[Federal Register Volume 59, Number 149 (Thursday, August 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18572]
[[Page Unknown]]
[Federal Register: August 4, 1994]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 52
Clean Air Act Sanctions; Final Rule and Notice
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[AD-FRL-5023-3]
Selection of Sequence of Mandatory Sanctions for Findings Made
Pursuant to Section 179 of the Clean Air Act
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The EPA is promulgating a rule governing the order in which
the sanctions shall apply under the mandatory sanctions provision of
the Clean Air Act (Act), as amended, after EPA makes a finding of
failure specific to any State implementation plan (SIP) or plan
revision required under the Act's nonattainment area provisions. This
final rule provides that the offset sanction shall apply in an area 18
months after the date on which EPA makes such a finding with regard to
that area and that the highway sanctions shall apply in that area 6
months following application of the offset sanction. Once this rule is
effective, sanctions will apply automatically in the sequence
prescribed in all instances in which sanctions are required following
applicable findings that EPA has already made or that EPA will make in
the future, except when EPA determines through a separate rulemaking to
change the sanction sequence for one or more specific circumstances.
The public will have an opportunity to comment on any such separate
rulemaking.
EFFECTIVE DATES: This action will become effective on September 6,
1994.
ADDRESS(ES): The public docket for this action, A-93-28, is available
for public inspection and copying between 8:30 a.m. and 3:30 p.m.,
Monday through Friday, at the Air and Radiation Docket and Information
Center, Room M-1500, Waterside Mall, U.S. EPA, 401 M Street, SW,
Washington, DC 20460. A reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT:
Mr. Christopher Stoneman, Sulfur Dioxide/Particulate Matter Programs
Branch, Mail Drop 15, Office of Air Quality Planning and Standards,
U.S. EPA, Research Triangle Park, North Carolina 27711, telephone (919)
541-0823.
SUPPLEMENTARY INFORMATION: The content of today's preamble is listed in
the following outline:
I. Background
A. Introduction
B. Consequences of State Failure
1. Section 179(a) Scope and Findings
2. Section 179(b) Sanctions
3. Applications and Timing of Section 179(b) Sanctions
C. Notice of Proposed Rulemaking
1. Proposal
2. Rationale for Sanction Order
3. Sanction Effectuation
4. Opportunity for Comment
II. Today's Action
A. Final Action
B. Summary of Comments and Responses
1. Sanction Sequence and Rationale
2. Sanction Effectuation
3. Sanction Clock Policy
4. Other Areas of Comment
C. Summary of Changes in Rule
1. Section 52.31(a)--Purpose
2. Section 52.31(b)--Definitions
3. Section 52.31(c)--Applicability
4. Section 52.31(d)--Sanction Application Sequencing
5. Section 52.31(e)--Available Sanctions and Methods for
Implementation
III. Implications of Today's Rulemaking
A. Implementation of the Sanctions
B. Areas Potentially Subject to Sanctions
IV. Miscellaneous
A. Executive Order 12866
B. Regulatory Flexibility Act
1. Proposal
2. Comments
3. Response
C. Paperwork Reduction Act
I. Background
A. Introduction
On October 1, 1993, EPA proposed a rule (58 FR 51270) governing the
sequence of mandatory sanctions under section 179(a) (42 U.S.C.
7509(a)) of the amended Act. The document included extensive background
on the Act, some of which is briefly resummarized in this background
section because it relates directly to the Act's sanction provisions.
The information not repeated concerns the overview at pages 51270-2 of
the proposal provided on the Clean Air Act Amendments of 1990 (1990
Amendments), title I requirements of the Act, and EPA action on SIP's.
This background section also summarizes the proposal and the rationale.
B. Consequences of State Failure
1. Section 179(a) Scope and Findings
The 1990 Amendments revised the law concerning sanctions1 to
address State failures to comply with the requirements of the Act.
Under section 179(a) of the Act, for any plan or plan revision required
under part D of title I or required in response to a finding of
substantial SIP inadequacy under section 110(k)(5) (42 U.S.C.
7410(k)(5)),2 the Act sets forth four findings3 that EPA can
make, which may lead to the application of one or both of the sanctions
specified under section 179(b) (42 U.S.C. 7509(b)). The four findings
are: (1) A finding under section 179(a)(1) that a State has failed, for
a nonattainment area, to submit a SIP or an element of a SIP, or that a
submitted SIP or SIP element fails to meet the completeness criteria
established pursuant to section 110(k) (42 U.S.C. 7410(k)); (2) a
finding under section 179(a)(2) where EPA disapproves a SIP submission
for a nonattainment area based on its failure to meet one or more plan
elements required by the Act; (3) a finding under section 179(a)(3)
that the State has not made any other submission required by the Act
(including an adequate maintenance plan) or has made any other
submission that fails to meet the completeness criteria or has made a
required submission that is disapproved by EPA for not meeting the
Act's requirements; or (4) a finding under section 179(a)(4) that a
requirement of an approved plan is not being implemented.
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\1\The 1990 Amendments also revised the Act's provisions
concerning Federal implementation plans (FIP's). Under section
110(c)(1), the FIP requirement is triggered by an EPA finding that a
State has failed to make a required submittal or that a received
submittal does not satisfy the minimum completeness criteria
established under section 110(k)(1)(A), or an EPA disapproval of a
SIP submittal in whole or in part. However, since FIP's are not the
subject of this notice, these provisions are not addressed here.
\2\A finding of substantial inadequacy under section 110(k)(5)--
known as a ``SIP call''--is made whenever EPA finds that a plan for
any area is substantially inadequate to attain or maintain the
relevant national ambient air quality standard (NAAQS).
\3\Section 179(a) refers to findings, disapprovals, and
determinations. These will all be referred to by the one term
``findings.''
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The EPA makes section 179(a) findings of failure to submit and
findings of incompleteness via letters from EPA Regional Administrators
to State governors or other State officers to whom authority has been
delegated.4 The letter itself triggers the sanctions clock. To
make findings of failure to submit and findings of incompleteness under
section 179(a)(1) and section 179(a)(3)(A), EPA is not required to go
through notice-and-comment rulemaking.5 For section 179(a)(2) and
section 179(a)(3)(B) findings of disapproval, the Federal Register
document in which EPA takes final action disapproving the submittal
(after notice and comment) initiates the sanctions clock. For section
179(a)(4) findings of nonimplementation, the sanctions clock starts
when EPA makes a finding of nonimplementation in the Federal Register
through notice-and-comment rulemaking. For both disapprovals and
findings of nonimplementation, the clock actually starts on the date
the final Federal Register actions are effective.
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\4\7-62, Finding of Failure to Submit a Required State
Implementation Plan or Any Other Required Submission of the Act,
Clean Air Act, Delegations Manual, 12/13/91.
\5\Notice and comment considerations vis-a-vis findings of
failure to submit and incompleteness are discussed in the proposal
at page 51272, footnote 7, and in section IV.G. of this document.
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2. Section 179(b) Sanctions
Under section 179(b), two sanctions are available for selection by
EPA following a section 179(a) finding.6 One available sanction is
a restriction on highway funding, as provided in section 179(b)(1) (42
U.S.C. 7509(b)(1)), which is discussed in the proposal at pages 51273-
51274. The other available sanction is the offset sanction, as provided
in section 179(b)(2) (42 U.S.C. 7509(b)(2)), which is also discussed in
the proposal at page 51274.
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\6\In addition, section 179(a) provides for an air pollution
grant sanction that applies to grants the EPA may award under
section 105. However, since it is not a sanction provided under
section 179(b), it is not one of the sanctions that automatically
apply under section 179(a).
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3. Application and Timing of Section 179(b) Sanctions
Although application of section 179(b) sanctions may become
mandatory when EPA makes a finding under section 179(a) (if the State
does not correct the deficiency), it is not immediate. Instead, section
179(a) provides for a sanction ``clock,'' which is described in the
proposal at page 51274. Generally, under section 179(a)'s sanction
clock, the sanction selected by EPA applies if the deficiency that
prompted the finding is not corrected before the sanction clock
expires. (The sanction clock is further discussed in section II.B.3. of
this document.)
C. Notice of Proposed Rulemaking
1. Proposal
In the proposal, EPA proposed that the section 179(b)(2) offset
sanction would apply in an area 18 months from the date when EPA makes
a finding under section 179(a). Furthermore, EPA proposed that the
section 179(b)(1) highway sanction would apply in an area 6 months
following application of the offset sanction. The EPA proposed to
sequence the application of sanctions under section 179(a) in this
manner in all cases unless EPA determines, through individual notice-
and-comment rulemaking, that the highway sanction will apply first.
The proposal addressed the sequence in which sanctions shall apply
as required under section 179(a) with respect to a finding made under
subsections (1)-(4) specific to any implementation plan or plan
revision required under part D or any implementation plan or revision
required under part D found substantially inadequate pursuant to
section 110(k)(5). In general, part D plans and plan revisions are
required for areas designated nonattainment under section 107.7
The proposal did not encompass findings EPA can make under section
179(a) regarding SIP calls for non-part D plans or plan revisions or
the sanction provisions in section 110(m) of the Act.8 It also
does not encompass any findings EPA may make under other titles of the
Act (e.g., section 502(d) for operating permitting programs).
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\7\While part D generally applies to nonattainment areas, some
requirements extend to other areas. For example, section 184(a)
specifically created at enactment an ozone transport region, called
the Northeast Ozone Transport Region (NOTR), which is comprised of
several mid-Atlantic and New England States and the Consolidated
Metropolitan Statistical Area containing the District of Columbia
(see ``General Preamble for the Implementation of Title I of the
Clean Air Act Amendments of 1990'' at page 13527 (57 FR 13498)).
Though areas within some of these States may not be designated
nonattainment, the States must submit revisions to their SIP's by
certain statutory deadlines to include specific part D measures for
these areas (e.g., enhanced vehicle inspection and maintenance
program, reasonably available control technology for volatile
organic compounds (VOC) sources).
\8\Section 110(m) of the Act grants EPA broad discretionary
authority to apply either sanction listed in section 179(b) ``at any
time (or at any time after) the Administrator makes'' a finding
under section 179(a) with respect to any portion of the State,
subject to certain limitations (57 FR 44534, Sept. 28, 1993). The
selection of sanctions being made by this action, however, does not
apply to the imposition of sanctions by EPA under section 110(m).
Note that sanction selection for section 110(m) findings will be
made through notice-and-comment rulemaking independent from this
action.
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2. Rationale for Sanction Order
At pages 51274-51275 of the proposal, EPA described the purpose
sanctions can serve. One function is to encourage compliance with the
Act's requirements. A second function of sanctions is to protect and
preserve air quality in areas until the deficiency prompting the
sanctions-initiating finding can be corrected.
In the proposal at page 51275, for three reasons, EPA proposed
that, as a general matter, the offset sanction apply at 18 months
followed by the highway sanction 6 months thereafter. First, EPA stated
that conceptually the offset sanction will, in general, provide a more
certain air quality benefit in the shorter and longer term than the
highway sanction.
Second, the proposal stated the offset sanction provides greater
potential for more significant air quality protection because it
potentially affects all categories of stationary sources and, depending
on the pollutant(s) addressed in the deficiency prompting the finding,
may affect all criteria pollutants (i.e., pollutants for which EPA has
promulgated national ambient air quality standards (NAAQS) such as
carbon monoxide (CO), PM-10 (particles with an aerodynamic diameter
less than or equal to a nominal 10 micrometers), etc.). By contrast,
the highway sanction would affect only mobile sources and pollutants
emitted by mobile sources. (Mobile sources are not, for instance,
regarded as significant emitters of lead and sulfur dioxide
(SO2).)
Third, in addition to air quality considerations, the 2-to-1 offset
sanction is less complicated to implement and administer than the
highway sanction by its very nature and because of the manner in which
EPA intends to effectuate it, as discussed in the proposal at pages
51275-51277.
In addition, EPA noted in the proposal that it does not regard
sanctions as a long-term solution to air quality problems but rather
intends to work with States to resolve deficiencies as rapidly as
possible. Thus, by applying the offset sanction at 18 months, if the
State corrects the deficiency prompting the finding prior to 6 months
thereafter, then the highway sanction would not apply and EPA and other
affected agencies (most notably the Department of Transportation (DOT))
would not be faced with its comparatively greater implementation and
administration burden.
The EPA, therefore, proposed, as a general matter, that the offset
sanction apply before the highway funding sanction following a section
179(a) finding. The EPA recognized, however, that in specific cases the
particular circumstances may lead EPA to conclude that it is more
appropriate for the highway sanction to apply first. Therefore, EPA has
specifically noted that it may go through notice-and-comment rulemaking
for the highway sanction to apply after 18 months and the offset
sanction 6 months thereafter. (The sanction sequence rationale is
further discussed in section II.B.1. of this document.)
3. Sanction Effectuation
At pages 51275-51277 of the proposal, EPA describes how the offset
sanction applies and notes that, under the highway sanction, EPA
imposes a prohibition on approval by the Secretary of DOT of certain
highway projects and grants. Thus, the highway sanction is not directly
implemented by EPA. However, EPA noted that it is in the process of
developing procedures with DOT to provide for the coordinated
implementation of the highway sanction. (Sanction effectuation is
further discussed in section II.B.2 of this document.)
4. Opportunity for Comment
As discussed above, under section 179(a), the Act requires that
sanctions apply if the deficiency that prompted EPA's finding is not
corrected within the timeframes prescribed. The only discretion
afforded EPA is which of the two section 179(b) sanctions applies at 18
months and which 6 months thereafter. The proposal noted that if in the
future EPA makes exceptions to this rule, then in individual notice-
and-comment rulemakings EPA will seek comment on whether the highway
sanction shall apply after 18 months and the offset sanction shall
apply 6 months thereafter given the circumstances at hand.
The proposal also noted that the Administrative Procedure Act (APA)
provides citizens with a means that could be used to petition EPA to
propose that the highway sanction apply first. The APA, 5 U.S.C.
553(e), provides that ``Each agency (including EPA) shall give an
interested person the right to petition for the issuance, amendment, or
repeal of a rule.'' This provision could conceivably be invoked by a
citizen to petition EPA to propose that the highway sanction apply
first with respect to a section 179(a) finding covered by this action.
II. Today's Action
A. Final Action
By this document, EPA is promulgating a rule which provides that
the section 179(b)(2) offset sanction shall apply in an area 18 months
from the date when EPA makes a finding under section 179(a) with regard
to that area if the deficiency prompting the finding is not corrected
within such period. The final rule also provides that the section
179(b)(1) highway sanction shall apply in an area 6 months following
application of the offset sanction in cases where the deficiency has
still not been corrected within that period. The section 179(b)
sanctions shall be sequenced in this manner in all cases unless EPA
proposes the highway sanction to apply first through separate notice-
and-comment rulemaking. This final rule applies to plan or plan
revisions required under part D but does not apply to plans or plan
revisions required under part D found substantially inadequate pursuant
to section 110(k)(5). The proposed rule applied to both types of SIP's;
a discussion of why the latter type of SIP's--commonly known as part D
``SIP calls''--are not covered by the final rule is in section II.C.3.
This rule also has the immediate effect of applying the offset sanction
on September 6, 1994 in affected areas for which the Administrator has
not determined that the 18-month sanction clock has expired by that
date and for which the deficiency prompting the finding has not been
corrected by that date. Specifically, in the notice section of today's
Federal Register, EPA is providing a list of areas that will be
potentially subject to sanctions on September 6, 1994.
Note that the proposed rule did include tables in which EPA
intended to list areas subject to sanctions. In the final rule, EPA has
removed the tables from the rule and decided to provide information on
areas that will be potentially subject to sanctions in the separate
notice mentioned above. (Sections II.C.5. and III.B. below include a
discussion of why the tables were removed from the proposed rule and
why such removal does not carry any substantive significance.)
B. Summary of Comments and Responses
With one exception, this section consists of a brief summary of the
comments received on the proposal and EPA's responses. A more detailed
summary of comments and EPA's responses can be found in the docket in a
document entitled `` Selection of Sequence of Mandatory Sanctions for
Findings Made Pursuant to Section 179 of the Clean Air Act: Detailed
Summary of Comments and EPA's Responses'' (herein referred to as
``Detailed Summary of Comments''). The one exception is for the
sanction clock policy; a detailed summary is provided here, as well as
in the companion document, in order to fully explain in the Federal
Register the changes EPA has made to the final rule in this area and
because of the complexity of this issue.
1. Sanction Sequence and Rationale
a. Summary of Comments. The EPA's proposal for the sequence of
mandatory sanctions and the rationale are provided in sections I.C.1.
and I.C.2. of this document, as well as in the proposal at pages 51274-
5. The EPA received 14 comments on this part of the proposed rule.
Comments on the sanction sequence and rationale can generally be
considered in four groups: (1) Commenters who believe the sequence
should be reversed with the highway sanction applying first, (2)
commenters who believe that EPA should determine sanction order on a
case-by-case basis, (3) commenters who believe that the nature of the
deficiency should be considered in determining sanction sequence, and
(4) commenters who support the sequence as proposed.
Four commenters stated that the sequence in which sanctions apply
should be reversed with the highway sanction generally applying first.
Several of the commenters contend that the highway sanction will be
more effective at compelling State correction of SIP deficiencies
because it would have greater economic impact, and it will be more
effective at addressing political and statewide failures. One commenter
disagrees with EPA's rationale that the offset sanction is more likely
to produce a greater air quality benefit, arguing instead that the
highway sanction better encourages early State compliance. Several
commenters challenge EPA's rationale that the offset sanction
potentially applies to all criteria pollutants; the commenters argue
that the fact that stationary sources emit more types of pollutants is
irrelevant since, in the proposed rule, the offset sanction applies
only to the pollutant(s) in the deficiency. The commenters also raise
an argument that EPA's proposed sequence unfairly burdens industry when
the SIP deficiency is State-caused and that sources will be unfairly
penalized due to project location and timing.
Four commenters believe that EPA should determine sanction order on
a case-by-case basis. These commenters express concern that EPA's
streamlined approach provides insufficient notice of sanctions and
leaves many sanction application details unclear. One commenter argues
that EPA should streamline its own rulemaking processes rather than
deny notice to affected parties. These commenters were also concerned
that general application of the offset sanction would negatively impact
stationary sources. One commenter argues economic competitiveness and
air quality will deteriorate under the offset sanction. Two commenters
were concerned that because of the length of the EPA rulemaking process
stationary sources will bear the brunt of the sanction burden.
Two commenters believe that the nature of the SIP deficiency should
be considered in determining sanction sequence. One commenter believes
that the sanction chosen should be linked to the SIP deficiency and
that EPA must conduct notice-and-comment rulemaking to determine
whether the highway sanction applies first as to specific types of SIP
deficiencies. The commenter is concerned that stationary sources will
bear the brunt of the sanctions burden, and that this result could
stifle economic development.
Three commenters support the proposed sequence of sanctions. One
commenter supports the position that the link between the highway
sanction and air quality benefits is uncertain and another commenter
agrees that the offset sanction provides a quantifiable and more likely
air quality benefit. Another commenter supported EPA's concerns
regarding the administrative and implementation burdens of the highway
sanction as a basis for the offset sanction applying first.
b. Response to Comments. In this final rule, EPA has maintained the
proposed sanction sequence with the offset sanction generally applying
first and the highway sanction second. The EPA continues to believe
this sequence is supported by the proposed rationales that the offset
sanction (compared to the highway sanction) will:
(1) Provide a more certain and direct air quality benefit,
(2) Potentially affect more criteria pollutants, and
(3) Be easier to implement and administer. The EPA disagrees with
the comments that highway sanctions will always more effectively
address SIP-related deficiencies and should, therefore, be generally
applied first. In addition, EPA does believe that the offset sanction
will more likely produce a net air quality benefit. In some cases, the
offset sanction may be more effective at resolving SIP deficiencies.
For example, in an area that is undergoing significant economic growth,
the offset sanction could help bring pressure through stationary
sources wishing to expand or locate in the area and which are faced
with the need for an additional emission offset increment. Furthermore,
offsets achieved by such a sanction would benefit air quality in the
affected area. However, in particular instances, the EPA does not deny
that the offset sanction may not be as effective because, for example,
the area may be economically depressed and not experiencing growth. In
such a case, there may be less air quality benefit and perhaps less
pressure to correct the deficiency in applying the offset sanction
first.
Nonetheless, overall EPA continues to believe that conceptually the
offset sanction (compared to the highway sanction) provides a more
certain, direct air quality benefit in the near and long term and
potentially covers more pollutants. An increased new source review
(NSR) offset ratio necessarily reduces air pollutant emissions as
sources modify or locate in an area under the offset sanction. By
contrast, the highway sanction may not directly reduce overall motor
vehicle emissions in the near term and any air quality benefits
resulting from the highway sanction would be indirect, as application
of the highway sanction would not necessarily prevent motorists from
driving, nor even necessarily result in overall emissions reductions,
at least in the short term. The EPA recognizes that in some instances
it may be more appropriate for the highway sanction to apply to address
a political failure and believes there are adequate mechanisms provided
under the rule to address these instances.9
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\9\ As noted in section I.C.4. of this notice, under the APA
citizens can petition the EPA for rulemaking to propose the highway
sanction to apply first.
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The EPA did not intend to suggest in the proposal that the offset
sanction will apply, in every case, to all criteria pollutants. The
offset sanction will apply only to all criteria pollutants (and their
precursors) for which the area is subject to the section 173 (42 U.S.C.
7503) offset requirement when the SIP deficiency is general in nature.
When the finding is specific to one or more pollutants (and its/their
precursor(s)), the sanction applies only to those pollutants (and/or
precursor(s)). The statement in the proposal intended that the offset
can potentially affect all criteria pollutants, either because of
pollutant-specific findings or general findings. This means that,
regardless of whether the finding is pollutant-specific or general, the
offset sanction will generally apply at least to the pollutants of
direct concern, and sometimes to others as well. On the other hand, the
highway sanction will potentially affect only those pollutants mobile
sources emit significantly and not, for instance, lead or SO2.
However, EPA also realizes that since CO nonattainment area problems
are due primarily to mobile sources, arguably application of the offset
sanction may not address the more significant sources contributing to
CO nonattainment problems. Nonetheless, the offset sanction still
applies to CO for nonattainment NSR purposes and thus will affect
sources subject to nonattainment NSR that wish to locate or expand in a
CO nonattainment area, which would provide some air quality benefit in
the area under the offset sanction. Therefore, EPA continues to believe
that overall the offset sanction is more likely to produce a greater
air quality benefit than the highway sanction because, as sources
locate in an area, direct emission reductions will be achieved through
the 2-to-1 offset for potentially any of the criteria pollutants.
With respect to imposing sanctions on a case-by-case basis, EPA
believes there are two main disadvantages to this approach which have
led EPA to reject it. First, the individual notice-and-comment
rulemakings that would be needed for implementing the sanctions on a
case-by-case basis would impose significant demands on EPA's resources.
These resources could otherwise be spent on activities that more
directly serve the goal of the Act, namely, clean air. Second, the
approach taken in the final rule will provide certainty and sufficient
notification to the parties affected about the details of sanction
application and consistency in the implementation of section 179. These
details are further discussed in section III.A. and in the detailed
summary of comments document.
As to establishing a rule that links the first sanction to the
deficiency on which the sanction is based, EPA believes that approach
fails to consider other important considerations with respect to
sanctions such as which sanction is more likely to yield the greater
air quality benefit. The EPA believes, as a general matter, that the
sanction that results in the greater air quality benefit is a more
important consideration than selecting the sanction sequence based
primarily on the nature of the deficiency.
At the same time, EPA recognizes that in some cases it may be more
appropriate to apply the highway sanction first if the circumstances of
the deficiency warrant and the offset sanction is unlikely to yield
significant air quality benefits. The EPA believes the rule provides
the flexibility to do so. Additionally, EPA cannot predict, across all
sanction findings, which sanction will more effectively address State
inaction and thus could not base the general sanction sequence proposal
on that factor. Fundamentally, EPA has based its sanction sequencing
rationale primarily on the basis of which sanction EPA believes is
likely to yield the greater air quality benefit. It is impossible to
gauge the impact since the universe of areas which will be sanctioned
and for what duration are not known.
The EPA does not disagree that the offset sanction has the
potential to impact industry and that this burden may be greater on
industry than on the transportation sector. However, by including the
offset sanction in the Act, Congress clearly intended that certain
sources, by virtue of the timing and location of their projects, would
be impacted.
2. Sanction Effectuation
A discussion of EPA's approach for effectuating the offset and
highway sanctions is provided in section I.C.3. of this document and at
pages 51275-7 of the proposal. The following is a brief summary of
major comments and EPA's responses.
a. Major Comments. (1) Offset Sanction. Comments on offset sanction
effectuation addressed both the source and pollutant applicability
aspects of EPA's proposal. One commenter objects to the timing of the
applicability of the offset sanction and believes EPA's proposed
approach is contrary to past EPA practice. The commenter argues that
applying the increased offset ratio to all sources that have not
received a permit as of the date the sanction begins would stop many
sources during the permitting process for reasons beyond their control.
The commenter believes that in the past EPA has avoided these problems
by applying tighter NSR requirements only where permit applications
were not complete when the requirements became effective. The commenter
recommends EPA continue with this approach.
Two comments concern the pollutant applicability of the offset
sanction. One commenter objects to the application of the offset
requirement to both ozone precursors (nitrogen oxides (NOX) and
volatile organic compounds (VOC)) even when the deficiency relates only
to one of the pollutants. In support, the commenter notes the broad
nature of section 179 and the manner in which NOX emissions are
treated under the Act vis-a-vis VOC emissions. Regarding PM-10
precursors, the commenter argues that the offset sanction should apply
to precursors only in those areas where EPA has approved a PM-10 SIP
control strategy imposing the offset requirement on PM-10 precursors.
Another commenter believes that regardless of the SIP deficiency
the offset sanction should apply to all criteria pollutants and
precursors. In support, the commenter argues that section 179
references section 173, which applies to all offset requirements in
title I of the Act, and that this reflects a clear Congressional intent
to apply the offset sanction to these pollutants. The commenter also
believes that areas that have not yet received a section 182(f) (42
U.S.C. 7511a(f)) NOX exemption from the section 173 offset
requirements should remain subject to the increased offset ratio for
NOX until EPA grants an exemption.
(2) Highway Sanction. One commenter requests that the rule include
a requirement that EPA notify several government entities of highway
sanctions to focus multi-agency resources on resolving SIP
deficiencies. Another commenter believes that the flow of flexible
funds for certain programs (e.g., congestion mitigation air quality
improvement program) should continue to flow if sanctions apply because
the funds are important for achieving the Act's goals by improving
transit.
b. Response to Comments. (1) Offset Sanction Applicability.
Regarding offset sanction source and pollutant applicability, in the
final rule, EPA has maintained the approaches in the proposal.
On source applicability, EPA believes it is important to maximize
the air quality benefit of the offset sanction by requiring that
sources whose permits are issued after the date the offset sanction
applies comply with a 2-to-1 emission offset requirement. Contrary to
the comment, the source applicability definition is not a departure
from all past EPA practices because historically EPA has not always
used the ``complete application'' definition. (The different source
applicability definitions EPA has used in the past are discussed in the
detailed response to comments document.) Therefore, EPA believes that
past practice does not constrain it from determining today that it is
important to enhance the effectiveness of the offset sanction by
defining source applicability on a permit issuance basis.
Moreover, EPA believes that once the offset sanction applies, it
would be a violation of the sanction for a permit to be issued with an
emission offset of less than 2-to-1. The plain language of section
179(a) and section 179(b)(2) does not provide for nor contemplate any
grace period based on whether a source has submitted a complete
application.
Regarding pollutant applicability of the offset sanction, EPA
believes the proposed applicability is reasonably supported and will
have the potential to effectively protect air quality. Section
179(b)(2) generally references the offset requirements of section 173
and does not restrict EPA's ability to base the applicability of the
sanction on a pollutant or pollutants (and its/their precursor(s)).
Moreover, pollutant-specific application of the offset sanction is
consistent with the requirements of section 179. Section 179(b)(2)'s
language providing that ``the ratio of emission reductions to increased
emissions shall be at least 2 to 1'' is general enough such that EPA
can determine the most reasonable method to apply the sanction. While
section 179(b)(2) references the broader section 173 requirement, EPA
believes it is more reasonable, with one caveat,10 to apply the
offset sanction to the criteria pollutants specifically related to the
SIP deficiency in question. Pollutant-specific application of the
offset sanction will encourage the State to correct its SIP
deficiencies and will provide reductions in emissions of the relevant
pollutant in the interim, without unnecessarily punishing stationary
sources in cases where the State's program for other pollutants is
adequate.
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\1\0Where the SIP deficiency is general, the offset sanction
applies to the criteria pollutant(s) (and its/their precursor(s))
for which the area is required to meet the section 173 NSR
requirements. (This pollutant applicability definition for general
SIP deficiencies is also discussed in section II.C.5. below.)
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Regarding ozone and PM-10 precursors, EPA is maintaining the
approach in the proposal that the sanction applies to ozone and PM-10
precursors. The caveat to that general rule has expanded in one minor
respect with respect to the ozone precursor NOX. As provided in
the proposed rule, sources will need to achieve the increased offset
ratio for VOC and NOX when the finding concerns an ozone
requirement unless EPA approves a section 182(f) demonstration that the
Act's NOX nonattainment NSR requirements should not apply. In
addition, EPA has added the exception that if the area otherwise is not
subject to the section 173 offset requirement for NOX (e.g.,
submarginal ozone nonattainment areas), then sources in that area would
not be subject to that requirement under the offset sanction (see
sections 182(f) and 182(b)(2)). This exception is necessary in light of
the specific language of the offset provision, which ties the offset
sanction specifically to offsets required under section 173. For PM-10
precursors, EPA has retained the caveat for cases in which EPA has made
a section 189(e) (42 U.S.C. 7513a(e)) determination for an area that
PM-10 precursors are not significant.
(2) Highway Sanction Effectuation. The issues raised by the
commenters are not a subject of this rulemaking. The DOT has primary
responsibility for implementing the highway sanction and EPA is
coordinating with DOT on the development of procedures for that
purpose.
3. Sanction Clock Policy
a. Summary of Proposal. In the proposal, EPA described its proposed
policy with respect to the sanctions clock at pages 51272-51273.11
Under that interpretation, once the sanctions clock has started upon
EPA making a finding under section 179(a), in order to stop the clock,
EPA must determine that the State has corrected the deficiency that
prompted the finding. Similarly, to remove section 179(b) sanctions
applied under section 179(a), EPA must determine that the State has
come into compliance by correcting the deficiency that prompted the
finding that resulted in the application of one or both sanctions.
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\1\1For general guidance on EPA's interpretation, at the time of
proposal, of how the sanctions clock functions and what is necessary
to stop it, see the memorandum entitled ``Processing of State
Implementation Plan (SIP) Submittals'' from John Calcagni to Air
Division Directors, Regions I-X, July 9, 1992. A copy of this
memorandum has been placed in the docket for this rulemaking.
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For a finding that a State has failed to submit a SIP or an element
of a SIP, or that the SIP or SIP element submitted fails to meet the
completeness criteria of section 110(k), the proposal provided that EPA
will stop the sanctions clock or remove any sanctions applied upon
EPA's determination that the State has submitted the missing plan or
plan element and that the submittal meets the completeness criteria
established pursuant to section 110(k)(1). Note that EPA's July 9, 1992
SIP processing guidance indicated that if the 18-month sanction clock
elapses during a completeness review, sanctions would not be imposed
unless and until EPA determined the plan to be incomplete.12 In
such a case, the 18-month clock would continue to run so that if EPA
determined the plan to be incomplete after 18-months had elapsed,
sanctions would immediately apply.
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\1\2The policy also provided that, following findings of
nonsubmittal and incompleteness, sanctions which had applied would
continue to apply upon State submittal until the submittal was
determined to be complete.
---------------------------------------------------------------------------
The proposal provided that if EPA disapproves a SIP submission
based on its failure to meet one or more plan elements required by the
Act, to correct the deficiency for purposes of stopping the sanctions
clock or removing the sanction, the State must submit a revised SIP to
EPA and EPA must approve that submittal pursuant to section 110(k). For
a finding that a requirement of an approved plan is not being
implemented, the proposal provided that the sanctions clock would stop
or sanctions would be removed through notice-and-comment rulemaking
determining that the State is implementing the approved plan or part of
a plan.
b. Summary of Comments. Two commenters raise both practical and
legal issues with respect to the proposal's sanction clock policy where
it indicates that EPA must fully approve SIP submittals before
sanctions clocks that are started by disapprovals can be stopped.
The first commenter's practical concern is time. With respect to a
sanctions clock started by a disapproval, because of the length of the
State's regulatory development, approval and adoption processes and
EPA's review period, the interpretation in the proposed rule could
result in sanctions being imposed even if a State had fully adopted and
submitted the corrective rule. Sanctions would remain in effect until
EPA finished its rulemaking approving the corrected rule. The commenter
is concerned that the rule could have an adverse impact solely because
EPA had not had time to act on SIP revisions that are fully approvable.
The commenter further believes that EPA's policy is not supported
by the language of the Act. The commenter argues that the Act elsewhere
explicitly distinguishes between correcting the deficiency and EPA's
process of approving a SIP. Section 110(c)(1)(B) states that the
Administrator must promulgate a Federal implementation plan (FIP)
within two years of SIP disapproval ``* * * unless the state corrects
the deficiency, and the Administrator approves the plan or plan
revision * * *.'' Section 179(a), though, merely provides that
sanctions shall apply ``unless such deficiency has been corrected * *
*'' and does not include the phrase regarding EPA plan approval. The
commenter believes that EPA cannot ignore the difference between
sections 110 and 179 because to do so would constitute ``reading out''
or rendering meaningless the additional phrase of section 110(c)(1)(B).
To support its legal argument, the commenter states that principles
of statutory construction provide that effect must be given to each
word in a statutory provision, and that every effort must be made to
avoid an interpretation which renders other provisions of the same
statute inconsistent, meaningless, or superfluous (Boise Cascade Corp.
v. United States Environmental Protection Agency, 942 F.2d 1427, 1432
(9th Cir. 1991)). The commenter also notes that an agency cannot ignore
or ``read out'' part of a statute (Natural Resources Defense Council v.
United States Environmental Protection Agency, 822 F.2d 104, 113 (D.C.
Cir. 1987)).
As an alternative to EPA's proposal, the commenter recommends that
the sanctions clock policy for disapprovals follow the process in the
proposal for findings of nonsubmittal and incompleteness. The commenter
states that under that alternative policy the clock would be stopped if
a new submittal is received, pending EPA's determination of whether the
deficiency has been corrected. The commenter urges EPA to adopt a
consistent policy to stop sanction clocks in all cases upon receiving a
revised SIP submittal. If EPA's preliminary review indicates the
deficiency has been corrected, then the clock would remain stopped and
EPA would proceed to approve the plan through rulemaking. If the
deficiency was not corrected initially, the clock would restart via a
letter to the State.
A second commenter raised similar concerns with EPA's proposal that
actual approval was needed to stop a sanctions clock started by a
disapproval. According to the commenter, the clock should be suspended
with the submittal to EPA of a completed rulemaking and remain
suspended unless EPA disapproves the SIP. The commenter notes that EPA
has the opportunity to participate in the State's rulemaking process to
ensure the deficiency is corrected.
c. Response to Comments. In response to the comments received, EPA
reevaluated its proposed sanction clock policy and made two
changes.13
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\1\3The EPA is also making a clarification to the sanction clock
policy which is discussed in section II.C.4.
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(1) Overview of Change One. For the reasons stated in subsection
(4) of this section II.B.3.c., EPA does not adopt the exact approach
set forth by the commenters, which would actually stop a sanctions
clock started by a disapproval upon State submittal of a SIP. However,
EPA has determined that it is reasonable to temporarily defer and/or
stay the application of sanctions, as appropriate,14 following SIP
disapprovals, where EPA proposes to fully approve a SIP revision or
proposes to conditionally approve a SIP.15 In addition, EPA has
determined that such deferral and/or staying of sanction application is
reasonable following findings of nonimplementation16 where EPA
proposes to find that a State is implementing its SIP. Simultaneous
with such proposed approval or finding of SIP implementation, EPA will
issue a separate, interim final determination that the State has
corrected the deficiency that prompted the finding that started the
sanctions clock. In all these cases, whether sanctions are deferred
and/or stayed depends on the timing of EPA's proposed action vis-a-vis
the sanction clocks.
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\1\4As discussed below under change two, the proposed sanction
clock policy specifically provided for the deferral of sanctions
during completeness reviews of SIP's submitted following
nonsubmittal and incompleteness findings, but not staying the
sanctions. The concept set forth here for initial disapprovals and
findings of failure to implement is carried forth from this process
developed in the proposal for initial findings of failure to submit
or of incompleteness. In carrying this concept over, EPA believes
that it is logical and necessary that if the effect of sanction
application is to be deferred that sanctions actually applied should
be stayed.
\1\5Note that a proposed partial or limited approval would not
result in the deferral and/or staying of the application of
sanctions because such actions are associated with proposed partial
or limited disapprovals. (For a discussion of partial and limited
approvals/disapprovals, see the memorandum entitled ``Processing of
State Implementation Plan (SIP) Submittals'' from John Calcagni to
Air Division Directors, Regions I-X, July 9, 1992.)
\1\6Although the comments focused on a clock started by a
disapproval, EPA has extended its changes to a clock started by a
finding of failure to implement, finding no reason to treat findings
of failure to implement differently.
---------------------------------------------------------------------------
For initial SIP disapprovals where EPA subsequently fully approves
the revised SIP, sanctions would be deferred and/or stayed unless and
until EPA's proposed full approval was reversed by a proposed
disapproval or final disapproval of the revised SIP in whole or in
part. At that point, the interim final determination that the
deficiency had been corrected would be rescinded or reversed. For
initial SIP disapprovals where EPA subsequently proposes to
conditionally approve the revised SIP, sanctions would be deferred and/
or stayed unless and until EPA reverses its proposed conditional
approval by a proposed disapproval or final disapproval of the revised
SIP in whole or in part. For initial SIP disapprovals where EPA
subsequently conditionally approves the revised SIP in final, sanctions
would be deferred and/or stayed unless and until the conditional
approval converts to a disapproval, or EPA proposes to disapprove in
whole or in part the revised SIP the State submits to fulfill the
commitment in its conditionally-approved SIP.17 When any of these
events occur with respect to a proposed or final conditional approval,
the interim final determination that the deficiency had been corrected
would be rescinded or reversed.
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\1\7On July, 9, 1992, EPA issued a policy that included a
discussion of how conditional approvals convert to disapprovals (see
memorandum entitled ``Processing of State Implementation Plan (SIP)
Submittals'' from John Calcagni to Air Division Directors, Regions
I-X, July 9, 1992). But note that, by this action, EPA is
withdrawing the part of the July 1992 guidance that addresses how
conditional approvals convert to disapprovals. In the near future,
EPA intends to issue additional guidance to address this aspect of
the conditional approval policy.
---------------------------------------------------------------------------
For initial findings of nonimplementation, sanctions would be
deferred and/or stayed unless and until EPA reversed its proposed
finding that the State was implementing its SIP by proposing to find or
finally finding that the State was not implementing its SIP or by
withdrawing its proposed finding that the State was implementing its
SIP. At the point of that subsequent action, the interim final
determination that the State had corrected the deficiency would be
rescinded or reversed. (Exactly how the application of sanctions would
be deferred and/or stayed following SIP disapprovals and
nonimplementation findings is discussed in greater detail below in this
section. Change one is reflected in the rule in Sec. 52.31 (d)(2),
(d)(3), and (d)(4).)
The rationale for the deferring and staying of sanctions in these
cases is that the proposed full or conditional approval or proposed
finding that the State is implementing its SIP would be the basis for
EPA's interim final determination that the State has corrected the
deficiency.18 When EPA issues this proposal, the Agency indicates
that it believes it is more likely than not that the State is complying
with the relevant requirements of the Act. The EPA believes it would be
inequitable for sanctions to apply in situations where EPA has made
such an affirmative finding, even though it is only preliminary.
Moreover, EPA believes it would be unfair to apply sanctions merely
because the clock had expired before EPA is able to take final action
on the submittal in these situations given the length of the rulemaking
process.
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\1\8The EPA's final conditional approval would merely continue
any stay or deferral initiated by EPA's proposed conditional
approval and EPA's simultaneous interim final determination the
deficiency has been corrected.
---------------------------------------------------------------------------
(2) Overview of Change Two. The second change to the rule concerns
the guidance discussed in the preamble to the proposed rule at page
51273, footnote 9, where EPA indicated that if the sanction clock
started by a finding of failure to submit or incompleteness expires
during a completeness review for a subsequent SIP submittal, the
sanction would not apply unless and until EPA found the submittal
incomplete. In this instance, EPA intended that the sanction clock
would not temporarily stop, but instead would continue to run. During
that time, EPA would simply defer the application of the sanction while
it reviewed the SIP submittal to determine whether or not the State had
corrected the deficiency prompting the finding. Thus, if and when EPA
found the SIP incomplete after expiration of the 18-month clock, the
sanction would apply on the date EPA found the plan incomplete.19
---------------------------------------------------------------------------
\1\9 Note that this specific aspect of the proposed sanction
clock policy was not actually reflected in the regulatory language
of the proposed rule but was discussed in the preamble only.
---------------------------------------------------------------------------
After further analysis of this aspect of the sanction clock policy
in the context of addressing comments, EPA has determined that it is
inappropriate to defer and/or stay sanctions when sanction clocks
elapse during review for completeness of plans submitted by States
following findings of nonsubmittal and incompleteness. Therefore, EPA's
rule provides that the temporary deferral and staying of the
application of sanctions occurs only when EPA takes an affirmative
action in which it indicates the Agency's belief that the State has
corrected the deficiency prompting the finding (e.g., that the State
has corrected the finding of nonsubmittal or incompleteness). The EPA
believes this change is necessary since, upon further reflection, EPA
realizes that in such a situation there has been no prior affirmative
action by EPA preliminarily or finally determining that the State has,
in fact, corrected the deficiency. A proposed approval of a revised SIP
following a disapproval constitutes such an action as does a proposed
finding that a State is implementing its SIP following a finding of
nonimplementation. However, mere EPA receipt of a SIP submittal from a
State following a nonsubmittal or incompleteness finding does not
constitute such an action, since EPA takes no affirmative action
preliminarily indicating that the State has submitted a complete SIP,
and there is nothing to give rise to an interim final determination
that the State has corrected the deficiency.
Under this change, sanctions will apply if a sanction clock expires
during a completeness review of a SIP submitted following a
nonsubmittal or incompleteness finding. An example illustrates the
implications of this change. Suppose EPA finds that a State failed to
submit a SIP and then at month 17 the State submits a SIP which the
Agency then starts reviewing for completeness. Month 18 arrives and EPA
is still reviewing the submittal. Under the approach in the proposal,
application of the offset sanction at month 18 would be deferred unless
and until EPA found the plan incomplete. Under the final rule, the
sanction will apply at month 18 and only be lifted once EPA takes
affirmative action finding the plan complete.
For EPA to continue with the proposed policy of deferring sanctions
following nonsubmittal and incompleteness findings, EPA would have to
view mere receipt of a submittal from the State as a preliminary
correction of the deficiency. However, EPA's view is that receipt of a
State plan does not constitute an affirmative EPA determination that
the revised SIP is complete.20 Therefore, it is inappropriate to
defer and/or stay sanctions following nonsubmittal and incompleteness
findings. Furthermore, once EPA has affirmatively determined the plan
is complete, any sanctions clock or any applied sanctions would be
permanently stopped. Therefore, it is inappropriate to defer or stay
sanctions following nonsubmittal and incompleteness findings until EPA
has affirmatively determined the plan is complete.21 The EPA
believes this change, as well as change one, makes the Agency's
approach in deferring and staying the application of sanctions more
consistent with the requirements of the Act.
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\2\0Arguably, EPA could make an interim final determination that
the State's submittal is complete. However, such an interim
determination is impractical and inappropriate for at least two
reasons. One, the short time period provided under the Act for EPA
to make completeness determinations (i.e., 60 days) indicate that
Congress did not intend for EPA (nor contemplate for EPA) to make
preliminary completeness determinations. Two, the nature of the
completeness review does not lend itself to EPA making preliminary
and final determinations. The completeness review is intended as a
straightforward exercise to determine if the SIP revision includes
the basic elements to warrant further review for overall adequacy.
Therefore, there is no room for a preliminary determination; any
review sufficient to make such a preliminary determination would be
sufficient for EPA's final completeness determination.
\2\1A clarification is being made in the final rule which was
not specifically addressed in the proposed rule. Following
nonsubmittal and incompleteness findings, the final rule effectively
provides that sanction clocks can be stopped (and sanctions lifted)
only when EPA makes an affirmative completeness finding, and not
when SIP's become complete by operation of law pursuant to section
110(k)(1)(B) of the Act. This change is further discussed in section
II.C.4. below.
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(3) Scenarios Illustrating First Change. The following five
scenarios illustrate how sanctions can be deferred and/or stayed
following SIP disapprovals and nonimplementation findings.22 They
are provided to clarify change one discussed above. (Section III.A.
discusses how the States and the public will be kept informed of the
status of sanction application.)
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\2\2Note that in the five cases discussed below in the
``scenarios illustrating first change,'' sanctions would apply or
reapply when a conditional approval converts to a disapproval just
as they do when a proposed full approval is reversed to a
disapproval. Note also that, unlike full approvals, the mandatory
sanctions process would not cease upon final conditional approval.
Following a disapproval, as indicated above, if EPA proposes full
approval of the State's revised plan, resulting in the deferral and/
or staying of sanction application, and then takes final, full
approval action, the mandatory sanctions process ceases. However, if
the scenario were one where EPA was conditionally approving the
plan, the final conditional approval does not stop the mandatory
sanction process because it does not represent EPA's final
determination that the SIP is adequate. The EPA will make that
determination when it reviews the revised plan the State commits to
submitting as part of the conditional approval. Ultimately, of
course, if the State fulfills its commitment and EPA approves the
State's plan revision, then any sanction clocks are permanently
stopped and no sanctions are applied or reapplied.
---------------------------------------------------------------------------
First, if, before month 18, EPA proposes to fully or conditionally
approve a plan or proposes to find that a State is implementing its SIP
and that action is reversed 24 or more months after the finding, at
which time the 18-month clock has expired, application of the offset
sanction is deferred until EPA's proposed approval or proposed finding
that the State is implementing its SIP is reversed.23 For both
types of findings, the offset sanction applies on the date EPA reverses
its preliminary finding. Following disapprovals, where EPA proposed to
fully approve the SIP, the reversal would be either a proposed or final
disapproval in whole or in part, whichever occurs. Following
disapprovals, where EPA proposes to or finally conditionally approves
the SIP, the reversal would occur as described in subsection (1) above
of this section II.B.3.c. Following findings of nonimplementation, the
reversal would be either a proposed or final finding, whichever occurs,
that the State was not implementing its SIP. For both disapprovals and
nonimplementation findings, the highway sanction applies 6 months from
the date the offset sanction applies, unless EPA determines within that
period that the State corrected the deficiency prompting the finding.
(This scenario is provided for in the rule in Sec. 52.31 (d)(2)(i),
(d)(3)(i), and (d)(4)(i).)
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\2\3This scenario assumes that EPA proposes approval prior to 18
months and that EPA's positive finding is reversed after 24 months.
In that instance, after 24 months, only the 18-month clock has
expired (and not the 6-month clock) because the 6-month clock is not
triggered until the offset sanction applies. (Section III.A. below
discusses how the section 179 sanction clocks function.) Therefore,
in this scenario, the 6-month clock does not start until EPA
reverses its positive finding after 24 months. The next paragraph
and Figure 1 give an example of how this functions.
---------------------------------------------------------------------------
The following discussion and Figure 1 provide an example of how
this process functions with respect to a sanctions clock started by an
initial disapproval. The process would function in the same manner
where the initial finding was a finding of failure to implement.
Suppose EPA issues a SIP disapproval, initiating the section 179
sanction process. Suppose that the State submits a revised SIP to EPA
which EPA proposes to fully or conditionally approve, prior to 18
months from the date the sanctions clock started. The EPA would
simultaneously issue an interim final rule, making a finding that the
State has corrected the deficiency. In that case, the application of
the offset sanction would be deferred. Now suppose that, at month 25,
EPA reverses its preliminary determination. The reversal would be a
proposal to disapprove the SIP in whole or in part or a final
disapproval of the SIP in whole or in part. At month 25 (or, for final
actions, on the action's effective date), the offset sanction applies.
The highway sanction then applies 6 months later at month 31 (or, for
final actions, shortly thereafter, as appropriate), if within that
period EPA has not determined that the State has corrected the
deficiency.
BILLING CODE 6560-50-P
TR04AU94.000
BILLING CODE 6560-50-C
Second, if EPA proposes (before expiration of the 18-month
sanctions clock) to fully or conditionally approve a plan or proposes
to find that a State is implementing its SIP and that proposal action
is reversed before the 6-month clock expires that would have followed
upon application of the offset sanction, application of the offset
sanction is deferred until such reversal of EPA's proposed finding. The
offset sanction applies on the date EPA's proposal finding is reversed
(or, for final actions, on the action's effective date). The highway
sanction then applies 6 months later if EPA has not determined during
that period that the State has corrected the deficiency. (This scenario
is provided for in the rule at Secs. 52.31 (d)(2)(i), (d)(3)(i) and
(d)(4)(i).)
The following discussion and Figure 2 provide an example of how
this process functions for a finding of nonimplementation.24 The
process would be the same for an initial disapproval. Suppose EPA makes
a finding of nonimplementation, initiating the section 179 sanction
process. Suppose that EPA, prior to the end of the 18 month sanctions
clock, proposes to find that the State is implementing its approved
SIP. At the time of the positive finding, EPA would simultaneously
issue an interim final rule, finding that the State has corrected the
deficiency.
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\2\4This example is given for a finding of failure to implement,
while the other four examples are given for SIP disapprovals, for
illustrative purposes only.
---------------------------------------------------------------------------
In this case, the application of the offset sanction would be
deferred unless and until EPA reverses its proposed positive finding.
Now suppose that EPA, at month 22, reverses its proposed positive
finding by withdrawing its proposed finding that the State is
implementing its SIP. At month 22 (or, for final actions, on the
action's effective date), the offset sanction applies. The highway
sanction then applies 6 months later at month 28 (or, for final
actions, shortly thereafter, as appropriate), if EPA has not determined
that the State has corrected the deficiency.
BILLING CODE 6560-50-P
TR04AU94.001
BILLING CODE 6560-50-C
Third, if EPA proposes (after month 18 but before expiration of the
subsequent 6-month sanctions clock) to fully or conditionally approve a
plan or proposes to find that a State is implementing its SIP,
application of the offset sanction is stayed unless and until EPA's
proposed positive finding is reversed. (This scenario assumes that
EPA's reversal occurs before expiration of the 6-month sanction clock.)
For both types of findings, the offset sanction reapplies on the date
EPA's preliminary positive determination is reversed. The highway
sanction applies 6 months from the date the offset sanction initially
applied, if EPA has not determined that the State has corrected the
deficiency prompting the finding. (This scenario is provided for in the
rule at Sec. 52.31 (d)(2)(ii), (d)(3)(ii) and (d)(4)(ii).)
The following discussion and Figure 3 provide an example of how
this process functions for a SIP disapproval. The process is the same
where EPA has made an initial finding of failure to implement. Suppose
EPA makes a SIP disapproval, initiating the section 179 sanction
process. Suppose that the State submits a revised SIP which EPA, after
18 months but before the subsequent 6-month clock expires, proposes to
fully or conditionally approve. The EPA would simultaneously issue an
interim final rule, finding that the State has corrected the
deficiency. In that case, application of the offset sanction would be
stayed unless and until EPA's proposed approval is reversed. Now
suppose that, at month 22, EPA reverses its proposed approval. The
reversal would be a proposal to disapprove the SIP in whole or in part
or a final disapproval of the SIP in whole or in part. At month 22 (or,
for final actions, on the action's effective date), the offset sanction
reapplies. The highway sanction then applies at month 24, 6 months
after the offset sanction originally applied, unless EPA determines
that the State corrected the deficiency within that period.
BILLING CODE 6560-50-P
TR04AU94.002
BILLING CODE 6560-50-C
Fourth, if EPA proposes (after month 18, but before the subsequent
6-month sanctions clock expires) to fully or conditionally approve a
plan or proposes to find that the State is implementing its SIP, and
EPA does not take action reversing such positive action until after the
subsequent 6-month clock expires, application of the offset sanction is
stayed and application of the highway sanction is deferred unless and
until EPA's proposed positive finding is reversed. The offset sanction
reapplies and the highway sanction applies on the date EPA's
preliminary determination is reversed. (This scenario is provided for
in the rule at Secs. 52.31(d)(2)(ii), (d)(3)(ii) and (d)(4)(ii).)
The following discussion and Figure 4 provide an example of how
this process functions for a SIP disapproval. The process functions in
the same way for an initial finding of failure to implement. Suppose
EPA makes a SIP disapproval, initiating the section 179 sanction
process. Suppose that EPA, after 18 months (but before the subsequent
6-month clock expires), proposes to fully or conditionally approve the
SIP. The EPA would simultaneously issue an interim final rule, finding
that the State has corrected the deficiency. In that case, application
of the offset sanction would be stayed and application of the highway
sanction deferred at the time EPA makes its positive finding. Now
suppose that, at month 26, EPA reverses its positive finding. The
reversal would be a proposal to disapprove the SIP in whole or in part
or a final disapproval of the SIP in whole or in part. At month 26 (or,
for final actions, on the action's effective date), the offset sanction
reapplies and the highway sanction applies.
BILLING CODE 6560-50-P
TR04AU94.003
BILLING CODE 6560-50-C
Lastly, the rule also provides that, following a SIP disapproval or
a finding of failure to implement, if EPA proposes after both sanctions
clocks have expired to fully or conditionally approve a plan or
proposes to find that a State is implementing its SIP, application of
the offset and highway sanctions is stayed unless and until EPA's
proposed positive finding is reversed. The offset and highway sanctions
reapply on the date EPA's preliminary determination is reversed. (This
scenario is provided for in the rule at Sec. 52.31 (d)(2)(iii),
(d)(3)(iii) and (d)(4)(iii).)
The following discussion and Figure 5 provide an example of how
this process functions for a SIP disapproval. The process functions the
same for an initial finding of failure to implement. Suppose EPA
disapproves a SIP, initiating the section 179 sanction process. Suppose
that the State submits a revised SIP which EPA, at 25 months, proposes
to fully or conditionally approve. The EPA would simultaneously issue
an interim final rule, finding that the State has corrected the
deficiency. In that case, the application of both sanctions would be
stayed on the date of the positive action. Now suppose that, at month
30, EPA reverses its proposed positive finding. The reversal would be a
proposal to disapprove the SIP in whole or in part or a final
disapproval of the SIP in whole or in part. At month 30 (or, for final
actions, on the action's effective date), both sanctions reapply.
BILLING CODE 6560-50-P
TR04AU94.004
BILLING CODE 6560-50-C
In all cases following disapprovals and findings of
nonimplementation, the sanctions clock stops permanently and any
sanctions applied are permanently lifted only when EPA completes final
notice-and-comment rulemaking action fully approving the SIP revision
or finding that the State is implementing its SIP.25
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\2\5 These actions permanently stop the sanctions clock and
permanently remove sanctions because such actions represent EPA's
final determination that the State has met the requirements of the
Act and thus has corrected the deficiency that initiated the
sanctions process.
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(4) Legal Basis and Rationale for Change One. The EPA believes that
its policy clarification is consistent with the statutory language of
section 179 and that it is a reasonable interpretation of that
language. The EPA believes this policy is consistent with the legal
requirements of section 179 of the Act and section 553 of the APA.
Section 179(a) of the Act requires sanctions to apply 18 months after a
deficiency finding ``unless such deficiency has been corrected * * *,''
and requires that sanctions apply ``until the Administrator determines
that the State has come into compliance * * *.'' The EPA interprets
this language to require that EPA make a determination that the State
has corrected the deficiency before permanently stopping the sanctions
clock or lifting sanctions. In the case of a clock started by a
disapproval, such a determination would be represented by a final, full
approval. However, EPA does not believe that section 179(a) requires a
final approval in order to defer or stay the application of sanctions,
since the statutory language speaks generally in terms of
``correcting'' deficiencies and ``determining'' compliance without
explicitly linking those events to final approval actions.
Regarding SIP disapprovals, EPA recognizes the first commenter's
concern over timing and believes that this policy clarification
eliminates the potential for sanctions applying in an area when EPA has
a submittal in house for which EPA has determined that it is more
likely than not that the State has corrected the deficiency that
prompted the original disapproval. Extending the approach for
disapprovals to findings of nonimplementation also serves to avoid
applying sanctions when EPA has proposed that a State is implementing
its approved SIP.
Consequently, EPA believes it is consistent with section 179 to
treat proposed full approvals following disapprovals26 as the
basis for deferring or staying the application of sanctions, while not
permanently stopping the sanctions clock or permanently lifting
sanctions. The EPA also believes it is consistent with section 179 for
proposed and final conditional approvals to be the basis for deferring
and/or staying the application of sanctions.27 The proposed full
or conditional approval then forms the basis for EPA to issue an
interim final determination, which EPA would publish in a separate
action in the Federal Register contemporaneously with the proposed
approval notice, that the State had corrected the deficiency and come
into compliance with the requirements of the Act.28 While this
interim final determination would have the effect of deferring or
staying sanctions, it would not have the final effect of either
approving the submitted SIP revision, or permanently stopping a
sanctions clock or permanently lifting sanctions. The interim final
determination would be subject to notice and comment and would have
effect only until either EPA made a final determination that the
deficiency was corrected at the time of a final approval of the SIP
revision, or EPA reversed its interim final determination at the time
EPA reverses its proposed full or conditional approval. If an EPA
proposed full approval were reversed by a proposed disapproval, the
Agency would publish a separate action in the Federal Register
withdrawing the interim final determination (that the State has
corrected the deficiency) contemporaneously with the notice of the
proposed disapproval. If an EPA proposed approval were reversed by a
final disapproval, EPA would take final action finding that the
deficiency has not been corrected in the final disapproval action. For
an EPA proposed conditional approval, a reversal could occur by a
proposed or final disapproval. For an EPA final conditional approval, a
reversal would occur when the conditional approval converts to a
disapproval through the State's failing to submit a complete revised
SIP to which it committed or by EPA's disapproval of the State's
revised SIP.
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\2\6The following discussion on EPA's legal rationale and basis
for staying and deferring sanctions only explicitly addresses SIP
disapprovals but applies equally to findings of nonimplementation.
\2\7In NRDC v. EPA, No. 92-1535, slip. op. at 18 (D.C. Cir. May
6, 1994), the Court struck down EPA's policy of conditionally
approving committal SIP's (i.e., SIP's consisting solely of a
commitment). However, the Court provided that ``the conditional
approval mechanism was intended to provide EPA with an alternative
to disapproving substantive, but not entirely satisfactory, SIP's *
* *.'' The EPA will issue conditional approvals consistent with that
Court's opinion.
\2\8Since a final conditional approval has the effect of
continuing the staying and/or deferring of sanctions, upon final
conditional approval, EPA would not publish a second interim final
determination that the State has corrected the deficiency (see
footnote 18).
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The EPA believes that this approach is similar to the method courts
traditionally use to grant interim equitable relief. Courts may grant
preliminary injunctions to parties that the court determines are likely
to succeed on the merits of their case, where there is no adequate
legal remedy available, and where the public interest would not be
served in not granting the injunction. Such injunctions may typically
last until the court has finally decided the merits of the case, either
for or against the party granted the injunction. Deferring or staying
the application of sanctions upon proposed approval of a SIP revision
is analogous, in that an EPA proposed approval represents EPA's view
that it is more likely than not that the State has corrected the
disapproval deficiency and come into compliance with the requirements
of the Act. Also, as SIP approval actions generally require notice-and-
comment rulemaking before they can become final, if a sanctions clock
is due to expire after proposed approval but before the Agency can
practicably fulfill its notice and comment duties and grant final
approval, there is no other ``remedy'' available to relieve the State
from the punishment of sanctions, even though it is probable that the
State has corrected the deficiency.
Moreover, EPA does not believe, following proposed approvals, that
it would be in the public interest for sanctions to remain in effect,
as at that point the Agency believes that there is nothing further that
the State need do to come into compliance, and thus there is no further
need for the deterrent effect of sanctions. The EPA also believes that
in these situations it would be especially unfair to States to begin
the application of sanctions where the only reason the sanctions clock
has not permanently stopped is that the Agency cannot complete its
rulemaking process to finally approve the SIP before sanctions apply.
Finally, EPA notes that like the judicial preliminary injunction model,
this approach provides that upon reversal of EPA's preliminary
assessment that the SIP revision is approvable, and that, therefore,
the deficiency has not been corrected, sanctions would be in effect as
if the interim final determination that the State had corrected the
deficiency had never been made.
The EPA also believes that this approach is consistent with the
requirements of section 553 of the APA. Generally, under the APA,
agency rulemaking affecting the rights of individuals must comply with
certain minimum procedural requirements, including publishing a notice
of proposed rulemaking in the Federal Register and providing an
opportunity for the public to submit written comments on the proposal,
before the rulemaking can have final effect. The EPA will not be
providing an opportunity for public comment before those deferrals or
stays are effective. Consequently, EPA's approach may appear to
conflict with the requirements of the APA. However, EPA will provide an
opportunity to comment on the proposed approval that was the basis for
the interim final decision and will provide an opportunity, after the
fact, for the public to comment on the interim final decision. Thus, an
opportunity for comment will be provided before any sanctions clock is
permanently stopped or any already applied sanctions are permanently
lifted. In the context of the SIP approval rulemaking, and with respect
to the interim final rule, the public would have an opportunity to
comment on the appropriateness of EPA's interim determination that the
State had corrected the deficiency and on whether the State should
remain subject to sanctions, even though the deferral or stay is
already effective.
The basis for allowing such an interim final action stems from
section 553(b)(B) of the APA which provides that the notice and
opportunity for comment requirements do not apply when the Agency finds
that those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' In the case of sanctions, EPA believes it would
be both impracticable and contrary to the public interest to have to
propose and provide an opportunity to comment before any relief is
provided from the effect of sanctions. First, until EPA proposes
approval of a SIP revision, the Agency's first step in determining
whether a State's SIP submittal meets the requirements of the Act, EPA
is not in a position to propose that the State has corrected the
deficiency; thus, there is no point in the process before proposed
approval at which EPA could propose that the State has corrected the
deficiency and provide an opportunity for meaningful public comment on
the issue. Second, as discussed above, EPA believes it would be unfair
to the State and its citizens, and thus not in the public interest, for
sanctions to remain in effect following an EPA proposed approval, since
at that point the Agency has completed a thorough evaluation of the
State's SIP revision and publicly stated its belief that the submittal
is approvable and that the State has corrected the deficiency, but due
to the procedural requirements of the Act the Agency has not yet been
able to issue a final approval. The EPA believes sanctions coming into
effect following proposed approvals would unnecessarily risk potential
dislocation in government programs and the marketplace. The EPA also
believes that the risk of an inappropriate deferral or stay would be
comparatively small, given the limited scope and duration deferrals and
stays would have and given the rule's mechanism for making sanctions
effective upon reversal of its initial determination that the State had
corrected the deficiency. Consequently, EPA believes that the ``good
cause'' exception under the APA allows the Agency to dispense with
notice and comment procedures before deferrals and stays of sanctions
become effective, and that it is thus appropriate to respond to the
commenters with the approach adopted in today's rule.
(5) Responses to Other Comments. The EPA does not support the
alternative proposed by the commenters that EPA temporarily or
permanently stop the sanction clocks started by disapprovals upon EPA
receipt of a submittal that the State believes corrects the deficiency.
The EPA cannot determine whether the State has corrected the
deficiency until it reviews the plan for adequacy. If the sanction
clock were temporarily or permanently stopped upon mere submission of a
plan following any section 179(a) disapproval (or finding of
nonimplementation) and not started again until subsequent disapproval,
mandatory sanctions would then take that much longer to have the effect
of encouraging State compliance and protecting air quality in the area.
Temporarily or permanently stopping the clock upon mere submission of a
plan could result in abuse of the system by States knowingly submitting
SIP's that EPA cannot approve in order to defer the application of
sanctions. By allowing such abuses, such an approach would also be
unfair to States which, despite a good faith effort at developing a
corrective rule, are unable to avert sanctions following disapproval.
In sum, under the revised policy, the underlying requirement for
stopping the sanction clock is maintained: EPA must take final action
to fully approve a submitted SIP revision or find that a State is
implementing its SIP in order to permanently stop the sanctions clock
and permanently lift any sanctions. As discussed above, EPA will defer
and/or stay the application of sanctions when it proposes a positive
finding that forms the basis for EPA to determine through an interim
final action that the deficiency has been corrected; but in these cases
EPA will not temporarily or permanently stop the underlying clock.
The EPA also believes that its interpretation is legally supported
under the Act. Generally, section 179 states that, ``* * * unless such
deficiency has been corrected within 18 months after the finding,
disapproval, or determination * * *'' one of the sanctions shall apply,
as selected by the Administrator. Section 110(c)(1) of the Act requires
EPA to promulgate a FIP at any time within 2 years after the
Administrator finds that a State has not made a required submission or
has made an incomplete submission, or disapproves a plan submission,
``unless the State corrects the deficiency, and the Administrator
approves the plan or plan revision, before the Administrator
promulgates such Federal implementation plan.''
The running of the sanctions clock is tied to the particular
deficiency at issue. For example, if the clock was triggered by a
finding of failure to submit or a finding of incompleteness, the clock
will stop if EPA determines that the State submits a complete plan; it
is not also necessary for the plan to be actually approved to stop the
clock. If the complete submission is later disapproved, then a new 18-
month clock will begin to run, as provided in section 179(a), and will
continue to run until that deficiency is corrected with an EPA approved
plan. For the FIP clock, in addition to the deficiency being corrected,
section 110(c)(1) includes an additional criterion--EPA SIP approval--
that must be satisfied for EPA not to have to promulgate a FIP within 2
years of a finding of nonsubmittal or incompleteness. The explicit
reference to an approval as an added prerequisite--beyond ``correcting
the deficiency''-- makes clear that, in the context of failures to
submit or submission of incomplete plans, plan approval is quite
distinct from ``correcting the deficiency.'' Therefore, the
Administrator's approval is distinct from ``correcting the deficiency''
for failure to submit and incompleteness. Therefore, the fact that the
``SIP approval'' language is redundant for disapprovals, where SIP
approval is part of correcting the deficiency, does not render that
clause superfluous.
This interpretation of the section 179 sanction clock does not
``read out'' the section 110(c) requirement, but rather merely
illustrates that following disapprovals what is necessary to stop the
sanction and FIP clocks is the same: EPA approval of the SIP. (See
EPA's July 9, 1992 SIP processing guidance, page 10.) However, as
discussed above, this is not the case for sanction clocks started by a
finding of failure to submit or a finding of incompleteness. There, the
State can correct the deficiency merely by submitting a SIP EPA finds
complete. This would stop the sanctions clock. In these situations, the
additional step of EPA approval is required to stop the FIP clock,
under the plain language of section 110(c)(1).
Therefore, EPA's interpretation of section 179(a) does not render
the provisions of section 110(c)(1)(B) inconsistent, meaningless or
superfluous. The Boise Cascade case cited by the commenter addressed a
situation in which one word, ``promulgation,'' was argued by
petitioners to have the same meaning as another, ``approval'' (942 F.2d
at 1342). The court rejected that argument because failing to
distinguish between the terms would have resulted either in a conflict
between two subsections of the Clean Water Act or made superfluous the
use of ``approval'' in another subsection (Id). Here, EPA's
interpretation of what is required to correct a deficiency under
section 179(a) does not conflict with the requirement for EPA approval
to stop a FIP clock. It logically follows that approval is implicitly
required to correct a deficiency based on a disapproval, since a State
cannot be considered to have remedied the underlying flaw that led to a
disapproval until EPA has determined that the State's attempt to do so
is approvable.29 The explicit language in section 110(c)(1)(B) is
necessary because FIP clocks also may be started by a finding of
failure to submit or SIP disapproval. Congress was explicitly providing
that in both these instances EPA approval is required to stop a FIP
clock. Therefore, the reference in section 110(c) to the need for EPA
approval still has meaning when the initial failure was a failure to
submit or an incompleteness finding. Thus, EPA's interpretation does
not render superfluous the explicit language in section 110(c)(1)(B).
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\2\9As discussed above, EPA believes it is appropriate at the
point of proposed approval to contemporaneously issue an interim
final determination that the State has corrected the deficiency for
purposes of deferring or staying the application of any sanctions
that are due. Again, this interim final determination would be
subject to the condition that EPA grant final approval to the SIP,
and would not have any final effect on the actual approval action.
If the subsequent condition is not met (i.e., if EPA's proposed
approval is reversed by a proposed or final disapproval), from that
point on the interim final determination would have no effect and
any sanctions required to be applied would be applied.
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Moreover, EPA's interpretation does not ignore or ``read out'' of
the statute section 110(c)(1)(B) (NRDC v. USEPA, 822 F.2d at 113). That
case addressed a petitioner's attempt to ignore a specific condition of
the Clean Water Act's applicability provision, which the court viewed
as an unacceptable method of construing statutes (Id). Here, rather
than disregarding the requirement that EPA approval is necessary to
stop a FIP clock, EPA is interpreting section 179(a) to implicitly
require that same element to be satisfied before a sanctions clock
started for a disapproval can be stopped. This in no way ignores the
section 110(c)(1)(B) language for purposes of the FIP clock, nor
represents an attempt to interpret the Act such that the language of
section 110(c)(1)(B) does not have full effect. As stated above, the
reference to EPA approval in that section still has meaning where the
clock was started by a finding of failure to submit or incompleteness.
(5) Additional Comments Regarding the Sanctions Clock.
(a) Comments. Another commenter believes that the final rule should
provide for resetting the sanctions clock whenever a State that had
failed to submit a timely SIP submits one, even if the SIP is later
found to be incomplete. The commenter notes that section 179 provides
for an 18-month period following one of four different types of
findings of inadequate State action before sanctions can be imposed.
The commenter argues that EPA illegally shortens this period by
combining into one, two types of inadequate action under the same 18-
month period, and that the final rule should provide for separate
clocks for each type of inadequate action.
Another commenter is concerned that States may be tempted to view
the 18-month sanctions clock as additional time in which to meet a
deadline. The commenter believes that Congress did not intend that
States that failed to submit a timely SIP and later submitted an
inadequate SIP would have more time before facing sanctions than States
that submitted a complete but unapprovable SIP on time. While the
commenter agrees with EPA's policy that incomplete submittals cannot
temporarily stop the sanctions clock, the commenter believes the
overall policy rewards delay in completing programs. The commenter
believes that the final rule should state that only EPA approval of a
final rule stops the clock.
(b) Responses. As noted above, section 179 indicates that sanctions
apply within certain timeframes, unless EPA determines that the
deficiency that prompted the finding starting the sanctions clock has
been corrected within those timeframes. Therefore, EPA believes the Act
requires that sanction clocks stop for findings of failure to submit
and findings of incompleteness when EPA finds a subsequently submitted
SIP complete (i.e., finds that the deficiency has been corrected).
The EPA disagrees that a clock started by a finding of failure to
submit should stop based on a mere submittal that may or may not be
complete. The Act provides under section 110(k)(1)(C) that where the
Administrator determines that a plan is incomplete the State is treated
as not having made the submission. Based on this, EPA believes that an
affirmative finding that a SIP is complete is necessary to cure a
nonsubmittal or incompleteness deficiency and stop sanction clocks
initiated by such findings.30 This interpretation is further
supported by the fact that a finding of failure to submit and
incompleteness are provided for under the same provision of sections
179(a)(1) and 179(a)(3)(A).
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\3\0As noted above in this section, this change is reflected in
the rule and is discussed in section II.C.4. of this document.
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On the other hand, EPA does not believe that it is appropriate to
allow only EPA approval to permanently stop the sanction clock for all
types of findings.31 It is conceivable that a State could abuse
the system under the process established in the final rule by
submitting a complete but inadequate SIP at 17 months that stops a
sanctions clock that started based on a finding of failure to submit or
a finding of incompleteness. Such an area could face sanctions later
than the State that submitted a timely, complete but unapprovable SIP.
However, as discussed above, EPA believes the reference to ``such
deficiency'' immediately following the list of the types of deficiency
findings in section 179(a) indicates that sanctions clocks will stop if
and when the State corrects the specific deficiency that prompted the
finding. Consequently, the running and stopping of the clock is tied to
the particular deficiency at issue, and EPA believes that it lacks the
statutory authority to apply mandatory sanctions under section 179 upon
those States that initially failed to make a submission (through
failure to submit or by virtue of an incomplete submission) but which
have subsequently submitted a complete plan. The submission of a
complete plan is sufficient to stop a clock started for a failure to
submit any or a complete plan because at that point the State has
corrected the specific earlier deficiency of not having submitted a
complete plan. Following this correction, the plain language of section
179 does not allow application of mandatory sanctions due to the
original deficiency, but if the complete submission is later
disapproved, a new sanction clock will begin to run and will continue
to run until that specific deficiency is corrected.32 The EPA
believes that overall its policy is consistent with the language of
section 179 and rational in that it recognizes that what the State must
do to correct a deficiency relates directly to the nature of the
finding, and that overall this policy will encourage compliance with
Act requirements.
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\3\1As noted above, the commenter indicates that it agrees with
EPA's proposed policy that incomplete submittals cannot temporarily
stop the sanctions clock. The EPA's proposed policy did not state
that incomplete submittals cannot temporarily stop the sanctions
clock. Rather, EPA's proposed policy stated that incomplete
submittals cannot permanently stop the sanctions clock initiated by
a finding of failure to submit or incompleteness. Thus, in
responding to the comment permanently stop has been substituted for
temporarily stop.
\3\2Furthermore, it appears that the approach articulated by
this commenter (i.e., that sanctions clocks and FIP clocks are both
stopped by EPA approval of a revised SIP) would present the problems
recognized in reading out of section 110(c)(1) the clause ``the
Administrator approves the plan or plan revision'' (Boise Cascade,
942 F.2d at 1432, and NRDC v. EPA, 822 F.2d at 113).
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Finally, the Act contains due dates by which the State is required
to submit certain SIP's. The EPA does not believe that Congress
established the 18-month period before mandatory sanctions must apply
as a grace period in which States have a legal right under section 179
to submit SIP's after the relevant statutory due date. In fact, EPA
interprets section 110(m) of the Act as providing EPA with the
authority to ``* * * apply any of the sanctions listed in section
179(b) at any time (or at any time after) the Administrator makes a
finding, disapproval, or determination under * * * section 179(a) * *
*.'' Therefore, EPA is not precluded from taking more aggressive action
than required under section 179 when States fail to correct deficient
plans.
4. Other Areas of Comment
This section addresses the remaining areas of the proposal where
comment was received.
a. Lack of Good Faith Determination. Under section 179(a), both the
offset and highway sanctions shall apply after 18 months if the
Administrator finds a lack of good faith on the part of the State. In
the proposal at page 51274, EPA indicated that any finding of a lack of
good faith EPA makes under section 179(a) will be subject to notice-
and-comment rulemaking.
One commenter believes that the final rule should define a ``lack
of good faith'' and require application of both sanctions as a default
where it exists. The commenter believes that some situations may
require fact specific judgment, while others are so extreme that they
presumptively prove the State has decided not to make a good faith
effort at complying. The commenter believes that EPA need not undertake
notice-and-comment rulemaking with respect to findings of a lack of
good faith. Another commenter believes that the phrase ``if the
Administrator finds a lack of good faith on the part of the State'' is
subjective and ambiguous and needs defining.
In response to the comments, EPA still believes findings of a lack
of good faith under section 179(a) must be subject to notice-and-
comment since it is a discretionary action which requires exercise of a
substantial degree of judgment on EPA's part. The public should have an
opportunity to comment on the basis for these actions. Further, EPA
does not yet have a policy on how to further define the Act's language,
or when and where it plans to make findings of a lack of good faith
other than the case-by-case approach described above. The notice-and-
comment rulemaking will provide an opportunity for the public to
comment on EPA's interpretation of a lack of good faith in each case-
specific circumstance.
b. Sanction Timing. The proposal at page 51272 indicated that since
section 179(a) provides for automatic sanction application once EPA has
made the selection, under this sanction sequence rule sanctions will
apply automatically in the order prescribed herein in all instances in
which sanctions are applied following findings under section 179(a)
(1)-(4) that EPA has already made or that EPA will make in the future,
except when EPA takes a separate action to select a different sequence
of sanction application. However, the proposal indicated that where the
sanction clock expires for any findings before this action is final and
effective and EPA has not taken independent sanction selection action,
EPA interprets section 179(a) to provide that sanctions shall not apply
until EPA makes the sanction selection through notice-and-comment
rulemaking, such as this action.
At page 51272 of the proposal EPA also indicated that EPA intends
to notify States of the automatic sanctions by letter and publish a
document in the Federal Register in which EPA amends the language of
the rule to indicate areas subject to the applicable sanctions. The
proposal provided that if removal of sanctions is warranted, EPA would
notify the State that sanctions are being removed and amend the rule to
reflect that.
One commenter believes that EPA's interpretation of section 179 is
incorrect and that section 179 unambiguously requires sanction
application within 18 months of a finding. The commenter believes that
Congress did not condition EPA's mandatory sanction application duty on
completion of notice-and-comment rulemaking.
The plain reading of section 179(a) is that sanctions, ``as
selected by the Administrator,'' apply within certain prescribed
timeframes. The section does not provide any guidance to EPA on
sanction application sequence. Given this wide discretion, EPA believes
that it is necessary for sanction selection to be subject to notice-
and-comment in order to provide for public comment. The EPA interprets
the phrase ``as selected by the Administrator'' as words of condition
that must be met before mandatory sanctions apply. Indeed, EPA is
undertaking this rulemaking to satisfy the conditional duty so that
sanctions may apply automatically when sanctions clocks expire.
The EPA is also conducting this rulemaking to eliminate the future
need (except to reverse the sanction sequence) for individual
rulemakings for every finding with respect to part D requirements. The
EPA believes in the long run this action will facilitate smooth
application of sanctions to encourage State compliance and protect air
quality.
c. Notice and Comment for Nonsubmittal and Incompleteness Findings.
In the proposal at page 51272, EPA's view was that notice-and-comment
is not required for findings of failure to submit because of
insufficient time provided by the statute. Since EPA has less than 60
days to determine whether a State's submittal is complete, and it is
impossible to provide notice-and-comment in 60 days, EPA believes that
Congress clearly intended that EPA should not go through notice-and-
comment rulemaking prior to making findings of failure to submit.
Additionally, EPA argued that even if EPA's findings of failure to
submit were subject to APA rulemaking procedures, EPA believed that the
good cause exception to the rulemaking requirement applies (APA section
553(b)(B)). Section 553(b)(B)of the APA provides that EPA need not
provide notice and an opportunity for comment if EPA determines that
notice and comment are ``impracticable, unnecessary, or contrary to the
public interest.'' The EPA argued that notice and comment for findings
of failure to submit does not require any judgment on the part of EPA
and, therefore, is unnecessary.
One commenter states that under the APA, burdens such as sanctions
cannot be imposed without notice-and-comment. The commenter argues that
EPA provides no defense of its denial of public comment for findings of
incompleteness and cannot defend such denial for findings of
nonsubmittal and incompleteness. The commenter further argues the
judgment of whether a SIP meets the SIP completeness criteria is often
debatable and discretionary. Therefore, the commenter argues, the
public should be able to comment.
Another commenter believes that EPA's proposal contradicts the
spirit and letter of the notice-and-comment provisions in the Act. The
commenter argues the proposal is contradictory on when it allows for
public comment in some instances but not others.
In response to the comments, EPA maintains that notice and comment
is not necessary for findings of failure to submit and incompleteness.
The 60 days the Act provides EPA to determine whether a State submittal
is complete does not provide sufficient time to conduct notice-and-
comment rulemaking prior to making findings of failure to submit or
findings of incompleteness. The EPA continues to believe that the
impossibility of conducting notice-and-comment rulemaking within the 60
days provided for completeness decisions is itself compelling evidence
that Congress did not intend such rulemaking. Additionally, EPA does
not believe that notice and comment are necessary for findings of
incompleteness because section 110(k)(1)(B) does not specifically
require it. By enacting section 110(k)(1) on completeness, Congress was
codifying an EPA practice created in late 1989 in which EPA did not
provide notice-and-comment rulemaking before making incompleteness
findings.33 By codifying that practice and by not specifically
requiring anything more than the process EPA already established,
Congress appears to have adopted EPA's established process of making
completeness determinations by letter. Moreover, EPA does not believe
that the completeness determination is highly discretionary, but
instead is a straightforward exercise to assure a State's submittal has
all the basic elements to warrant further review for overall adequacy.
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\3\3Note that in promulgating the completeness criteria, EPA
noted that the purpose of the completeness procedure is to ``keep
incomplete packages out of the more extensive review system (i.e.,
rulemaking for approval), thereby saving both EPA and the State
valuable time'' (54 FR 2138, 2139 (January 19, 1989)). Therefore,
requiring rulemaking action to determine whether a SIP submittal is
complete would defeat the purpose of the completeness criteria,
which is to allow for a quick rejection of those submittals that are
``essentially unreviewable'' (Id).
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Regarding the APA, EPA continues to believe that even if EPA's
findings of failure to submit and incompleteness were subject to
rulemaking procedures under the APA, the good cause exception applies
to such findings for the reasons discussed above. It would not be
practicable to subject every completeness review to notice and comment
because of the limited time afforded by the statute. It would also not
be in the public's interest because it would impose a tremendous burden
on the Agency and divert resources from more important substantive SIP
reviews.
Regarding the consistency comment, EPA believes that it is adhering
to the notice-and-comment provisions of the amended Act and the APA.
Where it is appropriate, because the determination requires EPA
judgment, EPA provides for notice and comment (i.e., for SIP
disapprovals or findings of nonimplementation). Additionally, as EPA
has done via this action, when EPA makes a sanction selection notice
and comment are also provided. On the other hand, as discussed above,
in other cases sufficient time does not exist to provide for notice and
comment and the determinations themselves require little, if any,
judgment. Finally, as discussed in section II.C.3., the final rule does
not cover findings of substantial inadequacy under section 110(k)(5)
for part D SIP's (so-called SIP calls), which were covered by the
proposed rule, because of concerns about adequate notice and comment
before sanctions are applied for State failure to respond to a SIP
call. The EPA intends to develop an alternative approach for applying
mandatory sanctions for State failure to respond to SIP calls that
provides for notice and comment.
d. PM-10 Waivers. The proposal did not address the PM-10 waiver
provisions in section 188(f) of the Act. The commenter expresses a
frustration with the definition of PM-10 ``significance'' and argues
that in the West, PM-10 levels above the standard are caused
predominately by fugitive dust and mobile sources. Therefore, the
commenter believes, applying 2-to-1 offsets to industrial sources will
have a negligible effect on PM-10 24-hour concentrations.
A July 1992 draft addendum to the General Preamble (57 FR 31477,
July 16, 1992) addresses several waiver policy issues, including
significance levels. The EPA believes the comment period for that
policy, rather than this action selecting sanctions, is the appropriate
forum for comments on that issue. The EPA recognizes that in some
nonattainment areas industrial sources may be less significant
contributors. In those cases, EPA may decide to apply the highway
sanction first, which this rule provides flexibility to do.
C. Summary of Changes in Rule
1. Section 52.31(a)--Purpose
Section 52.31(a) sets forth the purpose of this rulemaking, which
is to establish the sequence of sanctions required to apply under
section 179(a). The substance of this provision was not changed from
the proposed rule.
2. Section 52.31(b)--Definitions
Section 52.31(b) sets forth the definitions applicable under 40 CFR
52.31. The definitions of ``Act'' and ``1990 Amendments'' are not
substantively changed. However, the citations for these two definitions
were inadvertently switched and they now correctly provide that the Act
is located at 42 U.S.C. et seq. and the 1990 Amendments were set forth
in Public Law 101-549.
In addition, several definitions were added. Since the regulation
provides that the offset sanction only applies to the pollutant(s) that
the finding concerns and its precursors, EPA has added a definition of
``precursors.'' The EPA has also added a definition of ``ozone
precursors'' which specifically identifies the two ozone precursors--
VOC and NOx.
The EPA has added a new definition for ``affected area.'' This
term, while used in the proposed rule (e.g., the tables), was not
previously defined. Furthermore, its usage in the final rule has been
expanded; in many places the word ``area'' has now been replaced by
``affected area.'' The definition provides that an ``affected area'' is
the geographic area subject to or covered by the Act requirement that
is the subject of the finding and either, for purposes of the offset
and highway sanctions, is or is within an area designated nonattainment
area pursuant to 42 U.S.C. 7407(d) or, for purposes of the offset
sanction, is or is within an area otherwise subject to the emission
offset requirements of 42 U.S.C. 7503. As used in this rule, in
conjunction with Sec. 52.31(e) (1) and (2), the affected area is the
area potentially subject to a sanction based on a finding. The new
definition clarifies that the sanction applies to the geographic area
subject to or covered by the requirement at issue in the finding. This
will usually be the entire designated area, but in some instances may
be a portion of a designated area. This point is made through the first
portion of the definition. Moreover, since the affected area is the
area in which a sanction applies, it was necessary to limit the
definition to those areas that could be subject to a sanction.
Therefore, the second portion of the definition restricts the
definition of ``affected area'' by incorporating the geographic limits
of the highway and offset sanctions. First, the highway sanction, as
applied under section 179(a), is limited to nonattainment areas, since
section 179(b)(1) provides that the highway sanction may be
``applicable to a nonattainment area.''34 Second, by its terms,
the offset sanction has effect only in those areas in which the offset
requirements of section 173 are required to apply. (See 59 FR 1480
(January 11, 1994) for a further discussion of the geographic
applicability of section 179(b) sanctions.) This includes all
nonattainment areas. In addition, some attainment and unclassified
areas (e.g., those located in the NOTR could be subject to the offset
sanction, since those areas may be subject to the offset requirements
of section 173, even though they are not designated nonattainment (see
section 184, for example). Therefore, the second clause of the
definition limits affected areas to nonattainment areas (which would be
subject to both the highway and offset sanction) and areas otherwise
subject to the emission offset requirements of section 173 (which would
be subject to the offset sanctions).
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\3\4Section 171(2) defines ``nonattainment area'' as ``an area
which is designated `nonattainment' with respect to (an air)
pollutant within the meaning of section 107(d).''
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Three examples illustrate how this definition applies. One, if EPA
finds that a State fails to submit a PM-10 plan for a moderate PM-10
nonattainment area pursuant to section 189(a) and the State does not
correct the deficiency within 18 months, then, pursuant to this rule,
the offset sanction shall apply in the PM-10 nonattainment area whose
boundaries are described in 40 CFR part 81. If 6 months later the
deficiency remains uncorrected, then the highway sanction applies in
the nonattainment area as well. In both cases the sanction applies only
in the nonattainment area because that is the geographic area covered
by the Act requirement.
Two, if EPA finds a State fails to submit a required SIP revision
under the Act for a requirement that applies to only a portion of an
area, then the sanctions apply to the portion of the area subject to
the requirement and not the whole area. For example, the enhanced
inspection and maintenance plan requirement for serious, severe, and
extreme nonattainment areas applies only to ``each urbanized area (in
the nonattainment area) as defined by the Bureau of the Census, with a
1980 population of 200,000 or more'' (see section 182(c)(3)(A)).
Section 184 provides that for all areas within the NOTR, this
requirement will apply to urbanized areas with a population in excess
of 100,000. Therefore, this requirement could apply to a smaller area
within a designated nonattainment, attainment or unclassified area. If
the State fails to adopt the program for such an area, the section 179
sanctions would apply only to that smaller area.
Finally, if EPA finds that a State within the NOTR fails to submit
a reasonably available control technology SIP for VOC required pursuant
to section 184(b)(1)(B) with respect to all the sources in the State
subject to this requirement, and the State does not correct the
deficiency within 18 months, then, pursuant to this rule, the offset
sanction would apply in the entire State. If 6 months later the
deficiency remained uncorrected, then the highway sanction would apply
to all of the nonattainment areas in the State. If there were no
designated nonattainment areas within the State, the highway sanction
would not apply in that State.
The remaining definitions remain substantively unchanged from those
in the proposed rule.
3. Section 52.31(c)--Applicability
Section 52.31(c) establishes the applicability of the final rule.
The portions of Sec. 52.31(c) setting forth the findings that trigger
the sanctions clock remain unchanged as these portions were taken
directly from sections 179(a) (1)-(4). Generally, these findings are
that a State has failed to submit a required SIP or SIP element, has
submitted a SIP or SIP element that does not meet EPA's completeness
criteria, has submitted a SIP that is not approvable, or that the State
is failing to implement an approved SIP.
The portions of Sec. 52.31(c) indicating the SIP requirements to
which this rule applies have been modified. The proposal indicated the
rule covers any part D SIP or SIP revision required under the Act, or
any part D SIP or SIP revision required in response to a finding of
substantial inadequacy under section 110(k)(5). This section of the
final rule has been modified to cover only part D SIP and SIP revisions
and not calls for part D SIP's or SIP revisions under section
110(k)(5). The final rule does not cover part D SIP calls because of
concerns about applying sanctions for State failures to respond to such
SIP calls following EPA nonsubmittal findings without opportunity for
notice and comment. SIP calls are currently not subject to notice-and-
comment. The public and affected sources must be given notice and
opportunity to comment before SIP calls can have binding effect as a
result of a section 179(a) finding that a State has failed to submit a
SIP in response to a SIP call. Thus, if this rule were to apply to
State failures to respond to SIP calls, mandatory sanctions could apply
without an opportunity for such comment before new obligations become
binding against affected sources. This would be inconsistent with the
APA requirements of section 553. Therefore, as discussed in section
II.C.3., the final rule does not cover part D SIP calls. The EPA will
develop another approach to address SIP calls, providing an opportunity
for notice and comment before mandatory sanctions apply for a State
failure to respond to a SIP call.
4. Section 52.31(d)--Sanction Application Sequencing
Section 52.31(d)(1) is the heart of this rule in that it
establishes the order in which the automatic sanctions under section
179(a) shall apply. Several clarifications have been made to the
section.
One, this provision now requires affirmative EPA action to stop
sanction clocks and lift sanctions following section 179(a) findings,
including nonsubmittal and incompleteness findings. The EPA's proposed
and final sanction clock policy provides that, following findings of
nonsubmittal and incompleteness, sanction clocks are permanently
stopped (and any sanctions applied are permanently lifted) when EPA
finds the plan complete. Section 110(k)(1)(B) provides that a submittal
is deemed complete if a completeness finding is not made by EPA within
6 months of EPA's receipt of the plan. Under this clarification to
Sec. 52.31(d), a SIP becoming complete by operation of law will not be
sufficient to stop sanction clocks or for an area to avoid sanctions.
The EPA will need to affirmatively determine that the SIP is complete
in order for the sanction clock to stop and any sanctions to be lifted.
This policy clarification will henceforth govern what is required
to stop sanctions clocks and lift sanctions following findings of
nonsubmittal and incompleteness, and the other section 179 findings.
Prior to this policy clarification, in certain cases EPA did stop
sanction clocks started by EPA findings of failure to submit or
incompleteness by SIP submittals being deemed complete ``by operation
of law.'' The EPA believes that this approach was consistent with EPA
guidance at the time and that it is appropriate to grandfather these
areas under EPA's grandfathering guidance.
The EPA believes that after consideration of its grandfathering
policy for SIP requirements35 it is permissible to grandfather
these cases from this policy clarification. The EPA's general
grandfathering guidance provides that SIP revisions will remain subject
to the requirements in effect on the date that the State adopts the SIP
revision, provided a complete, fully adopted SIP revision is submitted
promptly, generally within 60 days of the adoption. Since the policy
clarification is effective by this action and all of the SIP submittals
in question were adopted more than 60 days prior to September 6, 1994,
under this general grandfathering, these cases are grandfathered.
However, the guidance includes several exceptions to the general
guidance which must be addressed before an action is considered by EPA
to be grandfathered.
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\3\5See ``'Grandfathering' of Requirements for Pending SIP
Revisions,'' memorandum from Gerald A. Emison to Air Division
Director, Regions I-X, June 27, 1988. This memorandum has been
entered in the docket for this rulemaking.
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The first exception concerns the intent of the policy not to
grandfather SIP's submitted hurriedly to avoid new requirements. In the
cases at issue, such action has not occurred on the part of the State
since the States have received no early, formal notification that the
sanction clock policy is being clarified in the manner it is today.
The second exception to general guidance on grandfathering concerns
situations where a court ruling has explicitly changed a current
Federal requirement or has convinced EPA that a previous requirement is
no longer supportable. Here no such court ruling is at issue so no
exception should be made in this case.
The third exception is that the Administrator may determine that
grandfathering is not appropriate under a new policy. In this case, the
Administrator is determining that grandfathering is appropriate.
The fourth exception indicates that grandfathering is not
appropriate if it would have an imminent and substantial adverse
environmental effect or could permanently foreclose use of part D
provisions such as sanctions. The EPA does not believe that
grandfathering these areas from this policy clarification will have an
imminent and substantial environmental impact given the limited number
of areas and given that the States' submittals must be adequate to
attain and maintain the relevant NAAQS before EPA can approve them. In
addition, this grandfathering does not permanently foreclose the
application of sanctions in these areas should EPA, through rulemaking,
find the SIP submittals inadequate to attain and maintain the NAAQS and
disapprove them.
The fifth exception provides that action on a SIP revision which
comports with the revised requirements but not the original
requirements may be based on the revised requirements. In this
instance, this is indeed the case; conceivably, one or more of those
SIP's deemed complete by operation of law may have lacked one or more
of the elements needed for EPA to find a plan affirmatively complete.
Nonetheless, EPA cannot fully approve a plan if any of the required
completeness elements are lacking. For example, if a SIP submittal
lacks compliance/enforcement strategies, one of technical elements
required for completeness, then EPA could not fully approve the plan.
Therefore, while EPA is grandfathering these SIP submittals from
completeness, EPA is not grandfathering these areas from having
adequate SIP's to attain and maintain the standards.
The sixth exception raises a concern as to whether grandfathering
the SIP from the requirements in question would render the SIP as a
whole substantially inadequate. Grandfathering these SIP submittals
from this policy does not raise direct concern that doing so might
render the SIP's substantially inadequate since the completeness review
is not a review intended to pass judgement on the adequacy of SIP's.
Rather, it is intended as a straightforward exercise to determine
whether the SIP's contain all the technical and administrative elements
to warrant further review. As discussed above, if any of these SIP
submittals deemed complete by operation of law lack any such elements,
then such deficiency will be reflected in EPA's determination as to the
SIP's adequacy to attain and maintain the air quality standards.
The seventh exception concerns certain classes of changes which are
only indirectly related to attainment and maintenance of the air
quality standards. Completeness reviews are only indirectly related to
attainment and maintenance of the standards in that the completeness
review is not intended to be review of the SIP's adequacy to meet the
standards. Therefore, the grandfathering of these SIP submittals from
the policy clarification satisfies this exception as well.
Two, the phrase ``affected area'' has been substituted for
``area.'' This is to clarify that the sanction only applies in affected
areas, and not necessarily all areas for which EPA makes a section
179(a) finding. (See the discussion of ``affected area'' under the
definitions section above.) Three, the second sentence regarding
highway sanctions has been clarified to provide that correction of the
deficiency ``forming the basis of the finding'' is needed to stop the
clock. This language is consistent with the language included in the
proposal section 52.31(d)(1) for the offset sanction in sentence 1 and
consistent with the interpretation established in the preamble to the
proposed rule at pages 51272-51273. This revision merely clarifies what
deficiency needs to be corrected in order to stop the sanctions clock.
Finally, a new final sentence has been added to the section. The
sentence provides that for clocks started by rulemaking actions (i.e.,
disapprovals and findings of failure to implement), the date of the
finding starting the clock is the ``effective date'' of the action, not
necessarily the date it is signed or the date it is published in the
Federal Register. Since the disapproval or finding of failure to
implement is not effective until the ``effective date'' of the final
action, the sanctions clock should not start until such action is
effective. Upon further reflection, EPA determined that the
clarification should be included in the rule in order to ensure that
the public is adequately apprised of when the sanctions clock has
started for particular areas based on a rulemaking action.
The EPA has revised the final rule to add new sections
Secs. 52.31(d)(2), (d)(3), and (d)(4). In response to comments, these
sections incorporate a revision made to the rule concerning how and
when sanctions, not yet applied, may be deferred and sanctions, already
applied, may be stayed. A complete discussion of the revisions is set
forth in section II.B.3. above. These corrections concern the
circumstance where EPA has disapproved a required submittal or where
EPA has found that a State has failed to implement an approved SIP.
Sections 52.31(d)(2) and 52.31(d)(3) set forth language concerning
disapproved SIP's and Sec. 52.31(d)(4) sets forth the language
regarding cases where EPA has made a final finding of failure to
implement. For purposes of an initial disapproval or an initial finding
of failure to implement for which EPA subsequently proposes a positive
finding and issues an interim final rule finding that the State has
corrected the deficiency, any sanctions resulting from a clock that
expires will be deferred and any sanctions that have been applied will
be stayed. (A final conditional approval would continue any stay or
deferral that resulted from a proposed conditional approval.) This
change providing for a stay or deferral of sanctions does not change
the rule's requirement that sanctions and sanctions clocks are not
permanently stopped until EPA issues a final full approval or
determination that a State is implementing its SIP.
A new Sec. 52.31(d)(5) has been added which reaffirms what EPA
actions are necessary for the mandatory sanctions process to
permanently cease. Specifically, it provides that any sanction clock
will be permanently stopped and sanctions applied, stayed or deferred
will be permanently lifted upon a final EPA finding that the deficiency
forming the basis of the finding has been corrected. For a sanctions
clock and applied sanctions based on a finding of failure to submit or
incompleteness, a finding that the deficiency has been corrected will
occur by letter from EPA to the governor. For a sanctions clock or
applied, stayed or deferred sanctions based on a SIP disapproval, a
finding that the deficiency has been corrected will occur through a
final notice in the Federal Register fully approving the revised SIP.
For a sanctions clock or applied, stayed or deferred sanctions based on
a finding of nonimplementation, a finding that the deficiency has been
corrected will occur through a final notice in the Federal Register
finding that the State is implementing the approved SIP.
Section 52.31(d)(6) is essentially unchanged from Sec. 52.31(d)(2)
of the proposed rule. This section makes clear that EPA may take
rulemaking action in any specific circumstance to reverse the order in
which sanctions will be applied under section 179(a). In other words,
EPA can take rulemaking action so that the highway sanction would apply
after 18 months and the offset sanction 6 months thereafter. Two minor,
nonsubstantive, changes were made. First, EPA replaced the phrase ``the
EPA'' with ``the Administrator.'' Second, EPA changed the term
``should'' to ``shall'' to more firmly reflect the mandatory nature of
the sanctions.
5. Section 52.31(e)--Available Sanctions and Methods for Implementation
Section 52.31(e) sets forth the two sanctions that are applied by
section 179(a). This rule, as did the proposed rule, interprets in
greater detail the offset sanction provided under section 179(b)(2).
Regarding Sec. 52.31(e)(1), applicability of the offset sanction,
there have been several changes that are intended to more clearly
capture the concepts in the proposed rule and the preamble to the
proposed rule. The EPA has clarified the applicability of the offset
sanction to PM-10 precursors, modified the rule for PM-10 and ozone
precursors, and clarified the language in the rule regarding the
pollutant applicability of the offset sanction when the SIP deficiency
in question is not specific to a pollutant or pollutants. A discussion
of these changes in the context of the specific sections follows.
The EPA has revised Sec. 52.31(e)(1)(i) in several ways. First, EPA
has removed the offset sanction table from the rule and decided to
provide the public information on areas that will be potentially
subject to sanctions in a separate Federal Register notice. As EPA
makes clear elsewhere in this paragraph and the rule, the sanctions
automatically apply in the timeframes prescribed under Sec. 52.31(d),
unless EPA determines that the State has corrected the relevant SIP
deficiency forming the basis of the finding. The EPA never intended the
inclusion of areas in a table in this rule to be necessary for
sanctions to apply automatically. The EPA does believe that it must
provide the public with as accurate information as possible on areas
that may face sanctions and has elected to do so through notices in the
Federal Register rather than through a table in the body of the rule.
Substantively, there is no difference in the sense that areas will face
sanctions in the timeframes prescribed under Sec. 52.31(d) regardless
of whether they are listed in a table in the rule or listed in a
separate notice.
Second, EPA has added the clause ``in the timeframe prescribed
under Sec. 52.31(d) of this section on those affected areas subject
under Sec. 52.31(d) to the offset sanction of this section.'' As noted
above, sanctions apply automatically regardless of whether there is a
table in the rule listing the areas subject to sanctions. Thus, this
change was made to make it clear that the sanctions apply within the
time frames set forth in Sec. 52.31(d). To further clarify this point,
a second change to proposed Sec. 52.31(e)(1)(i) was to delete
``following'' in the clause referencing the offset ratio for pollutants
and their precursors. The reason for this change is because the table
has been deleted and thus no areas will be listed. The first sentence
of Sec. 52.31(e)(1)(i) continues to require that the 2 to 1 offsets be
achieved for the pollutant or pollutants and any precursors for which
the finding is made. (For further discussion of this issue, see section
II.B.2.)
The EPA has added a second sentence to Sec. 52.31(e)(1)(i). This
sentence is partially derived from Sec. 52.31(e)(1)(iv) of the proposed
rule. The purpose of moving this sentence was to alleviate redundancy
in the proposed rule. The first sentence of proposed
Sec. 52.31(e)(1)(iv) appeared to echo proposed Sec. 52.31(e)(1)(i) by
stating that offsets must be achieved for the pollutant(s) and its
(their) precursors for which the finding was made. Therefore, EPA has
not included the first sentence of proposed Sec. 52.31(e)(1)(iv) in the
final rule and has moved the second sentence of proposed
Sec. 52.31(e)(1)(iv) to final Sec. 52.31(e)(1)(i). The sentence now
located as the second sentence of Sec. 52.31(e)(1)(i) continues to
provide that if the underlying finding is not specific to one or more
pollutants and their precursors, then the offset sanction shall apply
to all pollutants and, as relevant, their precursors for which the area
is subject to the new source requirement of section 173 of the Act.
(See section II.B.2. for further discussion of pollutant applicability
of the offset sanction.) This provision, of course, would apply to any
area (nonattainment, attainment, or unclassified) that is the subject
of the finding.
In its entirety, then, Sec. 52.31(e)(1)(i) now provides: (1) That
the emission offset sanction applies within the time specified in
Sec. 52.31(d), even though the rule now contains no offset sanction
table; (2) that the ratio of emission reductions to increased emissions
shall be 2:1; and (3) that the offset ratio shall apply to the one or
more pollutants and their precursors for which the Sec. 52.31(c)
finding was made or to all pollutants and their precursors (for which
the area is subject to the new source requirement of section 173 of the
Act) if the finding was not pollutant specific.
The EPA has added new Sec. 52.31(e)(1)(ii) to specifically address
the issue of findings made with respect to ozone and its two
precursors, VOC and NOX. This was discussed generally in the
preamble to the proposed rule at page 51276, footnote 18, although no
specific language was included in the proposed rule. The Act
establishes requirements for ozone nonattainment areas, some of which
are specific for either VOC or NOX. However, since the general
assumption is that both precursors are critical to ozone formation, EPA
believes that even though a finding may be specific as to one ozone
precursor, the offset sanction should apply for both precursors.
However, there are two exceptions to this general requirement, both of
which are based on the Act. First, affected areas that are designated
nonattainment for ozone but that are not classified as marginal,
moderate, serious, severe or extreme, are not required to achieve
offsets under section 173 for NOX. The second exception is for
affected areas that have received a NOX exemption from the NSR
requirement pursuant to section 182(f). These two exceptions and the
rationale for them are discussed in section II.B.2. above. A new
Sec. 52.31(e)(1)(iii) sets up a similar provision with respect to PM-10
precursors, which is also discussed in more detail in section II.B.2.
above.
Section 52.31(e)(1)(iv) of the final rule has merely been
renumbered. Section 52.31(e)(1)(iii) of the proposed rule previously
contained these requirements and substantially remains unchanged. The
preamble to the proposed rule at page 51276 provides that this section
requires States to apply the offset sanction consistent with amended
section 173, regardless of whether the State has approved NSR rules
consistent with section 173 requirements. The purpose of this provision
is to ensure that States that have been delinquent in meeting the NSR
requirements of the amended Act are not benefitted by applying
sanctions in accordance with NSR rules that are more lenient than
required by the Act or by the absence of NSR requirements within the
State. Under this section, therefore, all affected areas subject to the
offset sanctions would be subject to similar requirements in achieving
those offsets, as specified in the amended Act.
Section 52.31(e)(1)(v) of this rule is unchanged from
Sec. 52.31(e)(1)(v) of the proposed rule. The purpose of this provision
is to establish when the increased offset requirement will be applied.
As noted in section II.B.2. above, EPA received numerous comments on
this issue. For purposes of applying the offset sanction, EPA had some
flexibility in determining what permits would be subject to the
increased offset requirement. As noted in section II.B.2., numerous
commenters suggested other possibilities. For example, some suggested
that the increased offset ratio only apply to permits for which an
application was received after the date the offset sanction applied. As
stated more fully in the detailed response to comments document located
in the docket, EPA has determined that the offset sanction should have
immediate effects in affected areas.
Section 52.31(e)(2) of the final rule sets forth the highway
sanction. Several revisions have been made to this section. As with
Sec. 52.31(e)(1)(i), EPA has removed the highway sanction table from
Sec. 52.31(e)(2) of the proposed rule for the same reasons discussed
above for why the offset sanction table was removed. Similarly,
Sec. 52.31(e)(2) includes new language that directly refers to the
timing provisions of Sec. 52.31(d). As with the similar revised
language in Sec. 52.31(e)(1)(i), this is merely to clarify that the
highway sanction applies with respect to the times set forth in that
subsection, even though the area is not listed in a table in the rule.
In addition, a new sentence has been added which specifies that the
highway sanction only applies to affected areas that are also
nonattainment areas. Although this issue was not specifically addressed
in the proposed rule, the proposed rule and the preamble to the
proposed rule referred back to the section 179(b)(1) highway sanction
requirement of the Act (58 FR 51274, 51279; Sec. 51.32(e)(2) of the
proposed rule.) Section 179(b)(1) states that ``[t]he Administrator may
impose a prohibition, applicable to a nonattainment area * * *.''
Therefore, EPA is incorporating this language, which was merely
referenced in the proposed rule, into the final rule.
III. Implications of Today's Rulemaking
A. Implementation of the Sanctions
Section 179(a) provides that unless the deficiency prompting the
finding (i.e., nonsubmittal, disapproval, and nonimplementation) has
been corrected within the time periods prescribed therein one of the
sanctions in section 179(b) ``shall apply, as selected by the
Administrator.'' Under this final rule, sanctions will apply
automatically in the sequence prescribed herein in all instances in
which mandatory sanctions are applied under section 179(a) following
findings under section 179(a)(1)-(4) for part D plans or plan revisions
that EPA has already made or that EPA will make in the future, except
when EPA takes a separate action to reverse the sanction sequence.
However, if the sanction clock has expired for any findings before
September 6, 1994, no sanction has yet applied since EPA interprets
section 179(a) to provide that sanctions shall not apply until EPA
makes the sanction selection through notice-and-comment rulemaking.
Since this action constitutes the final sanction selection rulemaking,
the offset sanction begins to apply on any areas for which the sanction
clock has elapsed on September 6, 1994. To understand the timing of the
application of mandatory sanctions in these cases, it is first
necessary to clarify the discussion in the proposal at p. 51274 on how
the sanction clocks function under section 179(a).
Section 179(a) sets up two distinct sanction clocks. The Act states
that if the State does not correct the deficiency within 18 months
after a finding, one of the two available sanctions shall apply, as
selected by the Administrator. It then provides that if the deficiency
has not been corrected within 6 months thereafter, then both available
sanctions shall apply. The EPA interprets this to mean that the second
sanction always follows 6 months from the actual application of first,
regardless of whether this would cause the application of the second
sanction to be delayed beyond 24 months from the date of the finding.
Therefore, on September 6, 1994 the offset sanction shall apply on any
area(s) for which an 18-month sanction clock has elapsed and EPA has
not determined that the State has not corrected the deficiency. Both
sanctions shall then apply 6 months from that date if EPA has not
determined the deficiency has been corrected by then.
The EPA intends to notify States of the application and removal of
section 179 mandatory sanctions (as provided for in Sec. 52.31(d) of
this rule) before they apply. In addition, in its actions on submittals
received after a section 179(a) finding, EPA will indicate what the
effect of its action is on the sanctions clock and sanctions
application. The following discussion explains how this will occur,
first providing the examples where, prior to 18 months, EPA finally
determines whether the State has corrected the deficiency prompting the
finding, and then providing examples where EPA finally determines the
deficiency has been corrected after month 18.
In the cases where, prior to 18 months, EPA completes its action
determining that the State has corrected the section 179(a) deficiency,
sanctions would not apply. The following two examples address instances
in which EPA finally determines within 18 months of the finding that
started the sanctions clock whether the State has corrected the
deficiency and how EPA's action finding the State corrected the
deficiency affects the sanction clock.
In the case where, within 18 months following a finding of
nonsubmittal or incompleteness, EPA determines whether a State's SIP
submittal corrects the deficiency prompting the finding (i.e., is
complete or incomplete), EPA will inform the State of whether the
sanctions clock is stopped when it sends the completeness or
incompleteness letter to the State. If the SIP submittal is incomplete,
then the letter will indicate that the sanctions clock continues and
that automatic sanctions will apply as prescribed by this rule. If the
SIP submittal is complete, then the letter will indicate that the
sanctions clock started by the prior finding of failure to submit or
incompleteness permanently stops.
In the case where, within 18 months following a SIP disapproval or
finding of nonimplementation, EPA determines whether the State has
corrected the deficiency prompting the finding (i.e., whether the SIP
is approvable or whether the nonimplementation deficiency has been
corrected), EPA will indicate whether the sanctions clock is stopped
when it takes final rulemaking action on the SIP.36 If EPA finally
disapproves the SIP or finally determines that the nonimplementation
deficiency has not been corrected, then the Federal Register action
will indicate that the sanctions clock continues and that automatic
sanctions will apply as prescribed by this rule. If EPA finally
approves the SIP or finally determines that the nonimplementation
deficiency has been corrected, then the Federal Register action will
indicate that the sanctions clock started by the prior disapproval or
finding of nonimplementation permanently stops.
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\3\6As discussed above in section II.B.1., proposed approval (or
a proposal that the nonimplementation deficiency had been corrected)
following a SIP disapproval or nonimplementation finding has the
effect of deferring and/or staying the application of sanctions. In
this case, though, such proposal action would not have a deferral
and/or staying effect because it is assumed (for the purposes of
this example) that EPA completes final rulemaking action on the SIP
within 18 months.
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The following examples address how, following the section 179(a)
findings, the States will be kept informed when EPA's actions on
revised SIP's are not completed within 18 months of the finding's
deficiency. As provided in this rule at Sec. 52.31(d)(1) through (4),
in explaining how the States will be kept informed, these examples
address sanction removal, as well as sanction deferral and staying.
In EPA interim final determinations that the State has corrected
the deficiency, issued simultaneously with EPA proposed approvals and
proposed findings that States are implementing their SIP's (after EPA
SIP disapprovals or findings of nonimplementation), EPA intends to
notify interested parties, including States, of any deferral or staying
of sanctions that will result from Federal Register actions proposing
to approve SIP's or to find that the State is implementing its SIP, as
provided for in Sec. 52.31(d)(2), (3) and (4) of this rule. In these
cases, EPA will also indicate to all interested parties whether
sanctions are removed, apply or reapply when it takes subsequent final
action on the plan in the Federal Register. If subsequently EPA's
proposed positive finding is reversed, then in that action EPA will
indicate that sanctions apply or reapply, as appropriate, and what
sanctions, if any, apply subsequently. If EPA subsequently fully
approves the revised plan, then in that action EPA will indicate that
the sanctions clock permanently stops and that any sanctions previously
applied due to the original disapproval or finding of failure to
implement are removed.
In addition to these letters and Federal Register actions, the EPA
will also periodically publish notices in the Federal Register in which
EPA will provide the public with information on areas for which EPA has
made findings and which, therefore, are likely to be subject to the
offset and highway sanctions.37 If removal, staying, or deferral
of sanctions is warranted, EPA will similarly provide the public with
information that sanctions have either been removed, stayed or deferred
in the area. Finally, to supplement the various letters and actions
discussed above, EPA will provide information on the status of sanction
12 findings on EPA's Technology Transfer Network (TTN).\38\
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\3\7In some cases, the letter and/or the action may be combined
with another action relating to the submittal. For example, if
following a disapproval EPA proposes to approve a SIP at month 20
after the offset sanction is in place, the interim final
determination issued simultaneously with the proposed approval
action would also serve to notify the public that application of the
offset sanction has been stayed.
\3\8The TTN is EPA's bulletin board system for making air
quality information available to interested parties. For questions
on what information is available on the TTN and how to access it,
contact the systems operator (919) 541-5384).
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B. Areas Potentially Subject to Sanctions
The EPA has made section 179(a) findings of failure to submit and
incompleteness for numerous submittals due under the amended Act. As
explained in section II.C.5 above, EPA has elected to provide the
public with information on areas potentially subject to sanctions in a
separate notice that appears in the notice section of today's Federal
Register rather than in tables in today's rule. Therefore, for further
information on areas likely to face sanctions on September 6, 1994 see
that other notice.
IV. Miscellaneous
A. Executive Order 12866
Under Executive Order 12866 (Order), (58 FR 51735 (October 4,
1993)) the Agency must determine whether the regulatory action is
``significant'' and therefore subject to the Office of Management and
Budget (OMB) review and the requirements of the Order. The Order
defines ``significant regulatory actions'' as one that is likely to
result in a rule that may: (1) Have an annual effect on the economy of
$100 million or more or adversely affect in a material way the economy,
a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interface 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 or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Order.
Pursuant to the terms of the Order, OMB has notified EPA that it
considers this a ``significant regulatory action'' within the meaning
of the Order. The EPA has submitted this action to OMB for review.
Changes made in response to OMB suggestions or recommendations will be
documented in the public record.
B. Regulatory Flexibility Act
1. Proposal
The proposal includes a discussion of the impact of the rule on
small entities at pages 51277-8. The regulatory flexibility analysis
(RFA) (5 U.S.C. 600 et seq.) requires Federal agencies to identify
potentially adverse impacts of Federal regulations upon small entities.
Agencies are required to perform an RFA where the significant impacts
are possible on a substantial number of small entities. Small entities
include small businesses, small not-for-profit enterprises, and
governmental entities with populations of less than 50,000.
Because this action will have some impact, an initial RFA was
prepared pursuant to EPA guidelines, which has been placed in the
docket to this rulemaking. For the following three reasons, EPA
believes the impact of this rule on small entities will be limited.
First, any impact that may occur from the offset sanction is limited to
sources defined as ``major'' for nonattainment NSR purposes, generally
100 tons per year (TPY) or more of a criteria pollutant, except in the
more serious ozone nonattainment areas. The major sources most likely
to also be small entities as defined pursuant to the RFA are in these
more serious ozone areas where the major source TPY threshold has been
lowered under part D of title I of the Act. Second, the amended Act
also increases the nonattainment NSR offset ratio in the ozone
nonattainment areas. The ratio ranges from 1.1-to-1 to 1.5-to-1,
depending on the severity of the area's classification. Thus, any
impact the 2-to-1 offset sanction will have may not be as significant
in precisely those ozone nonattainment areas where small entities that
are also major sources are most likely to exist. Third, as stated
above, the only relevant impact period is 6 months in duration, since
after that period the State will either have become subject to both
sanctions or have corrected the deficiency and been relieved from any
sanctions.
2. Comments
Section II.B.1. of this document includes several comments
concerning the impact of the proposed rule. One additional comment is
summarized here.
The commenter states that the lowering of the major source
threshold under the Act exposes many more small sources to control and
the likelihood of sanctions. The commenter believes that many such
small sources are small businesses and that, contrary to the analysis
in the proposal, an increase in the offset ratio of 0.5 could have a
significant impact on the ability of businesses to find adequate
offsets.
3. Response
The EPA believes that the final rule will have some impact on small
entities. The lowering of the major source threshold could expose more
sources to the offset sanction. The EPA does not disagree that in
individual cases an increase in the offset ratio could have a
significant impact on a small business. However, EPA believes that the
impact of this rule on small entities will be limited for the second
and third reasons discussed above. Additionally, EPA notes that the
impact of this rule will also be lessened by the provision in final
rules that provides for the deferral and/or staying of the application
of sanctions in certain instances when EPA believes it is more likely
than not a deficiency has been corrected (see discussion in section
II.B.3. of this document). However, because this action will have some
impact, a final RFA has been prepared pursuant to EPA guidelines, which
has been placed in the docket to this rulemaking.
C. Paperwork Reduction Act
This rule does not contain any information collection requirements
which require OMB approval under the Paperwork Reduction Act (44 U.S.C.
3501 et seq.).
When the offset sanction applies, sources subject to it will not
incur an additional information collection burden because sources are
already required under the section 173 offset requirements to obtain an
emission offset from between 1-to-1 and 1.5-to-1. When the offset
sanction applies, it should not impose an additional information
collection burden because sources will not have to provide any
information in permit applications beyond that which is already
required in the absence of the sanction. (For the information
collection burden of new requirements of the amended Act for
nonattainment NSR and prevention of significant deterioration, an
information collection request is being prepared to support rulemaking
changes to parts 51 and 52.)
When the highway sanction applies, the Secretary of DOT is required
to determine which projects or grants should not be affected by the
sanction and which, therefore, are exempt. This determination will be
based on information readily available in existing documentation
gathered for the purpose of evaluating the environmental, social, and
economic impacts of different alternatives for transportation projects.
These analyses are required for the preparation of environmental
assessments and impact statements under the National Environmental
Policy Act (NEPA), (42 U.S.C. sec. 4321 et seq.). Historically,
exemption determinations by DOT for sanctions have been based on such
NEPA documentation and have not necessitated additional information
gathering and analysis by the States. In addition, since under NEPA
final environmental documents must be approved by DOT, in most cases
the NEPA documentation will already be in DOT's possession. Therefore,
EPA does not believe that the highway sanction, when applied, will
impose an additional information collection burden on the States.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Intergovernmental relations, Nitrogen dioxide, Particulate matter,
Reporting and recordkeeping requirements, and Sulfur dioxide.
Dated: July 21, 1994.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, part 52 of title 40,
Code of Federal Regulations, is amended as set forth below:
PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
1. The authority citation for part 52 is revised to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart A--[Amended]
2. Subpart A is amended by adding a new Sec. 52.31 to read as
follows:
Sec. 52.31 Selection of sequence of mandatory sanctions for findings
made pursuant to section 179 of the Clean Air Act.
(a) Purpose. The purpose of this section is to implement 42 U.S.C.
7509(a) of the Act, with respect to the sequence in which sanctions
will automatically apply under 42 U.S.C. 7509(b), following a finding
made by the Administrator pursuant to 42 U.S.C. 7509(a).
(b) Definitions. All terms used in this section, but not
specifically defined herein, shall have the meaning given them in
Sec. 52.01.
(1) 1990 Amendments means the 1990 Amendments to the Clean Air Act
(Pub. L. No. 101-549, 104 Stat. 2399).
(2) Act means Clean Air Act, as amended in 1990 (42 U.S.C. 7401 et
seq. (1991)).
(3) Affected area means the geographic area subject to or covered
by the Act requirement that is the subject of the finding and either,
for purposes of the offset sanction under paragraph (e)(1) of this
section and the highway sanction under paragraph (e)(2) of this
section, is or is within an area designated nonattainment under 42
U.S.C. 7407(d) or, for purposes of the offset sanction under paragraph
(e)(1) of this section, is or is within an area otherwise subject to
the emission offset requirements of 42 U.S.C. 7503.
(4) Criteria pollutant means a pollutant for which the
Administrator has promulgated a national ambient air quality standard
pursuant to 42 U.S.C. 7409 (i.e., ozone, lead, sulfur dioxide,
particulate matter, carbon monoxide, nitrogen dioxide).
(5) Findings or Finding refer(s) to one or more of the findings,
disapprovals, and determinations described in subsection 52.31 (c).
(6) NAAQS means national ambient air quality standard the
Administrator has promulgated pursuant to 42 U.S.C. 7409.
(7) Ozone precursors mean nitrogen oxides (NOx) and volatile
organic compounds (VOC).
(8) Part D means part D of title I of the Act.
(9) Part D SIP or SIP revision or plan means a State implementation
plan or plan revision that States are required to submit or revise
pursuant to part D.
(10) Precursor means pollutant which is transformed in the
atmosphere (later in time and space from point of emission) to form (or
contribute to the formation of) a criteria pollutant.
(c) Applicability
This section shall apply to any State in which an affected area is
located and for which the Administrator has made one of the following
findings, with respect to any part D SIP or SIP revision required under
the Act:
(1) A finding that a State has failed, for an area designated
nonattainment under 42 U.S.C. 7407(d), to submit a plan, or to submit
one or more of the elements (as determined by the Administrator)
required by the provisions of the Act applicable to such an area, or
has failed to make a submission for such an area that satisfies the
minimum criteria established in relation to any such element under 42
U.S.C. 7410(k);
(2) A disapproval of a submission under 42 U.S.C. 7410(k), for an
area designated nonattainment under 42 U.S.C. 7407(d), based on the
submission's failure to meet one or more of the elements required by
the provisions of the Act applicable to such an area;
(3)(i) A determination that a State has failed to make any
submission required under the Act, other than one described under
paragraph (c)(1) or (c)(2) of this section, including an adequate
maintenance plan, or has failed to make any submission, required under
the Act, other than one described under paragraph (c)(1) or (c)(2) of
this section, that satisfies the minimum criteria established in
relation to such submission under 42 U.S.C. 7410(k)(1)(A); or
(ii) A disapproval in whole or in part of a submission described
under paragraph (c)(3)(i) of this section; or
(4) A finding that any requirement of an approved plan (or approved
part of a plan) is not being implemented.
(d) Sanction Application Sequencing
(1) To implement 42 U.S.C. 7509(a), the offset sanction under
paragraph (e)(1) of this section shall apply in an affected area 18
months from the date when the Administrator makes a finding under
paragraph (c) of this section unless the Administrator affirmatively
determines that the deficiency forming the basis of the finding has
been corrected. To further implement 42 U.S.C. 7509(a), the highway
sanction under paragraph (e)(2) of this section shall apply in an
affected area 6 months from the date the offset sanction under
paragraph (e)(1) of this section applies, unless the Administrator
affirmatively determines that the deficiency forming the basis of the
finding has been corrected. For the findings under paragraphs (c)(2),
(c)(3)(ii), and (c)(4) of this section, the date of the finding shall
be the effective date as defined in the final action triggering the
sanctions clock.
(2)(i) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and the
Administrator, prior to 18 months from the finding, has proposed to
fully or conditionally approve the revised plan and has issued an
interim final determination that the revised plan corrects the
deficiency prompting the finding, application of the offset sanction
under paragraph (e)(1) of this section shall be deferred unless and
until the Administrator proposes to or takes final action to disapprove
the plan in whole or in part. If the Administrator issues such a
proposed or final disapproval of the plan, the offset sanction under
paragraph (e)(1) of this section shall apply in the affected area on
the later of the date the Administrator issues such a proposed or final
disapproval, or 18 months following the finding that started the
sanctions clock. The highway sanction under paragraph (e)(2) of this
section shall apply in the affected area 6 months after the date the
offset sanction under paragraph (e)(1) of this section applies, unless
the Administrator determines that the deficiency forming the basis of
the finding has been corrected.
(ii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and after
18 but before 24 months from the finding the Administrator has proposed
to fully or conditionally approve the revised plan and has issued an
interim final determination that the revised plan corrects the
deficiency prompting the finding, application of the offset sanction
under paragraph (e)(1) of this section shall be stayed and application
of the highway sanction under paragraph (e)(2) of this section shall be
deferred unless and until the Administrator proposes to or takes final
action to disapprove the plan in whole or in part. If the Administrator
issues such a proposed or final disapproval of the plan, the offset
sanction under paragraph (e)(1) of this section shall reapply in the
affected area on the date the Administrator issues such a proposed or
final disapproval. The highway sanction under paragraph (e)(2) of this
section shall apply in the affected area on the later of 6 months from
the date the offset sanction under paragraph (e)(1) of this section
first applied in the affected area, unless the Administrator determines
that the deficiency forming the basis of the finding has been
corrected, or immediately if the proposed or final disapproval occurs
more than 6 months after initial application of the offset sanction
under paragraph (e)(1) of this section.
(iii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and more
than 24 months after the finding the Administrator has proposed to
fully or conditionally approve the revised plan and has issued an
interim final determination that the revised plan corrects the
deficiency prompting the finding, application of the offset sanction
under paragraph (e)(1) of this section and application of the highway
sanction under paragraph (e)(2) of this section shall be stayed unless
and until the Administrator proposes to or takes final action to
disapprove the plan in whole or in part. If the Administrator issues
such a proposed or final disapproval, the offset sanction under
paragraph (e)(1) of this section and the highway sanction under
paragraph (e)(2) of this section shall reapply in the affected area on
the date the Administrator issues such proposed or final disapproval.
(3)(i) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and the
Administrator, prior to 18 months from the finding, has conditionally-
approved the revised plan and has issued an interim final determination
that the revised plan corrects the deficiency prompting the finding,
application of the offset sanction under paragraph (e)(1) of this
section shall be deferred unless and until the conditional approval
converts to a disapproval or the Administrator proposes to or takes
final action to disapprove in whole or in part the revised SIP the
State submits to fulfill the commitment in the conditionally-approved
plan. If the conditional approval so becomes a disapproval or the
Administrator issues such a proposed or final disapproval, the offset
sanction under paragraph (e)(1) of this section shall apply in the
affected area on the later of the date the approval becomes a
disapproval or the Administrator issues such a proposed or final
disapproval, whichever is applicable, or 18 months following the
finding that started the sanctions clock. The highway sanction under
paragraph (e)(2) of this section shall apply in the affected area 6
months after the date the offset sanction under paragraph (e)(1) of
this section applies, unless the Administrator determines that the
deficiency forming the basis of the finding has been corrected.
(ii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and after
18 but before 24 months from the finding the Administrator has
conditionally approved the revised plan and has issued an interim final
determination that the revised plan corrects the deficiency prompting
the finding, application of the offset sanction under paragraph (e)(1)
of this section shall be stayed and application of the highway sanction
under paragraph (e)(2) of this section shall be deferred unless and
until the conditional approval converts to a disapproval or the
Administrator proposes to or takes final action to disapprove in whole
or in part the revised SIP the State submits to fulfill the commitment
in the conditionally-approved plan. If the conditional approval so
becomes a disapproval or the Administrator issues such a proposed or
final disapproval, the offset sanction under paragraph (e)(1) of this
section shall reapply in the affected area on the date the approval
becomes a disapproval or the Administrator issues such a proposed or
final disapproval, whichever is applicable. The highway sanction under
paragraph (e)(2) of this section shall apply in the affected area on
the later of 6 months from the date the offset sanction under paragraph
(e)(1) of this section first applied in the affected area, unless the
Administrator determines that the deficiency forming the basis of the
finding has been corrected, or immediately if the conditional approval
becomes a disapproval or the Administrator issues such a proposed or
final disapproval, whichever is applicable, more than 6 months after
initial application of the offset sanction under paragraph (e)(1) of
this section.
(iii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following the findings under paragraphs
(c)(2) and (c)(3)(ii) of this section, if the State has submitted a
revised plan to correct the deficiency prompting the finding and after
24 months from the finding the Administrator has conditionally approved
the revised plan and has issued an interim final determination that the
revised plan corrects the deficiency prompting the finding, application
of the offset sanction under paragraph (e)(1) of this section and
application of the highway sanction under paragraph (e)(2) of this
section shall be stayed unless and until the conditional approval
converts to a disapproval or the Administrator proposes to or takes
final action to disapprove in whole or in part the revised SIP the
State submits to fulfill its commitment in the conditionally-approved
plan. If the conditional approval so becomes a disapproval or the
Administrator issues such a proposed or final disapproval, the offset
sanction under paragraph (e)(1) of this section and the highway
sanction under paragraph (e)(2) of this section shall reapply in the
affected area on the date the conditional approval becomes a
disapproval or the Administrator issues such a proposed or final
disapproval, whichever is applicable.
(4)(i) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following findings under paragraph (c)(4)
of this section, if the Administrator, prior to 18 months from the
finding, has proposed to find that the State is implementing the
approved plan and has issued an interim final determination that the
deficiency prompting the finding has been corrected, application of the
offset sanction under paragraph (e)(1) of this section shall be
deferred unless and until the Administrator preliminarily or finally
determines, through a proposed or final finding, that the State is not
implementing the approved plan and that, therefore, the State has not
corrected the deficiency. If the Administrator so preliminarily or
finally determines that the State has not corrected the deficiency, the
offset sanction under paragraph (e)(1) of this section shall apply in
the affected area on the later of the date the Administrator proposes
to take action or takes final action to find that the finding of
nonimplementation has not been corrected, or 18 months following the
finding that started the sanctions clock. The highway sanction under
paragraph (e)(2) of this section shall apply in the affected area 6
months after the date the offset sanction under paragraph (e)(1) of
this section first applies, unless the Administrator preliminarily or
finally determines that the deficiency forming the basis of the finding
has been corrected.
(ii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following findings under paragraph (c)(4)
of this section, if after 18 months but before 24 months from the
finding the Administrator has proposed to find that the State is
implementing the approved plan and has issued an interim final
determination that the deficiency prompting the finding has been
corrected, application of the offset sanction under paragraph (e)(1) of
this section shall be stayed and application of the highway sanction
under paragraph (e)(2) of this section shall be deferred unless and
until the Administrator preliminarily or finally determines, through a
proposed or final finding, that the State is not implementing the
approved plan and that, therefore, the State has not corrected the
deficiency. If the Administrator so preliminarily or finally determines
that the State has not corrected the deficiency, the offset sanction
under paragraph (e)(1) of this section shall reapply in the affected
area on the date the Administrator proposes to take action or takes
final action to find that the finding of nonimplementation has not been
corrected. The highway sanction under paragraph (e)(2) of this section
shall apply in the affected area on the later of 6 months from the date
the offset sanction under paragraph (e)(1) of this section first
applied in the affected area, unless the Administrator preliminarily or
finally determines that the deficiency forming the basis of the finding
has been corrected, or immediately if EPA's proposed or final action
finding the deficiency has not been corrected occurs more than 6 months
after initial application of the offset sanction under paragraph (e)(1)
of this section.
(iii) Notwithstanding paragraph (d)(1) of this section, to further
implement 42 U.S.C. 7509(a), following findings under paragraph (c)(4)
of this section, if after 24 months from the finding the Administrator
has proposed to find that the State is implementing the approved plan
and has issued an interim final determination that the deficiency
prompting the finding has been corrected, application of the offset
sanction under paragraph (e)(1) of this section and the highway
sanction under paragraph (e)(2) of this section shall be stayed unless
and until the Administrator preliminarily or finally determines,
through a proposed or final finding, that the State is not implementing
the approved plan, and that, therefore, the State has not corrected the
deficiency. If the Administrator so preliminarily or finally determines
that the State has not corrected the deficiency, the offset sanction
under paragraph (e)(1) of this section and the highway sanction under
paragraph (e)(2) of this section shall reapply in the affected area on
the date the Administrator proposes to take action or takes final
action to find that the finding of nonimplementation has not been
corrected.
(5) Any sanction clock started by a finding under paragraph (c) of
this section will be permanently stopped and sanctions applied, stayed
or deferred will be permanently lifted upon a final EPA finding that
the deficiency forming the basis of the finding has been corrected. For
a sanctions clock and applied sanctions based on a finding under
paragraphs (c)(1) and (c)(3)(i) of this section, a finding that the
deficiency has been corrected will occur by letter from the
Administrator to the State governor. For a sanctions clock or applied,
stayed or deferred sanctions based on a finding under paragraphs (c)(2)
and (c)(3)(ii) of this section, a finding that the deficiency has been
corrected will occur through a final notice in the Federal Register
fully approving the revised SIP. For a sanctions clock or applied,
stayed or deferred sanctions based on a finding under paragraph (c)(4)
of this section, a finding that the deficiency has been corrected will
occur through a final notice in the Federal Register finding that the
State is implementing the approved SIP.
(6) Notwithstanding paragraph (d)(1) of this section, nothing in
this section will prohibit the Administrator from determining through
notice-and-comment rulemaking that in specific circumstances the
highway sanction, rather than the offset sanction, shall apply 18
months after the Administrator makes one of the findings under
paragraph (c) of this section, and that the offset sanction, rather
than the highway sanction, shall apply 6 months from the date the
highway sanction applies.
(e) Available Sanctions and Method for Implementation
(1) Offset sanction. (i) As further set forth in paragraphs
(e)(1)(ii)-(e)(1)(vi) of this section, the State shall apply the
emissions offset requirement in the timeframe prescribed under
paragraph (d) of this section on those affected areas subject under
paragraph (d) of this section to the offset sanction. The State shall
apply the emission offset requirements in accordance with 42 U.S.C.
7503 and 7509(b)(2), at a ratio of at least two units of emission
reductions for each unit of increased emissions of the pollutant(s) and
its (their) precursors for which the finding(s) under paragraph (c) of
this section is (are) made. If the deficiency prompting the finding
under paragraph (c) of this section is not specific to one or more
particular pollutants and their precursors, the 2-to-1 ratio shall
apply to all pollutants (and their precursors) for which an affected
area within the State listed in paragraph (e)(1)(i) of this section is
required to meet the offset requirements of 42 U.S.C. 7503.
(ii) Notwithstanding paragraph (e)(1)(i) of this section, when a
finding is made with respect to a requirement for the criteria
pollutant ozone or when the finding is not pollutant-specific, the
State shall not apply the emissions offset requirements at a ratio of
at least 2-to-1 for emission reductions to increased emissions for
nitrogen oxides where, under 42 U.S.C. 7511a(f), the Administrator has
approved an NOX exemption for the affected area from the Act's new
source review requirements under 42 U.S.C. 7501-7515 for NOX or
where the affected area is not otherwise subject to the Act's new
source review requirements for emission offsets under 42 U.S.C. 7501-
7515 for NOX.
(iii) Notwithstanding paragraph (e)(1)(i) of this section, when a
finding under paragraph (c) of this section is made with respect to PM-
10, or the finding is not pollutant-specific, the State shall not apply
the emissions offset requirements, at a ratio of at least 2-to-1 for
emission reductions to increased emissions to PM-10 precursors if the
Administrator has determined under 42 U.S.C. 7513a(e) that major
stationary sources of PM-10 precursors do not contribute significantly
to PM-10 levels which exceed the NAAQS in the affected area.
(iv) For purposes of applying the emissions offset requirement set
forth in 42 U.S.C. 7503, at the 2-to-1 ratio required under this
section, the State shall comply with the provisions of a State-adopted
new source review (NSR) program that EPA has approved under 42 U.S.C.
7410(k)(3) as meeting the nonattainment area NSR requirements of 42
U.S.C. 7501-7515, as amended by the 1990 Amendments, or, if no plan has
been so approved, the State shall comply directly with the
nonattainment area NSR requirements specified in 42 U.S.C. 7501-7515,
as amended by the 1990 Amendments, or cease issuing permits to
construct and operate major new or modified sources as defined in those
requirements. For purposes of applying the offset requirement under 42
U.S.C. 7503 where EPA has not fully approved a State's NSR program as
meeting the requirements of part D, the specifications of those
provisions shall supersede any State requirement that is less stringent
or inconsistent.
(v) For purposes of applying the emissions offset requirement set
forth in 42 U.S.C. 7503, any permit required pursuant to 42 U.S.C. 7503
and issued on or after the date the offset sanction applies under
paragraph (d) of this section shall be subject to the enhanced 2-to-1
ratio under paragraph (e)(1)(i) of this section.
(2) Highway Funding Sanction. The highway sanction shall apply, as
provided in 42 U.S.C. 7509(b)(1), in the timeframe prescribed under
paragraph (d) of this section on those affected areas subject under
paragraph (d) of this section to the highway sanction, but shall apply
only to those portions of affected areas that are designated
nonattainment under 40 CFR part 81.
[FR Doc. 94-18572 Filed 8-3-94; 8:45 am]
BILLING CODE 6560-50-P
