availability of 
sulfates, NOX, ammonia, nitric acid and VOCs. The report 
also notes that implementing decreasing ammonia emissions where sulfate 
concentrations are high can reduce PM2.5 mass 
concentrations, but may also increase particle and precipitation 
acidity.\38\ As noted above, this acidification of particles may result 
in an increase in the formation of secondary organic compounds. 
Moreover, the relationship between ammonia and sulfate-nitrate 
equilibrium may also impact SOA formation, although this link is not 
well understood. Recent studies of ammonia sources and possible 
emission reduction measures indicate that ammonia controls are a 
maturing science, but that ongoing research will greatly improve our 
understanding of such control measures.
---------------------------------------------------------------------------

    \38\ Ibid, at S-31 (table S.4).
---------------------------------------------------------------------------

    The same can be said of our understanding of the role of ammonia in 
aerosol formation. Based on the above information and further insights 
gained from the NARSTO Fine Particle Assessment, it is apparent that 
the formation of sulfate, nitrate and SOA compounds is a complex, 
nonlinear process. The control techniques for ammonia and the 
analytical tools to quantify the impact of reducing ammonia emissions 
on atmospheric aerosol formation are both evolving sciences. Also, 
there are indications that there may be considerable ambiguity 
concerning the results of reducing ammonia emissions and in some cases, 
there may be undesired consequences of ammonia reductions. Therefore, 
based on our current understanding of ammonia's role in these complex 
precursor interactions and emission reduction processes, it seems 
prudent to continue research on ammonia control technologies and the 
ammonia--sulfate--nitrate--SOA equilibrium before one undertakes broad 
national programs to reduce ammonia emissions. However, as States and 
EPA develop a greater understanding over the coming years about the 
potential air quality effects of reducing ammonia emissions in specific 
nonattainment areas, it may be appropriate for ammonia reduction 
strategies to be included in future SIPs. At this time, however, we 
believe that reducing SO2 and NOX will allow us 
to move with greater certainty toward achieving our nation's air 
quality goals. We encourage you to provide comments on the resolution 
of this issue.

D. Regional Patterns of Carbon, Sulfate and Nitrate, and Indications of 
Transport

    Table 2 above shows that much of the eastern U.S., both urban and 
non-urban areas alike, is subject to high PM2.5 
concentrations, with the highest concentrations occurring in urban 
areas. Table 3 above compares the urban and rural concentrations of 
sulfate, nitrate, and carbon particles. The data show that there are 
high concentrations of sulfate across the region and that sulfate at 
urban monitoring sites is only slightly higher than at nearby non-urban 
sites. In contrast, the carbon mass at urban sites is significantly 
higher than at the nearby non-urban sites. This seems to indicate that 
sulfate is present on a much more regional scale and likely is 
associated with significant pollutant transport. On the other hand, a 
sizeable fraction of the carbonaceous mass seems to be more associated 
with urban sources. Mobile sources are much more concentrated in urban 
areas and may explain much of the elevated urban carbon concentrations. 
However, black carbon and organic aerosols still make up a large 
percentage of the non-urban air quality composition, indicating that 
there is a regional background level of carbon that is enhanced in 
urban areas by local sources.
    The atmospheric lifetimes of particles and thus the distances they 
can be transported vary with particle size. The regional nature of 
PM2.5 reflects the fact that fine particles can be 
transported over long distances. Ultra-fine and fine particles rapidly 
grow in size into a relatively stable size range, generally less than 2 
[mu]m. These fine particles are kept suspended by normal air motions 
and have very low deposition rates to surfaces. They can be transported

[[Page 65998]]

thousands of kilometers and remain in the atmosphere for a number of 
days. Thus, they are important when considering regional PM transport. 
Coarse particles can settle rapidly from the atmosphere within hours 
and normally travel only short distances. However, when mixed high into 
the atmosphere, as in some dust storms, the smaller-sized coarse-mode 
particles may have longer lives and travel greater distances.
    Meteorology also plays a role in the size and characteristics of 
particles. High temperatures increase reaction rates, which may explain 
why sulfate concentrations are generally greatest in the summer. 
Conversely, lower temperatures result in a greater fraction of nitrates 
being in the particle phase. Fine particles, especially particles with 
a hygroscopic component, grow as the relative humidity increases, serve 
as cloud condensation nuclei, and grow into cloud droplets. If the 
cloud droplets grow large enough to form rain, the particles are 
removed in the rain. Falling rain drops impact coarse particles and 
remove them. Very fine particles are small enough to diffuse to the 
falling drop, be captured, and be removed in rain. However, falling 
rain drops are not nearly as effective in removing PM2.5 as 
the cloud processes mentioned above. Sulfuric acid, ammonium nitrate, 
ammonium sulfates, and organic particles also are deposited on surfaces 
by dry deposition. Therefore, reductions in SO2 and 
NOX emissions will decrease both acidic deposition and PM 
concentrations.

E. Policy for Addressing PM2.5 Precursors

1. Legal Authority To Regulate Precursors
    The Clean Air Act authorizes the Agency to regulate criteria 
pollutant precursors. The term `air pollutant'' is defined in section 
302(g) to include ``any precursors to the formation of any air 
pollutant, to the extent the Administrator has identified such 
precursor or precursors for the particular purpose for which the term 
'air pollutant' is used.''' The first clause of this second sentence in 
section 302(g) explicitly authorizes the Administrator to identify and 
regulate precursors as air pollutants under other parts of the Act. In 
addition, the second clause of the sentence indicates that the 
Administrator has discretion to identify which pollutants should be 
classified as precursors for particular regulatory purposes. Thus, we 
do not necessarily construe the Act to require that EPA identify a 
particular precursor as an air pollutant for all regulatory purposes 
where it can be demonstrated that various Clean Air Act programs 
address different aspects of the air pollutant problem. Likewise, we do 
not interpret the Act to require that EPA treat all precursors of a 
particular pollutant the same under any one program when there is a 
basis to distinguish between such precursors. For example, in a recent 
rule addressing PM2.5 precursors for purposes of 
transportation conformity, we chose to adopt different approaches for 
some precursors based on the degree to which the various precursors 
emitted by transportation-related sources contributed to the 
PM2.5 air quality problem. 70 FR 24280 (May 6, 2005).
    Other provisions of the Act reinforce our reading of section 302(g) 
that Congress intended precursors to NAAQS pollutants to be subject to 
the air quality planning and control requirements of the Act, but also 
recognized that there may be circumstances where it is not appropriate 
to subject precursors to certain requirements of the Act. Section 182 
of the Act provides for the regulation of NOX and VOCs as 
precursors to ozone in ozone nonattainment areas, but also provides in 
Section 182(f) that major stationary sources of NOX (an 
ozone precursor) are not subject to emission reductions controls for 
ozone where the State shows through modeling that NOX 
reductions do not decrease ozone. Section 189(e) provides for the 
regulation of PM10 precursors in PM10 
nonattainment areas, but also recognizes that there may be certain 
circumstances where it is not appropriate to apply control requirements 
to PM10 precursors. In providing that the Agency was to 
issue guidelines for the control of PM10 precursors, the 
legislative history of Section 189(e) recognized the complexity behind 
the science of precursor transformation into PM10 ambient 
concentrations and the need to harmonize the regulation of 
PM10 precursors with other provisions of the Act:

    The Committee notes that some of these precursors may well be 
controlled under other provisions of the Act. The Committee intends 
that * * * the Administrator will develop models, mechanisms, and 
other methodology to assess the significance of the PM10 
precursors in improving air quality and reducing PM10. 
Additionally, the Administrator should consider the impact on ozone 
levels of PM10 precursor controls. The Committee expects 
the Administrator to harmonize the PM10 reduction 
objective of this section with other applicable regulations of this 
Act regarding PM10 precursors, such as NOX.

See H. Rpt. 101-490, Pt. 1, at 268 (May 17, 1990), reprinted in S. Prt. 
103-38, Vol. II, at 3292.
    In summary, section 302(g) of the Act clearly calls for the 
regulation of precursor pollutants, but the Act also identifies 
circumstances when it may not be appropriate to regulate precursors and 
gives the Administrator discretion to determine how to address 
particular precursors under various programs required by the Clean Air 
Act. Due to the complexities associated with precursor emissions and 
their variability from location to location, we believe that in certain 
situations it may not be effective or appropriate to control a certain 
precursor under a particular regulatory program or for EPA to require 
similar control of a particular precursor in all areas of the country.
    In the following section II.E.2, we discuss our proposal for how 
States should address PM2.5 precursors for the majority of 
the nonattainment program issues in PM2.5 implementation 
plans, such as RACT, RACM, reasonable further progress and most of the 
other issues discussed in section III. This discussion is linked to 
related discussions of precursor issues in the NSR section of this 
package (see section III.M.), the transportation conformity program 
(see section III.K. of this package, and the conformity regulations 
\39\), and the general conformity program (see section III.L. of this 
package. All of these programs take effect prior to approval of SIPs 
for attaining the PM2.5 NAAQS. In the case of NSR, the 
program applies on the effective date of the nonattainment area 
designation. In the case of transportation conformity and general 
conformity, the program takes effect one year from the effective date 
of designation of the nonattainment area (i.e., April 5, 2006). Thus, 
for each of these programs there is an interim period between the date 
the program becomes applicable to a given nonattainment area and the 
date the State receives EPA approval of its overall PM2.5 
implementation plan. Options for addressing PM2.5 precursors 
in the NSR program are discussed in section III.M. below. For the 
transportation conformity program, precursor policies are addressed in 
the final rule on PM2.5 precursors.\40\
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    \39\ See the final transportation conformity rule (69 FR 40004; 
July 1, 2004); the conformity rule amendments addressing 
PM2.5 precursors (70 FR 24280; May 6, 2005); and 
transportation conformity regulations at 40 CFR Parts 51 and 93.
    \40\ The final transportation conformity rule on 
PM2.5 precursors was published in the Federal Register on 
May 6, 2005 at 70 FR 24280.

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[[Page 65999]]

2. Proposed Policy Options for Addressing PM2.5 Precursors 
in Nonattainment Plan Programs
    This section discusses potential options for addressing the 
PM2.5 precursors SO2, ammonia, NOX and 
volatile organic compounds in PM2.5 nonattainment plan 
programs other than NSR and transporation conformity. Several other 
preamble sections in today's notice, including those on RFP, RACT, 
RACM, and modeling and attainment demonstrations refer the reader to 
this overall section. Our approach to precursors of PM2.5 in 
these areas will be decided after consideration of comments through 
this rulemaking process and our policy for PM2.5 precursors 
will be stated in the final rule.
    As an initial matter, it is helpful to clarify the terminology we 
use throughout this notice to discuss precursors. We recognize 
NOX, SO2, VOCs, and ammonia as precursors of 
PM2.5 in the scientific sense because these pollutants can 
contribute to the formation of PM2.5 in the ambient air. 
However, the degree to which these individual precursors and pollutants 
contribute to PM2.5 formation in a given location is complex 
and variable. This requires that we further consider in this action how 
States should address these PM2.5 precursors in their 
PM2.5 nonattainment plan programs. Thus, where we believe 
that all states should address a given precursor of PM2.5 
under a specific PM2.5 nonattainment plan requirement, we 
refer to it more specifically as a ``PM2.5 nonattainment 
plan precursor, transportation conformity precursor, or NSR precursor. 
We request comment on all aspects of the proposed options set forth 
below.
    Sulfur dioxide. We believe the previous technical discussion and 
analysis of speciated air quality data provides an appropriate basis 
for requiring States to address sulfur dioxide as a PM2.5 
nonattainment plan precursor in all areas.\41\ The fact that sulfate is 
a significant contributor (e.g. ranging from 9 percent to 40 percent) 
to PM2.5 nonattainment and other air quality problems in all 
regions of the country is a critical piece of evidence supporting this 
approach. The EPA requests comments on the requirement that 
SO2 is a PM2.5 nonattainment plan precursor in 
all nonattainment areas.
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    \41\ As stated in the May 6, 2005 (70 FR 24282) final 
transportation conformity rule on PM2.5 precursors, on-
road emissions of sulfur dioxide would only be addressed in 
conformity determinations if the state air agency or EPA Regional 
Administrator found that the on-road emissions are a significant 
contributor to the area's PM2.5 problem or if the area's 
SIP established a motor vehicle emissions budget for sulfer oxides.
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    Ammonia. In regard to ammonia, however, we believe there is 
sufficient uncertainty about emissions inventories and about the 
potential efficacy of control measures from location to location such 
that the most appropriate approach for proposal is a case-by-case 
approach. Ammonia reductions may be appropriate in selected locations, 
but in others such reductions may lead to increased atmospheric 
acidity, exacerbating acidic deposition problems. Each State should 
evaluate whether reducing ammonia emissions would lead to 
PM2.5 reductions in their specific PM2.5 
nonattainment areas. Under this proposed policy, however, States are 
not required to address ammonia as a PM2.5 nonattainment 
plan precursor, unless the State or EPA makes a technical demonstration 
that ammonia emissions from sources in the State significantly 
contribute to the PM2.5 problem in a given nonattainment 
area or to other downwind air quality concerns. As noted above, ammonia 
reductions may be effective primarily in areas where nitric acid is in 
abundance and ammonia is the limiting factor to ammonium nitrate 
formation. Where the State or EPA has determined that ammonia is a 
significant contributor to PM2.5 formation in a 
nonattainment area, the State would address ammonia emissions in its 
nonattainment SIP due in 2008. From that point in time, the 
implementation of the PM program and other associated programs (e.g. 
the NSR program and transportation conformity program) in that area 
would proceed in accordance with this determination.\42\ Ammonia will 
be addressed under the transportation conformity program if the SIP 
establishes a budget specifically for on-road ammonia emissions. The 
EPA requests comments on this approach to addressing ammonia emissions 
under the PM2.5 program.
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    \42\ As stated in the May 6, 2005 (70 FR 24282) final 
transportation conformity rule on PM2.5 precursors, on-
road emissions of ammonia would also be addressed in conformity 
determinations before a SIP is submitted and budgets are found 
adequate or approved if the state air agency or EPA Regional 
Administrator found that the on-road emissions of ammonia are a 
significant contributor to the area's PM2.5 problem.
---------------------------------------------------------------------------

    Nitrogen oxides. Based on a review of speciated monitoring data 
analyses, it is apparent that nitrate concentrations vary significantly 
across the country. For example, in some southeastern locations, annual 
average nitrate levels are in the range of 6 to 8 percent of total 
PM2.5 mass, whereas nitrate comprises 40 percent or more of 
PM2.5 mass in certain California locations. Nitrate 
formation is favored by the availability of ammonia, low temperatures, 
and high relative humidity. It is also dependent upon the relative 
degree of nearby SO2 emissions because ammonia reacts 
preferentially with SO2 over NOX.
    The sources of NOX are numerous and widespread, 
including motor vehicles, power plants, and many other combustion 
activities. We believe the previous technical discussion and analysis 
of speciated air quality data provides an appropriate basis for 
presuming that states must evaluate and implement reasonable controls 
on sources of NOX in all nonattainment areas. Under this 
policy, States are required to address NOX under all aspects 
of the program, unless the State and EPA makes a finding that 
NOX emissions from sources in the State do not significantly 
contribute to the PM2.5 problem in a given area or to other 
downwind air quality concerns. An additional consideration is that the 
majority of potential PM2.5 nonattainment areas are already 
designated as nonattainment for the 8-hour ozone standard. For 
PM2.5 areas that are also violating the 8-hour ozone 
standard, strategies to reduce NOX emissions will help 
address both air pollution problems. The EPA requests comments on this 
approach to addressing NOX emissions under the 
PM2.5 program.
    Volatile Organic Compounds (VOC). Section II.B. discusses the main 
categories of organic compounds with varying degrees of volatility: 
Highly reactive, volatile compounds with six or fewer carbon atoms 
which indirectly contribute to PM formation through the formation of 
oxidizing compounds such as the hydroxyl radical and ozone; and 
semivolatile compounds with between seven and 24 carbon atoms which can 
exist in particle form and can readily be oxidized to form other low 
volatility compounds. High molecular weight organic compounds (with 25 
carbon atoms or more and low vapor pressure) are emitted directly as 
primary organic particles and exist primarily in the condensed phase at 
ambient temperatures. For this reason, these organic compounds will be 
regulated as primary PM2.5 emissions and not VOCs for the 
purposes of the PM2.5 implementation program.
    Current scientific and technical information clearly shows that 
carbonaceous material is a significant fraction of total 
PM2.5 mass in most areas, and that certain aromatic VOC 
emissions such as toluene, xylene, and trimethyl-benzene are precursors 
to the formation of secondary organic aerosol. Further, analyses of 
ambient data

[[Page 66000]]

indicate that a considerable fraction of the total carbonaceous 
material is likely from local as opposed to regional sources.
    However, while significant progress has been made in understanding 
the role of gaseous organic material in the formation of organic PM, 
this relationship remains complex. We recognize that further research 
and technical tools are needed to better characterize emissions 
inventories for specific VOC compounds, and to determine the extent of 
the contribution of specific VOC compounds to organic PM mass.
    In light of the factors discussed above, EPA proposes that States 
are not required to address VOC's as PM2.5 nonattainment 
plan precursors, unless the state or EPA makes a finding that VOC's 
significantly contribute to a PM2.5 nonattainment problem in 
the State or to other downwind air quality concerns. In proposing this 
policy, we are mindful of the fact that a majority of areas that have 
been designated as nonattainment for PM2.5 are already 
designated as nonattainment for the 8-hour ozone standard. Thus, these 
areas will already be required to evaluate VOC control measures for 
ozone purposes. (The inventory of VOC as defined here, including 
gaseous organic compounds, is essentially identical to the inventory of 
VOC for ozone control purposes.) The few PM2.5 areas not 
designated as nonattainment for the 8-hour ozone standard will not be 
required to regulate VOC emissions sources unless the State or EPA 
makes a relevant technical finding. We request comments accompanied by 
detailed technical supporting information on this proposed policy 
approach for addressing VOC's under the PM2.5 implementation 
program.
    In general. Any State or EPA technical demonstration to modify the 
presumptive policy approach for ammonia, NOX, or VOC should 
be developed well in advance of the SIP submittal date. In addition, 
the development of such a technical demonstration should include 
consultation with appropriate State, local, and EPA technical 
representatives representing air quality and transportation agencies.

III. What Are the Specific Elements of EPA's PM2.5 
Implementation Program?

A. What classification options are under consideration for PM2.5 
nonattainment areas?

1. Background
    Section 172 of subpart 1 contains the general requirements for SIPs 
for all nonattainment areas. Section 172(a)(1) states that on or after 
the date of designation, the Administrator may classify the area for 
the purpose of applying an attainment date or for some other purpose. 
Thus, a classification system is allowed under section 172, but is not 
required for the purposes of implementing a national ambient air 
quality standard.
    If we choose to establish a classification system, the Act states 
that we may consider certain factors in doing so, such as the severity 
of nonattainment in such areas, and the availability and feasibility of 
the pollution control measures that may be needed to achieve 
attainment. We must publish a notice in the Federal Register announcing 
any classifications and provide for at least 30 days for written 
comment. Classifications are not subject to notice and comment 
rulemaking requirements, however, nor are they subject to judicial 
review until we take any action on plan submissions (under sections 
110(k) or 110(l)), or sanctions in cases where the State fails to 
submit a plan (under section 179).
2. Proposed Options for PM2.5 Classifications
    This section describes two implementation approaches for 
classifying or not classifying PM2.5 nonattainment areas. 
The first and preferred option is to not have any classification 
system. The second option would have a two-tiered classification 
system, with areas classified as ``moderate'' or ``serious'' based on 
specific criteria. These options are discussed below.
a. No Classification System Based on Design Values
    In today's notice, our preferred option is to not have any system 
for classifying PM2.5 nonattainment areas or assigning 
attainment dates and control strategy requirements based on the 
severity of the nonattainment problem (e.g. the area's design value). 
We believe that an advantage of this approach is that it will provide a 
relatively simple implementation structure for state implementation of 
the PM2.5 standards. This approach also will allow 
flexibility to determine attainment dates and control strategies 
appropriate for each area under Clean Air Act requirements.
    We believe that with the variable mix of sources contributing to 
PM2.5 concentrations in various regions of the country and 
the variable set of appropriate control measures, it may not be 
advantageous to have a classification system which automatically 
requires a longer list of control strategies, and allows a later 
attainment date, for areas with higher current levels of 
PM2.5 pollution.
    Under our proposed approach, the State will be required to submit 
an attainment demonstration for each nonattainment area proposing an 
attainment date that is as expeditious as practicable for each area. 
(Attainment date issues are discussed in more detail in section III.C.) 
In determining what attainment date is considered ``as expeditious as 
practicable,'' the State will need to demonstrate that it is achieving 
RFP (see section III.G.), and it will have to adopt rules to implement 
the RACT and RACM requirements within the nonattainment area (see 
section III.I.) in order to attain the standard as expeditiously as 
practicable. In determining an expeditious attainment date, the State 
will need to take into consideration the air quality improvements that 
are expected due to other emission reduction programs at the national 
level (e.g. Tier II vehicle standards, heavy-duty diesel program, 
etc.), regional level reductions (e.g. NOX SIP call), any 
additional regional SO2 or NOX reductions that 
may be achieved under a legislative or regulatory approach, and State 
level (e.g. Clean Smokestacks legislation in North Carolina).
b. Two-Tiered Classification System
    Another option on which we are seeking comment is a two-tiered 
classification system. Under this approach, areas with higher 
PM2.5 levels (i.e. design values) would qualify for an 
attainment date extension beyond April 2010 to no later than April 
2015. In return, consistent with the approach in subpart 2, part D of 
Title I for ozone, such areas would be required to include certain 
mandatory measures in their SIPs.
    Definition of serious and moderate areas. This option would 
establish two nonattainment classification categories: ``moderate'' and 
``serious.'' These categories could be based on the severity of 
nonattainment (e.g., serious areas would be those with a design value 
above a specific threshold), the attainment date for the area (e.g., 
serious areas would be those with attainment dates after April 2010), 
or some other measure. We invite comment on appropriate ways to define 
moderate and serious areas and request that any recommended approach be 
accompanied by adequate supporting information.
    Under a potential two-tiered classification system, all areas not 
classified as ``serious'' would be classified as ``moderate.'' However, 
any

[[Page 66001]]

moderate area that needed an attainment date longer than five years 
would be reclassified to serious. This would ensure that areas with a 
more persistent PM2.5 problem are subject to more stringent 
requirements, even if they are not one of the areas with the highest 
current design values. For such areas, the state would be required to 
request reclassification and ensure that the 2008 attainment SIP 
submission for the area includes all measures needed to meet serious 
area requirements.
    Serious area requirements. Serious areas would be required to meet 
RACM and RACT requirements described elsewhere in this notice. The 
attainment date would be as expeditiously as practicable, but no later 
than 10 years after designation, depending on the year in which the 
area would be projected to attain considering existing control 
requirements and the effect of RACM, RACT and RFP.
    Various approaches can be considered for outlining additional 
requirements for serious areas beyond those required for all areas by 
subpart 1. More stringent requirements for serious areas could be 
established for RFP, RACT, and/or RACM.
    For RFP, one approach could involve setting a more prescriptive or 
higher RFP requirement for serious areas from the 2002 base year to the 
attainment year. For example, the required rate could be a specific 
annual percentage reduction in direct PM2.5 and all 
PM2.5 precursors, analogous to the 3% per year reduction 
requirement for the 1-hour ozone program in section 182 of the Act. 
This approach is described among the options in the RFP section of this 
proposal (see section III.G.5). Progress would be evaluated in 2008 and 
every 3 years thereafter. An alternative could be to require a specific 
weighted average annual reduction in direct PM2.5 and all 
precursors, based upon the PM2.5 speciation profile for the 
relevant urban area.
    An additional requirement for serious areas could be to define a 
lower emissions threshold for major sources for purposes of determining 
applicability for RACT than would apply in moderate areas. Note that 
the option of a lower threshold for RACT is consistent with only 
options 1 and 3 proposed in the RACT section of this notice (see 
section III.I.5). A discussion of possible thresholds is included in 
that section.
    Moderate area requirements. Under this option, ``moderate'' areas 
would constitute all areas that are not categorized as ``serious.'' 
They would be required to submit 2008 plans that demonstrate attainment 
of the standards as expeditiously as practicable, but not later than 
April 2010.\43\ Attainment would be based on implementation of existing 
measures (e.g. CAIR, mobile source rules, previously adopted state and 
local measures) and any other measures necessary to meet the RACT, 
RACM, RFP, and expeditious attainment requirements. (The scope of these 
requirements will be determined based on which options for these 
program elements are adopted in the final rule.) The area would be 
required to provide a demonstration that it had adopted all reasonable 
controls to ensure expeditious attainment, and that there was no 
additional collection of reasonable controls (i.e. RACM and RACT) 
available in the area that would advance the attainment date by at 
least one year. EPA seeks comment on what would constitute adequate 
information provided by the State to show that a moderate area has met 
the RACT, RACM, and RFP requirements and cannot advance the attainment 
date.
---------------------------------------------------------------------------

    \43\ Under this approach, attaining by April 2010 means that the 
design value for 2007-2009 would attain the standards.
---------------------------------------------------------------------------

    Failure to attain. Under the general authority in section 172(a)(1) 
to establish a classification system, EPA proposes a process here that 
is similar to the PM10 process included in subpart 4 for 
addressing areas that fail to attain. With this approach, EPA would 
have the authority to make a finding of failure to attain within 6 
months for any moderate area that fails to attain the standards by 
April 2010. Once EPA issues such a finding, the area would be 
automatically ``bumped-up'' to the serious category. The area would 
then have one year to develop a revised implementation plan and RFP 
plan in order to attain the standards as expeditiously as practicable, 
but no later than April 2015.
    Any serious area that fails to attain by its attainment date would 
be subject to the requirements of sections 179(c) and (d) of the Act. 
EPA would make a finding of failure to attain no later than 6 months 
after the attainment date and publish a notice in the Federal Register. 
The state would be required to submit an implementation plan revision 
within one year after publication of the Federal Register notice 
pursuant to section 179(d)(2) of the Act.
    Voluntary Bump-Up. Under this option, any area wishing to 
reclassify from moderate to serious may do so. The Administrator shall 
publish a notice in the Federal Register of any such request and of the 
action by the Administrator granting the request.
c. Rural Transport Classification
    The 8-hour ozone implementation program includes a ``rural 
transport classification'' for subpart 1 nonattainment areas. In this 
section we discuss whether an area classification of this type would be 
appropriate for the PM2.5 implementation program in light of 
the fact that no currently designated PM2.5 nonattainment 
area could meet criteria similar to those that apply to rural transport 
areas under the ozone implementation program.
    Under this potential concept, a PM2.5 nonattainment area 
would qualify for the ``rural transport'' classification if it met 
criteria similar to those specified for rural transport areas for the 
1-hour ozone standard under section 182(h). Section 182(h) defines 
``rural transport'' areas as those areas that do not include, and are 
not adjacent to, any part of a Metropolitan Statistical Area (MSA) or, 
where one exists, a Consolidated Metropolitan Statistical Area (CMSA). 
Because OMB issued revised metropolitan area definitions in 2003, EPA 
suggests that if PM2.5 rural transport areas are made 
possible under the final rule, this geographic criterion would be 
revised for PM2.5 such that a rural transport area could not 
include or be adjacent to any part of a core-based statistical area 
(CBSA) or a consolidated statistical area (CSA). Section 182(h) further 
limits the category to those areas whose own emissions do not make a 
significant contribution to pollutant concentrations in those areas, or 
in other areas.
    In the event the ozone approach is followed, a State with a 
PM2.5 ``rural transport'' area would need to (1) demonstrate 
that the area meets the above criteria, (2) demonstrate using EPA 
approved attainment modeling that the nonattainment problem in the area 
is due to the ``overwhelming transport'' of emissions from outside the 
area, and (3) demonstrate that sources of PM2.5 and its 
precursor emissions within the boundaries of the area do not contribute 
significantly to PM2.5 concentrations that are measured in 
the area or in other areas. Because this is a proposed rule, EPA 
currently has not developed any modeling guidance for PM2.5 
rural transport demonstrations.
    An area which qualifies for the ``rural transport'' classification 
would only be required to adopt local control measures sufficient to 
demonstrate that the area would attain the standard by its attainment 
date ``but for'' the overwhelming transport of emissions emanating from 
upwind States. RFP requirements under subpart 1 would

[[Page 66002]]

still apply to these areas (see section E of this notice).
    As with other nonattainment areas, rural transport nonattainment 
areas would be subject to NSR, transportation conformity, and general 
conformity requirements. However, in section M of today's notice, we 
are soliciting comment on whether it would be appropriate to establish 
less burdensome NSR requirements in the event that a classification for 
rural transport areas is adopted in the final rule.\44\ Regarding 
transportation conformity, EPA has issued revised conformity 
regulations to address the 8-hour ozone and PM2.5 standards 
in separate actions. In general under the current program, 
nonattainment areas not part of a metropolitan planning organization 
subject to transportation conformity already have less burdensome 
requirements. For example, areas without a metropolitan planning 
organization do not need to conduct emissions analyses for conformity 
purposes until the time that a federal highway or transit project is 
proposed within the area (see further discussion of transportation 
conformity issues in section III.K. of this notice).
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    \44\ The Agency is also considering the development of a 
separate proposed rule on flexible implementation of nonattainment 
NSR for any areas where transport is the primary cause of the area's 
nonattainment for any criteria pollutant. Such a proposal would not 
be dependent on the incorporation of a transport classification in a 
classification system for a NAAQS.
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    Under this potential approach, a State applying for a rural 
transport classification for an area would need to develop an 
attainment demonstration that takes into consideration projected 
emissions reductions from the implementation of local, regional, and 
national control measures in order to show that it would reach 
attainment as expeditiously as practicable. Because such an area would 
need to rely on national or regional reductions to some degree, the 
State or Tribe should take into consideration the attainment date of 
contributing nonattainment areas that contribute to the affected area's 
air quality problem, and the implementation schedule for any regional 
reduction strategy (such as a regulation to address transported 
emissions of SO2 and NOX), in developing its 
attainment demonstration. The issues related to interstate transport 
are also discussed elsewhere in this proposed rulemaking.
    In reviewing the currently designated PM2.5 
nonattainment areas, it appears that all areas are within or adjacent 
to a CBSA or CSA, and thus would not meet the criteria discussed above. 
Because of this fact, EPA requests comment on whether this type of 
classification option is needed at all under the PM2.5 
implementation program.

B. When are PM2.5 attainment demonstrations and SIPs due, and what 
requirements must they address?

    Part D of Title I of the Act sets forth the requirements for SIPs 
needed to attain the national ambient air quality standards. Part D 
includes a general subpart 1 which applies to all NAAQS for which a 
specific subpart does not exist. Because the PM standards were not 
established until 1997, the nonattainment plan provisions found in 
section 172 of subpart 1 apply.
    Section 172(b) of the Act requires that at the time the Agency 
promulgates nonattainment area designations, the EPA must also 
establish a schedule for states to submit SIPs meeting the applicable 
requirements of section 172(c) and of section 110(a)(2) of the Act. 
Nonattainment area designations were finalized in December 2004, and a 
supplemental notice was issued in April 2005. Consistent with section 
172(b) of the Act, section 51.1002 of the proposed rule requires the 
State to submit its attainment demonstration and SIP revision within 
three years, or by April 2008.
    Section 51.1006 of the proposed rule addresses the situation in 
which an area is initially designated as attainment/unclassifiable but 
is later designated as nonattainment based on air quality data after 
the 2001-2003 period. Under such circumstances, the SIP submittal date 
would be three years from the effective date of the redesignation, and 
the attainment date would be as expeditiously as practicable but no 
later than five years from the effective date of the redesignation.
    The section 172(c) requirements that States are to address under 
section 172(c) (including RACT, RACM, RFP, contingency measures, 
emission inventory requirements, and NSR) are discussed in later 
sections of this notice. Section 110(a)(2) of the Act requires all 
States to develop and maintain a solid air quality management 
infrastructure, including enforceable emission limitations, an ambient 
monitoring program, an enforcement program, air quality modeling, and 
adequate personnel, resources, and legal authority. Section 
110(a)(2)(D) also requires State plans to prohibit emissions from 
within the State which contribute significantly to nonattainment or 
maintenance areas in any other State, or which interfere with programs 
under part C to prevent significant deterioration of air quality or to 
achieve reasonable progress toward the national visibility goal for 
federal class I areas (national parks and wilderness areas). In order 
to assist States in addressing their obligations regarding regionally 
transported pollution, EPA has finalized the CAIR to reduce 
SO2 and nitrogen oxide emissions from large electric 
generating units (see section I.E.2. for further discussion).\45\
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    \45\ More information on the Clean Air Interstate Rule is 
available at: http://www.epa.gov/cair.
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    To date, few states have submitted a SIP revision addressing the 
section 110(a) requirements for the purposes of implementing the PM 
standards. The EPA recognizes that this situation is due in part to the 
fact that there were a series of legal challenges to the PM standards 
which were not resolved until March 2002, at which time the standards 
and EPA's decision process were upheld (see section I.B. for further 
discussion of past legal challenges to the standards). To address the 
States' continuing obligation to address the requirements of section 
110(a), however, section 51.1002 of the proposed rule also requires 
each State to address the required elements of section 110(a)(2) of the 
Act in its nonattainment plan SIP revision, if it has not already done 
so.

C. What are the attainment dates for PM2.5 nonattainment areas?

1. Background
    Section 172(a)(2)(A) states that the attainment date for a 
nonattainment area must be ``as expeditiously as practicable, but no 
later than 5 years from the date of designation for the area.'' Since 
PM2.5 designations were promulgated in December 2004 and 
have an effective date of April 2005, the initial attainment date for 
PM2.5 areas would be no later than April 2010. For an area 
with an attainment date of April 2010, EPA would determine whether it 
had attained the standard by evaluating air quality data from the three 
previous calendar years (i.e. 2007, 2008, and 2009).
    Section 172 also states that if EPA deems it appropriate, the 
Agency may extend the attainment date for an area for a period not 
greater than 10 years from the date of designation, taking into account 
the severity of the nonattainment problem in the area, and the 
availability and feasibility of pollution control measures. (See 
further discussion of attainment date extensions in section III.C.4.) 
For any areas that are granted the full five year attainment date 
extension, the attainment date would be no later than April 2015. For

[[Page 66003]]

such areas, EPA would determine whether they have attained the standard 
by evaluating air quality data from 2012, 2013, and 2014. Section 
51.1004 of the proposed regulations addresses the attainment date 
requirement.
2. Consideration of Existing Measures in Proposing an Attainment Date
    As part of their attainment demonstrations, States will need to 
assess the effect of implementation of existing national and State 
programs already in place (e.g. partial implementation of the CAIR 
rule, final Acid Rain Program, motor vehicle tier II standards and 
heavy-duty diesel engine standards, NOX SIP call, State 
legislation such as Clean Smokestacks bill in North Carolina), plus the 
implementation of RACT and RACM in the nonattainment area, to determine 
what is the most expeditious attainment date for the area. States in 
this situation will need to first project the emissions reductions 
expected by 2009 due to national standards, State regulations, and any 
local measures already being implemented, and then conduct local-scale 
modeling to project the estimated level of air quality improvement in 
accordance with EPA's modeling guidance. These assessments and any 
needed State emission reduction programs will need to be part of the 
State's 2008 attainment demonstration.
3. Areas May Qualify for Two 1-Year Attainment Date Extensions
    Subpart 1 provides for States to request 2 one-year extensions of 
the attainment date for a nonattainment area under limited 
circumstances. Section 172(a)(2)(C) of the Act provides that EPA 
initially may extend an area's attainment date for one year, provided 
that the State has complied with all the requirements and commitments 
pertaining to the area in the applicable implementation plan, and 
provided that the area has had no more than a minimal number of 
``exceedances'' of the relevant standard in the preceding year. Because 
the PM2.5 standards do not have exceedance-based forms but 
are based on 3-year averaging periods, we interpret the air quality 
test in section 51.1005 to mean that the area would need to have 
``clean data'' for the third of the three years that are to be 
evaluated to determine attainment.\46\ By this we mean that for the 
third year, the air quality for all monitors in the area as analyzed in 
accordance with Appendix N to 40 CFR Part 50 each must have an annual 
average of 15.0 [mu]g/m\3\ or less, and a 98th percentile of 24-hour 
monitoring values of 65 [mu]g/m\3\ or less in order to qualify for a 1-
year extension. (Given the rounding provisions specified in 40 CFR Part 
50, Appendix N, these criteria would be satisfied if the concentrations 
before final rounding are less than an annual average of 15.05 [mu]g/
m\3\ and a 24-hour value of 65.5 [mu]g/m\3\.)
---------------------------------------------------------------------------

    \46\ See section 51.1005 of the proposed regulation.
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    For example, suppose an area in violation of the annual standard 
has an attainment date of April 2010, and its annual average for 2007 
was 15.8 and for 2008 was 15.6. If the annual average for the area in 
2009 is 14.9, then the 3-year average would be 15.4, and it would not 
have attained the standard. We interpret section 172(a)(2)(C) as 
allowing the area to submit a request to EPA for a one-year extension 
of its attainment date to 2013 (provided the State has also complied 
with its requirements and commitments) since the 14.9 ambient air 
quality value in the third year (2009) met the test of being at or 
below 15.0. Section 51.1005(a) of the proposed regulation addresses the 
initial one-year attainment date extension.
    The air quality measured in 2010 in conjunction with prior data 
will determine if the area attains the standard, qualifies for a second 
one-year extension, or does not attain the standard. For example, if 
the area's annual average for 2011 is 14.3, then its 3-year average for 
2009-2011 would be 14.9 and it would have met the annual standard.
    If the area's annual average for 2011 is 14.9, however, then its 3-
year average for 2009-2011 would be 15.1. In this situation the area 
would not have attained the standard, but the area would meet the air 
quality test for the second of the 1-year extensions allowed under 
section 172(a)(2)(C), because the 2011 annual average was at or below 
15.0. Section 51.1005(b) of the proposed rule addresses the second one-
year attainment date extension. After obtaining a second one-year 
extension, the State would evaluate whether the air quality values in 
2012, in conjunction with 2010 and 2011 data, bring the area into 
attainment.
    Pursuant to section 172(a)(2)(C), States must submit additional 
information to EPA to demonstrate that they have complied with 
applicable requirements, commitments, and milestones in the 
implementation plan. This information is needed in order for EPA to 
make a decision on whether to grant a 1-year attainment date extension. 
The EPA will not be inclined to grant a 1-year attainment date 
extension to an area unless the State can demonstrate that it has met 
important requirements contained in the area's implementation plan. 
States must demonstrate that: (1) Control measures have been submitted 
in the form of a SIP revision and substantially implemented to satisfy 
the requirements of RACT and RACM for the area, (2) the area has made 
emissions reductions progress that represents reasonable further 
progress (RFP) toward attainment of the NAAQS, and (3) trends related 
to recent air quality data for the area indicate that the area is in 
fact making progress toward attainment of the standard. Any decision 
made by EPA to extend the attainment date for an area will be based on 
facts specific to the nonattainment area at issue, and will only be 
made after providing notice in the Federal Register and an opportunity 
for the public to comment.
    If an area fails to attain the standard by the attainment date, EPA 
would publish a finding to this effect in accordance with section 179 
of the Act. The area then would be required, within 1 year of 
publication of this finding, to develop a revised SIP containing 
additional emission reduction measures needed to attain the standard as 
expeditiously as practicable. See section III.C.5. below for further 
discussion.
4. Areas May Submit a SIP Demonstrating That It Is Impracticable To 
Attain by the 5-Year Attainment Date
    As stated previously, under section 172(a)(2)(A), EPA may grant an 
area an extension of the initial attainment date for a period of one to 
five years. States that request an extension of the attainment date 
under this provision of the Act must submit a SIP in 2008 that 
includes, among other things, an attainment demonstration showing that 
attainment within 5 years of the designation date is impracticable. It 
must also show that the area will attain the standard by an alternative 
date that is as expeditiously as practicable, but in no case later than 
10 years after the designation date for the area (i.e. by April 2015 
for an area with an effective designation date of April 2005). An 
appropriate extension in some cases may be only 1 or 2 years--a five-
year extension is not automatic upon request.
    The attainment demonstration must provide sufficient information to 
show that attainment by the initial attainment date is impracticable 
due the severity of the nonattainment problem in the area, the lack of 
available or feasible control measures, and any other pertinent 
information which shows that additional time is required for the area 
to attain the standard. States requesting an extension of the 
attainment date must also demonstrate that all local

[[Page 66004]]

control measures that are reasonably available and technically feasible 
for the area are currently being implemented to bring about expeditious 
attainment of the standard by the alternative attainment date for the 
area. The State's plan will need to project the emissions reductions 
expected due to federally enforceable national standards, State 
regulations, and local measures such as RACT and RACM, and then conduct 
modeling to project the level of air quality improvement in accordance 
with EPA's modeling guidance. The EPA will not grant an extension of 
the attainment date beyond the initial five years required by section 
172(a)(2)(A) for an area if the State has not thoroughly considered the 
implementation of all RACM and RACT local control measures for the area 
(see section III.I for a more detailed discussion of RACT and RACM). 
EPA also will examine whether the State has adequately considered 
measures to address intrastate transport of pollution from sources 
within its jurisdiction. In attainment planning, States have the 
obligation and authority to address the transport of pollution from one 
area of the state to another. Any decision made by EPA to extend the 
attainment date for an area beyond its original attainment date will be 
based on facts specific to the nonattainment area at issue and will 
only be made after providing notice in the Federal Register and an 
opportunity for the public to comment.
5. Areas That Fail To Attain or Do Not Qualify for an Attainment Date 
Extension
    Section 179 of the Act requires that EPA publish a finding in the 
Federal Register for areas that fail to attain by their attainment 
dates, or that fail to qualify for an attainment date extension. Within 
one year of EPA's determination that the area failed to attain, the 
State is then required to submit a SIP revision providing for 
attainment of the standard as expeditiously as practicable in 
accordance with section 172(a)(2) of the Act. Section 179(d)(3) 
provides that the SIP revision must include any specific additional 
measures as may be prescribed by EPA, including ``all measures that can 
be feasibly implemented in the area in light of technological 
achievability, costs, and any nonair quality and other air quality-
related health and environmental impacts.'' The EPA believes that in 
considering the factors above, States that fail to attain the standard 
initially should give greater weight to technologically feasible 
measures despite the fact that these measures may be more costly than 
those implemented under the previous plan.
6. Determining Attainment for the PM2.5 Standards
    The EPA has the responsibility for determining whether a 
nonattainment area has attained the standard by its applicable 
attainment date. Section 179(c)(1) of the Act requires EPA to make 
determinations of attainment no later than 6 months following the 
attainment date for the area. Under section 179(c)(2), EPA must publish 
a notice in the Federal Register identifying those areas which failed 
to attain by the applicable attainment date. The statute further 
provides that EPA may revise or supplement its determination of 
attainment for the affected areas based upon more complete information 
or analysis concerning the air quality for the area as of the area's 
attainment date.
    Section 179(c)(1) of the Act provides that the attainment 
determination for an area is to be based upon an area's ``air quality 
data as of the attainment date.'' The EPA will make the determination 
of whether an area's air quality is meeting the PM2.5 NAAQS 
by the applicable attainment date primarily based upon data gathered 
from the air quality monitoring sites which have been entered into 
EPA's Air Quality System (AQS) database. No special or additional SIP 
submittal will be required from the State for this determination.
    A PM2.5 nonattainment area's air quality status is 
determined in accordance with appendix N of 40 CFR part 50. To show 
attainment of the 24-hour and annual standards for PM2.5, 
the most recent three consecutive years of data prior to the area's 
attainment date must show that three-year average PM2.5 
concentrations are at or below the levels of the standards. A complete 
year of air quality data, as described in part 50, Appendix N, is 
comprised of all 4 calendar quarters with each quarter containing data 
from at least 75 percent of the scheduled sampling days. The annual 
standard for PM2.5 is attained when the 3-year average 
annual mean concentration is less than or equal to 15.0 [mu]g/
m3. The 24-hour standard for PM2.5 is met when 
the average of 98th percentile values for three consecutive calendar 
years at each monitoring site is less than or equal to 65 [mu]g/
m3.
    The EPA will begin processing and analyzing data related to the 
attainment of PM2.5 areas immediately after the applicable 
attainment date for the affected areas. Current EPA policy, under 40 
CFR part 58, sets the deadline for submittal of air quality data into 
the AQS database for no later than 90 days after the end of the 
calendar year.
    While EPA may determine that an area's air quality data indicates 
that an area may be meeting the PM2.5 NAAQS for a specified 
period of time, this does not eliminate the State's responsibility 
under the Act to adopt and implement an approvable SIP. If EPA 
determines that an area has attained the standard as of its attainment 
date, the area will remain classified as nonattainment until the State 
has requested, and EPA has approved, redesignation to attainment for 
the area.
    In order for an area to be redesignated as attainment, the State 
must comply with the five requirements listed under section 
107(d)(3)(E) of the Act. Among other things, section 107(d)(3)(E) 
requires that EPA determine that an area has met the PM2.5 
NAAQS and that the State has submitted a SIP for the area which has 
been approved by EPA.
7. How Do Attainment Dates Apply to Indian Country?
    The Tribal Authority Rule (TAR) at 40 CFR 49.9 provides guidelines 
by which Tribes may implement air quality programs in a similar manner 
as States. However, Tribes choosing to implement their own air quality 
programs are not required to meet the same schedules and deadlines that 
apply to States, including attainment dates for NAAQS.
    In situations where a Tribe chooses to not implement its own air 
quality program or any element thereof, EPA is required under the TAR 
to develop a Federal Implementation Plan (FIP) as necessary and 
appropriate. 40 CFR 49.11. Because public health considerations are of 
utmost concern, we believe that any FIP for tribal lands should provide 
for an attainment date that is as expeditious as practicable. 
Therefore, EPA will work in consultation with the Tribes to ensure that 
implementation of the standards is conducted as soon as possible taking 
into consideration the needs of the Tribes, and to ensure that 
attainment in other jurisdictions is not adversely affected.

D. What Are the Incentives for Achieving Early Reductions of PM2.5 and 
Its Precursors?

    There are significant regulatory incentives for achieving early 
local area emissions reductions. Areas with design values just over the 
level of the standard may be able to achieve reductions in the local 
area or in the State so that, when their effect is considered in 
combination with reductions achieved under national programs, they may 
be sufficient to attain the standards before

[[Page 66005]]

SIPs are due in 2008. For example, if monitoring in a nonattainment 
area shows that the air quality for 2004-2006 meets the standards, then 
the area may be subject to reduced regulatory requirements and be 
redesignated as ``attainment.'' EPA issued a ``Clean Data'' policy 
memorandum in December 2004 describing possible reduced regulatory 
requirements for areas that attain the standards early, but have not 
yet been redesignated as attainment.\47\ For example, the area also 
would be relieved of the requirements to implement the nonattainment 
NSR program otherwise required for nonattainment areas, and instead 
would implement the PSD program.
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    \47\ Memorandum of December 14, 2004, from Steve Page, Director, 
EPA Office of Air Quality Planning and Standards to EPA Air Division 
Directors, ``Clean Data Policy for the Fine Particle National 
Ambient Air Quality Standards.'' This document is available at: 
http://www.epa.gov/pmdesignations/guidance.htm.
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    Another regulatory incentive for early emissions reductions is 
credit toward RFP requirements. We issued a guidance memorandum 
designating 2002 as the base year for emissions inventories for 
PM2.5 and 8-hour ozone attainment plans and for regional 
haze implementation plans.\48\ For PM2.5, States therefore 
can take credit for emissions reductions achieved after 2002 in meeting 
their requirements for RFP. In addition, when developing attainment 
demonstrations, States should account for these reductions when 
establishing baseline control scenarios for assessing what additional 
reductions might be needed to attain the standards.
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    \48\ Memorandum of November 18, 2002, from Lydia Wegman and 
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning: 
8-hr Ozone, PM2.5 and Regional Haze Programs.'' This 
document is available at the following web site: http://www.epa.gov/ttn/oarpg/t1/memoranda/2002bye_gm.pdf.
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    Examples of possible early reduction programs include efforts to 
reduce diesel engine emissions (e.g. Clean School Bus USA, retrofits 
for trucks, locomotives, construction equipment, and marine vessels 
such as ferries, and diesel idling emissions programs); programs to 
reduce auto emissions through reduced vehicle miles traveled and 
improving maintenance of high emitting vehicles; implementation and 
enforcement of regulations to reduce emissions from burning activities 
(such as smoke management programs, wood stove retrofit programs, and 
ordinances to ban open burning of waste or debris from land clearing); 
energy conservation programs that can reduce demand from power plants; 
improved emission controls on stationary sources; and improved 
compliance assurance monitoring to ensure that stationary source 
emissions are maintained at the levels demonstrated during emissions 
performance tests. Additional discussion of possible emission reduction 
strategies which could be introduced early is included in section 
III.I. on RACM and RACT.

E. How Should the States and EPA Balance the Need To Address Long-Range 
Transport of Fine Particle Pollution With the Need for Local Emissions 
Reductions When Implementing the PM2.5 Standards?

1. Clean Air Act Provisions for Achieving Local and Regional Emissions 
Reductions
    Section I provides background on PM2.5 monitoring data, 
the geographic distribution of potential nonattainment areas, and the 
estimated population affected. It also includes a discussion of the 
regional nature of the PM2.5 problem.
    Section 172(a)(2) of the Act requires States to attain the 
standards as expeditiously as practicable but within five years of 
designation (i.e. attainment date of April 2010 based on air quality 
data for 2007-2009), or within up to ten years of designation (i.e. to 
2015) if the EPA Administrator extends an area's attainment date by 1-5 
years based upon the severity of the nonattainment problem and/or the 
feasibility of implementing control measures.
    Virtually all nonattainment problems appear to result from a 
combination of local emissions and transported emissions from upwind 
areas. The structure of the CAA requires EPA to develop national rules 
for certain types of sources which are also significant contributors to 
local air quality problems, including motor vehicles and fuels. It also 
provides for States to address emissions sources on an area-specific 
basis through such requirements as RACT, RACM, and RFP.
    We believe that to attain the PM2.5 standards, it is 
important to pursue emissions reductions simultaneously on the local, 
regional, and national levels. As discussed in more detail in section 
III.I. on RACM and RACT requirements, States will need to evaluate 
technically and economically feasible emission reduction opportunities 
at the local level and determine which measures can be reasonably 
implemented within the nonattainment area. Local and regional emission 
reduction efforts should proceed concurrently and expeditiously.
    In addition, reductions in pollutants that contribute to 
PM2.5 can provide concurrent benefits in addressing a number 
of air quality problems--such as ozone, regional haze, urban 
visibility, and toxic air pollutant problems--by reducing common 
pollutants. Such is the case with programs to reduce diesel emissions, 
for example. While diesel engines collectively are large sources of 
NOX and direct PM emissions, they also emit significant 
amounts of toxic air pollutants.\49\ Similarly, many sources and 
activities which lead to direct emissions of organic and elemental 
carbon (such as open burning and residential wood combustion) also are 
key sources of toxic air pollutants (i.e. polycyclic aromatic 
hydrocarbon emissions), and contribute to regional haze as well. Thus, 
programs and strategies designed to reduce local emissions of PM and 
its precursors can help reach attainment for the PM2.5 
standards and provide other air quality benefits as well.
---------------------------------------------------------------------------

    \49\ USEPA, 2002. Health Assessment Document for Diesel Engine 
Exhaust. The EPA/600/8-90/057F. 01 May 2002. U.S. Environmental 
Protection Agency, Office of Research and Development, National 
Center for Environmental Assessment, Washington, DC. Available on 
EPA's Web site: http://cfpub.epa.gov/ncea/.
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2. Regional Emission Reduction Strategies
    As stated earlier in section II, the principal regional pollutants 
contributing to downwind PM2.5 concentrations in the eastern 
U.S. are SO2 and NOX. Sulfate formed from 
SO2 accounts for about 30-50 percent of PM2.5 
mass in most eastern locations, while ammonium nitrate formed from 
NOX accounts for 6 percent to more than 20 percent in some 
locations. The EPA implemented phase II of the Acid Rain Program in 
2000, setting an emissions cap of 8.95 million tons of SO2 
and bringing the average emission rate for power plants to a level of 
1.2 lbs per mmBTU. However, EPA analyses have shown that sulfate and 
nitrate contribute to nonattainment problems significantly and will 
remain a large percentage of PM2.5 concentrations in the 
eastern U.S. even after full implementation of the Acid Rain Program. 
In order to address health and environmental problems associated with 
PM2.5, ozone, and mercury deposition, the President has 
proposed the Clear Skies Act. [The Clear Skies Act of 2003 was 
introduced in the U.S. House of Representatives (H.R. 999) and the U.S. 
Senate (S. 485) on February 27, 2003.] It is designed to achieve 
significant reductions in SO2, NOX, and mercury 
emissions from power plants. (For more information, see section I.E.1. 
above.)

[[Page 66006]]

    Because it is uncertain whether the CSA will be enacted, EPA 
established the CAIR under the existing CAA to achieve regional 
reductions of SO2 and NOX. (See section I.E.2. 
for a discussion of CAIR.) The CAA requires States to develop SIPs that 
provide for attainment by deadlines in the CAA and requires States to 
have implementation plans that prohibit emissions that contribute 
significantly to nonattainment in other States. As described in the 
Federal Register actions for the NOX SIP call and section 
126 rulemakings, EPA believes it has the authority under the CAA to 
define what States need to do to address the interstate transport 
requirements of section 110 in advance of the submission of 
nonattainment area SIPs. The CAIR program will help many cities 
throughout the region meet the PM2.5 standards or make 
significant progress toward attainment.
    Air quality modeling analyses in support of the final CAIR rule 
show that of the 36 areas currently designated nonattainment for 
PM2.5 in the eastern United States, 17 areas are projected 
to attain the standards by 2010 with implementation of CAIR and other 
existing federal and state measures. By 2015, 22 areas are projected to 
attain the standards. While the air quality benefits from 
implementation of CAIR and other programs are significant, it is also 
evident that in some areas local emission reduction measures will serve 
an important role in addressing the PM2.5 nonattainment 
problem.
3. The Role of Local and State Emission Reduction Efforts in Reducing 
Health Risks and Achieving the PM2.5 Standards
    As discussed above, the implementation of regional and national 
strategies (such as CAIR and various mobile source programs) are 
expected to provide significant air quality improvements for 
PM2.5 nonattainment areas. At the same time, analyses for 
the final CAIR rule indicate that without implementation of local 
measures, approximately 14 to 19 areas would be projected to remain in 
PM2.5 nonattainment status in the 2010-2015 timeframe. Thus, 
EPA believes that local and State emission reduction efforts will need 
to play an important role in addressing the PM2.5 problem as 
well. EPA intends to work closely with States, Tribes, and local 
governments to develop appropriate in-state pollution reduction 
measures to complement regional and national strategies to meet the 
standards expeditiously and in a cost-effective manner.
    Many types of emissions sources contribute to the PM problem, and 
in many cases cost-effective measures are available to reduce their 
emissions. Examples of possible local measures are discussed in the 
previous section III.D. on early reductions, as well as in section 
III.I. on RACT and RACM. The EPA has also provided grant funding to 
STAPPA/ALAPCO to develop a ``menu of options'' document to provide 
State and local agencies and the general public with additional 
information on sources of emissions, potential control measures, and 
their associated costs and air quality benefits.
    EPA encourages States to implement technologically available and 
economically feasible local measures expeditiously. States can adopt a 
number of programs now, or expand their level of implementation of 
existing programs, in order to achieve local area emissions reductions 
in the near term. While regional emissions reductions may have a lower 
cost per ton of emissions reduced than many local reductions, local 
reduction opportunities may be more readily available, they may be more 
feasible to implement in a shorter period of time than a broad regional 
emissions trading program, and they may have high benefits per ton of 
emission reduction. In addition, local emissions reductions can be 
especially beneficial in reducing exposure to air pollution for dense 
urban populations. Thus, by taking action in advance of the date that 
regional reductions may be achieved, local communities can enjoy the 
benefits of improved public health (including a reduction in health 
care costs).
    Preliminary EPA analyses \50\ show that if local emissions 
reductions (e.g., including SO2 and other local emissions) 
were obtained only from sources located within metro areas projected to 
be nonattainment, the average air quality improvement in these cities 
would be 1.26 [mu]g/m\3\, and the number of counties projected to have 
violating monitors in 2010 would decrease from 61 to 26. These analyses 
also show that if local emissions reductions were limited to pollutants 
other than SO2, the average air quality improvement in these 
cities would be 0.37 [mu]g/m\3\, and the number of counties projected 
to have violating monitors in 2010 would decrease from 61 to 48. Thus, 
these analyses support the conclusion that emissions reductions due to 
regional and national programs such as CAIR and recently promulgated 
national rules for mobile sources will make important contributions to 
attainment for many eastern nonattainment areas. In the absence of 
regional controls on upwind sources, downwind States would be forced to 
obtain greater emissions reductions, and incur greater costs, to offset 
the transported pollution from upwind sources. At the same time, this 
preliminary analysis also illustrates that local emissions reductions 
can be beneficial, and have the potential to bring a number of 
metropolitan areas into attainment.
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    \50\ See discussion of local control measures in the proposed 
CAIR, 69 FR 4596-4599, and associated supporting information (docket 
OAR-2003-0053, item OAR-2003-0053-0162, Technical 
Support Document for the CAIR, Modeling Analyses).
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    EPA believes that expeditiously achieving the PM2.5 
reductions that are available from reasonable local controls is 
important because, as discussed in section I.A., the effects of 
PM2.5 on public health are serious. Estimates suggest that 
each year tens of thousands of people die prematurely from exposure to 
PM2.5, and many hundreds of thousands more people experience 
significant respiratory or cardiovascular effects. Even small 
reductions in PM2.5 levels may have substantial health 
benefits on a population level. For example, in a moderate-sized 
metropolitan area with a design value of 15.5 [mu]g/m\3\, efforts to 
improve annual average air quality down to the level of the standard 
(15.0 [mu]g/m\3\) may be expected to result in as many as 25-50 fewer 
mortalities per year due to air pollution exposure. In a smaller city, 
the same air quality improvement from 15.5 to 15.0 [mu]g/m\3\ still may 
be expected to result in a number of avoided mortalities per year. 
These estimates are based on EPA's standard methodology for calculating 
health benefits as used in recent rulemakings.\51\
---------------------------------------------------------------------------

    \51\ These estimates are based on the relative risk for all-
cause mortality from the Pope et al. 2002 analysis of the American 
Cancer Society cohort. The EPA standard methodology for estimating 
health benefits has been used in developing regulatory impact 
analyses for a number of regulations. Most recently, this 
methodology was used in support of the CAIR (docket OAR-
2003-0053, item OAR-2003-0053-0175, Benefits of the 
Proposed CAIR, January 2004).
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    The benefits of PM2.5 control also are significant in 
dollar terms. Depending on the particular emission controls on sources 
of PM2.5 precursor emissions, EPA has estimated that the 
monetized health benefits of reducing emissions of pollutants that lead 
to PM2.5 formation exceed the costs by 3 to over 30 
times.\52\
---------------------------------------------------------------------------

    \52\ U.S. EPA, 2005. Regulatory Impact Analysis for the Clean 
Air Interstate Rule. EPA 452/-03-001. Prepared by Office of Air and 
Radiation. Available at: http://www.epa.gov/interstateairquality/tsd0175.pdf. See also: U.S. Environmental Protection Agency, 2004. 
Final Regulatory Analysis: Control of Emissions from Nonroad Diesel 
Engines. EPA420-R-04-007. Prepared by Office of Air and Radiation. 
Available at http://www.epa.gov/nonroad-diesel/2004fr/420r04007.pdf.

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[[Page 66007]]

    As discussed in more detail in section III.I. on RACM and RACT 
requirements, States will need to evaluate technically and economically 
feasible emission reduction opportunities at the local level and 
determine which measures can be reasonably implemented within the 
nonattainment area. To avoid the public health consequences of delayed 
improvements in PM2.5 concentrations, we believe that local 
and regional emission reduction efforts should proceed concurrently and 
expeditiously.
    Although direct emissions may appear relatively small in tonnage 
terms, States should not overlook reductions of direct local emissions, 
particularly carbonaceous emissions. Monitoring data show that many 
urban areas have higher levels of carbonaceous PM2.5 than 
rural areas. Based on information developed by EPA in support of 
regulations on diesel engines, the population weighted impact per ton 
of direct PM diesel emissions reduced is estimated to be about 9-14 
times more effective in reducing health effects as compared to 
SO2 and NOX reductions from the same sources.\53\ 
This analysis reflects the fact that by definition, all of the direct 
fine particle emissions contribute to PM2.5 concentrations, 
but only a fraction of the SO2 and NOX emissions 
undergo reactions in the atmosphere to become PM2.5.
---------------------------------------------------------------------------

    \53\ ``Estimated NOX, SO2, and PM 
Emissions Health Damages for Heavy-duty Vehicle Emissions.'' April 
22, 2002. Memorandum by Bryan Hubbell, EPA Office of Air Quality 
Planning and Standards, to docket A-2000-01, docket item IV-A-146.
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    In addressing a nonattainment area having military training, 
testing and operational activities occurring within it, the State 
should not need to target these activities for emission reductions. 
Regarding prescribed burning activities, EPA intends to continue 
implementation of the Interim Air Quality Policy on Wildland and 
Prescribed Fires.\54\
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    \54\ USEPA, ``Interim Air Quality Policy on Wildland and 
Prescribed Fires,'' memorandum from Richard Wilson, Acting Assistant 
Administrator for Air and Radiation, to Regional Administrators, May 
15, 1998.
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4. Addressing Regionally Transported Emissions in Local Area Attainment 
Demonstrations
    As discussed in section III.C., the CAA requires States with 
PM2.5 nonattainment areas to attain the standards as 
expeditiously as practicable, but no later than within five years of 
designation (e.g., April 2010). If the State provides an adequate 
demonstration showing that it cannot attain the standards within five 
years, based on the severity of the area's problem, the availability of 
control measures, and the feasibility of implementing controls, then 
EPA may grant the area an attainment date extension of one to five 
years.
    Now that the multi-state CAIR emission reduction program has been 
adopted well before the PM2.5 SIPs are due, it will be 
important for affected States to take into account the incremental 
projected emissions reductions resulting from that program in assessing 
the degree of air quality improvement that can be expected in the State 
and the projected timetable for those reductions to be realized.
    Experience with implementation of the cap-and-trade and emissions 
banking provisions of the Acid Rain Program has shown that certain 
sources likely will take steps to reduce emissions and ``bank'' 
emissions allowances prior to the date that compliance with the initial 
emissions cap is required.
    Under a trading program with an emissions banking provision, we 
estimate that SO2 emissions will be reduced on a steadily 
decreasing glidepath rather than a stair step pattern. By 2009, the 
last year prior to the 2010 attainment year, a portion of the total 
regional SO2 emissions reductions expected under CAIR would 
be realized. In developing their SIPs, States should use existing 
projections of the geographic distribution and magnitude of early 
emissions reductions that are expected to be achieved by 2009 using 
existing information from the IPM emissions projection model. They 
should also assess the associated impact of these reductions on air 
quality by using a regional air quality model. We encourage the States 
to use existing analyses to the extent possible to project interim air 
quality improvements from regional emissions reduction strategies, and 
we commit to working with the States and regional planning 
organizations to evaluate the expected air quality improvements from 
CAIR. In addition, states must assess the effect of potential RACM, 
including RACT, in determining an appropriate attainment date. We will 
work with the States as they develop attainment demonstrations and SIPs 
designed to attain the standards as expeditiously as practicable, 
taking into account emissions reductions from broad regional programs 
(such as the CAIR and NOX SIP Call); national measures such 
as new emissions standards for cars and trucks; and other cost 
effective State and local strategies which may advance the attainment 
date.

F. How Will EPA Address Rrequirements for Modeling and Attainment 
Demonstration SIPs When Implementing the 24-Hour and Annual Aaverage 
PM2.5 Standards?

1. Introduction
    Section 172(c) requires States with nonattainment areas to submit 
an attainment demonstration. An attainment demonstration consists of: 
(1) Technical analyses that locate, identify, and quantify sources of 
emissions that are contributing to violations of the PM2.5 
NAAQS; (2) analyses of future year emissions reductions and air quality 
improvement resulting from already-adopted national and local programs, 
and from potential new local measures to meet the RACT, RACM, and RFP 
requirements in the area; (3) adopted emission reduction measures with 
schedules for implementation; and (4) contingency measures required 
under section 172(c)(9) of the CAA. with a nonattainment area will have 
to submit a SIP with an attainment demonstration that includes analyses 
supporting the State's proposed attainment date. The State must show 
that the area will attain the standards as expeditiously as 
practicable, and it must include an analysis of whether implementation 
of reasonably available measures will advance the attainment date.
2. Areas That Need To Conduct Modeling
    Some areas having design values close to the standard may be 
projected to come into attainment within five years based on modeling 
analyses of national and regional emission control measures that are 
scheduled to occur through 2009. Regional scale modeling for national 
rules such as the Tier II motor vehicle standards, the Heavy-duty 
Engine standards and the Nonroad Engine standards indicate major 
reductions in PM2.5 by 2010. A portion of these benefits 
will occur in the 2004-2009 PM2.5 attainment timeframe.
    Experience with past ozone attainment demonstrations has shown that 
the process of performing detailed photochemical grid modeling to 
develop an attainment demonstration can be very resource intensive for 
States. The EPA believes that it would be appropriate for States to 
leverage resources by collaborating on modeling analyses to support SIP 
submittals, or by making use of recent modeling analyses that have 
already been completed. For this reason, EPA proposes that States may 
use in a PM2.5 attainment demonstration certain local, 
regional and/or national modeling analyses that

[[Page 66008]]

have been developed to support Federal or local emission reduction 
programs, provided the modeling meets the attainment modeling criteria 
set forth in EPA's modeling guidance (described below). As with all 
SIPs under subpart 1, the State must demonstrate that the area will 
attain the PM2.5 standards as expeditiously as practicable. 
As part of this demonstration, the State must evaluate those 
technically and economically feasible measures in the nonattainment 
area in order to determine whether, if implemented together, these 
measures would advance the attainment date. (This evaluation of local 
measures may or may not involve additional modeling.) The EPA proposes 
that if the State can rely on existing modeling analyses as part of its 
attainment demonstration, it should reference appropriate reports on 
that modeling which are readily available, or include the modeling 
documentation in its submittal. In such situations, the State must 
provide an explanation describing how it meets the criteria for 
attainment-level modeling, and why the existing modeling is appropriate 
for use as part of the attainment demonstration. The EPA requests 
comment on this proposed approach for using existing air quality 
modeling analyses in attainment demonstrations, where appropriate.
    Nonattainment areas would be required to submit an attainment 
demonstration SIP that includes new modeling showing attainment of the 
standards as expeditiously as practicable. The new modeling will need 
to include additional emissions controls or measures in order to 
demonstrate attainment.
3. Modeling Guidance
    Section 110(a)(2)(K)(i) states that SIPs must contain air quality 
modeling as prescribed by the Administrator for the purpose of 
predicting the effect of emissions on ambient air quality. The 
procedures for modeling PM2.5 as part of an attainment SIP 
are contained in EPA's ``DRAFT Guidance for Demonstrating Attainment of 
Air Quality Goals for PM2.5 and Regional Haze.'' \55\ The 
EPA welcomes public comments on the guidance at any time and will 
consider those comments in any future revision of the document. 
Comments submitted on the modeling guidance document should be 
identified as such and will not be docketed as part of this rulemaking, 
nor will a comment/response summary of these comments be a part of the 
final PM2.5 implementation rule since they will not affect 
the rule itself. The final version of the guidance is scheduled for 
release in 2005 and will be posted on EPA's web site (http://www.epa.gov/ttn/scram/).
---------------------------------------------------------------------------

    \55\ ``DRAFT Guidance for Demonstrating Attainment of Air 
Quality Goals for PM2.5 and Regional Haze'' can be found 
at: http://www.epa.gov/scram001/guidance/guide/draft_pm.pdf.
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    The draft modeling guidance describes how to estimate whether a 
control strategy to reduce emissions of particulate matter and its 
precursors will lead to attainment of the annual and 24-hour 
PM2.5 NAAQS. Part I of the guidance describes a ``modeled 
attainment test'' for the annual and 24-hour PM2.5 NAAQS. 
Both tests are similar. The output of each is an estimated future 
design value consistent with the respective forms of the NAAQS. If the 
future design value does not exceed the concentration of 
PM2.5 specified in the NAAQS, the test is passed. The 
modeled attainment test applies to locations with monitored data.
    A separate test is recommended to examine projected future year 
PM2.5 concentrations in unmonitored locations.\56\ 
Interpolated PM2.5 ambient data combined with modeling data 
can be used to predict PM2.5 concentrations in unmonitored 
areas. The details of such an analysis will be contained in the final 
modeling guidance.
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    \56\ The unmonitored area attainment test will be limited to 
locations which are appropriate to allow the comparison of predicted 
PM2.5 concentrations to the NAAQS, based on 
PM2.5 monitor siting requirements and recommendations.
---------------------------------------------------------------------------

    States may use other analyses in addition to the modeled attainment 
test and hot spot analysis to estimate whether future attainment of the 
NAAQS is likely. Attainment is likely if a preponderance of evidence 
suggests so. This procedure is called a ``weight of evidence 
determination.''
    Reliability of recommended tests for estimating future attainment 
depends on having reliable data bases. The guidance identifies and 
prioritizes key data gathering activities and analytical capabilities 
which will increase credibility of analyses used to estimate if the air 
quality goals for PM2.5 will be met.
    Part II of the guidance describes how to apply air quality models 
to generate results needed by the modeled tests for attainment. This 
includes developing a conceptual description of the problem to be 
addressed; developing a modeling/analysis protocol; selecting an 
appropriate model to support the demonstration; selecting appropriate 
meteorological episodes or time periods to model; choosing an 
appropriate area to model with appropriate horizontal/vertical 
resolution; generating meteorological and air quality inputs to the air 
quality model; generating emissions inputs to the air quality model; 
evaluating performance of the air quality model; and performing 
diagnostic tests. After these steps are completed, the model is used to 
simulate effects of candidate control strategies.
    EPA is not recommending a specific model for use in the attainment 
demonstration for the PM2.5 NAAQS. At present, there is no 
single model which has been extensively tested and shown to be clearly 
superior to other available models. The current modeling guideline, 40 
CFR part 51, appendix W does not identify a ``preferred model'' for use 
in attainment demonstrations of the NAAQS for PM2.5. Thus, 
States may choose from several alternatives. The EPA's draft modeling 
guidance provides a set of general requirements which an air quality 
model should meet to qualify for use in an attainment demonstration for 
the PM2.5 NAAQS. These include having received a scientific 
peer review, being applicable to the specific application on a 
theoretical basis, and having an adequate data base to support its 
application.
    In some cases, multiple models may need to be applied in the 
attainment demonstration. In most cases, a photochemical grid model is 
needed to treat secondary particulate matter. Photochemical grid models 
can also be used to treat primary particulate. In high concentration 
areas of primary particulate, however, a Gaussian plume model or puff 
model may also be needed to more accurately represent steep 
concentration gradients. The modeling guidance provides details and 
recommendations on using multiple models.
    The application of air quality models requires a substantial effort 
by State agencies and EPA. Therefore, States should work closely with 
the appropriate U.S. EPA Regional Offices in executing each step of the 
modeling process. By doing so, it will increase the likelihood of EPA 
approval of the State demonstration submitted at the end of the 
modeling and overall SIP development process.
4. Modeled Attainment Test
    The two modeled attainment tests for the annual and 24-hour 
standards use monitored data to estimate current air quality. The 
attainment test for a given standard is applied at each monitor 
location within or near a designated nonattainment area for that 
standard. There is also an additional attainment test to be performed 
in unmonitored areas. Models are used in a relative sense to estimate 
the response of

[[Page 66009]]

measured air quality to future changes in emissions. Future air quality 
is estimated by multiplying current monitored values times modeled 
responses to changes in emissions. Because PM2.5 is a 
mixture of chemical components, States should use current observations 
and modeled responses of major components of PM2.5 to 
estimate future concentrations of each component. The predicted future 
concentration of PM2.5 is the sum of the predicted component 
concentrations.
    Direct application of the modeled attainment tests requires 
speciated PM2.5 ambient data co-located with FRM sites. 
However, there will not be speciation monitors at every FRM site. In 
fact, speciation monitors are only located at approximately 20 percent 
of the FRM monitoring sites. Therefore EPA is developing a refinement 
of the modeled attainment test that uses interpolated ambient 
speciation data to calculate current values of PM2.5 species 
at all of the FRM monitoring sites. Gridded spatial fields of 
interpolated speciated PM2.5 data are created in order to 
estimate the species fractions at each FRM site. This information, 
combined with modeling results, may be used to calculate future air 
quality at each FRM monitoring site.
    An application of this methodology was employed and documented as 
part of EPA's Clean Air Interstate Rule (CAIR). The final modeling 
guidance will contain default recommendations for the disaggregation 
and treatment of PM2.5 species for the purpose of applying 
the modeled attainment test.
5. Multi-Pollutant Assessments and One-Atmosphere Modeling
    A multi-pollutant assessment, or one-atmosphere modeling, is 
conducted with a single air quality model that is capable of simulating 
transport and formation of multiple pollutants simultaneously. For 
example, this type of model simulates the formation and deposition of 
PM2.5, ozone, and regional haze components, and it includes 
algorithms simulating gas phase chemistry, aqueous phase chemistry, 
aerosol formation, and acid deposition.
    Multipollutant assessments are recommended for PM2.5 
attainment demonstrations because the formation and transport of 
PM2.5 is closely related to the formation of both regional 
haze and ozone. The components of PM2.5 account for the vast 
majority of visibility impairment associated with regional haze. For 
any given mass, fine particles are more efficient at scattering light 
than particles larger than 2.5 micrometers in diameter, and certain 
components of PM2.5 are more efficient at scattering or 
absorbing light than others. The most efficient light-scattering 
particle types are secondary particulate species such as sulfates and 
nitrates. Primary particles composed of crustal and other inorganic 
material are less efficient at scattering light. Secondary particulate 
matter comprises a significant fraction of measured PM2.5 in 
most parts of the country, and therefore is a significant contributor 
to regional haze. The impact of fine particles on visibility is 
enhanced still further by high relative humidity, which is especially 
relevant in the Eastern U.S., because sulfates and nitrates commonly 
absorb water and grow to sizes comparable to the wavelengths of visible 
light.
    There is often a positive correlation between measured ozone and 
secondary particulate matter. Many of the same factors affecting 
concentrations of ozone also affect concentrations of secondary 
particulate matter. For example, similarities exist in sources of 
precursors for ozone and secondary particulate matter. Emissions of 
NOX may lead to formation of nitrates as well as ozone. 
Sources of VOC may be sources or precursors for both ozone and organic 
particles. Presence of ozone itself may be an important factor 
affecting secondary particulate formation. For example, as ozone builds 
up, hydroxyl (OH) radicals do also as a result of equilibrium reactions 
between ozone, water and OH in the presence of sunlight. Hydroxyl (OH) 
radicals are instrumental in oxidizing gas phase SO2 to 
sulfuric acid, which is eventually absorbed by liquid aerosol and 
converted to particulate sulfate in the presence of ammonia. 
SO2 also reacts with ozone and hydrogen peroxide (a 
byproduct of photochemistry), in the aqueous phase, to form particulate 
sulfate. Hydroxyl radicals and NO are also precursors for gas phase 
nitric acid, which is absorbed by liquid aerosol and, in the presence 
of ammonia, leads to particulate nitrate.
    Strategies to reduce ozone can also affect formation of secondary 
PM. Reducing VOC emissions could reduce ozone, OH, and/or hydrogen 
peroxide. If sulfate or nitrate production is limited by lack of 
availability of oxidizing agents, the ozone reduction strategy could 
also reduce secondary PM. Recent research has also shown increased 
secondary organic aerosol concentrations in the presence of acid 
aerosols. Reductions in oxidizing agents may lead to lower 
concentrations of sulfate and/or nitrate which may lead to reduced 
levels of secondary organic aerosols. Control of certain VOCs \57\ may 
also reduce secondary organic aerosols by reducing their semi-volatile 
precursors. Reducing NOX emissions diminishes one of the 
precursors for nitric acid (i.e., NO2 which results from 
NO). Therefore, in the presence of sufficient ammonia, reducing 
NOX emissions could reduce particulate nitrate 
concentrations. There are also more subtle interfaces between 
strategies to reduce ozone and to reduce secondary particulate matter. 
For example, reducing NOX in the presence of substantial 
particulate sulfates and lack of sufficient ammonia could in some cases 
exacerbate the particulate sulfate problem, or reducing SO2 
in the presence of substantial NOX and ammonia could in some 
cases exacerbate the particulate nitrate problem.
---------------------------------------------------------------------------

    \57\ Certain VOCs (especially aromatic compounds) with >6 carbon 
atoms may form secondary organics aerosols.
---------------------------------------------------------------------------

    Therefore, models and data analysis intended to address 
PM2.5 should also address visibility impairment. These 
models also need to be capable of simulating transport and formation of 
ozone. At a minimum, modeling should include previously implemented or 
planned measures to reduce ozone, PM, and visibility impairment. An 
integrated assessment of the impact controls have on ozone, 
PM2.5, and regional haze provides safeguards to ensure that 
optimal emission reduction strategies are developed for the three 
programs to the extent possible. States that undertake multi-pollutant 
assessments as part of their attainment demonstration should assess the 
impact of their PM2.5 strategies on visibility and ozone, or 
perform a consistent analysis for PM2.5,visibility, and 
ozone. To facilitate such an effort, EPA encourages States to work 
closely with established regional haze Regional Planning Organizations 
(RPOs) and the jurisdictions responsible for developing ozone 
implementation plans.
6. Which Future Year(s) Should be Modeled?
    The concept of simultaneously modeling control impacts on 
PM2.5, regional haze, and ozone may be further facilitated 
by the alignment of the implementation process for ozone, regional 
haze, and PM2.5. To the extent that dates for attainment 
demonstration SIPs coincide, the practicality of using common data 
bases and analysis tools for all three programs becomes more viable and 
encourages efficient use of resources.

[[Page 66010]]

    In some cases the attainment dates for areas that are classified as 
nonattainment for both the 8-hour ozone NAAQS and the PM2.5 
NAAQS will coincide. In other cases they may differ by one or more 
years. The choice of the future modeling year should take into account 
the local attainment dates for PM2.5 and ozone as well as 
the attainment dates of nearby nonattainment areas within the State 
and/or nearby areas or regions. Where possible, future modeling years 
should be coordinated so that a single year can be used for both 
PM2.5 and ozone modeling. This coordination will help to 
reduce resources expended for individual modeling applications for 
PM2.5 and ozone and will facilitate simultaneous evaluation 
of ozone and PM impacts.
    Although there is some flexibility in choosing the future year 
modeling time periods, unless the State believes it cannot attain the 
standards within five years of the date of designation and must request 
an attainment date extension, the choice of modeling years for 
PM2.5 cannot go beyond the initial five year attainment 
period. For example, if a nonattainment area has an ozone nonattainment 
date that is beyond the 5 year PM2.5 period, the area cannot 
show attainment of the PM2.5 NAAQS by modeling the later 
ozone attainment date. In this case, the State could model an earlier 
year for both PM2.5 and ozone.
    Attainment date extensions will only be granted under certain 
circumstances. Among other things, the State must submit an attainment 
demonstration showing that attainment within 5 years of the designation 
date is impracticable. Section III.C. includes further discussion on 
attainment date issues.
    Further details on choosing future modeling years is contained in 
EPA's draft modeling guidance. Further revisions to the guidance are 
expected to address the needed flexibility in choosing future modeling 
years.
7. Mid-Course Review
    A MCR is a process by which the State assesses whether a 
nonattainment area is or is not making sufficient progress toward 
attainment of the PM2.5 standards, as predicted in its 
attainment demonstration. Such a review would evaluate the most recent 
monitoring and other data to assess whether the control measures relied 
on in a State's attainment demonstration have resulted in adequate 
improvement in air quality.
    In reviewing each attainment demonstration, EPA will assess on a 
case-by-case basis whether a MCR would be needed. EPA will consider a 
number of factors in making this determination, including: The length 
of time to the proposed attainment date; the supporting information 
provided in the attainment demonstration; and uncertainties associated 
with future projections of pollutant emissions, air quality levels, and 
related information.
    Where EPA finds that a MCR would be required, the approval of the 
demonstration would be contingent on a commitment from the State to 
conduct the MCR. For such cases, the EPA believes that a commitment to 
perform a MCR is a critical element in an attainment demonstration that 
employs a long-term projection period. Because of the uncertainty in 
long term projections, EPA believes such attainment demonstrations 
should contain provisions for periodic review of monitoring, emissions, 
and modeling data to assess the extent to which refinements to emission 
control measures are needed.
    In reviewing individual attainment demonstrations, EPA will give 
particular consideration to requiring a MCR for areas that are granted 
an extension of their attainment date of two years or more beyond the 
first five year period. For areas where the effective date of 
designations is April 2005, the MCR requirement would then apply to 
areas with attainment date extensions to April 2012 to April 2015. The 
EPA would require submittal of the MCR within five years of the 
effective date of designations.
    The procedure for performing a MCR contains three basic steps: (1) 
Demonstrate whether the appropriate emission limits and emission 
reduction programs that were approved as part of the original 
attainment demonstration and SIP submittal were adopted and 
implemented; (2) analyze available air quality, meteorology, emissions 
and modeling data and document relevant findings; and (3) document 
conclusions regarding whether progress toward attainment is being made 
using a weight of evidence determination. This determination may or may 
not include new modeling analyses.
    The EPA does not request that States commit in advance to adopt new 
control measures as a result of the MCR process. Based on the MCR, 
however, if EPA determines that sufficient progress has not been made, 
EPA would determine whether additional emissions reductions are 
necessary from the State or States in which the nonattainment area is 
located, or from upwind States, or both. The EPA would then require the 
appropriate State or States to adopt and submit the new measures within 
a specified period. 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. Thus, States must complete the MCR three 
or more years before the applicable attainment date to ensure that any 
additional controls that may be needed can be adopted in sufficient 
time to reduce emissions by the attainment year.
    A number of States previously participated in a consultative 
process with EPA which resulted in the development of the 1-hour ozone 
MCR guidance.\58\ If a MCR will be required for certain 
PM2.5 nonattainment areas, separate PM2.5 MCR 
guidance will be written to address the specific requirements of 
PM2.5 nonattainment areas.
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    \58\ Memorandum of March 28, 2002, from Lydia N. Wegman and J. 
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone 
Nonattainment Areas that Rely oin Weight-of-Evidence for Attainment 
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/guide/policymem33d.pdf.
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G. What Requirements for RFP Apply Under the PM2.5 Implementation 
Program?

1. Background
    Section 172(c)(2) provides that nonattainment area plans ``shall 
require reasonable further progress.'' Section 171(1) defines 
``reasonable further progress,'' as ``such annual incremental 
reductions in emissions of the relevant air pollutant as are required 
by this part or may reasonably be required by the Administrator for the 
purpose of ensuring attainment of the applicable national ambient air 
quality standard by the applicable date.'' This section presents how 
EPA will implement the RFP requirement, and it proposes the criteria by 
which EPA will judge State submittals addressing this requirement. The 
approaches proposed here should ensure emissions reductions on a path 
towards attainment which will yield an incremental improvement in air 
quality, while being sufficiently flexible to accommodate the range of 
control strategies necessary to address the complex mixtures of 
pollutants comprising PM2.5 in different areas.
    EPA has previously described its interpretation of RFP requirements 
applicable to particles with a nominal aerodynamic diameter of 10 
micrometers and smaller (PM10).\59\ The

[[Page 66011]]

guidance for serious PM10 nonattainment areas included 
extensive discussion of the need for incremental reductions to provide 
RFP. According to the criteria described in that guidance, 
PM10 nonattainment areas are expected to implement an 
ongoing series of measures providing steady progress toward attainment. 
It is important that reductions needed to attain the standards not be 
achieved only in the last year or two prior to the attainment date. The 
EPA believes that these principles should also apply in achieving RFP 
for the PM2.5 standards.
---------------------------------------------------------------------------

    \59\ EPA issued general guidance for moderate PM10 
nonattainment areas in the General Preamble on CAA Title I 
provisions, published April 16, 1992, at 57 FR 13498. (See 57 FR 
13539). Further guidance by EPA (published August 16, 1994 at 59 FR 
41997) described RFP requirements for serious PM10 
nonattainment areas. (See 59 FR 42015.)
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2. What Is the Baseline Year From Which States Will Track Emission 
Reductions for Meeting RFP Requirements?
    EPA issued a memorandum identifying 2002 as the appropriate 
emission inventory base year for purposes of addressing the RFP and SIP 
planning requirements under the implementation programs for the 8-hour 
ozone and the PM2.5 standards.\60\ The EPA selected 2002 as 
the appropriate inventory base year for RFP and attainment 
demonstration purposes for several reasons. First, the inventory for 
2002 will be the most recently available consolidated emissions 
inventory available at the time EPA promulgates PM2.5 
designations. Under the ``Consolidated Emissions Reporting Rule'' (June 
10, 2002, 67 FR 39602), emissions inventories are required every three 
years, including the years 2002 and 2005.
---------------------------------------------------------------------------

    \60\ Memorandum of November 18, 2002, from Lydia Wegman and 
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning: 
8-hr Ozone, PM2.5 and Regional Haze Programs.'' This 
document is available at the following web site: http://www.epa.gov/ttn/oarpg/t1/memoranda/2002bye_gm.pdf.
---------------------------------------------------------------------------

    Second, with a 2002 base year, States will receive credit for 
reductions from the 2002 base year forward. The policy provides an 
incentive for State and local agencies to achieve early emissions 
reductions, and it gives appropriate credit for projected future 
reductions from certain already-adopted national, regional, and local 
measures. Third, EPA designated nonattainment areas based on air 
quality data for the 2001 to 2003 period. Emissions inventories for 
2002 should be representative of the period on which States and EPA 
establish nonattainment area designations. For all these reasons, EPA 
proposes that the base year inventory for attainment and RFP planning 
should be 2002.
3. How Does EPA Propose to Address the Pollutants Associated With 
PM2.5 in these RFP Requirements?
    Ambient PM2.5 is a complex mixture containing multiple 
components. In many areas more than half of the PM2.5 mass 
collected by speciation monitors arises not from direct particle 
emissions but rather from emissions of precursors that undergo 
atmospheric transformation into particles. Section II.E. takes comment 
on options for addressing PM2.5 precursors, and the 
pollutants required to be addressed in RFP plans will be determined in 
the final rule. As proposed, the pollutants that are to be addressed in 
all RFP plans for PM2.5 are direct PM2.5 
(including organic carbon, elemental carbon, and crustal material), 
sulfur dioxide, and nitrogen oxides. Ammonia and/or VOCs should be 
addressed in the RFP plan if ammonia and/or VOC emission reduction 
strategies are included in the attainment demonstration.
4. What Areas Must Submit an RFP Plan?
    Under this proposed RFP approach, an area's RFP requirement would 
be considered to be met if its attainment demonstration (due by April 
2008) shows that the area will attain the standards within 5 years of 
its nonattainment designation (i.e. by April 2010). An area submitting 
an attainment demonstration indicating that it will not attain by April 
2010 must submit an RFP plan by April 2008 along with its attainment 
demonstration. The RFP plan must show how the area will make reasonable 
progress toward attainment with periodic 3-year milestones. Subsection 
(a) discusses areas projected to attain by April 2010. Subsection (b) 
discusses areas projected to attain after April 2010.
a. Areas Projected To Attain Within 5 Years of Designation
    Under this option, an area that the State projects will attain 
within five years of designation (i.e. April 2010) will be considered 
to have met the RFP requirement through submission of all regulations 
and emissions reductions necessary to demonstrate attainment as 
expeditiously as practicable. For such areas, attainment-level 
emissions must be achieved during 2009. It would be assumed that 
adequate interim progress is already being made in the area since the 
area would be projected to attain within a relatively short period of 
time--only two years from the date of SIP submittal. This option 
provides a flexible interpretation of RFP (``annual incremental 
emission reductions'') in order to minimize additional regulatory 
burden on State and local agencies. It is consistent with the approach 
taken for ``subpart 1 areas'' in the implementation rule for the 8-hour 
ozone program. How a State projects that an area will attain the 
standards within five years is a critical issue in implementing this 
approach and one on which EPA seeks comment. For example, should State 
projections of attainment be based on regional modeling conducted for 
major regulatory analyses (such as for CAIR), or should State 
projections only be based on local modeling analyses performed with a 
finer grid resolution and more refined local emission inventory inputs? 
EPA proposes that States must follow the Agency's most recent modeling 
guidance for PM2.5 implementation in developing such 
projections. Section III.F. includes an in-depth discussion about 
modeling guidance and attainment demonstrations, and it requests 
comment on a number of related issues.
b. Areas Projected To Attain More Than 5 Years From the Date of 
Designation Must Submit a 2008 RFP Plan
    Under this approach, EPA proposes that for any area for which the 
State submits an attainment demonstration in April 2008 requesting an 
attainment deadline extension beyond April 2010,\61\ the state also 
must submit an RFP plan along with the area's attainment plan. This 
2008 RFP plan must show that the area will achieve generally linear 
progress according to emission reduction milestones the State 
establishes for 2010 and every 3 years thereafter until the attainment 
year. Just as attainment is determined by evaluating air quality data 
for previous years, compliance with an RFP milestone would be 
determined by evaluating emissions from the previous year. Thus, any 
reference to an RFP milestone in this section refers to annual 
emissions levels achieved during the previous year and prior to January 
1 of the milestone year.
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    \61\ Section 172(a)(2)(A) allows EPA to provide extensions of 1 
to 5 years based on an adequate demonstration by the State. 
Attainment deadline extensions under section 172(a)(2)(C), which 
extend the attainment deadline by up to a total of 2 additional 
years to confirm preliminary monitoring data indicating attainment, 
would not trigger the requirement for the second RFP plan.
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    The following sections III.G.4.b.i. through III.G.4.b.iv. describe 
the proposed 2008 RFP plan option under a scenario where there is no 
classification system. Section III.G.4.b.v. discusses a potential 2008 
RFP plan approach for ``serious'' areas under a two-tiered 
classification system. As described in

[[Page 66012]]

section III.A., a serious area would be one that could not demonstrate 
that it would attain the standards within the first five years after 
designation, or one with a design value above a particular threshold.
i. For purposes of the 2008 RFP plan, how should a nonattainment area 
define its emission reduction milestones?
    The deadline for submittal of the 2008 RFP plan is the same as the 
deadline for submittal of the attainment plan, i.e. three years after 
designations. In developing their RFP plans and emission reduction 
targets for specific nonattainment areas, States should use the 
emission inventories and air quality modeling they have completed for 
attainment planning purposes. EPA expects the attainment plan would 
define several elements of the 2008 RFP plan. First, the attainment 
plan will define the pollutants that are to be reduced for attaining 
the standards. Second, the attainment plan will define the relationship 
between emissions reductions and air quality improvement, including 
identifying the emissions reductions by pollutant which are needed to 
attain the standard. Third, the attainment plan will define the 
expected attainment year, thereby defining the number of years over 
which the reductions leading to attainment must occur.
    EPA proposes that the 2008 RFP plan must provide emission reduction 
and program implementation milestones to be achieved by January 1, 2010 
(based on the 2009 emissions year), and, if necessary, milestones to be 
achieved by January 1, 2013 (based on the 2012 emissions year). As part 
of the plan, the State also should include a motor vehicle emissions 
budget for each milestone year. The motor vehicle emissions budget 
should only apply to emissions attributed to vehicles in the 
nonattainment area. (See section III.K. for further discussion of 
transportation conformity issues.)
    Under Section 172(a)(2)(A), EPA may extend the attainment deadline 
to as late as April 2015 (for areas where the effective date of 
designations is April 2005), based on an acceptable demonstration. 
Thus, 2014 is the latest year in which attainment level emissions are 
to be achieved. The EPA proposes to define RFP as emissions reductions 
that would be estimated to provide generally linear progress toward 
attainment from the 2002 base year emissions to the emissions year 
prior to the attainment date. The States have flexibility in meeting 
RFP goals with alternative emission reduction and air quality 
improvement scenarios.
    An important element of establishing appropriate RFP milestones for 
addressing PM2.5 is establishing the relative degrees of 
control of various pollutants. The following subsection describes how 
EPA proposes to assure that the plans provide for the necessary air 
quality improvement and yet provide flexibility for addressing a 
variety of situations of relative feasibility and significance of 
controlling various pollutants.
ii. For what pollutants must States reduce emissions?
    One approach for achieving RFP is to address all pollutants, 
including direct PM and all precursors, on the same timetable. However, 
EPA recognizes that different control measures address different 
pollutants, and States can implement some measures more quickly than 
others. Therefore, EPA's proposal for 2008 RFP plan requirements 
includes two components: (1) A benchmark set of pollutant reductions 
that establish the overall level of control that the 2010 milestones 
must provide; and (2) an equivalency process that allows States the 
flexibility to address different pollutants according to different 
schedules so long as the EPA finds the net air quality improvements to 
be equivalent.
    The RFP benchmark reflects reductions only for those pollutants 
that the State intends to reduce in the attainment plan, subject to EPA 
approval. Pollutants that are not subject to control measures in the 
attainment plan, either because of insignificant benefits in reducing 
ambient PM2.5 concentrations or because of availability or 
feasibility of control, are not included in the RFP benchmark for 2008 
RFP plan purposes.
    EPA proposes that States should define RFP benchmark emission 
reduction levels in each area to reflect generally linear progress 
toward attainment. Consider an example for a particular area in which 
the State proposes an April 2013 attainment date and thus would need to 
achieve attainment level emissions in 2012. If the attainment plan 
calls for a 20 percent reduction in SO2 emissions from 2002 
levels and a 10 percent reduction in PM2.5 direct emissions, 
then the RFP benchmark for SO2 would reflect roughly a 2 
percent reduction in SO2 emissions per year, and the 
benchmark level for PM2.5 would be roughly a 1 percent 
reduction per year. The 2010 milestones in this example would be about 
a 14 percent reduction in annual SO2 emissions and a 7 
percent reduction in PM2.5 direct emissions to be achieved 
during 2009 (the emissions year prior to the January 1, 2010 milestone 
date).
    EPA proposes that States must provide 2010 RFP milestones that 
provide air quality improvement equivalent to this RFP benchmark. The 
next subsection describes the process EPA is proposing to use to assess 
whether alternative timetables for controlling various pollutants are 
equivalent.
iii. How should States assess the equivalence of alternative 
combinations of pollutant emissions reductions?
    EPA proposes to judge an alternative combination of pollutant 
emissions reductions as being at least equivalent to the RFP benchmark 
(e.g., emissions reductions to be achieved from 2002 to the January 1, 
2010 milestone) if the State makes an adequate showing that the 
alternative will provide estimated air quality improvements that are 
roughly the same as those that the benchmark emission reductions would 
provide. If the State elects to follow this approach, it must provide 
in its 2008 RFP plan the information necessary to assess whether an 
alternative set of emissions reductions is generally equivalent to the 
RFP benchmark reduction levels. The attainment plan will define a set 
of emissions reductions and analyze the corresponding expected air 
quality improvements. For example, attainment plans that include 
reductions in SO2 emissions will include modeling and an 
attainment demonstration which assess the corresponding reduction in 
sulfate concentrations. States should use this information to evaluate 
the equivalence of alternative combinations of pollutant emissions 
reductions.
    EPA recommends that States estimate air quality improvements 
associated with intermediate emission control levels by assuming that 
the same relationship between emissions and air quality applies at 
intermediate levels as would apply at attainment plan levels. For the 
purpose of developing their 2010 RFP milestones, States should assume 
that by January 1, 2010, a given fraction of the emissions reductions 
in the attainment plan (i.e. the fraction being the percent of 
reductions to be achieved by the 2010 milestone) will achieve the same 
fraction of the associated air quality benefits in the attainment plan. 
An example in the next section further explains this point.
    EPA recognizes that because atmospheric processes are quite 
complex, a specific percent change in emissions typically does not lead 
to an equivalent percent change in air quality. This non-linear 
relationship introduces

[[Page 66013]]

uncertainties as to whether alternate RFP plans will in fact achieve 
equivalent benefits. Nevertheless, EPA believes that it is important to 
provide the flexibility to address different pollutants on different 
timetables so long as the plan can reasonably be expected to achieve 
the intended air quality benefits at the RFP benchmark level. In 
general, EPA does not intend to require dispersion modeling 
specifically to assess whether an alternative approach to meeting RFP 
provides equivalent air quality benefits as the benchmark definition. 
The attainment plan modeling addresses the nonlinearities at attainment 
levels, and EPA believes for RFP plan purposes that the relationship 
between emissions and air quality at attainment levels provides an 
adequate approximation of the relationship at RFP levels.
    EPA anticipates that RFP plans will generally only control 
pollutants that are also controlled in the attainment plan. Therefore, 
EPA expects the attainment plan to include information on the 
emissions-air quality relationship for all pollutants included in the 
RFP plan. If a case arises where the RFP plan reduces emissions for a 
pollutant that is not reduced in the attainment plan, the State may 
need to conduct additional modeling to assess the air quality benefit 
of the relevant component of the RFP plan to support its demonstration 
of equivalence with the RFP benchmark.
iv. How would RFP be evaluated for a sample 2008 RFP plan?
    As an example, suppose that the attainment plan for ``Kleenare 
City'' projects that the area will attain the standards with a 20 
percent reduction in SO2 emissions, 20 percent reduction in 
nitrogen oxide emissions, and a 10 percent reduction in direct 
PM2.5 emissions. (For the purpose of simplifying this 
example, assume that direct PM2.5 emissions are principally 
comprised of organic and elemental carbon.) The area's plan projects 
that, consistent with the requirement to attain as expeditiously as 
practicable, the area would attain by April 2013 based on reductions 
achieved during 2012. Under EPA's proposal, the RFP benchmark levels 
should reflect roughly \1/10\ of the emission reduction for each 
pollutant each year. Thus, for the ten year period from 2002-2012, this 
roughly equates to a 2.0 percent annual reduction in SO2 
emissions, 2.0 percent annual reduction in nitrogen oxide emissions, 
and 1.0 percent annual reduction in direct PM2.5 (carbon) 
emissions per year. The January 1, 2010 milestones should then include 
\7/10\ of the progress from 2002 conditions through 2009 (the emissions 
year prior to the milestone). Thus, the 2010 RFP benchmark would have 
emission levels reflecting a 14 percent reduction of SO2 
emissions, a 14 percent reduction of nitrogen oxide emissions, and a 7 
percent reduction of direct PM2.5 (carbon) emissions.
    Unless the State sets RFP emission reduction milestones for 2010 
identical to (or greater than) the RFP benchmark, the next step is to 
assess the air quality improvement estimated for the RFP benchmark and 
the air quality improvement estimated for the State's alternative 
milestones. Both assessments would rely on the relationship between 
emissions reductions and air quality improvement for the various 
pollutants addressed in the attainment plan.
    This example assumes that Kleenare City has the concentrations of 
PM2.5 constituents described in the above example, the 
attainment plan described in the paragraph above, and the expectation 
of achieving attainment level emissions by 2012 (i.e., a 2013 
attainment deadline). Thus, the design value for the area is 17.0 
[mu]g/m\3\, consisting of 7.0 [mu]g/m\3\ of ammonium sulfate, 6.0 
[mu]g/m\3\ of carbonaceous PM (e.g. organic and elemental carbon), and 
4.0 [mu]g/m\3\ of ammonium nitrate. Assume further that the attainment 
plan as described just above demonstrates relative reduction factors 
which indicate the following impacts: The 20 percent SO2 
emission reduction is expected to reduce ammonium sulfate 
concentrations by 1.2 [mu]g/m\3\; the 10 percent reduction in direct 
PM2.5 emissions is expected to reduce direct 
PM2.5 concentrations (assume this component is primarily 
organic and elemental carbon) by 0.4 [mu]g/m\3\; and the 20 percent 
NOX emission reduction is expected to reduce nitrate 
concentrations by 0.6 [mu]g/m\3\.
    As calculated above, the RFP benchmark levels for 2010 would 
include \7/10\ of the emissions reductions planned through 2012, which 
would be expected to achieve at least \7/10\ of the associated air 
quality improvement expected in the attainment plan. Thus, the 2010 RFP 
benchmark levels would be expected to reflect the following estimated 
air quality improvement: the 20 percent SO2 emission 
reduction would yield an estimated [1.2 * (14 percent / 20 percent)] or 
0.84 [mu]g/m\3\ ammonium sulfate reduction, the 8 percent direct 
PM2.5 (carbon) emission reduction would yield an estimated 
[0.4 * (7 percent / 10 percent)] or 0.28 [mu]g/m\3\ carbon particle 
reduction, and the 20 percent NOX emission reduction would 
yield an estimated [0.6 * (14 percent / 20 percent)] or 0.42 [mu]g/m\3\ 
ammonium nitrate reduction. The total air quality improvement of this 
2010 benchmark plan would be estimated as (0.84 + 0.28 + 0.42), or 1.54 
[mu]g/m\3\. Thus, for this example, the target air quality level for 
the 2007-9 period would be approximately 15.5 [mu]g/m\3\ (17.0 - 1.54 = 
15.46).
    Now suppose that the State is considering phasing in emission 
reduction strategies such that by the 2010 milestone date, 
SO2 emissions would be reduced by only 10 percent, direct 
organic and elemental carbon particle emissions would be reduced by the 
full 10 percent (as included in the attainment plan), and 
NOX emissions would be reduced by the full 20 percent. This 
alternative would be estimated to achieve air quality improvement that 
includes [1.2 * (10 percent / 20 percent)] or 0.6 [mu]g/m\3\ ammonium 
sulfate reduction, [0.4 * (10 percent / 10 percent)] or 0.4 [mu]g/m\3\ 
carbon particle reduction, and [0.6 * (20 percent / 20 percent)] or 0.6 
[mu]g/m\3\ ammonium nitrate reduction. The total air quality 
improvement of this 2010 milestone alternative would be estimated to be 
(0.6 + 0.4 + 0.6) or 1.6 [mu]g/m\3\ reduction in PM2.5 
concentrations. Since this estimated air quality improvement exceeds 
the improvement estimated for the 2010 RFP benchmark level, EPA would 
judge this set of milestones to be considered equivalent to the 2010 
RFP benchmark levels.
v. What potential RFP requirements could apply for ``serious'' areas 
under the two-tiered classification option?
    As described in section III.A. on classification options, a serious 
area would be one that could adequately demonstrate that attainment of 
the standards ``as expeditiously as practicable'' would not be within 
the first five years after designation, and therefore would receive an 
attainment date extension of 1 to 5 years. Under the two-tiered 
classification option, a serious area would be subject to more 
stringent requirements in return for the attainment date extension. The 
classifications section III.A. takes comment on possible ``more 
stringent'' requirements for serious areas, including prescriptive RFP 
requirements and/or lower thresholds for RACT review (under one RACT 
option presented in section III.I.5 of this package).
    One possible RFP approach contemplated in the classifications 
discussion is a fixed percentage reduction of the emissions of direct 
PM2.5 and regulated PM2.5 precursors to be 
achieved in specified milestone years between the 2002 base year and 
the

[[Page 66014]]

attainment year proposed in the attainment demonstration. This approach 
would be patterned after the rate of progress requirement in section 
182 for ozone, which requires a 3 percent per year average emission 
reduction of VOC for certain areas, with emission reduction targets to 
be met every three years (i.e., a 9 percent reduction over three 
years). The EPA could formulate this alternative either with the same 3 
percent average annual emission reduction as specified in section 182 
or with some other more appropriate percentage. Use of a fixed 
percentage reduction target would be consistent with the congressional 
intent behind the section 182 requirement to require additional 
emission reduction actions in areas with more serious air quality 
problems.
    This approach could require a strict percentage reduction of each 
pollutant, or it could allow the States flexibility to employ a 
different mix of pollutant reduction percentages in order to achieve an 
equivalent air quality improvement as would be achieved under the fixed 
percentage approach. Section III.G.5.b.iii. above provides guidance on 
how to demonstrate equivalency in this type of situation.
    Under this option, RFP plans would be submitted in April 2008 along 
with attainment plans. RFP milestones would be established for 2010 
and, in the case of areas with later attainment dates, 2013. The 
application of the percent reduction concept is relatively straight 
forward. For example, under a 3 percent per year RFP emission reduction 
requirement for an area with an attainment date extension to 2015, the 
area's 2010 emission reduction milestone would reflect a 21% reduction 
(i.e. 3% per year x 7 years from 2002 through 2009) in emissions of 
regulated PM2.5 pollutants. For a 2013 milestone (e.g. 
reductions through 2012), a 30% emission reduction would be required 
(3% per year x 10 years from 2002 to 2012). The requirement for RFP 
between 2013 and the attainment date would be satisfied by the 
reductions needed for attainment.
    As with the basic RFP approach proposed above, all emissions 
reductions since 2002 from federal, regional, state and local measures 
would be creditable toward meeting the RFP targets. These would 
include, for example, substantial reductions from CAIR, federal motor 
vehicle emissions standards and other federal rules. Overall, we 
believe there would be merit in establishing a more stringent RFP 
requirement under any option for serious areas. An advantage of the 
fixed percentage approach may be that it would be easier to implement 
and communicate to the public. EPA requests comment on the use of a 
fixed percentage requirement for serious areas and on what is an 
appropriate annual percentage reduction rate for PM2.5 and 
associated precursors.
5. Other RFP Issues
a. How should States account for regional control strategies in 
evaluating RFP?
    States should consider all adopted, enforceable control programs in 
evaluating whether RFP is being achieved, including national measures, 
regional measures, and local measures. National programs established by 
EPA include the Clean Air Interstate Rule addressing SO2 and 
NOX emissions in the eastern U.S., eastern NOX 
reductions from power plants and other sources to address the ozone 
standards (the ``NOX SIP call''), and a variety of motor 
vehicle limitations, including the phase-in of emission limits as new 
vehicles replace older vehicles through fleet turnover. More recent 
mobile source rules include limits for new heavy-duty diesel engines 
starting in 2004, considerably more stringent diesel engine limits 
starting in 2007, emission limits for new gasoline vehicles (``Tier 
II'') starting in 2004, limits on the sulfur content of gasoline and 
diesel starting in 2004 and 2006, respectively, and limits on nonroad 
vehicle emissions. Expressed more generally, States should base the 
evaluation of RFP simply on the enforceable emissions for the area, 
regardless of what mix of adopted control programs and other influences 
lead to the applicable emissions level.
    The guidance for PM2.5 differs somewhat in this respect 
from the guidance for ozone. For ozone, CAA section 182(b)(1)(D) 
specifies several types of measures that may not be credited toward 
achievement of the ozone rate of progress requirements. These 
restrictions are only mandated by the statute with respect to pre-1990 
controls for ozone. The Act does not provide any such requirement with 
respect to controls for PM.
b. What geographic area should States address in RFP plans?
    Another important issue is the geographic area to be addressed in 
the RFP plan. As discussed above, EPA believes the CAA RFP provision 
requires emissions reductions that will provide steady improvement in 
air quality in the nonattainment area prior to its attainment date. 
This suggests that RFP requirements should apply within a geographic 
area from which emissions substantially affect air quality in the 
nonattainment area. This geographic area may differ for different 
pollutants that contribute to PM2.5 levels. The EPA also 
envisions approaching this issue differently for the reasons described 
below.
    EPA proposes an approach based on EPA's views of the typical 
emissions area that most strongly correlates with associated components 
of urban PM2.5 concentrations. Since different prospective 
nonattainment areas have different types of PM2.5 problems, 
some areas may warrant use of different geographic areas from the 
defaults presented here. For example, a mountain valley area in which 
concentrations are dominated by local emissions regularly trapped in 
inversions should address all pollutants on a nonattainment area basis 
and not on a statewide basis.
    EPA is proposing default areas of consideration for emissions of 
direct PM2.5, NOX, and SO2. For direct 
PM2.5 emissions, including emissions of elemental carbon, 
organic particles and inorganic particles such as metals and crustal 
material, emissions from within the nonattainment area should be 
considered for tracking compliance with RFP milestones. Particles that 
originate from direct PM2.5 emissions tend to be dominated 
by nearby emissions. While the greatest impact at a monitoring location 
may arise from sources within a few kilometers, a nonattainment area-
wide approach assures that the entire area is achieving RFP. A 
nonattainment area-wide approach also will generally be easier to 
administer in conjunction with other requirements such as RACT and 
RACM. EPA does not believe that direct PM2.5 emissions from 
sources outside the nonattainment area should be considered for RFP 
purposes.
    The proposed approach for considering NOX and 
SO2 emissions for RFP under the PM2.5 program is 
similar to the approach for addressing NOX emissions in past 
guidance for 1-hour ozone rate of progress plans.\62\ The ozone 
guidance provides that in their RFP baseline inventories, States at a 
minimum are required to include all

[[Page 66015]]

sources of NOX and VOC emissions from within the 
nonattainment area. The ozone guidance also provides that States may 
include in RFP plans certain NOX sources located up to 200 
kilometers outside of an ozone nonattainment area and certain VOC 
sources located 100 kilometers outside of an ozone nonattainment area 
and take credit for emission reductions from these sources for RFP 
purposes. EPA believes that for the PM2.5 program, it would 
be appropriate to allow for the possibility of crediting SO2 
and NOX reductions outside the nonattainment area because 
numerous technical studies have generally demonstrated the long-range 
transport of sulfates and nitrates. (See section II on the technical 
characterization of PM2.5.) As with ozone, EPA believes that 
ambient particle concentrations reflect a combination of effects from 
local as well as regional NOX and SO2 emissions, 
justifying an approach that focuses on nonattainment area 
NOX and SO2 emissions but also gives incentive 
for reductions outside the nonattainment area.
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    \62\ Memorandum of December 29, 1997 from Richard D. Wilson to 
Regional Administrators, Regions I-X re ``Guidance for Implementing 
the 1-Hour Ozone and Pre-Existing PM10 NAAQS.'' Located 
at URL: http://www.epa.gov/ttn/oarpg/t1/memoranda/iig.pdf-. This 
policy recognized that VOC emissions up to 100 km and NOX 
emissions up to 200 km from the nonattainment area could be relied 
on for RFP. The specified distances resulted from discussions of the 
FACA Subcommittee on Ozone, PM, and Regional Haze Implementation 
Programs. Because some stakeholders have expressed concerns about 
this policy, EPA is in the process of subjecting this policy to a 
technical review and may revise it in light of that review.
---------------------------------------------------------------------------

    However, because of various concerns expressed about such a policy 
for RFP purposes, any State proposing to take credit for reductions by 
any NOX or SO2 source located within 200 
kilometers of the nonattainment area will need to include with its SIP 
submittal appropriate documentation demonstrating that emissions from 
the sources outside the nonattainment area contribute to fine particle 
concentrations within the nonattainment area. Because of the 
uncertainty associated with VOC contributions to PM2.5 
concentrations, we do not believe it would be appropriate to extend the 
policy to VOC sources located 100 kilometers outside of a 
PM2.5 nonattainment area. If the State or EPA finds that VOC 
are a significant contributor to an area's PM2.5 problem, 
RFP credit for VOC will be granted for reductions achieved within the 
nonattainment area only.
    As discussed earlier, the RFP plan should include a motor vehicle 
emissions budget for each milestone year. Because the transportation 
conformity program applies only within the nonattainment area, the RFP 
plan cannot take credit for motor vehicle direct PM2.5 and 
applicable PM2.5 precursor emissions reductions achieved 
outside of the nonattainment area. (See section III.K. for further 
discussion of transportation conformity issues.)
    The EPA expects that analyses conducted as part of the attainment 
demonstration will help identify the most appropriate geographic range 
of interest for each pollutant. EPA believes that if an area concludes 
that controls for a specific pollutant on an alternate geographic scale 
are more appropriate for reaching attainment, the area should use that 
same alternate geographic scale in assessing RFP. In particular, for 
each pollutant addressed, the same geographic scale must be used in 
analyzing the 2002 inventory, the attainment year inventory, and any 
RFP milestone year inventories, in order to assure that the milestones 
in fact represent RFP on a path to timely attainment.
    EPA solicits comments on other alternatives for the geographic 
coverage of NOX and SO2 inventories. The 
principal alternatives of interest are to be either more or less 
inclusive. EPA takes comment on (1) an approach that would allow the 
State to include a broader set of sources \63\ located within 200 
kilometers of the nonattainment area, and (2) an approach including all 
nonattainment area sources but no additional sources outside the 
nonattainment area.
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    \63\ Under this option, sources outside the nonattainment area 
would exclude on-road sources since under the transportation 
conformity program, motor vehicle emissions budgets apply only 
within the nonattainment area.
---------------------------------------------------------------------------

c. How should RFP be addressed in multi-state nonattainment areas?
    In general, EPA seeks to ensure that nonattainment areas that 
include more than one State meet RFP requirements as a whole. States 
that share a nonattainment area should consult to assure that the 
collective set of emission reduction milestones provide for adequate 
emissions reductions to represent RFP for the area as a whole. The 
States should work with the EPA region or regions that oversee the SIPs 
for those States to confirm that their collective approach is 
acceptable for RFP.
d. How should States compile emission inventories for RFP plans?
    In general, States should prepare emission inventories for RFP 
plans according to the same guidance that applies to emission 
inventories for attainment plans. Similar guidance on assessment of 
allowable emissions resulting from a new emission limit applies in both 
cases. Emission inventories for RFP plans should be adequate to track 
progress in meeting the annual standard in all areas. States should 
also develop inventories adequate to ensure progress in meeting the 24-
hour standard for those areas that violate or are close to violating 
this standard.
e. What RFP requirements apply in Tribal areas?
    Under the Tribal Authority Rule (40 CFR 49.4), EPA found that it 
was not appropriate to treat Tribes in a manner similar to a State with 
regard to SIP schedules. This flexibility extends to submittal of plans 
for the RFP requirement. Because there are typically limited emissions 
in Tribal areas, this flexibility on RFP should not have significant 
impact on surrounding jurisdictions in most instances. However, the TAR 
also acknowledges that where the Tribes are unable to meet the 
requirements of the CAA, EPA will implement the program where it is 
``necessary and appropriate''. Therefore, in the event that flexibility 
in the RFP deadline for Tribes jeopardizes RFP in surrounding 
jurisdictions, EPA will work with the Tribes to ensure that emissions 
on Tribal lands are appropriately addressed.
    EPA guidance for nonattainment areas that include both State and 
Tribal lands is similar to guidance for multi-State nonattainment 
areas. States and Tribes that share a nonattainment area should consult 
to assure that the collective set of emission reduction milestones for 
the nonattainment area as a whole satisfy the requirements described 
above and thus provide for the steady air quality improvement intended 
under the CAA.
f. What must States submit to show whether they have met RFP 
milestones?
    The establishment of milestones implies subsequent reporting 
demonstrating whether these milestones have been met. For example, the 
establishment in a 2008 RFP plan of milestones reflecting 2009 
emissions implies reporting in 2010 whether these milestones were met. 
However, emissions for a given year are commonly not known until well 
after the year has ended. The EPA is evaluating alternative approaches 
to this issue and plans to issue guidance on this issue at a later 
date.

H. What requirements for contingency measures should apply under the 
PM2.5 implementation program?

    For PM2.5, under Subpart I of the CAA, all nonattainment 
areas must include in their SIPs contingency measures consistent with 
section 172(c)(9). Contingency measures are additional control measures 
to be implemented in the event that an area fails to meet RFP or fails 
to attain the standards by its attainment date. These contingency 
measures must be fully

[[Page 66016]]

adopted rules or control measures that are ready to be implemented 
quickly upon failure to meet RFP or failure of the area to meet the 
standard by its attainment date. The SIP should contain trigger 
mechanisms for the contingency measures, specify a schedule for 
implementation, and indicate that the measures will be implemented 
without significant further action by the State or EPA. The contingency 
measures should consist of other control measures for the area that are 
not included in the control strategy for the SIP.
    The April 16, 1992 General Preamble provided the following 
guidance: ``States must show that their contingency measures can be 
implemented with minimal further action on their part and with no 
additional rulemaking actions such as public hearings or legislative 
review. In general, EPA will expect all actions needed to affect full 
implementation of the measures to occur within 60 days after EPA 
notifies the State of its failure.'' (57 FR at 13512.) This could 
include Federal measures and local measures already scheduled for 
implementation.
    The EPA has approved numerous SIPs under this interpretation--i.e., 
that use as contingency measures one or more Federal or local measures 
that are in place and provide reductions that are in excess of the 
reductions required by the attainment demonstration or RFP plan. (62 FR 
15844, April 3, 1997; 62 FR 66279, December 18, 1997; 66 FR 30811, June 
8, 2001; 66 FR 586 and 66 FR 634, January 3, 2001.) The key is that the 
statute requires extra reductions that are not relied on for RFP or 
attainment and that are in the demonstration in order to provide a 
cushion while the plan is revised to meet the missed milestone. In 
other words, contingency measures are intended to achieve reductions 
over and beyond those relied on in the attainment and RFP 
demonstrations. Nothing in the statute precludes a State from 
implementing such measures before they are triggered. In fact, a recent 
court ruling upheld contingency measures that were previously required 
and implemented where they were in excess of the attainment 
demonstration and RFP SIP. See LEAN v. EPA, 382 F.3d 575 5th Circuit, 
2004.
    One basis EPA recommends for determining the level of reductions 
associated with contingency measures is the amount of actual 
PM2.5 emissions reductions required by the control strategy 
for the SIP to attain the standards. The contingency measures are to be 
implemented in the event that the area does not meet RFP, or attain the 
standards by the attainment date, and should represent a portion of the 
actual emissions reductions necessary to bring about attainment in 
area. Therefore, the emissions reductions anticipated by the 
contingency measures should be equal to approximately one year's worth 
of emissions reductions necessary to achieve RFP for the area (See 
section III.G. for more detail on RFP requirements.)
    As stated previously, EPA believes that contingency measures should 
consist of other available control measures beyond those required to 
attain the standards, and may go beyond those measures considered to be 
RACM for the area. It is, however, important that States make decisions 
concerning contingency measures in conjunction with their determination 
of RACM for the area, and that all available measures needed in order 
to demonstrate attainment of the standards must be considered first; 
all remaining measures should then be considered as candidates for 
contingency measures. It is important not to allow contingency measures 
to counteract the development of an adequate control strategy 
demonstration.
    Contingency measures must also be implemented immediately after EPA 
determines that the area has either failed to meet RFP, or attain the 
standard by its attainment date. The purpose of the contingency measure 
provision is to ensure that corrective measures are put in place 
automatically at the time that EPA makes its determination that an area 
has either failed to meet RFP or failed to meet the standard by its 
attainment date. The EPA is required to determine within 90 days after 
receiving a State's RFP demonstration, and within 6 months after the 
attainment date for an area, whether these requirements have been met. 
The consequences for states which fail to attain or to meet RFP are 
described in section 179 of the Act.

I. What requirements should apply for RACM and RACT for PM2.5 
nonattainment areas?

1. General Background
    Subpart 1 of section 172 of the Act includes general requirements 
for all designated nonattainment areas. Section 172(c)(1) requires that 
each nonattainment area plan ``provide for the implementation of all 
reasonably available control measures as expeditiously as practicable 
(including such reductions in emissions from existing sources in the 
area as may be obtained through the adoption, at a minimum, of 
reasonably available control technology), and shall provide for 
attainment of the national primary ambient air quality standards.'' 
States are required to implement RACM and RACT in order to attain the 
standards ``as expeditiously as practicable.'' \64\ A RACM 
demonstration should show that there are no additional reasonable 
measures available that would advance the attainment date by at least 
one year or contribute to RFP for the area.\65\
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    \64\ Under the TAR, requirements for RACT and RACM may be 
considered to be severable elements of implementation plan 
requirements for Tribes.
    \65\ In the context of the PM10 NAAQS, EPA has 
concluded, based upon the annual form of the standard, that 
``advancement of the attainment date'' should mean an advancement of 
at least one calendar year. See: State Implementation Plans; General 
Preamble for the Implementation of Title I of the CAA Amendments of 
1990; Proposed Rule.'' April 16, 1992 (57 FR 13498). See also Sierra 
Club v. EPA, 294 F.3d 155 (DC Cir. 2002).
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    This section first discusses issues associated with RACT, 
traditionally considered to be an independent stationary source control 
requirement, and then addresses issues associated with RACM.
2. Background for RACT
    EPA's historic definition of RACT has been the lowest emissions 
limitation that a particular source is capable of meeting by the 
application of control technology that is reasonably available, 
considering technological and economic feasibility. Because RACT is a 
control technology requirement and modeling techniques were not precise 
in the past, RACT has been considered to be independent of the need to 
demonstrate attainment.
    Section 172 (subpart 1) does not include specific applicability 
thresholds for the size of sources that should be the minimum starting 
point for RACT analysis, as are provided in subpart 2 (ranging from 100 
to 10 tons per year for ozone, depending on the level of nonattainment) 
or subpart 4 (either 100 or 70 tons per year for PM10 
depending on the level of nonattainment). Subpart 1 also does not 
include a specific list of stationary source categories for which 
control techniques guidelines are to be developed. For PM10, 
the Act provided particular emphasis for specific sources of area 
emissions, but did not highlight specific stationary sources for the 
purposes of RACT. (Section 190 of the Act required EPA to develop RACM 
guidance documents for residential wood combustion, prescribed burning 
for forest management and agricultural activities, and for urban 
fugitive dust control.) Under subpart 2 for ozone, EPA has more 
specifically identified RACT for certain source categories through 
issuance of a number of control techniques guidelines (CTGs) and

[[Page 66017]]

alternative control techniques (ACTs) documents.
3. Emissions Inventory Analysis Supporting RACT Options
    As supporting information for developing options for RACT for 
PM2.5, we have reviewed the 2001 National Emissions 
Inventory to examine both the size range of stationary sources and the 
types of sources that emit PM2.5 and its precursors. Because 
the statutory requirements for both PM10 and ozone are such 
that the RACT applicability threshold cannot be higher than a potential 
to emit 100 tons per year, we began our analysis by evaluating the 
national emissions inventory to identify sources of PM2.5 or 
any precursor which exceeded this threshold. Because information in the 
national emission inventory is expressed in terms of actual emissions 
rather than ``potential'' emissions, we used actual emissions 
information in this analysis as a surrogate for potential emissions 
thresholds.
    Our analysis of the national emissions inventory indicates that the 
mix of source categories responsible for PM2.5 and precursor 
emissions in potential PM2.5 nonattainment areas varies 
greatly. Contributing sources include stationary sources such as 
electricity generating units, industrial boilers, and oil refineries, 
as well as smaller mobile and area sources, such as diesel engines, 
solvent usage, and various types of burning activities.
    The analysis of point source emissions for stationary sources 
located in PM2.5 nonattainment areas shows that for each of 
the five main pollutants associated with PM2.5 (direct 
PM2.5, SO2, NOX, VOC, and ammonia), 
individual facilities with actual emissions greater than 100 tons per 
year of one of these pollutants account for a significant amount of the 
total emissions for all facilities in these areas. When the potential 
70 and 50 ton per year thresholds are compared to the 100 ton per year 
threshold, the additional emissions coverage increases by 2 percent or 
less for PM2.5, NOX, SO2, and ammonia. 
For VOC, the emissions coverage increases modestly, by about 9 percent.
    In contrast, the number of facilities potentially covered at the 70 
and 50 ton thresholds increase more significantly. When the number of 
facilities exceeding the 100 ton threshold for each pollutant is 
compared to the number of facilities exceeding the 70 ton threshold, 
the numbers of facilities increase from 10 percent (ammonia) to 44 
percent (VOC). When the number of facilities exceeding the 100 ton 
threshold for each pollutant is compared to the number of facilities 
exceeding the 50 ton threshold, the numbers of facilities increase by 
24 percent (SO2) to 90 percent (VOC).
4. Which PM2.5 precursors must be addressed by States in 
establishing RACT requirements?
    As discussed earlier in this section on RACT and RACM and in the 
technical overview section, the precursors of PM2.5 are 
SO2, NOX, VOC, and ammonia. In section II.E., we 
discuss options for addressing these precursors under the PM 
implementation program. The EPA will finalize its precursor policy for 
PM implementation after considering public comment received on this 
proposal.
5. What are the proposed options for implementing the RACT requirement?
    This section describes the approaches EPA is considering for 
implementation of the RACT requirement of section 172(c)(1), to insure 
that States consider and adopt RACT measures for stationary sources in 
a way that is consistent with the overarching requirement to attain the 
standards as expeditiously as practicable, yet provides flexibility for 
States to focus regulatory resources on those sources of emissions that 
contribute most to local PM2.5 nonattainment. The RACT 
requirement will apply both to sources of direct PM2.5 
emissions and to sources of PM2.5 precursors in the given 
nonattainment area. The EPA will require States to demonstrate that 
they have adopted all appropriate RACT measures in the attainment 
demonstrations that States must submit to EPA in early 2008.
    EPA is proposing three basic approaches to implementing the RACT 
requirement. The first alternative would simply require States to 
conduct a RACT analysis and require reasonably available controls for 
all affected stationary sources in the nonattainment area, comparable 
to the implementation of RACT provided in subpart 4 governing 
implementation of the PM10 NAAQS and subpart 2 governing 
implementation of the 1-hour ozone NAAQS. Under this alternative for 
RACT, EPA is also proposing to limit the universe of sources for which 
States must conduct a RACT analysis and impose RACT controls, based 
upon the amount of emissions potentially emitted by the sources. (See 
discussion later in this section on potential emissions thresholds 
applicable under the first alternative.) The second alternative would 
likewise require States to conduct a RACT analysis and require 
reasonably available controls on stationary sources, but would allow 
States to decline to impose controls that would not otherwise be 
necessary to meet RFP requirements or to attain the PM2.5 
NAAQS as expeditiously as practicable.\66\
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    \66\ Note that States are required to implement RACT only within 
the nonattainment area while it is proposed elsewhere in today's 
proposal that States may use reductions from selected sources 
outside the nonattainment area to meet RFP milestones.
---------------------------------------------------------------------------

    The third alternative would be a combination of the first two and 
is consistent with the RACT approach adopted in the final 
implementation rule for the 8-hour ozone program. It would require 
States to conduct a RACT analysis and require reasonably available 
controls for all affected stationary sources in the nonattainment area 
only for areas with attainment dates more than five years from the date 
of designation. For areas with an attainment date within five years of 
designation (e.g. by April 2010 for areas designated in late 2004), 
RACT would be required as under the second alternative, in which States 
could decline to impose controls that would not otherwise be necessary 
to meet RFP requirements or to attain the PM2.5 NAAQS as 
expeditiously as practicable. The EPA seeks comment on the three 
alternative approaches for RACT discussed below, and on the options 
presented for a RACT source emissions threshold applicable under the 
first and third options.
    First proposed alternative for RACT. Under the first alternative, 
EPA would require States to conduct RACT determinations and require 
RACT controls for all stationary sources located in nonattainment 
areas, subject to any size threshold as discussed in the options below. 
In this approach, covered sources would be required to apply 
technically and economically feasible controls and there would be no 
opportunity for States to excuse major stationary sources from control 
on the basis that the emissions reductions from those controls would 
not be necessary for RFP or to expedite attainment. The EPA believes 
that this first alternative would be consistent with the approach set 
forth in the CAA in subpart 4 governing PM10 nonattainment 
areas and in subpart 2 governing 1-hour ozone nonattainment areas 
wherein all stationary sources with at least a given amount of 
potential annual emissions are subject to RACT controls. The logic 
behind requiring RACT for all such sources in subpart 2 and subpart 4 
was presumably that large stationary sources are a significant source 
of emissions in nonattainment areas and that States

[[Page 66018]]

necessarily need to control them as part of an effective SIP.
    EPA believes that requiring RACT for all large sources may also be 
appropriate for implementation of the RACT requirement for 
PM2.5 for a number of reasons. First, as with ozone problem 
areas, sources located across a broad region appear to contribute to 
PM2.5 nonattainment problems. As such, implementing the RACT 
requirement for all major sources located in nonattainment areas will 
``level the playing field'' from one area to another. Controls on 
sources subject to RACT will improve air quality in the nonattainment 
area in which the facility is located, and in many cases will also 
improve air quality in nearby nonattainment areas.
    Second, like ozone and to a lesser extent PM10, 
PM2.5 nonattainment in many areas appears to be largely a 
product of secondarily formed particles that result from emissions of 
precursors that react in the atmosphere. While we understand the basic 
processes and mechanisms that cause PM2.5 formation, we 
likewise recognize that sorting out the various sources and their 
impacts on local and regional nonattainment is a difficult and resource 
intensive process, subject to some uncertainty. Requiring RACT controls 
for all large stationary sources under subpart 2 (for ozone) and 
subpart 4 (for PM10) greatly simplified the SIP development 
process by requiring the analysis for and imposition of RACT controls 
for these sources, and thereby foreclosed the need to divert State 
resources to demonstrate conclusively the need for RACT controls for 
large stationary sources or to explore plan options that would permit 
excusing certain sources from control, perhaps at the cost of 
regulating other smaller sources less central to the nonattainment 
problem.
    Third, EPA notes that the rule to implement the new 8-hour ozone 
NAAQS also sought comment on an option that would require RACT for all 
large stationary sources in subpart 1 areas with design values greater 
than 91 parts per billion (ppb). Given that some of the 
PM2.5 and 8-hour ozone nonattainment areas will overlap and 
that PM and ozone have common precursors, EPA anticipates that many of 
the same large stationary sources will be subject to RACT in connection 
with the ozone NAAQS in any case. Thus, requiring RACT on all large 
sources will also ``level the playing field'' among sources located in 
ozone or PM2.5 nonattainment areas, and will help to 
alleviate unintended consequences of an inconsistent approach.
    Notwithstanding the practical and policy arguments in favor of 
requiring RACT for all large stationary sources, EPA recognizes that in 
other contexts concerning other NAAQS, RACT has been interpreted 
alternatively as a component of the general RACM requirement in section 
172(c)(1). Nevertheless, EPA believes that the health impacts of 
PM2.5 nonattainment and the similarities between the 
PM2.5, PM10, and ozone problems (e.g., cause by 
many and various sources, regional in nature) may justify consideration 
of a comparable RACT approach. The EPA specifically solicits comment on 
this alternative in which RACT is required for all large sources above 
a particular tonnage threshold, without regard to RFP or attainment 
needs.
    Options for a RACT emissions threshold under the first proposed 
alternative. Under the first proposed alternative in which States are 
required to impose RACT controls on stationary sources, EPA recognizes 
that it may not be reasonable for States to require RACT controls 
regardless of the amount of the emissions from the individual sources 
in question. Section 172(c)(1) does not provide an explicit cutoff for 
the size of sources that States should subject to RACT controls, but 
there are such cutoffs elsewhere in the statute.
    For example, in section 182(b)(2) governing nonattainment areas for 
the one-hour ozone NAAQS, the CAA requires RACT for those sources 
covered by preexisting control techniques guidelines or for other 
``major stationary sources,'' i.e., those sources with emissions above 
a specified number of tons per year, which varies depending upon the 
area's nonattainment classification. In subpart 4 governing 
PM10 nonattainment areas, section 189(b)(3) defines a 
``major source'' as one stationary source (or a group of such sources 
contiguously located and under common control) that emits or has the 
potential to emit at least 70 tons of PM10 per year, thereby 
altering the otherwise applicable 100 ton definition of major source in 
``moderate'' PM10 nonattainment areas and imposing greater 
control requirements on smaller sources in areas that are ``serious'' 
nonattainment for PM10. The logic behind such emissions 
thresholds is presumably that requiring RACT controls for small sources 
may not achieve the same degree of reductions that may be possible 
through focusing regulatory resources on relatively larger sources.
    Given the significance of the health impacts that result from 
PM2.5 nonattainment, EPA considered proposing that there 
should be no size threshold for sources that States must address in a 
RACT analysis, thereby considering even small emissions sources for 
RACT controls and implementing those controls as appropriate. 
Ultimately, however, EPA has concluded that under the first proposed 
alternative for RACT, requiring RACT analyses for all stationary 
sources, regardless of the amount of annual potential emissions, may 
divert resources and attention from the necessary RACT analyses for 
larger, more significant sources of direct PM2.5 and 
PM2.5 precursors. Moreover, EPA expects States to consider 
controls for smaller stationary sources as part of the RACM analysis 
discussed below, so EPA does not anticipate that the creation of a RACT 
threshold based upon the amount of emissions will serve to exempt 
smaller stationary sources completely from all consideration of 
controls.
    In short, EPA finds that under the first proposed alternative, it 
may not be reasonable to require RACT controls for all stationary 
sources regardless of size, and EPA is proposing to interpret section 
172(c)(1) to allow EPA to define the universe of sources for which 
States should consider the need to impose RACT, based upon the 
potential annual emissions of the sources affected. For the first 
overall RACT alternative discussed above, EPA is proposing three sub-
options for thresholds for implementing the RACT requirement that would 
limit the universe of sources for which States must conduct a RACT 
analysis, based upon the potential emissions from each source.
    The first sub-option would require States to conduct RACT 
determinations, at a minimum, for all existing stationary sources \67\ 
located in nonattainment areas and which have the potential to emit 100 
tons per year or more of direct PM2.5 or any individual 
precursor to PM2.5. (See the following subsection for a more 
detailed discussion of precursor emissions covered under RACT.) A 
source would be subject to this requirement if its plant-wide potential 
emissions exceeded the 100 ton threshold for PM2.5 or any 
individual precursor in the baseline year of 2002 or later. We would 
require States to adopt RACT rules covering those sources above this 
threshold for which control

[[Page 66019]]

measures are technically and economically feasible. As discussed in the 
previous section, the number of sources with emissions over 100 tons 
per year of direct PM2.5 or any precursor pollutant make up 
a fairly small percentage of all stationary sources, but on a 
pollutant-by-pollutant basis, they are responsible for 70-90+ percent 
of the emissions in many nonattainment areas. Thus, this proposed 
approach to RACT would provide a mechanism by which States can address 
large emissions sources in all contributing source categories while 
evaluating a relatively small number of sources for consideration of 
RACT and implementation of RACT, as compared to the entire inventory of 
emissions sources.
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    \67\ A stationary source, as defined in various EPA regulations, 
is any building, structure, facility or installation which emits or 
may emit any pollutant regulated under the CAA, and for which all of 
the pollutant-emitting activities belong to the same industrial 
grouping, are located on one or more contiguous or adjacent 
properties, and are under the control of the same person (or persons 
under common control).
---------------------------------------------------------------------------

    Under the second proposed sub-option on emissions thresholds, we 
would require States to conduct RACT determinations for all existing 
stationary sources located in nonattainment areas which have potential 
emissions of 50 tons per year or more of direct PM2.5 or any 
individual precursor to PM2.5. Under this option, States 
would conduct RACT determinations for a larger universe of stationary 
sources responsible for a larger fraction of direct PM2.5 
and precursor emissions. This sub-option would provide a lower 
threshold for RACT that would require States to address smaller sources 
and a broader range of sources under the RACT requirement.
    As a third suboption for a RACT emissions threshold under the first 
alternative, EPA is considering creation of a scaled RACT threshold 
based upon the severity of pollution in the nonattainment area. Under 
this approach, most PM areas would have a 100-ton threshold, but areas 
with a more serious PM problem would have a 50-ton threshold. As a 
variation, another tier (e.g., 25 tons or 10 tons) could be created for 
areas with the highest PM levels.
    The CAA imposes a tiered RACT approach for ozone in subpart 2, and 
EPA believes that the approach has been helpful to assure more 
expeditious attainment of the ozone NAAQS. The EPA has not yet 
determined what design values might be appropriate as cut points for 
lower thresholds, and we specifically request comments and supporting 
analyses on this issue, as well as on the overall approach in general.
    Under all three sub-options for the RACT threshold, the specified 
potential-to-emit threshold would be the minimum starting point for 
RACT analyses. The EPA would not preclude a State from conducting an 
analysis to assess the suitability of RACT controls for sources with 
emissions below the applicable threshold, particularly in areas having 
more serious air quality problems, in order to apply available control 
technology to those existing sources in the nonattainment area that are 
reasonable to control in light of the attainment needs of the area and 
the feasibility of installing such controls.\68\ For example, States 
may find that selected source categories can apply controls cost-
effectively at smaller sources than EPA's baseline applicability 
threshold.
---------------------------------------------------------------------------

    \68\ This approach is consistent with EPA's historical RACT 
policy outlined in the 1992 general preamble (57 FR 13541).
---------------------------------------------------------------------------

    Second proposed alternative for RACT. Under the second proposed 
alternative for RACT, EPA also would require States to conduct a RACT 
analysis and to require RACT for stationary sources, but would allow 
States to decline to impose controls that would otherwise be required 
as RACT if they are not necessary to meet RFP requirements or to attain 
the PM2.5 NAAQS as expeditiously as practicable. In 
connection with other NAAQS, EPA has previously interpreted section 
172(c)(1) to provide that a State must adopt at a minimum those RACM 
measures that are necessary for the nonattainment areas in that State 
to meet RFP requirements and to attain the standards as expeditiously 
as practicable. Under this second proposed alternative, the imposition 
of RACT controls on stationary sources would derive from the same 
statutory provision and impose the same requirement.\69\ The EPA has 
also interpreted section 172(c)(1) to allow a State to decline to adopt 
certain technically and economically feasible measures, if adoption of 
those measures would not advance the attainment date by at least a year 
for the nonattainment area. Under this alternative interpretation, EPA 
would take the position that the RACT requirement for the 
PM2.5 standards should be subject to that limitation as 
well.\70\
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    \69\ Subpart 1 of part D of the CAA includes the general 
provision that States must adopt plans for nonattainment areas which 
require implementation of RACM and RACT. The EPA has interpreted the 
provision to require States to include RACM and RACT measures to the 
extent that such measures will meet RFP requirements and will 
expedite attainment. In Subpart 2 specifically governing one-hour 
ozone nonattainment areas, however, the Act requires States to 
implement RACT on certain stationary sources independent of the 
emissions reductions needed to attain the applicable standard.
    \70\ A recent decision by the U.S. Court of Appeals for the 
District of Columbia has upheld this interpretation for RACM. The 
Court agreed with EPA's view that the statute does not require a 
State to adopt reasonably available control measures without regard 
to whether they would facilitate RFP or would expedite attainment. 
See Sierra Club v. EPA, 294 F.3d 155 (DC Cir. 2002).
---------------------------------------------------------------------------

    In the context of the PM10 NAAQS, EPA has concluded, 
based upon the annual form of the standard, that ``advancement of the 
attainment date'' should mean an advancement of at least one calendar 
year.\71\ Similarly, given that the annual PM2.5 standard is 
considered to be the ``controlling'' standard (as opposed to the 24-
hour standard), and the fact that all sites violating the 
PM2.5 standards are violating the annual standard rather 
than only the 24-hour standard, EPA believes that, under this option, 
advancement of the attainment date by at least one calendar year is 
likewise the proper test for assessing whether RACM (including RACT 
under this option) would advance the attainment date for purposes of 
the PM2.5 NAAQS.
---------------------------------------------------------------------------

    \71\ ``State Implementation Plans; General Preamble for the 
Implementation of Title I of the CAA Amendments of 1990; Proposed 
Rule.'' April 16, 1992 (57 FR 13498). See also Sierra Club v. EPA, 
294 F.3d 155 (DC Cir. 2002).
---------------------------------------------------------------------------

    EPA's second proposed RACT alternative, therefore, would require 
that all States must adopt such RACT measures for stationary sources as 
are necessary to meet RFP requirements and to attain the 
PM2.5 standards as expeditiously as practicable. Under this 
approach, determination of RACT would be part of the broader RACM 
analysis and identification of all measures--for stationary, mobile, 
and area sources--that are technically and economically feasible, and 
that would collectively contribute to advancing the attainment date. 
Because RACT and RACM are considered together under this alternative, 
we are not proposing emissions threshold options for evaluation of 
stationary source RACT as are included under the first proposed 
alternative. In addition, under the second alternative, areas cannot 
avoid the imposition of either available RACT or RACM measures without 
a demonstration showing that there is no combination of such declined 
RACT and RACM measures that would advance the date of attainment by one 
year.
    EPA presumes that many States with PM2.5 nonattainment 
areas will conclude that RACT standards are necessary for many of the 
major stationary sources of emissions within the boundaries of such 
nonattainment areas in order to meet RFP and to expedite attainment of 
the standards. Nevertheless, there may be nonattainment areas in which 
a requirement for RACT controls on certain stationary sources would not

[[Page 66020]]

advance attainment by at least one year. For example, there may be 
nonattainment areas that are within a few tenths of a microgram of the 
standard and the State may determine that other local measures are 
adequate to bring the area into attainment as expeditiously as 
practicable, and that the absence of such controls will not 
significantly impact downwind States. In such areas, EPA believes that 
it might be reasonable to forego the requirement of RACT controls on 
certain stationary sources. Under this second alternative, each State 
would make that determination through its own fact specific RACT 
analysis in the attainment demonstration it submits to the Agency. EPA 
proposes that the RACT analysis under this option would not need to be 
a source-specific analysis, and instead could be conducted on a source-
category basis. This alternative would provide greater flexibility for 
States to design local control programs for such areas.\72\ EPA 
requests comment on all aspects of the second proposed option for RACT.
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    \72\ EPA must initially rely on the States to provide the 
necessary analysis and documentation to show whether RACT measures 
would advance the attainment date at least one year. It should be 
noted that although the court upheld EPA's interpretation of Sec.  
172(c)(1) in Sierra Club v. EPA, supra, the court also concluded in 
that case that neither the local government authority nor EPA had 
provided an adequate analysis to support the determination that 
certain control measures were not in fact capable of advancing the 
attainment date for that area.
---------------------------------------------------------------------------

    Third proposed alternative for RACT. The third proposed alternative 
for RACT would be a combination of the first two and is consistent with 
the RACT approach adopted in the final implementation rule for the 8-
hour ozone program. Because of the importance EPA places on providing 
consistent policies between the ozone and PM2.5 
implementation programs, we propose this alternative as our preferred 
option.
    The third proposed alternative would require States to conduct a 
RACT analysis and impose reasonably available controls for all affected 
stationary sources in the nonattainment area, only for those 
nonattainment areas with attainment dates more than five years from the 
date of designation. The same proposed suboptions with respect to the 
size of sources for consideration discussed under the first alternative 
would be included under this alternative as well.
    For areas with an attainment date within five years of designation 
(e.g. by April 2010 for areas designated in late 2004), RACT would be 
required as described under the second alternative, in which States 
could decline to impose controls that would not otherwise be necessary 
to meet RFP requirements or to attain the PM2.5 NAAQS as 
expeditiously as practicable.
    EPA believes that this alternative, which is in effect a ``hybrid'' 
of the first two, provides important policy advantages. First, it 
recognizes that certain areas are projected to attain the standards 
within five years of designations predominantly due to federal emission 
reduction programs. This alternative enables such areas to decline to 
impose controls on certain categories of sources if their 
implementation would not provide for an advancement of the attainment 
date. Second, it recognizes that those areas that need an attainment 
date extension due to more serious nonattainment problems should be 
required to impose RACT controls on affected sources in return for 
receiving the extension. This alternative is consistent with the 
overall approach taken in the 1990 Clean Air Act amendments, such as 
subpart 2 for ozone, under which areas with more severe air quality 
problems are required to implement a broader range of control 
requirements, in conjunction with attainment dates that are farther 
into the future. EPA requests comment on all three proposed RACT 
alternatives presented above.
    Factors to consider in determining RACT. States should consider a 
number of factors in analyzing whether or not RACT controls will help a 
given area to meet RFP requirements or to attain the standard as 
expeditiously as practicable, and in determining what would constitute 
RACT for a given source category. First, our understanding of 
PM2.5 formation indicates that ambient pollutant levels are 
the result of emissions from a large number of varied sources of direct 
PM2.5 and PM2.5 precursors. Accordingly, each 
State should examine closely the universe of emissions sources in each 
nonattainment area and evaluate carefully whether RACT controls are 
appropriate for some or all of these sources, given the specific nature 
of the nonattainment problem in such area. We anticipate that States 
may decide upon RACT controls that differ from State to State, but that 
are the most effective given the relevant mixture of sources and 
potential controls in the respective nonattainment areas. So long as 
each State can adequately demonstrate that its chosen RACT approach 
will provide for meeting RFP requirements and for attainment of the 
NAAQS as expeditiously as practicable, we anticipate approving plans 
that may elect to control a somewhat different mix of sources or to 
implement somewhat different controls as RACT. Nevertheless, States 
should consider and address RACT measures developed for other areas or 
other States as part of a well reasoned RACT analysis. The EPA's own 
evaluation of State SIPs for compliance with the RACT and RACM 
requirements will include comparison of measures considered or adopted 
by other States.
    Second, implementation of the PM2.5 NAAQS is in its 
initial stages, and many of the designated PM2.5 
nonattainment areas are not current or former PM10 
nonattainment areas. Thus, some existing stationary sources in these 
areas may currently be uncontrolled or undercontrolled for PM or PM 
precursors. Further, emissions controls for existing sources in these 
areas may focus primarily on particulate matter that is filterable at 
stack temperatures and thus may not adequately control condensable 
emissions. In addition, States should bear in mind that the controlled 
sources may have installed emission controls 15 years ago or more, and 
now there may be cost-effective opportunities available to reduce 
emissions further through more comprehensive and improved emissions 
control technologies, or through production process changes that are 
inherently lower in emissions.
    Moreover, improved monitoring methods may enhance the ability of 
sources to maintain the effectiveness of installed emissions controls 
and to reduce emissions by detecting equipment failures more quickly. 
For example, State imposition of requirements for more frequent 
monitoring (e.g., continuous opacity monitors, PM continuous emissions 
monitors, etc.) may provide greater assurance of source compliance and 
quicker correction of inadvertent upset emissions conditions than 
existing approaches.
    Third, even in former or current PM10 nonattainment 
areas, existing requirements for controlling direct PM emissions (e.g., 
with a baghouse or electrostatic precipitator) may not have been 
revised significantly since the 1970's. When EPA established the 
PM10 standards in 1987, we stated in the General Preamble 
that it was reasonable to assume that control technology that 
represented RACT for total suspended particulates (TSP) should satisfy 
the requirement for RACT for PM10. The rationale for this 
provision was that controls for PM10 and TSP would both be 
focused on reducing coarse particulate matter, and specifically that 
fraction of particulate matter that is solid (rather than gaseous or 
condensable) at typical stack

[[Page 66021]]

temperatures. However, emission controls to capture coarse particles in 
some cases may be less effective in controlling PM2.5. For 
this reason, there may be significant opportunities for sources to 
upgrade existing control technologies \73\ and compliance monitoring 
methods to address direct PM emissions contributing to fine particulate 
matter levels with technologies that have advanced significantly over 
the past 15 years.
---------------------------------------------------------------------------

    \73\ For example, see past EPA guidance on PM2.5 
control technologies: Stationary Source Control Techniques Document 
for Fine Particulate Matter (EPA-452/R-97-001), EPA Office of Air 
Quality Planning and Standards, October 1998.
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    Fourth, it will be important for States to conduct RACT 
determinations for stationary sources of PM2.5 precursors as 
well as direct PM2.5 emissions. A significant fraction of 
PM2.5 mass in most areas violating the standards is 
attributed to secondarily-formed components such as sulfate, nitrate, 
and carbonaceous PM, and EPA believes that certain stationary sources 
of these precursors in nonattainment areas currently may be poorly 
controlled. Accordingly, to address these precursors, States should 
review existing sources for emission controls or process changes that 
could be reasonably implemented to reduce emissions from activities 
such as fuel combustion, industrial processes, and solvent usage.
    Finally, EPA believes that the proper and timely implementation of 
RACT by the States is a relevant criterion in assessing State requests 
for any attainment date extension of the applicable attainment date. 
Because EPA anticipates that most States will conclude that RACT 
controls are appropriate and consistent with meeting RFP requirements 
and with expeditious attainment of the standards, EPA assumes that 
States will include a detailed RACT analysis in connection with any 
extension request. The EPA proposes that any State that seeks an 
attainment date extension of 1 to 5 years beyond the initial 5-year 
attainment date provided in section 172(a)(2) must, among other things, 
submit a demonstration satisfactory to EPA showing that the State has 
implemented all RACT for the appropriate sources in that State in order 
to meet RFP requirements and to provide for attainment of the 
PM2.5 standards as expeditiously as practicable.
    EPA requests comment on all aspects of the proposed alternatives 
and guidance for implementing the RACT requirement discussed above.
6. What factors should States consider in determining whether an 
available control technology is technically feasible?
    The technological feasibility of applying an emission reduction 
method to a particular source should consider factors such as the 
sources's process and operating procedures, raw materials, physical 
plant layout, and any other environmental impacts such as water 
pollution, waste disposal, and energy requirements. For example, the 
process, operating procedures, and raw materials used by a source can 
affect the feasibility of implementing process changes that reduce 
emissions and the selection of add-on emission control equipment. The 
operation of, and longevity of, control equipment can be significantly 
influenced by the raw materials used and the process to which it is 
applied. The feasibility of modifying processes or applying control 
equipment also can be influenced by the physical layout of the 
particular plant. The space available in which to implement such 
changes may limit the choices and will also affect the costs of 
control.
    Reducing air emissions may not justify adversely affecting other 
resources by increasing pollution of bodies of water, creating 
additional solid waste disposal problems or creating excessive energy 
demands. An otherwise available control technology may not be 
reasonable if these other environmental impacts cannot reasonably be 
mitigated. For analytic purposes, a State may consider a 
PM2.5 control measure technologically infeasible if, 
considering the availability (and cost) of mitigative adverse impacts 
of that control on other pollution media, the control would not, in the 
State's reasoned judgment, provide a net benefit to public health and 
the environment. In many instances, however, PM2.5 control 
technologies have known energy penalties and adverse effects on other 
media, but such effects and the cost of their mitigation are also known 
and have been borne by owners of existing sources in numerous cases. 
Such well-established adverse effects and their costs are normal and 
assumed to be reasonable and should not, in most cases, justify 
rejection of the potential PM2.5 control technology. The 
costs of preventing adverse water, solid waste and energy impacts will 
also influence the economic feasibility of the PM2.5 control 
technology.
    EPA recommends that States evaluate alternative approaches to 
reducing emissions of particulate matter by reviewing existing EPA 
guidance \74\ and other sources of control technology information. In 
EPA's 1998 guidance, the design, operation and maintenance of general 
particulate matter control systems such as electrostatic precipitators, 
fabric filters, and wet scrubbers are presented. The filterable 
particulate matter collection efficiency of each system is discussed as 
a function of particle size. Information is also presented regarding 
energy and environmental considerations and procedures for estimating 
costs of particulate matter control equipment. Secondary environmental 
impacts are also discussed. Because control technologies and monitoring 
approaches are constantly being improved, the State should also 
consider more updated or advanced technologies not referenced in this 
1998 guidance when conducting a RACT determination. Emissions 
reductions may also be achieved through the application of monitoring 
and maintenance programs that use critical process and control 
parameters to verify that emission controls are operated and maintained 
so that they more continuously achieve the level of control that they 
were designed to achieve.\75\
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    \74\ Stationary Source Control Techniques Document for Fine 
Particulate Matter (EPA-452/R-97-001), EPA Office of Air Quality 
Planning and Standards, October 1998. See also: Controlling 
SO2 Emissions: A Review of Technologies (EPA/600/R-00/
093), EPA Office of Research and Development, November 2000.
    \75\ See EPA's website for more information: http://www.epa.gov/ttn/emc/monitor.html.
---------------------------------------------------------------------------

7. What factors should States consider in determining whether an 
available control technology is economically feasible?
    Economic feasibility considers the cost of reducing emissions and 
the difference between the cost of the emissions reduction approach at 
the particular source and the costs of emissions reduction approaches 
that have been implemented at other similar sources. Absent other 
indications, EPA presumes that it is reasonable for similar sources to 
bear similar costs of emission reduction. Economic feasibility for RACT 
purposes is largely determined by evidence that other sources in a 
source category have in fact applied the control technology or process 
change in question.
    The capital costs, annualized costs, and cost effectiveness of an 
emission reduction technology should be considered in determining its 
economic feasibility. The EPA Air Pollution

[[Page 66022]]

Control Cost Manual \76\ describes procedures for determining these 
costs for stationary sources. The above costs should be determined for 
all technologically feasible emission reduction options.
---------------------------------------------------------------------------

    \76\ EPA Air Pollution Control Cost Manual--Sixth Edition (EPA 
452/B-02-001), EPA Office of Air Quality Planning and Standards, 
Research Triangle Park, NC, Jan 2002.
---------------------------------------------------------------------------

    States may give substantial weight to cost effectiveness in 
evaluating the economic feasibility of an emission reduction 
technology. The cost effectiveness of a technology is its annualized 
cost ($/year) divided by the emissions reduced (i.e., tons/year) which 
yields a cost per amount of emission reduction ($/ton). Cost 
effectiveness provides a value for each emission reduction option that 
is comparable with other options and other facilities.
    In considering what level of control is reasonable, EPA is not 
proposing a fixed dollar per ton cost threshold for RACT. We believe 
that what is considered to be a reasonable control level should vary 
based on the severity of the nonattainment problem in the area. In 
addition, we believe that in determining what are appropriate emission 
control levels, the State should also consider the collective health 
benefits that can be realized in the area due to projected improvements 
in air quality. The health benefits associated with reducing 
PM2.5 levels are significant. Using estimation techniques 
reviewed and deemed reasonable by the National Academy of Sciences, 
national monetized health benefits resulting from reductions in PM 
concentrations are estimated to exceed emission control costs by a 
factor of three to thirty times, depending on the particular controls 
on sources of PM precursor emissions.\77\ This approach is consistent 
with EPA's view that RACT may be related to what is needed for 
attainment. That is, for options where RACT is met where an area 
demonstrates timely attainment and areas with more severe air quality 
problems typically will need to adopt more stringent controls, RACT 
level controls in such areas will require controls at higher cost 
effectiveness levels ($/ton) than areas with less severe air quality 
problems.
---------------------------------------------------------------------------

    \77\ U.S. EPA, 2003 Technical Support Package for Clear Skies; 
U.S. EPA, 2003. See also: Draft Regulatory Impact Analysis: Control 
of Emissions from Nonroad Diesel Engines. United States 
Environmental Protection Agency Office of Air and Radiation EPA420-
R-03-008, April 2003.
---------------------------------------------------------------------------

    Areas with more serious air quality problems typically will need to 
obtain greater levels of emissions reductions from local sources than 
areas with less serious problems, and it would be expected that their 
residents could realize greater health benefits. For this reason, we 
believe that it will be reasonable and appropriate for areas with more 
serious air quality problems and higher design values to impose 
emission reduction requirements with generally higher costs per ton of 
reduced emissions than the cost of emissions reductions in areas with 
lower design values.
    If a source contends that a source-specific RACT level should be 
established because it cannot afford the technology that appears to be 
RACT for other sources in its source category, the source should 
support its claim with such information regarding the impact of 
imposing RACT on:
    1. Fixed and variable production costs ($/unit),
    2. Product supply and demand elasticity,
    3. Product prices (cost absorption vs. cost pass-through),
    4. Expected costs incurred by competitors,
    5. Company profits, and
    6. Employment costs.
8. How should condensable emissions be treated in RACT determinations?
    Certain commercial or industrial activities involving high 
temperature processes (fuel combustion, metal processing, cooking 
operations, etc.) emit gaseous pollutants into the ambient air which 
rapidly condense into particle form. The constituents of these 
condensed particles include, but are not limited to, organic material, 
sulfuric acid, and metals. In general, condensable emissions are taken 
into account wherever possible in emission factors used to develop 
national emission inventories, and States are required under the 
consolidated emissions reporting rule (CERR) \78\ to report condensable 
emissions in each inventory revision. Currently, some States have 
regulations requiring sources to quantify condensable emissions and to 
implement control measures for them, and others do not. In 1990, EPA 
promulgated Method 202 in Appendix M of 40 CFR Part 51 to quantify 
condensable particulate matter emissions.
---------------------------------------------------------------------------

    \78\ The consolidated emissions reporting rule was published in 
the Federal Register on June 10, 2002, pages 39602-39616.
---------------------------------------------------------------------------

    EPA is in the process of developing detailed guidance on a new test 
method which quantifies and can be used to characterize the 
constituents of the PM2.5 emissions including both the 
filterable and condensable portion of the emissions stream. (See 
section III.P for more information.) When a source implements either of 
these test methods addressing condensable emissions, the State will 
likely need to revise the source's emissions limit to account for those 
emissions that were previously unregulated. For the purposes of 
determining RACT applicability and establishing RACT emission limits, 
EPA intends to require the State to adopt the new test method once EPA 
issues its detailed guidance for use by all sources within a 
PM2.5 nonattainment area that are required to reduce 
emissions as part of the area's attainment strategy. The EPA requests 
comment on this proposal with respect to addressing condensable 
emissions in PM2.5 RACT determinations.
9. What are the required dates for submission and implementation of 
RACT measures?
    States must submit adopted RACT rules to EPA within three years of 
designation, at the same time as the attainment demonstration due in 
April 2008. States should also implement any measures determined to be 
RACT expeditiously, as required by section 172. Implementation of RACT 
measures should start no later than the beginning of the final year of 
the three-year period on which attainment is to be assessed. (See 
section I.11. for a discussion of RACT for sources subject to CAIR.) 
For example, if an area has an attainment date of April 2010, then any 
required RACT measures should be in place and operating no later than 
the beginning of 2009, so that their effect will be reflected in the 
air quality levels for calendar year 2009. (See related-discussion in 
section I.11. on the interaction of CAIR and RACT.) If the area has 
recorded air quality levels above 15.1 [mu]g/m3 for the first two years 
of the three-year period, then it is possible that implementation of 
the emission controls in the third year could enable the area to have 
improved air quality below 15.1 and thereby be eligible to receive a 
one-year attainment date extension.
    While EPA expects that States will implement required RACT controls 
by January 2009 in most situations, there may be cases where additional 
implementation time is needed to implement an innovative control 
measure or to achieve a greater level of reduction through a phased 
approach. If an area has provided an adequate demonstration showing 
that an attainment date extension would be appropriate, then the area 
may consider phasing-in certain RACT controls after January 2009. 
Implementation of

[[Page 66023]]

selected RACT controls after January 2009 would only be allowable if 
the state can show why additional time is needed for implementation, 
and still would need to be on a schedule that provides for expeditious 
attainment. In no event could the area wait to implement RACT controls 
until the last few years prior to the attainment date. EPA requests 
comments on this approach for RACT implementation.
10. Under the PM2.5 implementation program, does a State 
need to conduct a RACT determination for an applicable source that 
already has a RACT determination in effect?
    In PM2.5 nonattainment areas, States are required to 
implement the RACT requirement to reduce emissions of direct 
PM2.5 and PM2.5 precursors from applicable 
sources. Under this proposal, RACT would need to be addressed for 
emissions of SO2 and NOX in all areas. For VOC 
and ammonia, this proposal would require RACT to be addressed only in 
those areas for which EPA or the State provides a determination that 
the pollutant is a significant contributor to the local 
PM2.5 problem.
    The sources subject to RACT in a particular nonattainment area will 
depend on which RACT option described in section III.I.5 is adopted in 
the final rule. Under EPA's preferred option, an area projected to 
attain within five years after designations (by April 2010) according 
to the attainment demonstration would need to impose RACT controls only 
on those sources as necessary to attain as expeditiously as 
practicable. An area projected to attain in more than five years would 
be required to conduct RACT determinations for all sources exceeding a 
particular emissions threshold.
    EPA anticipates that for a number of sources located in a 
PM2.5 nonattainment area, the State would have previously 
conducted RACT determinations for VOC or NOX under the 1-
hour ozone standard, or for direct PM10 emissions under the 
PM10 standards. Some of the RACT determinations established 
under these other programs would have been made more recently, while 
other determinations will be more than ten years old. In some cases, a 
new RACT determination would call for the installation of similar 
control technology as the initial RACT determination because the 
relevant pollutant was addressed, the same emission points were 
reviewed, and the same fundamental control techniques would still have 
similar costs. In other cases, a new RACT analysis could determine, for 
example, that better technology has become available, and that cost-
effective emission reductions are achievable.
    For these reasons, EPA recommends that the State should closely 
review any existing RACT determinations established under another NAAQS 
program. We believe States must consider new information that has 
become available since the original RACT determination. EPA proposes 
that where major sources or source categories were previously reviewed 
and sources subsequently installed controls to meet the RACT 
requirement for the pollutant(s) in question, States would be allowed 
to accept the initial RACT analysis as meeting RACT for purposes of the 
PM2.5 program, provided that the State submits as part of 
its SIP revision a certification with appropriate supporting 
information that it previously met the RACT requirement for these 
sources as part of its prior SIP revision, and that the previous 
determination currently represents an appropriate RACT level of control 
for PM2.5. In the alternative, the State should revise the 
SIP to reflect a modified RACT requirement for specific sources or 
source categories.
    In any case where additional information on updated control 
technologies is presented as part of notice-and-comment rulemaking, 
including a RACT SIP submittal for sources previously controlled, 
States (and EPA) must consider the additional information as part of 
that rulemaking. In cases where the State's RACT analysis previously 
concluded that no additional controls were necessary, we propose that a 
new RACT determination is required for that source. The new RACT 
determination is needed to take into account that newer, cost-effective 
control measures may have become available for sources that were not 
previously regulated. EPA believes it may not always be sufficient for 
a State to rely on technology guidance that is several years old in 
conducting new RACT determinations. States should take into account 
appropriate information about updated control technologies as well as 
any additional information obtained through public comments when 
conducting RACT determinations for PM2.5.
    EPA requests comment on the policy approach described above for 
taking existing RACT determinations into account, and on the following 
questions: (1) Should new RACT determinations be required for all 
existing determinations that are older than a specified amount of time 
(such as 10 years old)?; (2) what supporting information should a state 
be required to submit as part of its certification to demonstrate that 
a previous RACT analysis meets the RACT requirement currently for 
purposes of the PM2.5 program?
    Prior BACT/LAER/MACT determinations. In many cases, but not all, 
best available retrofit technology (BACT) or lowest achievable emission 
rate (LAER) provisions for new sources would assure at least RACT level 
controls on such sources. The BACT/LAER analyses do not automatically 
ensure compliance with RACT since the regulated pollutant or source 
applicability may differ and the analyses may be conducted many years 
apart. States may, however, rely on information gathered from prior 
BACT or LAER analyses for the purposes of showing that a source has met 
RACT to the extent the information remains valid. We believe that the 
same logic holds true for emissions standards for municipal waste 
incinerators under CAA section 111(d) and NSR/PSD settlement 
agreements. Where the State is relying on these standards to represent 
a RACT level of control, the State should present their analysis with 
their determination during the SIP adoption process.
    In situations where the State has determined VOC to be a 
significant contributor to PM2.5 formation in an area, 
compliance with MACT standards may be considered in VOC RACT 
determinations. For VOC sources subject to MACT standards, States may 
streamline their RACT analysis by including a discussion of the MACT 
controls and relevant factors such as whether VOCs are well controlled 
under the relevant MACT air toxics standard, which units at the 
facility have MACT controls, and whether any major new developments in 
technologies or costs have occurred subsequent to the MACT standards. 
We believe that there are many VOC sources that are well controlled 
(e.g., through add-on controls or through substitution of non-VOC non-
HAP materials for VOC HAP materials) because they are regulated by the 
MACT standards, which EPA developed under CAA section 112. Any source 
subject to MACT standards must meet a level that is as stringent as the 
best-controlled 12 percent of sources in the industry. Examples of 
these HAP sources that may effectively control VOC emissions include 
organic chemical plants subject to the hazardous organic NESHAP (HON), 
pharmaceutical production facilities, and petroleum refineries.\79\ We 
believe

[[Page 66024]]

that, in many cases, it will be unlikely that States will identify 
emission controls more stringent than the MACT standards that are not 
prohibitively expensive and thus unreasonable. We believe this will 
allow States, in many cases, to rely on the MACT standards for purposes 
of showing that a source has met VOC RACT.
---------------------------------------------------------------------------

    \79\ However, there are some MACT categories for which it may 
not be possible to determine the degree of VOC reductions from the 
MACT standard without additional analysis; for example, the 
miscellaneous metal parts and products (40 CFR part 60, subpart 
MMMM) due to the uncertainty of the compliance method that will be 
selected.
---------------------------------------------------------------------------

    Year-round controls. In some cases, sources subject to 
NOX RACT for PM will also be subject to controls under the 
NOX SIP Call. We proposed in the 8-hour ozone implementation 
rule that certain sources which have installed emission controls to 
comply with the NOX SIP call would be deemed to meet 
NOX RACT for the purposes of the 8-hour ozone implementation 
program. Some of these sources subject to the NOX SIP call 
may choose to control NOX emissions only or primarily during 
the ozone season. For purposes of PM, however, EPA believes that the 
operation of emission controls only or primarily during the ozone 
season would not constitute RACT for PM purposes. Instead, EPA believes 
that RACT for PM should be year-round operation of controls because PM 
concentrations are a year-round problem and NOX emissions 
have a more significant role in PM formation in cooler temperatures.
    As described above, the PM RACT determination is made on a case-by-
case basis. For sources subject to both the NOX SIP call and 
NOX RACT for PM, we believe that, in most cases, the 
additional costs of running the NOX SIP call controls year-
round would be feasible and the cost effectiveness would be lower than 
the average cost effectiveness for many other sources subject to PM 
RACT. For example, if a source that has installed selective catalytic 
reduction to comply with the NOX SIP call extends operation 
of the control equipment from just during the ozone season to year-
round, it would only incur additional operating costs but would achieve 
substantial additional emissions reductions. Thus, where sources have 
installed controls to meet the NOX SIP call, we believe that 
in most cases, RACT for PM would require running the emission controls 
year-round.
11. What policies affect compliance with RACT for electric generating 
units?
    Overview. The Clean Air Interstate Rule (CAIR) (70 FR 25162) 
provides for a cap-and-trade mechanism that States may choose to use to 
achieve the emissions reductions required by CAIR. Under the cap-and-
trade program, electric generating units (EGUs) \80\ must collectively 
reduce their emissions of SO2 and NOX across a 
multi-state area in order to comply with emissions caps for these 
pollutants. A source subject to a cap-and-trade program such as the 
CAIR trading program generally has the option of installing emissions 
control technology, adopting some other strategy (such as using lower 
sulfur coal) to control its emissions, or purchasing emissions 
allowances and thereby effectively paying another source covered by the 
cap to reduce its emissions. The initial CAIR NOX cap is 
effective in 2009, and the initial CAIR SO2 cap is effective 
in 2010. However, EPA analysis shows that sources covered by the 
SO2 trading program will make significant reductions in 
their SO2 emissions well before 2010 because they are able 
to ``bank'' these early reductions. EPA also expects some early 
NOX reductions due to the opportunity for states to use 
their portion of the compliance supplement pool to award credit for 
early annual NOX reductions.
---------------------------------------------------------------------------

    \80\ Under CAIR, states may allow other units to opt into the 
trading program.
---------------------------------------------------------------------------

    Although we expect that many EGUs that will be subject to mandatory 
requirements under the cap-and-trade program under CAIR will not be 
located in PM2.5 nonattainment areas, some of these units 
will be located in nonattainment areas and thus will be subject to RACT 
requirements for large stationary sources. As discussed elsewhere in 
this section, RACT is one of the basic subpart 1 control requirements 
for nonattainment areas. Under the Clean Air Act, a source subject to 
CAIR that is located within a nonattainment area is also subject to the 
nonattainment RACT provisions for emissions of PM2.5 and 
nonattainment plan precursors (including SO2 and, in the 
absence of a finding that NOX is not a significant 
contributor, NOX).
    In this rulemaking, EPA is proposing to determine that in states 
that fulfill their CAIR emission reductions entirely through emission 
reductions from EGUs, CAIR would satisfy SO2 RACT 
requirements for EGU sources in eastern PM2.5 nonattainment 
areas covered by CAIR. EPA is proposing a similar finding for 
NOX RACT for EGUs, subject to a requirement that existing 
SCRs in those nonattainment areas be operated year-round beginning in 
2009. The EPA believes that the SIP provisions for those sources meet 
the ozone Nox RACT requirement. A State that is relying on this 
conclusion for the affected sources should document this reliance in 
its RACT SIP.
    SO2 RACT. As stated elsewhere in this proposal, RACT controls in 
PM2.5 nonattainment areas should be in place and operational 
by the beginning of 2009 unless an attainment date extension is 
obtained. As discussed more fully in the CAIR final rulemaking notice, 
EPA has set the 2009 and 2010 CAIR caps at a level that will require 
EGUs to install emission controls on the maximum total capacity on 
which it is feasible to install emission controls by those dates. 
Although the actual SO2 cap does not become effective until 
2010, we have designed ``banking'' provisions in CAIR so that covered 
EGUs will begin to reduce their SO2 emissions almost 
immediately after CAIR is finalized, and will continue steadily to 
reduce their emissions in anticipation of the 2010 cap and the more 
stringent cap that becomes effective in 2015. The 2015 SO2 
and NOX caps are specifically designed to eliminate all 
SO2 and NOX emissions from EGUs that are highly 
cost effective to control (the first caps represent an interim step 
toward that end). In general, we expect that the largest-emitting 
sources will be the first to install SO2 and NOX 
control technology and that such control technology will gradually be 
installed on progressively smaller-emitting sources until the ultimate 
cap is reached.
    We do not believe that requiring source-specific RACT controls on 
EGUs in nonattainment areas will reduce total SO2 and 
NOX emissions from sources covered by CAIR below the levels 
that would be achieved under CAIR alone. In fact, if states chose to 
require smaller-emitting sources in nonattainment areas to meet source-
specific RACT requirements by 2009, they would likely use labor and 
other resources that would otherwise be used for emission controls on 
larger sources. Because of economies of scale, more boiler-makers may 
be required per megawatt of power generation for smaller units than 
larger units. In this case, the imposition of source-specific RACT on 
smaller emitting sources by 2009 could actually reduce the amount of 
``banking'' that would otherwise occur and result in higher 
SO2 emissions in 2009 as compared to the level that would 
result from CAIR alone.
    In any event, the imposition of source-specific control 
requirements on a limited number of sources also covered by a cap-and-
trade program would not reduce the total emissions from sources subject 
to the program. Under a cap-and-trade program such as CAIR, there is a 
given number of

[[Page 66025]]

allowances that equals a given emission level. Source-specific control 
requirements may affect the temporal distribution of emissions (by 
reducing banking and thus delaying early reductions) or the spatial 
distribution of emissions (by moving them around from one place to 
another), but it does not affect total emissions. If source-specific 
requirements were targeted at the units that can be controlled most 
cost-effectively, then the imposition of source-specific controls would 
likely achieve the same result as the cap-and-trade program. If not, 
however, the imposition of source-specific requirements would make any 
given level of emission reduction more costly than it would be under 
the cap-and-trade program alone. Thus, the imposition of source-
specific RACT on EGUs covered by CAIR would not reduce total emissions, 
but would likely achieve the same total emission reductions in a more 
costly way.
    We recognize that the RACT provisions are an important tool to help 
nonattainment areas come into attainment. However, neither EPA nor the 
States have determined what would constitute SO2 and 
NOX RACT on EGUs for the purpose of the PM2.5 
implementation program. Therefore, it is not possible to determine at 
this time whether, for any particular PM2.5 nonattainment 
area, CAIR or the imposition of RACT on EGUs located in that area would 
achieve greater emissions reductions from those specific EGUs. We are 
confident, however, that CAIR will provide substantial SO2 
emissions reductions in most nonattainment areas in the CAIR region, as 
well as substantial SO2 reductions in attainment areas, 
which together will substantially improve air quality in 
PM2.5 nonattainment areas in the CAIR region. EPA requests 
comment on this option in which EGUs located within PM2.5 
nonattainment areas would be considered to meet their SO2 
RACT requirements through participation in the CAIR trading program.
    NOX RACT. With respect to NOX, we propose to 
find that, for EGUs subject to CAIR SIPs, CAIR satisfies NOX 
RACT in PM2.5 nonattainment areas, except that in addition, 
the state's SIP must ensure that any source that has selective 
catalytic reduction (SCR) technology for summertime NOX 
control will operate the SCR year-round, starting by the beginning of 
2009. In the CAIR final rulemaking notice, EPA found that the operation 
of existing SCRs on a year-round basis, instead of operating them only 
during the ozone season, could achieve NOX reductions at low 
cost relative to other available NOX controls for EGUs or 
for other sectors. EPA projected that power generators would employ 
this control measure for CAIR compliance. Based on this control 
opportunity, EPA estimated the average cost of non-ozone-season 
NOX control at $500/ton. These considerations support a 
finding that RACT should include year-round operation of existing SCRs 
that are located in PM2.5 nonattainment areas. ``Existing'' 
SCR would be defined to include those in place by the date of proposal 
of this rule; using the proposal date rather than the final rule date 
would avoid creating a potential incentive to delay installation of new 
SCR. Because all areas violate the annual form of the PM2.5 
standard and public health can be affected by high PM2.5 
levels in the winter as well as the summer, we believe that year-round 
operation of existing SCR in nonattainment areas will provide 
additional health benefits for relatively low dollar cost per ton of 
pollutant reduced.
    The Act requires RACT to be implemented as expeditiously as 
practicable (and, in the case of areas without an attainment date 
extension, no later than 2009). EPA has considered the following 
factors in proposing January 1, 2009, as the compliance date for year-
round operation of existing SCR. Depending on the source, year-round 
operation of existing SCR involves either no alteration or relatively 
minor alteration of existing equipment. For EGUs where these 
alterations are needed, we expect the work to be conducted during a 
routine outage at a unit, which typically occurs one or more times a 
year. Finally, a year-round operation requirement would not be legally 
applicable to individual sources until the RACT SIP is adopted. We note 
that all EGUs in PM2.5 nonattainment areas would be on 
notice from the date this rule is finalized that RACT SIPs must require 
year-round operation of existing SCRs. Taking these factors into 
account, EPA believes that a January 1, 2009, implementation date would 
provide ample lead time to enable existing SCRs in PM2.5 
nonattainment areas to be operated year-round, including those SCRs for 
which physical alterations are necessary. EPA requests comment on the 
proposal to find that for an EGU located in a PM2.5 
nonattainment area in the CAIR region and having selective catalytic 
reduction control technology to reduce NOX emissions, 
compliance with CAIR satisfies NOX RACT, provided the 
State's SIP ensures that the source operates the SCR year-round, 
starting no later than the beginning of 2009.
    RACT for sources in states requiring non-EGU reductions for CAIR 
compliance or allowing non-EGUs to ``opt into'' CAIR. Under CAIR, a 
State may elect to meet its state caps for SO2 and 
NOX emissions by requiring emissions reductions from 
SO2 and NOX sources that are not electric 
generating units. A second, separate option allowed under CAIR is that 
the state may elect to allow non-EGU sources to voluntarily enter the 
EPA-administered CAIR trading program through an opt-in provision in 
the CAIR model rule. If only part of a state's CAIR reductions are 
achieved by EGUs, and the balance of the reductions obtained from non-
EGU sources, then the stringency of CAIR EGU control would be 
diminished to some extent (an amount that cannot be determined until 
the State submits a SIP indicating which sources are participating in 
the program). Therefore, in these cases, the above rationale for our 
judgment that CAIR satisfies RACT would not apply. For this reason, a 
state selecting either of the above non-EGU options in implementing 
CAIR would need to conduct RACT analyses for EGUs in its 
PM2.5 nonattainment areas (either on an individual basis, or 
using the averaging approach within the nonattainment area) to 
determine whether the lesser EGU reductions satisfy RACT.
    For clarity, it should be noted that a State has authority to 
conduct its own RACT analysis for any source. Also, the proposed 
approach to CAIR and RACT would not prevent a state from requiring 
beyond-RACT controls to provide for expeditous attainment.
    RACT averaging concept. In addition to the option above relating to 
EGU compliance with CAIR and RACT for PM2.5, we propose to 
provide states with a nonattainment area RACT averaging option for 
EGU's previously available in the ozone program. We also propose to 
make this option available to non-EGU categories for which 
accountability of an averaging system could be assured.
    The EPA's NOX RACT guidance (NOX General 
Preamble at 57 FR 55625) under the ozone program encourages States to 
develop NOX RACT programs for EGU's that are based on 
``areawide average emission rates.'' Thus, EPA's 1992 policy for ozone 
RACT provides for States to submit a demonstration as part of their 
RACT submittal showing that the weighted average emission rate from EGU 
sources in the nonattainment area subject to RACT--including sources 
reducing emissions to meet the NOX SIP Call or CAIR 
NOX requirements--meet RACT requirements. Under this 
approach, emission reductions within the nonattainment area must be at 
least

[[Page 66026]]

equivalent to the emission reductions that would result from collective 
application of source-specific RACT within the nonattainment area.
    We envision that the state would first identify presumptive RACT 
for a set of emissions sources, as EPA has not issued guidance on RACT 
for PM2.5 purposes. The state would then propose a program 
that would assure collective emissions reductions equivalent or greater 
than the emissions reductions that would be achieved if the presumptive 
RACT level were met by each individual source.
    EPA proposes that the approach described above be available as a 
way for states to show that EGUs in PM2.5 nonattainment 
areas comply with RACT for NOX and SO2. 
Similarly, EPA proposes that this option be available to non-EGUs. As 
with other economic incentive programs, an approvable program would be 
required to ensure emissions reductions that are quantifiable, surplus, 
enforceable and permanent, and provide an environmental benefit.\81\
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    \81\ Economic incentive program guidance, ``Improving Air 
Quality With Economic Incentive Programs,'' January 2001.
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    We generally solicit comment on whether RACT averaging should be 
permitted in PM2.5 areas for EGUs and non-EGUs, and which 
non-EGU source categories have adequate monitoring methods available to 
provide for accountability in an emissions trading program. In 
addition, we solicit comment on the following topics:
     Whether RACT averaging in PM2.5 nonattainment 
areas, if permitted for both EGUs and non-EGUs, should be separate for 
EGUs and for non-EGUs, or whether averaging among EGUs and non-EGUs 
should be permitted
     Whether a collective approach to RACT should be 
implemented through a rate-based approach (mass of emissions per 
activity level) involving weighted average emission rates (e.g., pounds 
of NOX per MMBtu of heat input), or through a cap-and-trade 
approach that controls total emissions regardless of activity level.
     The appropriate averaging period for showing compliance 
with RACT for PM2.5 purposes
12. Is EPA developing PM2.5 control techniques guidelines 
for specific source categories?
    To date, EPA has not developed a series of control techniques 
guidelines for specific source categories for the purposes of 
PM2.5 implementation. However, there are a number of sources 
of information on recent control technologies and other approaches for 
reducing PM2.5 and precursor emissions from stationary 
sources that are available to States and Tribes and can be helpful in 
making RACT determinations on a source category or source-specific 
basis. These sources of information include EPA's 1998 guidance 
document on stationary source control measures, a 1996 particulate 
matter ``Menu of Options'' document by STAPPA/ALAPCO,\82\ and the EPA's 
Clean Air Technology Center website.\83\ The Clean Air Technology 
Center website includes a wide variety of control technology 
information, including summaries of previous RACT determinations for 
other NAAQS programs, as well as assessments for best available control 
technology (BACT) and lowest achievable emissions rate (LAER) under the 
NSR and prevention of significant deterioration programs.
---------------------------------------------------------------------------

    \82\ Controlling Particulate Matter Under the Clean Air Act: A 
Menu of Options, STAPPA/ALAPCO, July 1996.
    \83\ See EPA's website at http://www.epa.gov/ttn/catc for the 
Clean Air Technology Center and RACT/BACT/LAER Clearinghouse.
---------------------------------------------------------------------------

    Under the implementation program for the 1-hour ozone standard, a 
number of control techniques guidance (CTG) and alternative control 
technology (ACT) documents have been developed for sources of 
NOX and VOC over the past 25 years. (CTGs include a 
presumptive RACT level while ACTs do not. However, ACTs are intended to 
help States in making RACT determinations.) Over a five year period, 
1991-94, EPA issued nine alternative control technique guideline 
documents for large stationary sources of NOX. In 2000, 
updates to the NOX ACT documents were completed for 
stationary internal combustion engines and cement kilns. In addition, 
EPA issued a number of CTGs in the 1980's for various source categories 
of NOX and VOC.
    As discussed in section III.I.10 above, EPA recognizes that control 
technology guidance for certain source categories has not been updated 
for many years. Section 183(c) of the CAA, which addresses control 
technologies to address ozone nonattainment problems, requires EPA to 
``revise and update such documents as the Administrator determines 
necessary.'' As new or updated information becomes available States 
should consider the new information in their RACT determinations. A 
State should consider the new information in any RACT determinations or 
certifications that have not been issued by the State as of the time 
such updated information becomes available.\84\
---------------------------------------------------------------------------

    \84\ Available at: http://www.epa.gov/air/caaac/aqm.html#library 
in response to the recent National Research Council report on Air 
Quality Management in the United States (January 2004) [available 
for sale; individual pages available for viewing at http://www.nap.edu/books/0309089328/html].
---------------------------------------------------------------------------

    In addition, EPA is considering related recommendations from the 
Air Quality Management Work Group to the Clean Air Act Advisory 
Committee (CAAAC) dated January 2005. One of the recommendations to the 
CAAAQ is that ``for the SIPs States are required to submit over the 
next several years, EPA and States, locals, and Tribes should promote 
the consideration of multipollutant impacts, including the impacts of 
air toxics, and where there is discretion, select regulatory approaches 
that maximize benefits from controlling key air toxics, as well as 
ozone, PM2.5 and regional haze.'' As part of this effort, 
EPA intends in the future to develop updated technology guidance with 
respect to source categories emitting multiple pollutants in large 
amounts. At this time, however, we think it is unlikely that updated 
technology guidance will be available prior to 2006. The EPA also 
intends to maintain an updated list of references for new 
PM2.5 control technology options. We request that commenters 
submit any additional references for PM2.5 control 
technology information that may be useful for state program 
implementation efforts.
    We also have provided STAPPA/ALAPCO with funding to update its 1996 
Particulate Matter Menu of Options document with additional information 
regarding control measures to reduce PM2.5 and its 
precursors. STAPPA/ALAPCO will be able to draw on the information and 
experience of its broad national membership in developing this updated 
guidance document for PM2.5. While we anticipate that this 
guidance document will provide very useful updated information for 
regulatory agencies and affected sources, the specifications in this 
privately-issued document will not be binding on States, sources, or 
EPA.
13. Background for RACM
    The proposed approach for implementing the RACM requirement for 
PM2.5 is generally consistent with the approach followed 
under other NAAQS implementation programs. Under this approach, the 
State is required to provide a demonstration in its SIP that it has 
adopted all reasonably available measures needed to meet RFP and to 
attain the standard as expeditiously as

[[Page 66027]]

practicable. The demonstration should show that there are no additional 
reasonable measures available that would advance the attainment date by 
at least one year or contribute to RFP for the area. Reasonable 
measures are those measures that are technologically and economically 
feasible within the nonattainment area.
    Under section 172, the attainment date for a nonattainment area is 
presumed to be within five years or less after the effective date of 
designation of the area (e.g., no later than April 2010 for the final 
designations December 2004). Each State is required to evaluate all 
RACM in the area to determine if any such measures could contribute to 
RFP or attainment as expeditiously as practicable. If this evaluation 
of all RACM finds that the State will not be able to demonstrate 
attainment within five years of designation based on the severity of 
the problem or the availability or feasibility of implementing 
controls, then the State may request an attainment date extension. The 
EPA may extend the attainment date for a period of 1 to 5 years, 
provided the State has presented an adequate demonstration showing they 
will implement all RACT and RACM as expeditiously as practicable, and 
still need additional time to attain.
14. What is the proposed approach for implementing RACM?
    The State should begin the process of determining RACM by 
identifying all available control measures in the nonattainment area. 
RACM can apply to mobile sources, area sources, and stationary sources 
not already subject to PM2.5 RACT requirements. If the State 
receives substantive public comment demonstrating through appropriate 
documentation that other specific control measures may be available for 
existing emissions sources or activities in the area, then the State or 
local agency must also closely review those additional control measures 
and determine if they are reasonably available for the area in light of 
local circumstances.
    After the universe of available measures have been identified for 
the sources in the area, the State should evaluate them to determine 
whether implementation of such measures is technically and economically 
feasible, and whether the measure will contribute to advancing the 
attainment date. The State should consider the feasibility of partial 
implementation of certain measures when ``full'' implementation would 
be infeasible. For example, if a State is considering diesel retrofits 
of school buses to be RACM for an area, it may not be feasible to 
retrofit all school buses in the nonattainment area, but it may be 
feasible to retrofit buses for specific school districts. The burden is 
with the State to provide a demonstration to EPA containing the 
justification and supporting documentation describing which measures it 
has determined to be RACM, and which it has not.
    Because the local circumstances for each area (e.g., design value, 
variety of emissions sources, contribution of each PM2.5 
precursor to overall PM2.5 mass) will be different, the set 
of measures that constitute RACM are expected to vary from area to 
area. We anticipate that what may be considered RACM in one area may 
not be considered RACM in another. For example, certain transportation 
control measures, such as high occupancy vehicle (HOV) lanes, may be 
appropriate in a densely populated urban area with a significant 
commuting population, whereas HOV lanes may not be appropriate in a 
less densely populated suburban county.
    In any case, the State or local agency will have the initial 
responsibility for demonstrating to EPA that the area has adopted all 
reasonably available measures so that the area will achieve RFP and 
attain the standards as expeditiously as practicable, in accordance 
with applicable policy and guidance for attainment demonstrations and 
modeling. In reviewing the State's selection of measures for RACM, or 
determination that certain measures are not RACM, EPA may supplement 
the rationale of the State or provide an alternative reason for 
reaching the same conclusion as the State, where appropriate.
    In the past under other SIP programs, there have been instances 
where a State proposed to reject a single measure under consideration 
as RACM because the emission reduction benefits from that measure alone 
would not advance the attainment date by one year. The EPA does not 
believe this approach is appropriate under section 172. In the past, 
EPA has historically interpreted the RACM requirement as requiring the 
collective evaluation of measures and the assessment of whether they 
will advance the attainment date when taken together. EPA believes this 
approach is appropriate for implementing the PM2.5 program.
    In a RACM assessment, the State should not reject an individual 
measure unless the State can show that it has evaluated the collective 
effect of that measure plus all other available control measures to 
determine whether implementing those measures together would advance 
the attainment date. The State's analysis should provide a reasoned 
justification for rejecting any available control measures. The 
supporting information must show why each rejected measure, including 
any measure raised as part of the State's public hearing or public 
comment process, is infeasible or unreasonable, or will not contribute 
to advancing attainment by one year.
    If, for example, a State determines that there are six available 
control measures that are technically and economically feasible, yet 
when implemented together they would not contribute to RFP or advance 
the attainment date, then the state would not be required to adopt the 
measures as RACM. On the other hand, suppose a State determines that 
there are ten available control measures that are technically and 
economically feasible and collectively these measures would advance the 
attainment date by more than a year but less than two years. If the 
State determines that the collective implementation of only seven of 
the measures would still advance the attainment date by at least one 
year, then the state only would be required to adopt the seven measures 
and not all ten.
    EPA emphasizes the importance for States to provide credible and 
thorough RACM analyses as part of their SIP demonstrations, complete 
with adequate supporting information and rationale supporting the 
State's inclusion or rejection of control measures. Recent experience 
with other SIP programs has shown that members of the public may bring 
legal challenges against the State if the State fails to provide an 
adequate technical analysis and supporting information for RACM. We 
believe it is essential that the public have the benefit of reviewing 
credible State RACM analyses in order to be sure that emissions 
reductions will be achieved expeditiously and all requirements for RFP 
and timely attainment will be achieved.
    In the CAIR rulemaking (May 12, 2005 (70 FR at 25221 et seq.), EPA 
found that the control installations projected to result from the CAIR 
NOX and SO2 caps in 2009 and 2010 would be as 
much as feasible from EGUs across the CAIR region by those dates. EPA 
concluded that the CAIR compliance dates represent an aggressive 
schedule that reflects the limitations of the labor pool, and 
equipment/vendor availability, and need for electrical generation 
reliability for installation of emission controls. States should 
recognize these constraints in developing their own compliance 
schedules for emission controls in meeting their CAIR and

[[Page 66028]]

RACT responsibilities. However, the CAIR trading program did not 
specify which sources should install emissions control equipment or 
reduce emissions rates to a specific level in order to meet the 
SO2 and NOX caps under CAIR.
    Based on our experience developing the NOX SIP call, 
CAIR, and the proposed Clear Skies legislation, we believe that many 
power companies will develop their strategies for complying with CAIR 
based, in part, on consultations with air quality officials in the 
areas in which their plants are located. Because power plants are 
generally major emission sources, the operators of those plants 
typically have ongoing relationships with state and local officials 
that will be involved in developing air quality plans. We are aware 
that, in the past, companies have worked with air quality officials to 
meet their emission control obligations under a cap-and-trade approach 
such as the NOX SIP call while also addressing the concerns 
of air quality officials about the air quality impacts of specific 
plants. This has led to controlling emissions from power plants located 
in or near specific ozone nonattainment areas. A number of companies 
have indicated that such collaboration will be even more important as 
the States where they are located address multiple air quality goals 
(e.g., visibility, interstate air pollution, local attainment).
    EPA expects similar consultations between States and power sector 
companies on the location of plants to be controlled under CAIR, 
considering local PM2.5 and ozone attainment needs in 
planning for CAIR compliance. This consultation might reveal 
opportunities to provide improved air quality earlier for large numbers 
of people. Power companies may identify economic advantages in 
situating CAIR controls to help the local area attain; for example, it 
might need to control fewer facilities for the area to reach 
attainment. These benefits may outweigh any additional marginal costs 
the company might incur by forgoing controls on another more distant 
plant. In any event, the intent of these consultations would not be to 
upset market behavior or incentives. Rather, we anticipate that these 
consultations will affect individual control decisions for certain 
PM2.5 areas. In this regard, EPA notes that CAIR SIPs will 
be due in 2006, while local attainment plans are proposed to be due in 
April 2008. EPA suggests that consultations on location of CAIR 
controls would be timely during state development of the CAIR SIP.
15. What factors should States consider in determining whether control 
measures are reasonably available?
    Once the State has identified measures that are available for 
implementation in the nonattainment area, then it must evaluate those 
measures to determine whether implementation of such measures would be 
technically and economically feasible, and would collectively advance 
attainment. Many of the factors that the State should take into 
consideration in determining technical and economic feasibility are 
described earlier in sections 6 and 7 for RACT. Since RACM applies to 
area and mobile sources as well as stationary sources, the State should 
consider other factors as well in conducting its RACM analysis. For 
example, in many cases obtaining emissions reductions from area and 
mobile sources is achieved not by adding control technology to a 
specific emissions source, but by reducing the level of activity of a 
fleet of vehicles or by modifying a type of commercial process. In 
these situations, the State should also consider issues such as the 
social acceptability of the measure; local circumstances such as 
infrastructure, population, or workforce; and the time needed to 
implement the measure in light of the attainment date.
    In regard to economic feasibility, EPA is not proposing a fixed 
dollar per ton cost threshold for RACM, just as it is not doing so for 
RACT. We believe that what is considered to be a reasonable emission 
reduction level can vary based on the severity of the nonattainment 
problem in the area and existing control measures in place. Where the 
severity of the nonattainment problem makes reductions more imperative 
or where essential reductions are more difficult to achieve, the 
acceptable cost of achieving those reductions could increase. In 
addition, we believe that in determining what are economically feasible 
emission reduction levels, the State should also consider the 
collective health benefits that can be realized in the area due to 
projected improvements in air quality. Areas with more serious air 
quality problems typically will need to obtain greater levels of 
emissions reductions from local sources than areas with less serious 
problems, and it would be expected that their residents could realize 
greater health benefits from such reductions. For this reason, we 
believe that it will be reasonable and appropriate for areas with more 
serious air quality problems and higher design values to impose 
emission reduction requirements with generally higher costs per ton 
than the cost of emissions reductions in areas with lower design 
values. In areas with existing control measures in place for the 
purpose of attaining the PM10 standards, the RACM analysis 
should evaluate the cost-effectiveness of additional control measures 
beyond those already being implemented.
    Some nonattainment areas with 2001-2003 design values relatively 
close to the standard may be able to demonstrate through existing 
modeling analyses that they are projected to attain the standard within 
five years of the date of designation, based on the implementation of 
existing federally enforceable national and State measures alone (e.g., 
CAIR, national mobile source measures such as Tier II standards).
    EPA believes that while areas projected to attain within five years 
of designation as a result of existing national measures should still 
be required to conduct a RACM analysis, such areas may be able to 
conduct a limited RACM analysis that does not involve additional air 
quality modeling. A limited analysis of this type could involve the 
review of available reasonable measures, the estimation of potential 
emissions reductions, and the evaluation of the time needed to 
implement these measures. If the State could not achieve significant 
emissions reductions by the beginning of 2008 due to time needed to 
implement reasonable measures or other factors, then it could be 
concluded that reasonably available local measures would not advance 
the attainment date. In lieu of conducting air quality modeling to 
assess the impact of potential RACM measures, existing modeling 
information could be considered in determining the magnitude of 
emissions reductions that could significantly affect air quality and 
potentially result in earlier attainment. If the State, in consultation 
with EPA, determines from this initial, more limited RACM analysis that 
the area may be able to advance its attainment date through 
implementation of reasonable measures, then the State must conduct a 
more detailed RACM analysis, involving air quality modeling analyses, 
to assess whether it can advance the attainment date.
16. What specific source categories and control measures should a State 
evaluate when determining RACM for a nonattainment area?
    Section 172 does not provide a specific list of source categories 
and control measures that must be evaluated for RACM for 
PM2.5. In order to provide further guidance to States in the 
form of a starting list of source categories to

[[Page 66029]]

consider in a RACM analysis, we reviewed 2001 national emission 
inventory information for the more than 200 counties comprising 
PM2.5 nonattainment areas. We have identified the detailed 
stationary, mobile, and area source categories that are major 
contributors to total emissions of PM2.5 and its precursors 
in these counties.\85\ Based on our review of this emission inventory 
data and air quality monitoring data from the speciation trends 
network, we recognize that a wide variety of source categories 
contribute to PM2.5 concentrations in nonattainment areas 
across the country. We have also reviewed a wide variety of information 
sources to identify available control measures for many of these 
categories. Based on this analysis, a list of potential RACM measures 
is included at the end of this section.
---------------------------------------------------------------------------

    \85\ ``Emission inventory analysis for 39 PM2.5 
Nonattainment Areas,'' memo by Richard Damberg to docket OAR-2003-
0062.
---------------------------------------------------------------------------

    Emission reduction measures constituting RACM should be determined 
on an area-by-area basis. We believe that a State should consider each 
of the measures listed in this section to determine if each measure is 
reasonably available in the applicable nonattainment area. However, 
under current EPA policy we do not presume that each of these measures 
is reasonably available in each nonattainment area.
    We propose that each State use the list of source categories in 
this section as a starting point for identifying potentially available 
control strategies for a nonattainment area. States are encouraged and 
expected to add other potentially available measures to the list based 
on its knowledge of the particular universe of emissions sources in the 
area and comments from the general public. We expect that, depending on 
the potential measure being analyzed, the State's degree of evaluation 
will vary as appropriate.
Stationary Source Measures
--Stationary diesel engine retrofit, rebuild or replacement, with 
catalyzed particle filter
--New or upgraded emission control requirements for direct 
PM2.5 emissions at stationary sources (e.g., installation or 
improved performance of control devices such as a baghouse or 
electrostatic precipitator; revised opacity standard; improved 
compliance monitoring methods)
--New or upgraded emission controls for PM2.5 precursors at 
stationary sources (e.g., SO2 controls such as wet or dry 
scrubbers, or reduced sulfur content in fuel)
--Energy efficiency measures to reduce fuel consumption and associated 
pollutant emissions (either from local sources or distant power 
providers)
Mobile Source Measures
--Onroad diesel engine retrofits for school buses \86\ and trucks using 
EPA-verified technologies
--Nonroad diesel engine retrofit, rebuild or replacement, with 
catalyzed particle filter \87\
--Diesel idling programs for trucks, locomotive, and other mobile 
sources \88\
---------------------------------------------------------------------------

    \86\ See Clean School Bus USA program at http://www.epa.gov/cleanschoolbus/. See also: ``What You Should Know About Diesel 
Exhaust and School Bus Idling'', (June 2003, EPA420-F-03-021) at 
http://www.epa.gov/otaq/retrofit/documents/f03021.pdf.
    \87\ See EPA's voluntary diesel retrofit program web site at 
http://www.epa.gov/otaq/retrofit/overfleetowner.htm.
    \88\ See EPA's voluntary diesel retrofit program web site at 
http://www.epa.gov/otaq/retrofit/idling.htm.
---------------------------------------------------------------------------

--Transportation control measures (including those listed in section 
108(f) of the CAA as well as other TCMs), as well as other 
transportation demand management and transportation systems management 
strategies \89\
---------------------------------------------------------------------------

    \89\ See EPA's website on transportation control measures at 
http://www.epa.gov/otaq/transp/traqtcms.htm.
---------------------------------------------------------------------------

--Programs to reduce emissions or accelerate retirement of high 
emitting vehicles, boats, and lawn and garden equipment
--Emissions testing and repair/maintenance programs for onroad vehicles
--Emissions testing and repair/maintenance programs for nonroad heavy-
duty vehicles and equipment \90\
---------------------------------------------------------------------------

    \90\ See EPA's web site on nonroad engines, equipment, and 
vehicles at http://www.epa.gov/otaq/nonroad.htm.
---------------------------------------------------------------------------

--Programs to expand use of clean burning fuels
--Prohibitions on the sale and use of diesel fuel that exceeds a high 
sulfur content
--Low emissions specifications for equipment or fuel used for large 
construction contracts, industrial facilities, ship yards, airports, 
and public or private vehicle fleets
--Opacity or other emissions standards for ``gross-emitting'' diesel 
equipment or vessels
--Reduce dust from paved and unpaved roads
Area Source Measures
--New open burning regulations and/or measures to improve program 
effectiveness
--Smoke management programs to minimize emissions from forest and 
agricultural burning activities
--Programs to reduce emissions from woodstoves and fireplaces
--Controls on emissions from charbroiling or other commercial cooking 
operations
--Reduced solvent usage or solvent substitution (particularly for 
organic compounds with 7 carbon atoms or more, such as toluene, xylene, 
and trimethyl benzene)
--Reduce dust from construction activities and vacant disturbed areas

    We request comment on the specific sources and potential control 
measures recommended for RACM analysis on this list. Commenters 
supporting the inclusion or exclusion of measures for this list should 
provide detailed supporting information as part of their comments.
17. What criteria should be met to ensure effective regulations or 
permits to implement RACT and RACM?
    After the State has identified a RACT or RACM measure for a 
particular nonattainment area, it must then implement that measure 
through a legally enforceable mechanism (e.g., such as a regulation or 
a permit provision). The regulation or permit provision should meet 
four important criteria.
    First, the baseline emissions from the source or group of sources 
and the future year projected emissions should be quantifiable so that 
the projected emissions reductions from the sources can be attributed 
to the specific measures being implemented. It is important that the 
emissions from the source category in question are accurately 
represented in the baseline inventory so that emissions reductions are 
properly calculated. In particular, it is especially important to 
ensure that both the filterable and condensable components of 
PM2.5 are accurately represented in the baseline since 
traditional Federal and State test methods have not included the 
condensable component of particulate matter emissions and have not 
required particle sizing of the filterable component.
    Second, the control measures must be enforceable. This means that 
they must specify clear, unambiguous, and measurable requirements. When 
feasible, the measurable requirements for larger emitting facilities 
should include periodic source testing to establish the capability of 
such facilities to achieve the required emission level. Additionally, 
to verify the continued performance of the control measure,

[[Page 66030]]

specific monitoring programs appropriate for the type of control 
measure employed and the level of emissions must be included to verify 
the continued performance of the control measure. The control measures 
and monitoring program must also have been adopted according to proper 
legal procedures.
    Third, the measures should be replicable. This means that where a 
rule contains procedures for interpreting, changing, or determining 
compliance with the rule, the procedures are sufficiently specific and 
nonsubjective so that two independent entities applying the procedures 
would obtain the same result.
    Fourth, the control measures should be accountable. This means, for 
example, that source-specific emission limits should be permanent and 
must reflect the assumptions used in the SIP demonstration. It also 
means that the SIP must contain a mechanism (such as a title V 
operating permit) to track emission changes at sources and provide for 
corrective action if emissions reductions are not achieved according to 
the plan.

J. What guidance is available to States and Tribes for implementing 
innovative programs to address the PM2.5 problem?

    EPA recognizes that, in order to address their fine particle 
problems, States, Tribes, and local agencies may need to approach 
certain categories of contributing emissions sources in non-traditional 
and innovative ways. EPA has developed several guidance documents on 
innovative programs and policies that may be useful to States and 
Tribes in developing implementation plans for attaining the 
PM2.5 standards, and these are available at http://www.epa.gov/ttn/airinnovations/policy.html.
    Many of these guidance documents and policies provide information 
on approaches that could be used for achieving reductions in emissions 
of PM2.5 and its precursors. In 2001, EPA released guidance 
on the development and implementation of nontraditional measures. This 
guidance, entitled ``Improving Air Quality with Economic Incentive 
Programs,'' provides factors to use to select the right emissions 
control program, as well as guidance on writing nontraditional 
regulations that can be approved into a SIP.
    EPA has also developed policy documents that provide guidance on 
attaining credit in SIPs for voluntary measures which reduce emissions 
from stationary sources \91\ and from mobile sources.\92\ Current SIP 
policy requires that, in order for an emission reduction measure to be 
approved, the emissions reductions must be quantifiable, surplus to 
other program requirements, enforceable, and permanent. These 
``voluntary measures'' policies address situations in which reductions 
will be achieved despite the lack of any directly enforceable 
requirement on the sources of emissions. Under these policies, the 
State would receive credit toward its SIP obligations, and it would be 
responsible for assuring that the emissions reductions credited in the 
SIP actually occur. The State would make an enforceable commitment to 
monitor, assess and report on the emissions reductions resulting from 
the voluntary measures, and to remedy any shortfalls from forecasted 
emissions reductions in a timely manner. An example of stationary 
source measures that could be considered under this policy are no-burn 
days for wood stoves, voluntary woodstove change-out programs, or 
energy conservation programs. Examples of voluntary mobile source 
measures include ozone action plans, reduced switchboard locomotive 
idling, and trip reduction strategies.
---------------------------------------------------------------------------

    \91\ ``Incorporating Emerging and Voluntary Measures in a State 
Implementation Plan,'' EPA Office of Air Quality Planning and 
Standards, Air Quality Strategies and Standards Division, Research 
Triangle Park, NC, September 2004. For further information, see: 
http://www.epa.gov/ttn/oarpg/t1/memoranda/evm_ievm_g.pdf.
    \92\ ``Guidance on Incorporating Voluntary Mobile Source 
Emission Reduction Programs in State Implementation Plans (SIPs),'' 
memorandum from Richard D. Wilson, Acting Assistant Administrator 
for Air and Radiation, to EPA Regional Administrators, October 24, 
1997. For further information, see http://www.epa.gov/otaq/transp/vmweb/vmpoldoc.htm.
---------------------------------------------------------------------------

    The emerging and voluntary measures policy also addresses 
situations where quantification of projected emissions reductions from 
certain measures may be difficult to assess. The policy enables a State 
to receive provisional credit for implementing hard-to-quantify 
measures and sets forth procedures by which the State should evaluate 
program effectiveness.
    Request for Comment on the Integrated Local Emission Reduction 
Program Concept. While significant environmental gains will be achieved 
through the Title IV SO2 Acid Rain Program, the 
NOX SIP Call Program, the Mobile Source Control Program, and 
future implementation of the Clean Air Interstate Rule (CAIR), they are 
not designed to solve every nonattainment problem. Residual 
nonattainment areas will continue to exist after implementation of 
these programs, and EPA believes that it may be useful to provide 
incentives that would stimulate innovative programs to focus additional 
emission reduction efforts designed to help bring these remaining 
nonattainment areas into attainment.
    In particular, it may be useful to provide real incentives for the 
emissions-generating community to help design additional approaches on 
their own initiative that could achieve further environmental benefits 
outside of the sources and emissions subject to these rules.
    EPA is interested in ideas that could create a system which 
satisfies regional reduction obligations through targeted reduction 
strategies for designated nonattainment areas. These ideas and 
incentives could be designed and administered by individual States, or 
groups of States to be incorporated as part of their State and local 
attainment planning process for developing SIPs. We believe that, for 
any such program to be successful, it would need to balance 
accountability and flexibility, as well as respond to the needs and 
concerns of air pollution control agencies and regulated sources.
    To support the concept of the ILERP, EPA solicits comment on the 
development and application of factors or criteria for the States and 
the emissions-generating community that would take into account the 
unique needs of specific nonattainment areas. We also seek comment on 
approaches that would provide incentives for improved monitoring and 
characterization of emissions, e.g., using different factors based on 
the technical rigor and reliability of emissions verification methods.
    Potential mechanisms could range from basic financial incentives to 
more aggressive and innovative approaches. In its simplest form, the 
emissions-generating community could choose to complement or expand 
existing control measures, or perhaps fund new ones. Under the latter 
approach, a specific value could be applied to a ton of local emissions 
to be reduced depending on one or more specific criteria such as: The 
accuracy and technical validity of emissions monitoring used to 
characterize emissions or demonstrate compliance, seasonal timing or 
location of the reductions, population exposure, or other 
considerations.
    For example, reducing PM2.5 from a sector in a 
nonattainment area might receive a greater value than reductions from a 
sector that is upwind of the nonattainment area most of the year, due 
to the relative effectiveness of the measures at reducing population 
exposure and monitoring of PM2.5.

[[Page 66031]]

Another example could be one in which the emissions-generating facility 
receives an incentive in exchange for reductions in other pollutants 
causing PM2.5, based on using technically appropriate air 
quality models to demonstrate superior environmental results.
    We seek comment, consistent with the philosophy of State 
implementation planning, on various approaches that could incorporate 
these ideas to allow the States to implement such a program that would 
result in greater emissions reductions and greater environmental 
results beyond the reductions achieved by the aforementioned existing 
programs.

K. What aspects of transportation conformity and the PM2.5 standard are 
addressed in this proposal?

1. What is transportation conformity?
    Transportation conformity is required under section 176(c) of the 
CAA (42 U.S.C. 7506(c)) to ensure that federally supported highway and 
transit project activities are consistent with (``conform to'') the 
purpose of a SIP. Conformity to the purpose of the SIP means that 
transportation activities will not cause new air quality violations, 
worsen existing violations, or delay timely attainment of the NAAQS. 
Transportation conformity applies in nonattainment areas and 
maintenance areas. The EPA's transportation conformity rule, 40 CFR 
part 93, establishes the criteria and procedures for determining 
whether transportation activities conform to the State air quality 
plan. It also establishes criteria and procedures for determining 
whether transportation activities conform in areas where no SIP 
containing mobile source emissions budgets yet exists.
    EPA first published the transportation conformity rule on November 
24, 1993 (58 FR 62188) and has amended the rule several times. On 
August 15, 1997, a comprehensive set of amendments was published that 
clarified and streamlined language from the 1993 transportation 
conformity rule (62 FR 43780). On July 1, 2004 the rule was amended to 
address conformity requirements in 8-hour ozone and PM2.5 
nonattainment and maintenance areas (69 FR 40004). The July 1, 2004 
final rule also incorporated revisions related to a March 1999 court 
decision and further clarified and streamlined language in the previous 
version of the rule. On May 6, 2005, EPA finalized a rule on 
requirements for addressing PM2.5 precursors in 
transportation conformity determinations (70 FR 24280). These 
rulemakings, as well as other relevant conformity materials such as 
guidance documents, policy memoranda, the complete text of the 
conformity rule, and conformity research can be found at EPA's 
transportation conformity Web site, at http://www.epa.gov/otaq/transp.htm (once at the site, click on ``Transportation Conformity.'')
2. Why does transportation conformity apply to PM2.5?
    Transportation conformity will apply to PM2.5 because 
EPA has evidence to indicate that motor vehicle emissions are 
significant contributors to the air quality problem in most, if not 
all, PM2.5 nonattainment areas. Gasoline and diesel vehicles 
emit fine particulate matter as well as PM2.5 precursors 
such as volatile organic compounds (VOCs), NOX, sulfur 
oxides (SO2) and ammonia (NH3). Travel on paved 
and unpaved roads results in re-entrained road dust which may 
contribute to measured PM2.5 violations. Also, in some areas 
transportation-related construction activities may also result in the 
creation of significant amounts of dust.
3. Why is EPA discussing transportation conformity in this proposal?
    We are not proposing changes to the transportation conformity rule 
in today's proposal. Instead, we are discussing transportation 
conformity in this notice in order to provide affected parties with 
information on when transportation conformity will be implemented under 
the PM2.5 standard. Affected parties may include State and 
local transportation and air quality agencies, metropolitan planning 
organizations (MPOs) and the U.S. Department of Transportation (DOT). 
To determine whether this discussion affects your organization, you 
should carefully examine the applicability requirements in 40 CFR 
93.102 of the transportation conformity rule.
4. What revisions have been made to the transportation conformity rule 
to address the PM2.5 standard?
    The July 1, 2004, transportation conformity rule revisions contain 
a number of provisions that apply to PM2.5 nonattainment and 
maintenance areas. For example, the July 1, 2004, rule contains 
requirements for: regional conformity tests in PM2.5 areas; 
considering direct emissions of PM2.5 (i.e., exhaust, brake 
and tire wear and re-entrained dust) in regional emissions analyses; 
considering re-entrained road dust and construction-related fugitive 
dust in regional emissions analyses and compliance with 
PM2.5 SIP control measures.
    In addition to the July 1, 2004 rule, EPA published a final rule on 
May 6, 2005 (70 FR 24280) that established requirements for addressing 
PM2.5 precursors in regional emissions analyses. EPA also 
published a supplemental notice of proposed rulemaking \93\ requesting 
comment on a number of options for consideration of localized emissions 
impacts of individual transportation projects in PM2.5 
nonattainment and maintenance areas. We intend to finalize requirements 
for localized emissions analyses in PM2.5 nonattainment and 
maintenance areas as expeditiously as possible.
---------------------------------------------------------------------------

    \93\ 69 FR 72140 (December 13, 2004).
---------------------------------------------------------------------------

5. Does EPA plan to revoke the PM10 standard?
    No, we are not planning to revoke the PM10 standards at 
this time. We are in the process of reviewing the PM NAAQS, and as part 
of that process we are considering whether the current scientific 
literature would support the establishment of coarse particle 
standards. (Coarse particles are those which have an aerodynamic 
diameter between 2.5 and 10 micrometers.)
6. Will some areas be demonstrating conformity for both PM10 
and PM2.5 at the same time?
    Yes, since the PM10 standard is being retained, a small 
number of areas will be required to determine conformity to both air 
quality standards. PM10 nonattainment and maintenance areas 
should continue to make PM10 conformity determinations 
according to the conformity regulation. By the end of the one-year 
grace period, conformity of metropolitan plans and transportation 
improvement programs (TIPs) must be determined, reflecting the 
metropolitan area and any associated donut areas (defined below).
7. When does transportation conformity apply to PM2.5 
nonattainment areas?
    Transportation conformity applies to PM2.5 nonattainment 
areas one year after the effective date of an area's designation. This 
one-year grace period is found in the CAA at 42 U.S.C. 7506(c)(6). 
Specifically, this section of the CAA provides areas, when they are 
first designated nonattainment for a given air quality standard, with a 
one-year grace period before the conformity regulation applies with 
respect to that standard. Since the PM2.5 standard is a 
different standard from the PM10 standard, every area that 
is designated nonattainment for the PM2.5 standard will have 
a one-year grace period before

[[Page 66032]]

conformity applies for the PM2.5 standard, regardless of 
whether conformity applies in the area for the PM10 
standard.
    For more information, please see the proposed and final rulemaking 
entitled, ``Transportation Conformity Rule Amendments: Minor Revision 
of 18-Month Requirement for Initial SIP Submissions and Addition of 
Grace Period for Newly Designated Nonattainment Areas,'' published 
October 5, 2001, (66 FR 50954), and August 6, 2002, (67 FR 50808), 
respectively for additional discussion of the one-year grace period for 
newly designated areas. (The proposed and final rule can be found on 
EPA's transportation conformity website mentioned above.)
8. How does the 1-year grace period apply in metropolitan areas?
    A one-year grace period for implementation of the conformity 
program applies in metropolitan areas that have an established 
metropolitan planning organization (MPO) that is responsible for 
transportation planning per 23 U.S.C. 134. In these areas, the one-year 
grace period means that, one year after the effective date of an area's 
designation as nonattainment for the PM2.5 standard, the 
area must have a conforming transportation plan and transportation 
improvement program (TIP) \94\ in place to fund or approve 
transportation projects. (For the discussion of which projects can 
proceed after the end of the grace period if a conformity determination 
has not been made by the MPO and U.S. DOT, please see the July 1, 2004 
final rule (69 FR 40037), DOT's January 2, 2002, guidance, published 
February 7, 2002, at 67 FR 5882; and EPA's May 14, 1999, conformity 
guidance. All of these documents can be found on EPA's transportation 
conformity Web site.)
---------------------------------------------------------------------------

    \94\ When used only in this section on transportation 
conformity, the acronym ``TIP'' refers to ``transportation 
improvement program.'' In all other sections of this preamble, the 
acronym ``TIP'' stands for ``tribal implementation plan.''
---------------------------------------------------------------------------

9. How does the 1-year grace period apply in ``donut'' areas?
    For the purposes of conformity, a donut area is the geographic area 
outside a metropolitan planning area boundary, but inside the boundary 
of a designated nonattainment/maintenance area. The conformity 
requirements for donut areas are generally the same as those for 
metropolitan areas, and the MPO would include any projects occurring in 
the donut area in its analysis of the metropolitan transportation plan 
and TIP. A donut area is not an isolated rural area for the purposes of 
the conformity process. Therefore, the one-year grace period applies to 
donut areas in much the same way that it applies to metropolitan areas. 
That is, within one year of the effective date of an area's 
designation, a donut area's projects must be included in an MPO's 
conformity determination for the metropolitan plan and TIP for those 
projects to be funded or approved. If, at the conclusion of the one-
year grace period, the donut area's projects have not been included in 
the MPO's conformity determination, new ``nonexempt'' projects and 
project phases could not be approved in the metropolitan area or the 
donut area.
10. How does the 1-year grace period apply in isolated rural areas?
    For the purposes of conformity, isolated rural nonattainment and 
maintenance areas are areas that do not contain or are not part of any 
metropolitan planning area designated under the transportation planning 
regulations. Isolated rural areas do not have federally required 
metropolitan transportation plans or TIPs and do not have projects that 
are part of the emissions analysis of any MPO's transportation plan or 
TIP. Isolated rural areas are distinguished from ``donut'' areas which 
are geographic areas outside a metropolitan planning area boundary, but 
inside the boundary of a nonattainment or CAA section 175A maintenance 
plan area that is dominated by a metropolitan area(s).
    Because isolated rural areas do not have federally required 
metropolitan transportation plans and TIPs, a conformity determination 
need only be done in an isolated rural area when that area has a 
transportation project or projects that need approval. Therefore, 
isolated rural areas also have a one-year grace period before 
conformity applies under the PM2.5 standard, but at the end 
of that grace period, the area does not have to have made a conformity 
determination. An isolated rural area would be required to do 
conformity only at the point when a new transportation project needs 
approval. This point may occur significantly after the one-year grace 
period has ended. (Conformity requirements for isolated rural areas can 
be found at 40 CFR 93.109(g).)

L. What requirements for general conformity should apply to the 
PM2.5 standards?

1. What is the purpose of the general conformity regulations?
    Section 176(c) of the CAA requires that before a Federal entity 
takes an action, it must make a determination that the proposed action 
will not interfere with the SIP or the State's ability to attain and 
maintain the NAAQS. In November 1993, EPA promulgated two sets of 
regulations to implement section 176(c). One set, known as the 
Transportation Conformity Regulations (described above) deals with 
approval and funding of highway and mass transit project. The other 
set, known as the general conformity regulations, deals with all other 
Federal activities. Besides ensuring that Federal actions will not 
interfere with the SIP, the general conformity program also fosters 
communications with State/local air quality agencies, allows for public 
participation in the review of air quality impacts from Federal 
actions, and allows for air quality review of individual projects. In 
1995, Congress limited the application of section 176(c) to 
nonattainment and maintenance areas only.
2. How is the general conformity program currently structured?
    Due to the very broad definition of ``Federal action'' in the 
statute and the number of Federal agencies subject to the conformity 
requirement, the number of individual conformity decisions could have 
been on the order of a thousand or more per day. To avoid creating an 
unreasonable administrative burden, EPA established de minimis 
emissions levels and exempted certain actions. In addition, the 
regulations allow Federal agencies to develop their own list of actions 
which are presumed to conform. For non-exempt actions that increase 
emissions above the de minimis levels, the Federal agency must 
demonstrate that the action will conform with the SIP or will not cause 
or contribute to any new violation of any standard in any area; 
interfere with provisions in the applicable SIP for maintenance of any 
standard; increase the frequency or severity of any existing violation 
of any standard; or delay timely attainment of any standard or any 
required interim emissions reductions or other milestone. We are 
currently reviewing the general conformity program and, in a separate 
action, may revise the regulations as appropriate, with respect to the 
PM2.5 standards.

[[Page 66033]]

3. Who runs the general conformity program?
    Each Federal agency is responsible for determining if the action it 
takes is subject to the conformity regulations and, if so, whether the 
action conforms to the SIP. Each Federal agency's approach to the 
conformity evaluation differs depending upon the actions being taken. 
Agencies that permit or fund actions subject to the conformity rules 
generally require the applicant to develop the technical support for 
the conformity determination, although some agencies undertake the 
complete evaluation themselves.
4. How does an agency demonstrate conformity?
    Depending upon the pollutant and the specific situation, Federal 
agencies have several options for demonstrating conformity. For actions 
in PM2.5 nonattainment and maintenance areas, the Federal 
agency can demonstrate that the project/action is specifically 
identified and accounted for in the SIP, obtain documentation from the 
State that the emissions are included in the SIP, have the State commit 
to include the emissions in the SIP, or mitigate the emissions or 
offset the emissions from emissions reductions within the same 
nonattainment or maintenance area.
5. General Conformity Regulation Revisions for the PM2.5 
Standards
a. What de minimis emission levels will be set for pollutants that 
contribute to PM2.5 concentrations?
    As discussed in the technical overview section, the key pollutants 
contributing to PM2.5 concentrations in the atmosphere are 
direct PM2.5 emissions, SO2, NOX, VOC, 
and ammonia. Section II.E. proposes policy options for addressing each 
of these precursors under the PM2.5 implementation program. 
After consideration of public comment, EPA will finalize precursor 
requirements for the PM2.5 implementation program. When 
finalized, these precursor requirements will also apply under the 
general conformity program.
    In another rulemaking action, we will propose to establish de 
minimis emission levels for federal projects or actions covered by the 
general conformity program. It is expected that the proposed levels 
will be identical to the nonattainment area major source levels for the 
NSR program. Under this approach, PM2.5 nonattainment areas 
would have de minimis emission levels for general conformity purposes 
of 100 tons per year for all PM2.5 pollutants. These levels 
are also consistent with the levels proposed for VOC and NOX 
emissions in subpart 1 areas under the 8-hour ozone implementation 
strategy.\95\
---------------------------------------------------------------------------

    \95\ See 68 FR 32843.
---------------------------------------------------------------------------

b. What impact will the implementation of the PM2.5 
standards have on a State's general conformity SIP?
    Since we are not now proposing to make specific revisions to the 
general conformity regulations in this proposal, States should not need 
to revise their general conformity SIPs, unless they need to do so to 
ensure the regulations apply in the appropriate areas.
c. Are there any other impacts on the SIPs related to general 
conformity based on implementation of the PM2.5 standards?
    Currently, we are developing a revision to the general conformity 
regulations through a separate rulemaking action, but we are not 
proposing any general conformity revisions in today's action. However, 
as areas develop SIPs for the PM2.5 standards, we recommend 
that State and local air quality agencies work with major facilities 
which are subject to the general conformity regulations (e.g., 
commercial airports and large military bases) to establish an emission 
budget for each facility in order to facilitate future conformity 
determinations. Such a budget could be used by Federal agencies in 
determining conformity or identifying mitigation measures.
6. Is there a 1-year grace period which applies to general conformity 
determinations for the purposes of the PM2.5 standards?
    Yes, the 1-year grace period for implementation of conformity 
requirements after area designations are completed applies to both 
transportation and general conformity.\96\ Therefore, the general 
conformity requirements would not apply to federal actions or projects 
in newly designated nonattainment areas until 1 year after the 
effective date of the PM2.5 area designation. The effective 
date of the PM2.5 designations was April 2005. Thus, general 
conformity requirements would apply in April 2006. As discussed 
earlier, the PM2.5 standards are new and the grace period 
applies to all the areas designated nonattainment for that standard. 
The general conformity regulations specify requirements for actions/
projects in areas without an approved SIP. Those requirements would 
apply to PM2.5 nonattainment areas until the SIP is approved 
by EPA.
---------------------------------------------------------------------------

    \96\ See section 42 U.S.C. 7506(c)(6).
---------------------------------------------------------------------------

M. How will the NSR program address PM2.5 and its precursors?

1. Background
    The existing regulations require both major and minor New Source 
Review (NSR) programs to address any pollutant for which there is a 
national ambient air quality standard (NAAQS) and any precursors to the 
formation of that pollutant when identified for regulation by the 
Administrator. We are proposing to amend the NSR regulations to clarify 
how States, local agencies and Tribes must implement NSR for the 
PM2.5 standard. This proposal also explains how the existing 
rules will be implemented with respect to PM2.5 during the 
State Implementation Plan (SIP) development period.
    The NSR program is a preconstruction permitting program that 
applies when a source is constructed or modified. The NSR program is 
composed of three different programs:
     Prevention of Significant Deterioration (PSD);
     Nonattainment NSR (NA NSR); and,
     Minor NSR.

We often refer to the PSD and Nonattainment NSR program as the major 
NSR program because these programs regulate only major sources.\97\
---------------------------------------------------------------------------

    \97\ The Act uses the terms ``major emitting facility'' to refer 
to sources subject to the PSD program, and ``major stationary 
source'' to refer to sources subject to Nonattainment NSR. CAA 
Sections 169 and 302(j). For ease of reference, we use the term 
``major source'' to refer to both terms.
---------------------------------------------------------------------------

    The PSD program applies when a major source, that is located in an 
area that is designated as attainment or unclassifiable for any 
criteria pollutant, is constructed or undergoes a major 
modification.\98\ The NA NSR program applies when a major source that 
is located in an area that is designated as nonattainment for any 
criteria pollutant is constructed or undergoes a major modification. 
The minor NSR program addresses both major and minor sources that 
undertake construction or modification activities that do not qualify 
as major, and it applies regardless of the designation of the area in 
which a source is located.
---------------------------------------------------------------------------

    \98\ In addition, the PSD program applies to most noncriteria 
regulated pollutants.
---------------------------------------------------------------------------

    The national regulations that apply to each of these programs are 
located in the Code of Federal Regulations (CFR) as shown below:

[[Page 66034]]



------------------------------------------------------------------------
                                            Applicable regulations
------------------------------------------------------------------------
PSD................................  40 CFR 52.21, 40 CFR 51.166, 40 CFR
                                      51.165(b).
NA NSR.............................  40 CFR 52.24, 40 CFR 51.165, 40 CFR
                                      Part 51, Appendix S.
Minor NSR..........................  40 CFR 51.160-164.
------------------------------------------------------------------------

    The PSD requirements include but are not limited to:
     Installation of Best Available Control Technology (BACT),
     Air quality monitoring and modeling analyses to ensure 
that a project's emissions will not cause or contribute to a violation 
of any NAAQS or maximum allowable pollutant increase (PSD increment),
     Notification of Federal Land Manager of nearby Class I 
areas, and
     Public comment on the permit.
    Nonattainment NSR requirements include but are not limited to:
     Installation of Lowest Achievable Emissions Rate (LAER) 
control technology,
     Offsetting new emissions with creditable emissions 
reductions,
     Certification that all major sources owned and operated in 
the State by the same owner are in compliance with all applicable 
requirements under the Act,
     An alternative siting analysis demonstrating that the 
benefits of the proposed source significantly outweigh the 
environmental and social costs imposed as a result of its location, 
construction, or modification,
     Public comment on the permit.
    Minor NSR programs must meet the statutory requirements in Section 
110(a)(2)(c) of the Act which requires ``* * *regulation of the 
modification and construction of any stationary source* * * as 
necessary to assure that the [NAAQS] are achieved.''
    This proposed rule on the implementation of NSR for 
PM2.5 does not supersede existing PM10 NSR 
requirements. EPA is not planning to revoke the original 
PM10 standards at this time. Accordingly, sources are 
subject to NSR for both PM10 and PM2.5.
2. What are the principal elements of the proposed major NSR program 
for PM2.5?
    The table below summarizes the main elements of the existing major 
NSR program that EPA is proposing to address for PM2.5 as a 
regulated NSR pollutant. The EPA's proposal for each element, or where 
appropriate, explanation of implementation under existing regulations, 
is explained in detail in the referenced sections of this preamble.

------------------------------------------------------------------------
  Major NSR program element       EPA proposal             Section
------------------------------------------------------------------------
PSD Major Source Threshold..  100/250 TPY (no       IV.M.4.
                               change).
NA NSR Major Source           100 TPY (no change).  IV.M.4.
 Threshold.
Significant Emissions Rate..  PM2.5 Direct          IV.M.5 & 6.
                               Emissions--10 TPY;
                               SO2--40 TPY.
                              If other precursors
                               are included:.
                              NOX--40 TPY (no
                               change).
                              VOC & Ammonia--
                               determined by SIP.
Control technology: BACT and  Applies for PM2.5     IV.M.9 & 13.
 LAER.                         direct, SO2 and
                               other precursors,
                               if included.
Air quality impact analysis.  Applies for PM2.5...  IV.M.11.
Preconstruction monitoring..  Applies for PM2.5...  IV.M.12.
                              Proposing five
                               options to address..
NA NSR Statewide compliance.  Applies for PM2.5     IV.M.13.
                               direct and
                               precursors, if
                               included.
NA NSR offsets..............  Applies for PM2.5     IV.M.14.
                               direct.
                              Considering for
                               precursor emissions.
Interprecursor Offsetting...  Allowed with          IV.M.14.c.
                               modeling
                               demonstration (no
                               change).
Transition for PSD..........  Continues to apply    IV.M.16.
                               with limited
                               provisions for use
                               of PM10 as a
                               surrogate.
Transition for NA NSR.......  Applies at            IV.M.17.
                               designation through
                               an approved SIP or
                               through 40 CFR part
                               51, appendix S.
Minor NSR...................  Clarifies that State  IV.M.20.
                               and local
                               regulatory programs
                               must include PM2.5
                               requirements for
                               minor sources.
NSR Transport Option........  Flexible              IV.M.21.
                               implementation for
                               areas granted a
                               transport
                               classification.
------------------------------------------------------------------------

    The proposed provisions of the PM2.5 major NSR program 
will be codified in the regulatory text as revisions to 40 CFR 51.165; 
51.166; 52.21; and 40 CFR part 51, Appendix S. We have made two 
assumptions in developing the proposed regulatory text for this rule.
    The first assumption is that the ozone phase II rule will be 
promulgated prior to the promulgation of this proposed PM2.5 
rule. Thus, this proposed PM2.5 rule includes language 
related to ozone precursors and offsets that make the format of the 
ozone rule consistent with the PM2.5 language. The ozone 
provisions contained in the regulatory text set forth below are 
consistent with what we expect to finalize in the ozone rule, and this 
PM2.5 proposal is not intended to alter the substance of the 
ozone phase II rule. To the extent there are changes to the ozone phase 
II regulatory language when promulgated or the ozone rule is not 
promulgated prior to the final PM2.5 rule, we would need to 
make changes to the proposed regulatory text in this PM2.5 
rule at promulgation.
    The paragraphs in the revisions to appendix S of this proposed 
PM2.5 rule have not been numbered at this time, based on the 
second assumption that both of the appendix S rule revisions, appendix 
S changes in the ozone phase II rule (incorporating the 1990 
amendments) and the revisions to appendix S (incorporating NSR reform), 
will be promulgated prior to the final PM2.5 rule. Depending 
on the status of these appendix S rule revisions at the time of 
promulgation of the PM2.5 rule, the paragraphs would be 
numbered accordingly.
3. Should precursors to the formation of ambient concentrations of 
PM2.5 be subject to regulation under NSR?
a. Background
    Certain NAAQS pollutants such as ozone and PM2.5, are 
partially or entirely formed by precursors. Precursors are currently 
regulated under parts C and D of the Act based on either statutory 
presumptions or a scientific determination that the pollutants must be 
regulated to achieve attainment. The following table shows precursors 
that we have identified for regulation under the NSR program because of 
their ability

[[Page 66035]]

to cause or contribute to violations of the ozone NAAQS.

------------------------------------------------------------------------
           Criteria pollutant                  Precursor pollutants
------------------------------------------------------------------------
Ozone:
    Nonattainment Areas................  Volatile Organic Compounds
                                          (VOC) and Nitrogen Oxides
                                          (NOX).
    Attainment Areas...................  VOC \99\.
------------------------------------------------------------------------

Individual SIPs may identify additional precursors as regulated NSR 
pollutants.
---------------------------------------------------------------------------

    \99\ We have proposed to amend the PSD regulations to expressly 
include NOx as an ozone precursor. 68 FR 32802 (June 2, 
2003).
---------------------------------------------------------------------------

    Scientific research has shown that various pollutants can 
contribute to ambient PM2.5 concentrations, including the 
following:
     PM2.5 (direct emissions)
     SO2 (as a precursor)
     NOX (as a precursor)
     VOC (as a precursor)
     Ammonia (as a precursor)
b. Should NSR cover precursor emissions in addition to direct emissions 
of PM2.5?
    Contribution of precursors to PM2.5 nonattainment. As 
discussed in Section II, precursors contribute significantly to ambient 
PM2.5 concentrations, producing approximately half of the 
concentration. In most areas of the country, PM2.5 precursor 
emissions are the major contributors to ambient PM2.5 
concentrations. However, it is technically difficult to determine 
impacts of source-specific precursor emissions on ambient air quality 
levels. The relative contribution to ambient PM2.5 
concentrations from each of these pollutants varies by area. The 
relative effect of reducing emissions of these pollutants is also 
highly variable.
    PM2.5 precursors already addressed under NSR. Some 
PM2.5 precursors are already subject to major NSR under 
other NAAQS as shown below:

 
 
 
PM2.5 precursor........................  Existing Program coverage for
                                          major NSR applicability.
NOX....................................  NA NSR for NO2 and Ozone PSD
                                          for NO2.
SO2....................................  NA NSR and PSD for SO2.
VOC....................................  NA NSR and PSD for Ozone.
Ammonia................................  No coverage for NSR (Some areas
                                          regulate ammonia for other air
                                          quality purposes.)
 

    The PM2.5 NSR program could include some, all or none of 
these precursors of PM2.5.
    Legal Authority. As discussed earlier in section II.E. of this 
preamble, we interpret the Clean Air Act to provide explicit authority 
for EPA to regulate precursors but also to grant the Administrator 
discretion to determine how to address precursors for particular 
regulatory purposes. This reading is based on section 302(g) of the 
Clean Air Act which defines the term ``air pollutant'' to include ``any 
precursors to the formation of any air pollutant, to the extent the 
Administrator has identified such precursor or precursors for the 
particular purpose for which the term `air pollutant' is used.'' The 
Administrator's discretion to determine how to address precursors under 
specific programs is also supported by the language in sections 182(f) 
and 189(e) which identifies circumstances where the Administrator may 
determine that it is not appropriate to regulate certain precursors. We 
discuss these provisions in more detail in section II.E.
    Thus, we interpret section 302(g) of the Act to require that the 
Administrator consider how to address precursors under the NSR program. 
The term ``air pollutant'' is incorporated into the NSR provisions for 
various purposes. Sections 182(f) and 189(e) apply to State 
implementation plan provisions and control requirements, which include 
NSR programs.
    With regard to PSD, Section 165(a)(3) of the Act states that new or 
modified major sources must demonstrate that emissions ``will not 
cause, or contribute to, air pollution in excess of any * * * NAAQS in 
any air quality control region.'' A source could not reasonably make 
this demonstration without considering precursors that the Agency has 
identified for this purpose. Section 165(a)(4) of the Act states that a 
new or modified source must apply the Best Available Control Technology 
(BACT) ``for each pollutant subject to regulation under this Act 
emitted from, or which results from, such facility.'' The phrase 
``emitted from, or which results from'' indicates that the statute is 
not limited to direct emissions, but rather extends to precursors as 
well.
    With regard to nonattainment NSR, Sections 172(c)(4) and 173 
require States to demonstrate, among other things, that emissions from 
new or modified major sources are consistent with the achievement of 
``reasonable further progress.'' Reasonable further progress is further 
defined as reductions of the relevant air pollutant, which is defined 
in Section 302(g) to include precursors identified by the Agency as 
subject to regulation for that purpose. Treatment of Precursors for 
Purposes of NSR. As discussed in section II.E., where there is a basis 
to do so, we believe EPA may treat precursors of the same pollutant 
differently under the same program. In this action, we propose 
different approaches for addressing the individual precursors to 
PM2.5 under the Act's NSR provisions. Generally, where the 
scientific data and modeling analyses provide reasonable certainty that 
the pollutant's emissions from stationary sources are a significant 
contributor to ambient PM2.5 concentrations, we believe that 
pollutant should be identified as a ``regulated NSR pollutant'' and 
subject to the PM2.5 NSR provisions. Conversely, where the 
effect of a pollutant's emissions from stationary sources on ambient 
PM2.5 concentrations is subject to substantial uncertainty, 
such that in some circumstances, the pollutant may not result in 
formation of PM2.5, or control of the pollutant may have no 
effect or may even aggravate air quality, we generally believe it is 
unreasonable to establish a nationally-applicable presumption that the 
pollutant is a regulated NSR pollutant subject to the requirements of 
NSR for PM2.5. We also request comment on whether, despite 
reasonable scientific certainty associated with the effect of a

[[Page 66036]]

pollutant's emissions from stationary sources on ambient 
PM2.5 concentrations, there are circumstances that would 
support a finding that the Administrator should not identify the 
pollutant as a precursor for the purposes of the NSR program even if 
the pollutant is so identified for other programs.
    For the purposes of the NSR program, the EPA proposes the following 
options for addressing SO2, NOX, VOCs, and 
ammonia as precursors to PM2.5, and requests comment on 
these options. Commenters should provide detailed technical information 
supporting their comments. Sulfur Dioxide. We are proposing to regulate 
SO2 as a precursor to PM2.5 for purposes of NSR 
in all attainment, unclassifiable and nonattainment areas. We believe 
that the technical discussion and analysis of speciated air quality 
data described in Section II provide an appropriate basis for requiring 
States to address SO2 as a precursor to PM2.5 for 
NSR purposes. The fact that sulfate is a significant contributor (e.g. 
ranging from 9 percent to 40 percent) to PM2.5 nonattainment 
and other air quality problems in all regions of the country is a 
critical piece of evidence supporting this approach. Additionally, 
sulfates are a major contributor to ambient PM2.5 
concentrations in the Eastern United States, roughly equaling the 
concentration of carbonaceous particles.
    EPA does not believe that regulating SO2 as a precursor 
to PM2.5 is likely to add a major burden to sources as 
SO2 is already regulated in these programs as part of the 
NSR program for the SO2 NAAQS. The EPA requests comments on 
this approach to regulate SO2 as a precursor to 
PM2.5 and a ``regulated NSR pollutant'' for purposes of NSR 
in all attainment, unclassifiable and nonattainment areas[boxur] 
Nitrogen Oxides. We are proposing to regulate NOX as a 
precursor to PM2.5 for the NSR program. Under this approach, 
a State or EPA would presume that NOX is a significant 
contributor to an area's ambient PM2.5 concentration. This 
presumption is warranted based on the well-known transformation of 
NOX into nitrates, as discussed in more detail in Section 
II. Nitrates are a significant component of PM2.5 mass in 
northern regions, such as the Midwest and East Coast, and are a main 
contributor to urban PM2.5 mass in California (35-40 
percent). However, as described in Section II, nitrate concentrations 
vary significantly in other regions of the country.
    Thus, a State could exempt NOX from its PM2.5 
NSR program in a specific area by demonstrating to the Administrator's 
satisfaction that NOX emissions from stationary sources in 
that area are not a significant contributor to that area's ambient 
PM2.5 concentrations and the area is not in a State 
identified by EPA as a source of a PM2.5 interstate 
transport problem. Hence, for such an area, the State would not need to 
regulate construction and modification of stationary sources that 
increase emissions of NOX in that area to assure that these 
emissions do not interfere with reasonable further progress or the 
ability of that area to attain or maintain the PM2.5 NAAQS. 
Otherwise, this option would make NOX a precursor for the 
PSD, NA NSR and minor source programs for PM 2.5. EPA does 
not believe that this is likely to add a major burden to sources as 
NOX is already a regulated NSR pollutant. This is because 
NOX is an identified precursor for the ozone NAAQS and an 
indicator for the NO2 NAAQS.
    Volatile Organic Compounds. The consideration of VOC for NSR 
applicability is complicated by the variations in reactions of the 
different species of VOC in the atmospheric transformation into 
PM2.5. Scientific analysis demonstrates that, while the 
transformation of VOC into particles is a complex and uncertain 
process, all VOC potentially play a role in the formation of 
PM2.5. However some specific compounds play a more direct 
role than others. These transformations are discussed in Section II. In 
light of the complexity in assessing the role of VOC in PM 
2.5 formation, we are not proposing to regulate VOC as a 
precursor to PM2.5 for the NSR program.
    However, if a State demonstrates to the Administrator's 
satisfaction that VOC emissions from stationary sources in a specific 
area are a significant contributor to that area's ambient 
PM2.5 concentrations, then the State would regulate VOC (or 
a subset of VOC) as a PM2.5 precursor for the NSR program in 
that area. Therefore, for such an area, the State would need to 
regulate construction and modification of stationary sources that 
increase emissions of VOC in that area to assure that these emissions 
do not interfere with reasonable further progress or the ability of 
that area to attain or maintain the PM2.5 NAAQS. Under 
either scenario, as discussed in Section II, we would still regulate 
high molecular weight VOC (with 25 carbon atoms or more and low vapor 
pressure) as PM2.5 direct emissions because they are emitted 
directly as primary organic particles and exist primarily in the 
condensed phase at ambient temperatures.
    Ammonia. As discussed in section II.E., in some areas of the 
country, ammonia plays a significant role in the formation of ambient 
PM2.5 concentrations. In other areas, ammonia plays a less 
significant role. Our understanding of emissions inventories, and the 
impact that reducing ammonia emissions has on ambient PM2.5 
concentrations, is evolving. In some cases, undesired consequences may 
result from reductions of ammonia, such as increased acidity levels for 
particles and deposition. For these reasons, EPA proposes that ammonia 
would only be identified as a precursor to PM2.5 NAAQS in a 
nonattainment area for purposes of NSR on a case-by-case basis. If the 
State demonstrates to the Administrator's satisfaction that ammonia 
emissions from stationary sources in a specific nonattainment area are 
a significant contributor to that area's ambient PM2.5 
concentrations, then the State would regulate ammonia as a 
PM2.5 precursor under the NSR program in that nonattainment 
area. Therefore the State would need to regulate construction and 
modification of stationary sources that increase emissions of ammonia 
in that area to assure that these emissions do not interfere with 
reasonable further progress or the ability of that area to attain or 
maintain the PM2.5 NAAQS. However, in other nonattainment 
areas, we would not require States to include ammonia in their NSR 
programs. We are not proposing to identify ammonia as a regulated NSR 
pollutant for purposes of PSD in any attainment or unclassifiable 
areas.
    The EPA requests comments on this approach for addressing ammonia 
emissions under the NSR programs.
4. What is a major stationary source (major source) under the major NSR 
program for PM2.5?
a. Background
    The major NSR program applies to construction of major stationary 
sources and major modifications at major stationary sources. A 
stationary source is a ``major source'' if its actual emissions or its 
potential to emit for a specific pollutant equals or exceeds the major 
source threshold for that pollutant established in the CAA. Different 
pollutants are not summed to determine applicability.
b. Proposed Option
    Sections 169 and 302(j) of the Act contain definitions of ``major 
emitting facility'' and ``major stationary source'' that apply to 
programs implemented under part C and subpart 1 of part D of the Act. 
Accordingly, we are proposing to follow these definitions for purposes 
of defining a major emitting facility or

[[Page 66037]]

major stationary source that would be subject to major NSR based on 
direct PM2.5 emissions or emissions of pollutants identified 
as PM2.5 precursors for the NSR program. This approach is 
also consistent with how we treat other criteria pollutants that are 
covered by subpart 1 of part D of the Clean Air Act and thus are not 
subject to a tiered classification system such as the one required for 
ozone nonattainment areas under subpart 2 of the Clean Air Act. EPA 
does not interpret subpart 4 of part D of the Act (creating ``serious'' 
and ``moderate'' classifications for PM10 nonattainment 
areas) to apply to PM2.5.
    This means the major source thresholds would be:

 
 
 
PSD...............................  100 tpy for source categories listed
                                     in 40 CFR 51.166(b)(1)(i)(a) and
                                     52.21(b)(1)(i)(a).
                                    250 tpy for all other source
                                     categories.
NA NSR............................  100 tpy for all source categories.
 

Thus, no regulatory change would be required. See Sec. Sec.  
51.165(a)(1)(iv)(a); 51.166(b)(1)(i); 52.21(b)(1)(i); Appendix S, 
Section II.A.4.
    We request comment on this approach for establishing the major 
source threshold for purposes of the major NSR program for the 
PM2.5 NAAQS. We also request comment on whether the 
definitions in Section 169 and 302(j) are controlling for purposes of 
establishing the definition of major stationary source for the 
PM2.5 NAAQS, which is being implemented under part C and 
subpart 1 of part D of the Act.
c. What is the effect of this proposed option?
    Although our proposed approach is consistent with Sections 169 and 
302(j) and Subpart 1 of part D of the Act, this approach results in a 
higher major source threshold in PM2.5 nonattainment areas 
than the major source threshold that applies in some PM10 
nonattainment areas under Subpart 4 of part D of the Act. This is 
because Section 189(b) of the Act establishes a 70 tpy major source 
threshold for ``serious'' PM10 nonattainment areas while 
``moderate'' PM10 nonattainment areas apply a 100 tpy major 
source threshold based on the definition in section 302(j). We do not 
believe the Act gives us the discretion to promulgate a lower major 
source threshold for pollutants such as PM2.5 that are only 
subject to Subpart 1 of part D of the Act.
    Nevertheless, we do not believe this situation will adversely 
impact attainment of the PM2.5 NAAQS. Data from EPA's 
emissions inventory indicate that a significant number of sources have 
actual PM2.5 emissions in the 100 to 250 tpy range. 
Additionally, the more current inventory data shows that the number of 
sources that would be covered as major sources by a lower major source 
threshold would not increase substantially unless the threshold were 
lowered to 20 tpy or below. Thus, even if EPA had the discretion to 
adopt a 70 tpy major source threshold for PM2.5 
nonattainment areas, we do not believe that many additional sources 
would be subject to the major NSR program in PM2.5 
nonattainment areas.
    States should consider this information in developing their own 
SIP-approved NSR programs. For example, if construction of 
PM2.5 sources emitting 99 tpy with no major NSR controls and 
without mitigation would undermine a State's ability to achieve 
reasonable further progress or attain the PM2.5 NAAQS, then 
the State should consider imposing emissions controls or other 
requirements on these sources through the State's minor NSR program.
5. What should the significant emissions rate be for direct emissions 
of PM2.5?
a. Background
    The determination of what should be classified as a modification 
subject to major NSR is based, in part, on a significant emissions 
rate.\100\ The NSR regulations define this term as a rate above which a 
net emissions increase will trigger major NSR permitting requirements 
if such increase results from a major modification. Sources are exempt 
from major NSR requirements if an emissions increase resulting from a 
modification is below this rate because EPA considers such lower 
emissions increase to be de minimis for purposes of the NSR program. 
The significant emissions rates for criteria pollutants are given 
below:
---------------------------------------------------------------------------

    \100\ For additional background on EPA's interpretation of 
modification and rationale for including significant emissions rates 
in defining major modifications, see 61 FR 38253-54 (Dec. 31, 2002).

------------------------------------------------------------------------
        Criteria pollutant            Significant emissions rate (tpy)
------------------------------------------------------------------------
Ozone.............................  VOC: Any increase--40 tpy (dependent
                                     on NA classification).
                                    NOX: Any increase--40 tpy (dependent
                                     on NA classification).
NO2...............................  NOX: 40 tpy.
PM10..............................  15 tpy.
CO................................  100 tpy.
SO2...............................  40 tpy.
Lead..............................  .6 tpy.
------------------------------------------------------------------------

    The significant emissions rates listed in the above table apply to 
the direct and precursor pollutants listed in the table in section 
III.M.3.a. Significant emissions rates for additional pollutants that 
are subject to the PSD program are contained in the following 
provisions of our regulations:
     40 CFR 51.166(b)(23) and
     40 CFR 52.21(b)(23)
    The EPA performed some preliminary modeling analyses to determine 
an appropriate significant emissions rate for direct emissions of 
PM2.5. Several typical stack heights (ranging from 5 to 200 
meters in height) were modeled using meteorological data from 
Pittsburgh and Oklahoma City. Modelers ran ISCST (Industrial Source 
Complex Short Term model) to assess the impact of emissions increases 
on ambient PM2.5 concentrations. EPA ran models for a 
variety of source types with varying meteorology, release heights, 
building shapes, and receptor locations.
    The modeling produced the following results that we considered 
further in developing the options below:
     Shorter stacks had much more impact in the local area than 
taller stacks.
     Increases of about 5 tons per year from facilities with 
short stacks were shown to cause a measurable increase in ambient 
PM2.5 concentrations.
     Emissions increases from tall stacks, 100 meters or 
greater, were associated with a small increase in ambient 
PM2.5 concentrations in the immediate area.
b. Proposed Options
    Preferred option 1: For direct emissions of PM2.5, EPA 
is proposing to define the significant emissions rate as 10 tons per 
year. This proposal is based fundamentally on the same approach as we 
used in setting the significant emissions rate for total suspended 
particulate matter (TSP) and PM10.
    Historically, the significant emissions rate for TSP (equal or 
exceeding 25 tons per year) was set by analyzing the source size that 
would be unlikely to cause impacts above 4 percent of the standard (4 
percent of 260 [mu]g/m3 or 10.4 [mu]g/m3 as a 24-
hour average). Although a range of source configurations can yield a 
wide range of impacts per ton per year of emissions, EPA reviewed 
typical configurations of major TSP sources and concluded that a major 
modification that increased emissions by 25 tons per year or more would 
be unlikely to increase 24-hour average TSP concentrations by more than 
10.4 [mu]g/m3.
    When EPA set the significant emissions rate for PM10, we 
first determined the ratio between the

[[Page 66038]]

controlling standards for PM10 and TSP, i.e. (150 [mu]g/
m3)/(260 [mu]g/m3) or about 3/5. Both of these 
standards are based on a year's second highest 24-hour average 
concentration. The EPA then set the PM10 significant 
emissions rate at about 3/5 of 25 tons per year, which (with rounding) 
is 15 tons per year. This reflects the fact that a source emitting 25 
tons of TSP per year that has an impact of 4 percent of the TSP 
standard would show an impact from 15 tons PM10 per year of 
approximately 4 percent of the PM10 standard (i.e., 6 [mu]g/
m3).
    Conceptually, EPA is proposing a significant emissions rate for 
PM2.5 based on the same approach. However, the comparison of 
the PM2.5 standard with earlier particulate matter standards 
is complicated by the difference in the averaging times of the 
controlling standards, which are 24-hour average values for TSP and 
PM10 but an annual average value for PM2.5. 
Because the annual standard is the generally controlling standard for 
lowering both short-term and long-term ambient PM2.5 
concentrations (62 FR at 38669), EPA proposes using the annual standard 
to determine the significant emissions rate.
    We conducted additional modeling using the ISC3 model to compare 
annual average and 24-hour average impacts of a fixed emissions rate 
for a variety of source configurations. Several typical stack heights 
(ranging from 5 to 200 meters in height) were modeled using 
meteorological data from Pittsburgh and Oklahoma City and both with and 
without downwash from different building types.
    Our analysis of these modeling results shows that a major 
modification that increases direct PM2.5 emissions by less 
than 10 tons per year would be unlikely to increase annual average 
ambient PM2.5 concentrations by more than 4 percent of the 
annual PM2.5 standard. This finding relies on EPA's 
comparison of annual average versus 24-hour average concentrations. As 
noted above, EPA previously concluded that a source that increases 
PM10 emissions by 15 tons per year would likely cause an 
increase in the 24-hour average PM10 concentration by 6 
[mu]g/m3 or less. Based on the ratios between annual and 24-
hour average concentrations found in EPA's recent modeling, a source 
having that impact would typically increase annual average 
PM10 concentrations by about 0.8 [mu]g/m3 or 
less. The EPA is using a target PM2.5 impact of 4 percent of 
the annual PM2.5 standard or 0.6 [mu]g/m3. This 
target impact is (0.6 [mu]g/m3)/(0.8 [mu]g/m3) or 
3/4 of the potential impact of a 15 ton per year emissions increase. 
This suggests a significant emissions rate of 3/4 of 15 tons per year. 
By rounding the result, we determined that an emissions increase below 
10 tons per year increase in direct PM2.5 emissions would be 
unlikely to increase ambient PM2.5 concentrations by more 
than 4 percent of the annual PM2.5 standard.
    Option 2: The EPA recognizes that a range of source configurations 
can have a range of impacts, that the PM2.5 source 
population differs in some respects from the TSP and PM10 
source population and that the acceptable stationary source impact on 
ambient PM2.5 concentrations may warrant being defined 
differently from the acceptable impact for TSP or PM10. The 
EPA specifically solicits comments on a range of potential thresholds 
ranging from 5 to 15 tons per year for the significant emissions rate 
for PM2.5 direct emissions. The upper bound is a set rate of 
15 tons per year because that is the significant emissions rate for 
PM10. The lower bound is a set rate of 5 tons per year 
because our modeling indicates that an increase in ambient 
PM2.5 concentrations above the target de minimis impact 
level can occur where facilities with short stacks have 
PM2.5 emissions increases of about 5 tons per year.
    We solicit comments on the proposed significant emissions rate 
level and on any other approaches for determining this value.
6. What should be the significant emissions rates for PM2.5 
precursors?
a. Background
    It is difficult to determine the ambient air quality effects that 
result from a single source of emissions of PM2.5 
precursors. There are conservative screening models for predicting 
impacts of large NOX and SO2 sources on ambient 
PM2.5 concentrations. We conducted a range of modeling 
analyses to determine the amount of PM2.5 precursor 
emissions needed to show an increase in ambient PM2.5 
concentrations. These analyses showed that precursor emissions probably 
have some localized impacts, but that most impact is farther downwind 
as precursors have the time to convert to PM2.5. In 
addition, the modeling available at this time does not provide 
sufficient information to estimate impacts of single source emissions 
of ammonia and VOC on ambient PM2.5 concentrations.
    Although we have not finally determined which pollutants (if any) 
will be regulated as PM2.5 precursors under the NSR program, 
we are proposing significant emissions rates in the event that the 
precursors under consideration are identified as such for the major NSR 
program. In the event that EPA adopts an ``opt-in'' approach--that is, 
the presumption that a precursor is not subject to NSR unless a State 
demonstrates to the Administrator's satisfaction that it should be 
included--the State opting in would be required to adopt the 
significant emissions rate for the precursor as set forth below, in the 
absence of demonstrating that another significant emissions rate is 
more appropriate.
b. Proposed Options
    Preferred Option 1: The EPA proposes the use of existing 
significant emissions rates for those pollutants already included in 
major NSR programs as shown below:

------------------------------------------------------------------------
                                     Significant emissions rate  (equal
             Pollutant                          or exceeding)
------------------------------------------------------------------------
NOX...............................  40 tpy.
SO2...............................  40 tpy.
VOC...............................  40 tpy.
------------------------------------------------------------------------

    The use of existing significant emission rates where the 
PM2.5 precursor is also regulated under NSR for a separate 
criteria pollutant harmonizes the NSR program for PM2.5 with 
the NSR programs for those other criteria pollutants. This enables a 
source to determine the NSR impacts of proposed modifications by 
reference to a single significant emissions rate for each pollutant, 
and enables streamlining of determinations regarding the applicable 
control technology and analysis of air quality impacts into a single 
and comprehensive decision making process for both PM2.5 and 
other criteria pollutants that also cover PM2.5 precursors. 
This also follows precedent. When ozone became a criteria pollutant EPA 
used the NOX significant emissions rate from the 
NO2 program.
    EPA has never set a significant emissions rate for ammonia to 
determine major NSR applicability. A necessary component of our 
approach to NSR applicability for ammonia is that those States who 
determine in their SIPs that control of ammonia is necessary will set 
the significant emissions rate for ammonia based on the information 
presented in each attainment demonstration.
    Option 2: Set the precursor levels at the same level as the 
significant emission rate for PM2.5 direct emissions, that 
is, 10 TPY. This would make more modifications subject to 
PM2.5 permitting requirements and therefore could provide 
more protection to the environment. This does not, however, follow the 
precedent in the ozone NSR program. Having several different 
significant emissions rates for the same

[[Page 66039]]

pollutant would add additional complexity to an already complex program 
without necessarily providing additional environmental benefits.
    We request comment on the options listed above and on any other 
approaches for establishing precursor significant emissions rates.
7. What is the role of condensible emissions in determining major NSR 
applicability?
    Condensible emissions commonly make up a significant component of 
PM2.5 emissions. As discussed in Sections IV.I. and IV.P, 
certain sources utilizing high temperature processes emit gaseous 
pollutants into the ambient air which rapidly condense into particle 
form. The constituents of these condensed particles include, but are 
not limited to, organic material, sulfuric acid, nitrates, and metals.
    The EPA has issued guidance clarifying that PM10 
includes condensible particles and that, where condensible particles 
are expected to be significant, States should use methods that measure 
condensible emissions.\101\ States are already required under the 
consolidated emissions reporting rule to report condensible emissions 
in each inventory revision (see 67 FR 39602, June 10, 2001), and Method 
202 in Appendix M of 40 CFR part 51 quantifies condensible particulate 
matter.
---------------------------------------------------------------------------

    \101\ Memo. from Thompson G. Pace, Acting Chief, Particulate 
Matter Programs Branch, to Sean Fitzsimmons, Iowa Department of 
Natural Resources, (Mar. 31, 1994) (copy avaiable at http://www.epa.gov/Region7/programs/artd/air/nsr.nsrmemos/cpm.pdf).
---------------------------------------------------------------------------

    However, because of the flexibility incorporated into EPA's 
approach to the issue and the inconsistent implementation of the 
existing guidance, there have been some misconceptions as to whether 
condensible emissions must be included in a source's PM10 
emissions under the PM10 standard in determining NSR 
applicability. The rules at 40 CFR 51.100 define ``PM emissions'' and 
``PM10 emissions'' by reference to the PM measured by 
applicable reference methods, an equivalent or alternative method 
specified in part 51, or by a test method specified in an approved SIP. 
See 40 CFR 51.100(pp), (rr), and Sec.  52.01 (incorporating Sec.  
51.100 definitions by default). As discussed in Section III.P., 
different test methods measure condensible emissions with varying 
levels of accuracy. In addition, sources often project their emissions 
increases from new construction and modifications based on emissions 
factors, such as AP-42 factors, that in some cases have not accounted 
for condensible emissions. Sources have used other methods to project 
their PM emissions that do not account for condensible emissions (e.g., 
projecting PM10 impacts based on an analysis of existing TSP 
limits without adding condensible emissions).
    We are proposing to clarify in this rule that condensible emissions 
must be included when determining whether a source is subject to the 
major NSR program. The inclusion of condensible emissions in a source's 
PM2.5 emissions is of increasing importance with the change 
in the indicator for particulate matter to PM2.5. 
Condensible emissions are essentially fine particles, and thus are a 
larger fraction of PM2.5 emissions than of TSP or 
PM10 emissions. Condensible emissions commonly make up a 
significant component of PM2.5 emissions, and the failure to 
include them may result in adverse consequences to the environment.
    While EPA has always included condensible emissions in its 
definition of particulate matter emissions, insofar as these emissions 
are measured by applicable test methods or included in emissions 
factors, we believe that the greater significance of condensible 
emissions in addressing PM2.5 warrants greater emphasis on 
including these emissions in implementing the major NSR program. A key 
aspect of this issue is the development of the new test method 
discussed in Section III.P., which quantifies and can be used to 
characterize the constituents of PM2.5 emissions, including 
both the filterable and condensible portion of the emissions stream.
8. What are the requirements of the Prevention of Significant 
Deterioration (PSD) program for attainment areas?
    Background. Sources subject to PSD must:
     Install Best Available Control Technology (BACT),
     Conduct air quality modeling analyses to ensure that the 
project's emissions will not cause or contribute to:
     A violation of any NAAQS or maximum allowable pollutant 
increase (PSD increment),
     Any impact on any Class I area air quality related value, 
and
     As required, perform preconstruction monitoring.

    Each of these elements is discussed below.
9. How should BACT be implemented?
    We are not proposing any change to our current policy for 
implementing BACT requirements at a major source that is subject to the 
requirements of the PSD program. Accordingly, if a physical or 
operational change at the source will result in a significant emissions 
increase and a significant net emissions increase of a regulated NSR 
pollutant, then the major source must apply BACT (for that pollutant) 
to the emissions unit(s) that will be physically or operationally 
changed as a part of that project. Under the PM2.5 major NSR 
program, BACT will be required at an emissions unit if a physical or 
operational change at the unit causes a significant emissions increase 
and significant net emissions increase of PM2.5 direct 
emissions, or a PM2.5 precursor, if applicable at the major 
stationary source.
10. What is EPA's plan for preventing significant deterioration of air 
quality for PM2.5?
    Background. The PSD provisions of the CAA limit the degradation of 
ambient air concentrations of certain pollutants. The CAA does not 
dictate the mechanism to achieve this result for pollutants other than 
PM10 and SO2. One mechanism involves a system of 
``increments'' and area classifications that define significant 
deterioration for individual pollutants. The PSD increments are the 
maximum allowable increase in ambient air concentrations above a 
baseline concentration for a criteria pollutant. The current increments 
are:

----------------------------------------------------------------------------------------------------------------
       Pollutant/averaging time                Class I                  Class II                Class III
----------------------------------------------------------------------------------------------------------------
PM10
    Annual average...................  4 [mu]g/m3               17 [mu]g/m3              34 [mu]g/m3
    8-Hour average...................  8 [mu]g/m3               30 [mu]g/m3              60 [mu]g/m3
SO2
    Annual average...................  2 [mu]g/m3               20 [mu]g/m3              40 [mu]g/m3
    24-hour average..................  5 [mu]g/m3               91 [mu]g/m3              182 [mu]g/m3
    3 Hour Average...................  25 [mu]g/m3              512 [mu]g/m3             700 [mu]g/m3

[[Page 66040]]

 
    NO2--Annual Average..............  2.5 [mu]g/m3             25 [mu]g/m3              50 [mu]g/m3
----------------------------------------------------------------------------------------------------------------

    We are in the process of developing an approach for preventing 
significant deterioration of air quality which may include 
PM2.5 increments. The EPA has placed this action on a 
separate administrative track due to the additional time necessary to 
fully develop any potential proposal. In the interim period, States 
must continue to implement the PM10 increments in 40 CFR 
51.166, 52.21 and/or their SIPs, as applicable.
11. How will the air quality analysis required under section 165(a)(3) 
be implemented?
    Scope of the Requirement. All sources subject to PSD review must 
perform an ambient air quality impact analysis to show that the 
emissions from the source do not cause or contribute to a PSD increment 
or NAAQS violation. See CAA Section 165(a)(3); 40 CFR 51.166(k), 
52.21(k). Accordingly, sources will be required to perform this 
analysis for the PM2.5 NAAQS. Such analyses would consider 
how a source impacts air quality at existing PM2.5 monitor 
locations as well as at other locations which are appropriate to allow 
the comparison of predicted PM2.5 concentrations to the 
NAAQS, based on PM2.5 monitor siting requirements and 
recommendations.
    Sources also will remain under an obligation to perform the air 
quality impact analysis for the PM10 increments and the 
PM10 NAAQS.
    Plan for Development of Significant Impact Levels for PM2.5. The 
Agency has had a practice of exempting sources from the cumulative air 
quality impact analyses where their level of contribution is below a 
significant impact level (SIL). If the maximum ambient impacts from the 
proposed project are less than a SIL, the source
     Is presumed to not cause or significantly contribute to a 
PSD increment or NAAQS violation, and
     Is not required to perform multiple source cumulative 
impact assessments.
    The EPA has long interpreted the ``significant contribution'' test 
set forth in Sec.  51.165(b)(2) to apply to the PSD program since the 
provision applies to major new sources and major modifications located 
in attainment and unclassifiable areas. We have proposed codifying this 
exemption in the PSD regulations in a separate Federal Register notice. 
See 61 FR 38249, 38293 (July 23, 1996). This exemption is based on the 
de minimis nature of the source's contribution.
    The SIL (in [mu]g/m3) have been established for other 
criteria pollutants with PSD increments and are given below:

----------------------------------------------------------------------------------------------------------------
                                                                                Class I SIL
                                                                                 [mu]g/m3
             Criteria pollutant                      Averaging time           (proposed 7/23/   Class II and III
                                                                                  96, not         SIL [mu]g/m3
                                                                               promulgated)
----------------------------------------------------------------------------------------------------------------
SO2........................................  3 hour........................               1.0               25.0
                                             24-hour.......................                .2                5.0
                                             Annual........................                .1                1.0
CO.........................................  1 hour........................               N/A             2000
                                             8 hours.......................               N/A              500
NO2........................................  Annual........................                .1                1.0
PM10.......................................  24-hour.......................                .3                5.0
                                             Annual........................                .2                1.0
----------------------------------------------------------------------------------------------------------------

    Because the SIL benefits the NSR permitting program by exempting 
sources with de minimis impacts from the cumulative air quality 
analysis, EPA is considering establishing PM2.5 SIL for 
emissions of PM2.5 direct. This would enable sources with 
impacts below the SIL to avoid the cumulative air quality impact 
analysis with respect to their potential contribution to a 
PM2.5 NAAQS violation, and create a de minimis ``cause or 
contribute'' definition for violations. Direct PM2.5 
emissions can be evaluated with current models. Therefore, the 
development of SIL for impact evaluations of direct PM2.5 
emissions is technically achievable. The EPA is soliciting comments on 
this question and on methods for the development of PM2.5 
SIL.
    The limited capabilities of existing models make it difficult to 
establish and implement SIL for PM2.5 precursors. Current 
models are only able to accurately address individual source impacts 
associated with direct PM2.5 emissions and, to a lesser 
degree, SO2 and NOX. They can not accurately 
predict single source impacts on ambient PM2.5 
concentrations from other precursors. Without including formation of 
PM2.5 from precursor emissions, the complete impact cannot 
be assessed.
    EPA solicits comments and ideas on the direction to take and 
possible approaches to setting PM2.5 SIL for direct and 
precursor emissions. The EPA intends to use these comments in 
developing SIL on a separate administrative track.
12. How should the PSD pre-construction monitoring requirement be 
implemented for PM2.5?
    EPA solicits comment on what preconstruction monitoring 
requirements should be required by the PM2.5 PSD program.
a. Background
    Sources subject to PSD are subject to pre-construction ambient air 
quality monitoring requirements. See Sections 165(a)(7) and 165(e) of 
the CAA and 40 CFR 51.166(m), Sec.  52.21(m). The PSD permitting 
requirements currently provide that continuous pre-construction ambient 
air quality monitoring must be conducted for any criteria pollutant 
emitted in significant amounts. Under 40 CFR 51.166(i)(5), and 40 CFR 
52.21(i)(5) the reviewing authority has the discretion to exempt an 
applicant from this monitoring requirement if:
     The maximum modeled concentration for the applicable 
averaging period caused by the proposed significant emissions increase 
(or net emissions increase) is less than

[[Page 66041]]

the prescribed significant monitoring concentration (SMC); or
     The existing monitored ambient concentrations are less 
than the prescribed SMC. The following are the SMC for criteria 
pollutants:

------------------------------------------------------------------------
                                         Ambient
            Pollutants                concentration    Averaging  period
                                       ([mu]g/m3)
------------------------------------------------------------------------
CO................................               575  8 hours.
NO2...............................                14  Annual.
SO2...............................                13  24 hours.
PM10..............................                10  24 hours.
------------------------------------------------------------------------

    A source may also use existing data as a surrogate for pre-
construction monitoring if the existing monitored data record is 
determined to be representative of the project's location. For 
information on representative monitoring see ``Ambient Monitoring 
Guideline for Prevention of Significant Deterioration (PSD),'' EPA-450/
4-87-007. Under the current regulatory approach, the need for pre-
construction monitoring by an applicant depends on the spatial and 
temporal coverage of the current monitoring program. The expected 
gradients of concentration between existing monitors also need to be 
considered in deciding whether there is a need for pre-construction 
ambient monitoring.
    The PM2.5 ambient monitoring data are used in the PSD 
program to:
     Establish current PM2.5 NAAQS compliance status 
in the project's impact area;
     Determine a representative background ambient 
PM2.5 concentration which will be included with modeled 
estimates to assess NAAQS compliance.
    The PM2.5 ambient monitoring measurements include 
particulate matter from PM2.5 direct emissions and those 
formed by PM2.5 precursors. If required of a particular 
source, pre-construction monitoring could add one year to the 
permitting process and increase the cost of the permit. Such a 
requirement could have the effect of delaying or preventing sources 
from undertaking environmentally beneficial projects. Accordingly, 
today, we are reconsidering our current approach for satisfying the 
pre-construction monitoring requirements for the purposes of the 
PM2.5 standard. While we are proposing to retain the current 
approach, we are also soliciting comments on innovative options that 
could provide better solutions for satisfying the preconstruction 
monitoring requirements.
b. Options for PSD Preconstruction Monitoring
    Preferred Option 1: Require preconstruction monitoring for all 
major sources of PM2.5 direct and the precursors identified 
as regulated NSR pollutants for PM2.5, but on a case-by-case 
basis allow sources to satisfy this requirement by demonstrating the 
existing PM2.5 network is sufficient. This option will 
provide information on effects of new construction on the 
PM2.5 NAAQS and increments. This option would not require a 
change to the preconstruction monitoring regulations. Concerns about 
this option include:
     It is challenging to find an appropriate location for any 
monitor because PM2.5 direct emissions typically affect 
nearby locations while precursor emissions affect areas farther away.
     The existing monitors can either measure total 
PM2.5 mass or can provide data on the mass of different 
PM2.5 components. The latter type, a speciation monitor, is 
more expensive to operate but provides useful information on the 
contribution of sources of precursor and PM2.5 direct 
emissions.
    In cases where ambient PM2.5 concentration gradients 
between existing monitors are small with little likelihood of local 
site-specific ``hot spots,'' interpolation between existing monitored 
values may be appropriate for determining that the existing 
PM2.5 monitoring network is sufficient. We request comment 
on this approach.
    Option 2: Exempt all PM2.5 sources from doing monitoring 
by determining the existing PM2.5 network is sufficient.
    The use of the acquired PM2.5 monitored data record in 
place of applicant performed pre-construction monitoring would follow 
the current trend in PSD permitting activities. This procedure would 
have the advantage of reducing the time required for permit preparation 
and reduce the costs of the permit application. If ambient 
PM2.5 concentration gradients between monitoring stations 
are small there may be little need for additional monitoring data. The 
need to make discretionary decisions on whether to perform pre-
construction monitoring would be eliminated.
    However, EPA favors the continued use of the case-by-case 
determination as to the need to perform ambient PM2.5 pre-
construction monitoring because of the following limitations to using 
the existing PM2.5 monitoring data record:
     The PM2.5 monitoring data record would require 
spatial interpolation between monitors for the determination of 
appropriate concentrations at the project's location.
     Use of existing monitored data will not increase the 
PM2.5 monitoring data record to confirm or contradict 
conventional perceptions.
     The PM2.5 monitoring data record assumes that 
local hot spots of high PM2.5 concentrations do not exist or 
are already being monitored, which may not be true in all cases.
     Automatic acceptance of existing measurements does not 
follow EPA's current policy that a case-by-case determination needs to 
be made to determine whether pre-construction ambient monitoring is 
necessary.
     When used with the impact modeling, separate 
concentrations of direct and precursor formed particulate matter is 
needed.
    Because of these limitations, existing PM2.5 monitoring 
data must be reviewed for applicability and representativeness before 
being judged appropriate for use in lieu of project acquired ambient 
data. The current PM2.5 network may not be sufficient for 
all applicants. The EPA is soliciting comments and suggestions on this 
issue.
    Option 3: Use Significant Monitoring Concentrations (SMC) to exempt 
sources from pre-construction monitoring requirements. The reviewing 
authority has the discretion to exempt an applicant from the pre-
construction monitoring requirement if the modeled impacts from the 
proposed source are less than the prescribed SMC.
    Similar to the significant impact levels used in modeled impact 
analysis, the PSD process will become simpler through the use of SMC. 
It provides a definitive means for applicants with little impact to opt 
out of the resource intensive, costly, and time consuming pre-
construction ambient air quality monitoring requirement. Therefore, it 
is an important component of the PSD program.
    The form of the SMC will be defined by the form of the impact 
modeling. SMC must be developed for direct PM2.5 emissions 
if the impact modeling only addresses direct emissions of 
PM2.5. This may require different direct and precursor SMC.
    Because of the advantages SMC provide to the NSR permitting 
program, EPA is considering the development of PM2.5 SMC. 
The EPA is soliciting comments on the development and use of 
PM2.5 SMC in the PSD program. This option could be used in 
combination with the other options described.
    Option 4: Use of the available large PM10 data record, 
combined with the recent PM2.5 acquired ambient 
measurements, may provide a monitoring data base that is sufficiently 
distributed to provide representative

[[Page 66042]]

ambient measurements for most applicants. This would alleviate the need 
for pre-construction monitoring and make the PSD program less 
burdensome. This would also provide an interim means to estimate 
ambient PM2.5 concentrations until more extensive monitoring 
data record can be developed.
    However, the differences in characteristics between 
PM2.5 and PM10, and our limited understanding of 
their relationships, presents a problem.
     PM10 conversion factors may not sufficiently 
reflect important industry specific and spatially related 
characteristics of PM2.5.
     Removing the obligation to provide pre-construction 
ambient monitoring data would eliminate industry's contribution to the 
ambient PM2.5 data record.
    This may not be a viable substitute to satisfy the need to provide 
representative PM2.5 ambient measurements. The EPA requests 
comments on these options on pre-construction monitoring.
    Option 5: Existing Sec.  52.21(i)(5)(ii) and Sec.  
51.166(i)(5)(iii) could be interpreted to allow a reviewing authority 
to exempt an applicant from pre-construction monitoring for any 
pollutant for which we have not established a SMC. These provisions 
state that a source may be exempted from preconstruction monitoring 
``if * * * the pollutant is not listed in'' the list of pollutants for 
which SMC have been set.\102\ The original rationale for this exemption 
is based on the lack of adequate methods for measuring ambient 
concentrations of pollutants not on the list. 45 FR at 52709, 52723-
52724. We request comment on this interpretation and any other legal or 
policy rationale that could support applying the text of these 
provisions to exempt sources from preconstruction monitoring if we do 
not define a SMC for PM2.5.
---------------------------------------------------------------------------

    \102\ These sections actually cross-reference the list at Sec.  
51.166(i)(8)(i) and 52.21(i)(8)(i), however we renumbered those 
sections to subsection (i)(5)(i) of those provisions in December 
2002 and inadvertently overlooked correcting the cross-references in 
subsections (i)(5)(ii) and (i)(5)(iii). See 67 FR 80186. It is 
apparent from the rule as originally promulgated in 1980 that 
subsection (i)(5)(i) is now the correct cross-reference. See 45 FR 
52676, 52739 (Aug. 7, 1980). We propose to correct this misnumbering 
and others in this section when we finalize today's proposal.
---------------------------------------------------------------------------

13. Nonattainment New Source Review (NA NSR) Requirements
    Background. Sources subject to NA NSR must:
     Install Lowest Achievable Emissions Rate (LAER) control 
technology;
     Offset new emissions with creditable emissions reductions.
     Certify that all sources owned and operated by the same 
owner within the State are in compliance; and,
     Conduct an alternative siting analysis demonstrating that 
the benefits of the proposed source significantly outweigh the 
environmental and social costs.
14. What are the offset requirements for NA NSR?
    Background. Under Section 173 of the Act, all major sources and 
major modifications at existing sources within a nonattainment area 
must obtain emissions reductions to offset any emissions increases 
resulting from the project in an amount that is at least equal to the 
emissions increase, and that is consistent with reasonable further 
progress towards attainment. In addition, these offsets must be:
     From the same nonattainment area or a different 
nonattainment area that impacts the area where the source is located 
(as long as the other area has the same or higher classification);
     Federally enforceable; and
     Affect air quality in the area where the emissions 
increases from the new major source or modification are occurring.
    We refer to the proportional difference between the amount of the 
required offsets to the amount of emissions increase as the ``offset 
ratio.'' The offset ratios for the other criteria pollutants are:

------------------------------------------------------------------------
                 Pollutant                          Offset ratio
------------------------------------------------------------------------
Ozone.....................................  At least 1:1 to 1.5:1
                                             depending on ozone
                                             nonattainment
                                             classification.
PM10......................................  At least 1:1.
NOX.......................................  At least 1:1.
SO2.......................................  At least 1:1.
Lead......................................  At least 1:1.
CO........................................  At least 1:1.
------------------------------------------------------------------------

a. What is the required offset ratio for PM2.5 direct 
emissions?
    The Act specifies an offset ratio for several situations. In ozone 
nonattainment areas subject to subpart 2, the ratio is set between 
1.1:1 and 1.5:1 depending on the area's level of classification 
pursuant to subpart 2 of the Act. For other nonattainment areas, the 
Act establishes a minimum offset ratio of 1:1 pursuant to Subpart 1 of 
the Act. Since the PM2.5 program is being implemented under 
subpart 1, the applicable ratio is at least 1:1 on a mass basis. We 
request comment on establishing a required offset ratio of at least 
1:1, and on any other option for establishing the required offset ratio 
for PM2.5 direct emissions.
b. Which precursors shall be subject to the offset requirement?
    If we identify a precursor as a regulated NSR pollutant in our 
final action, then that pollutant will be subject to the offset 
requirement. Accordingly, consistent with our preferred approach for 
identifying SO2 as a national precursor and NOX 
as a presumptive national precursor, we propose that SO2 and 
NOX would be subject to the offset requirement. VOCs and 
ammonia would be subject to the offset requirement if we designated 
these pollutants as PM2.5 precursors for the purposes of 
major NSR. If we adopt an approach under which the precursors are 
presumptively excluded from major NSR unless and until a State NA NSR 
program specifically includes such a pollutant, then the precursor 
would not be subject to the offset requirement until such time.
c. What is the required offset ratio for PM2.5 precursors?
    The Act requires that a source obtain offsets for emissions 
increases that occur in a nonattainment area. As with PM2.5 
direct emissions, the minimum offset ratio permitted under the Act 
would be at least 1:1. We believe this ratio should apply where a 
source seeks to offset an increase in emissions of a PM2.5 
precursor with creditable reductions of the same precursor. We request 
comment on requiring an offset ratio of at least 1:1 for any precursor 
identified by the Administrator as a regulated NSR pollutant for 
PM2.5 nonattainment areas. We also request comment on 
whether this mandatory offset ratio should apply to any other precursor 
identified by a State for regulation through its SIP-approved 
nonattainment major NSR program, or whether the State should have the 
option to establish a different offset ratio for such pollutant.
d. Should EPA allow interprecursor trading to comply with the offset 
requirement?
    Because several different pollutants contribute to ambient 
PM2.5 concentrations, we are proposing to allow flexibility 
in how major sources may satisfy the offset requirement. Specifically, 
we are proposing to allow increases in emissions of direct 
PM2.5 to be offset by a decrease in PM2.5 
precursor emissions; and we are proposing to allow an increase in a 
PM2.5 precursor to be offset by a decrease in emissions of a 
different PM2.5 precursor or with PM2.5 direct

[[Page 66043]]

emissions. However, such trades would only be permissible if the State 
shows that the trade is beneficial in reducing overall ambient 
concentrations of PM2.5, and the Administrator approves of 
the trade.
    This additional flexibility might make it difficult to ensure that 
the ambient air concentration of PM2.5 continues to 
decrease. It may also be administratively difficult to manage. 
Nonetheless, we are proposing to allow interprecursor trading to 
generate creditable emissions reductions for use as offsets, because we 
believe that reductions of a different PM2.5 precursor may 
have an equal or better impact in reducing ambient PM2.5 
concentrations if an appropriate offset ratio is determined. 
Additionally, interprecursor trading may provide a reliable source of 
offset emissions in areas where availability may otherwise be limited.
    There are several ways in which interprecursor trading for offsets 
could be implemented. Under one approach, a State would develop its own 
interprecursor trading rule for inclusion in its SIP, based on a 
modeling demonstration for a specific nonattainment area. The EPA would 
review a State interprecursor trading rule during the SIP approval 
process. Once approved, the State could follow this approach on all 
future NSR permits issued. Another approach would be to review 
individual trades as part of the major NSR permitting process. The EPA 
and the public would have an opportunity to comment on whether the 
modeling or other technical evidence presented by a particular State is 
sufficient to support interprecursor offsets for that specific permit 
application. Under either approach, a State could not allow 
interprecursor trading without EPA approval. The EPA is requesting 
comment on whether, States should be required to demonstrate the 
adequacy of offset ratio(s) using modeling as part of a State rule, in 
demonstrations for specific nonattainment areas, and/or on a permit-by-
permit basis, and/or on some other basis. While EPA believes that such 
interprecursor trading flexibility is more appropriate for offsets 
which are statutorily required, we are seeking comment on whether this 
flexibility should also apply to netting analysis for a source.
15. What are the implementation and transition issues associated with 
this rule?
    Implementation. Implementation of NSR for PM2.5 is 
dependent on:
     Who implements the program and
     What regulations are used to implement NSR.
    The components of the NSR programs are implemented by the 
following:
     PSD: States or EPA
     Nonattainment NSR: State or EPA
     Minor NSR: States only
     NSR in Indian country: Tribes or EPA
    Transition. The requirements applicable to NSR SIPs for and the 
obligation to subject sources to NSR permitting for PM2.5 
direct and precursor emissions are codified in the existing federal 
regulations, and can be implemented without specific regulatory 
changes. The existing regulations require NSR for any NAAQS pollutant 
for which an area is designated attainment or nonattainment. See 40 CFR 
51.160(b); 51.165(a)(2)(i); 51.166(a)(7); 52.21(a)(2); 52.24(k); 40 CFR 
part 51, Appendix S, Section IV. A. Thus, the obligation to implement 
PSD for the NAAQS was triggered upon the effective date of the NAAQS, 
as explained in prior guidance.\103\ (In that guidance, EPA also 
explained that PSD permitting for PM10 would be accepted as 
a surrogate approach for this obligation, as discussed in more detail 
below.) For nonattainment areas, permits must comply with the 
nonattainment NSR requirements for PM2.5, either in a 
State's approved part D program or, where that is lacking, as set forth 
in 40 CFR part 51, Appendix S, pursuant to Sec.  52.24(k). To clarify 
how these requirements are to be implemented for PM2.5, we 
are proposing to add provisions to:
---------------------------------------------------------------------------

    \103\ See ``Interim Implementation for New Source Review 
Requirements for PM2.5,'' J. Seitz, EPA (Oct. 23, 1997).
---------------------------------------------------------------------------

     40 CFR 51.166--implementation plan requirements for major 
new or modified sources in attainment or unclassifiable areas;
     40 CFR 51.165--implementation plan requirements for 
addressing major new or modified sources in nonattainment areas and 
sources located in attainment or unclassifiable areas that would impact 
a nonattainment area;
     40 CFR 52.21--the federal implementation plan for areas 
lacking an approved SIP or TIP program to regulate construction or 
modification of major stationary sources in an attainment or 
unclassifiable area.
     40 CFR part 51, Appendix S--provisions for issuing permits 
before a State has an approved implementation plan regulating 
construction or modification of major stationary sources.
16. Implementation of PSD provisions during the SIP Development period
a. Background
    On October 23, 1997, we issued a guidance document entitled 
``Interim Implementation for the New Source Review Requirements for 
PM2.5,'' John Seitz, EPA. As noted in that guidance, Section 
165 of the Act suggests that PSD requirements become effective for a 
new NAAQS upon the effective date of the NAAQS. Section 165(a)(1) of 
the Act provides that no new or modified major source may be 
constructed without a PSD permit that meets all of the Section 165(a) 
requirements with respect to the regulated pollutant. Moreover, Section 
165(a)(3) provides that the emissions from any such source may not 
cause or contribute to a violation of any NAAQS. Also, Section 
165(a)(4) requires BACT for each pollutant subject to PSD regulation. 
The 1997 guidance stated that sources would be allowed to use 
implementation of a PM10 program as a surrogate for meeting 
PM2.5 NSR requirements until certain difficulties were 
resolved, primarily the lack of necessary tools to calculate the 
emissions of PM2.5 and related precursors, the lack of 
adequate modeling techniques to project ambient impacts, and the lack 
of PM2.5 monitoring sites. As discussed in this preamble, 
those difficulties have been resolved in most respects, and where they 
have not been, the proposal contains appropriate provisions to account 
for it. These issues will be finally resolved by the Agency upon 
promulgation of these proposed revisions. When final, these revisions 
will take effect immediately on the effective date in States that issue 
permits under a delegation from EPA. However, States with a SIP-
approved PSD program requiring amendments to incorporate these rule 
changes will need additional time to incorporate the final NSR rule 
change for PM2.5 into their SIPs. For example, a State may 
need to amend their existing regulations to add the specific 
significant emissions rate for PM2.5 or a designated 
precursor. We propose to require that States with SIP-approved PSD 
programs submit revised PSD programs for PM2.5 at the same 
time that they must submit nonattainment NSR programs for 
PM2.5 (April 5, 2008).\104\ However, during the SIP-

[[Page 66044]]

development period, the PM2.5 NAAQS must still be protected 
under the PSD program in such States.
---------------------------------------------------------------------------

    \104\ We note that we requested that States submit 
certifications that their SIPs were adequate with respect to certain 
infrastructure elements, including PSD, for the PM2.5 
NAAQS, by July 2000, consistent with Section 110(a)(1) and (2). See 
Re-issue of the Early Planning Guidance for the Revised Ozone and 
Particulate Matter (PM) National Ambient Air Quality Standards 
(NAAQS) (June 16, 1998). In accordance with a Consent Decree in 
Environmental Defense and American Lung Ass'n v. Johnson, No. 
1:05CV00493 (D.D.C. June 15, 2005), EPA must determine by October 4, 
2008 whether each State has submitted SIP revisions for 
PM2.5 required under section 110(a)(2) of the Clean Air 
Act.
---------------------------------------------------------------------------

b. Proposed Options
    Upon promulgation of this rule, States that accept delegation would 
implement the PM2.5 program in 40 CFR 52.21 from the 
effective date of this rule. However, for SIP-approved States, we seek 
comment on the following options to address implementation of the PSD 
program from the time this rule is final until EPA approves a State's 
PSD program for PM2.5:
Option 1--Continue Implementing the 1997 Guidance To use 
PM10 Program as a Surrogate for PM2.5
    We are proposing that if a SIP-approved State is unable to 
implement a PSD program for the PM2.5 NAAQS upon 
promulgation of these proposed revisions, then the State may continue 
to implement a PM10 program as a surrogate to meet the PSD 
program requirements for PM2.5 pursuant to the 1997 guidance 
mentioned above. However, to assure that use of PM10 is 
protective of the PM2.5 NAAQS, the State must assure that 
two requirements are met. First, States must require sources to 
demonstrate that emissions from construction or operation of the 
facility will not cause or contribute to a violation of the 
PM2.5 NAAQS. We believe that States have the authority to 
implement this requirement through existing SIP-approved programs. 
Second, States will be required to include condensible particulate 
matter emissions in determining major NSR applicability and control 
requirements. As discussed elsewhere, PM10 already includes 
condensible emissions, but many States have not regulated condensible 
emissions in implementing the PM10 NAAQS because EPA has not 
consistently implemented its guidance on this issue. Because 
condensible emissions are essentially fine particles and a larger 
fraction of PM2.5 emissions in comparison to 
PM10, EPA believes inclusion of condensible emissions during 
the SIP development period for PSD programs is necessary to ensure that 
the PM10 indicator acts as an adequate surrogate for 
PM2.5.
Option 2--Update the 1997 Guidance to Include Proposed Provisions of 
this Rule or Amend 40 CFR part 51, Appendix S to State That 40 CFR 
52.21 Would Apply
    Another option would be to update the 1997 guidance to reflect the 
provisions in this proposed rule and allow States to run a 
PM2.5 program pursuant to this updated guidance. 
Alternatively, we would amend Appendix S and 40 CFR 52.24 so that the 
PSD requirements of 40 CFR 52.21 would govern the issuance of major NSR 
permits during the period between the time we finalize this 
implementation rule and when we approve changes to the State's PSD 
program to include PM2.5 as a regulated NSR pollutant. This 
provision would not apply to sources located in Indian Country because 
they are already directly subject to the requirements of 40 CFR 52.21.
    If a State does not believe it has the authority to issue PSD 
permits consistent with Appendix S, then EPA would issue the permit. We 
specifically seek comment on whether we should update the 1997 guidance 
or amend Appendix S to allow States to run a PSD program for 
PM2.5 in attainment areas during the SIP development period.
Option 3--State Requests Delegation of 40 CFR 52.21
    A third option would be for EPA to allow a State to request 
delegation of just the federal PM2.5 program (reflected in 
Sec.  52.21 of our regulations) in that State. A State that otherwise 
has a SIP-approved PSD program could request delegation for 
PM2.5 by informing EPA that it does not intend to submit a 
PSD SIP for PM2.5 in the immediate future.
    After promulgation of a new NAAQS, EPA may allow States up to three 
years to submit a State implementation plan containing a PSD program 
for that pollutant. 42 U.S.C. 7410(a). EPA's PSD regulation at Sec.  
51.166 gives SIP-approved States up to three years to submit a revision 
to their PSD program after EPA amends Sec.  51.166. (Sec.  
51.166(a)(6)). Under section 110(c) of the Act, EPA must promulgate a 
federal implementation plan (FIP) upon finding that a State has failed 
to make a required plan submission or that a required submission is 
inadequate.
    If a State notifies EPA prior to the close of the customary three-
year period that the State does not intend to submit a PSD SIP for 
PM2.5 in the immediate future and requests delegation, we 
believe EPA could find that the State has failed to submit the 
requisite PSD SIP for PM2.5, promulgate a PSD FIP for 
PM2.5 based on 40 CFR 52.21, and delegate implementation of 
the federal PSD program to the State. The State would then be able to 
implement a PSD program for PM2.5 in accordance with the 
terms of section 52.21, as amended in this rulemaking action. However, 
such a State would still have the option to obtain EPA approval of a 
PSD SIP for PM2.5 if it submitted the SIP revision at a 
later date.
c. Rationale
    We believe option 1 is reasonable for the following reasons. First, 
PM10 will act as an adequate surrogate for PM2.5 
in most respects, because all new major sources and major modifications 
that would trigger PSD requirements for PM2.5 would also 
trigger PM10 requirements because PM2.5 is a 
subset of PM10. The one situation where this would not be 
true is where a source emitted significant amounts of condensible 
emissions that would not otherwise be counted under a State's 
PM10 PSD program. This is the reason EPA would ensure that 
States include condensible emissions in determining major NSR 
applicability as a condition of using PM10 as a surrogate. 
Second, both of the precursors proposed for regulation in this 
preamble--SO2 and NOX--are already regulated 
under State NSR programs for other criteria pollutants. Thus, those 
precursors will be subject to NSR through those other programs. Third, 
requiring immediate implementation of the Section 165(a)(3) air quality 
analysis for the PM2.5 NAAQS will adequately cover the 
remaining gap that results from using PM10 as a surrogate 
for PM2.5.
    Upon promulgation of these rules, except in SIP-approved States 
which would be running a PM10 program as a surrogate for a 
PM2.5 program as stated in option 1 above, a 
PM2.5 program would apply in attainment areas of delegated 
States and in nonattainment areas. Hence to avoid this imbalance, we 
are seeking comment on option 2 which addresses whether there is a need 
to update the 1997 interim policy to reflect these rules in SIP-
approved States or whether we should amend Appendix S to allow these 
States to run a PM2.5 program for PSD based on the 
requirements of 40 CFR 52.21 during the SIP development period in 
attainment areas.
    Option 3 would also address this imbalance by allowing a State to 
request delegation of only the PSD program for PM2.5 prior 
to the deadline for submitting a PSD SIP for PM2.5. (April 
5, 2008 as discussed in the background discussion of section M16.) 
Because we need to allow a State enough time to submit a PSD SIP for 
PM2.5, we do not

[[Page 66045]]

believe we can unilaterally issue a FIP for the PSD PM2.5 
program right away. However, if a State informs EPA prior to April 5, 
2008 that it does not intend to submit a PM2.5 SIP, we would 
then have cause to issue a FIP addressing the PSD program for 
PM2.5 and then delegate that program to the State.
17. Implementation of the Nonattainment NSR Provisions During the SIP 
Development Period
a. Background
    EPA interprets section 172(c)(5) of the Clean Air Act to require 
that States issue major NSR permits for construction and major 
modifications of major stationary sources in any nonattainment area. 
Thus, since the PM2.5 nonattainment designations became 
effective on April 5, 2005, States are now required to issue major NSR 
permits that address the Section 173, nonattainment major NSR 
requirements for PM2.5. On the date that the 
PM2.5 non-attainment designations took effect (April 5, 
2005), we issued a guidance to address implementation of the NA NSR 
program pending the completion of this action to develop implementation 
rules for PM2.5. See memorandum from Stephen D. Page, 
Director, Office of Air Quality Planning and Standards to Regional Air 
Directors, ``Implementation of New Source Review Requirements in 
PM2.5 Nonattainment Areas'' (Apr. 5, 2005).
    Our current guidance permits States to implement a PM10 
nonattainment major NSR program as a surrogate to address the 
requirements of nonattainment major NSR for the PM2.5 NAAQS. 
A State's surrogate major NSR program in PM2.5 nonattainment 
areas may consist of either the implementation of the State's SIP-
approved nonattainment major NSR program for PM10 or 
implementation of a major NSR program for PM10 under the 
authority in 40 CFR part 51, Appendix S. Appendix S generally applies 
where a State lacks a nonattainment major NSR program covering a 
particular pollutant.
    Once this PM2.5 implementation rule is finalized, States 
will have the necessary tools to implement a major NSR program for 
PM2.5 States will no longer be permitted to implement a 
nonattainment major NSR program for PM10 as a surrogate for 
the PM2.5 nonattainment major NSR program. Most States will 
then need to implement a transitional PM2.5 nonattainment 
major NSR program under Appendix S (as amended in this rulemaking 
action) until EPA approves changes to a State's SIP-approved major NSR 
program to reflect the requirements of this rule.
    The NA NSR provisions in a State's existing SIP-approved NA NSR 
program would only apply in areas designated nonattainment for the 
PM2.5 NAAQS if the SIP-approved regulations contain a 
generic requirement to issue part D permits in areas designated as 
nonattainment for any criteria pollutant and do not otherwise need to 
be amended to incorporate the changes proposed in this rule. In the 
situations described below, the States will need to revise their NA NSR 
regulations and submit them to EPA for incorporation into the SIP by 
the date the new implementation plans for PM2.5 are due 
(April 5, 2008):
     States that have nonattainment regulations that need to be 
amended to incorporate the new PM2.5 requirements.
     States that have newly designated nonattainment areas for 
PM2.5 and nonattainment NSR regulations that specifically 
list the areas in which NA NSR applies (i.e., the list does not include 
the newly designated areas).
     States that currently have no nonattainment areas but have 
newly designated nonattainment areas for PM2.5.
    States in the categories listed above will have to implement a 
transitional major NSR permitting program for PM2.5 pursuant 
to 40 CFR 52.24(k) and Appendix S until their existing part D SIPs are 
revised to meet these new PM2.5 NSR regulations.
b. Implementation of NSR Under the Emissions Offset Interpretative 
Ruling (40 CFR part 51, Appendix S) With Revisions
    In general, Appendix S requires new or modified major sources to 
meet LAER and obtain sufficient offsetting emissions reductions to 
assure that a new major source or major modification of an existing 
major source will not interfere with the area's progress toward 
attainment. Readers should refer to 40 CFR part 51, Appendix S for a 
complete understanding of these and other existing Appendix S 
requirements. In this action, we propose to revise Appendix S to 
include provisions necessary to implement a transitional major NSR 
program for PM2.5, including significant emissions rates 
applicable to major modifications for PM2.5 and, as 
appropriate, precursors.\105\
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    \105\ In a separate Federal Register notice, we will be revising 
Appendix S to incorporate changes that conform Appendix S with the 
minimum requirements for implementation plans that are set forth in 
40 CFR 51.165.
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    As currently written, Appendix S applies directly to major 
stationary sources. In accordance with the requirements of Section 
110(a)(2)(c) of the Act, we believe that the majority of States have 
the legal authority to issue permits consistent with these requirements 
under an existing SIP-approved permitting program. Nonetheless, at 
least one State has reported that it lacks the legal authority to issue 
permits implementing the requirements of Appendix S under its existing 
permitting rules. If a State is unable to apply the requirements of 
Appendix S, EPA will act as the reviewing authority for the relevant 
portion of the permit.
    We believe that it is appropriate for EPA to issue the pre-
construction permits in such circumstances. As discussed earlier, 
Congress amended the Act in 1990 to remove the requirements that would 
have applied a construction ban in area's that lacked a SIP-approved 
part D permit program. Thus, we believe that it is consistent with 
Congressional intent that either the State or EPA issue permits to 
construct during the interim period.
c. Legal Basis for Requiring States To Issue Nonattainment NSR Permits 
During the SIP-Development Period
    Section 110(a)(2)(C) of the CAA establishes a general duty on 
States to include a program in their SIP that regulates the 
modification and construction of any stationary source as necessary to 
assure that NAAQS are achieved. This general duty exists during all 
periods, including before a State has an approved NA NSR permit 
program.
    Section 110(a)(2)(c) of the Act does not define specific 
requirements States must follow for issuing major source permits during 
the period between nonattainment designation and EPA approval of a 
nonattainment NSR SIP (the ``SIP-development'' period). However, EPA 
has historically recognized that the SIP development period provided 
under Section 172(b) of the CAA leaves a gap in part D major NSR 
permitting and has determined that this gap is to be filled, in 
general, with a transitional major NSR program that includes the LAER 
and offset requirements from part D. 57 FR 18070, 18076 (Apr. 28, 
1992). This transitional NSR program has been implemented, to date, 
through the Emissions Offset Interpretative Ruling at 40 CFR part 51, 
Appendix S. The EPA's regulations at 40 CFR 52.24(k) require that 
Appendix S govern permitting during this time.\106\

[[Page 66046]]

In addition, Congress indicated in the 1977 CAA Amendments that major 
NSR permitting should apply during the SIP development period. See 
Public Law 95-95, section 129(a), 91 Stat. 685 (1977). Specifically, in 
1977, when Congress enacted a moratorium on construction in any area 
lacking an approved part D SIP, with a delayed effective date of July 
1, 1979, Congress directed that Appendix S govern permitting of sources 
constructing in such areas prior to that date. Id. section 108(b), 
section 129(a).
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    \106\ EPA has interpreted this requirement to require States to 
issue permits that are consistent with the requirements in Appendix 
S. We believe that many States have the authority to issue permits 
that are consistent with Appendix S for example, through State minor 
NSR permit programs. However, if a State lacks authority to issue a 
permit, then EPA will issue the permit.
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    The EPA subsequently codified the use of Appendix S as the 
transitional major NSR program in 40 CFR 52.24(k), reasoning (in the 
context of implementing a delay in the construction ban for then-
recently designated nonattainment areas) that Congress had directed 
that Appendix S remain in effect to protect air quality while State 
plans were being designed. 45 FR 91604 (Oct. 2, 1980). When Congress 
removed the construction ban (except as provided in Section 110(n)(3)), 
it left 40 CFR 52.24(k) in place, implementing the transitional major 
NSR program under Appendix S.
    The continued application of appendix S through Sec.  52.24(k) is 
also supported by one of the purposes of the Clean Air Act ``to protect 
and enhance the quality of the Nation's air resources so as to promote 
the public health and welfare and the productive capacity of its 
population.'' 42 U.S.C. 7401(b)(1). This provision was the basis for 
the original judicial finding that the Act imposed an obligation to 
prevent significant deterioration in areas that meet the NAAQS, prior 
to Congress' enactment of the PSD program at part C of the Act.\107\ 
This policy of nondegradation applies with even greater force in areas 
that fail to meet the NAAQS. Thus, we believe that an interim major NSR 
program for the SIP development period--as codified at appendix S and 
updated to reflect CAA amendments and the promulgation of the 
PM2.5 NAAQS--is supported by section 110(a)(2)(C), section 
101(b)(1), Congressional intent, and our gap-filling authority under 
section 301(a).
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    \107\ See Alabama Power Co. v. Costle, 636 F.3d 323, 346-047 (DC 
Cir. 1980) (discussing Sierra Club v. Ruckelshaus, 344 F. Supp. 253 
(D.D.C. 1972), aff'd per curiam 4 ERC 1815 (DC Cir. 1972), aff'd by 
an equally divided court, sub nom Fri v. Sierra Club, 412 U.S. 541 
(1973).
---------------------------------------------------------------------------

    Although EPA omitted Sec.  52.24(k) from the regulatory text 
accompanying a proposed rulemaking in 1996 (see 61 FR 38250, 38305 
(July 23, 1996)), the preamble indicated that the change was intended 
only to update and clarify the regulation with regard to the changes to 
the construction ban made by the 1990 Amendments.\108\ The proposal did 
not in any manner indicate that EPA believed that NSR permits complying 
with Appendix S, or otherwise satisfying Section 110(a)(2)(C), were not 
required during the interim period. We have discussed the continued 
applicability of Sec.  52.24(k) and Appendix S in implementation of the 
8-hour ozone NAAQS. 68 FR at 32846.
---------------------------------------------------------------------------

    \108\ The actual language at 40 CFR 52.24(k) arguably allows 
States to issue permits under Appendix S for a maximum period of 18 
months after designation. After this time, if the nonattainment area 
does not have an approved NA NSR permit program, a construction ban 
would apply. However, in 1990, Congress altered the provisions of 
the construction ban such that it would not apply when a State/Local 
lacked an approved NA NSR permit program in the future. The EPA 
believes that Congress' removal of the construction ban from the Act 
supersedes the regulatory language at 52.24(k) and EPA has 
reinterpreted this language to allow States to issue permits under 
Appendix S from designation until the SIP is approved even if this 
exceeds 18 months. See 1991 memo, ``New Source Review (NSR) program 
Transitional Guidance, John S. Seitz, March 11, 1991. The EPA 
anticipates revising the language at section 52.24(k) to properly 
reflect this interpretation.
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18. NSR Applicability to Precursors During the Interim Period
    As discussed in Section M.2, EPA has proposed several options for 
NSR applicability to the potential PM2.5 precursors 
(SO2, NOX, VOC, and ammonia). EPA has proposed 
that SO2 is a national precursor to PM2.5. EPA 
has also proposed that if NOX emissions are subject to NSR 
as PM2.5 precursor, States could exempt NOX from 
its PM2.5 NSR program in a specific area by demonstrating 
that NOX emissions from stationary sources in that area are 
not a significant contributor to that area's ambient PM2.5 
concentrations and the area is not in a State identified by EPA as a 
source of a PM2.5 interstate transport problem. However, 
during the SIP development period, States face substantial hurdles in 
making such a demonstration because they are in the initial stages of 
gathering information and analyses necessary to prepare their 
attainment demonstrations. Thus, during this period, a presumption that 
a precursor is a regulated NSR pollutant for PM2.5 may 
amount to an irrebuttable presumption for many States. Because of the 
challenges posed by the SIP development period, EPA is considering 
whether NSR applicability to precursors should be stayed for one or 
more precursors during the SIP development period. The EPA is 
soliciting comments on the applicability of NSR to precursors during 
the SIP development period.
19. Are there any Tribal concerns?
    We expect that some Tribal areas will be designated as 
nonattainment in part because of pollution that is transported from 
surrounding State lands. Tribal representatives have advocated for 
additional flexibility to address nonattainment problems caused by 
transported pollution, such as the provision of NSR offset set-asides 
(which we expect would come from State offset pools or banks), because 
they have limited ability to generate offsets on their own. Tribal 
representatives have raised these and other concerns in discussions on 
implementation of the 8-hour ozone and PM2.5 standards, and 
in comments on the 8-hour ozone implementation rule.\109\ We request 
comment on whether emissions offset set-asides, possibly generated by 
innovative measures to promote additional emissions reductions, are an 
appropriate method to help level the playing field for the Tribes and 
support economic development in Tribal areas. We also request comment 
on ways in which States may help provide the Tribes access to offsets 
from non-Tribal areas.
---------------------------------------------------------------------------

    \109\ 109 Letter from Bill Grantham, National Tribal 
Environmental Council, to docket 2003-0079, providing comments on 
the proposed 8-hour ozone implementation rule (66 FR 32802).
---------------------------------------------------------------------------

    In addition, to address these and other issues related to 
implementation of the NSR program in Indian country, EPA is evaluating 
the impact of the NSR program on Tribes in Indian country. The EPA 
plans to address these concerns in a future Tribal NSR rule.
20. What must a State or local agency do about minor sources of 
PM2.5?
    Pursuant to Section 110(a)(2)(C), States must have a minor source 
permitting program. This applies to new and modified stationary sources 
that are not considered major for a criteria pollutants or a precursor 
for a criteria pollutant. At this time States must include the 
following pollutants in their minor NSR program:
     VOC,
     SO2,
     NOX,
     CO,
     PM10, and
     Lead (Pb)
    States must now amend their minor source programs to include
     PM2.5 direct emissions, and
     Precursor emissions as included in PM2.5 major 
NSR.

[[Page 66047]]

21. Supplemental Program Option: Rural Transport Areas
a. What flexible implementation options should be available for 
Transport areas?
    EPA is considering flexible implementation for Nonattainment NSR 
for areas that qualify for the transport classification. These areas 
are designated nonattainment due to overwhelming transport, for 
example, areas where pollution is from surrounding jurisdictions but 
where there are few or no sources of PM2.5 in the area. 
Under the current program no flexibility is available under NA NSR for 
sources in these areas overwhelmed by transport. As mentioned earlier, 
in this rule, we are proposing a transport classification to provide 
some flexibility to address some of the fairness issues associated with 
transport. This transport classification can be used by States and 
Tribes if they meet the criteria discussed below. If there is no 
transport classification then this option will not be available in the 
near-term. However, EPA intends to develop a separate proposed rule on 
flexible implementation of nonattainment NSR for areas designated 
nonattainment for any criteria pollutant, where transport is the 
primary cause of the area's nonattainment. Such a proposal would not be 
dependent on the incorporation of a transport classification in a 
classification system for a NAAQS.
b. Which nonattainment areas would be eligible for the transport 
program?
    In order to be eligible for the transport option the State/Local 
with jurisdiction over a nonattainment area must:
    (1) Have submitted an attainment plan which demonstrates, through 
modeling, that the area is designated nonattainment due to overwhelming 
transport from an upwind area(s); and
    (2) Have submitted an attainment plan containing any additional 
local control measures needed for attainment of the PM2.5 
standard; and
    (3) Have submitted the attainment plan that commits the State/Local 
to implement a program that meets the requirements for transport areas 
discussed below.
    As described earlier in the classification section, an area will 
not be reclassified as a ``transport'' area until after the SIP is 
approved by the Regional Office. A transport area could apply for 
single or multi-state/Local nonattainment areas. Such areas will not be 
able to implement the nonattainment NSR transport program until the 
area is reclassified as a ``transport'' area. Until an area is 
reclassified, States must continue to apply the nonattainment NSR 
program.
c. What would be the basic requirements of a transport nonattainment 
NSR program?
    EPA is requesting comment on what type of regulatory flexibility 
would be beneficial for transport areas while providing equal 
environmental protection. Specific examples of needed flexibility for 
areas which the commenter suggests would qualify as transport areas 
would be helpful. As noted above, we anticipate proposing a separate 
rulemaking on the details of the NSR requirements.

N. How will EPA ensure that the 8-hour ozone standard will be 
implemented in a way which allows an optimal mix of controls for PM2.5, 
ozone, and regional haze?

1. Could an area's PM2.5 strategy affect its 8-hour ozone 
and/or regional haze strategy?
    Based on current data, many areas are violating both the 8-hour 
ozone and the PM2.5 NAAQS. Thus, many cities will have ozone 
and PM2.5 nonattainment areas with overlapping boundaries. 
Requirements for regional haze apply to all areas. Each State is 
responsible for developing SIP revisions to meet all the requirements 
relevant to each nonattainment area for each pollutant as well as 
developing a regional haze plan. In some cases, ozone control measures 
may also be useful for a PM2.5 control strategy or a 
regional haze plan. Similarly, controls for PM2.5 may lead 
to reductions in ozone or regional haze. For example, considered in 
isolation, a metropolitan area's ozone strategy might be based on 
additional VOC emissions reductions; if the area needs NOX 
reductions for PM2.5 attainment, however, an optimal 
approach might include a more complex ozone strategy using both 
NOX and VOC reductions. We believe integration of ozone and 
PM2.5 attainment planning will reduce overall costs of 
meeting multiple air quality goals.
    Many of the factors affecting concentrations of ozone also affect 
concentrations of PM2.5. Emissions of NOX and/or 
VOC will lead to formation of organic particles and the precursors of 
particulate nitrate, as well as ozone. The presence of ozone is an 
important factor affecting PM2.5 formation; as ozone builds 
up, so do hydroxyl (OH-) radicals which are instrumental in 
oxidizing gas phase SO2 to sulfuric acid. The sulfuric acid 
may be converted to sulfate particles, increasing the PM2.5 
concentration. Further, the local ozone concentrations may be decreased 
by the reaction of ozone with nitric oxide; thus, in some large urban 
areas, a decrease in local NOX emissions can result in 
higher local ozone concentrations, leading to higher OH radical 
concentrations and increases in secondary PM2.5. Because the 
precursors for ozone and PM2.5 may be transported hundreds 
of kilometers, regional scale impacts must also be considered.
2. What guidance has EPA provided regarding ozone, PM2.5 and 
regional haze interaction?
    States must develop 8-hour ozone and PM2.5 attainment 
demonstrations for most nonattainment areas. General criteria for 
attainment demonstrations are contained in 40 CFR part 51, appendix W 
(i.e., ``EPA's Guideline on Air Quality Models''). The EPA's May 1999 
draft ``Guidance on the Use of Models and Other Analyses in Attainment 
Demonstrations for the 8-Hour Ozone NAAQS'' provides a set of general 
requirements that an air quality model should meet to qualify for use 
in an attainment demonstration for the 8-hour ozone NAAQS. The draft 
guidance encourages States to integrate PM2.5 control 
strategies with strategies designed to attain the 8-hour ozone NAAQS 
and to meet reasonable progress goals for regional haze. In addition, 
the draft guidance presents some modeling/analysis principles to help 
States develop databases and capabilities for considering joint effects 
of control strategies for ozone, PM2.5 and regional haze. 
Because emissions and meteorological conditions vary seasonally, the 
guidance recommends assessing the effects of an ozone control strategy 
on annual PM2.5 concentrations by estimating effects on mean 
PM2.5 for each season and using the resulting information to 
estimate annual impacts. Emission estimates for VOC, NOX, 
primary PM2.5, SO2 and ammonia will be needed. In 
addition, the modeling should separately estimate the effects of the 
ozone strategy on the major components of PM2.5: Mass 
associated with sulfates, nitrates, organic carbon, elemental carbon, 
and all other species. We believe that this approach is adequate to 
ensure that the 8-hour ozone standard will be implemented by States in 
a way that allows an optimal mix of controls for ozone, 
PM2.5, and regional haze.
    Similarly, EPA's draft attainment demonstration guidance for 
PM2.5 and regional haze states that models intended to 
address secondary PM problems should also be capable of simulating 
ozone formation and transport (January 2, 2001 (draft),

[[Page 66048]]

``Guidance for Demonstrating Attainment of Air Quality Goals for 
PM2.5 and Regional Haze''). The formation and transport of 
secondary PM are closely related to processes that are important in the 
formation and transport of ozone. Thus, it makes sense for programs 
designed to control ozone to be cognizant of programs to reduce 
PM2.5 and improve visibility and vice versa. The 
PM2.5 guidance suggests conducting a ``mid-course review'' 
of an approved PM2.5 plan to review changes in air quality 
resulting from implementation of plans to reduce PM2.5, 
regional haze, and ozone (see section E).
3. What is EPA proposing?
    Today, we propose to continue the policy of encouraging each State 
with a PM2.5 nonattainment area which overlaps, is near to, 
or otherwise affects an 8-hour ozone nonattainment area to take all 
reasonable steps to coordinate the required control measures needed to 
attain the standards in nonattainment areas and meet reasonable 
progress goals for regional haze. Specifically, States conducting 
modeling analyses for PM2.5 should evaluate the concurrent 
effects of control strategies on estimated ozone levels. In addition, 
we encourage States conducting modeling analyses for ozone to estimate 
separately the effects of ozone control strategies on PM2.5 
and its precursors.

O. What emission inventory requirements should apply under the PM2.5 
NAAQS?

    Emission inventories are critical for the efforts of State, local, 
tribal and federal agencies to attain and maintain the NAAQS that EPA 
has established for criteria pollutants including PM2.5. 
Pursuant to its authority under section 110 of Title I of the CAA, EPA 
has long required States to submit emission inventories containing 
information regarding the emissions of criteria pollutants and their 
precursors. The EPA codified these requirements in 40 CFR part 51, 
subpart Q in 1979 and amended them in 1987.
    The 1990 CAAA revised many of the provisions of the CAA related to 
attainment of the NAAQS and the protection of visibility in mandatory 
Class I Federal areas (certain national parks and wilderness areas). 
These revisions established new emission inventory requirements 
applicable to certain areas that were designated nonattainment for 
certain pollutants. In the case of particulate matter, the emission 
inventory provisions are in the general provisions under Section 
172(c)(3).
    In June 2002, EPA promulgated the Consolidated Emissions Reporting 
Rule (CERR)(67 FR 39602, June 10, 2002). The CERR consolidates the 
various emissions reporting requirements that already exist into one 
place in the CFR, establishes new reporting requirements for 
PM2.5 and ammonia, and establishes new requirements for the 
statewide reporting of area source and mobile source emissions.
    The CERR establishes two types of required emission inventories:
     Annual inventories
     3-year cycle inventories
    The annual inventory requirement is limited to reporting statewide 
emissions data from the larger point sources. For the 3-year cycle 
inventory, States will need to report data from all of their point 
sources plus all of the area and mobile sources on a statewide basis. A 
special case exists for the first 3-year cycle inventory for the year 
2002 which is due on June 1, 2004. The EPA has designated 2002 as the 
new Base Year for 8-hour ozone, PM2.5 and regional haze 
(November 18, 2002 EPA memorandum ``2002 Base Year Emission Inventory 
SIP Planning: 8-Hour Ozone, PM2.5 and Regional Haze 
Programs'' http://www.epa.gov/ttn/chief/eidocs/2002baseinven_102502new.pdf).
    States would estimate mobile source emissions by using the latest 
emissions models and planning assumptions available at the time the SIP 
is developed. The latest approved version of the MOBILE model should be 
used to estimate emissions from on-road transportation sources, in 
combination with the latest available estimates of vehicle miles 
traveled (VMT). The current version of the MOBILE model, MOBILE6.2, is 
used for areas outside California.\110\ The model EMFAC2002 is used for 
California. The latest information on MOBILE6.2 is available at: http://www.epa.gov/otaq/m6.htm. The NONROAD model is currently available in 
draft form and can be used for estimates of non-road mobile source 
emissions: http://www.epa.gov/otaq/nonrdmdl.htm. By merging the 
information on point sources, area sources and mobile sources into a 
comprehensive emission inventory, State, local and Tribal agencies may 
do the following:
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    \110\ As in the past, EPA will provide sufficient time for state 
and local agencies to transition to any new motor vehicle emissions 
factor model, if one becomes available during the development of 
PM2.5 SIPs.
---------------------------------------------------------------------------

     Set a baseline for SIP development.
     Measure their progress in reducing emissions.
     Have a tool to support future trading programs.
     Answer the public's request for information.
    EPA uses the data submitted by the States to develop the National 
Emission Inventory (NEI). The NEI is used by EPA to show national 
emission trends, as modeling input for analysis of potential 
regulations, and other purposes.
    Most importantly, States need these inventories to help 
nonattainment areas develop and meet SIP requirements to attain the 
annual and 24-hour PM2.5 NAAQS. There is a special situation 
regarding emission inventories from Tribal areas that should be 
considered. In the past, there have been instances where portions of 
tribal areas have been included in designated nonattainment areas, but 
when the baseline emission inventory was prepared, emissions from the 
tribal lands were not included. This has had the effect of preventing 
the tribes from generating emissions reductions from existing sources 
to develop emission offsets, as well as impairing the ability of the 
State to model as accurately as possible. We are encouraging the States 
and Tribes to work together to ensure that the information used in 
developing the baseline emission inventory is inclusive of all 
emissions from the nonattainment area.
    In April 1999, EPA published the ``Emissions Inventory Guidance for 
Implementation of Ozone and Particulate Matter National Ambient Air 
Quality Standards (NAAQS) and Regional Haze Regulations,'' EPA-454/R-
99-006. The EPA updated this guidance in August 2005.\111\ The current 
version of this guidance is available at: http://www.epa.gov/ttn/chief/eidocs/eiguid/index.html. The EPA developed this guidance document to 
complement the CERR and to provide specific guidance to State and local 
agencies and Tribes on how to develop emissions inventories for 8-hour 
ozone, PM2.5, and regional haze SIPs. While the CERR sets 
forth requirements for data elements, EPA guidance complements these 
requirements and indicates how the data should be prepared for SIP 
submissions. The SIP inventory also must be approved by EPA as a SIP 
element and is subject to public hearing requirements where the CERR is 
not. Because of the regulatory significance of the SIP inventory, EPA 
will need more documentation on how the SIP inventory was developed by 
the State as

[[Page 66049]]

opposed to the documentation required for the CERR inventory. In 
addition, the geographic area encompassed by some aspects of the SIP 
submission inventory will be different from the statewide area covered 
by the CERR emissions inventory. If a State's 2005 emission inventory 
(or a later one) becomes available in time to use for an area 
subsequently redesignated nonattainment, then that inventory should be 
used. We also encourage the cooperation of the Tribes and the State and 
local agencies in preparing their emissions inventories.
---------------------------------------------------------------------------

    \111\ Emissions Inventory Guidance for Implementation of Ozone 
and Particulate Matter National Ambient Air Quality Standards 
(NAAQS) and Regional Haze Regulations,'' EPA-454/R-05-001, August 
2005.
---------------------------------------------------------------------------

    Therefore, the basis for EPA's emission inventory program is 
specified in the CERR and the related guidance document. The EPA is 
interested in receiving comments on whether or not additional emission 
inventory requirements or guidance are needed to implement the 
PM2.5 NAAQS. For example, do any of the following issues 
need to be defined through additional requirements or guidance?
     An important difference between inventories submitted in 
response to the CERR and SIP inventories is the issue of approvability. 
While it is likely that an inventory submitted under the CERR would be 
identical to the inventory submitted as part of a SIP, the SIP 
inventory will need to go through public hearing and formal approval by 
EPA as a SIP element. This approval process can be combined with other 
SIP elements. Should EPA specify an inventory approval process?
     Are the data elements specified within the CERR sufficient 
to develop adequate SIPs? For example, in the determination of RACT 
should more information on existing control devices be required?
     Currently the CERR requires the reporting of 
SO2, VOC, NOX, CO, Pb, PM10, 
PM2.5, and NH3. VOC and PM are speciated by the 
emissions processing models based on speciation profiles for specific 
source categories. Is this approach sufficient, or should EPA require 
more specific emission component reporting such as specific organic 
compounds or groups of compounds or reporting of elemental carbon and 
organic carbon?
     The CERR allows states to adopt EPA developed emission 
estimates from area and mobile sources in lieu of making these 
estimates themselves if they accept these estimates for their emission 
inventory. Since 2002 has been designated as the new base year, should 
EPA require that States develop their own estimates for area and mobile 
sources?
     Are there other inventory issues that EPA should define 
through either regulation or guidance?

P. What stationary source test methods should States use under the 
PM2.5 implementation program?

1. Will the existing stationary source test methods for particulate 
matter (PM) be acceptable for use in PM2.5 SIPs?
    We believe that states that need to adopt local control measures 
for primary particulate matter in nonattainment areas will need to 
revise their stationary source test methods. However, the acceptability 
of existing stationary source test methods for PM2.5 SIPs 
depends upon what is measured under the State's current test methods 
for particulate matter. Information available to the Agency indicates 
that the majority of existing SIPs currently specify the use of 
stationary source test methods that quantify only filterable 
particulate matter. We believe that test methodologies that measure 
only filterable particulate matter would be acceptable in areas where 
no additional reductions of primary PM2.5 and particulate 
precursor emissions are required to project attainment of the 
PM2.5 NAAQS. The use of these existing stationary source 
test methods provide verification that PM2.5 emissions are 
consistent with the levels emitted as a result of existing applicable 
requirements for filterable particulate matter. However, for areas 
where additional local control of primary particulate matter emissions 
are required as part of the attainment demonstration, we believe that 
existing test methodologies that measure only filterable particulate 
matter would not be acceptable. The use of existing source test methods 
potentially would limit the control measures available for developing 
cost effective strategies to achieve attainment of the PM2.5 
NAAQS. In addition, the existing test methods may not be acceptable for 
demonstrating compliance with emission limitations to achieve the 
PM2.5 NAAQS under certain circumstances:
    (1) Where the attainment demonstration includes control 
methodologies for PM precursors which are likely to result in a 
significant increase in the direct emissions of fine particulate matter 
(for example, ammonia injection to reduce NOX emissions).
    (2) Where the attainment demonstration includes control 
methodologies for PM precursors which are likely to result in a 
significant decrease in the direct emissions of fine particulate matter 
(for example, alkaline scrubbers to reduce SO2 emissions) 
and incorporate these direct emissions reductions in their attainment 
demonstration or allow for the use of these reductions as credits for 
other programs.
2. Why are the existing stationary source test methods for PM 
deficient?
    Most stationary source test methods specified in State rules do not 
adequately quantify either total PM emissions or PM2.5 
emissions. Additionally, some of the current stationary source test 
methods will not adequately provide a uniform indication of the 
sources' performance in controlling PM2.5 emissions. Most 
source test methods referenced in SIPs provide a measurement of the 
particulate matter that is solid or liquid at a temperature specified 
in the method or applicable standard. Filtration temperatures of 250 
[deg]F and 320 [deg]F are typical although other temperatures may be 
specified in a few test methods or applicable standards. Generally, 
these filterable particulate matter test methods are either identical 
or very similar to one of the ten Federal test methods published in 
Appendix A of 40 CFR Part 60 and used to determine compliance with New 
Source Performance Standards (NSPS). These test methods are adequate to 
evaluate the compliance status of a source for emissions of that 
component of particulate matter evaluated when the applicable rule was 
developed. However, these test methods do not provide a measurement of 
total particulate matter emissions, or PM2.5 emissions.
    The test method proposed to determine compliance with the first 
group of NSPS (36 FR 15713) determined the sum of the mass of material 
collected on or prior to the filters maintained at 250 [deg]F and the 
material collected in the cooled impingers that followed the filter. 
While the material collected prior to the filter provided a measure of 
the filterable particulate material, the material collected in the 
impingers was stated to measure vapors in the stack that would become 
particulate matter at 70 [deg]F (36 FR 15495). When combined, the 
method provided a measurement of the total particulate matter emissions 
from the facility tested. The promulgated test method (36 FR 24888) did 
not include the analysis of the impinger portion of the sampling train. 
To accommodate the change in the test method, EPA made adjustments in 
the promulgated emission limits to reflect the change in the test 
method. The EPA made adjustments of up to 50 percent in the promulgated 
emission limitations to

[[Page 66050]]

reflect the measurement of only the filterable portion of the 
emissions.
    EPA recognized in setting several subsequent NSPS that the source 
test method used to determine compliance with the particulate matter 
emissions limits measured only part of the total particulate matter 
emitted by the applicable sources. This recognition was published on 
October 6, 1975, in the promulgated Revisions to Performance Testing 
Methods (40 FR 46250). Similarly, EPA acknowledged this in the proposal 
preamble to Subpart CC--Standards of Performance for Glass 
Manufacturing Plants (6/15/79) in the section ``Selection of 
Performance Test Methods: The use of EPA Reference Method 5--
Determination of Particulate Emissions from Stationary Sources.''
    In developing the NSPS emission limitations, it is evident that 
only a portion of the particulate matter emissions were considered. As 
a result, the test methods that EPA selected for determining compliance 
with these emission limitations measured only that same portion of the 
particulate matter emissions. It was recognized that these test methods 
were not suitable for quantifying the total emissions to the atmosphere 
and that the impinger portion of the sampling train contained the 
missing portion of the particulate matter emissions.
    On December 17, 1990, EPA promulgated Method 202 in Appendix D of 
40 CFR Part 51 (56 FR 65433) to provide a method for States to use to 
analyze the impinger (or ``back half'') content of PM emissions and 
provide a measure of the condensable particulate emissions. The 
principal procedures in Method 202 improved upon the original Method 5 
back half analysis proposed in 1971. In developing this measurement 
method, EPA consulted with several State and local agencies and 
incorporated several options to simplify or accommodate existing 
policies and source testing methodologies for condensable particulate 
matter. We believe that by excluding the optional components, the use 
of EPA Method 202, combined with EPA Method 5 or EPA Method 17, 
provides a reasonable indication of total particulate matter emissions 
for the majority of stationary emission sources.
    However, the combination of EPA Method 5 and Method 202 measures 
particulate matter that is larger than 2.5 micrometers in aerodynamic 
diameter, and will not provide a reasonable measurement of the 
emissions of PM2.5. Methods are available that can separate 
particulate matter by aerodynamic size. On April 17, 1990, EPA 
promulgated EPA Method 201 and Method 201A to provide a source test 
method that separated filterable particulate matter greater than 10 
micrometers from filterable particulate matter equal or smaller than 10 
micrometers. The single cyclone used in these methods replaced the 
nozzle of EPA Method 17 to separate the two size classes of filterable 
particulate. This method allows sources to determine their emissions of 
filterable PM10 when there are size specific emission limits 
or when there is a need for size specific emission inventories. With 
the addition of a second smaller cyclone following the single cyclone 
of EPA Method 201A, the filterable particulate can be separated into 
three size classifications. These classifications include filterable 
particulate matter greater than 10 micrometers, filterable particulate 
matter equal or smaller than 10 micrometers but greater than 2.5 
micrometers, and filterable particulate matter equal or smaller than 
2.5 micrometers. This method is posted as Conditional Method 40 (CTM 
40) on EPA's Emission Measurement Centers web page at http://www.epa.gov/ttn/emc/ctm.html. Of the methods mentioned previously, the 
most reliable measurement of total direct PM2.5 emissions 
would combine the use of Conditional Method 40 with EPA Method 202.
    Conditional Method 40 has been used at several facilities in the 
U.S. and the hardware required to implement this method has been 
readily available since the mid-1980's. The acceptability of a source 
using the existing SIP test methods for filterable particulate matter 
as an indication of the source's relative performance in controlling 
PM2.5 emissions would depend on the source's level of 
condensable particulate matter emissions in relation to filterable PM 
emissions, the proportion of filterable particulate matter that is 
smaller than 2.5 micrometers, the add-on PM control device 
effectiveness, and the need to consider limiting the emissions of the 
condensable material. In areas where there is no need to reduce 
stationary source particulate matter emission levels to demonstrate 
attainment of the PM2.5 NAAQS, the use of total filterable 
particulate test methods may be adequate to insure that existing levels 
of PM control are being maintained. However, in areas where a reduction 
of stationary source particulate matter emissions is incorporated into 
the attainment demonstration, the use of a test method that measures 
total PM2.5 emissions would be more appropriate than 
existing test methods that measure only total filterable PM.
3. If the stationary source test methods are changed, will the existing 
emission limitations incorporated in SIPs need to be changed?
    Changes in the source test method will require reevaluations of the 
emission limitations. The reevaluation will need to consider the 
interrelated impacts due to differences in the test method, 
characteristics of the particulate matter emissions from the sources, 
and intended changes in the stringency of the emission limitations. The 
following three examples provide a range of the relationships that can 
occur between the source test method and the characteristics of the 
particulate matter emissions. For sources with no condensable 
particulate matter emissions, a change from a total particulate matter 
test method (using the same particle size cutoff) to a PM2.5 
test method will result in lower measured emissions. The difference in 
mass measured by the two test methods depends on the size distribution 
of the filterable particulate matter emissions from the source. For 
sources with condensable particulate matter emissions, a change from a 
filterable particulate matter test method to a total particulate matter 
test method will result in higher measured emissions. The difference in 
mass measured by the two test methods depends on the relative emissions 
of filterable and condensable emissions from the source. For sources 
with condensable particulate matter emissions, a change from a total 
filterable particulate matter test method to a total PM2.5 
test method may increase or decrease the measured emissions. The 
increase or decrease and the magnitude of any change would depend on 
the particle size distribution of the filterable particulate matter and 
the magnitude of the condensable particulate matter emission.
    As can be inferred from these three examples, the application of a 
single multiplier to convert existing emission limitations to a total 
PM2.5 emission limitation would result in a variable change 
in the stringency of emission limitation. The use of a single 
multiplier would result in unplanned and variable changes in the 
stringency in the existing emission limitations. These changes may 
create unintended consequences for the affected sources and result in 
poorly understood and quantified estimates of the benefits.

[[Page 66051]]

4. The existing PM test methods and the emission limits based upon 
these methods have been acceptable since 1971, why do they need to be 
changed for PM2.5?
    Several changes have occurred over the last 30 years that have 
gradually eroded the predictive capabilities of particulate matter 
source test methods used in most SIPs to evaluate the sources 
performance in controlling the pollutant measured by the ambient air 
quality test method. In the 1970's and early 1980's, the ambient air 
quality test method quantified the total particulate matter suspended 
in the ambient air. At the beginning of this period, particulate matter 
control measures were relatively poor. Additionally, most of 
particulate matter control measures applied over the last 30 years have 
focused on filterable particulate matter. While some control measures 
for other air pollutants also resulted in collateral reductions in 
condensable particulate and particulate precursor emissions, these 
reductions were relatively small. As a result, the relative amount of 
sulfates, nitrates and condensed organic matter in the ambient air 
particulate matter was proportionally greater in the 1980's than it was 
in the 1970's. The promulgation of the PM10 NAAQS in 1987 
resulted in further reductions in filterable PM from sources, but there 
were few non-attainment areas where control of the condensable 
constituents of PM10 was required in order to achieve 
attainment. As a result, stationary source control measures that 
addressed only the filterable component of particulate matter were 
generally adequate to achieve the PM10 NAAQS.
    With the promulgation of the PM2.5 NAAQS in 1997 and 
associated ambient air quality monitoring, speciation analyses of 
PM2.5 show that a substantial portion of PM2.5 
consists of sulfates, nitrates and organic carbon. These constituents 
are also a substantial portion of the condensable particulate matter 
collected from stationary sources. With the increased application of 
increasingly efficient filterable particulate matter control measures, 
condensable emissions have become a larger percentage of overall 
PM2.5 emissions for several stationary source categories.
    Based upon the particle size distribution presented in Table 1.1-6 
of AP-42, about 29 percent of the total filterable particulate matter 
is filterable PM2.5. As a result, about 78 percent of the 
total PM2.5 emissions would be condensable PM.\112\ Since 
filterable particulate matter emissions controls have improved since 
1971 and since most sources achieve substantially lower emissions than 
required by State and Federal emissions limitations, and condensable 
emissions have generally not been significantly reduced, the 
significance of the condensable emissions as a proportion of direct 
PM2.5 emissions may be greater than indicated above. A test 
method that measures total filterable particulate matter, commonly 
including mostly particles larger than PM2.5 and yet 
excluding condensable emissions, is a poor indicator of source 
performance at reducing PM2.5 emissions.
---------------------------------------------------------------------------

    \112\ The significance of the condensable fraction of 
PM2.5 is illustrated using the original supporting data 
for the Subpart D NSPS cited previously. The promulgated standard 
was reduced by 50% because about half the emissions were filterable 
PM and the other half were condensable PM. However, only about 29 
percent of the filterable particulate matter is filterable 
PM2.5 (based upon the particle size distribution 
presented in Table 1.1-6 of AP-42). Therefore, about 78 percent of 
the total PM2.5 emissions would be condensable PM {Total 
PM = 0.5 filterable + 0.5 condensable, Total PM2.5 = (0.5 
filterable x .29) + 0.5 condensable = 0.645, condensable 
PM2.5 = 0.5/0.645 = 78%{time} .
---------------------------------------------------------------------------

5. What methods are available for measuring PM size and condensable PM 
from stationary sources?
    EPA has adopted one of several methods that are available for 
classifying particulate matter by aerodynamic diameter. The method 
adopted is based upon the use of centrifugal forces created in cyclones 
to separate particulate matter into two aerodynamic size 
classifications. The cyclone specified in EPA Method 201 and 201A 
separates particulate matter with a nominal aerodynamic diameter 
greater than 10 micrometers from the remaining particulate matter. The 
addition of a second smaller cyclone following the EPA Method 201A 
cyclone as is specified in EPA Method CTM 40 separates the particulate 
matter that has an aerodynamic diameter greater than 2.5 micrometers 
from the remaining particulate matter. A filter follows the final 
cyclone of these particle sizing methods to collect the smaller 
material. Under EPA's source test methods to separate PM based on 
particle size, both of the cyclones and the filter are maintained at 
the flue gas temperature. Therefore, any material that is in a vapor 
state in the flue gas but would be condensed as a result of dilution 
and cooling when released to the ambient air will not be measured by 
these particle sizing methods.
    Vapors that would condense to form particulate matter in the 
ambient air can be quantified by EPA Method 202. The EPA Method 202 is 
intended for use in conjunction with a filterable particulate matter 
test method such as Method 201A or CTM 40. Impingers containing cold 
water are used by most methods to condense water vapor for determining 
the flue gas moisture content. Besides condensing water vapor in the 
flue gas, organic and inorganic chemical vapors are also condensed in 
these impingers. In EPA Method 202, the organic and inorganic vapors 
condensed in the impingers are separated with an organic solvent and 
weighed after evaporating the water and organic solvent used for 
separation.
    As recommended by the National Academy of Sciences, EPA and others 
are developing dilution based source test methods for collecting and 
analyzing PM2.5. Rather than condensing vapors in chilled 
water, cool filtered dilution air condenses the vapors prior to 
collection on filters. In the new method developed by EPA, particulate 
matter is sized using the same cyclones used in CTM 40. However, the 
in-stack filter used in CTM 40 is removed so that all of the 
PM2.5 particulate matter is collected at near ambient 
temperature on the filters.
6. Why is a new dilution-based test method being developed by EPA?
    The use of dilution-based particulate matter sampling offers 
several advantages over the combination of EPA Method CTM 40 and Method 
202. One advantage is that the vapors are condensed and chemical 
reactions occur in a manner similar to when stack gas is released to 
the atmosphere. As a result, the potential for particulate matter 
formation that may occur in water but would not occur in air is 
eliminated. Another advantage is that the potential for losing 
particulate matter during the evaporation of the impinger water is 
eliminated. With the use of multiple filter types, the use of dilution 
sampling methods will allow for the speciation of the collected 
PM2.5 by the same methods used for speciation of ambient air 
particulate matter. Additionally, dilution-based methods allow for the 
measurement of the particle size distribution of the particulate matter 
smaller than 2.5 micrometers. This can be accomplished by modifying the 
hardware of the sampling equipment to extend the residence time of the 
sampled particulate matter. The extra residence time allows the 
ultrafine particulate matter initially formed during vapor condensation 
to grow toward its ultimate particle size distribution.

[[Page 66052]]

7. What types of sources should use the new dilution-based test method?
    The new dilution-based test method would be appropriate for most 
sources. Sources with very complex flue gas characteristics (e.g., 
having several acidic and alkali gases with semi-volatile organic 
matter) and those sources that want to generate a speciation profile 
specific to their facility should use the new dilution test method. 
Sources with very low PM2.5 emission concentrations and low 
SO2 and NOX emission concentrations also may wish 
to use the new dilution method. However, the more complex operation and 
increased size of the equipment associated with the new method may 
persuade some sources to use an alternative method. Sources where the 
flue gas is near ambient temperature or where the sampled gas can be 
cooled to near ambient temperature could use CTM 40 or its equivalent 
to quantify PM2.5 emissions. Sources with less complex flue 
gas characteristics may want to use CTM 40 combined with EPA Method 
202.
8. What are the main features of the new test method?
    The main features of the new test method are in the areas of sample 
extraction, particle sizing, sample flow rate measurement, dilution air 
conditioning, dilution air flow rate measurement, sample mixing with 
dilution air and sample filtration. An additional major feature, where 
particulate speciation is desired, is the method of extracting an 
aliquot of the diluted sample. Flue gas is extracted isokinetically at 
a flow rate that produces particulate matter sizing at 10 and 2.5 
micrometers by the two in-stack cyclones. The sampled flue gas and the 
PM2.5 particulate matter is extracted from the stack prior 
to dilution and cooling with ambient air that has been conditioned by 
removing excess moisture and ambient particulate matter with a HEPA 
filter. The objective of all the methods is to achieve complete mixing 
prior to filtration and to minimize sample losses on the internal 
surfaces of the hardware. The PM2.5 is removed from the 
diluted sample gas by a Teflon filter. The PM2.5 deposited 
on the internal surfaces of the hardware is quantitatively recovered 
with acetone. Both the Teflon filter and the PM2.5 recovered 
from the internal surfaces of the sampler are weighed. When speciation 
of the PM2.5 is desired, aliquots of the diluted sample gas 
are extracted for collection on filters. The ambient air speciation 
criteria are followed with respect to the filter media used and 
analytical finish of the three filters.
9. What is the schedule for finalization of the new test method?
    We have posted the dilution-based PM2.5 source test 
method on the TTN web as ``Conditional Test Method 39'' and expect that 
this method will provide the basis for a 40 CFR Part 51, Appendix M 
method to be proposed at a later date. Beyond proposing the EPA-
developed dilution test method, we may identify the use of a source 
test method developed by a national voluntary consensus standard 
setting organization. Public Law 104-113, also known as the National 
Technology Transfer and Advancement Act (NTTAA), requires that we use 
technical standards that are developed or adopted by voluntary 
consensus standards bodies as a means to carry out policy objectives 
where appropriate. The law also requires us to consult with such bodies 
when it is in the public interest to participate with them in the 
development of technical standards. Recently, the ASTM Source and 
Ambient Atmospheres Committee developed a PM2.5 source test 
method similar to the method we have developed. We believe that it is 
in the interest of the public and the Agency to participate in the ASTM 
process of developing a PM2.5 source test method. While we 
cannot predict when an ASTM standard will be available and whether it 
will be a suitable test method for EPA to specify for use in SIPs, we 
expect to make a decision on the final test method in the near future. 
We are aware of two manufacturers which have commercially available 
equipment meeting the specifications of CTM-39 and the draft ASTM 
certification.
10. How will use of this new method affect an areas emissions inventory 
and the emissions inventory for individual sources?
    We do not expect that particulate matter emissions inventories will 
be significantly affected by the use of this new test method. The 
stationary source emissions of PM2.5 are based upon existing 
filterable particulate matter size distributions and filterable and 
condensable particulate matter emission factors. The emission factor 
information is supported by source test data similar to that available 
from EPA Method CTM-40 and Method 202. However, it is unclear how the 
use of the new dilution sampling method will affect the 
PM2.5 emission inventory for any particular source category. 
Source categories for which emission estimates for condensable 
particulate matter are not available or are under estimated may find 
that the inventoried emissions are significantly higher. As indicated 
previously, the addition of the condensable portion of PM2.5 
to filterable PM2.5 may increase direct PM2.5 
emissions by a factor of five or more. Source categories for which the 
condensable particulate matter emission factor is based on EPA Method 
202 test data that excludes the nitrogen purge may find that their 
emissions are somewhat lower. The significance of this lower mass of 
condensable particulate matter depends on the mass of filterable and 
condensable particulate matter compared to the mass of particulate 
artifact formed by the dissolved SO2 that was not removed 
from the impinger water by the nitrogen purge.
11. How will use of this new method affect a State's implementation 
program more broadly?
    The use of this new dilution method (or the use of EPA Method CTM 
40 combined with Method 202) to obtain measured source specific 
emissions of PM2.5 will improve the quality of the emissions 
inventory for stationary sources and will aid in the development of a 
more reliable attainment strategy. In addition, we expect the use of 
the speciation capabilities of this new source test method will expand 
the information available to formulate attainment demonstration 
strategies and to justify the most effective strategy. For example, 
this new source-specific speciation data may allow the State to 
identify additional local control measures for consideration. The 
combined information from the ambient air speciation network and 
individual source category speciation data will aid in developing the 
most efficient attainment strategies. In addition, after initial 
attainment strategies are implemented, speciation profiles for the most 
significant sources of direct PM2.5 combined with data from 
the ambient monitoring network may enable States to make important mid-
course revisions to attainment strategies as needed.

Q. How can potentially inadequate source monitoring in certain SIP 
rules be improved?

1. How Does Improved PM2.5 Monitoring Relate to Title V 
Monitoring?
    Two provisions of EPA's State and federal operating permits program 
regulations require that title V permits contain monitoring 
requirements. The ``periodic monitoring'' rules, 40 CFR 
70.6(a)(3)(i)(B) and 71.6(a)(3)(i)(B), require that:


[[Page 66053]]


    ``[w]here the applicable requirement does not require periodic 
testing or instrumental or noninstrumental monitoring (which may 
consist of recordkeeping designed to serve as monitoring), [each 
title V permit must contain] periodic monitoring sufficient to yield 
reliable data from the relevant time period that are representative 
of the source's compliance with the permit, as reported pursuant to 
[Sec.  70.6(a)(3)(iii) or Sec.  71.6(a)(3)(iii)]. Such monitoring 
requirements shall assure use of terms, test methods, units, 
averaging periods, and other statistical conventions consistent with 
the applicable requirement. Recordkeeping provisions may be 
sufficient to meet the requirements of [Sec.  70.6(a)(3)(i)(B) and 
Sec.  71.6(a)(3)(i)(B)].''

The ``umbrella monitoring'' rules, Sec. Sec.  70.6(c)(1) and 
71.6(c)(1), require that each title V permit contain, ``[c]onsistent 
with paragraph (a)(3) of this section, compliance certification, 
testing, monitoring, reporting, and recordkeeping requirements 
sufficient to assure compliance with the terms and conditions of the 
permit.''
    In a final rule entitled ``Revisions to Clarify the Scope of 
Certain Monitoring Requirements for Federal and State Operating Permits 
Programs'' (69 FR 3202, January 22, 2004), EPA announced a four-step 
strategy for improving existing monitoring where necessary through 
rulemaking or other programmatic actions, while reducing resource-
intensive, case-by-case monitoring reviews and so-called ``gap-
filling'' in title V operating permits. Improved PM2.5 
monitoring, as discussed in this preamble and to be addressed in future 
guidance, is part of that strategy.
    In the first step, the ``umbrella monitoring'' rule (69 FR 3202, 
January 22, 2004), EPA decided not to adopt proposed revisions to the 
regulatory text of Sec. Sec.  70.6(c)(1) and 71.6(c)(1) (67 FR 58561, 
September 17, 2002) and instead ratified the text of those rules 
without making any changes. The EPA also announced that notwithstanding 
the recitation in Sec. Sec.  70.6(c)(1) and 71.6(c)(1) of monitoring as 
a permit element, EPA has determined that these provisions do not 
establish a separate regulatory standard or basis for requiring or 
authorizing review and enhancement of existing monitoring independent 
of any review and enhancement as may be required under Sec. Sec.  
70.6(a)(3) and 71.6(a)(3). The EPA explained that Sec. Sec.  70.6(c)(1) 
and 71.6(c)(1) require that title V permits contain: (1) Monitoring 
required by ``applicable requirements'' under the Act, as that term is 
defined in Sec. Sec.  70.2 and 71.2 \113\; and (2) such monitoring as 
may be required under Sec. Sec.  70.6(a)(3)(i)(B) and 71.6(a)(3)(i)(B). 
See Appalachian Power Co. v. EPA, 208 F.3d 1015 (DC Cir. 2000). Thus, 
for monitoring, EPA explained, Sec. Sec.  70.6(c)(1) and 71.6(c)(1) 
constitute ``umbrella provisions'' that direct permitting authorities 
to include monitoring required under existing statutory or regulatory 
authorities in title V permits. Based on EPA's interpretation of the 
Act, the plain language and structure of Sec. Sec.  70.6(c)(1) and 
71.6(c)(1) and the policy reasons described in the preamble to the 
umbrella monitoring rule (see 69 FR at 3204), EPA concluded that where 
the periodic monitoring rules do not apply, Sec. Sec.  70.6(c)(1) and 
71.6(c)(1) do not require or authorize a new and independent type of 
monitoring in permits in order for the permits to contain monitoring to 
assure compliance as required by the Act.
---------------------------------------------------------------------------

    \113\ The term ``applicable requirements'' includes, but is not 
limited to: monitoring required under the compliance assurance 
monitoring (CAM) rule, 40 CFR part 64, where it applies; monitoring 
required under federal rules such as new source performance 
standards (NSPS) in 40 CFR part 60, national emissions standards for 
hazardous air pollutants (NESHAP) in 40 CFR part 61, maximum 
achievable control technology (MACT) standards in 40 CFR part 63, 
and the acid rain program rules in 40 CFR parts 72 through 75; and 
monitoring required in EPA-approved SIP, TIP and FIP rules.
---------------------------------------------------------------------------

    In the ``umbrella monitoring'' rule, EPA also announced plans to 
address monitoring in three related rulemaking actions. First, EPA 
announced plans to encourage States to improve potentially inadequate 
monitoring in certain SIP rules through this preamble and specifically 
through separate guidance to be developed later in connection with this 
rulemaking. The guidance is expected to describe methods of improving 
monitoring frequency or adopting more appropriate monitoring for States 
to consider in developing their PM2.5 SIPs and to illustrate 
the amount of credit that States could receive in PM2.5 SIPs 
for adopting such improved monitoring. In particular, the guidance is 
expected to address the widespread practice of using visual techniques, 
such as visible emissions checks, to show compliance with particulate 
matter limits. As discussed in section Q.2 below, we are concerned that 
visible emissions techniques may be inadequate to detect 
PM2.5 emissions in some circumstances. To the extent that 
States implement this PM2.5 guidance and revise their SIPs 
to adopt improved monitoring, then further actions by the State or EPA 
to bring an area into attainment may be unnecessary.
    In addition, EPA announced plans to identify and consider improving 
potentially inadequate monitoring in certain federal rules or in SIP 
rules not addressed in connection with the PM2.5 
implementation guidance or rulemaking over a longer time frame. 
Specifically, EPA announced its intent to publish an advance notice of 
proposed rulemaking requesting comment on what inadequate monitoring 
may exist in federal applicable requirements and seeking suggestions as 
to the ways in which inadequate monitoring in such rules could be 
improved. EPA also announced its intent to request comment on 
inadequate monitoring that may exist in other rules, such as SIP rules 
not addressed in connection with this PM2.5 rulemaking and 
guidance. The EPA indicated that comments received on the ANPR will 
inform its decision as to what steps to take next, such as whether to 
undertake national rulemakings to revise federal rules such as NSPS or 
NESHAP. Finally, EPA announced plans to publish a separate proposed 
rule to address what monitoring constitutes ``periodic'' monitoring 
under Sec. Sec.  70.6(a)(3)(i)(B) and 71.6(a)(3)(i)(B) and what types 
of monitoring should be created under Sec. Sec.  70.6(a)(3)(i)(B) and 
71.6(a)(3)(i)(B). Together with the umbrella monitoring rule, these 
three related rulemaking actions comprise EPA's four-step strategy for 
improving existing monitoring where necessary on a programmatic basis.
2. Are Instrumental Techniques More Appropriate Than Visual Emissions 
(VE) Techniques for Monitoring Compliance With PM Emissions Limits, for 
Some Situations and Applications?
    We have a concern about the reliance on VE techniques (which are 
based on observations of visible emissions or opacity) for monitoring 
compliance with particulate matter emissions limits, in certain 
situations. For example, in situations where a facility has a low 
margin of compliance with its emission limit [e.g., the emission limit 
is 25 milligrams of PM2.5 per dry standard cubic meter (mg/
dscm) and actual emissions are 22.5 mg/dscm, leaving a margin of 
compliance of 2.5 mg/dscm], VE monitoring may not provide the level of 
sensitivity necessary to monitor compliance. We also have a concern 
about the infrequency of the monitoring sometimes associated with the 
use of these VE monitoring techniques. Although visible emissions and 
the opacity of visible emissions are indicators of a change in PM 
emissions levels, we believe the use of available instrumental 
monitoring technologies that provide a more direct measure of the 
pollutant of concern, PM2.5, constitute improved monitoring 
techniques and are the more appropriate

[[Page 66054]]

method in many cases. These instrumental techniques include bag leak 
detectors (BLD), and particulate matter continuous emissions monitoring 
systems (PM CEMS). In this proposal, we are encouraging States to adopt 
improved monitoring techniques for PM2.5 in their SIPs, and 
we plan to show, via separate guidance, how States can improve 
emissions reductions and therefore increase credits in their SIPs if 
they adopt the improved monitoring for selected sources. See the 
discussion above in section I.17 for potential ways to obtain emissions 
reductions through improved monitoring or controls. Note that the 
improved monitoring techniques may also be appropriate for sources with 
PM10 emissions.
    With respect to the frequency of VE monitoring, we believe more 
frequent monitoring will reduce the potential for excess emissions to 
occur unnoticed and, thus, will minimize the duration of excess 
emissions periods. An example is the monitoring of VE from a fabric 
filter control device utilizing weekly visual observations. The 
potential exists for excess emissions to occur during the entire period 
between observations, or up to seven days. Increasing the frequency of 
observations to a daily basis significantly reduces the potential 
duration of any excess emissions period. For example, consider an 
emissions unit controlled with a fabric filter that emits 15 tons per 
year PM2.5 (filterable), and has no visible emissions during 
normal operation. For the baseline condition, assume an excess 
emissions rate of 5 percent. By increasing the frequency of 
observations from a weekly to a daily basis, the exceedences are 
observed and corrective action and repair are taken in a more timely 
manner; the resulting emissions reduction ranges from 11 to 13 tons per 
year filterable PM2.5, or 37 to 81 percent reduction of the 
potential excess emissions.\114\ If the potential emissions reduction 
for filterable PM10 also is considered, the PM reductions 
would include an additional 6.3 to 8.0 tons per year depending on the 
calculation method used.
---------------------------------------------------------------------------

    \114\ ``Impact of Improved Monitoring on PM2.5 
Emissions,'' memorandum from L. Barr and K. Schaffner, RTI 
International, to B. Parker, U.S. Environmental Protection Agency. 
December 2003.
---------------------------------------------------------------------------

    With respect to improved monitoring techniques for 
PM2.5, we believe currently available instrumental 
techniques are more capable of detecting changes in performance of the 
control device than visual observations or COMS, in some applications, 
such as at low emissions levels sometimes required for compliance with 
PM2.5 emissions limits. Furthermore, unlike periodic visual 
observations, these instrumental techniques provide information on a 
continuous basis. Consequently, we believe use of these instrumental 
techniques can reduce the occurrence of excess emissions because (1) 
they are capable of sensing a change in performance that might not be 
sensed by a visual technique and (2) when excess emissions occur, the 
duration of excess emissions will be reduced as a result of the 
frequency of monitoring. An example of an improved monitoring technique 
is the use of a BLD to monitor PM2.5 emissions from a fabric 
filter control device in lieu of weekly visual observations. Consider a 
model emissions unit emitting 15 tons per year PM2.5 
(filterable). For the baseline condition, assume an excess emissions 
rate of 5 percent. By using a continuous instrumental technique, such 
as a BLD, rather than weekly visual observations, the emissions from 
potential excess emissions events would be reduced by 11 to 14 tons per 
year of filterable PM2.5. If the potential emissions 
reduction for filterable PM10 also is considered, the PM 
reductions would be an additional 6.8 to 8.5 tons per year.\115\
---------------------------------------------------------------------------

    \115\ Ibid.
---------------------------------------------------------------------------

    Use of a PM CEMS is another improved monitoring technique. PM CEMS 
technology provides the opportunity to quantitatively monitor PM 
emissions levels (concentration or emissions rates). This provides the 
source owner/operator with an additional level of information that can 
be useful for understanding and operating the process and air pollution 
control device. Furthermore, this technology will provide the State 
with quantitative information on actual PM emissions, which will help 
improve the inventory and achieve compliance with the NAAQS for 
PM2.5.
    To inform our guidance development, we are asking for comment, 
information, and relevant data on these monitoring issues. 
Specifically:
    (1) In certain instances or applications, are we correct in our 
belief that improved monitoring techniques are available and are more 
appropriate to use than VE techniques for monitoring compliance with 
PM2.5 emissions? Based on your experience, in which cases do 
you believe improved monitoring techniques are more appropriate than VE 
techniques for monitoring compliance with PM2.5 (or PM, in 
general) emissions limits, and what monitoring techniques would you 
recommend? Based on your experience, are BLD and PM CEMS reliable, 
cost-effective methods that are more sensitive then VE techniques for 
monitoring compliance with PM emissions?
    (2) Will increasing the frequency of VE observations resolve the 
issue of applicability of VE techniques for monitoring compliance with 
PM2.5 emissions? In other words, are there situations in 
which increased VE frequency (i.e., daily versus weekly) would be 
expected to have no impact on compliance with PM2.5 emission 
limits? If so, please provide relevant data and explanation of such 
situations.
    (3) Do we need to mandate through rulemaking a move away from VE 
techniques for monitoring compliance with PM2.5 and PM 
emissions limits, in certain situations and applications? If so, in 
what cases?
    (4) Should our effort with regard to the use of improved monitoring 
techniques in lieu of VE monitoring be focused on applicable 
requirements established/relied upon for compliance with the 
PM2.5 standard, or should we more broadly address other 
applicable requirements where VE techniques are commonly used (e.g., 
TSP, PM10)?
    In addition, we also request comment, information, and relevant 
data on any other issues relating to the use of VE techniques for 
monitoring compliance with particulate matter emission limits.
3. What constitutes improved monitoring?
    Additional Reductions from Existing Rules. We request comment on 
the following approach that States may choose to implement to reduce 
emissions through the improved monitoring of emission controls at 
stationary sources. An improved monitoring control measure would 
increase emissions reduction for existing rules. These emissions 
reductions would be achieved by increasing the monitoring frequency or 
improving the monitoring technique of the add-on air pollution control 
device operation and the process operation above the level currently 
required in existing rules. The increased frequency or improved 
technique would allow owners or operators to achieve greater emissions 
reductions by identifying and correcting periods of excess emissions. 
State, local, and Tribal agencies could use the improved monitoring 
control measure option to reduce emission levels and receive credits. 
As described in the docket, State, local, and Tribal air pollution 
agencies who have source owners/operators increase monitoring frequency 
at their facilities could achieve emissions reductions up to 13 
percent, and those who improve the monitoring technique could achieve 
emissions reductions up to 15

[[Page 66055]]

percent.\116\ Nonattainment areas where additional reductions are 
needed to help the area achieve compliance with the NAAQS could 
implement an improved monitoring measure. State, local, and Tribal air 
pollution agencies could set a size cutoff or other criteria that would 
define which facilities would be subject. State, local, and Tribal 
agencies could receive SIP credits because enforceable improved 
monitoring or voluntary programs meeting EPA's voluntary policies for 
SIP credit could achieve additional emissions reductions for facilities 
in the area.
---------------------------------------------------------------------------

    \116\ ``Impact of Improved Monitoring on PM2.5 
Emissions,'' memorandum from L. Barr and K. Schaffner, RTI 
International, to B. Parker, U.S. Environmental Protection Agency. 
December 2003.
---------------------------------------------------------------------------

    Improved monitoring could come in the form of (1) conducting the 
currently required monitoring more frequently (i.e., increased 
monitoring frequency), (2) changing the monitoring technique to a 
parameter more closely related to PM2.5 and its precursors 
(i.e., an improved monitoring technique), (3) changing the technique to 
monitoring PM2.5 and its precursors, or (4) a combination of 
these improvements. These types of monitoring improvements could be 
conducted for both controlled and uncontrolled emission units. The 
improved monitoring control measure would require facilities to pay 
more attention to the operation of add-on air pollution control devices 
and the process operation. The additional attention will reduce excess 
emission periods and increase emissions reductions for existing rules.
    For the purposes of discussion today, we are focusing on two 
scenarios. The first scenario involves increased monitoring frequency 
for controlled emission units. The second scenario incorporates 
improved monitoring techniques that include upgrading to a bag leak 
detector (BLD) monitoring device and upgrading to a PM continuous 
emissions monitoring system (CEMS) for controlled emission units.
    As an example of improved monitoring, consider a facility that 
currently monitors for visible emissions once per day voluntarily 
increasing its monitoring frequency of visible emissions to once per 
hour, or installing a BLD system that continuously monitors the control 
device. Under the improved monitoring control measure, the source 
owners/operators would be more likely to detect the presence of a 
problem and to correct it more quickly. Expedient detection and 
correction of problems will result in reduced periods of excess 
emissions and, consequently, lower emissions. The increased monitoring 
frequency works to reduce the time between equipment failure and its 
discovery by plant personnel. The underlying assumption is, of course, 
that faster discovery leads to faster correction.
    The improved monitoring technique provides more certainty in 
detecting the presence of a problem that may have gone unnoticed with 
the previous technique. For example, consider a facility that monitors 
opacity with a COMS as a surrogate for particulate matter. The 
facility's opacity, as measured by the COMS, is consistently at 10 
percent. However, emissions test data have shown that, when a new BLD 
monitoring system is applied, the facility can be exceeding its PM 
limit at an opacity less than 10 percent. In this example, application 
of an improved monitoring technique provides a more direct and more 
sensitive measurement of the pollutant of concern (PM vs. opacity) and 
allows the facility to better track performance of the control device 
and its emissions levels.
    In addition to the improved monitoring measures, there are other 
ways to achieve significant PM2.5 emissions reductions, 
including requiring add-on air pollution controls for uncontrolled 
emissions units that are capable of being controlled. In this type of 
approach, State, local, and Tribal agencies could require large 
uncontrolled emission units to be controlled with new air pollution 
control devices. Fabric filters would control filterable 
PM2.5 emissions while other control devices such as 
scrubbers would control both filterable and condensable 
PM2.5 emissions. In one example for a large uncontrolled 
unit, PM2.5 emissions (filterable) may be reduced by 131 
tons per year when a fabric filter achieving 99 percent control 
efficiency is installed. The cost effectiveness to install this new 
control device would be determined based on the annualized cost of 
operating the fabric filter and the emission reduction of 
PM2.5 achieved by the device. If co-controlled pollutants 
are included in the analysis, e.g., PM10 filterable 
emissions, then the emissions reductions achieved by the new fabric 
filter would include an additional 260 tons per year. The total 
emission reduction for this source would be 390 tons per year; the 
cost-effectiveness values with collateral benefits included will be 
even lower. The fabric filter in this example would be monitored with a 
BLD system on a continuous basis (at least four times per hour).
    What are the Assumptions Used to Determine the Reductions? We 
estimated the emissions reductions that can be achieved by 
implementation of the improved monitoring measures. Consistent with the 
baseline excess emissions rate established in the compliance assurance 
monitoring (CAM) rule (40 CFR part 64) analysis, we assumed an initial 
excess emissions rate of five percent each year. Under the NSPS and 
other federal rules, an excess emissions rate greater than five percent 
is a trigger for increased reporting, and facilities generally ensure 
that they do not exceed this threshold level of excess emissions to 
avoid increased reporting. Of course, there may be exceptions to this 
assumption, where facilities have excess emissions rates greater than 5 
percent. The percentage of excess emissions represents a period of 
noncompliance when emissions are likely to be above the allowable 
emissions rates. Increased frequency monitoring will help owners or 
operators of facilities to maintain the effectiveness of emissions 
controls by identifying excursions early and repairing or adjusting the 
control device immediately. The length of time that an emissions unit 
is experiencing excess emissions is directly related to the level of 
excess emissions from the source. Reducing the amount of time the 
emission unit operates in this mode will reduce its actual emissions to 
the atmosphere.
    In this study, we made two assumptions regarding the control 
efficiency of the add-on air pollution control device during excess 
emissions periods. In one method, we assumed the control device fails 
catastrophically; that is, its control efficiency is zero percent. We 
realize that some add-on air pollution control devices fail 
catastrophically during malfunctions, while others operate at some 
efficiency less than optimal but greater than zero. For the purposes of 
the study and for simplification, we made the assumption of zero 
percent control in this method. The control efficiency could also be 
estimated at some value between zero and the design control efficiency. 
In an alternative method, the control efficiency during excess 
emissions periods was estimated to be 80 percent of the design 
efficiency.
    The potential emissions reductions examined here mostly address 
direct, filterable PM2.5 and also address condensable 
PM2.5 only where the control device was likely to achieve 
reductions for condensable emissions. Additional emissions reductions 
may also be achieved for co-pollutants emitted from the emissions 
units. We

[[Page 66056]]

believe that control for these other pollutants, e.g., PM10, 
TSP, and HAP, may also be improved by the monitoring measures. However, 
these improvements are not accounted for here. Improved monitoring, 
i.e., increased frequency for existing monitoring instruments or 
improved monitoring techniques, could also be applied to the precursors 
of PM2.5 to achieve additional potential reductions.
    The improved monitoring control measure would increase emissions 
reductions for existing rules. The emissions reduction achieved would 
not necessarily be reflected in future emissions inventory data but 
rather would be reflected in lower ambient air monitoring 
concentrations.\117\ In assessing emissions from a particular facility, 
we generally assume 100 percent compliance for 100 percent of the 
operating time. However, excess emissions occur as a result of less 
than full compliance with standards, rules, and regulations. For 
example, a facility with an air pollution control device designed to 
achieve a 95 percent control efficiency will achieve the design 
efficiency if maintained and operated properly. Currently, the owner or 
operator of such a facility would conduct a prescribed monitoring 
technique (control device parameter, process parameter, or pollutant 
concentration) at a prescribed frequency. Operation outside of limits 
set for the monitored parameter(s) is an excursion for CAM rule 
purposes (and may be an exceedance for other rules) and may be an 
indication of excess emissions.
---------------------------------------------------------------------------

    \117\ In the six metropolitan statistical areas reviewed for 
this study, 100 percent rule effectiveness and 100 percent rule 
penetration was shown in the 1999 NEI version 3 for all facilities.
---------------------------------------------------------------------------

    In accordance with CAM rule requirements, we assumed that 
facilities are currently required to monitor add-on control devices of 
applicable emission units at least once per day. With this approach, we 
ensure that the emissions reductions achieved by the CAM rule are not 
double-counted. We determined previously during the CAM rule 
development that the detection of a problem with an add-on air 
pollution control device that is monitored once per day could take up 
to 12 hours to detect. After the problem has been detected, it may take 
an additional 24 hours to conduct the repair, during which time the 
process may be emitting above the emissions limit. The entire excess 
emissions period could last up to 36 hours. By increasing the frequency 
of monitoring and conducting diligent repair, the time required to 
detect a problem will decrease, and the time a unit operates in excess 
emission mode or malfunction will decrease.
    Examples of the Emissions Reductions that Can Be Achieved. In a 
six-metropolitan statistical area (MSA) mini-study, we reviewed the 
PM2.5 emissions data (filterable and some condensable) from 
the 1999 NEI version 3 for all emission points at stationary sources 
located in the MSAs. We applied the improved monitoring control 
measures to only those emission points in the MSA that are controlled 
with fabric filters, electrostatic precipitators, and scrubbers. This 
subset included a total of 689 emission points at 128 facilities.
    Based on review of emission points with add-on air pollution 
control devices, we found that PM2.5 emissions (filterable/
some condensable) can be reduced from 0.25 percent up to 13 percent 
following the application of a requirement to conduct more frequent 
monitoring. Potential PM2.5 emissions reductions ranged from 
89 tons per year to 4,600 tons per year with increased monitoring 
frequency. We also found that PM2.5 emissions (filterable/
some condensable) can be reduced from 2.5 percent to 15 percent by 
requiring an improved monitoring technique such as a PM CEMS (and a 
corollary increased frequency). The potential PM2.5 
emissions reductions ranged from 810 to 5,300 tons per year. We 
analyzed the emissions reductions achievable by reducing the excess 
emission rate from the nominal 5 percent excess emissions to an excess 
emissions rate of 2.5 percent (half of the nominal excess emission 
rate), 0.46 percent (represents one week of excess emissions each year, 
40 hours out of 8760), and 0 percent (no excess emissions). As 
mentioned previously, there may be some facilities with an excess 
emissions rate even greater than 5 percent; in these instances, the 
potential emissions reductions due to improved monitoring may be even 
greater. The emissions reduction calculation for application of an 
improved monitoring control measure included a certainty factor related 
to detecting excess emission periods and assurance of emissions levels. 
The certainty factor for PM CEMS was 1.0, the factor for BLD was 0.95, 
and the factor for parametric monitoring was 0.90. The certainty factor 
for visual emissions and COMS when used to monitor PM was also 0.90.
    In another example of an improved monitoring technique, a BLD 
monitoring system was applied only to the subset of emission units in 
the six MSA area that are controlled with fabric filters. A total of 
102 facilities were affected by this option. In this scenario, the 
emission reduction (filterable PM2.5 only) was determined to 
be 0.78 to 12 percent, or 280 to 4,100 tons per year.
    Costs to conduct monitoring at an increased frequency included the 
cost to develop the more frequent monitoring approach and the 
incremental annual costs for recordkeeping, reporting, and 
certification related to the improved monitoring. Costs to implement an 
improved monitoring technique included the total annual cost for the 
new monitoring equipment, including the recordkeeping and reporting 
costs associated with the new monitoring. We anticipate that changes to 
monitoring would be incorporated into individual facility permits at 
permit renewal, to help minimize costs to air agencies and source 
owners/operators; costs related to incorporating the improved 
monitoring into permits on a quicker basis than regular permit renewal 
have not been assessed. The cost algorithms for the six-MSA study are 
delineated in the ``Improved Monitoring'' memorandum. The cost-
effectiveness values include the emissions reductions for 
PM2.5 filterable and some condensable. When reduction of co-
pollutants are included in the cost-effectiveness analysis, the cost-
effectiveness values are even lower. States can compare the cost 
effectiveness for improved monitoring to the cost effectiveness of 
other PM2.5 control measures when selecting the mix of 
measures for their implementation plans.
    The methods for estimating emission reductions and cost 
effectiveness ranges for the six-city study discussed in this section 
are based on the best technical information we had available. We 
recognize that commenters may have suggestions for ways to improve 
these estimates. Thus, to inform our guidance development, we solicit 
your comments on a number of issues. We solicit your comments on these 
control measures for increased frequency of monitoring and improved 
monitoring technique. We also request your comments on the feasibility 
of co-pollutant control due to improved monitoring measures. We also 
solicit submission of developed examples of improved monitoring, 
including a description of the measure, monitoring data, etc., if 
available. Finally, we encourage submission of methodologies--complete 
with equations and explanations--for estimating emissions reductions 
due to improved monitoring other than those referenced here.

[[Page 66057]]

R. What guidance should be provided that is specific to Tribes?

    This section summarizes guidance for Tribes offered in various 
parts of this proposal. The 1998 Tribal Authority Rule (TAR) (40 CFR 
part 49), which implements section 301(d) of the CAA, gives Tribes the 
option of developing tribal implementation plans (TIPs). Specifically, 
the TAR provides for the Tribes to be treated in the same manner as a 
State in implementing sections of the CAA. However, Tribes are not 
required to develop implementation plans. The EPA determined in the TAR 
that it was inappropriate to treat Tribes in a manner similar to a 
State with regard to specific plan submittal and implementation 
deadlines for NAAQS-related requirements, including, but not limited 
to, such deadlines in CAA sections 110(a)(1), 172(a)(2), 182, 187, and 
191.\118\
---------------------------------------------------------------------------

    \118\ See 40 CFR 49.4(a). In addition, EPA determined it was not 
appropriate to treat tribes similarly to states with respect to 
provisions of the CAA requiring as a condition of program approval 
the demonstration of criminal enforcement authority or providing for 
the delegation of such criminal enforcement authority. See 40 CFR 
49.4(g). To the extent a tribe is precluded from asserting criminal 
enforcement authority, the federal government will exercise primary 
criminal enforcement responsibility. See 40 CFR 49.8. In such 
circumstances, tribes seeking approval for CAA programs provide 
potential investigative leads to an appropriate federal enforcement 
agency.
---------------------------------------------------------------------------

    If a Tribe elects to do a TIP, we will work with the Tribe to 
develop an appropriate schedule which meets the needs of the Tribe, and 
which does not interfere with the attainment of the NAAQS in other 
jurisdictions. The Tribe developing a TIP can work with the EPA 
Regional Office on the appropriateness of addressing RFP and other 
substantive SIP requirements that may or may not be appropriate for the 
Tribe's situation.
    The TAR indicates that EPA is ultimately responsible for 
implementing CAA programs in Indian country, as necessary and 
appropriate, if Tribes choose not to implement those provisions. For 
example, an unhealthy air quality situation in Indian country may 
require EPA to develop a FIP to reduce emissions from sources on the 
reservation. In such a situation, EPA, in consultation with the Tribe 
and in consideration of their needs, would work to ensure that the 
NAAQS are met as expeditiously as practicable. Likewise, if we 
determine that sources in Indian country could interfere with a larger 
nonattainment area meeting the NAAQS by its attainment date, we would 
develop a FIP for those sources in consultation with the Tribe, as 
necessary or appropriate.
    The TAR also provides flexibility for the Tribe in the preparation 
of a TIP to address the NAAQS. If a Tribe elects to develop a TIP, the 
TAR offers flexibility to Tribes to identify and implement--on a Tribe-
by-Tribe, case-by-case basis--only those CAA programs or program 
elements needed to address their specific air quality problems. In the 
proposed Tribal rule, we described this flexible implementation 
approach as a ``modular approach.'' Each Tribe may evaluate the 
particular activities, including potential sources of air pollution 
within the exterior boundaries of its reservation (or within non-
reservation areas for which it has demonstrated jurisdiction), which 
cause or contribute to its air pollution problem. A Tribe may adopt 
measures for controlling those sources of PM2.5-related 
emissions, as long as the elements of the TIP are ``reasonably 
severable'' from the package of elements that can be included in a 
whole TIP. A TIP must include regulations designed to solve specific 
air quality problems for which the Tribe is seeking EPA approval, as 
well as a demonstration that the Tribal air agency has the authority 
from the Tribal government to develop and run their program, the 
capability to enforce their rules, and the resources to implement the 
program they adopt. In addition, the Tribe must receive an 
``eligibility determination'' from EPA to be treated in the same manner 
as a State and to receive authorization from EPA to run a CAA program.
    EPA would review and approve, where appropriate, these partial TIPs 
as one step of an overall air quality plan to attain the NAAQS. A Tribe 
may step in later to add other elements to the plan, or EPA may step in 
to fill gaps in the air quality plan as necessary or appropriate. In 
approving a TIP, we would evaluate whether the plan interferes with the 
overall air quality plan for an area when Tribal lands are part of a 
multi-jurisdictional area.
    Because many of the nonattainment areas will include multiple 
jurisdictions, and in some cases both Tribal and State jurisdictions, 
it is important for the Tribes and the States to work together to 
coordinate their planning efforts. States need to incorporate Tribal 
emissions in their base emission inventories if Indian country is part 
of an attainment or nonattainment area. Tribes and States need to 
coordinate their planning activities as appropriate to ensure that 
neither is adversely affecting attainment of the NAAQS in the area as a 
whole.

S. Are there any additional requirements related to enforcement and 
compliance?

    In general, for a SIP regulation to be enforceable, it must clearly 
spell out which sources or source types are subject to its requirements 
and what its requirements (e.g., emission limits, work practices, etc.) 
are. The regulation also needs to specify the time frames within which 
these requirements must be met, and must definitively state 
recordkeeping and monitoring requirements appropriate to the type of 
sources being regulated. The recordkeeping and monitoring requirements 
must be sufficient to allow determinations on a continuing basis 
whether sources are complying. An enforceable regulation must also 
contain test procedures in order to determine whether sources are in 
compliance.
    Under the Title V regulations, major sources have an obligation to 
include in their Title V permit applications all emissions for which 
the source is major and all emissions of regulated air pollutants. The 
definition of regulated air pollutant in 40 CFR 70.2 includes any 
pollutant for which a NAAQS has been promulgated, which would include 
both PM10 and PM2.5. To date, some permitted 
entities have been using PM10 emissions as a surrogate for 
PM2.5 emissions. Upon promulgation of this rule, EPA will no 
longer accept the use of PM10 as a surrogate for 
PM2.5. Thus, sources will be required to include their 
PM2.5 emissions in their Title V permit applications, in any 
corrections or supplements to these applications, and in applications 
submitted upon modification and renewal.\119\ Sources must continue to 
identify their PM10 emissions in their applications as 
described above because the original PM10 NAAQS remains in 
effect.
---------------------------------------------------------------------------

    \119\ See 40 CFR 70.5(c)(3)(i), 70.5(b), and 70.7(a)(1)(i); 40 
CFR 71.5(c)(3)(i), 71.5(b), and 71.7(a)(1)(i).
---------------------------------------------------------------------------

T. What requirements should apply to emergency episodes?

    Currently, subpart H of 40 CFR part 51 specifies requirements for 
SIPs to address emergency air pollution episodes and for preventing air 
pollutant levels from reaching levels determined to cause significant 
harm to human health. We anticipate proposing a separate rulemaking in 
the future to update portions of that rule to address the 8-hour ozone 
and PM2.5 NAAQS.

[[Page 66058]]

U. What ambient monitoring requirements will apply under the PM2.5 
NAAQS?

    States are required to monitor PM2.5 mass concentrations 
using Federal Reference Method devices to determine compliance with the 
NAAQS.\120\ Currently, there are more than 1200 FRM monitors located 
across the country. States will need to maintain monitors in designated 
nonattainment areas in order to track progress toward attainment and 
ultimately determine whether the area has attained the PM2.5 
standards.
---------------------------------------------------------------------------

    \120\ The PM2.5 monitoring regulations are located at 
40 CFR Part 58.
---------------------------------------------------------------------------

    In addition to the FRM network, EPA and the States have also 
deployed more than 250 speciation monitoring sites around the country 
to sample for chemical composition of PM2.5. The data 
provided from these speciation monitors are invaluable in identifying 
contributing source categories and developing control strategies to 
reach attainment. Source apportionment and other receptor modeling 
techniques rely on the detailed data on species, ions, and other 
compounds obtained from chemical analysis. Analyses of rural versus 
urban sites to identify which PM2.5 components comprise the 
``urban excess'' (urban minus rural levels) portion of PM2.5 
mass also rely on data from speciation monitors. The EPA encourages 
states to expand their data analysis efforts using the wealth of 
information provided from the speciation monitoring network.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, [58 FR 51735 (October 4, 1993)] the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Under the terms of Executive Order 12866, it has been determined 
that this rule is a ``significant regulatory action.'' As such, this 
action was submitted to OMB for EO 12866 review. Changes made in 
response to OMB suggestions or recommendations will be documented in 
the public record.

B. Paperwork Reduction Act

    The information collection requirements in this rule will be 
submitted for approval to OMB under the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. The information collection requirements are not 
enforceable until OMB approves them other than to the extent required 
by statute.
    This rule provides the framework for the States to develop SIPs to 
achieve a new or revised NAAQS. This framework reflects the 
requirements prescribed in CAA sections 110 and part D, subpart 1 of 
title I. In that sense, the present final rule does not establish any 
new information collection burden on States. Had this rule not been 
developed, States would still have the legal obligation under law to 
submit nonattainment area SIPs under part D of title I of the CAA 
within specified periods after their nonattainment designation for the 
PM2.5 standards, and the SIPs would have to meet the 
requirements of part D.
    A SIP contains rules and other requirements designed to achieve the 
NAAQS by the deadlines established under the CAA, and also contains a 
demonstration that the State's requirements will in fact result in 
attainment. The SIP must meet the CAA requirements in subpart 1 to 
adopt RACM, RACT, and provide for RFP toward attainment for the period 
prior to the area's attainment date. After a State submits a SIP, the 
CAA requires EPA to approve or disapprove the SIP. If EPA approves the 
SIP, the rules in the SIP become federally enforceable. If EPA 
disapproves the SIP (or if EPA finds that a State fails to submit a 
SIP), the CAA requires EPA to impose sanctions (2:1 offsets for major 
new or modified sources and restrictions on Federal highway funding) 
within specified timeframes; additionally, EPA must prepare and publish 
a SIP within 2 years after a disapproval or finding of failure to 
submit. The SIP must be publicly available. States must maintain 
confidentiality of confidential business information, however, if used 
to support SIP analyses. The SIP is a one-time submission, although the 
CAA requires States to revise their SIPs if EPA requests a revision 
upon a finding that the SIP is inadequate to attain or maintain the 
NAAQS. The State may revise its SIP voluntarily as needed, but in doing 
so must demonstrate that any revision will not interfere with 
attainment or RFP or any other applicable requirement under the CAA 
(see section 110(l)).
    This rule does not establish requirements that directly affect the 
general public and the public and private sectors, but, rather, 
interprets the statutory requirements that apply to States in preparing 
their SIPs. The SIPs themselves will likely establish requirements that 
directly affect the general public, and the public and private sectors.
    The EPA has not yet projected cost and hour burden for the 
statutory SIP development obligation but has started that effort and 
will shortly prepare an Information Collection Request (ICR) request. 
However, EPA did estimate administrative costs at the time of 
promulgation of the PM2.5 standards in 1997. See Chapter 10 
of U.S. EPA 1997, Regulatory Impact Analyses for the Particulate Matter 
and Ozone National Ambient Air Quality Standards, Innovative Strategies 
and Economics Group, Office of Air Quality Planning and Standards, 
Research Triangle Park, N.C., July 16, 1997. Assessments of some of the 
administrative cost categories identified as a part of the SIP for the 
PM2.5 standards have already been conducted as a result of 
other provisions of the CAA and associated ICRs (e.g., emission 
inventory preparation, air quality monitoring program, conformity 
assessments, NSR, I/M program).
    The burden estimates in the ICR for this rule are incremental to 
what is required under other provisions of the CAA. Burden means the 
total time, effort, or financial resources expended by persons to 
generate, maintain, retain, or disclose or provide information to or 
for a Federal agency. This includes the time needed to review 
instructions; develop, acquire, install, and utilize technology and 
systems for the purposes of collecting, validating, and verifying 
information, processing and maintaining information, and disclosing and 
providing information; adjust the existing ways to comply with any 
previously applicable instructions and requirements; train personnel to 
be able to respond to a collection of information; search data sources; 
complete and review the collection of information; and transmit or 
otherwise disclose the information.

[[Page 66059]]

    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is 
approved by OMB, the Agency will publish a technical amendment to 40 
CFR part 9 in the Federal Register to display the OMB control number 
for the approved information collection requirements contained in this 
final rule. However, the failure to have an approved ICR for this rule 
does not affect the statutory obligation for the States to submit SIPs 
as required under part D of the CAA.
    The information collection requirements associated with NSR 
permitting for ozone are covered by EPA's request to renew the approval 
of the ICR for the NSR program, ICR 1230.17, which was approved by OMB 
on January 25, 2005. The information collection requirements associated 
with NSR permitting were previously covered by ICR 1230.10 and 1230.11. 
The OMB previously approved the information collection requirements 
contained in the existing NSR regulations at 40 CFR parts 51 and 52 
under the provisions of the Paperwork Reduction Act, and assigned OMB 
control number 2060-0003. A copy of the approved ICR may be obtained 
from Susan Auby, Collection Strategies Division; U.S. Environmental 
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 
20460 or by calling (202) 566-1672.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an Agency to 
prepare a regulatory flexibility analysis of any rule subject to notice 
and comment rulemaking requirements under the Administrative Procedures 
Act or any other statute unless the Agency certifies the rule will not 
have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions.
    For purposes of assessing the impacts of today's proposed rule on 
small entities, small entity is defined as: (1) A small business that 
is a small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards. (See 13 CFR part 121); (2) a 
governmental jurisdiction that is a government of a city, county, town, 
school district or special district with a population of less than 
50,000; and (3) a small organization that is any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The proposed 
rule governing SIPs will not directly impose any requirements on small 
entities. Rather, this rule interprets the obligations established in 
the CAA for States to submit implementation plans in order to attain 
the PM2.5 NAAQS.
    Additionally, with respect to NSR, this proposed rule does not 
itself create the obligation to obtain an NSR permit for new major 
stationary sources and modifications resulting in emissions of 
PM2.5 and its precursors. Rather, the preexisting rules 
establish this obligation, and this proposed rule clarifies how that 
obligation will be implemented.
    We believe that the existing Regulatory Flexibility Screening 
Analysis (RFASA) further supports the conclusion that the NSR proposal 
will not have a significant economic impact on a substantial number of 
small entities. The RFASA, developed as part of a 1994 draft Regulatory 
Impact Analysis (RIA) and incorporated into the September 1995 ICR 
renewal analysis, showed that the changes to the NSR program due to the 
1990 CAA Amendments would not have an adverse impact on small entities. 
This analysis encompassed the entire universe of applicable major 
sources that were likely to also be small businesses (approximately 50 
``small business'' major sources). Because the administrative burden of 
the NSR program is the primary source of the NSR program's regulatory 
costs, the analysis estimated a negligible ``cost to sales'' 
(regulatory cost divided by the business category mean revenue) ratio 
for this source group. Currently, there is no economic basis for a 
different conclusion. We do not believe the number of ``small 
business'' major sources will increase appreciably because all sources 
who are major for PM2.5 or one of its precursors 
(SO2, NOX, or VOC) will already be major for 
PM10 or such precursor. We continue to be interested in the 
potential impacts of the proposed rule on small entities and welcome 
comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and Tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
1 year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including Tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    The EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and Tribal governments, in the aggregate, or the private 
sector in any 1 year. The estimated administrative burden hour and 
costs associated with implementing the PM2.5 NAAQS were 
developed upon promulgation of the standard and presented in Chapter 10 
of U.S. EPA 1997, Regulatory Impact Analyses for the Particulate Matter 
and Ozone National Ambient Air Quality Standards, Innovative Strategies 
and Economics Group, Office of Air Quality Planning and Standards, 
Research Triangle Park, N.C., July 16, 1997. The estimated costs 
presented there for States in 1990 dollars totaled $0.9 million. The 
corresponding estimate in 1997 dollars is $1.1 million. Thus, today's 
rule is not subject to the requirements of section 202 and 205 of the 
UMRA.

[[Page 66060]]

    The CAA imposes the obligation for States to submit SIPs to 
implement the PM2.5 NAAQS. In this rule, EPA is merely 
providing an interpretation of those requirements. However, even if 
this rule did establish an independent requirement for States to submit 
SIPs, it is questionable whether a requirement to submit a SIP revision 
would constitute a Federal mandate in any case. The obligation for a 
State to submit a SIP that arises out of section 110 and section 172 
(part D) of the CAA is not legally enforceable by a court of law, and 
at most is a condition for continued receipt of highway funds. 
Therefore, it is possible to view an action requiring such a submittal 
as not creating any enforceable duty within the meaning of section 
421(5)(9a)(I) of UMRA (2 U.S.C. 658(a)(I)). Even if it did, the duty 
could be viewed as falling within the exception for a condition of 
Federal assistance under section 421(5)(a)(i)(I) of UMRA (2 U.S.C. 
658(5)(a)(i)(I)).
    In the proposal, EPA has determined that this proposed rule 
contains no regulatory requirements that may significantly or uniquely 
affect small governments, including Tribal governments. Nonetheless, 
EPA carried out consultations with governmental entities affected by 
this rule.

E. 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.''
    This proposed rule does not have federalism implications. It 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. As described in section D, above 
(on UMRA), EPA previously determined the costs to States to implement 
the PM2.5 NAAQS to be approximately $0.9 million in 1990 
dollars. The corresponding estimate in 1997 dollars is $1.1 million. 
While this proposed rule considers options not addressed at the time 
the NAAQS were promulgated, the costs for implementation under these 
options would rise only marginally. This rule clarifies the statutory 
obligations of States in implementing the PM2.5 NAAQS. 
Finally, the CAA establishes the scheme whereby States take the lead in 
developing plans to meet the NAAQS. This proposed rule would not modify 
the relationship of the States and EPA for purposes of developing 
programs to implement the NAAQS. Thus, Executive Order 13132 does not 
apply to this proposed rule.
    Although section 6 of Executive Order 13132 does not apply to this 
rule, EPA actively engaged the States in the development of this 
proposed rule. The EPA held a number of calls with representatives of 
State and local air pollution control agencies.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by Tribal officials in the development of regulatory 
policies that have Tribal implications.'' This proposed rule does not 
have ``Tribal implications'' as defined in Executive Order 13175. This 
rule concerns the requirements for state and tribal implementation 
plans for attaining the PM2.5 air quality standards. The CAA 
provides for States to develop plans to regulate emissions of air 
pollutants within their jurisdictions. The Tribal Air Rule (TAR) under 
the CAA gives Tribes the opportunity to develop and implement CAA 
programs such as programs to attain and maintain the PM2.5 
NAAQS, but it leaves to the discretion of the Tribe the decision of 
whether to develop these programs and which programs, or appropriate 
elements of a program, they will adopt.
    This proposed rule does not have Tribal implications as defined by 
Executive Order 13175. It does not have a substantial direct effect on 
one or more Indian Tribes, since no Tribe has implemented a CAA program 
to attain the PM2.5 NAAQS at this time. EPA notes that even 
if a Tribe were implementing such a plan at this time, while the rule 
might have Tribal implications with respect to that Tribe, it would not 
impose substantial direct costs upon it, nor would it preempt Tribal 
law.
    Furthermore, this rule does not affect the relationship or 
distribution of power and responsibilities between the Federal 
government and Indian Tribes. The CAA and the TAR establish the 
relationship of the Federal government and Tribes in developing plans 
to attain the NAAQS, and this rule does nothing to modify that 
relationship. As this rule does not have Tribal implications, Executive 
Order 13175 does not apply.
    Although Executive Order 13175 does not apply to this rule, EPA did 
reach out to Tribal leaders and environmental staff regarding this 
proposal. The EPA supports a national ``Tribal Designations and 
Implementation Work Group'' which provides an open forum for all Tribes 
to voice concerns to EPA about the designations and implementation 
process for the NAAQS, including the PM2.5 NAAQS. In 
conference calls EPA briefed Work Group participants and Tribal 
environmental professionals gave input as the rule was under 
development. Furthermore, EPA is sending individualized letters to all 
federally recognized Tribes about this proposal to give Tribal leaders 
the opportunity for consultation. EPA specifically solicits additional 
comment on this proposed rule from tribal officials.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045: ``Protection of Children From Environmental 
Health 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 
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.
    The proposed rule is not subject to Executive Order 13045. 
Nonetheless, we have evaluated the environmental health or safety 
effects of the PM2.5 NAAQS on children. The results of this 
evaluation are contained in the 1997 Federal Register notice 
establishing the PM2.5 standards.\121\ In a number of

[[Page 66061]]

locations in that notice, children are identified as one of the 
principle sub-populations that are particularly sensitive to exposure 
to fine particle pollution. Today's proposed rule provides the 
framework by which States will require sources to reduce pollutant 
emissions, thereby improving air quality and reducing the exposure of 
children and others to unhealthy levels of fine particle pollution.
---------------------------------------------------------------------------

    \121\ See 62 FR 38652-38760, National Ambient Air Quality 
Standards for Particulate Matter, Final Rule; also 40 CFR Part 50.
---------------------------------------------------------------------------

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

    This proposed rule is not a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions That Significantly Affect 
Energy Supply, Distribution, or Use,'' (66 FR 28355, May 22, 2001) 
because it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer 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 (VCS) 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 VCS bodies. The NTTAA directs EPA to provide Congress, 
through OMB, explanations when the Agency decides not to use available 
and applicable VCS.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any VCS.
    The EPA will encourage the States and Tribes to consider the use of 
such standards, where appropriate, in the development of the 
implementation plans.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 requires that each Federal agency make 
achieving environmental justice part of its mission by identifying and 
addressing, as appropriate, disproportionate high and adverse human 
health or environmental effects of its programs, policies, and 
activities on minorities and low-income populations.
    The EPA believes that this proposed rule should not raise any 
environmental justice issues. The health and environmental risks 
associated with ozone were considered in the establishment of the 
PM2.5 NAAQS. The level is designed to be protective with an 
adequate margin of safety. The proposed rule provides a framework for 
improving environmental quality and reducing health risks for areas 
that may be designated nonattainment.

    Dated: September 8, 2005.
Stephen L. Johnson,
Administrator.

    For the reasons stated in the preamble, Title 40, Chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS

    1. The authority citation for part 51 continues to read as follows:

    Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I--Review of New Sources and Modifications

    2. Section 51.165 is amended:
    a. By revising paragraphs (a)(1)(x), (a)(1)(xxxvii)(B), 
(a)(1)(xxxvii)(C);
    b. By adding paragraphs (a)(1)(xxxvii)(D) and (a)(9); and
    c. By adding and reserving paragraph (a)(8) to read as follows:


Sec.  51.165  Permit requirements.

    (a) * * *
    (1) * * *
    (x) Significant means in reference to a net emissions increase or 
the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:

Pollutant Emission Rate

    Carbon monoxide: 100 tons per year (tpy).
    Nitrogen oxides: 40 tpy.
    Sulfur dioxide: 40 tpy.
    Ozone: 40 tpy of volatile organic compounds.
    Lead: 0.6 tpy.
    PM10: 15 tpy.
    PM2.5: 10 tpy of PM2.5 emissions; 40 tpy of 
sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions when 
identified as a PM2.5 precursor under paragraph 
(a)(1)(xxxvii)of this section.
* * * * *
    (xxxvii) * * *
    (B) Any pollutant for which a national ambient air quality standard 
has been promulgated;
    (C) Any pollutant that is a constituent or precursor of a general 
pollutant listed under paragraphs (a)(1)(xxxvii)(A) or (B) of this 
section, provided that a constituent or precursor pollutant may only be 
regulated under NSR as part of regulation of the general pollutant. 
Precursors identified by the Administrator for purposes of NSR are the 
following:
    (1) Volatile organic compounds and nitrogen oxides are precursors 
to ozone in all ozone nonattainment areas.
    (2) Sulfur dioxide is a precursor to PM2.5 in all 
PM2.5 nonattainment areas.
    (3) Nitrogen oxides are presumed to be precursors to 
PM2.5 in all PM2.5 nonattainment areas, unless 
the State demonstrates to the Administrator's satisfaction that 
emissions of nitrogen oxides from stationary sources in a specific area 
are not a significant contributor to that area's ambient 
PM2.5 concentrations and the area is not in a State 
identified by the Administrator as a source of a PM2.5 
interstate transport problem.
    (4) Volatile organic compounds and ammonia are presumed not to be 
precursors to PM2.5 in any PM2.5 nonattainment 
area, unless the State demonstrates to the Administrator's satisfaction 
that emissions of volatile organic compounds or ammonia from stationary 
sources in a specific area are a significant contributor to that area's 
ambient PM2.5 concentrations; or
    (D) Particulate matter (PM2.5 and PM10) 
includes gaseous emissions from a source or activity which condense to 
form particulate matter at ambient temperatures.
* * * * *
    (8) [Reserved.]
    (9) (i) The plan shall require that in meeting the emissions offset 
requirements of paragraph (a)(3) of this section, the ratio of total 
actual emissions reductions to the emissions increase shall be at least 
1:1 unless an alternative ratio is provided for the applicable 
nonattainment area in paragraph (a)(9)(ii) through (a)(9)(iv) of this 
section.
    (ii) The plan shall require that in meeting the emissions offset 
requirements of paragraph (a)(3) of this section for ozone 
nonattainment areas that are subject to subpart 2, part D, title I of 
the Act, the ratio of total actual emissions reductions of VOC to the 
emissions increase of VOC shall be as follows:
    (A) In any marginal nonattainment area for ozone--at least 1.1:1;
    (B) In any moderate nonattainment area for ozone--at least 1.15:1;
    (C) In any serious nonattainment area for ozone--at least 1.2:1;
    (D) In any severe nonattainment area for ozone--at least 1.3:1 
(except that the

[[Page 66062]]

ratio may be at least 1.2:1 if the approved plan also requires all 
existing major sources in such nonattainment area to use BACT for the 
control of VOC); and
    (E) In any extreme nonattainment area for ozone--at least 1.5:1 
(except that the ratio may be at least 1.2:1 if the approved plan also 
requires all existing major sources in such nonattainment area to use 
BACT for the control of VOC); and
    (iii) Notwithstanding the requirements of paragraph (a)(9)(ii) of 
this section for meeting the requirements of paragraph (a)(3) of this 
section, the ratio of total actual emissions reductions of VOC to the 
emissions increase of VOC shall be at least 1.15:1 for all areas within 
an ozone transport region that is subject to subpart 2, part D, title I 
of the Act, except for serious, severe, and extreme ozone nonattainment 
areas that are subject to subpart 2, part D, title I of the Act.
    (iv) The plan shall require that in meeting the emissions offset 
requirements of paragraph (a)(3) of this section for ozone 
nonattainment areas that are subject to subpart 1, part D, title I of 
the Act (but are not subject to subpart 2, part D, title I of the Act, 
including 8-hour ozone nonattainment areas subject to 40 CFR 
51.902(b)), the ratio of total actual emissions reductions of VOC to 
the emissions increase of VOC shall be at least 1:1.
* * * * *
    3. Section 51.166 is amended:
    a. By adding paragraph (a)(6)(iv).
    b. By revising paragraphs (b)(23)(i), (b)(49)(i), (b)(49)(iii), 
(i)(5)(ii), and (i)(5)(iii);
    c. By adding and reserving paragraph (b)(49)(v); and
    d. By adding paragraphs (b)(49)(vi) to read as follows:


Sec.  51.166  Prevention of significant deterioration of air quality.

    (a) * * *
    (6) * * *
    (iv) When an implementation plan must be amended to address the 
prevention of significant deterioration of air quality for the 
PM2.5 national ambient air quality standards, the 
PM10 implementation plan provisions approved pursuant to 
this section may be used to implement a PM2.5 program until 
such amendments are approved, provided that: Particulate matter 
emissions shall include gaseous emissions from a source or activity 
which condense to form particulate matter at ambient temperatures for 
purposes of determining applicability of prevention of significant 
deterioration requirements; and the air quality analysis required under 
paragraph (m) of this section shall be conducted with respect to the 
PM2.5 standards.
* * * * *
    (b) * * *
    (23) (i) Significant means, in reference to a net emissions 
increase or the potential of a source to emit any of the following 
pollutants, a rate of emissions that would equal or exceed any of the 
following rates:

Pollutant and Emissions Rate

    Carbon monoxide: 100 tons per year (tpy).
    Nitrogen oxides: 40 tpy.
    Sulfur dioxide: 40 tpy.
    Particulate matter: 25 tpy of particulate matter emissions. 15 tpy 
of PM10 emissions.
    PM2.5: 10 tpy of PM2.5 emissions; 40 tpy of 
sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions when 
identified as a PM2.5 precursor under paragraph (b)(49).
    Ozone: 40 tpy of volatile organic compounds.
    Lead: 0.6 tpy.
    Fluorides: 3 tpy.
    Sulfuric acid mist: 7 tpy.
    Hydrogen sulfide (H2 S): 10 tpy.
    Total reduced sulfur (including H2 S): 10 tpy.
    Reduced sulfur compounds (including H2 S): 10 tpy.
    Municipal waste combustor organics (measured as total tetra-through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 10-6 
megagrams per year (3.5 x 10-6 tons per year).
    Municipal waste combustor metals (measured as articulate matter): 
14 megagrams per year (15 tons per year) Municipal waste combustor acid 
gases (measured as sulfur dioxide and hydrogen chloride): 36 megagrams 
per year (40 tons per year) Municipal solid waste landfill emissions 
(measured as nonmethane organic compounds): 45 megagrams per year (50 
tons per year).
* * * * *
    (49) Regulated NSR pollutant, for purposes of this section, means 
the following:
    (i) Any pollutant for which a national ambient air quality standard 
has been promulgated and any constituents or precursors to such 
pollutants. Precursors identified by the Administrator for purposes of 
NSR are the following:
    (A) Volatile organic compounds and nitrogen oxides are precursors 
to ozone in all attainment and unclassifiable areas.
    (B) Sulfur dioxide is a precursor to PM2.5 in all 
attainment and unclassifiable areas.
    (C) Nitrogen oxides are presumed precursors to PM2.5 in 
all attainment and unclassifiable areas, unless the State demonstrates 
to the Administrator's satisfaction that emissions of nitrogen oxides 
from stationary sources in a specific area are not a significant 
contributor to that area's ambient PM2.5 concentrations and 
the area is not in a State identified by the Administrator as a source 
of a PM2.5 interstate transport problem.
    (D) Volatile organic compounds are presumed not to be precursors to 
PM2.5 in any attainment or unclassifiable area, unless the 
State demonstrates to the Administrator's satisfaction that emissions 
of volatile organic compounds from stationary sources in a specific 
area are a significant contributor to that area's ambient 
PM2.5 concentrations.
* * * * *
    (iii) Any Class I or II substance subject to a standard promulgated 
under or established by title VI of the Act;
* * * * *
    (v) [Reserved.];
    (vi) Particulate matter (PM2.5 and PM10) 
emissions include gaseous emissions from a source or activity which 
condense to form particulate matter at ambient temperatures.
* * * * *
    (i) * * *
    (5) * * *
    (ii) The concentrations of the pollutant in the area that the 
source or modification would affect are less than the concentrations 
listed in paragraph (i)(5)(i) of this section; or
    (iii) The pollutant is not listed in paragraph (i)(5)(i) of this 
section.
* * * * *
    5. A new Subpart Y is added to read as follows:
Subpart Y--Provisions for Implementation of PM2.5 National Ambient Air 
Quality Standards
Sec.
51.1000 Definitions.
51.1001 Applicability of part 51.
51.1002 Submittal of State implementation plan.
51.1003 Classifications.
51.1004 Attainment dates.
51.1005 One-year extensions of the attainment date.
51.1006 Redesignation to nonattainment following initial 
designations for the PM2.5 NAAQS.
51.1007 Attainment demonstration and modeling requirements.
51.1008 Emission inventory requirements for the PM2.5 
NAAQS.
51.1009 Reasonable further progress (RFP) requirements.
51.1010 Requirements for reasonably available control technology 
(RACT) and

[[Page 66063]]

reasonably available control measures (RACM).

Subpart Y--Provisions for Implementation of PM2.5 National Ambient 
Air Quality Standards


Sec.  51.1000  Definitions.

    The following definitions apply for purposes of this subpart. Any 
term not defined herein shall have the meaning as defined in 40 CFR 
51.100.
    (a) Act means the Clean Air Act as codified at 42 U.S.C. 7401-
7671q. (2003).
    (b) Attainment year means the final year of the three consecutive 
years evaluated to determine attainment with the PM2.5 
NAAQS.
    (c) Benchmark RFP plan means the reasonable further progress plan 
that requires generally linear emission reductions from the 2002 
baseline emissions year through the emissions year preceding the RFP 
milestone.
    (d) Date of designation means the effective date of the 
PM2.5 area designation as promulgated by the Administrator.
    (e) Direct PM2.5 emissions means air pollutant emissions 
of direct fine particulate matter, including organic carbon, elemental 
carbon, direct sulfate, direct nitrate, and miscellaneous inorganic 
material (i.e. crustal material).
    (f) Existing control measure means any federally enforceable 
national, State, or local control measure that has been approved in the 
SIP and that results in reductions in emissions of PM2.5 and 
its precursors in a nonattainment area.
    (g) PM2.5 NAAQS means the particulate matter national 
ambient air quality standards (annual and 24-hour) codified at 40 CFR 
50.7.
    (h) PM2.5 design value for a nonattainment area is the 
highest of the three-year average concentrations calculated for the 
monitors in the area, in accordance with 40 CFR part 50, appendix N.
    (i) PM2.5 direct emissions means solid particles emitted 
directly from an emissions source or activity, or gaseous emissions or 
liquid droplets from a source or activity which condense to form 
particulate matter at ambient temperatures. PM2.5 direct 
emissions include elemental carbon, directly emitted organic carbon, 
and inorganic particles (including but not limited to crustal material, 
metals, and sea salt).
    (j) PM2.5 nonattainment plan precursor means those 
PM2.5 precursors emitted by sources in the State which the 
State must evaluate for emission reduction measures.
    (k) PM2.5 precursor means those regulated air pollutants 
other than PM2.5 direct emissions that contribute to the 
formation of PM2.5. PM2.5 precursors include 
SO2, NOX, volatile organic compounds, and 
ammonia.
    (l) Reasonable further progress (RFP) means the incremental 
emissions reductions toward attainment required under section 172(c)(2) 
and section 171(1).
    (m) Subpart 1 means subpart 1 of part D of title I of the Act.


Sec.  51.1001  Applicability of Part 51.

    The provisions in subparts A-X of part 51 apply to areas for 
purposes of the PM2.5 NAAQS to the extent they are not 
inconsistent with the provisions of this subpart.


Sec.  51.1002  Submittal of State Implementation Plan.

    (a) For any area designated by EPA as nonattainment for the 
PM2.5 NAAQS, the State shall submit a State implementation 
plan satisfying the requirements of section 172 of the Act and this 
subpart Y of 40 CFR part 51 to EPA no later than 3 years from the 
effective date of the designation.
    (b) The State must submit a plan consistent with the requirements 
of section 110(a)(2) of the Act unless the State already has fulfilled 
this obligation for the purposes of implementing the PM2.5 
NAAQS.
    (c) Precursors of fine particles. The state implementation plan 
must identify and evaluate sources of PM2.5 direct emissions 
and PM2.5 nonattainment plan precursors in accordance with 
Sec. Sec.  51.1009 and 51.1010 of this subpart.
    (1) The State must address sulfur dioxide as a PM2.5 
nonattainment plan precursor and evaluate SO2 emissions 
sources for control measures.
    (2) The State must address NOX as a PM2.5 
nonattainment plan precursor and evaluate sources of NOX 
emissions sources for control measures, unless the State and EPA 
provide an appropriate technical demonstration for a specific area 
showing that NOX emissions do not significantly contribute 
to the PM2.5 nonattainment problem in the area or to other 
downwind air quality concerns.
    (3) The State is not required to address VOC as a PM2.5 
nonattainment plan precursor and evaluate sources of VOC emissions for 
control measures in that area, unless:
    (i) The State provides an appropriate technical demonstration for a 
specific area showing that VOC emissions significantly contribute to 
the PM2.5 nonattainment problem in the area or to other 
downwind air quality concerns and such demonstration is approved by 
EPA, or
    (ii) EPA provides such a technical demonstration.
    (4) The State is not required to address ammonia as a 
PM2.5 nonattainment plan precursor and evaluate sources of 
ammonia emissions for control measures in that area, unless:
    (i) the State provides an appropriate technical demonstration for a 
specific area showing that ammonia emissions significantly contribute 
to the PM2.5 nonattainment problem in the area or to other 
downwind air quality concerns and such demonstration is approved by 
EPA, or
    (ii) EPA provides such a technical demonstration.
    (5) Any technical demonstration referred to in paragraphs (c)(1) 
through (c)(4) of this section to modify the presumptive approach for 
any PM2.5 precursor must be considered in future SIP 
development activities.


Sec.  51.1003.  Classifications.

    An area designated as nonattainment for the PM2.5 NAAQS 
will not receive a specific classification based on design value.


Sec.  51.1004  Attainment dates.

    (a) Consistent with section 172(a)(2)(A) of the Act, the attainment 
date for an area designated nonattainment for the PM2.5 
NAAQS shall be the date by which attainment can be achieved as 
expeditiously as practicable. The attainment date presumptively shall 
be 5 years or less from the date of designations. The Administrator may 
approve an attainment date extension pursuant to section 172(a)(2)(A).
    (b) In the SIP submittal for each of its nonattainment areas, the 
State shall submit an attainment demonstration providing detailed 
information justifying its proposed attainment date. For each 
nonattainment area, the Administrator will approve an attainment date 
at the same time the Administrator approves the attainment 
demonstration for the area, consistent with the attainment date timing 
provision of section 172(a)(2)(A) and paragraph (a) of this section.


Sec.  51.1005  One-year extensions of the attainment date.

    (a) Pursuant to section 172(a)(2)(C)(ii) of the Act, a State with 
an area that fails to attain the PM2.5 NAAQS by its 
attainment date may apply for an initial 1-year attainment date 
extension if the State has complied with all requirements and 
commitments pertaining to the area in the applicable implementation 
plan, and:
    (1) For an area that violates the annual PM2.5 NAAQS as 
of its attainment date, the annual average concentration for the

[[Page 66064]]

most recent year at each monitor is 15.0 [mu]g/m\3\ or less (calculated 
according to the data analysis requirements in 40 CFR part 50, appendix 
N).
    (2) For an area that violates the 24-hour PM2.5 NAAQS as 
of its attainment date, the 98th percentile concentration for the most 
recent year at each monitor is 65 [mu]g/m\3\ or less (calculated 
according to the data analysis requirements in 40 CFR part 50, appendix 
N).
    (b) An area that fails to attain the PM2.5 NAAQS after 
receiving a 1-year attainment date extension may apply for a second 1-
year attainment date extension pursuant to section 172(a)(2)(C)(ii) if 
the State has complied with all requirements and commitments pertaining 
to the area in the applicable implementation plan, and:
    (1) For an area that violates the annual PM2.5 NAAQS as 
of its attainment date, the annual average concentration at each 
monitor, averaged over both the original attainment year and the first 
extension year, is 15.0 [mu]g/m\3\ or less (calculated according to the 
data analysis requirements in 40 CFR part 50, appendix N).
    (2) For an area that violates the 24-hour PM2.5 NAAQS as 
of its attainment date, the 98th percentile concentration at each 
monitor, averaged over both the original attainment year and the first 
extension year, is 65 [mu]g/m\3\ or less (calculated according to the 
data analysis requirements in 40 CFR part 50, appendix N).


Sec.  51.1006  Redesignation to nonattainment following initial 
designations for the PM2.5 NAAQS.

    Any area that is initially designated ``attainment/unclassifiable'' 
for the PM2.5 NAAQS may be subsequently redesignated to 
nonattainment if ambient air quality data in future years indicate that 
such a redesignation is appropriate. For any area that is redesignated 
to nonattainment for the PM2.5 NAAQS, any absolute, fixed 
date that is applicable in connection with the requirements of this 
part is extended by a period of time equal to the length of time 
between the effective date of the initial designation for the 
PM2.5 NAAQS and the effective date of redesignation, except 
as otherwise provided in this subpart.


Sec.  51.1007  Attainment demonstration and modeling requirements.

    (a) For any area designated as nonattainment for the 
PM2.5 NAAQS, the State must submit an attainment 
demonstration showing that the area will attain the annual and 24-hour 
standards as expeditiously as practicable. The demonstration must 
include modeling results, inventory data, and emission reduction 
analyses on which the State has based its projected attainment date. 
Such modeling must be consistent with EPA guidance and must be 
appropriate for the area. The modeled strategies must be consistent 
with requirements in Sec.  51.1009 for RFP and in Sec.  51.1010 for 
RACT and RACM. The attainment demonstration and supporting air quality 
modeling must be consistent with Appendix W of this part and EPA's most 
recent modeling guidance in effect at the time the modeled attainment 
demonstration is performed.
    (b) Required timeframe for obtaining emissions reductions. For each 
nonattainment area, the State implementation plan must provide for 
implementation of all control measures needed for attainment as 
expeditiously as practicable, but no later than the beginning of the 
year prior to the attainment date. Consistent with section 172(c)(1) of 
the Act, the plan must provide for implementation of all RACM and RACT 
as expeditiously as practicable. The plan also must include RFP 
milestones in accordance with Sec.  51.1009, and control measures 
needed to meet these milestones, as necessary.


Sec.  51.1008  Emission inventory requirements for the PM2.5 NAAQS.

    (a) For purposes of meeting the emission inventory requirements of 
section 172(c)(3) of the Act, the State shall:
    (1) Submit to EPA statewide emission inventories for 
PM2.5 and its precursors under the Consolidated Emissions 
Reporting Rule (CERR), 40 CFR part 51, subpart A.
    (2) Submit any additional emission inventory information needed to 
support an attainment demonstration and RFP plan ensuring expeditious 
attainment of the annual and 24-hour PM2.5 standards.
    (b) A baseline emission inventory is required for the attainment 
demonstration required under Sec.  51.1007 and for meeting RFP 
requirements under Sec.  51.1009. As determined on the effective date 
of an area's nonattainment designation, the base year for this 
inventory shall be the most recent calendar year for which a complete 
inventory was required to be submitted to EPA pursuant to the 
Consolidated Emissions Reporting Rule in subpart A of this part. The 
baseline emission inventory for calendar year 2002 shall be used for 
attainment planning and RFP plans for areas initially designated 
nonattainment for the PM2.5 NAAQS.


Sec.  51.1009  Reasonable further progress (RFP) requirements.

    (a) Consistent with section 172(c)(2) of the Act, State 
implementation plans for areas designated nonattainment for the 
PM2.5 NAAQS must demonstrate reasonable further progress as 
defined in section 171(1).
    (b) Requirements for RFP plans.
    (1) If the State submits an attainment plan for an area which 
proposes to attain the PM NAAQS within five years of the date of 
designation and such plan is approved by EPA, then compliance with the 
requirements of the attainment plan will be considered to also meet the 
requirements for achieving reasonable further progress for that area.
    (2) For any area for which the State proposes an attainment date of 
more than five years from the date of designation (i.e. attainment date 
extension), the State must submit an RFP plan as part of its SIP 
submittal. The SIP submittal is due to EPA within three years of the 
date of designation.
    (3) The RFP plan must require generally linear progress in direct 
PM2.5 and PM2.5 nonattainment plan precursor 
emission reductions from the 2002 base year through the year preceding 
the attainment date. For any area seeking an attainment date extension, 
the RFP plan must include RFP emission reduction milestones and 
projected air quality improvement to be achieved prior to January 1, 
2010. Any area seeking an attainment date extension of three years or 
more must also include in its plan RFP emission reduction milestones 
and projected air quality improvement to be achieved prior to January 
1, 2013. The State should develop these emission reduction milestones 
from attainment year modeling analyses and the projected direct 
PM2.5 and PM2.5 nonattainment plan precursor 
emission reduction levels presented in the analyses.
    (4) In its RFP plan, the State must define the geographic area to 
be covered by the inventories for each pollutant addressed in the plan. 
For each pollutant, this area shall reflect the area for which the 
emissions of that pollutant best corresponds with concentrations of the 
associated ambient species in the nonattainment area, based on 
information developed during attainment planning. In no case shall the 
area be less than the nonattainment area. All emissions sources that 
the State intends to track for RFP purposes must be included in the 
2002 baseline inventory.
    (5) For any area seeking an attainment date extension beyond five 
years from designation, the benchmark RFP plan due with the area's 
attainment

[[Page 66065]]

demonstration shall include emission reduction milestones to be 
achieved by January 1, 2010 and January 1, 2013, if applicable. The 
following dates are defined for purposes of the benchmark RFP plan:
    (i) The baseline year for the benchmark RFP plan is the 2002 
emissions year.
    (ii) The milestone date inventory is the emission inventory for the 
year prior to the January 1 milestone date.
    (iii) The full implementation emission inventory is the emission 
inventory for the year preceding the attainment date.
    (6) The plan shall address each emitted pollutant that is reduced 
or otherwise affected by the control strategy of the PM2.5 
attainment plan.
    (7) For each pollutant addressed pursuant to paragraph (b)(6) of 
this section, an overall tonnage reduction shall be calculated by 
subtracting the full implementation emission inventory from the 
baseline year inventory.
    (8) The ``milestone date fraction'' is the ratio of the number of 
years from the baseline year to the milestone inventory year divided by 
the number of years from the baseline year to the full implementation 
year.
    (9) For each pollutant addressed pursuant to paragraph (b)(6) of 
this section, a benchmark tonnage emission reduction shall be 
calculated by multiplying the full strategy tonnage reduction pursuant 
to paragraph (b)(7) of this section times the milestone date fraction 
pursuant to paragraph (b)(8) of this section. The benchmark emission 
level for each pollutant as of the milestone date shall be determined 
by subtracting the benchmark tonnage emission reduction from the 
baseline year emission level. A benchmark RFP plan is defined as a plan 
that achieves benchmark emission levels for each pollutant to be 
addressed pursuant to paragraph (b)(6) of this section.
    (10) The RFP plan due at the time of the attainment demonstration 
shall provide milestones that provide for emissions levels by January 
1, 2010, to be either:
    (i) At levels that are roughly equivalent to the benchmark emission 
levels defined in paragraph (b)(8) of this section for all applicable 
pollutants; or
    (ii) At levels included in an alternative scenario that can be 
shown to provide generally equivalent air quality protection as the 
benchmark RFP plan.
    (11) The equivalence of an alternative scenario to the 
corresponding benchmark plan shall be determined by comparing the 
expected air quality benefits of the two scenarios at the design value 
monitor location. This comparison shall use the information developed 
for the attainment plan to assess the relationship between emissions 
reductions of the regulated pollutants and the ambient air quality 
improvement for the associated ambient species. The analysis of both 
scenarios may use the linear assumption that achievement of a given 
fraction of the emissions reductions of the attainment plan will 
achieve the same fraction of the associated air quality improvement 
that the attainment plan is demonstrated to achieve.


Sec.  51.1010  Requirements for reasonably available control technology 
(RACT) and reasonably available control measures (RACM).

    (a) A PM2.5 nonattainment area that provides an 
attainment demonstration proposing an attainment date no later than 
five years from the date of designation is required to conduct RACT 
determinations for major stationary sources and impose RACT controls 
only to the extent that such controls are necessary to meet RFP or 
attain the PM2.5 standards as expeditiously as practicable.
    (b) A PM2.5 nonattainment area that provides an 
attainment demonstration proposing an attainment date of more than five 
years but no later than ten years from the date of designation must 
conduct a RACT determination for all stationary sources with the 
potential to emit 100 tons or more of any one pollutant associated with 
PM2.5 (direct PM2.5, SO2, and 
NOX).
    (c) In any source-specific RACT determination, the State must 
evaluate whether emission controls, process changes, or other emission 
reduction measures are technically and economically feasible in 
accordance with this rule and appropriate guidance. The State also must 
consider any additional information obtained through public comments 
when conducting RACT determinations for PM2.5. Any RACT 
emission reduction regulations required by the State must be included 
in the State's SIP submittal.
    (d) For any source that installed controls due to a previous RACT 
determination for another NAAQS implementation program, the State may 
accept the previous RACT determination for the purposes of the 
PM2.5 program, provided it submits a certification with 
appropriate supporting information that the previous RACT determination 
currently represents an appropriate level of control for the 
PM2.5 program.
    (e) For each PM2.5 nonattainment area, the State shall 
submit with the attainment demonstration a SIP revision demonstrating 
that it has adopted all reasonably available control measures necessary 
to demonstrate attainment as expeditiously as practicable and to meet 
any RFP requirements. In developing its attainment demonstration, in 
demonstrating attainment as expeditiously as practicable, and in 
determining whether a particular emission reduction measure or set of 
measures must be adopted as RACM under section 172(c)(1) of the Act, 
the State must consider the cumulative impact of implementing the 
available measures and whether such measures taken together would 
advance the attainment date by one year. In conducting a RACM analysis, 
the State should consider control technology information available in 
EPA and State guidance documents, in control technology clearinghouses, 
and in any comments provided by the public.
    5. Appendix S to Part 51 is amended:
    a. By revising paragraph II. A. 10.;
    c. By adding paragraph II. A. 21.; and
    b. By revising paragraph IV. G. to read as follows:

Appendix S to Part 51--Emission Offset Interpretative Ruling

* * * * *
    II. * * *
    A. * * *
    10. Significant means, in reference to a net emissions increase or 
the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:

Pollutant and Emissions Rate

    Carbon monoxide: 100 tons per year (tpy) .
    Nitrogen oxides: 40 tpy.
    Sulfur dioxide: 40 tpy.
    Ozone: 40 tpy of volatile organic compounds.
    Lead: 0.6 tpy.
    Particulate matter: 25 tpy of particulate matter emissions.
    PM10: 15 tpy.
    PM2.5: 10 tpy of PM2.5 emissions; 40 tpy of 
sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions when 
identified as a PM2.5 precursor under paragraph II. A. 21.
* * * * *
    21. Regulated NSR pollutant, for purposes of this section, means 
the following:
    (i) Nitrogen oxides or any volatile organic compounds;
    (ii) Any pollutant for which a national ambient air quality 
standard has been promulgated;
    (iii) Any pollutant that is a constituent or precursor of a general 
pollutant listed under paragraphs II. A.

[[Page 66066]]

21. (i) or (ii) of this section, provided that a constituent or 
precursor pollutant may only be regulated under NSR as part of 
regulation of the general pollutant. Precursors identified by the 
Administrator for purposes of NSR are the following:
    (a) Volatile organic compounds and nitrogen oxides are precursors 
to ozone in all ozone nonattainment areas.
    (b) Sulfur dioxide is a precursor to PM2.5 in all 
PM2.5 nonattainment areas.
    (c) Nitrogen oxides are presumed to be precursors to 
PM2.5 in all PM2.5 nonattainment areas, unless 
the State demonstrates to the Administrator's satisfaction that 
emissions of nitrogen oxides from stationary sources in a specific area 
are not a significant contributor to that area's ambient 
PM2.5 concentrations and the area is not in a State 
identified by the Administrator as a source of a PM2.5 
interstate transport problem.
    (d) Volatile organic compounds and ammonia are presumed not to be 
precursors to PM2.5 in any PM2.5 nonattainment 
area, unless the State demonstrates to the Administrator's satisfaction 
that emissions of volatile organic compounds or ammonia from stationary 
sources in a specific area are a significant contributor to that area's 
ambient PM2.5 concentrations; or
    (iv) Particulate matter (PM2.5 and PM10) 
includes gaseous emissions from a source or activity which condense to 
form particulate matter at ambient temperatures.
* * * * *
    IV. * * *
    G. Offset Ratios.
    1. In meeting the emissions offset requirements of paragraph IV. 
A., Condition 3 of this Ruling, the ratio of total actual emissions 
reductions to the emissions increase shall be at least 1:1 unless an 
alternative ratio is provided for the applicable nonattainment area in 
paragraphs IV. G. 2. to IV. G. 4.
    2. In meeting the emissions offset requirements of paragraph IV. 
A., Condition 3 of this Ruling for ozone nonattainment areas that are 
subject to subpart 2, part D, title I of the Act, the ratio of total 
actual emissions reductions of VOC to the emissions increase of VOC 
shall be as follows:
    (i) In any marginal nonattainment area for ozone--at least 1.1:1;
    (ii) In any moderate nonattainment area for ozone--at least 1.15:1;
    (iii) In any serious nonattainment area for ozone--at least 1.2:1;
    (iv) In any severe nonattainment area for ozone--at least 1.3:1 
(except that the ratio may be at least 1.2:1 if the State also requires 
all existing major sources in such nonattainment area to use BACT for 
the control of VOC); and
    (v) In any extreme nonattainment area for ozone--at least 1.5:1 
(except that the ratio may be at least 1.2:1 if the State also requires 
all existing major sources in such nonattainment area to use BACT for 
the control of VOC);
    3. Notwithstanding the requirements of paragraph IV.G. 2. of this 
Ruling for meeting the requirements of paragraph IV. A., Condition 3 of 
this Ruling, the ratio of total actual emissions reductions of VOC to 
the emissions increase of VOC shall be at least 1.15:1 for all areas 
within an ozone transport region that is subject to subpart 2, part D, 
title I of the Act, except for serious, severe, and extreme ozone 
nonattainment areas that are subject to subpart 2, part D, title I of 
the Act.
    4. In meeting the emissions offset requirements of paragraph IV. 
A., Condition 3 of this Ruling for ozone nonattainment areas that are 
subject to subpart 1, part D, title I of the Act (but are not subject 
to subpart 2, part D, title I of the Act, including 8-hour ozone 
nonattainment areas subject to 40 CFR 51.902(b)), the ratio of total 
actual emissions reductions of VOC to the emissions increase of VOC 
shall be at least 1:1.

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

    6. Section 52.21 is amended by:
    a. Revising paragraphs (b)(23)(i), (b)(50)(i), (b)(50)(iii), and 
(i)(5)(ii);
    b. Adding and reserving paragraph (b)(50)(v); and
    c. Adding paragraphs (b)(50)(vi) and (i)(5)(iii) to read as 
follows:


Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (23)(i) Significant means, in reference to a net emissions increase 
or the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:

Pollutant and Emissions Rate

    Carbon monoxide: 100 tons per year (tpy).
    Nitrogen oxides: 40 tpy.
    Sulfur dioxide: 40 tpy.
    Particulate matter: 25 tpy of particulate matter emissions.
    PM10: 15 tpy.
    PM2.5: 10 tpy of PM2.5 emissions; 40 tpy of 
sulfur dioxide emissions; 40 tpy of nitrogen oxide emissions when 
identified as a PM2.5 precursor under paragraph (b)(50) of 
this section.
    Ozone: 40 tpy of volatile organic compounds.
    Lead: 0.6 tpy.
    Fluorides: 3 tpy.
    Sulfuric acid mist: 7 tpy.
    Hydrogen sulfide (H2 S): 10 tpy.
    Total reduced sulfur (including H2 S): 10 tpy.
    Reduced sulfur compounds (including H2 S): 10 tpy.
    Municipal waste combustor organics (measured as total tetra-through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 10-6 
megagrams per year (3.5 x 10-6 tons per year).
    Municipal waste combustor metals (measured as particulate matter): 
14 megagrams per year (15 tons per year).
    Municipal waste combustor acid gases (measured as sulfur dioxide 
and hydrogen chloride): 36 megagrams per year (40 tons per year).
    Municipal solid waste landfills emissions (measured as nonmethane 
organic compounds): 45 megagrams per year (50 tons per year).
* * * * *
    (50) Regulated NSR pollutant, for purposes of this section, means 
the following:
    (i) Any pollutant for which a national ambient air quality standard 
has been promulgated and any constituents or precursors for such 
pollutants. Precursors identified by the Administrator for purposes of 
NSR are the following:
    (A) Volatile organic compounds and nitrogen oxides are precursors 
to ozone in all attainment and unclassifiable areas.
    (B) Sulfur dioxide is a precursor to PM2.5 in all 
attainment and unclassifiable areas.
    (C) Nitrogen oxides are presumed precursors to PM2.5 in 
all attainment and unclassifiable areas, unless the State demonstrates 
to the Administrator's satisfaction that emissions of nitrogen oxides 
from stationary sources in a specific area are not a significant 
contributor to that area's ambient PM2.5 concentrations and 
the area is not in a State identified by the Administrator as a source 
of a PM2.5 interstate transport problem.
    (D) Volatile organic compounds are presumed not to be precursors to 
PM2.5 in any attainment or unclassifiable area, unless the 
State demonstrates to the Administrator's satisfaction that emissions 
of volatile organic compounds from stationary sources in a specific 
area are a significant

[[Page 66067]]

contributor to that area's ambient PM2.5 concentrations.
* * * * *
    (iii) Any Class I or II substance subject to a standard promulgated 
under or established by title VI of the Act;
* * * * *
    (v) [Reserved.];
    (vi) Particulate matter (PM2.5 and PM10) 
emissions include gaseous emissions from a source or activity which 
condense to form particulate matter at ambient temperatures.
* * * * *
    (i) * * *
    (5) * * *
    (ii) The concentrations of the pollutant in the area that the 
source or modification would affect are less than the concentrations 
listed in paragraph (i)(5)(i) of this section; or
    (iii) The pollutant is not listed in paragraph (i)(5)(i) of this 
section.
* * * * *
[FR Doc. 05-20455 Filed 10-31-05; 8:45 am]
BILLING CODE 6560-50-U