98-18272. Designation of Areas for Air Quality Planning Purposes; State of California; Redesignation of the San Francisco Bay Area to Nonattainment for Ozone  

  • [Federal Register Volume 63, Number 132 (Friday, July 10, 1998)]
    [Rules and Regulations]
    [Pages 37258-37280]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-18272]
    
    
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    ENVIRONMENTAL PROTECTION AGENCY
    
    40 CFR Part 81
    
    [CA-008-BU, FRL-6120-4]
    
    
    Designation of Areas for Air Quality Planning Purposes; State of 
    California; Redesignation of the San Francisco Bay Area to 
    Nonattainment for Ozone
    
    AGENCY: Environmental Protection Agency (EPA).
    
    ACTION: Final rule.
    
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    SUMMARY: EPA is taking final action to redesignate the San Francisco 
    Bay Area (Bay Area) as a nonattainment area for the 1-hour ozone 
    National Ambient Air Quality Standard (NAAQS). The Clean
    
    [[Page 37259]]
    
    Air Act (CAA or Act) provides that EPA may at any time revise the 
    designation of an area on the basis of air quality, planning and 
    control considerations, following notification to the Governor. On 
    August 21, 1997, EPA notified the Governor of California that the 
    Agency intended to propose to redesignate the Bay Area from attainment 
    to nonattainment of the federal 1-hour ozone standard, based on a total 
    of 43 exceedances and 17 violations of the standard since the June 1995 
    redesignation to attainment.
    
    EFFECTIVE DATE: This action is effective on August 10, 1998.
    
    ADDRESSES: A copy of this document and related information are 
    available in the air programs section of EPA Region 9's website, http:/
    /www.epa.gov/region09/air. The docket for this rulemaking is available 
    for inspection during normal business hours at EPA Region 9, Planning 
    Office, Air Division, 17th Floor, 75 Hawthorne Street, San Francisco, 
    California 94105. A reasonable fee may be charged for copying parts of 
    the docket. Please call (415) 744-1249 or 744-1251 for assistance.
    
    FOR FURTHER INFORMATION CONTACT: Regina Spindler (415) 744-1251 or 
    Celia Bloomfield (415) 744-1249, Planning Office (AIR-2), Air Division, 
    EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105.
    
    SUPPLEMENTARY INFORMATION:
    
    Outline
    
    I. Executive Summary
    II. Background
        A. Original Nonattainment Designation and Redesignation and 
    Redesignation to Attainment
        B. Subsequent Violations and Petitions to Redesignate the Bay 
    Area to Nonattainment
        C. Applicable Statutory Provisions
        D. Notification to the Governor and Governor's Response
        E. Proposed Action
    III. Summary of Public Comments and EPA Response
        A. Introduction
        B. Response of the State
        C. Overview of Public Comments
        D. Specific Comments and EPA Response
        1. Comments Relating to the Basis of EPA's Proposal to 
    Redesignate the Bay Area to Nonattainment
        a. Air Quality and Emissions
        b. Legal Authority
        i. General Comments on Mandatory and Discretionary Authorities 
    to Redesignate
        ii. Authority to Redesignate without Classification
        c. Policy Issues
        i. Public Notification and Public Perception
        ii. Impact of the Bay Area Emissions on Downwind Nonattainment 
    Areas and Issues of Equity
        iii. Effect of Redesignation on Limited Air Pollution Control 
    Resources
        iv. Alternatives to Redesignation
        2. Comments Relating to EPA's Proposed SIP Requirements
        a. Emissions Inventory
        b. Attainment Assessment
        c. Control Measures
        i. Suggested Measures
        ii. NOX Waiver and Efficacy of NOX 
    Controls
        d. Attainment Deadline
        e. Planning Schedule
        3. Comments on Miscellaneous Issues
        a. Conformity
        b. Congestion Mitigation and Air Quality (CMAQ) Funding
        c. Unfunded Mandates Reform Act (UMRA)
        d. Procedural Obligations under CAA, Section 107 and the 
    Administrative Procedures Act (APA)
    IV. Final Action
        A. Overview
        B. SIP Requirements and Deadlines
        C. Changes from Proposal
    V. Emission Reduction Opportunities
        A. Stationary Sources
        B. Transportation Control Measures
        C. Voluntary Measures
        D. Enhanced Inspection and Maintenance
        E. Mitigating Emissions Increases from Oakland Seaport and 
    Airport Expansion Projects
    VI. Administrative Requirements
        A. Executive Order (E.O.) 12866
        B. Regulatory Flexibility
        C. Unfunded Mandates Reform Act
        D. Executive Order 13045: Protection of Children from 
    Environmental Health Risks and Safety Risks
        E. Submission to Congress and the General Accounting Office
    
    I. Executive Summary
    
        On December 19, 1997 EPA published a Notice of Proposed Rulemaking 
    to redesignate the Bay Area to nonattainment of the federal 1-hour 
    ozone standard. During the 60-day public comment period that followed 
    publication, EPA received comments both in support of and in opposition 
    to our proposed action. All commenters, regardless of their views on 
    the proposed redesignation or the proposed requirements associated with 
    redesignation, expressed strong support for clean air progress in the 
    Bay Area. EPA appreciates the thoughtful comments on the proposal and 
    greatly values the commenters' commitment to improved air quality and 
    public health protection in the Bay Area. EPA has made significant 
    changes and clarifications in response to the comments and EPA believes 
    the final action recognizes the innovation and collaborative efforts 
    that can contribute to clean air in the Bay Area.
        After carefully considering all of the comments received, EPA has 
    decided to finalize the redesignation of the Bay Area to nonattainment 
    of the 1-hour ozone standard while clarifying and streamlining the 
    actions necessary to reach attainment. Although the Bay Area Air 
    Quality Management District (BAAQMD), the California Air Resources 
    Board (CARB), other regulatory agencies, businesses, and the community 
    as a whole have made great strides in improving air quality in the Bay 
    Area, there is still more work to be done. Redesignation is the most 
    appropriate course of action to assure further air quality improvements 
    and protection of public health and should place minimal burdens on the 
    local economy, residents, industry and regulators.
        When the federal ozone standard is exceeded, people, and in 
    particular children, the elderly, and those with respiratory diseases, 
    may experience ozone's ill effects, such as chest pain, cough, lung 
    inflammation, respiratory infection, and chronic bronchitis. In light 
    of these significant public health concerns, EPA believes that it is 
    important to provide the public with accurate information and the 
    correct message that ozone pollution is still a problem.
        EPA is compelled to redesignate the Bay Area to nonattainment 
    because of the numerous and widespread violations of the 1-hour ozone 
    standard, a standard that was designed to protect public health. The 
    Bay Area's air quality during 1996 ranked as the 6th worst in the 
    nation and for the three-year period 1995-1997, it was the 8th 
    smoggiest of the major metropolitan areas in the country. The absence 
    of violations in 1997 is a positive sign but the Agency does not feel 
    that the clean smog season last year proves that the serious ozone 
    problem revealed in 1995 and 1996 has been solved. Compliance with the 
    standard is measured over a three-year period so as to account for the 
    effects of weather and other meteorological conditions that can work to 
    either the advantage or disadvantage of air quality. This is 
    particularly relevant to the Bay Area's case since the meteorological 
    conditions prevailing on the West Coast during 1997 were unusually 
    favorable to good air quality and, according to an October 1997 report 
    by the BAAQMD, the ozone-conducive meteorology that occurred in 1995 
    and 1996 is likely to recur. The BAAQMD report also revealed that 
    during the 1990s ``progress appears to have lapsed; there appears to 
    have been an increase in ozone potential, after accounting for 
    meteorology.''
        The number of violations of this public health standard that 
    occurred in the Bay Area during 1995 and 1996 is
    
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    especially significant when compared to the air quality in other parts 
    of the country and the nonattainment designation and requirements 
    applicable to those areas. For example, EPA recently reclassified or 
    ``bumped-up'' the Phoenix and Santa Barbara areas from ``moderate'' to 
    ``serious'' nonattainment areas for failure to attain the ozone 
    standard by 1996. This ``bump-up'' to the ``serious'' nonattainment 
    classification means that these areas must comply with additional 
    planning and control requirements (e.g. attainment demonstration, 
    reasonable further progress demonstration, enhanced vehicle inspection 
    and maintenance program, Photochemical Assessment Monitoring) and must 
    attain the ozone standard by 1999 or face ``bump-up'' to the severe 
    classification, which would impose still more requirements. Phoenix 
    monitored 13 violations of the ozone standard, and Santa Barbara 
    recorded 7 violations, during the three-year period 1994-1996. The Bay 
    Area experienced 17 violations during that same three-year period. Such 
    a comparison reinforces the appropriateness of a nonattainment 
    designation for the Bay Area.
        EPA concluded that a redesignation to nonattainment not only 
    accurately describes air quality in the Bay Area, but also provides an 
    opportunity for reevaluating the causes of the Bay Area's ozone 
    violations, the quantity of emission reductions needed to attain the 
    health-based standard, and the measures that will achieve those 
    reductions quickly. Some believe that EPA should not proceed with 
    redesignation under the 1-hour standard, and that the BAAQMD should 
    instead focus all its energies on planning for the revised 8-hour ozone 
    standard. EPA is convinced, however, that some near-term action is 
    essential to protecting the health and welfare of the Bay Area 
    residents. Emission reduction strategies will be evaluated and put in 
    place much sooner through a redesignation under the 1-hour standard 
    than under a plan to meet the revised 8-hour ozone standard. In 
    addition, everything that the Bay Area does to meet the 1-hour standard 
    will help in meeting the more protective 8-hour standard. The Bay Area 
    won't have to complete its planning for the 8-hour standard until 2003 
    or comply with the new standard until 2005 at the earliest. That is 
    five years during which Bay Area residents would be breathing dirtier 
    air than they should be. It is the public's right, and EPA's 
    obligation, to be assured that current health standards are met now.
        EPA is redesignating the Bay Area to nonattainment without 
    assigning it a specific classification. The classification system 
    (marginal, moderate, serious, severe, or extreme) associated with other 
    current ozone nonattainment areas was created as part of the 1990 Clean 
    Air Act amendments to match a nonattainment area's planning and control 
    requirements with the severity of the area's ozone problem. The Bay 
    Area is in a unique position. It was designated nonattainment under the 
    1990 amendments, redesignated to attainment after implementing most of 
    the moderate nonattainment area requirements, and is now being returned 
    to nonattainment. The existing Clean Air Act classification system does 
    not specifically apply to the Bay Area. In order to allow maximum 
    flexibility and in keeping with the best legal reading of the Act, EPA 
    is redesignating the Bay Area under the longstanding general 
    nonattainment provisions of the Act, which have no associated 
    classifications. During public comment, the flexibility allowed by this 
    approach generated uncertainty as to the planning and control 
    requirements for the Bay Area. In response to this concern, and to make 
    sure the Air District's time and energy are spent on control measures, 
    not unnecessary paperwork, EPA has been more specific in the final 
    rulemaking notice describing what is required of the Bay Area.
        Redesignation should not result in a burdensome and duplicative 
    planning effort. EPA wants the District and its co-lead agencies to 
    focus on emission reductions, not paperwork. EPA is asking for only 
    three plan elements: the existing 1995 emissions inventory for Volatile 
    Organic Compounds (VOC) and Nitrogen Oxides (NOX); an 
    assessment of emission reductions, using available data and technical 
    analyses, needed to attain the federal standard; and control measures 
    to achieve those reductions. EPA will accept, in addition to or in lieu 
    of adopted regulations, control measures with enforceable commitments 
    to adopt in regulatory form and implement by specified dates sufficient 
    to attain the 1-hour ozone standard by the attainment date. It is an 
    additional public safeguard to make the control measures in this plan 
    federally enforceable elements of the State Implementation Plan (SIP), 
    since only in this way can the EPA and the public ensure that the 
    commitments in the plan are fully implemented and the plan's promised 
    air quality benefits are realized.
        In response to public comment, EPA has modified both the schedule 
    and content for State submissions and the attainment date. First, EPA 
    is requiring only one formal State Implementation Plan (SIP) submittal 
    instead of two. The one formal SIP submittal will include the emissions 
    inventory, attainment assessment, and control measures so that the 
    District can avoid having to undergo two public hearing and adoption 
    processes, one for the inventory and assessment and a second for the 
    control measures. EPA is allowing the BAAQMD to make a single SIP 
    submittal with the understanding, pursuant to a letter of commitment 
    from the Air District and co-lead agencies dated June 23, 1998, that 
    the emissions inventory and attainment assessment will be made 
    available to the public and submitted informally to EPA within 5 months 
    after signature of the final redesignation by the Regional 
    Administrator. This early, informal submittal will allow EPA to review 
    the draft inventory and assessment and work with the District to 
    address any deficiencies.
        Second, EPA has extended the deadlines for the formal SIP submittal 
    from May 1998 for the emissions inventory and attainment assessment, 
    and from September 1998 for the adopted control measures and/or 
    enforceable commitments, to June 15, 1999 for both. This extension 
    gives the BAAQMD and its co-lead agencies more time to address the 
    substantive requirements of the redesignation and carry out their 
    formal adoption and submittal processes.
        Third, EPA has extended the attainment deadline from November 15, 
    1999 to November 15, 2000 in order to allow additional time for the 
    emission reduction strategies to take effect on air quality in the Bay 
    Area.
        Fourth, both CARB and the BAAQMD submitted compelling arguments 
    that a weekend emissions inventory was too difficult and resource 
    intensive to complete at this time, and so EPA has streamlined the SIP 
    requirements still further by eliminating that obligation.
        Finally, in response to public comment, EPA has eliminated the 
    requirement to submit an emissions inventory for carbon monoxide (CO).
        The above changes from the proposed redesignation are summarized as 
    follows:
    
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    ------------------------------------------------------------------------
                                                 Final--weekend emissions   
     Proposal--weekend emissions inventory    inventory and CO inventory not
           and CO inventory required                     required           
    ------------------------------------------------------------------------
    Emissions inventory and attainment       Final emissions inventory and  
     assessment due 5/1/98.                   attainment assessment due 6/15/
                                              99. (Commitment to make draft 
                                              available to EPA and the      
                                              public by 11/25/98.)          
    Adopted regulations and/or control       Adopted regulations and/or     
     measures with enforceable commitments    control measures with         
     due 9/1/98.                              enforceable commitments and   
                                              final emissions inventory and 
                                              attainment assessment due 6/15/
                                              99.                           
    Attainment date of 11/15/99............  Attainment date of 11/15/2000. 
    ------------------------------------------------------------------------
    
        EPA recognizes that innovative methods, including voluntary 
    measures, have the potential to contribute in a cost-effective manner 
    to emission reductions needed for progress toward attainment. To 
    promote the creation and expansion of effective voluntary mobile source 
    programs, the Agency has developed a new policy that allows SIP credit 
    for such programs.\1\ The Bay Area has already demonstrated leadership 
    in crafting innovative approaches to air quality problems through the 
    ``Spare-the-Air'' and Silicon Valley ECOPASS programs. EPA is eager to 
    work with the local government agencies and members of the business and 
    environmental communities, who are critical to building public support 
    for voluntary programs, to explore opportunities for innovation and to 
    ensure that the voluntary measures stand the test of public 
    accountability.
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        \1\ Memorandum dated October 23, 1997 entitled, ``Guidance on 
    Incorporating Voluntary Mobile Sourve Emission Reduction Programs in 
    State Implementation Plans (SIPs).''
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    II. Background
    
    A. Original Nonattainment Designation and Redesignation to Attainment
    
        For more detailed information on the Bay Area's original ozone 
    nonattainment designation, classification under the 1990 Clean Air Act 
    Amendments, and redesignation to attainment, the reader is directed to 
    EPA's proposed redesignation, published on December 19, 1997 (62 FR 
    66578-66583).
        The Bay Area was initially designated under section 107 of the 1977 
    CAA as nonattainment for ozone on March 3, 1978 (40 CFR part 81.305). 
    The Bay Area consists of the following counties: Alameda, Contra Costa, 
    Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano (part), and 
    Sonoma (part).2 Following the 1990 amendments to the Act, 
    the area was classified by operation of law, under section 181(a), as a 
    ``moderate'' ozone nonattainment area. (56 FR 56694, Nov. 6, 1991). On 
    May 22, 1995 (60 FR 27028), EPA approved the maintenance plan adopted 
    by BAAQMD, the Metropolitan Transportation Commission (MTC), and the 
    Association of Bay Area Governments (ABAG) and submitted to EPA by 
    CARB. In the same document, EPA redesignated the area to attainment for 
    ozone, based on 3 violation-free years of data from the Bay Area's 
    official monitoring network.
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        \2\ For a description of those portions of Solano and Sonoma 
    County that are included in the Bay Area, the reader is directed to 
    40 CFR part 81.21.
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    B. Subsequent Violations and Petitions to Redesignate the Bay Area to 
    Nonattainment
    
        Despite implementation of most of the measures in the Bay Area's 
    maintenance plan, the monitoring network has recorded 43 exceedances 
    and 17 violations of the federal 1-hour ozone standard over the years 
    1995-1996.3
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        \3\ An exceedance of the 1-hour ozone standard occurs when the 
    hourly average ozone concentration at a given monitoring site is 
    greater than or equal to .125 parts per million (ppm). A violation 
    of the standard occurs when the expected number of days per calendar 
    year with maximum hourly average ozone concentrations at or above 
    .125 ppm is greater than one. 40 CFR part 50.9. The average number 
    of days is calculated for a 3-year period. 40 CFR part 50, Appendix 
    H. This 3-year period was established to reduce the impact of yearly 
    fluctuations in ozone levels. Table 1 in EPA's proposed 
    redesignation (62 FR 66579) lists both the exceedances and the 3-
    year average number of days over the 1-hour ozone standard for the 
    period 1994-1996 at Bay Area monitoring sites in the official State 
    and Local Monitoring (SLAMS) network.
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        EPA has received 2 petitions requesting that the Administrator 
    redesignate the Bay Area to nonattainment with the federal 1-hour ozone 
    standard. On March 31, 1997, the Sierra Club and Communities for a 
    Better Environment (CBE) requested that EPA withdraw the 1995 
    redesignation action, or alternatively redesignate the area to 
    nonattainment. The Sierra Club also requested that EPA issue a CAA 
    section 110(k)(5) SIP call based on the inadequacy of the current SIP. 
    On July 14, 1997, U.S. Congressman Gary Condit and a coalition of 
    federal, state and local elected officials and public interest and 
    industry groups from downwind areas (primarily the San Joaquin Valley) 
    petitioned EPA to withdraw the 1995 redesignation to attainment, or 
    alternatively redesignate the area to nonattainment, and issue a SIP 
    call. Congressman Condit incorporated this petition in his public 
    comment on the proposed action, and the petition is summarized in more 
    detail in section III.C., Overview of Public Comments.
    
    C. Applicable Statutory Provisions
    
        Section 107(d)(3) of the Act gives the Administrator the authority 
    to redesignate areas. Under this provision, the Administrator may 
    ``(O)n the basis of air quality data, planning and control 
    considerations, or any other air quality-related considerations the 
    Administrator deems appropriate, * * * at any time notify the Governor 
    of any State that available information indicates that the designation 
    of any area * * * should be revised.'' Section 107(d)(3)(A). The 
    Governor then has 120 days to submit the redesignation, as the Governor 
    considers appropriate. Section 107(d)(3)(B). The Administrator must 
    promulgate the redesignation within 120 days of the Governor's 
    response. The Administrator may make any modifications to the 
    Governor's redesignation which she deems necessary, but must notify the 
    Governor of such changes 60 days before promulgating a final 
    redesignation. If the Governor does not submit the redesignation, the 
    Administrator shall promulgate the redesignation which she deems 
    appropriate. Section 107(d)(3)(C).
    
    D. Notification to the Governor and the Governor's Response
    
        EPA notified the Governor of California by letter dated August 21, 
    1997, that EPA believes that the Bay Area should be redesignated to 
    nonattainment, based on repeated violations of the ozone NAAQS. In the 
    letter to the Governor, EPA proposed that the Bay Area be classified as 
    a ``moderate'' nonattainment area, and that the area be required to 
    submit by March 1, 1998, an emissions inventory and an attainment 
    assessment; submit by May 1, 1998, a schedule and plan for completing a 
    field study and modeling; and submit by September 1, 1998, rules and/or 
    control measures sufficient to attain the 1-hour ozone NAAQS by 1999.
        The Governor responded to this letter on December 10, 1997. Noting 
    that the Bay Area had recorded no exceedances of the 1-hour ozone NAAQS 
    in 1997, the
    
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    Governor opposed the redesignation, preferring that EPA allow the 
    BAAQMD maintenance plan, subsequent BAAQMD measures, and CARB measures 
    to ensure that the area would not violate the ozone NAAQS in the 
    future. See sections III.B. and III.D. below for a more detailed 
    summary of the Governor's comments and EPA's response.
    
    E. Proposed Action
    
        On December 11, 1997, EPA issued its proposal to redesignate the 
    San Francisco Bay Area to nonattainment for the 1-hour ozone NAAQS 
    because ozone levels have violated the federal standard 17 times over 
    the 3-year period 1994-1996. The proposal was published on December 19, 
    1997, and invited public comment through February 17, 1998.
        After summarizing applicable CAA provisions and the Bay Area's 
    record of exceedances and violations, EPA proposed to require the 
    BAAQMD and its co-lead agencies to develop and submit a SIP revision 
    designed to provide for attainment of the 1-hour ozone NAAQS by 1999. 
    EPA's proposal set forth the Agency's reasons for concluding that the 
    Bay Area should not be classified under subpart 2 of the CAA, but 
    should rather be subject to the basic SIP requirements of section 110 
    and the general nonattainment plan requirements of section 172 (62 FR 
    66580). Finally, EPA proposed that the State be required to submit SIP 
    revisions on the schedule in the table reproduced below, labeled 
    ``Proposed Schedule of Submittal of Revisions to the State 
    Implementation Plan for Ozone for the San Francisco Bay Area.''
    
     Proposed Schedule of Submittal of Revisions to the State Implementation
    Plan for Ozone for the San Francisco Bay Area (62 FR 66578, December 19,
                                      1997)                                 
    ------------------------------------------------------------------------
                   Action/SIP submittal                         Date        
    ------------------------------------------------------------------------
    Current and complete baseline annual average and    5/1/98              
     summer weekday and weekend day emissions                               
     inventory for volatile organic compounds (VOC),                        
     nitrogen oxides (NOX), and carbon monoxide.                            
    Assessment, employing available modeling            5/1/98              
     information, of the level of emission reductions                       
     needed to attain the current 1-hour ozone                              
     National Ambient Air Quality Standard (NAAQS).                         
     This assessment should take into account the                           
     meteorological conditions and ambient                                  
     concentrations associated with the violations of                       
     the ozone NAAQS in the period 1995-6, and should                       
     be based on likely control measures for reducing                       
     VOC and NOX emissions.                                                 
    Adopted regulations and/or control measures, with   9/1/98              
     enforceable commitments to adopt and implement                         
     the control measures in regulatory form by                             
     specified dates, sufficient to meet reasonable                         
     further progress and attain the 1-hour NAAQS                           
     expeditiously.                                                         
    ------------------------------------------------------------------------
    
    III. Summary of Public Comments and EPA Response
    
    A. Introduction
    
        EPA received 127 comments between EPA's notification to the 
    Governor on August 21, 1997, and the close of the public comment period 
    on February 17, 1998. The docket for this notice includes the public 
    comments. Of the comments, 68 supported the redesignation and 59 
    opposed the redesignation. In section III.D. below, EPA summarizes and 
    responds to each of the substantive comments.
    
    B. Response of the State
    
        On the day EPA issued its proposed redesignation, EPA received an 
    extensive response from the Governor, dated December 10, 1997. This was 
    supplemented by a letter dated February 17, 1998, from Peter M. Rooney, 
    Secretary for Environmental Protection, California Environmental 
    Protection Agency. The Governor's letter was timely, in that it was 
    received 7 days before the expiration of the 120-day period for the 
    Governor to respond to EPA's notification letter.
        This section provides a general summary of the State's comments, 
    expressed in the two letters. EPA's response to the State's comments 
    appears in section III.D., which organizes by subject matter all of the 
    public comments and EPA's responses.
        The State opposed the redesignation as an inefficient use of 
    resources, in view of the forthcoming planning responsibilities to 
    address the new, more stringent 8-hour ozone NAAQS.4 The 
    State preferred that EPA allow the region to pursue additional emission 
    reductions through the air quality maintenance process and through 
    implementation of the Bay Area's 1997 Clean Air Plan, rather than force 
    the Bay Area to divert resources to an unnecessary planning process 
    triggered by redesignation.5 The State noted that EPA had 
    followed a similar, flexible approach by not redesignating other areas 
    that have violated the ozone standard.
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        \4\ EPA promulgated a revised 8-hour ozone NAAQS on July 18, 
    1997 (62 FR 38856).
        \5\ This plan was adopted by the BAAQMD on December 17, 1997, to 
    address requirements of the California Clean Air Act, including a 
    triennial update to the area's comprehensive strategy for attaining 
    the State's air quality standards. The plan was not adopted to 
    address Federal CAA requirements and it has not been submitted to 
    EPA as a SIP revision.
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        Both letters from the State attached two legal opinions (CARB 
    memorandum dated December 8, 1997, from Kathleen Walsh to Michael P. 
    Kenny; BAAQMD memorandum dated December 4, 1997, from Robert N. Kwong 
    to Ellen Garvey). These legal analyses concluded that, while EPA has 
    the authority to redesignate the Bay Area to nonattainment even if the 
    Governor does not submit a redesignation request, the Act also gives 
    EPA other preferable options. The BAAQMD memorandum discusses 3 
    options: federal maintenance plan, SIP call, and Clinton 
    Administration's common sense plan. The CARB memorandum argues that EPA 
    should issue a call for a revision to the Bay Area's maintenance plan 
    under CAA section 110(k)(5) if the Administrator determines that a SIP 
    revision is necessary to correct a violation, since this approach would 
    allow a more targeted effort to correct the problem. The BAAQMD 
    memorandum adds that a maintenance plan is the means Congress 
    established for addressing exceedances following redesignation to 
    attainment, and both memoranda conclude that the existing maintenance 
    plan and the Bay Area's 1997 Clean Air Plan are already at work toward 
    returning the District to attainment, as indicated by the absence of 
    any exceedances of the 1-hour ozone NAAQS in the Bay Area during 1997.
        The State argued that there is no technical basis for determining a 
    specific emission reduction target by EPA's proposed deadline of May 1, 
    1998, and that a quasi-technical assessment would not be accepted by 
    the public or the business community. The State contended that modeling 
    information is outdated and inadequate for purposes of determining an 
    emissions reduction target.
        The State argued that redesignation would hurt attainment efforts 
    in the Central Valley, since it would distract the Bay Area from 
    achieving real
    
    [[Page 37263]]
    
    emissions reductions.6 The Governor stated that he has 
    directed the Chairman of CARB to work with involved districts to ensure 
    that the BAAQMD develops additional measures to address the needs of 
    the Central Valley.
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        \6\ California's Central Valley comprises the Sacramento Valley 
    to the northeast of the Bay Area and the San Joaquin Valley to the 
    southeast. CARB has concluded that the Sacramento Valley, the San 
    Joaquin Valley, and the North Central Coast (to the south of the Bay 
    Area) are affected by transport of ozone and ozone precursors from 
    the Bay Area.
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        The State concluded that EPA's proposed schedule does not provide 
    sufficient time for planning or attainment, and that accomplishment of 
    the proposed SIP requirements would be too costly. The State noted that 
    the BAAQMD had estimated that EPA's proposed planning process, although 
    streamlined, would still cost in the range of one million dollars or 
    more, and would require significant investments of staff time, advisory 
    committee time, and governing board time for all 3 co-lead agencies. 
    The State specifically argued against EPA's proposed requirements for a 
    weekend emissions inventory, which would require several person-years 
    of effort and associated costs in the range of a half-million dollars. 
    As an additional financial burden, the State asserted that EPA's 
    proposed redesignation of the Bay Area without a classification 
    jeopardizes the region's Congestion Mitigation and Air Quality 
    Improvement Program (CMAQ) funding.
        Finally, the State cited the President's directive that accompanied 
    the promulgation of the new federal standards for ozone and particulate 
    matter.7 The State encouraged EPA to comply with the spirit 
    of the directive, which emphasizes that ``implementation of the air 
    quality standards is to be carried out to maximize common sense, 
    flexibility, and cost effectiveness.'' The State concluded that EPA 
    withdrawal of the redesignation proposal would be most consistent with 
    this directive.
    ---------------------------------------------------------------------------
    
        \7\ Memorandum from the President to the Administrator of the 
    Environmental Protection Agency, dated July 16, 1997, entitled 
    ``Implementation of Revised Air Quality Standards for Ozone and 
    Particulate Matter,'' and attaching ``Implementation Plan for 
    Revised Air Quality Standards.'' 62 FR 38421 (July 18, 1997).
    ---------------------------------------------------------------------------
    
    C. Overview of Public Comments
    
        EPA's proposed redesignation elicited a very large number of 
    comments, offering strong arguments either in support of, or in 
    opposition to, redesignation. Many of the letters also provided helpful 
    information regarding the impacts, beneficial or adverse, expected to 
    result from redesignation. Regardless of whether or not the writer 
    favored redesignation, every commenter strongly supported clean air 
    progress in the Bay Area. It is notable, for example, that many 
    commenters from the Bay Area business community wished to do their part 
    to improve air quality and maintain a sound economy, based on their 
    conviction that investments in air quality directly enhance the area's 
    economic vitality and their employees' quality of life. EPA appreciates 
    each comment and greatly values the commenters' commitment to improved 
    air quality and public health protection.
        As previously noted, well over 100 individuals or organizations 
    submitted comments on the proposed redesignation.
        Included among the comments were letters supporting redesignation 
    from Congressman Gary Condit (Fresno) and from 6 Members of Congress 
    from the Bay Area (Representatives George Miller, Lynn Woolsey, Nancy 
    Pelosi, Pete Stark, Anna Eshoo, and Tom Lantos). Four Northern 
    California Members of Congress (Representatives Ellen Tauscher, Tom 
    Campbell, Frank Riggs, and Vic Fazio) signed a letter in opposition to 
    the redesignation.
        The Bay Area Members of Congress opposing the redesignation 
    believed that such an action is neither consistent with the CAA nor in 
    the spirit of the President's 1997 directive on implementing the ozone 
    and particulate matter NAAQS. These Representatives noted that the CAA 
    does not mandate redesignation but allows EPA to recognize the Bay 
    Area's track record and overall quality of air. The Members felt that 
    redesignation will trigger a costly, duplicative planning process that 
    will detract from collaborative efforts to improve air quality and 
    prepare for compliance with the 8-hour NAAQS. The Representatives 
    indicated that sources informed them that EPA's proposed action would 
    provide no new authority, funding and technology. The legislators felt 
    that declining Bay Area emissions and the clean 1997 ozone season prove 
    that a region can quickly return to attainment without the economic, 
    political, and administrative complexities of redesignation. The 
    Representatives indicated that they are not opposed to the new 8-hour 
    ozone NAAQS but wish an efficient, common sense transition to achieve 
    the NAAQS. Finally, if EPA redesignates the Bay Area, the legislators 
    wanted assurance that the CMAQ funding for the Bay Area will not be 
    jeopardized by EPA's action.
        Congressman Condit fully supported the proposed redesignation and 
    referenced scientific data relating to Bay Area's exceedances and to 
    the impact of transported pollutants to downwind areas, such as the San 
    Joaquin Valley. Congressman Condit asked that a July 14, 1997 petition 
    to EPA be incorporated in his comment. This petition was signed by 4 
    Congressmen in addition to Congressman Condit (Representatives George 
    Radanovich, Richard Pombo, John Doolittle, and Sam Farr), 4 state 
    legislators, local elected officials, and officials representing farm 
    and manufacturing organizations, environmental groups, and the San 
    Joaquin Valley Unified Air Pollution Control District.
        The petition summarizes the adverse impacts of elevated ozone 
    levels on public health, health care costs, and crops. The petition 
    also notes reasons why the years during the early 1990's when the Bay 
    Area recorded no violations were exceptional: A severe drought limited 
    biogenic emissions, summer peak temperatures were lower than normal, 
    the area was experiencing an economic recession, and the 55 mph speed 
    limit was in effect, reducing emissions of ozone precursors from cars 
    and trucks.
        The petition notes that no modeling supported the redesignation of 
    the Bay Area to attainment, and that contingency measures in the 
    maintenance plan yielded no additional air quality benefit, 
    particularly in light of EPA's decision to waive certain NOX 
    control requirements. Thus, the maintenance plan failed to comply with 
    the requirement in CAA section 175A(d) that the plan contain 
    contingency measures sufficient to assure that the State will promptly 
    correct any violation of the standard which occurs after the 
    redesignation. The petition adds that it is now apparent that the 
    maintenance plan failed to comply with the even more fundamental 
    requirement of section 175(A)(a) that such plans contain additional 
    measures, if any, as may be necessary to ensure maintenance of the 
    NAAQS.
        The petition recounts the Bay Area's ozone NAAQS violations 
    immediately following redesignation, some lasting up to 7 hours on 11 
    different days, with the worst exceedance in excess of .150 ppm, and 13 
    exceedances at or above .140 ppm. The petition concludes that prompt 
    action is necessary to achieve the overriding purpose of the Act, since 
    the SIP controls have been shown to be insufficient for attainment or 
    maintenance.
        The petition asks EPA either to withdraw the redesignation or 
    redesignate the Bay Area to nonattainment, and further asks EPA to find 
    that the current Bay Area SIP is inadequate and require the State to
    
    [[Page 37264]]
    
    revise the SIP to attain the NAAQS expeditiously.
        The petition states that there is no longer a defensible basis to 
    believe that the Bay Area has attained or that the approved maintenance 
    plan is still adequate. The petition continues: ``The existing 
    attainment designation sends a false signal to the public, the 
    regulated community, local agencies and the District itself that ozone 
    pollution is no longer a problem. The complacency created by that 
    message will hinder rather than help solve the problem within the Bay 
    Area and the San Joaquin Valley * * *.''
        The petitioners requested EPA to establish a SIP requirement that 
    the State perform a comprehensive analysis of all factors affecting the 
    ozone precursor ``carrying capacity'' for maintenance of the NAAQS in 
    the Bay Area, and provide accurate estimates of emission reductions 
    anticipated to be achieved from additional measures to be included in 
    the plan, based upon an updated emissions inventory. While the 
    nonattainment SIP is being prepared, a SIP call should allow the State 
    1 year to submit a maintenance revision that includes adopted 
    additional measures to ensure the earliest practicable attainment and 
    maintenance of the ozone NAAQS. The petitioners stated that, ``Given 
    history, the submittal should demonstrate the reliability and adequacy 
    of those measures convincingly.'' The subsequent SIP offers an 
    opportunity to fine tune the maintenance SIP revision and address any 
    problems that may surface in implementation.
        The 6 Bay Area Members of Congress supporting the redesignation 
    stressed that protecting the health of their constituents is one of 
    their highest responsibilities as lawmakers. After careful 
    consideration, these Representatives concluded that the specific 
    proposed redesignation presented by EPA is the best course of action to 
    provide the greatest assurance of improving Bay Area air quality and 
    protecting public health, while placing the fewest burdens on the local 
    economy, residents, industry and regulators.
        The legislators noted as significant a recent BAAQMD report showing 
    a worsening trend in ozone pollution in the 1990s. While acknowledging 
    the BAAQMD's new plan for future actions, the Members of Congress 
    expressed concern that the plan, adopted to meet California Clean Air 
    Act requirements, is inadequate since it contains only proposals, not 
    binding commitments, and can be changed at any time. Since the plan is 
    not enforceable by EPA or the public, the Representatives were unable 
    to verify that the plan would achieve attainment or genuinely improve 
    air quality.
        The Representatives' letter went on to stress that there is no way 
    to know whether Bay Area actions are sufficient for attainment until 
    federal and local regulators have a common understanding of the extent 
    of local air pollution problems. These Members of Congress considered 
    that EPA's redesignation proposal allows the maximum flexibility to the 
    BAAQMD to reach attainment by building on its existing plan and 
    avoiding redundancy, specifically with respect to emissions inventory 
    and modeling. The Members stated that it is incumbent upon the BAAQMD 
    to work with EPA to find common ground on credible and binding actions 
    and timetables.
        While aware of arguments against redesignation based on EPA's 
    recent adoption of a more stringent 8-hour ozone NAAQS, the Members of 
    Congress still favored redesignation and action now to address the 1-
    hour standard, since 10 years may pass before the Bay Area must comply 
    with the revised ozone standard, and any steps taken to comply with the 
    current standard will only help, not hinder, the area's ability to meet 
    the 8-hour standard when it is officially in place. In the meantime, 
    Bay Area residents are likely to be exposed to harmful pollution levels 
    if there is no action.
        Finally, these 6 Representatives noted that the Department of 
    Transportation has concluded that EPA's proposed redesignation would 
    not jeopardize the Bay Area's eligibility for CMAQ funds under either 
    the existing Intermodal Surface Transportation and Efficiency Act 
    (ISTEA) or pending revisions to the Act.
        EPA received numerous letters from State legislators, mayors, and 
    boards of supervisors, in almost equal number supporting and opposing 
    the redesignation. Fifteen city councils or county boards of 
    supervisors in the San Joaquin Valley adopted resolutions supporting 
    the redesignation and Federal actions to mandate additional controls in 
    the Bay Area to reduce pollution levels exported into the Valley.
        Five California air pollution control districts (Monterey, San 
    Joaquin, Sacramento, Yolo-Solano, and Placer) wrote to support further 
    emission reductions in the Bay Area, while the BAAQMD opposed the 
    redesignation. EPA summarizes and responds to the BAAQMD's extensive 
    comments in section III.D., below.
        EPA received letters from over 20 Bay Area businesses and business 
    organizations arguing against the proposed redesignation, as well as 
    several letters from San Joaquin Valley businesses supporting the 
    redesignation.
        Letters supporting the redesignation and encouraging adoption of 
    specific additional controls were sent by Northern California 
    environmental groups. These commenters generally perceived a contrast 
    between the major threat to public health reflected in the recent ozone 
    violations and the lack of political will shown by State and Bay Area 
    officials. The commenters supported a stringent timetable for SIP 
    revisions and attainment, agreeing with EPA that the urgent priority is 
    to actually adopt measures to ensure that the Bay Area ozone violations 
    will not recur.
        Nineteen public interest groups representing the Bay Area 
    Environmental Justice Community signed a letter in support of the 
    redesignation, emphasizing the need to stem job flight to the suburbs 
    and to increase public transit within the Bay Area. The environmental 
    justice groups noted that these changes would benefit poor people and 
    communities of color both by improving their health and by increasing 
    their access to jobs and essential services.
        All letters from downwind areas (including, notably, the San 
    Joaquin Valley) strongly urged EPA to finalize the redesignation, on 
    the grounds that the Bay Area exports ozone or ozone precursors to 
    their region, thus jeopardizing public health, prosperity, and scenic 
    and resource values. These letters typically noted that the Bay Area, 
    as an attainment area, does not confront Federal control 
    responsibilities, and that this double standard unfairly penalizes 
    downwind nonattainment areas, which face specific CAA mandates 
    associated with their ``serious'' or ``severe'' ozone classifications.
        Letters from Bay Area local officials and businesses generally 
    pointed to unusual weather during 1995 and 1996 as the cause of the 
    ozone exceedances; the Bay Area's continuing efforts to reduce 
    emissions and the BAAQMD's projections that emission levels will 
    decline significantly in future years; the fact that the Bay Area 
    recorded no exceedances in 1997; and the importance of not diverting 
    resources from implementation of existing measures and planning for the 
    more protective 8-hour ozone NAAQS. The commenters frequently observed 
    that EPA's proposed SIP timetable was too hasty to allow for good 
    decision making.
    
    [[Page 37265]]
    
    D. Specific Comments and EPA Response
    
    1. Comments Relating to the Basis of EPA's Proposal to Redesignate the 
    Bay Area to Nonattainment
    a. Air Quality and Emissions
        Comment: The primary cause of the recent ozone exceedances is the 
    very unusual weather patterns of 1995 and 1996. There were fewer 
    exceedances of the 1-hour ozone NAAQS in 1996 and no exceedances in 
    1997. The Bay Area should therefore continue to be considered an 
    attainment area.
        Response: The Bay Area is not in compliance with the federal ozone 
    standard, a standard that was designed to protect public health. The 
    absence of violations in 1997 is a positive sign, but compliance with 
    the federal ozone standard is measured over a 3-year period, not on an 
    annual basis. The primary reason for the 3-year time frame is to 
    account for the effects of weather and other meteorological conditions 
    that can work to either the advantage or disadvantage of air quality. 
    This is particularly relevant in the Bay Area's case, since the 
    meteorological conditions prevailing on the West Coast during 1997 were 
    unusually favorable to good air quality. Furthermore, according to a 
    recent technical analysis by the BAAQMD, the ozone-conducive 
    meteorology that occurred in 1995 and 1996 is likely to recur (BAAQMD 
    Evaluation of the 1995 and 1996 Ozone Seasons in the San Francisco Bay 
    Area, October 1997, attached to Governor Wilson's December 10, 1997 
    letter to EPA Administrator Browner). Bay Area residents must be 
    assured of clean air under all weather conditions.
        The Bay Area recorded 17 violations of the 1-hour standard over the 
    3-year period 1994-1996. During that period, exceedances of the ozone 
    standard were measured at 15 official network monitoring locations 
    throughout the Bay Area. Although air quality improved between 1995 and 
    1996, the Bay Area's ranking in 1996 was the 6th worst in the nation 
    for number of days when ozone levels exceeded the federal standard. 
    Over the period 1995-1997, the Bay Area recorded 15 violations and had 
    significantly worse air quality than most other metropolitan areas 
    designated as nonattainment for ozone (see response to the following 
    comment). Many of these areas are classified as ``serious'' or higher 
    under the Clean Air Act, and are subject to specific mandatory 
    requirements which would not apply to the Bay Area in EPA's 
    redesignation proposal.
        These high ozone levels are harmful to public health in the Bay 
    Area. Exposure to ambient ozone concentrations, even at relatively low 
    levels and for brief periods of time, can cause respiratory symptoms 
    such as a reduction in lung function, chest pain, and cough. Repeated 
    exposure can make people more susceptible to respiratory infection and 
    lung inflammation, and can aggravate preexisting respiratory diseases 
    such as asthma. In consideration of these significant public health 
    concerns associated with the Bay Area's elevated ozone levels, EPA 
    continues to believe that redesignation to nonattainment is warranted.
        Comment: The Bay Area has the cleanest air of any metropolitan 
    region in the nation. Since 1990, the Bay Area has been in attainment 
    99.995% of the time.
        Response: There is no question that air quality in the Bay Area has 
    improved over the last 40 years. However, the Bay Area is not currently 
    attaining the federal 1-hour ozone standard, a standard that was 
    designed to protect public health and which has been made more 
    protective by adoption of a new, 8-hour standard. The magnitude of the 
    problem is significant as demonstrated by the number of violations (17 
    since redesignation to attainment in 1995) and the number of days when 
    the standard was exceeded (19 days between 1995-1997). When comparing 
    air quality in the Bay Area to other major metropolitan areas, there 
    are a number of large metropolitan areas, such as Chicago and Detroit, 
    with fewer violations and exceedance days than experienced in the Bay 
    Area. Furthermore, the Bay Area ranks among the worst of the 243 Air 
    Quality Control Regions in the country, based on data from the most 
    recent 3-year period. Finally, in contrast to most areas of the 
    Country, there is not a significant downward trend in the number of 
    ozone exceedances in the Bay Area since 1989.
        Comment: EPA's reliance on a statistic ranking the Bay Area the 6th 
    worst in the nation in number of days over the ozone standard is 
    misplaced. EPA's simplistic characterization of the number of 
    exceedances fails to realistically depict the situation. A more 
    realistic characterization is based on a review of the exceedances in 
    terms of hours over the standard relative to hours in the ozone season 
    for six or seven years. Following this approach, the number of hours 
    over the standard is less than \2/100\ of a percent for 1990-1996. This 
    analysis properly focuses on long-term trends rather than short-term 
    data.
        Response: When EPA establishes an ambient air quality standard, it 
    sets not only the level of the standard (in this case, .12 ppm) but 
    also the averaging time of the standard (1-hour) and the form of the 
    standard (how compliance is measured). Each of these components of the 
    NAAQS is set based on EPA's review of the available health effects 
    data. When EPA set the 1-hour ozone NAAQS, EPA specified that the form 
    be based on the number of exceedance days per year averaged over 3 
    years. Therefore, EPA's characterization of the Bay Area air quality in 
    terms of number of days over the standard is appropriate. The form of 
    the standard is not based on the number of hours over the standard 
    relative to hours in the ozone season for 6 or 7 years, so an 
    examination of the Bay Area's air quality on this basis would not be 
    appropriate.
        Comment: Some commenters concluded that the absence of violations 
    in 1997, in conjunction with predicted further declines in emissions, 
    proves that the Bay Area's ozone problem has been solved. Other 
    commenters noted that the West Coast's extraordinary meteorology in 
    1997 kept ozone concentrations unusually low, and that emissions in the 
    Bay Area may in fact not be decreasing as much as predicted, given the 
    strong economic growth in the area and other factors.
        Response: The October 1997 BAAQMD report referenced above 
    identifies a downtrend in ozone precursor emissions from 1979 through 
    the early 1990s, but notes that during the 1990s ``progress appears to 
    have lapsed; there appears to have been an increase in ozone potential, 
    after accounting for meteorology'' (page v). The report further notes 
    that the ozone violations in 1995 and 1996 cannot be attributed solely 
    to unusual circumstances. It identifies possible explanations for 
    increased emissions over this time period (e.g., increased speed 
    limits, increased congestion levels, and increased employment levels in 
    East Bay communities).
        EPA believes that a redesignation to nonattainment not only 
    accurately describes air quality in the Bay Area, but also provides an 
    opportunity for reevaluating the causes of the Bay Area's ozone 
    violations, the quantity of emission reductions needed to attain the 
    health-based standard, and the measures that will achieve those 
    reductions expeditiously. This may involve not only CARB and BAAQMD but 
    also MTC and ABAG in cooperative efforts to reduce the motor vehicle 
    contribution to the Bay Area's continuing smog problem.
    
    [[Page 37266]]
    
        Comment: EPA has not demonstrated that contingency measures in the 
    Bay Area's maintenance plan in conjunction with other projected 
    reductions will fail to bring the region back into attainment.
        Response: EPA acknowledges that additional emission reductions are 
    likely to be achieved from measures already in the SIP or submitted for 
    SIP approval. No commenter, however, has provided any evidence that 
    these reductions will be sufficient to avoid violations in the future. 
    Indeed, many commenters, including the BAAQMD and the State, emphasized 
    that recently adopted control measure commitments in the Bay Area's 
    1997 Clean Air Plan are important in order to ensure continued air 
    quality progress.
        The Clean Air Act places the burden on the State to demonstrate 
    that its plan, at all times, provides for attainment and maintenance of 
    the NAAQS, through federally enforceable emission reductions sufficient 
    to avoid violations of the NAAQS. The Federal CAA also provides 
    protections to the public in the event that State plans are not fully 
    and successfully implemented to achieve the scheduled emission 
    reductions and air quality improvements. These protections include 
    federally imposed nonimplementation sanctions and opportunities for 
    citizens to sue to compel implementation.
        EPA believes, therefore, that redesignation and new SIP obligations 
    for the Bay Area are consistent with the overall structure and intent 
    of the CAA, and provide key public health benefits. The State and 
    BAAQMD will assess, using available data and technical analyses, the 
    amount of emission reductions needed to ensure that violations of the 
    1-hour ozone NAAQS do not recur. The State, BAAQMD, and other 
    responsible local agencies must then identify control measures that 
    will achieve these reductions. EPA expects that the agencies will 
    analyze which control measures from the 1997 Clean Air Plan are needed 
    to attain the standard and which measures beyond those contained in the 
    plan are also needed. The State, BAAQMD, and other responsible agencies 
    will be subject to a schedule for adopting and implementing the 
    necessary controls. The public will have increased protections as a 
    result of making control measures needed to attain the standard part of 
    the SIP, thus providing insurance that the measures will be carried 
    out, if necessary, through federal enforcement or citizen suit.
        Comment: EPA received a number of comments related to the continued 
    applicability of the 1-hour ozone NAAQS in light of the new 8-hour 
    standard.
        Response: EPA is responding to these comments at length below to 
    further the public's understanding of this issue. However, EPA's 
    decisions that (1) the 1-hour standard will remain in effect in an area 
    until it is attained, and (2) that the standard continues to apply in 
    the Bay Area because the area is not attaining the standard, are not at 
    issue in this rulemaking action and are not appropriately challenged 
    here. EPA's views regarding these issues are set forth in 63 FR 31013, 
    June 5, 1998.
        Comment: The Bay Area had attained the 1-hour ozone NAAQS and, 
    therefore, rather than being redesignated to nonattainment, the area 
    was entitled to revocation of the 1-hour NAAQS in conformance with the 
    President's directive.
        Response: The President's ``Implementation Plan for Revised Air 
    Quality Standards'' (``Implementation Plan'') (62 FR 38424) called for 
    EPA to revoke the 1-hour ozone NAAQS in all areas that attain the 
    standard. The President did not direct EPA to revoke the 1-hour ozone 
    standard in all areas currently designated as maintenance or attainment 
    areas. The President clearly intended that current air quality be the 
    basis of EPA's determination of which areas attain. The Implementation 
    Plan states that ``[f]or areas where the air quality does not currently 
    attain the 1-hour standard, the 1-hour standard will continue in 
    effect'' (emphasis added). Moreover, the controlling regulatory 
    provision, 40 CFR section 50.9(b), specifies that an area must have air 
    quality that meets the standard at the time of the decision. EPA's 
    rulemaking action to determine that the 1-hour standard no longer 
    applies in areas that are not currently violating the standard is 
    therefore consistent with the Presidential memorandum. 63 FR 31013 
    (June 5, 1998). Because the Bay Area is currently violating the 1-hour 
    ozone standard, the area is not currently eligible for this 
    determination.
        Comment: EPA has indicated that if the Agency's review of recent 
    monitoring data finds that an attainment or maintenance area now 
    violates the 1-hour standard, EPA will not redesignate these areas to 
    nonattainment under the 1-hour standard.
        Response: Both EPA's final regulation promulgating the new ozone 
    regulation (62 FR 38873) and the Presidential memorandum regarding 
    implementation of the standards (62 FR 38424) explain that in order to 
    ensure a smooth transition to the implementation of the 8-hour ozone 
    standard, the 1-hour standard will remain applicable to an area until 
    it has attained the 1-hour standard. As long as the 1-hour standard 
    remains in effect in an area, so does EPA's authority under CAA section 
    107(d)(3) to redesignate that area as a nonattainment area. EPA's 
    ``Guidance for Implementing the 1-Hour Ozone and Pre-Existing 
    PM10 NAAQS'' (December 29, 1997 Memorandum from Richard D. 
    Wilson, to EPA Regional Administrators) clarifies that ``in certain 
    cases where air quality data through 1997 show nonattainment, EPA may 
    be redesignating areas from attainment to nonattainment for the 1-hour 
    standard.''
        Comment: EPA should treat the Bay Area like other maintenance areas 
    in the Country, where the 1-hour NAAQS is not being revoked because the 
    areas have had recent violations of the NAAQS. These areas are not 
    being reclassified to nonattainment.
        Response: The Bay Area's number of exceedances and violations and 
    the Bay Area's peak concentrations (highest monitored value and design 
    concentration) far exceed those in all other maintenance areas that 
    have had exceedances since 1994. There are 5 other ozone maintenance 
    areas in addition to the Bay Area that have experienced violations of 
    the 1-hour ozone standard after redesignation: Kansas City, Detroit-Ann 
    Arbor, Dayton-Springfield, Grand Rapids and Memphis. Three of these 
    maintenance areas (Detroit-Ann Arbor, Grand Rapids, and Dayton-
    Springfield) already meet the test for attainment of the 1-hour ozone 
    NAAQS based on 1995-1997 data and are therefore proposed for revocation 
    of the 1-hour ozone standard (63 FR 27247, May 18, 1998). The remaining 
    2 areas, Kansas City and Memphis, could meet that test at the end of 
    1998, assuming that no more than 2 exceedances are recorded at the peak 
    monitor during 1998. Because the peak monitor in the Bay Area recorded 
    8 exceedances in 1996, the Bay Area would still violate the 1-hour 
    ozone NAAQS even if no exceedances occur in 1998, since the average 
    number of exceedances for the 3-year period 1996-1998 would exceed 1 
    per year.
    b. Legal Authority
    (i) General Comments on Mandatory and Discretionary Authorities To 
    Redesignate
        Comment: A number of commenters felt that EPA should not 
    redesignate the Bay Area to nonattainment because the Clean Air Act 
    contains no mandatory duty to do so.
        Response: EPA agrees that section 107(d)(3)(A) does not require EPA 
    to redesignate the Bay Area. However,
    
    [[Page 37267]]
    
    section 107(d)(3) of the Act grants the Administrator broad discretion 
    to redesignate areas when she determines that it is appropriate. For 
    the reasons discussed at length in the proposal and in today's final 
    notice, the Administrator believes that it is necessary to redesignate 
    the Bay Area.
    (ii) Authority To Redesignate Without Classification
        Comment: The BAAQMD commented that it disagrees with EPA's 
    interpretation of section 181(b)(1) of the Act, and believes that the 
    ambiguity contained in the language of this section argues in favor of 
    a SIP call to strengthen the maintenance plan, rather than 
    redesignation without classification.
        Response: As EPA explained at length in its proposal, section 
    181(b)(1), which provides for new designations to nonattainment, does 
    not on its face apply to the Bay Area. (Please refer to 62 FR 66580, 
    December 19, 1997, for EPA's analysis of the applicability of section 
    181.) Section 181(b)(1) explicitly sets forth which areas it governs. 
    Specifically, section 181(b)(1) covers only those areas that were 
    originally designated attainment or unclassifiable pursuant to section 
    107(d)(4) of the 1990 amendments. This section is silent with regard to 
    areas, like the Bay Area, that were designated nonattainment under the 
    1990 amendments, redesignated to attainment, and that subsequently 
    returned to nonattainment.
        In its comments on the proposal, the BAAQMD cautions EPA against 
    inferring anything from Congress' silence with regard to areas like the 
    Bay Area. However, because Congress was silent on this point, some 
    inference must be made in order to decide how an area like the Bay Area 
    is to be treated under the Act. The BAAQMD would like us to infer that 
    we cannot redesignate an area back to nonattainment once it has 
    attained the standard, but must instead issue a SIP call to address the 
    inadequacies in the maintenance plan and contingency measures. While a 
    SIP call is one possible option, it is clearly not the only option 
    authorized by the Act. There is no ambiguity in the language of section 
    107(d)(3), which grants the Administrator the authority to redesignate 
    an area ``any time'' she deems it is appropriate based on air quality 
    data, planning and control considerations, or any other air quality-
    related considerations.8 EPA continues to believe that 
    redesignation, rather than a SIP call, is the appropriate action in 
    this instance. Given the broad discretion granted the Administrator 
    under section 107(d)(3), EPA is exercising that discretion today to 
    redesignate the area to nonattainment. Moreover, we also continue to 
    believe that the ambiguity contained in the language of section 
    181(b)(1) is best interpreted as placing the Bay Area under subpart 1 
    of the Act for the following reasons. The plain language of section 
    181(b)(1) applies only to areas designated attainment under section 
    107(d)(4) and excludes areas like the Bay Area. Second, as an area that 
    was previously designated nonattainment, the Bay Area has already done 
    much of the work required for a nonattainment area SIP and should not 
    need the lengthy time period granted to new nonattainment areas to 
    complete its planning process. The Bay Area has already implemented the 
    section 181 requirements applicable to its previous moderate 
    classification. Finally, sections 172(a)(1) and (2) contain express 
    statements that they do not apply to nonattainment areas that are 
    specifically covered by other provisions of Part D of the Act, thereby 
    demonstrating that the Act contemplates that some areas will fall under 
    subpart 1, rather than subpart 2.
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        \8\ The Bay Area recorded 43 exceedances of the ozone standard 
    in the two-year period 1995-1996. The standard allows no more than 
    three exceedances at any one monitor over three years. In addition, 
    the area recorded violations at special purpose monitors (SPMs) from 
    1992-1993, prior to being redesignated to attainment. While these 
    violations were not considered in EPA's original decision to 
    redesignate the area to attainment because the monitors were not 
    part of the official monitoring network, the Agency has since issued 
    a policy that requires that any reliable monitoring data be relied 
    upon in such decisions. (August 22, 1997 memorandum entitled, 
    ``Agency Policy on the Use of Special Purpose Monitoring Data,'' 
    from John Seitz, Director of the Office of Air Quality Planning and 
    Standards.) As we noted in the proposal (62 FR 66579, December 19, 
    1997), EPA has determined that the SPMs data should have been 
    considered in the 1995 redesignation action. With the advantage of 
    hindsight, these violations can be viewed as an indicator that the 
    air quality problem in the Bay Area has not been solved at the time 
    the area was redesignated, as was borne out by the high number of 
    exceedances during 1995-1996. As we have discussed at length herein 
    and in the notice of proposed rulemaking, the severity of the air 
    quality problem makes redesignation the appropriate action in this 
    case.
    ---------------------------------------------------------------------------
    
    c. Policy Issues
    (i) Public Notification and Public Perception
        Comment: Some commenters considered redesignation to be simply a 
    labeling exercise that will have a negative impact on public support 
    for existing air quality programs by emphasizing redundant and 
    counterproductive procedural and paperwork tasks above real progress in 
    emission reductions.
        Other commenters noted that the redesignation debate in the Bay 
    Area shows that labels are significant, and that ``nonattainment'' 
    accurately conveys the message that making the Bay Area's air safe to 
    breathe is a task still unfinished; there needs to be a clear and 
    consistent signal to the affected sources and the public about why new 
    measures are necessary. These commenters concluded that, to win 
    approval of additional reductions in air pollution, the public needs to 
    know the actual status of air quality in the Bay Area. The broader 
    public will not support efforts to reduce pollution if air quality is 
    deemed to be in attainment of health standards. If local regulators 
    maintain that air quality is fine and if there is no public 
    accountability through EPA oversight or the right of public interest 
    groups to enforce attainment plans, the regulators will not take on the 
    difficult task of requiring polluters to invest further in pollution 
    prevention or control technology.
        Response: The large number of Bay Area exceedances in 1995 and 1996 
    indicates that we do not have a convincing basis for predicting an end 
    to ozone violations without further reductions. Designations of 
    attainment are intended to apply to areas that have demonstrated clean 
    air over a 3-year period.
        Moreover, EPA does not believe that the Bay Area's current 
    attainment designation is appropriate since it tells the affected 
    public, the regulated community, local agencies, and the District that 
    ozone pollution is no longer a problem. This inaccurate message tends 
    to undercut collaborative and progressive actions in the near term, and 
    contributes to confusion and dissension both within the Bay Area and in 
    downwind populations.
        EPA remains convinced that near-term action is needed to protect 
    the health and welfare of the State's residents. Emission reduction 
    strategies will be evaluated and put in place 4-5 years sooner through 
    a redesignation under the 1-hour standard than is expected under a plan 
    to meet the revised ozone standard (new plans are not expected to be 
    due under the revised standard until 2003 and the attainment date for 
    an area such as the Bay Area for the 8-hour standard is expected to be 
    2005 at the earliest). That is at least 4-5 years during which 
    Californians would be breathing dirtier air than they should be.
        Finally, EPA continues to believe that a redesignation to 
    nonattainment not only accurately describes air quality in the Bay Area 
    but also provides an opportunity for reevaluating the causes
    
    [[Page 37268]]
    
    of the Bay Area's ozone violations, the quantity of emission reductions 
    needed to attain the health-based standard, and the measures that will 
    achieve those reductions expeditiously.
    (ii) Impact of Bay Area Emissions on Downwind Nonattainment Areas and 
    Issues of Equity
        Comment: Commenters from downwind areas and environmental groups 
    referenced a CARB study indicating that pollution transported from the 
    Bay Area produces up to 27% of the smog in the Central Valley. Monterey 
    Bay Unified Air Pollution Control District noted that CARB has found 
    that half of the exceedances of the State 1-hour ozone standard in the 
    North Central Coast Air Basin result from overwhelming transport from 
    the Bay Area (i.e., the exceedances would have occurred even in the 
    absence of local emissions). Commenters expressed the belief that 
    continued Bay Area progress toward meeting federal requirements is key 
    to achieving air quality in these downwind areas, and that further 
    NOX reductions in the Bay Area are especially important. 
    Commenters noted high pollution levels in areas downwind of the Bay 
    Area, and argued that redesignation would help ensure that the Bay Area 
    pays the price of controlling its pollution rather than passing it on 
    in the form of health impacts and added regulatory requirements for 
    downwind areas. Downwind areas stated that enhanced motor vehicle 
    inspection and maintenance (or enhanced I/M, which is known in 
    California as Smog Check 2) should be required in the Bay Area, just as 
    it is in urbanized portions of the Central Valley.
        The BAAQMD argued that redesignation without classification would 
    not ensure implementation of Smog Check 2 in the Bay Area under 
    existing State law. The State argued that redesignation would hurt 
    attainment efforts in the Central Valley, since it would distract the 
    Bay Area from achieving real emissions reductions. Bay Area industry 
    commented that redesignation will not solve pollution transport issues 
    in California and that any reliance on pollutant transport concerns to 
    support redesignation is unfounded and legally impermissible.
        Response: The basis for the nonattainment designation is the large 
    number of recent violations of the 1-hour ozone NAAQS in the Bay Area, 
    not any new evidence regarding the impact of Bay Area pollution on 
    downwind areas within the State. EPA believes that primary 
    responsibility for addressing transport to and from the Bay Area 
    resides with the State.
        With respect to the importance of Smog Check 2 in the Bay Area, EPA 
    strongly endorses enhanced I/M as one of the most cost-effective 
    measures that could be added to the Bay Area's existing controls, since 
    the program has the potential to achieve substantial emissions 
    reductions in the near term and to ensure that the benefits of 
    California's stringent motor vehicle standards are not diminished 
    because of poorly maintained vehicles.
    (iii) Effect of Redesignation on Limited Air Pollution Control 
    Resources
        Comment: Redesignation will trigger an expensive, duplicative 
    planning process that will detract from effective collaborative efforts 
    to improve air quality. Redesignation provides no new funds, authority, 
    or technology but simply imposes paperwork and process requirements.
        Response: Redesignation should not result in a burdensome and 
    duplicative planning effort. EPA wants the District and its co-lead 
    agencies to focus on emission reductions, not paperwork.
        EPA is asking, in fact, for only three plan elements: the existing 
    1995 emissions inventory for VOC and NOX, an assessment of 
    emissions reductions needed to attain the federal standard, and control 
    measures to achieve those reductions. EPA is allowing the District to 
    use available data and technical analyses to establish the emission 
    reduction targets. Finally, EPA expects that most of the work to 
    identify potential control measures has also been completed for the 
    District's recently adopted 1997 Clean Air Plan. EPA expects that the 
    District will analyze which control measures from this plan are needed 
    to attain the standard and which measures beyond those contained in the 
    plan are also needed. Making these control measures federally 
    enforceable elements of the SIP provides an important public safeguard 
    since only in this way can EPA and the public ensure that the 
    commitments in the plan are fully implemented and the plan's promised 
    air quality benefits are realized. This streamlined planning effort 
    also provides an opportunity for the Bay Area to quickly determine 
    whether additional reductions from transportation sources are 
    appropriate, in the event that attainment requires more near-term 
    reductions than the Clean Air Plan currently identifies.
        While EPA concedes that redesignation may provide no new funds, 
    authority, or technology, the Agency does not agree that the 
    redesignation, as finalized in this action, simply imposes burdensome 
    paperwork and process requirements on the Bay Area. EPA's proposed 
    streamlined and flexible set of requirements contrasts with extensive 
    and prescriptive planning and control requirements that apply to ozone 
    nonattainment areas with 1999 attainment deadlines. Most of these 
    areas, which were classified as ``serious'' under the Clean Air Act, 
    have far fewer ozone exceedances and far fewer planning resources than 
    does the Bay Area. The following are examples of ``serious'' ozone 
    nonattainment area mandates, which EPA does not propose to require in 
    the Bay Area: (1) A more stringent definition of major stationary 
    source for purposes of Title V operating permit requirements; (2) more 
    stringent applicability thresholds and offset ratios for purposes of 
    permitting new and modified stationary sources; (3) a more stringent 
    definition of major stationary source for purposes of applying 
    reasonably available control technology requirements to existing 
    stationary sources; (4) specific, detailed plan elements addressing 
    rate-of-progress; (5) an enhanced vehicle inspection and maintenance 
    program; and (6) specific, detailed provisions relating to 
    transportation control.
        Comment: Redesignation is inconsistent with the President's 
    directive that the new federal air quality standards be implemented in 
    a flexible, cost-effective and common-sense manner; that EPA respect 
    agreements already made by States, communities, and businesses to clean 
    up the air; and that EPA implement the standards with the minimum 
    amount of paperwork necessary. Redesignation also fails to promote the 
    ideals of the President's and Vice President's reinvention report which 
    calls for the building of partnerships, the reduction of red tape, and 
    the use of sound science to set priorities.
        Response: A key component of the President's implementation plan 
    for the new federal air quality standards is that continued progress 
    toward meeting the 1-hour standard will ensure a smooth and effective 
    transition to the 8-hour standard. EPA's action to redesignate the Bay 
    Area as a nonattainment area for the 1-hour ozone standard and the 
    simplified set of planning objectives that accompany this action are 
    consistent with continuing progress towards meeting the 1-hour 
    standard. They are also consistent with other elements of the 
    implementation plan pertaining to respecting existing agreements, 
    reducing paperwork, and maximizing common sense flexibility, and cost-
    effectiveness. As discussed above, EPA is asking for only 3 plan
    
    [[Page 37269]]
    
    elements: the existing 1995 emissions inventory for VOC and 
    NOX, an assessment of emissions reductions needed to attain 
    the federal standard, and control measures to achieve those reductions, 
    without requiring expensive new modeling or unnecessary paperwork. The 
    District has already identified additional control measures in its 1997 
    California Clean Air Act plan that could be used for a new federal 
    plan. In addition, partnerships between the private sector, 
    environmental groups, and regulators to promote innovative methods for 
    addressing the air quality problem could be an important part of the 
    Bay Area's response to the redesignation.
    (iv) Alternatives to Redesignation
        Comment: EPA should allow the Bay Area to implement and supplement, 
    if necessary, the contingency measures in the Bay Area's Maintenance 
    Plan, as the remedy to violations. The CAA recognizes that attainment 
    areas will experience violations from time to time and that contingency 
    provisions should be adequate to cure the problem. If EPA determines 
    that the existing Bay Area Maintenance Plan is inadequate, the CAA 
    provides a remedy: EPA may issue a SIP call under section 110(k)(5) to 
    strengthen the maintenance plan.
        Response: EPA hoped and expected that the Bay Area's maintenance 
    plan would be the means to prevent future exceedances of the ozone 
    standard. Unfortunately, almost all of the emission reductions from the 
    Bay Area's maintenance and contingency measures were in effect at the 
    time that the Bay Area experienced so many violations of the ozone 
    standard in 1995 and 1996. After completing a stakeholder process over 
    the past several years, EPA concluded that additional public health 
    protections are needed beyond current Bay Area plans. EPA evaluated all 
    of the options available under the Clean Air Act to address the public 
    health problem and continues to believe that redesignation is the most 
    direct and sensible outcome.
        The proposal that EPA rely only on a ``SIP Call'' would apparently 
    involve EPA using the authority of CAA section 110(k)(5) to mandate 
    submission of a strengthened maintenance plan. For the reasons 
    discussed above, EPA believes that redesignation to nonattainment is a 
    more appropriate course under the framework of the Act. While EPA 
    considered the ``SIP Call'' option, the Agency concluded that a federal 
    nonattainment designation for the Bay Area was important to provide the 
    public with accurate information and the correct message: Pollution 
    levels must be reduced quickly in order to eliminate unhealthy air 
    quality within the Bay Area. Since the amount of reductions necessary 
    to attain the federal 1-hour ozone standard has not yet been 
    established, EPA believes that the proper SIP remedy is twofold. First, 
    the BAAQMD must submit its existing 1995 emissions inventory for VOC 
    and NOX and an assessment, using available data and 
    technical analyses, of the emissions reductions needed to attain the 
    standard. Second, the BAAQMD and its co-lead agencies must identify, 
    adopt, and submit for incorporation in the SIP all of those control 
    measures that are needed to meet the reduction target expeditiously. 
    EPA proposed and is now finalizing this simplified SIP remedy, which 
    does not substantively differ from the planning requirements that would 
    need to be addressed by the State in revising the Bay Area's 
    maintenance plan so that it provides for attainment.
        Comment: The BAAQMD commented that if redesignation is finalized 
    EPA should classify the Bay Area as a ``marginal'' ozone nonattainment 
    area, subject to the requirements specifically delineated in CAA 
    section 182(a). This certainty would provide a more specific and 
    defensible foundation for the responsibilities of the co-lead agencies, 
    CARB, and EPA. The BAAQMD expressed the belief that areas designated as 
    ``marginal'' would have 3 years to develop a SIP submittal and 5 years 
    to reach attainment. Other commenters recommended a ``moderate'' 
    classification as more appropriate to the Bay Area's air quality.
        Response: As discussed above and in the proposal, EPA concluded 
    that subpart 2 of the Clean Air Act (which includes the ozone 
    classifications and specific requirements for each classification) 
    applies, on its face, only to: (1) Areas designated nonattainment under 
    107(d)(4) at the time the 1990 amendments were passed, and (2) areas 
    designated nonattainment under 107(d)(3) for the first time after 
    passage of the 1990 amendments. See CAA 181(b)(1). Thus, the subpart 2 
    provisions would not seem to apply to the Bay Area, which was initially 
    nonattainment, redesignated to attainment, and then redesignated back 
    to nonattainment.
        In the proposed redesignation (62 FR 66580), EPA also presented two 
    policy reasons for not classifying the Bay Area or requiring the 
    District to meet all of the subpart 2 requirements for a ``moderate'' 
    ozone nonattainment area:
        (1) Many of the classification requirements served no purpose for 
    the Bay Area, because the requirements had already been addressed 
    previously when the area was nonattainment or because the requirements 
    would contribute no specific emission reductions. For example, 
    ``moderate'' area requirements include the gasoline vapor recovery 
    program (which has been approved as part of the Bay Area SIP for many 
    years) and the rate-of-progress plan (which would be superfluous given 
    the compressed attainment schedule for the Bay Area). EPA's proposal 
    stressed the Agency's determination to eliminate paperwork and focus 
    the Bay Area's energies on achieving the emission reductions needed to 
    attain the 1-hour NAAQS quickly.
        (2) It did not seem appropriate to allow the Bay Area as much time 
    as subpart 2 gives to newly designated and classified nonattainment 
    areas. The CAA allows newly designated nonattainment areas the same 
    amount of time to meet subpart 2 requirements as was given to areas 
    initially nonattainment under the 1990 CAA amendments. This would mean 
    that the Bay Area would have either 3 years or 4 years from the 
    effective date of the final designation to make a ``moderate'' SIP 
    submittal, depending upon whether sophisticated photochemical modeling 
    was employed (approximately 6/2001 or 6/2002, instead of the 6/1999 
    date for SIP submittal set in this action). The Bay Area would also 
    have 6 years to attain the 1-hour ozone NAAQS (2004, instead of the 
    2000 date in this action).
        The same analysis applies to an even greater extent with respect to 
    a ``marginal'' classification. The Bay Area has previously addressed 
    the CAA ``marginal'' area requirements for corrections to RACT rules, 
    NSR rules, basic I/M, and rules requiring sources to report on their 
    emissions. If EPA were to classify the area as ``marginal,'' in fact, 
    the Bay Area would only need to submit a single new SIP element--an 
    updated emissions inventory--which would not be due until 2 years from 
    the effective date of the final designation (approximately 6/2000, 
    instead of the 11/1998 informal submittal date agreed to by the BAAQMD, 
    and the 6/1999 SIP deadline set in this action). The CAA does not 
    require ``marginal'' areas to submit attainment assessments, but sets 
    an attainment deadline 3 years after the effective date of the 
    nonattainment designation (i.e., 2001).
        EPA does not believe that either the ``moderate'' or ``marginal'' 
    classification requirements and schedule represent an efficient, 
    common-sense, or adequate response to the urgent public health concerns 
    associated with the Bay Area's large number of recent ozone NAAQS
    
    [[Page 37270]]
    
    violations. EPA continues to conclude that the proposed approach of 
    redesignation without classification, setting near-term deadlines for 
    SIP revision and attainment, is not only better supported by the terms 
    of the CAA but also better fits the goals of this action: To provide 
    the Act's clean air protections to Bay Area residents as quickly as 
    possible, with minimal process and paper, and with the greatest 
    flexibility afforded to the State and local agencies.
        Comment: The BAAQMD proposed that, in lieu of redesignation, the 
    BAAQMD, EPA, CARB, the Metropolitan Transportation Commission, the 
    Association of Bay Area Governments, the San Joaquin Valley Unified Air 
    Pollution Control District, CBE, Earth Justice, and the Sierra Club 
    could enter into a binding memorandum of understanding or agreement 
    that would result in additional stationary and mobile source control 
    measures, with their concomitant emission reductions, being added to 
    the BAAQMD's Maintenance Plan or SIP. The BAAQMD argued that this 
    approach was supported by the President's emphasis on regulatory 
    flexibility.
        Response: EPA strongly supports collaborative efforts between all 
    involved parties, and particularly encourages consultation with 
    downwind air districts and environmental groups. EPA does not view 
    broad cooperative efforts such as the BAAQMD proposes as incompatible 
    with redesignation to nonattainment, and notes that half of the parties 
    named by the BAAQMD support EPA's proposed redesignation action. EPA is 
    unclear, however, regarding the scope of the BAAQMD's proposed binding 
    MOU or MOA, whether all of the parties would have the authority to 
    enter into a binding MOU or MOA, and whether all necessary parties 
    would be bound. There are significant statutory constraints, for 
    example, on EPA's authority to enter into binding agreements. 
    Nevertheless, EPA would be pleased to participate in any process 
    established by the BAAQMD.
        Comment: EPA should follow the Clinton Administration's ``Common 
    Sense'' option, and allow the Bay Area simply to focus on the 8-hour 
    ozone standard on the schedule established for new ozone SIPs.
        Response: This option apparently involves no near-term actions by 
    State and local Bay Area agencies, since most substantive requirements 
    and deadlines for SIPs addressing the 8-hour ozone NAAQS will not come 
    due for approximately 5 years. The commenter appears to conclude that 
    we should abandon efforts to reach a less stringent ozone standard on 
    our way to achieving a more stringent ozone standard.
        EPA's final promulgation of the revised 8-hour ozone NAAQS and 
    final interim implementation policy, ``Guidance for Implementing the 1-
    Hour Ozone and Pre-Existing PM10 NAAQS'' (December 29, 1997), responded 
    to commenters on the proposals, who argued that abandonment of SIP 
    obligations to provide attainment plans for the 1-hour ozone NAAQS 
    would be inconsistent with national public health goals, in view of the 
    fact that new plans addressing the 8-hour ozone NAAQS will not be due 
    until mid-2003. In order to ensure that momentum is maintained by state 
    and local agencies, the final policy provides that the 1-hour standard 
    and applicable Clean Air Act requirements will continue to apply to an 
    area until EPA makes a determination that the area has met the 1-hour 
    standard. As discussed elsewhere in response to comments, EPA believes 
    that a compressed and streamlined planning process is necessary for the 
    Bay Area to expedite efforts to protect public health. EPA agrees with 
    commenters who concluded that this process will benefit rather than 
    detract from eventual preparation of a SIP addressing the 8-hour ozone 
    NAAQS.
    2. Comments Relating to EPA's Proposed SIP Requirements
    a. Emissions Inventory
        Comment: While the BAAQMD has been maintaining and updating a 
    weekday inventory for many decades, preparing a weekend day inventory, 
    as EPA proposes to require, would demand extensive new data gathering 
    and compilation, several person-years of effort, and one half-million 
    dollars or more. Although assumptions could be made and best-judgment 
    factors could be applied to weekday data to generate an estimate of 
    weekend day data, the resulting uncertainties would hamper planning 
    efforts based on their use. Such an extensive new requirement would be 
    more appropriate for a SIP submittal focused on the new 8-hour NAAQS.
        Response: Based on these comments from the State and the BAAQMD, 
    EPA has decided to amend the proposed SIP submittal schedule to delete 
    the weekend day emission inventory requirement. Nevertheless, EPA 
    encourages BAAQMD and CARB to work together with State and regional 
    planning and transportation agencies to assess weekend emissions and 
    develop appropriate additional control measures as may be necessary and 
    appropriate to ensure that weekend violations do not persist.
        Comment: EPA proposed to require an updated carbon monoxide (CO) 
    emissions inventory. A commenter noted that, although a CO inventory 
    may help shed light on sources of ozone precursors, the CO inventory 
    has no direct bearing on ozone attainment status and EPA should delete 
    the requirement from the final redesignation.
        Response: In order to minimize still further the scope of the Bay 
    Area SIP obligation, EPA agrees to eliminate this requirement. 
    Consequently, EPA finalizes in this action a SIP requirement for the 
    existing 1995 inventory for VOC and NOX emissions only.
    b. Attainment Assessment
        Comment: Bay Area industry, the State, and the BAAQMD argued that a 
    credible attainment assessment, particularly one that takes into 
    account the 1995-6 meteorological conditions and ambient 
    concentrations, cannot be performed by May 1, 1998, due to data gaps 
    and lack of modeling capability. If the BAAQMD should attempt an 
    assessment, it would not be technically defensible and would not be 
    accepted by the public or business community. Reliable modeling cannot 
    be performed until the results of a new field study (conducted in 1999 
    or 2000) are available. Bay Area industry expressed concern that EPA's 
    unrealistic schedule may lead the BAAQMD to prematurely ``lock in'' a 
    control strategy that emphasizes counterproductive NOX 
    reductions.
        On the other hand, environmental groups and other commenters felt 
    that EPA's proposed schedule struck an appropriate balance between the 
    competing concerns for acting quickly and acting knowledgeably. These 
    commenters emphasized that the BAAQMD cannot assure compliance with the 
    1-hour NAAQS without first knowing what emissions are and what 
    reductions are needed, and any extra time and effort spent to 
    understand the problem now will pay double dividends in the future, in 
    helping the regulatory agencies and affected industry comply with the 
    Federal 8-hour NAAQS and the California 1-hour standard.
        Response: EPA continues to believe that available data and 
    technical analyses can be used to provide, within a very short period 
    of time, a reasonable estimate of emission reductions needed to attain. 
    The BAAQMD's October 1997 report, Evaluation of the 1995 and 1996
    
    [[Page 37271]]
    
    Ozone Seasons in the San Francisco Bay Area, recommended such an 
    assessment. EPA remains willing to work with the BAAQMD to ensure that 
    the exercise can be completed within the established time limits and 
    resource constraints, and that the analysis will comply with applicable 
    federal requirements. EPA notes that there is no CAA requirement that 
    the Bay Area use Urban Airshed Modeling, and that other approaches may 
    be appropriate to target the amount of emission reductions needed to 
    attain the NAAQS expeditiously. The quality of technical data and 
    analyses techniques will continually improve, but it does not make 
    sense to wait for the ``perfect'' science to take action. Regulatory 
    agencies need to use the best information available now to make 
    reasonable decisions about how to protect public health. In order to 
    allow more time to assess the reductions needed for attainment, EPA is 
    extending the formal SIP submittal deadline for the attainment 
    assessment from May 1, 1998 to June 15, 1999. The District has 
    committed to submit a draft attainment assessment informally to EPA, 
    and make it available to the public, by November 25, 1998. (Letter from 
    BAAQMD, ABAG, and MTC dated June 23, 1998.) This early informal 
    submittal will allow EPA to review the draft inventory and assessment 
    and work with the District to address any deficiencies. Finally, with 
    respect to industry's contention that EPA's schedule may lead the 
    District to ``lock in'' allegedly counterproductive NOX 
    controls, EPA does intend to allow CARB and BAAQMD the flexibility to 
    select the appropriate mix of ozone precursor controls to ensure 
    attainment. This issue is also discussed below in the context of the 
    NOX waiver.
    c. Control Measures
    (i) Suggested Measures
        Comment: Several of the commenters recommended particular control 
    measures that could be adopted to speed Bay Area attainment. The most 
    frequently mentioned new measure was the Smog Check 2 program. 
    Sacramento Valley air pollution control districts and environmental 
    groups also urged implementation of two additional reduction programs: 
    (1) A heavy duty mobile source NOX control strategy that 
    includes incentives for early introduction of clean engine and fuel 
    technologies; and (2) a requirement for permits and controls on smaller 
    stationary sources, including natural gas fired boilers and internal 
    combustion engines, and regulation of stationary diesel internal 
    combustion engines, which are now exempt. The Sierra Club attached to 
    their comment an extensive list of control measures for inclusion into 
    the SIP, particularly suggestions for specific improvements to the Bay 
    Area transportation control measures. CBE provided detailed 
    recommendations for a variety of specific additional controls at Bay 
    Area refineries and chemical plants. CBE also endorsed a public comment 
    on the proposed redesignation from Chesapeake Environmental Group, 
    Inc., advocating further reductions in VOC emissions from land fills by 
    prohibitions on the use of petroleum-contaminated soil as a landfill 
    cover. The Bay Area Environmental Justice Community recommended tough 
    rules on oil refining and other polluting manufacturing processes, 
    control on the movement of jobs to the outer suburbs, and commitments 
    to redirect public funds to transit instead of highway building.
        Response: EPA believes that the suggested control measures merit 
    serious attention by the responsible agencies. EPA has forwarded the 
    comments to CARB, BAAQMD, MTC and ABAG with encouragements to these 
    agencies to consider the suggestions for incorporation into the SIP, as 
    appropriate. In order to allow more time for evaluation of additional 
    control measures, EPA is extending the SIP submittal deadline for 
    adopted regulations or enforceable commitments to adopt regulations, 
    from September 1, 1998, to June 15, 1999.
        Comment: The Association of International Automobile Manufacturers, 
    Inc., the New United Motor Manufacturing, Inc. (NUMMI), and Toyota 
    Motor Manufacturing North America, Inc., commented that the adoption 
    and implementation schedule of rules in the Bay Area's 1997 Clean Air 
    Plan was coordinated with the implementation schedule of CAA section 
    183(e) rules for reducing VOC emissions and the Federal schedule for 
    implementation of the maximum achievable control technology (MACT) 
    standards for automobiles and light duty trucks. The commenters noted 
    that the respective deadlines for these Federal rules are 2003 and 
    2000, respectively. The commenters emphasized that any acceleration of 
    the BAAQMD's current schedule to meet EPA's proposed 1999 attainment 
    deadline would likely result in duplicative efforts and inconsistent 
    requirements, and thus increased costs to affected industry.
        Response: EPA has asked the State to perform an assessment of 
    reductions needed to attain the 1-hour ozone NAAQS expeditiously, in 
    order to prevent recurrence of the violations experienced following the 
    redesignation to attainment. EPA wishes the State to use its good 
    judgment to determine which new controls should be adopted or expedited 
    to meet attainment requirements, assuming that the attainment 
    assessment identifies the need for more reductions to prevent 
    exceedances by the attainment year 2000. EPA encourages the BAAQMD and 
    other responsible agencies to select control approaches that maximize 
    common sense and cost effectiveness.
        Comment: Industry commenters questioned whether controls adopted to 
    meet the 1-hour ozone NAAQS would necessarily be helpful in meeting the 
    new 8-hour ozone NAAQS. Other commenters, however, noted that controls 
    adopted to meet the Federal 1-hour ozone standard would contribute to 
    eventual attainment of California's more stringent 1-hour ozone 
    standard and could be generally presumed to benefit attainment of the 
    new 8-hour ozone NAAQS.
        Response: While EPA believes that the great majority of control 
    possibilities for meeting the 1-hour ozone NAAQS will also advance 
    attainment of the 8-hour ozone NAAQS in the Bay Area, EPA encourages 
    CARB, BAAQMD, MTC, and ABAG to assess any new control measures that may 
    be considered for expeditious attainment of the 1-hour ozone NAAQS, in 
    order to ensure that the measures will also promote attainment of the 
    8-hour ozone NAAQS.
        Comment: The BAAQMD proposed that new contingency measures be added 
    to the SIP to augment the ones currently implemented. The BAAQMD stated 
    that the process for identifying these measures ``can occur quickly 
    through consultation among EPA, CARB, and the co-lead agencies. Through 
    this process, we can commit our energies and our limited resources to 
    pursuing our real shared goal--clean air for all people all the time--
    through common sense, flexible, cost-effective, and coordinated 
    actions.''
        In its comment letter, the BAAQMD identified the following options 
    for supplementing the existing SIP controls:
        (1) already adopted measures which have not been submitted into the 
    SIP, such as controls on refinery fugitive emissions and pressure 
    relief valves, NOX Best Available Retrofit Control 
    Technology (BARCT) controls on refineries and utilities, $1 increase in 
    bridge tolls;
        (2) measures that the BAAQMD will be pursuing in the near term, 
    such as an aqueous solvents rule, new CMAQ-funded projects);
    
    [[Page 37272]]
    
        (3) State measures, such as further improvements to the I/M 
    program.
        Response: EPA shares completely the BAAQMD's goal statement to 
    provide ``clean air for all people all the time--through common sense, 
    flexible, cost effective, and coordinated actions.'' EPA also 
    appreciates the BAAQMD's point that additional control measures can be 
    identified quickly through consultation with EPA, CARB, and the co-lead 
    agencies; and EPA would be happy to consult on appropriate measures.
        In terms of supplementing the current SIP with additional control 
    measures, EPA agrees the example measures are feasible. Depending on 
    the outcome of the attainment assessment, however, additional controls 
    may be needed. The Bay Area has already identified several feasible 
    control measures in response to the State requirement for a 1997 Clean 
    Air Plan. Upon review of the Bay Area's 1997 Clean Air Plan, CARB 
    suggested a number of modifications to existing Bay Area regulations 
    and transportation control measures that could result in additional 
    emission reductions (See letter from Lynn Terry, Assistant Executive 
    Officer, CARB to Ellen Garvey, Air Pollution Control Officer, BAAQMD, 
    dated December 1, 1997.) In addition, EPA's Office of Air Quality 
    Planning and Standards identified 42 cost effective control measures 
    that may be appropriate for the Bay Area. (E.H. Pechan & Associates, 
    Inc., ``Control Measure Analysis of Ozone and PM Alternatives: 
    Methodology and Results,'' prepared for Innovative Strategies and 
    Economics Group, Office of Air Quality Planning and Standards, U.S. 
    EPA, RTP, NC July 17, 1997.) Whatever additional SIP measures are 
    pursued, they must provide sufficient emission reductions to ensure 
    expeditious attainment of the 1-hour ozone NAAQS in the Bay Area.
    (ii) NOX Waiver and the Efficacy of NOX Controls
        Comment: Industry commenters stated that EPA provided no adequate 
    notice of its retroactive revocation of the NOX waiver and 
    the waiver remains appropriate to avoid requirements for expensive and 
    counterproductive NOX controls, since modeling evidence 
    shows that NOX reductions may elevate ozone concentrations 
    at locations within the Bay Area under certain meteorological 
    conditions, and thus could detract from attaining the ozone NAAQS.
        Earthjustice, on behalf of Sierra Club and CBE, agreed with EPA's 
    position that no waiver of NOX control requirements now 
    applies, but contended that the waiver continued during the maintenance 
    period. Earthjustice considered that the waiver expired by its own 
    terms, however, because it was explicitly conditional, lasting only as 
    long as the area's monitoring data continue to demonstrate attainment. 
    Finally, Earthjustice concluded that the Bay Area is therefore now 
    subject to CAA section 182 requirements for NOX control.
        Response: Section 182(f) of the Act extends the ozone nonattainment 
    area VOC requirements of subpart 2 of the Act to emissions of 
    NOX. This section also provides that the Administrator may, 
    either on her own or in response to a petition, waive these subpart 2 
    NOX requirements if, for nonattainment areas outside an 
    ozone transport region, either of 2 tests are met. The section 182(f) 
    NOX requirements would not apply if the Administrator 
    determines that (1) for the sources concerned, net air quality benefits 
    are greater in the absence of the NOX reductions, or (2) 
    additional NOX reductions would not contribute to attainment 
    of the ozone NAAQS. Additionally, the NOX control 
    requirements, under the same tests, could be relieved as to any portion 
    of the controls that are shown to result in excess emissions 
    reductions. On December 16, 1993, EPA issued guidance on obtaining 
    NOX waivers.9 This guidance was subsequently 
    revised on May 27, 1994.10
    ---------------------------------------------------------------------------
    
        \9\ ``Guideline for Determining the Applicability of Nitrogen 
    Oxide Requirements under Section 182(f),'' John Seitz, Director, 
    Office of Air Quality Planning and Standards.
        \10\ ``Section 182(f) Nitrogen Oxides (No) Exemptions--Revised 
    Process and Criteria,'' John Seitz, Director, Office of Air Quality 
    Planning and Standards.
    ---------------------------------------------------------------------------
    
        At the time the Bay Area submitted its redesignation request, EPA 
    guidance governing redesignations required, pursuant to section 107 of 
    the Act, that an area must meet all applicable requirements of section 
    110 and part D prior to redesignation. Thus, before EPA could 
    redesignate the Bay Area to attainment, the Bay Area had to adopt all 
    required NOX RACT rules. However, based on air quality data 
    from official SLAMS monitors, EPA determined that the Bay Area had 
    attained the NAAQS without adopting all of these rules. Based on the 
    determination that the area was attaining without benefit of additional 
    NOX reductions, it was apparent that such reductions would 
    not contribute to attainment of the ozone NAAQS. Thus, the Bay Area 
    qualified for a waiver under the test provided in subsection 
    182(f)(1)(A). Therefore, the Bay Area requested, and EPA approved, a 
    NOX waiver under that subsection. One commenter points out 
    that the waiver was granted in the same notice as the redesignation to 
    attainment, arguing that this fact supports the position that the 
    waiver must remain in effect. However, the waiver was acted on in the 
    same notice so that the area could be redesignated without first 
    meeting any remaining part D NOX requirements. Because the 
    Agency was ready to act on both requests at the same time, it saw no 
    reason to hold up the redesignation so that it could grant the 
    NOX waiver first.
        The NOX waiver acts only to relieve an ozone 
    nonattainment area from subpart 2 nonattainment area NOX 
    requirements. Once an area is redesignated to attainment these 
    requirements no longer apply and a NOX waiver is irrelevant. 
    Moreover, as the May 27, 1994 John Seitz guidance memo cited above 
    points out, the NOX exemption test set forth in section 
    182(f)(1)(A) asks only if additional reductions of NOX would 
    contribute to attainment of the ozone NAAQS, not whether they would 
    contribute to maintenance of the standard once attainment is confirmed 
    through redesignation to attainment. Recognition of this by both the 
    BAAQMD and EPA is inherent in the fact that the Bay Area's maintenance 
    plan contingency measures, approved as part of the redesignation to 
    attainment, are nearly all NOX measures.
        The commenters cite language in the May 27, 1994, guidance to 
    support their position that EPA must notify the state and provide 
    notice in the Federal Register in order to revoke NOX 
    exemptions. However, this language deals with a situation where a 
    nonattainment area is granted a NOX waiver based upon clean 
    air quality data, the area is not redesignated to attainment, and the 
    area subsequently violates the ozone NAAQS. In this situation the 
    exemption must be revoked because the area remains a nonattainment area 
    and, unless revoked, the exemption would continue, inappropriately, to 
    apply. Such is not the case with an area, such as the Bay Area, which 
    is redesignated to attainment and thereby becomes a maintenance area. 
    In such areas the exemption, which applies to nonattainment areas, by 
    its terms no longer applies.\11\
    ---------------------------------------------------------------------------
    
        \11\ Sections I.C. and II.A. of a later guidance document 
    entitled ``Conformity: General Preamble for Exemption from Nitrogen 
    Oxides Provisions expands on this point.'' See 59 FR at 31239-40, 
    including note 1 (June 17, 1994).
    ---------------------------------------------------------------------------
    
        The commenters argue that EPA should not take any action to revoke 
    the NOX exemption because it remains appropriate due to the 
    commenters'
    
    [[Page 37273]]
    
    position that the Bay Area is ``hydrocarbon limited, and * * * 
    NOX reduction measures may elevate ozone concentrations * * 
    *.'' Even assuming that this is true, there is no legal basis for 
    retaining the NOX exemption. The Bay Area's exemption was 
    granted based on three years of clean air quality data. After 43 
    exceedances and 17 violations of the ozone NAAQS in two years, the 
    basis for the exemption no longer exists.
        The commenters' concerns regarding the relationship between 
    NOX emissions and ozone formation in the Bay Area are 
    appropriately addressed through the District's SIP revision process. 
    Because the Bay Area is being redesignated under subpart 1 of the Act, 
    there are no mandatory NOX measures which must be adopted. 
    On the other hand, the Bay Area may not eliminate from the SIP any 
    existing NOX controls without a demonstration that such 
    revision would not interfere with progress, attainment, or other 
    applicable requirements of the Act (CAA section 110(l)). In response to 
    the redesignation, EPA expects CARB and BAAQMD to pursue whatever 
    combination of VOC and NOX reductions is most consistent 
    both with expeditious attainment in the Bay Area and with the State's 
    determination of appropriate and necessary emissions levels in the Bay 
    Area consistent with the attainment and maintenance requirements of 
    downwind areas. In view of the fact that nitrates appear to constitute 
    more than one third of the Bay Area's fine particulate matter, EPA also 
    recommends that the Bay Area take into account the role of 
    NOX emissions reductions in the control of fine 
    particulates.
    d. Attainment Deadline
        Comment: The 1999 attainment deadline (assuming that attainment is 
    to be based on 1997-99 air quality) is unrealistic, since most of the 
    1998 season will have passed before the control measure SIP submittal 
    to EPA; consequently the plan will affect emissions only for 1999.
        Response: The commenters appear to have misunderstood EPA's 
    proposal. In accordance with the Agency's interpretation of the CAA 
    requirement that plans ``provide for attainment,'' under a 1999 
    attainment deadline, the State would need only show that its SIP 
    includes sufficient emission reductions in effect by the start of the 
    1999 smog season to ensure that no more than one exceedance at any 
    monitor will occur in 1999. Moreover, EPA's proposal noted that, under 
    the terms of CAA section 172(a)(2)(C), the area may be eligible for up 
    to 2 1-year extensions of the attainment deadline if no more than 1 
    exceedance occurred in the year preceding the extension and the SIP is 
    fully implemented. Finally, EPA notes that the same commenters arguing 
    against a 1999 attainment deadline also claim that there is already 
    strong evidence that the Bay Area will not experience future 
    violations, since no exceedances were recorded in 1997 and both CARB 
    and BAAQMD project that the emissions inventory will continue to 
    decline. EPA recognizes that the proposed 1999 deadline may be 
    difficult to meet if the attainment assessment demonstrates that 
    substantial additional control measures are needed. In an effort to 
    balance the time constraints associated with SIP adoption and submittal 
    with the goal of protecting public health as quickly as possible, EPA 
    has decided to extend the attainment deadline by one year to November 
    15, 2000.
        Comment: Redesignation of the Bay Area will have no effect on air 
    quality within the time frame proposed by EPA. The time from the start 
    of rule development to achievement of the reductions is generally well 
    over 18 months. Consequently, implementation of control measures would 
    not occur until after the end of the 1999 ozone season. If EPA is 
    seeking only to add federal enforceability to existing state air 
    quality control requirements, then redesignation is clearly nothing 
    more than a paperwork exercise since those control requirements are 
    already in place.
        Response: As discussed earlier, EPA wants the District to focus on 
    near-term emission reductions, not paperwork. Because the District has 
    already identified additional control measures in its 1997 California 
    Clean Air Act plan, these measures could be used for a new federal plan 
    and implemented sooner than initially planned to achieve near term 
    emission reductions. Otherwise, under the California Clean Air Act 
    plan, the Bay Area would not implement these measures until 2000 or 
    later. EPA also believes that it is important to make federally 
    enforceable all of the control measures needed to bring the Bay Area 
    into attainment. This provides further assurance to the public that the 
    control measures will be implemented and the emission reductions needed 
    to protect public health achieved.
    e. Planning Schedule
        Comment: EPA's SIP schedule provides insufficient time to complete 
    planning processes, public involvement, and adoption, since the co-lead 
    agency planning process normally requires 15 months, California 
    Environmental Quality Act (CEQA) requirements for public review must be 
    satisfied under State law, at least 2 months are required for CARB 
    review prior to submittal, and the regulated community needs adequate 
    lead time to change or install new controls. The BAAQMD also concluded 
    that more time to prepare a plan for the 1-hour ozone NAAQS would not 
    result in a better plan, better air quality, or better health. The 
    prudent course, according to the BAAQMD, is to focus on the new 8-hour 
    NAAQS.
        Response: EPA acknowledges the time constraints associated with SIP 
    development, adoption, and submittal. On the other hand, EPA does not 
    expect that the agencies will launch a wholly new planning exercise but 
    rather that they will continue the 1997 Clean Air Plan planning effort, 
    adding only an attainment assessment using available data and technical 
    analyses and adjustments to the control measures that may be necessary 
    to ensure expeditious attainment. In an effort to be responsive to the 
    District's scheduling concerns without sacrificing near term public 
    health protections, EPA has agreed to allow the State to submit only 
    one official SIP revision on June 15, 1999 based on the District's 
    commitment to submit a draft of the emissions inventory and attainment 
    assessment to EPA by November 25, 1998. In committing to submit a draft 
    inventory and assessment within 5 months after signature of the final 
    redesignation by the Regional Administrator, the District also agreed 
    to hold an early public workshop on the inventory and assessment. 
    (Letter from Ellen Garvey, BAAQMD; Eugene Leong, ABAG; and Lawrence 
    Dahms, MTC to Felicia Marcus dated June 23, 1998.) These changes not 
    only extend the time frames contained in the proposal but also enable 
    the District to hold one public hearing for all three elements of the 
    SIP revision.
    3. Comments on Miscellaneous Issues
    a. Conformity
        Comment: Several commenters questioned the effect of Bay Area 
    redesignation on transportation conformity. One commenter argued that 
    it would be inconsistent with CAA section 176(c) if EPA were to 
    determine that the emissions budget from a new Bay Area SIP submittal 
    applied simultaneously with the emissions budget in the currently-
    approved Bay Area maintenance plan.
        Response: Today's action does not have an immediate effect on 
    transportation conformity in the Bay
    
    [[Page 37274]]
    
    Area. The Bay Area currently has an approved ozone maintenance plan and 
    the budgets in this plan continue to apply. Any EPA action with 
    potential effects on transportation conformity will take place in the 
    context of EPA's review of the Bay Area's June 15, 1999 SIP submittal.
        The transportation conformity rule does not directly address a 
    situation, like that in the Bay Area, where an approved maintenance 
    plan proves to be inadequate and the area is redesignated and required 
    to submit a new plan. However, EPA believes the correct interpretation 
    of the conformity rule would require any new budgets contained in the 
    June 15, 1999 submittal to become effective after a 45-day review 
    period unless EPA finds them inadequate. EPA will continue to work with 
    the US Department of Transportation (DOT) to resolve DOT's concerns 
    regarding the interpretation of the rule and simultaneous applicability 
    of budgets and will make a final policy decision in the future.
    b. Congestion Mitigation and Air Quality (CMAQ) Funding
        Comment: Redesignation of the Bay Area to nonattainment without a 
    classification could jeopardize the Bay Area's continued eligibility 
    for CMAQ funding pursuant to either current law or the pending bills 
    for reauthorization of the Intermodal Surface Transportation Efficiency 
    Act (ISTEA).
        Response: Under the Transportation Equity Act for the 21st Century 
    (TEA-21), the new transportation funding legislation, signed recently 
    by the President, redesignation of the Bay Area to nonattainment for 
    ozone will not affect CMAQ eligibility. In fact, the Bay Area will be 
    eligible for more CMAQ funding than they were allocated under ISTEA, 
    the previous transportation funding legislation.
    c. Unfunded Mandates Reform Act (UMRA)
        Comment: Some commenters asserted that EPA failed to comply with 
    the Unfunded Mandates Reform Act (UMRA), and should have prepared a 
    statement in accordance with section 202 of UMRA. In the proposal, EPA 
    stated that the redesignation did not trigger section 202, as it did 
    not contain any federal mandate because it did not impose any 
    enforceable duties, and that even if it did contain a federal mandate, 
    the resulting expenditures would not exceed $100 million in any one 
    year. Commenters argued that the redesignation does impose an 
    enforceable duty upon California and the BAAQMD, because failure to 
    adopt a SIP would result in loss of highway funds and, in addition, 
    result in more stringent emissions offset requirements for new and 
    modified stationary sources, result in loss of grants, and trigger a 
    duty for EPA to issue a federal implementation plan (FIP).
        One commenter also argued that the redesignation constitutes a 
    private sector mandate under UMRA, because it requires the District to 
    submit regulations or enforceable commitments to adopt regulations 
    imposing duties on emissions sources. However, the test for a private 
    sector mandate under UMRA is whether it ``would impose an enforceable 
    duty upon the private sector.'' Clearly the redesignation has created 
    no duty enforceable against any private party. The commenter also 
    states that EPA is requiring that new source review permitting 
    requirements, applicability thresholds and offset ratios be set ``by 
    analogy'' at the levels otherwise applicable to moderate nonattainment 
    areas. These are the levels currently in effect in the Bay Area as a 
    result of the area's previous status as a moderate nonattainment area 
    and therefore present no new burdens on private parties in any event.
        Some commenters also asserted that the redesignation will impose 
    costs in excess of $100 million. This estimate was based on projected 
    costs of complying with the types of requirements the commenter 
    believes would be imposed if the state were to adopt a SIP.
        Response: EPA does not believe that it is necessary to resolve the 
    issues of whether the redesignation constitutes a ``federal mandate'' 
    or requires consideration of costs to private parties, as well as costs 
    to the state, under UMRA.
        EPA believes that even if it were construed as a federal mandate, 
    with costs to private parties to be considered as well as costs to the 
    state, those costs could not reasonably be expected to exceed $100 
    million in any one year. EPA has conducted an analysis of potential 
    costs to private parties. In terms of the impact on the private sector, 
    the BAAQMD has yet to determine the amount of needed reductions and the 
    mix of VOC and NOX measures to achieve the needed 
    reductions. EPA used cost data developed for the July 1997 ``Regulatory 
    Impact Analyses for the Particulate Matter and Ozone National Ambient 
    Air Quality Standards and Proposed Regional Haze Rule,'' as the basis 
    of its analysis. This data shows that the national average cost for 
    reasonably available VOC control measures is higher than the national 
    average cost for reasonably available NOX control measures 
    ($2,652 per ton per year for VOC; $1,937 per ton per year for 
    NOX, expressed in 1990 dollars). EPA assumes that reductions 
    of both VOC and NOX will be necessary to bring the Bay Area 
    back into attainment. However, for the purpose of this analysis EPA 
    assumed that all the needed reductions would come from VOC measures 
    because this approach would over-estimate the actual costs. In 
    addition, EPA assumed that VOC emissions may need to be reduced by as 
    much as 80 tons per day (approximately 28,800 tons per year) above and 
    beyond measures currently underway at the State and local levels. This 
    amount of reductions is significantly greater than that assumed to be 
    needed by the various interested parties. During the extensive 
    stakeholder process EPA has heard that anywhere from 0 to 50 tons per 
    day in additional reductions will be necessary. Thus, by assuming 80 
    tons per day for the purposes of this analysis, EPA believes that it is 
    significantly overestimating the costs. Even by employing cost numbers 
    and tons to be reduced that are significantly higher than what EPA 
    believes the actual results will be, the impacts would still be less 
    than $100 million (i.e., $76,377,600).
        As previously discussed in Section III.D.3.b. of this notice, one 
    commenter indicated that the redesignation without classification under 
    the Clean Air Act would result in loss of highway funds in excess of 
    $100 million under ISTEA and that this should be viewed as the cost of 
    the ``mandate''. The interplay of these two distinct statutes, were it 
    to result in a significant decrease in highway funding to the Bay Area, 
    would not be a mandate as it is defined in UMRA, as it would impose no 
    enforceable duty on State, local or tribal governments. Moreover, as 
    discussed above in section III.D.3.b., EPA, in consultation with the 
    Department of Transportation, has determined that the redesignation 
    will not result in any significant loss of highway funding to the Bay 
    Area under the recently passed reauthorization of ISTEA.
    d. Procedural Obligations Under CAA Section 107 and the Administrative 
    Procedures Act (APA)
        Comment: EPA has failed to follow the procedure set forth in 
    section 107(d)(3) of the Act for redesignating areas, and consequently 
    has failed to follow procedural requirements of the Administrative 
    Procedure Act.
        Response: The commenters misinterpret both the plain language of 
    sections 107(d)(3) (A), (B) and (C), and
    
    [[Page 37275]]
    
    the intent of these sections. As described more fully below, the 
    exchange of correspondence between EPA and a State provided for by 
    section 107(d)(3) is intended to address situations where there is 
    agreement that a redesignation is necessary, but differing opinions 
    concerning the boundaries of the area, or portion thereof, to be 
    redesignated.
        Section 107(d)(3) of the Act sets forth the procedure for 
    redesignation of areas and provides that the Administrator may at any 
    time notify the Governor of any state that available information 
    indicates that the designation of any area should be revised. Section 
    107(d)(3)(B) provides that the Governor has 120 days from receipt of 
    this letter to submit to the Administrator such redesignation, if any, 
    of the appropriate area (or areas) or portion thereof as the Governor 
    considers appropriate.
        Section 107(d)(3)(C) contemplates four potential outcomes which 
    flow from a Governor's response to notification from EPA that an area 
    should be redesignated:
        (1) The Governor concurs with EPA's notification and submits a 
    redesignation of the same area, or portion thereof, that was proposed 
    by EPA. In this event, section 107(d)(3)(C) provides that EPA must 
    promulgate the redesignation no later than 120 days after receipt of 
    the Governor's redesignation submittal. No further correspondence with 
    the Governor is required.
        (2) The Governor concurs with EPA's notification that a 
    redesignation is necessary, but submits a redesignation of the area 
    with different boundaries, or submits a redesignation of only a portion 
    of the area that was proposed by EPA. If EPA agrees with the Governor's 
    redesignation submittal, section 107(d)(3)(C) provides that EPA must 
    promulgate the redesignation no later than 120 days after receipt of 
    the Governor's redesignation submittal. No further correspondence with 
    the Governor is required.
        (3) The Governor concurs with EPA's notification that a 
    redesignation is necessary, but submits a redesignation of the area 
    with different boundaries, or submits a redesignation of only a portion 
    of the area that was proposed by EPA. If EPA disagrees with the 
    Governor's submittal, section 107(d)(3)(C) provides that EPA may make 
    such modifications as it deems necessary, but must notify the State 60 
    days before promulgation of the redesignation in order to provide the 
    State with an opportunity to demonstrate why any proposed modification 
    is inappropriate.
        (4) The Governor does not submit a redesignation for an area, or 
    portion thereof. Section 107(d)(3)(C) provides that EPA ``shall 
    promulgate such redesignation, if any, that the Administrator deems 
    appropriate.'' No further correspondence with the Governor is required.
        In the instance at hand, EPA notified the Governor of California by 
    letter dated August 21, 1997, that the Bay Area should be redesignated 
    to nonattainment for ozone, based on available air quality data 
    demonstrating 43 exceedances and 17 violations of the standard in the 
    two-year period from 1995 through 1996. The Governor of California did 
    not submit a redesignation of the Bay Area. Rather, the Governor 
    responded, by letter dated December 10, 1997, that he does not believe 
    any redesignation is appropriate. Thus, EPA's action is governed by the 
    last sentence of section 107(d)(3)(C), which provides that EPA ``shall 
    promulgate such redesignation, if any, that the Administrator deems 
    appropriate.''
        EPA has complied with the requirements of both the Clean Air Act 
    and the Administrative Procedure Act in its action to redesignate the 
    Bay Area. EPA has conducted notice and comment rulemaking, fully 
    considering all comments received, including those provided by the 
    Governor. Contrary to the assertions of the commenter, there is nothing 
    in either statute which precludes EPA from proposing a redesignation at 
    any time following notification of the Governor. EPA is free to solicit 
    comment from the general public simultaneously with the Governor's 
    notification, at any time during the 120 day period for the Governor's 
    response, or at any time following the Governor's response, so long as 
    EPA complies with the time periods set forth in section 107(d)(3), and 
    its general duty to consider and respond to all comments.
        While it is true that EPA made minor changes to the redesignation 
    requirements set out in the Governor's notification when the Agency 
    published its proposal, the State was in no way prejudiced by this 
    fact. The changes did not relate to area boundaries, or portions 
    thereof, and therefore did not invoke the notification procedures. 
    EPA's proposed rulemaking provided a 60 day public comment period and 
    the State was provided with a copy of the proposal on December 11, 
    1997, 8 days before it was published in the Federal Register. The State 
    provided EPA with comments on its proposal on February 17, 1998. These 
    comments, as well as the Governor's response letter, have been fully 
    considered in EPA's decision to redesignate the Bay Area.
    
    IV. Final Action
    
    A. Overview
    
        As discussed in the response to comments, EPA remains convinced 
    that the Agency's appropriate action, in the face of numerous and 
    widespread violations of the 1-hour ozone standard in the Bay Area, is 
    to finalize the redesignation of the San Francisco Bay Area to 
    nonattainment for the 1-hour ozone NAAQS. EPA takes this action under 
    CAA section 107(d), based specifically on the Bay Area's 17 violations 
    of the 1-hour ozone NAAQS over the 3-year period, 1994-1996.
        EPA also finalizes the Agency's determination that the Bay Area 
    should not be classified under subpart 2 of the CAA, but rather should 
    be required to meet applicable requirements of CAA subpart 1.
    
    B. SIP Requirements and Deadlines
    
        In accordance with CAA sections 110 and 172, the State must submit 
    by June 15, 1999 a SIP revision containing: (1) The existing 1995 
    emissions inventory for NOX and VOC in the Bay Area; (2) an 
    assessment, using available data and technical analyses, of the 
    emission reductions needed to attain the federal 1-hour ozone standard; 
    and (3) adopted regulations and/or control measures with enforceable 
    commitments to adopt and implement the control measures in regulatory 
    form by specified dates. The extension for the emissions inventory and 
    attainment assessment submittal is being granted in response to a 
    commitment made by the Air District (Letter from Ellen Garvey, BAAQMD 
    et al. to Felicia Marcus, EPA Region IX, dated June 23, 1998) to 
    provide the inventory and assessment to EPA in draft within 5 months of 
    the final redesignation. This early, informal submittal will allow EPA 
    to review the draft inventory and assessment and work with the District 
    to address any deficiencies. The District also agreed to hold an early 
    public workshop on the draft inventory and assessment. The adopted 
    regulations and control measures, and the schedule for adoption and 
    implementation of such measures, must be sufficient to meet reasonable 
    further progress and attain the 1-hour NAAQS expeditiously but no later 
    than November 15, 2000. EPA emphasizes that the submittal due on June 
    15, 1999 must include contingency measures that go into effect if the 
    Bay Area does not attain the NAAQS by the prescribed deadline in order 
    to address the specific requirement of CAA section 172(c)(9).
    
    [[Page 37276]]
    
    For a more complete discussion of subpart 1 elements applicable to 
    these SIP submittals, the reader is referred to the proposal (62 FR 
    66580-66581).
    
     Schedule of Submittals State Implementation Plan for Ozone for the San 
                               Francisco Bay Area                           
    ------------------------------------------------------------------------
                Action/SIP submittal                         Date           
    ------------------------------------------------------------------------
    1995 emissions inventory for VOC and NOX....  Draft--11/25/98 Final--6/ 
                                                   15/99                    
    Assessment, employing available data and      Draft--11/25/98 Final--6/ 
     technical analyses, of the level of           15/99                    
     emission reductions needed to attain the                               
     current 1-hour ozone National Ambient Air                              
     Quality Standard (NAAQS). This assessment                              
     should take into account the meteorological                            
     conditions and ambient concentrations                                  
     associated with the violations of the ozone                            
     NAAQS in the period 1995-6, and should be                              
     based on likely control measures for                                   
     reducing VOC and NOX emissions.                                        
    Adopted regulations and/or control measures,  6/15/99                   
     with enforceable commitments to adopt and                              
     implement the control measures in                                      
     regulatory form by specified dates,                                    
     sufficient to meet reasonable further                                  
     progress and attain the 1-hour NAAQS                                   
     expeditiously but no later than November                               
     15, 2000.                                                              
    ------------------------------------------------------------------------
    
    C. Changes from Proposal
    
        In this final action, EPA has amended both the schedule and content 
    of the proposed SIP requirements in response to public comments, as 
    discussed above in section III.D.2. The changes are as follows:
    
    ------------------------------------------------------------------------
                                                 Final--weekend emissions   
     Proposal--weekend emissions inventory    inventory and CO inventory not
           and CO inventory required                    required.           
    ------------------------------------------------------------------------
    Emissions inventory and attainment       Emissions inventory and        
     assessment due to EPA 5/1/98.            attainment assessment due to  
                                              EPA 6/15/99. (Commitment to   
                                              submit draft by 11/25/98.)    
    Adopted regulations and/or control       Adopted regulations and/or     
     measures with enforceable commitments    control measures with         
     due 9/1/98.                              enforceable commitments, and  
                                              final emissions inventory and 
                                              attainment assessment due 6/15/
                                              99.                           
    Attainment date of 11/15/99............  Attainment date of 11/15/2000. 
    ------------------------------------------------------------------------
    
    V. Emission Reduction Opportunities
    
        Under EPA's final redesignation, the Air District and its co-lead 
    agencies are responsible for determining the appropriate mix of control 
    measures that will most effectively bring the Bay Area into attainment 
    with the 1-hour ozone standard. The Bay Area, like other major 
    metropolitan areas, is experiencing rapid economic growth and an 
    increasing population that may lead to emission increases from both the 
    stationary and mobile source sectors. Given these circumstances, the 
    Air District may wish to explore new and innovative approaches for 
    achieving reductions from both source sectors. EPA believes that 
    traditional control strategies aimed at reducing emissions from 
    stationary sources are essential to any air pollution control program. 
    At the same time, EPA supports efforts to develop alternative emission 
    reduction methods. Mobile source emissions, for example, make up the 
    majority of the ozone precursor inventory in many urban areas, 
    including the Bay Area, but air pollution control agencies often have 
    difficulty regulating these emissions. Mobile sources are therefore 
    good candidates for non-traditional approaches. EPA encourages the 
    BAAQMD and its co-lead agencies to identify opportunities for 
    innovation, in addition to traditional control strategies, as they 
    develop measures to bring the Bay Area into attainment of the ozone 
    standard.
    
    A. Stationary Sources
    
        Stationary sources in the Bay Area emit approximately 152 tons of 
    VOC and 157 tons of NOX per day (Bay Area Clean Air Plan, 
    Volume 1, p.21). This current level of emissions reflects tremendous 
    progress in stationary source reductions over the past 20 years. 
    Nonetheless, BAAQMD will need to assess whether additional stationary 
    source measures are needed to help the Bay Area attain the federal 1-
    hour ozone standard. Recently, BAAQMD proposed in its 1997 Clean Air 
    Plan several stationary source measures believed to be both feasible to 
    implement and effective at reducing emissions. EPA expects that the 
    District will analyze which control measures from this plan are needed 
    to attain the standard and assess whether any measures beyond those 
    contained in the plan are also needed. If additional measures are 
    needed, the District may want to consider stationary source measures 
    suggested by public commenters on the redesignation proposal such as 
    improving tank and flare design, eliminating exemptions from certain 
    District rules, and improving controls on energy sources (e.g., natural 
    gas fired boilers and privately owned and operated power plants). 
    However, EPA is not requiring adoption of these or any other specific 
    controls; it is the BAAQMD's authority and responsibility to determine 
    the appropriate mix of Bay Area measures.
    
    B. Transportation Control Measures
    
        Given that on-road motor vehicles emit 43% of the total VOC and 47% 
    of the total NOX emissions in the Bay Area (Bay Area 1997 
    Clean Air Plan, Volume 1, p.7), that vehicle travel has been steadily 
    increasing, and that the Metropolitan Transportation Commission (MTC) 
    directs the allocation of billions of dollars of transit funds, MTC 
    plays an important role in the Bay Area's overall strategy to attain 
    the 1-hour ozone standard. MTC is currently updating its 20-year plan 
    and will continue to revise this plan every two years. MTC's planning 
    process offers a good opportunity to incorporate air quality goals into 
    both long term planning and short term projects. In addition, MTC is 
    required to identify possible transportation control measures (TCMs) as 
    part of the California Clean Air Plan (CAP). The Bay Area's 1997 CAP 
    contained an estimated 7 tons per day (3 tpd VOC, 4 tpd NOX) 
    worth of potential reductions from TCMs for the year 2000 and even more 
    for later years (Bay Area 1997 Clean Air Plan, Volume 1, p.49). If 
    these measures were adopted and submitted for SIP approval, they could 
    make a measurable contribution toward attainment of the 1-hour ozone 
    standard. Finally, MTC may be able to help reduce emissions by 
    reevaluating
    
    [[Page 37277]]
    
    the way it distributes transportation funds, the way it finances 
    transportation projects, its policies with respect to land use and 
    transportation and giving priority to the most cost-effective (i.e., 
    tons of emission reduction per dollar spent) investments.
    
    C. Voluntary Measures
    
        EPA encourages the State, District and co-lead agencies to explore 
    innovative approaches to achieving their air quality goals. One 
    possible area for innovation is the mobile source arena. Mobile sources 
    emit 75% of the total NOX emissions and 58% of the total VOC 
    emissions in the Bay Area (Bay Area 1997 Clean Air Plan, Volume 1, p. 
    7). Though there have been great strides in reducing vehicle emission 
    rates, transportation emissions continue to be a problem due to large 
    increases in vehicle miles travelled (VMT). Regulatory agencies and 
    others are therefore developing voluntary mobile source strategies that 
    promote changes in local transportation sector activity levels and 
    changes in in-use vehicle and engine fleet composition to complement 
    regulatory programs.
        Voluntary mobile source control measures have the potential to 
    contribute to, in a cost-effective manner, emission reductions needed 
    for attainment of the NAAQS. EPA believes, therefore, that SIP credit 
    is appropriate for voluntary mobile source emission reduction programs 
    (VMEPs) where we have confidence that the measures can achieve emission 
    reductions. Consistent with that belief, EPA issued its October 23, 
    1997 ``Guidance on Incorporating Voluntary Mobile Source Emission 
    Reduction Programs in State Implementation Programs'' (signed by 
    Richard Wilson, Acting Assistant Administrator for Air and Radiation). 
    The guidance lays out the terms and conditions for establishing and 
    implementing VMEPs and the guidelines for SIP approval. In light of the 
    innovative nature of voluntary measures and EPA's inexperience with 
    quantifying their emission reductions, EPA's guidance limits the amount 
    of emission reductions allowed for VMEPs in a SIP to 3% of the total 
    projected future year emission reductions required to attain the 
    appropriate NAAQS. In addition, the guidance requires that a state or 
    local agency track on an annual basis the resulting emissions effect of 
    the voluntary measure and also commit to remedy any shortfall if the 
    VMEP does not achieve projected emission reductions.
        The BAAQMD and co-lead agencies may wish to take advantage of the 
    flexibility provided by EPA's voluntary mobile source measures policy 
    as they develop their SIP control strategies in response to the 
    redesignation. EPA encourages the three co-lead agencies to work with 
    the business and environmental communities that may have an interest in 
    developing or participating in such innovative strategies, as 
    stakeholder involvement is a critical factor in building community 
    acceptance and ultimate success. For example, the Silicon Valley 
    Manufacturing Group has worked with businesses to develop the ECOPASS 
    program; this is an employer-sponsored alternative commute program that 
    is designed to get employees out of their cars and onto public transit. 
    Another example is the BAAQMD's ``Spare-the-Air'' Program, a public 
    education campaign that encourages citizens to refrain from or reduce 
    activities that produce emissions of ozone precursors. The program 
    currently enjoys the participation of 475 businesses and is continuing 
    to grow with the help of the Bay Area business community. EPA applauds 
    BAAQMD and the business community for successfully implementing these 
    innovative and important programs. The BAAQMD has not yet submitted to 
    EPA its plan for quantifying and tracking the impacts of these programs 
    on an on-going basis, and therefore EPA has not yet evaluated how the 
    District will ensure that the criteria presented in the VMEP guidance 
    will be met. However, EPA is currently consulting with the BAAQMD 
    regarding quantification and tracking of emissions associated with 
    these programs and will continue to work with the District to clarify 
    the VMEP policy. We encourage the District and its co-lead agencies to 
    consider and pursue other innovative approaches as they evaluate 
    measures needed to attain the ozone standard.
    
    D. Enhanced Inspection and Maintenance
    
        While the Bay Area has both the flexibility and the responsibility 
    to determine the appropriate mix of control measures that are needed to 
    attain the federal 1-hour ozone standard, EPA believes that emission 
    reductions from implementation of an enhanced inspection and 
    maintenance program would make a substantial contribution to attainment 
    in the Bay Area. The California Bureau of Automotive Repair has 
    indicated that implementation of the California Smog Check 2 program 
    (California's enhanced I/M program) would result in an incremental 
    benefit of 12 tons per day VOC and 14 tons per day NOX. EPA 
    is hopeful that Bay Area leaders will work together to pursue 
    authorization and expeditious implementation of an enhanced I/M 
    program. Furthermore, implementation of an enhanced I/M program in the 
    Bay Area would address some of the equity concerns raised by Bay Area's 
    downwind neighbors who are impacted by pollution from the Bay Area and 
    are required under federal and State law to implement an enhanced I/M 
    program. EPA does not believe, however, that enhanced I/M is the 
    complete answer to Bay Area's ozone nonattainment problem. EPA believes 
    that the BAAQMD should evaluate measures aimed at both the stationary 
    and mobile source sectors that will work together to achieve healthy 
    air in the Bay Area.
    
    E. Mitigating Emissions Increases From Oakland Seaport and Airport 
    Expansion Projects
    
        The Port of Oakland is planning to expand its operations over the 
    next several years. Dredging operations, which will provide larger 
    vessels with access to the Port, will begin in February 2000. Emissions 
    of CO and VOCs from dredging and related construction activities are 
    not expected to be significant. Gas or diesel powered dredging 
    equipment, however, emits significant quantities of NOX; the 
    draft EIS/EIR prepared by the U.S. Army Corps of Engineers (COE) for 
    the port expansion estimates that total construction-related 
    NOX emissions, gas or diesel powered dredging equipment, 
    would be in the range of 1500 to 1700 tons over the four-year period 
    (2000-2004) during which dredging will occur. The COE, however, has 
    subsequently indicated that it plans to use electric dredging equipment 
    which would reduce the potential construction-related NOX 
    emissions to 330 tons over four years, or an average of 83.5 tons per 
    year. The dredging and related construction activities performed by the 
    COE are subject to the General Conformity regulations (40 CFR 93.150), 
    which require federal agencies to demonstrate that emissions from 
    federal projects conform to the approved State Implementation Plan if 
    the emissions are above ``de minimis'' levels defined in 40 CFR 93.153. 
    Because the Corps of Engineers will be employing electric dredging 
    equipment in its construction activities, and limiting the number of 
    disposal trips per year, the emissions will be below the 100 ton per 
    year NOX de minimis level established in the conformity 
    regulations and a conformity determination is therefore not required. 
    The Corps' plan to use electric dredging equipment will help to ensure 
    cleaner air for the surrounding community and the Bay Area as a whole 
    and contribute
    
    [[Page 37278]]
    
    to efforts to achieve attainment with the ozone standard.
        Once construction of the Port expansion project is complete, 
    operational emissions increases are projected to be significant. 
    Because the long-term emissions from new vessels, trucks, trains, 
    terminal operations, and employee vehicles are considered to be 
    indirect emissions that cannot be practicably controlled by and are not 
    under a continuing program responsibility of the COE, these activities 
    are exempt from the conformity requirements. EPA believes however, that 
    mitigation of these long-term emissions may be an important part of the 
    Bay Area's strategy for attaining and maintaining not only the 1-hour 
    ozone NAAQS, but the revised 8-hour and PM2.5 NAAQS as well. For this 
    reason, EPA encourages the Port to work with BAAQMD and MTC to identify 
    opportunities to mitigate long-term emission increases from the 
    project. EPA also welcomes opportunities to share information regarding 
    mitigation techniques that have been identified during discussions with 
    the South Coast AQMD on ports and airports.
        Plans to expand the Oakland Airport are also underway and EPA 
    believes that the project will be subject to the General Conformity 
    requirements. EPA believes that there are opportunities to mitigate 
    emissions increases associated with the expansion and again welcomes 
    the opportunity to share information resulting from discussions with 
    the South Coast regarding reducing airport emissions.
    
    VI. Administrative Requirements
    
    A. Executive Order (E.O.) 12866
    
        Under E.O. 12866, (58 FR 51735, October 4, 1993), EPA is required 
    to determine whether today's action is a ``significant regulatory 
    action'' within the meaning of the E.O., and therefore should be 
    subject to OMB review, economic analysis, and the requirements of the 
    E.O. See E.O. 12866, sec. 6(a)(3). The E.O. defines, in sec. 3(f), a 
    ``significant regulatory action'' as a regulatory action that is likely 
    to result in a rule that may meet at least one of four criteria 
    identified in section 3(f), including,
        (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.
        EPA has determined that the redesignation to nonattainment 
    finalized today, as well as the establishment of SIP submittal 
    schedules, would result in none of the effects identified in E.O. 12866 
    sec. 3(f). Under section 107(d)(3) of the Act, redesignations to 
    nonattainment are based upon air quality considerations. The finding, 
    based on air quality data, that the Bay Area is not attaining the ozone 
    NAAQS and should be redesignated to nonattainment does not, in and of 
    itself, impose any new requirements on any sectors of the economy. 
    Similarly, the establishment of new SIP submittal schedules merely 
    establishes the dates by which SIPs must be submitted, and does not 
    adversely affect entities.
    
    B. Regulatory Flexibility
    
        Under the Regulatory Flexibility Act, 5 U.S.C. section 601 et. 
    seq., EPA must prepare a regulatory flexibility analysis assessing the 
    impact of any proposed or final rule on small entities. 5 U.S.C. 
    sections 603 and 604. Alternatively, EPA may certify that the rule will 
    not have a significant economic impact on a substantial number of small 
    entities. Small entities include small businesses, small not-for-profit 
    enterprises, and government entities with jurisdiction over populations 
    of less than 50,000.
        A redesignation to nonattainment under section 107(d)(3), and the 
    establishment of a SIP submittal schedule for a reclassified area, do 
    not, in and of themselves, directly impose any new requirements on 
    small entities. See Mid-Tex Electric Cooperative, Inc. v. FERC, 773 
    F.2d 327 (D.C. Cir. 1985) (agency's certification need only consider 
    the rule's impact on entities subject to the requirements of the rule). 
    Instead, this rulemaking simply makes a factual determination and to 
    establish a schedule to require the State to submit SIP revisions, and 
    does not directly regulate any entities. Because EPA is applying the 
    same permitting applicability thresholds and offset ratios applicable 
    to moderate areas, no additional sources will be subject to these 
    requirements as a result of EPA's action. Therefore, pursuant to 5 
    U.S.C. 605(b), EPA certifies that today's action does not have a 
    significant impact on a substantial number of small entities within the 
    meaning of those terms for RFA purposes.
    
    C. Unfunded Mandates Reform Act
    
        Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
    L. 104-4, establishes requirements for Federal agencies to assess the 
    effects of their regulatory actions on State, local, and tribal 
    governments and the private sector. Under section 202 of the UMRA, EPA 
    generally must prepare a written statement, including a cost-benefit 
    analysis, when EPA promulgates ``any general notice of proposed 
    rulemaking that is likely to result in promulgation of any rule that 
    includes any Federal mandate that may result in the expenditures by 
    State, local, and tribal governments, in the aggregate, or by the 
    private sector, of $100 million or more'' in any one year. A ``Federal 
    mandate'' is defined, under section 101 of UMRA, as a provision that 
    ``would impose an enforceable duty'' upon the private sector or State, 
    local, or tribal governments,'' with certain exceptions not here 
    relevant. Under section 203 of UMRA, EPA must develop a small 
    government agency plan before EPA ``establish[es] any regulatory 
    requirements that might significantly or uniquely affect small 
    governments.'' Under section 204 of UMRA, EPA is required to develop a 
    process to facilitate input by elected officers of State, local, and 
    tribal governments for EPA's ``regulatory proposals'' that contain 
    significant Federal intergovernmental mandates. Under section 205 of 
    UMRA, before EPA promulgates ``any rule for which a written statement 
    is required under [UMRA sec.] 202,'' EPA must identify and consider a 
    reasonable number of regulatory alternatives and either adopt the least 
    costly, most cost-effective or least burdensome alternative that 
    achieves the objectives of the rule, or explain why a different 
    alternative was selected.
        EPA has concluded that this rule is not likely to result in the 
    promulgation of any Federal mandate that may result in expenditures of 
    $100 million or more for State, local or tribal governments in the 
    aggregate, or for the private sector, in any one year. It is not 
    necessary to resolve here whether a redesignation would constitute a 
    federal mandate.
        Even assuming that a redesignation were considered a Federal 
    mandate, and it were appropriate to consider both private and public 
    sector costs, the anticipated annual costs resulting from the mandate 
    would not exceed $100 million to the private sector, State, local
    
    [[Page 37279]]
    
    and tribal governments. In terms of the impact on the private sector, 
    the BAAQMD has yet to determine the amount of needed reductions and the 
    mix of VOC and NOX measures to achieve the needed 
    reductions. EPA used cost data developed for the July 1997 ``Regulatory 
    Impact Analyses for the Particulate Matter and Ozone National Ambient 
    Air Quality Standards and Proposed Regional Haze Rule,'' as the basis 
    of its analysis. This data shows that the national average cost for 
    reasonably available VOC control measures is higher than the national 
    average cost for reasonably available NOX control measures 
    ($2,652 per ton per year for VOC; $1,937 per ton per year for 
    NOX, expressed in 1990 dollars). EPA assumes that reductions 
    of both VOC and NOX will be necessary to bring the Bay Area 
    back into attainment. However, for the purpose of this analysis EPA 
    assumed that all the needed reductions would come from VOC measures 
    because this approach would over-estimate the actual costs. In 
    addition, EPA assumed that VOC emissions may need to be reduced by as 
    much as 80 tons per day (approximately 28,800 tons per year) above and 
    beyond measures currently underway at the State and local levels. This 
    amount of reductions is significantly greater than that assumed to be 
    needed by the various interested parties. During the extensive 
    stakeholder process EPA has heard that anywhere from 0 to 50 tons per 
    day in additional reductions will be necessary. Thus, by assuming 80 
    tons per day for the purposes of this analysis, EPA believes that it is 
    significantly overestimating the costs. Even by employing cost numbers 
    and tons to be reduced that are significantly higher than what EPA 
    believes the actual results will be, the impacts would still be less 
    than $100 million (i.e., $76,377,600).
        The cost to the State of California is the cost of developing, 
    adopting and submitting any necessary SIP revision. Because that cost, 
    taken in combination with private sector costs, will not exceed $100 
    million, this action (even assuming it is a federal mandate) is not 
    subject to the requirements of sections 202 and 205 of UMRA (2 U.S.C. 
    1532 and 1535). EPA has also determined that this action would not 
    result in regulatory requirements that might significantly or uniquely 
    affect small governments because only the State would take any action 
    as result of today's rule, and thus the requirements of section 203 (2 
    U.S.C. 1533) do not apply.
    
    D. Executive Order 13045: Protection of Children From Environmental 
    Health Risks and Safety Risks
    
        This final rule is not subject to E.O. 13045, entitled ``Protection 
    of Children from Environmental Health Risks and Safety Risks'' (62 FR 
    19885, April 23, 1997) because this is not an economically significant 
    regulatory action as defined by E.O. 12866, and because it does not 
    involve decisions on environmental health risks or safety risks that 
    may disproportionately affect children.
    
    E. Submission to Congress and the General Accounting Office
    
        The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
    Small Business Regulatory Enforcement Fairness Act of 1996, generally 
    provides that before a rule may take effect, the agency promulgating 
    the rule must submit a rule report, which includes a copy of the rule, 
    to each House of the Congress and to the Comptroller General of the 
    United States. EPA will submit a report containing this rule and other 
    required information to the U.S. Senate, the U.S. House of 
    Representatives, and the Comptroller General of the United States prior 
    to publication of the rule in the Federal Register. This rule is not a 
    ``major'' rule as defined by 5 U.S.C. 804(2).
    
    List of Subjects in 40 CFR Part 81
    
        Environmental protection, Air pollution control, National parks.
    
        Dated: June 25, 1998.
    Felicia Marcus,
    Regional Administrator, Region IX.
    
        Part 81, chapter I, title 40 of the Code of Federal Regulations is 
    amended as follows:
    
    PART 81--[AMENDED]
    
        1. The authority citation for part 81 continues to read as follows:
    
        Authority: 42 U.S.C. 7401 et seq.
    
        2. In Sec. 81.305, the table for California--Ozone, is amended by 
    revising the entry for the San Francisco Bay Area to read as follows:
    
    
    Sec. 81.305  California.
    
    * * * * *
    
                                                                        California-Ozone                                                                    
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Designation                                              Classification                
              Designated Area           --------------------------------------------------------------------------------------------------------------------
                                                      Date\1\                            Type                        Date \1\                  Type         
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    San Francisco--Bay Area:                                                                                                                                
        Alameda County.................  August 10, 1998.................  Nonattainment...................                                                 
        Contra Costa County............  ......do                          ......do                                                                         
        Marin County...................  ......do                          ......do                                                                         
        Napa County....................  ......do                          ......do                                                                         
        San Francisco County...........  ......do                          ......do                                                                         
        Santa Clara County.............  ......do                          ......do                                                                         
        San Mateo County...............  ......do                          ......do                                                                         
        Solano County (part)...........  ......do                          ......do                                                                         
        Sonoma County (part)...........  ......do                                                                                                           
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ This date is November 15, 1990, unless otherwise noted.                                                                                             
    
    
    [[Page 37280]]
    
    * * * * *
    [FR Doc. 98-18272 Filed 7-9-98; 8:45 am]
    BILLING CODE 6560-50-P
    
    
    

Document Information

Effective Date:
8/10/1998
Published:
07/10/1998
Department:
Environmental Protection Agency
Entry Type:
Rule
Action:
Final rule.
Document Number:
98-18272
Dates:
This action is effective on August 10, 1998.
Pages:
37258-37280 (23 pages)
Docket Numbers:
CA-008-BU, FRL-6120-4
PDF File:
98-18272.pdf
CFR: (2)
40 CFR 3(f)
40 CFR 81.305