95-10104. Clean Air Act Section 182(f) NOINFX Exemption Petition; Monterey Bay Ozone Nonattainment Area  

  • [Federal Register Volume 60, Number 79 (Tuesday, April 25, 1995)]
    [Rules and Regulations]
    [Pages 20233-20237]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-10104]
    
    
    
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    ENVIRONMENTAL PROTECTION AGENCY
    40 CFR Part 52
    
    [CA-82-1-6926; FRL-5195-9]
    
    
    Clean Air Act Section 182(f) NOX Exemption Petition; 
    Monterey Bay Ozone Nonattainment Area
    
    AGENCY: Environmental Protection Agency (EPA).
    
    ACTION: Final rule.
    
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    SUMMARY: The EPA is finalizing the approval of a petition submitted by 
    the Monterey Bay Unified Air Pollution Control District (MBUAPCD) 
    requesting that EPA grant an exemption for the Monterey Bay ozone 
    nonattainment area (Monterey Bay) from the section 182(f) requirement 
    to control major stationary sources of oxides of nitrogen (NOX) 
    emissions. EPA published a proposed action to approve the Monterey Bay 
    NOX exemption in the Federal Register on December 20, 1994. In 
    accordance with the requirements of the Clean Air Act, as amended in 
    1990 (the Act or CAA), the EPA has determined that additional NOX 
    reductions from major stationary sources in Monterey Bay would not 
    contribute to attainment of the national ambient air quality standard 
    (NAAQS) for ozone. The approval of this action exempts Monterey Bay 
    from implementing the NOX requirements for reasonably available 
    control technology (RACT), new source review (NSR), and the applicable 
    general and transportation conformity and inspection and maintenance 
    (I/M) requirements of the CAA. The EPA is finalizing approval of this 
    action under provisions of the Act regarding plan requirements for 
    nonattainment areas.
    
    EFFECTIVE DATE: This action is effective as of April 12, 1995. The 
    Administrative Procedure Act (APA) 5 U.S.C. 553(d)(1), permits the 
    effective date of a substantive rule to be less than thirty days after 
    publication of the rule if the rule ``relieves a restriction''. Since 
    the approval of the section 182(f) exemption for the Monterey Bay area 
    is a substantive action that relieves the restrictions associated with 
    the CAA title I requirements to control NOX emissions, the 
    NOX exemption approval may be made effective upon signature by the 
    EPA Administrator.
    
    ADDRESSES: Copies of the petition and EPA's evaluation report are 
    available for public inspection at EPA's Region IX office during normal 
    business hours. Copies of the submitted petition are available for 
    inspection at the following locations:
    
    Rulemaking Section (A-5-3), Air and Toxics Division, U.S. Environmental 
    Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
    94105.
    Environmental Protection Agency, Air Docket (6102), 401 ``M'' Street 
    SW., Washington, DC 20460.
    Monterey Bay Unified Air Pollution Control District, Rule Development 
    Section, 24580 Silver Cloud Court, Monterey, CA 93940.
    
    FOR FURTHER INFORMATION CONTACT: Wendy Colombo, Rulemaking Section, Air 
    and Toxics Division, U.S. Environmental Protection Agency, Region IX, 
    75 Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-
    1202.
    
    SUPPLEMENTARY INFORMATION:
    
    Background
    
        On December 20, 1994, EPA proposed to approve the Monterey Bay 
    NOX exemption petition, submitted by the MBUAPCD on April 26, 
    1994. 59 FR 65523. The exemption petition is based on ambient 
    monitoring data and demonstrates that additional NOX reductions in 
    Monterey Bay would not contribute to attainment of the NAAQS for ozone. 
    A detailed discussion of the background concerning the NOX 
    requirements and the submitted petition is provided in the notice of 
    proposed rulemaking (NPRM) cited above.
        EPA has evaluated the exemption petition for consistency with the 
    requirements of the CAA, EPA regulations, and EPA interpretation of 
    these requirements as expressed in the various EPA policy guidance 
    documents referenced in the NPRM cited above. EPA believes that the 
    petition satisfies the applicable EPA requirements and is, therefore, 
    exempting the Monterey Bay area from implementing the NOX 
    requirements for RACT, NSR, and the applicable general and 
    transportation conformity and I/M requirements1 of the CAA.
    
        \1\See ``Scope of Nitrogen Oxides (NOX) Exemptions,'' from 
    G.T. Helms, Group Leader, Ozone/Carbon Monoxide Programs Branch (MD-
    15), to the Air Branch Chiefs, January 12, 1995. ``I/M Requirements 
    in NOX RACT Exempt Areas'', from Mary T. Smith, Acting 
    Director, Office of Mobile Sources, to the Air Division Directors, 
    October 14, 1994.
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        The proposal identifies two NOX RACT source categories MBUAPCD 
    has identified which encompass the major stationary sources of NOX 
    in the Monterey Bay nonattainment area.
        Rules have been developed and submitted for these two categories, 
    entitled, Rule 431, Emissions From Utility Power Boilers, and Rule 435, 
    Control of Nitrogen Oxides From Kilns. EPA indicated in the NPRM that 
    once the final approval of the NOX waiver is granted, MBUAPCD 
    would then rescind the two NOX rules submitted for inclusion into 
    the California SIP. This is not the intention of MBUAPCD with respect 
    to one of these rules. MBUAPCD, in subsequently applying to EPA for 
    redesignation to attainment of the NAAQS for ozone, has indicated that 
    the emissions reductions achieved by rule 431 will form part of its 
    ozone [[Page 20234]] maintenance plan. Although NOX waivers may be 
    granted for areas demonstrating that NOX reductions do not 
    contribute to attainment of the ozone standard, areas may choose to 
    impose NOX restrictions on other bases, such as ozone maintenance, 
    visibility protection, PM-10 control, acid deposition, or other 
    environmental protection purposes. MBUAPCD has indicated in its 
    attainment plan its belief that the reductions achieved from rule 431 
    are needed for maintenance of the ozone standard. Therefore, rule 431 
    will not be rescinded, but instead will be evaluated for incorporation 
    into the California SIP. However, rule 435 contains language within the 
    rule which will make its applicability void upon final approval of the 
    NOX waiver.
    
    Response to Public Comments
    
        A 30-day public comment period was provided in 59 FR 65523. EPA 
    received no comments specifically regarding the Monterey Bay exemption 
    petition. However, in August 1994, three environmental groups submitted 
    joint comments on the proposed approvals of NOX exemptions for the 
    Ohio and Michigan ozone nonattainment areas. The comments address EPA's 
    policy regarding NOX exemptions in general and apply to all 
    actions EPA takes regarding section 182(f) NOX exemptions. 
    Therefore, these comments are addressed below.
        Comment: The commenters argued that NOX exemptions are 
    provided for in two separate parts of the CAA, section 182(b)(1) and 
    section 182(f). Because the NOX exemption tests in subsections 
    182(b)(1) and 182(f)(1) include language indicating that action on such 
    requests should take place ``when [EPA] approves a plan or plan 
    revision,'' these commenters conclude that all NOX exemption 
    determinations by the EPA, including exemption actions taken under the 
    petition process established by subsection 182(f)(3), must occur during 
    consideration of an approvable attainment or maintenance plan, unless 
    the area has been redesignated as attainment. These commenters also 
    argue that even if the petition procedures of subsection 182(f)(3) may 
    be used to relieve areas of certain NOX requirements, exemptions 
    from the NOX conformity requirements must follow the process 
    provided in subsection 182(b)(1), since this is the only provision 
    explicitly referenced by section 176(c), the CAA's conformity 
    provisions.
        Response: Section 182(f) contains very few details regarding the 
    administrative procedure for acting on NOX exemption requests. The 
    absence of specific guidelines by Congress leaves EPA with discretion 
    to establish reasonable procedures, consistent with the requirements of 
    the APA.
        The EPA disagrees with the commenters regarding the process for 
    considering exemption requests under section 182(f), and instead 
    believes that subsections 182(f)(1) and 182(f)(3) provide independent 
    procedures by which the EPA may act on NOX exemption requests. The 
    language in subsection 182(f)(1), which indicates that the EPA should 
    act on NOX exemptions in conjunction with action on a plan or plan 
    revision, does not appear in subsection 182(f)(3). And, while 
    subsection 182(f)(3) references subsection 182(f)(1), the EPA believes 
    that this reference encompasses only the substantive tests in paragraph 
    (1) [and, by extension, paragraph (2)], not the procedural requirement 
    that the EPA act on exemptions only when acting on SIPs. Additionally, 
    paragraph (3) provides that ``person[s]'' (which section 302(e) of the 
    CAA defines to include States) may petition for NOX exemptions 
    ``at any time,'' and requires the EPA to make its determination within 
    six months of the petition's submission. These key differences lead EPA 
    to believe that Congress intended the exemption petition process of 
    paragraph (3) to be distinct and more expeditious than the longer plan 
    revision process intended under paragraph (1).
        With respect to major stationary sources, section 182(f) requires 
    States to adopt NOX NSR and RACT rules, unless exempted. These 
    rules were generally due to be submitted to EPA by November 15, 1992. 
    Thus, in order to avoid the CAA sanctions, areas seeking a NOX 
    exemption would have needed to submit their exemption request for EPA 
    review and rulemaking action several months before November 15, 1992. 
    In contrast, the CAA specifies that the attainment demonstrations are 
    not due until November 1993 or 1994 (and EPA may take 12-18 months to 
    approve or disapprove the demonstration). For marginal ozone 
    nonattainment areas (subject to NOX NSR), no attainment 
    demonstration is called for in the CAA. For maintenance plans, the CAA 
    does not specify a deadline for submittal of maintenance 
    demonstrations. Clearly, the CAA envisions the submittal of and EPA 
    action on exemption requests, in some cases, prior to submittal of 
    attainment or maintenance demonstrations.
        The CAA requires conformity to the applicable SIP with regard to 
    federally-supported NOX generating activities in relevant 
    nonattainment and maintenance areas. However, EPA's conformity rules 
    explicitly provide that these NOX requirements would not apply if 
    EPA grants an exemption under section 182(f). In response to the 
    comment that section 182(b)(1) should be the appropriate vehicle for 
    dealing with exemptions from the NOX requirements of the 
    conformity rule, EPA notes that this issue has previously been raised 
    in a formal petition for reconsideration of EPA's final transportation 
    conformity rule and in litigation pending before the U.S. Court of 
    Appeals for the District of Columbia Circuit on the substance of both 
    the transportation and general conformity rules. The issue, thus, is 
    under consideration within EPA, but at this time remains unresolved. 
    Additionally, subsection 182(f)(3) requires that NOX exemption 
    petition determinations be made by the EPA within six months. The EPA 
    has stated in previous guidance that it intends to meet this statutory 
    deadline as long as doing so is consistent with the APA. The EPA, 
    therefore, believes that until a resolution of this issue is achieved, 
    the applicable rules governing this issue are those that appear in 
    EPA's final conformity regulations, and EPA remains bound by their 
    existing terms.
        Comment: The commenters stated that the modeling required by EPA 
    guidance is insufficient to establish that NOX reductions would 
    not contribute to attainment since only one level of NOX control, 
    i.e., ``substantial'' reductions, is required to be analyzed. They 
    further explained that an area must submit an approvable attainment 
    plan before EPA can know whether NOX reductions will aid or 
    undermine attainment.
        Response: The EPA does not believe that this comment is applicable 
    to the Monterey Bay exemption because the demonstration is based on 
    three years of ambient monitoring data and not modeling.
        Comment: The commenters provided a comment that three years of 
    ``clean'' data fail to demonstrate that NOX reductions would not 
    contribute to attainment, and that EPA's policy erroneously equates the 
    absence of a violation for one three-year period with ``attainment.''
        Response: The EPA has separate criteria for determining if an area 
    should be redesignated to attainment under section 107 of the CAA. The 
    section 107 criteria are more comprehensive than the CAA requires with 
    respect to NOX exemptions under section 182(f).
        Under section 182(f)(1)(A), an exemption from the NOX 
    requirements may be granted for nonattainment areas outside an ozone 
    transport region if EPA [[Page 20235]] determines that ``additional 
    reductions of (NOX) would not contribute to attainment'' of the 
    ozone NAAQS in those areas. In some cases, an ozone nonattainment area 
    might attain the ozone standard, as demonstrated by 3 years of adequate 
    monitoring data, without having implemented the section 182(f) NOX 
    provisions over that 3-year period. The EPA believes that, in cases 
    where a nonattainment area is demonstrating attainment with 3 
    consecutive years of air quality monitoring data without having 
    implemented the section 182(f) NOX provisions, it is clear that 
    the section 182(f) test is met since ``additional reductions of 
    (NOX) would not contribute to attainment'' of the NAAQS in that 
    area. The EPA's approval of the exemption, if warranted, would be 
    granted on a contingent basis (i.e., the exemption would last for only 
    as long as the area's monitoring data continue to demonstrate 
    attainment).
        Comment: Some commenters provided a comment on all section 182(f) 
    actions that a waiver of NOX controls is unlawful if such a waiver 
    will impede attainment and maintenance of the ozone standard in 
    separate downwind areas.
        Response: The EPA believes that while this comment may be 
    applicable to proposed NOX exemption actions in other areas, it is 
    not applicable to the Monterey Bay exemption action because the EPA is 
    unaware of, and the comment itself does not specify, any downwind areas 
    for which NOX transport is of concern.
        However, as a result of these comments and comments received 
    regarding transport in NOX exemption requests for other areas in 
    the United States, EPA reevaluated its position on this issue and 
    decided to revise the previously issued guidance.2 As described 
    below, EPA intends to use its authority under section 110(a)(2)(D) to 
    require a State to reduce NOX emissions from stationary and/or 
    mobile sources where there is evidence, such as photochemical grid 
    modeling, showing that NOX emissions would contribute 
    significantly to nonattainment in, or interfere with maintenance by, 
    any other State. This action would be independent of any action taken 
    by EPA on a NOX exemption request for stationary sources under 
    section 182(f). That is, EPA action to grant or deny a NOX 
    exemption request under section 182(f) would not shield that area from 
    EPA action to require NOX emission reductions, if necessary, under 
    section 110(a)(2)(D).
    
        \2\See ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--
    Revised Process and Criteria'', issued February 8, 1995 by John S. 
    Seitz, Director of EPA's Office of Air Quality Planning and 
    Standards.
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        Modeling analyses are underway in many areas for the purpose of 
    demonstrating attainment in the 1994 SIP revisions. Recent modeling 
    data suggest that certain ozone nonattainment areas may benefit from 
    reductions in NOX emissions far upwind of the nonattainment area. 
    For example, the northeast corridor and the Lake Michigan areas are 
    considering attainment strategies which rely in part on NOX 
    emission reductions hundreds of kilometers upwind. The EPA is working 
    with the States and other organizations to design and complete studies 
    which consider upwind sources and quantify their impacts. As the 
    studies progress, EPA will continue to work with the States and other 
    organizations to develop mutually acceptable attainment strategies.
        At the same time as these large scale modeling analyses are being 
    conducted, certain nonattainment areas in the modeling domain have 
    requested exemptions from NOX requirements under section 182(f). 
    Some areas requesting an exemption may be upwind of and impact upon 
    downwind nonattainment areas. EPA intends to address the transport 
    issue through section 110(a)(2)(D) based on a domain-wide modeling 
    analysis.
        Under section 182(f) of the Act, an exemption from the NOX 
    requirements may be granted for nonattainment areas outside an ozone 
    transport region if EPA determines that ``additional reductions of 
    [NOX] would not contribute to attainment of the national ambient 
    air quality standard for ozone in the area.''3 As described in 
    section 4.3 of the December 16, 1993 guidance document, EPA believes 
    that the term ``area'' means the ``nonattainment area'' and that EPA's 
    determination is limited to consideration of the effects in a single 
    nonattainment area due to NOX emissions reductions from sources in 
    the same nonattainment area.
    
        \3\There are 3 NOX exemption tests specified in section 
    182(f). Of these, 2 are applicable for areas outside an ozone 
    transport region; the ``contribute to attainment'' test described 
    above, and the ``net air quality benefits'' test. EPA must 
    determine, under the latter test, that the net benefits to air 
    quality in an area ``are greater in the absence of NOX 
    reductions'' from relevant sources. Based on the plain language of 
    section 182(f), EPA believes that each test provides an independent 
    basis for receiving a full or limited NOX exemption. 
    Consequently, as stated in section 1.4 of the December 16, 1993 EPA 
    guidance, ``[w]here any one of the tests is met (even if another 
    test is failed), the section 182(f) NOX requirements would not 
    apply or, under the excess reductions provision, a portion of these 
    requirements would not apply.''
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        Section 4.3 of the guidance goes on to encourage, but not require, 
    States/petitioners to include consideration of the entire modeling 
    domain, since the effects of an attainment strategy may extend beyond 
    the designated nonattainment area. Specifically, the guidance 
    encourages States to ``consider imposition of the NOX requirements 
    if needed to avoid adverse impacts in downwind areas, either intra- or 
    inter-State. States need to consider such impacts since they are 
    ultimately responsible for achieving attainment in all portions of 
    their State (see generally section 110) and for ensuring that emissions 
    originating in their State do not contribute significantly to 
    nonattainment in, or interfere with maintenance by, any other State 
    [see section 110(a)(2)(D)(i)(I)].''
        In contrast, section 4.4 of the guidance states that the section 
    182(f) demonstration would not be approved if there is evidence, such 
    as photochemical grid modeling, showing that the NOX exemption 
    would interfere with attainment or maintenance in downwind areas. The 
    guidance goes on to explain that section 110(a)(2)(D) [not section 
    182(f)] prohibits such impacts.
        Consistent with the guidance in section 4.3, EPA believes that the 
    section 110(a)(2)(D) and 182(f) provisions must be considered 
    independently, and hence, is withdrawing the guidance presently 
    contained in section 4.4. Thus, if there is evidence that NOX 
    emissions in an upwind area would interfere with attainment or 
    maintenance in a downwind area, that action should be separately 
    addressed by the State(s) or, if necessary, by EPA in a section 
    110(a)(2)(D) action. In addition, a section 182(f) exemption request 
    should be independently considered by EPA. In some cases, then, EPA may 
    grant an exemption from across-the-board NOX RACT controls under 
    section 182(f) and, in a separate action, require NOX controls 
    from stationary and/or mobile sources under section 110(a)(2)(D). It 
    should be noted that the controls required under section 110(a)(2)(D) 
    may be more or less stringent than RACT, depending upon the 
    circumstances.
        Comment: Comments were received regarding exemption of areas from 
    the NOX requirements of the conformity rules. The commenters argue 
    that such exemptions waive only the requirements of section 182(b)(1) 
    to contribute to specific annual reductions, not the requirement that 
    conformity SIPs contain information showing the maximum amount of motor 
    vehicle NOX emissions allowed under the transportation conformity 
    rules and, [[Page 20236]] similarly, the maximum allowable amounts of 
    any such NOX emissions under the general conformity rules. The 
    commenters admit that, in prior guidance, EPA has acknowledged the need 
    to amend a drafting error in the existing transportation conformity 
    rules to ensure consistency with motor vehicle emissions budgets for 
    NOX, but want EPA in actions on NOX exemptions to explicitly 
    affirm this obligation and to also avoid granting waivers until a 
    budget controlling future NOX increases is in place.
        Response: With respect to conformity, EPA's conformity rules45 
    provide a NOX waiver if an area receives a section 182(f) 
    exemption. In its ``Conformity; General Preamble for Exemption From 
    Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 17, 1994), EPA 
    reiterated its view that in order to conform, nonattainment and 
    maintenance areas must demonstrate that the transportation plan and 
    transportation improvement program (TIP) are consistent with the motor 
    vehicle emissions budget for NOX even where a conformity NOX 
    waiver has been granted. Due to a drafting error, that view is not 
    reflected in the current transportation conformity rules. As the 
    commenters correctly note, EPA states in the June 17th notice that it 
    intends to remedy the problem by amending the conformity rule. Although 
    that notice specifically mentions only requiring consistency with the 
    approved maintenance plan's NOX motor vehicle emissions budget, 
    EPA also intends to require consistency with the attainment 
    demonstration's NOX motor vehicle emissions budget. However, the 
    exemption for Monterey Bay was submitted pursuant to section 182(f)(3), 
    and EPA does not believe it is appropriate to delay the statutory 
    deadline for acting on this petition until the conformity rule is 
    amended. As noted earlier in response to a previous issue raised by 
    these commenters, this issue has also been raised in a formal petition 
    for reconsideration of the Agency's final transportation conformity 
    rule and in litigation pending before the U.S. Court of Appeals for the 
    District of Columbia Circuit on the substance of both the 
    transportation and general conformity rules. This issue, thus, is under 
    consideration within the Agency, but at this time remains unresolved. 
    The EPA, therefore, believes that until a resolution of this issue is 
    achieved, the applicable rules governing this issue are those that 
    appear in the Agency's final conformity regulations, and the Agency 
    remains bound by their existing terms.
    
        \4\See ``Criteria and Procedures for Determining Conformity to 
    State or Federal Implementation Plans of Transportation Plans, 
    Programs, and Projects Funded or Approved under Title 23 U.S.C. of 
    the Federal Transit Act,'' November 24, 1993 (58 FR 62188).
        \5\See ``Determining Conformity of General Federal Actions to 
    State or Federal Implementation Plans; Final Rule,'' November 30, 
    1993 (58 FR 63214).
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        Comment: The commenters argue that the CAA does not authorize any 
    waiver of the NOX reduction requirements until conclusive evidence 
    exists that such reductions are counter-productive.
        Response: EPA does not agree with this comment since it ignores 
    Congressional intent as evidenced by the plain language of section 
    182(f), the structure of the Title I ozone subpart as a whole, and 
    relevant legislative history. By contrast, in developing and 
    implementing its NOX exemption policies, EPA has sought an 
    approach that reasonably accords with Congress' intent. Section 182(f), 
    in addition to imposing control requirements on major stationary 
    sources of NOX similar to those that apply for such sources of 
    VOC, also provides for an exemption (or limitation) from application of 
    these requirements if, under one of several tests, EPA determines that 
    in certain areas NOX reductions would generally not be beneficial. 
    In subsection 182(f)(1), Congress explicitly conditioned action on 
    NOX exemptions on the results of an ozone precursor study required 
    under section 185B. Because of the possibility that reducing NOX 
    in a particular area may either not contribute to ozone attainment or 
    may cause the ozone problem to worsen, Congress included attenuating 
    language, not just in section 182(f) but throughout the Title I ozone 
    subpart, to avoid requiring NOX reductions where it would be 
    nonbeneficial or counterproductive. In describing these various ozone 
    provisions (including section 182(f)), the House Conference Committee 
    Report states in pertinent part: ``[T]he Committee included a separate 
    NOX/VOC study provision in section [185B] to serve as the basis 
    for the various findings contemplated in the NOX provisions. The 
    Committee does not intend NOX reduction for reduction's sake, but 
    rather as a measure scaled to the value of NOX reductions for 
    achieving attainment in the particular ozone nonattainment area.'' H.R. 
    Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990). As noted in 
    response to an earlier comment by these same commenters, the command in 
    subsection 182(f)(1) that EPA ``shall consider'' the 185B report taken 
    together with the timeframe the Act provides both for completion of the 
    report and for acting on NOX exemption petitions clearly 
    demonstrate that Congress believed the information in the completed 
    section 185B report would provide a sufficient basis for EPA to act on 
    NOX exemption requests, even absent the additional information 
    that would be included in affected areas' attainment or maintenance 
    demonstrations. However, while there is no specific requirement in the 
    Act that EPA actions granting NOX exemption requests must await 
    ``conclusive evidence'', as the commenters argue, there is also nothing 
    in the Act to prevent EPA from revisiting an approved NOX 
    exemption if warranted due to better ambient information.
        In addition, the EPA believes (as described in EPA's December 1993 
    guidance) that section 182(f)(1) of the CAA provides that the new 
    NOX requirements shall not apply (or may be limited to the extent 
    necessary to avoid excess reductions) if the Administrator determines 
    that any one of the following tests is met:
        (1) In any area, the net air quality benefits are greater in the 
    absence of NOX reductions from the sources concerned;
        (2) In nonattainment areas not within an ozone transport region, 
    additional NOX reductions would not contribute to ozone attainment 
    in the area; or
        (3) In nonattainment areas within an ozone transport region, 
    additional NOX reductions would not produce net ozone air quality 
    benefits in the transport region.
        Based on the plain language of section 182(f), EPA believes that 
    each test provides an independent basis for receiving a full or limited 
    NOX exemption.
        Only the first test listed above is based on a showing that 
    NOX reductions are ``counter-productive.'' If one of the tests is 
    met (even if another test is failed), the section 182(f) NOX 
    requirements would not apply or, under the excess reductions provision, 
    a portion of these requirements would not apply.
    
    EPA Action
    
        EPA is finalizing this action to exempt Monterey Bay from 
    implementing the NOX requirements for RACT, NSR, the applicable 
    general and transportation conformity requirements, and I/M.
        The EPA believes that all section 182(f) exemptions that are 
    approved should be approved only on a contingent basis. As described in 
    the EPA's NOX Supplement to the General Preamble (57 FR 55628, 
    November 25, 1992) and further guidance issued by 
    [[Page 20237]] EPA,6 section 182(f) exemptions are granted on a 
    contingent basis and last for only as long as the area's monitoring 
    data continue to demonstrate attainment. Monterey Bay is required to 
    continue to operate an appropriate air quality monitoring network, in 
    accordance with 40 CFR part 58, to verify the attainment status of the 
    area.
    
        \6\See ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--
    Revised Process and Criteria'', issued by John S. Seitz, Director, 
    Office of Air Quality Planning and Standards (MD-10), May 27, 1994.
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        If, prior to redesignation of the area to attainment, a violation 
    of the ozone NAAQS is monitored in Monterey Bay (consistent with the 
    requirements contained in 40 CFR part 58 and recorded in AIRS), the 
    section 182(f) exemption would no longer apply, as of the date EPA 
    makes a determination that a violation has occurred. EPA would notify 
    the area that the exemption no longer applies, and would also provide 
    notice to the public in the Federal Register. If the exemption is 
    revoked, the area must comply with any applicable NOX requirements 
    set forth in the CAA. Thus, a determination that the NOX exemption 
    no longer applies would mean that the applicable NOX NSR, general 
    and transportation conformity, and I/M provisions would immediately be 
    applicable (see 58 FR 63214 and 58 FR 62188) in Monterey Bay.
        If Monterey Bay is redesignated to attainment of the ozone NAAQS, 
    NOX RACT is to be implemented as provided for as contingency 
    measures in the maintenance plan.
        Nothing in this action should be construed as permitting or 
    allowing or establishing a precedent for any future request for 
    revision to any state implementation plan. Each request for revision to 
    the state implementation plan shall be considered separately in light 
    of specific technical, economic, and environmental factors and in 
    relation to relevant statutory and regulatory requirements.
    
    Regulatory Process
    
        Under Executive Order 12866 (58 FR 51735, October 4, 1993), the EPA 
    must determine whether the regulatory action is ``significant'', and 
    therefore subject to Office of Management and Budget (OMB) review and 
    the requirements of the Executive Order. It has been determined that 
    this action is not a ``significant regulatory action'' under the terms 
    of Executive Order 12866, and is therefore not subject to OMB review.
        Under sections 202, 203, and 205 of the Unfunded Mandates Reform 
    Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 
    1995, EPA must assess whether various actions undertaken in association 
    with proposed or final regulations include a Federal mandate that may 
    result in estimated costs of $100 million or more to the private 
    sector, or to State, local, or tribal governments in the aggregate.
        EPA's final action relieves requirements otherwise imposed under 
    the CAA and, hence does not impose and Federal intergovernmental 
    mandate, as defined in section 101 of the Unfunded Mandates Act. This 
    action also will not impose a mandate that may result in estimated 
    costs of $100 million or more to either State, local or tribal 
    governments in the aggregate, or to the private sector.
        Under section 307(b)(1) of the CAA, petitions for judicial review 
    of this action must be filed in the United States Court of Appeals for 
    the appropriate circuit by May 25, 1995. Filing a petition for 
    reconsideration by the Administrator of this rule does not affect the 
    finality of this rule for the purposes of judicial review nor does it 
    extend the time within which a petition for judicial review may be 
    filed, and shall not postpone the effectiveness of such a rule. This 
    action may not be challenged later in proceedings to enforce its 
    requirements. Section 307(b)(2).
    
    List of Subjects in 40 CFR Part 52
    
        Environmental protection, Air pollution control, Hydrocarbons, 
    Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and 
    recordkeeping requirements, Volatile organic compounds.
    
        Dated: April 12, 1995.
    Felicia Marcus,
    Regional Administrator.
    
        Part 52, chapter I, title 40 of the Code of Federal Regulations is 
    amended as follows:
    
    PART 52--[AMENDED]
    
        1. The authority citation for part 52 continues to read as follows:
    
        Authority: 42 U.S.C. 7401-7671q.
    
    Subpart D--California
    
        2. Subpart F is amended by adding Sec. 52.235 to read as follows:
    
    
    Sec. 52.235  Control strategy for ozone: Oxides of nitrogen.
    
        EPA is approving an exemption request submitted by the Monterey Bay 
    Unified Air Pollution Control District on April 26, 1994 for the 
    Monterey Bay ozone nonattainment area from the NOX RACT 
    requirements contained in section 182(f) of the Clean Air Act. This 
    approval exempts the area from implementing the oxides of nitrogen 
    (NOX) requirements for reasonably available control technology 
    (RACT), new source review (NSR), the related requirements of general 
    and transportation conformity regulations, and applicable inspection 
    and maintenance (I/M). The exemption is based on ambient air monitoring 
    data and lasts for only as long as the area's monitoring efforts 
    continue to demonstrate attainment without NOX reductions from 
    major stationary sources.
    
    [FR Doc. 95-10104 Filed 4-24-95; 8:45 am]
    BILLING CODE 6560-50-W