2013-06905. Disapproval of Implementation Plan Revisions; State of California; South Coast VMT Emissions Offset Demonstrations

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

EPA is taking final action to withdraw its previous approvals of state implementation plan revisions submitted by the State of California to meet the vehicle-miles-traveled emissions offset requirement under the Clean Air Act for the Los Angeles-South Coast Air Basin 1-hour and 8-hour ozone nonattainment areas. EPA is also taking final action to disapprove the same plan revisions. EPA is finalizing the withdrawal and disapproval actions in response to a remand by the Ninth Circuit Court of Appeals in Association of Irritated Residents v. EPA. The effect of this action is to trigger deadlines by which new plan revisions meeting the applicable requirements must be submitted by the State of California and approved by EPA to avoid sanctions and to avoid an obligation on EPA to promulgate a federal implementation plan.

DATES:

Effective Date: This rule is effective on April 29, 2013.

ADDRESSES:

EPA has established docket EPA-R09-OAR-2012-0713 for this action. The index to the docket for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California, 94105-3901. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available at either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT:

Wienke Tax, Air Planning Office, U.S. Environmental Protection Agency, Region 9, Mailcode AIR-2, 75 Hawthorne Street, San Francisco, California 94105-3901, 415-947-4192, [e-mail].

SUPPLEMENTARY INFORMATION:

Throughout this document, “we,” “us” and “our” refer to EPA.

Table of Contents

I. Summary of Today's Action

II. Background

III. Response to Public Comments

IV. Final Action and Consequences of Final Disapproval

V. Statutory and Executive Order Reviews

I. Summary of Today's Action

EPA is taking final action to withdraw our previous approvals of revisions to the state implementation plan (SIP) submitted by the State of California to demonstrate compliance with the vehicle miles traveled (VMT) emissions offset requirement under Clean Air Act (CAA) section 182(d)(1)(A) with respect to the 1-hour and 8-hour ozone standard in the South Coast nonattainment area. EPA is taking this action in response to a decision by the Ninth Circuit in Association of Irritated Residents v. EPA. Under section 110(k) of the CAA, we are also taking final action to disapprove these same plan elements because they reflect an approach to showing compliance with section 182(d)(1)(A) that was rejected by the Ninth Circuit.

Subject to our regulations at 40 CFR 52.31, our disapproval of the SIP revisions will trigger the new source review (NSR) offset sanction in CAA section 179(b)(2) and the highway funding sanction under CAA section 179(b)(1) in the South Coast ozone nonattainment area 18 months, and 24 months, respectively, after the effective date of this action unless we take final action approving SIP revisions meeting the relevant requirements of the CAA prior to the time the sanctions would take effect.^[1] In addition to the sanctions, CAA section 110(c) provides that EPA must promulgate a federal implementation plan (FIP) addressing the deficiency that is the basis for this disapproval two years after the effective date of the disapproval unless we have approved a revised SIP before that date.

II. Background

On September 19, 2012 (77 FR 58067), we proposed the same actions that we are finalizing today. In our proposed rule, we reviewed the regulatory and SIP submittal history of the South Coast Air Basin 1-hour and 8-hour nonattainment areas with respect to the VMT emissions offset requirement under CAA section 182(d)(1)(A), the related EPA actions, and the ensuing litigation and court decision. We provide a summary of that discussion herein. For a more detailed discussion, please see our September 19, 2012 proposed rule at pages 58068-58070.

The CAA requires EPA to promulgate national ambient air quality standards (NAAQS or “standards”) for certain pervasive air pollutants to protect public health and welfare with an adequate margin of safety. In 1979, EPA promulgated an ozone NAAQS of 0.12 parts per million (ppm), averaged over a 1-hour period. Under the CAA, EPA must also designate areas as attainment, nonattainment, or unclassifiable for the NAAQS, and States with designated nonattainment areas must submit revisions to their SIPs that provide for, among other things, attainment of the standards within certain prescribed periods.

The control requirements and date by which attainment of the one-hour ozone standard was to be achieved varied with an area's classification. Under the Clean Air Act Amendments of 1990, EPA designated the Los Angeles-South Coast Air Basin Area (“South Coast”) ^[2] as “extreme” nonattainment for the 1-hour ozone standard, with an attainment date no later than November 15, 2010. See 56 FR 56694 (November 6, 1991). Extreme areas were subject to the most stringent planning requirements and were provided the most time to attain the standard. The various ozone planning requirements to which Extreme ozone nonattainment areas were subject are set forth in section 172(c) and section 182(a)-(e) of the CAA. Of particular importance for the purposes of this action, section 182(d)(1)(A) requires the following:

Within 2 years after November 15, 1992, the State shall submit a revision that identifies and adopts specific enforceable transportation control strategies and transportation control measures to offset any growth in emissions from growth in vehicle miles traveled or numbers of vehicle trips in such area and to attain reduction in motor vehicle emissions as necessary, in combination with other emission reduction requirements of this subpart, to comply with the requirements of subsection (b)(2)(B) and (c)(2)(B) of this section (pertaining to periodic emissions reduction requirements). The State shall consider measures specified in section 7408(f) of this title, and choose from among and implement such measures as necessary to demonstrate attainment with the national ambient air quality standards; in considering such measures, the State should ensure adequate access to downtown, other commercial, and residential areas and should avoid measures that increase or relocate emissions and congestion rather than reduce them.”

As we discussed in our proposed rule, EPA believes that it is appropriate to treat the three required elements of section 182(d)(1)(A) (i.e., offsetting emissions growth, attainment of the reasonable further progress (RFP) reduction, and attainment of the ozone NAAQS) as separable. As to the first element of CAA section 182(d)(1)(A) (i.e., offsetting emissions growth), EPA has historically interpreted this CAA provision to allow areas to meet the requirement by demonstrating that emissions from motor vehicles decline each year through the attainment year. See 57 FR 13498, at 13521-15323 (April 16, 1992). The proposed rule and this final rule relate only to the first element of section 182(d)(1)(A) (i.e., offsetting emissions growth). Herein, we refer to this element as the VMT emissions offset requirement.

In 1997, EPA replaced the 1-hour ozone standard with an 8-hour ozone standard of 0.08 ppm. See 62 FR 38856 (July 18, 1997).^[3] EPA's anti-backsliding rules governing the transition from the 1-hour ozone standard to the 8-hour ozone standard revoked the 1-hour ozone standard effective June 2005 but also carried forward most of the SIP requirements, which had applied to an area by virtue of its 1-hour ozone classification, to areas designated as nonattainment for the 8-hour ozone standard. See 69 FR 23951 (April 30, 2004); 40 CFR 51.905(a)(1); and 40 CFR 51.900(f). The VMT emission offset requirement is one of the requirements carried forward; thus, the South Coast, which is designated nonattainment for the 1997 8-hour ozone standard, remains subject to the VMT emissions offset requirement for the 1-hour ozone standard notwithstanding the revocation of that standard in 2005. Moreover, the South Coast is subject to the VMT emissions offset requirement for the 1997 8-hour ozone standard itself by virtue of its classification, first as “Severe-17,” and now as “Extreme,” for the 1997 ozone standard. See 69 FR 23858 (April 30, 2004); 70 FR 71612 (November 29, 2005); 75 FR 24409 (May 5, 2010); and 40 CFR 51.902(a).

In 2008, to comply with the VMT emissions offset requirement for the 1-hour ozone standard, the South Coast Air Quality Management District (SCAQMD) submitted a demonstration showing decreases in aggregate year-over-year motor vehicle emissions in the South Coast from a base year through the applicable attainment year (2010).^[4] The following year, EPA approved the South Coast 1-hour ozone VMT emissions offset demonstration as meeting the VMT emissions offset requirement. See 74 FR 10176 (March 10, 2009). The State of California also submitted a VMT emissions offset demonstration for the South Coast for the 8-hour ozone standard, and it too demonstrated compliance through a showing of aggregate year-over-year motor vehicle emissions decreases from a base year (2002) through the applicable attainment year (2024).^[5]

Meanwhile, as explained in more detail in our September 19, 2012 proposed rule, EPA's approval of the SCAQMD's VMT emissions offset demonstration for the 1-hour ozone standard was challenged in the Ninth Circuit Court of Appeals, and in 2011, the court ruled against EPA, determining that EPA incorrectly interpreted the statutory phrase “growth in emissions” in section 182(d)(1)(A) as meaning a growth in “aggregate motor vehicle emissions.” In other words, the court ruled that additional transportation control strategies and measures are required whenever vehicle emissions are projected to be higher than they would have been had vehicle miles traveled not increased, even when aggregate vehicle emissions are actually decreasing. Association of Irritated Residents v. EPA, 632 F.3d 584, at 596-597 (9th Cir. 2011), reprinted as amended on January 27, 2012, 686 F.3d 668, further amended February 13, 2012 (“Association of Irritated Residents v. EPA”).

Based on this reasoning, the court remanded the approval of the South Coast VMT emissions offset demonstration for the 1-hour ozone standard back to EPA for further proceedings consistent with the opinion. In May 2011, EPA filed a petition for panel rehearing requesting the court to reconsider its decision as to the VMT emissions offset requirement. In January 2012, the court denied the request and issued the mandate, but prior to the court's mandate, EPA took final action to approve the South Coast VMT emissions offset demonstration for the 1997 8-hour ozone standard as part of a larger plan approval action. See 77 FR 12674 (March 1, 2012). Shortly thereafter, several environmental and community groups filed a lawsuit in the Ninth Circuit challenging EPA's approval of that larger plan (i.e., the South Coast 1997 8-hour ozone plan). Communities for a Better Environment, et al. v. EPA, No. 12-71340.

In light of the remand in the Association of Irritated Residents v. EPA case and the current court challenge to EPA's approval of the same SIP element for the 8-hour ozone standard, EPA proposed to withdraw the Agency's previous approvals of the VMT emissions offset demonstrations submitted by the State of California to comply with the VMT emissions offset requirement under CAA section 182(d)(1)(A) for the 1-hour and the 1997 8-hour ozone standards in the South Coast. EPA also proposed to disapprove those same submittals.

EPA proposed the withdrawals of previous approvals and the disapprovals because the Ninth Circuit rejected EPA's long-standing interpretation of the first element of section 182(d)(1)(A) that states could demonstrate compliance with the VMT emissions offset requirement through submittal of aggregate motor vehicle emissions estimates showing year-over-year declines in such emissions and because the submitted demonstrations and related EPA approvals were predicated on the long-standing interpretation that was rejected by the court. Specifically, as explained in our September 19, 2012 proposed rule, we found that the submitted VMT emissions offset demonstrations are not consistent with the court's ruling on the requirements of section 182(d)(1)(A) because they fail to identify, compared to a baseline assuming no VMT growth, the level of increased emissions resulting solely from VMT growth and to show how such increased emissions have been offset through adoption and implementation of transportation control strategies and transportation control measures. See the proposed rule at page 58070.

III. Response to Public Comments

Publication of our September 19, 2012 proposed rule in the Federal Register started a 30-day public comment period which ended on October 19, 2012. We received two comment letters, one from the California Air Resources Board (CARB), and one from the SCAQMD. Neither comment letter objects to our proposed withdrawal or disapproval actions. Rather, both comment letters address aspects of a non-binding and non-final guidance memorandum ^[6] issued by EPA in response to the court's decision on the section 182(d)(1)(A) VMT emissions offset requirement.

EPA appreciates the comments from CARB and the SCAQMD on the guidance. However, the comments are beyond the scope of this rulemaking, and EPA is not here taking any final action to respond to these comments or with respect to the non-final and non-binding guidance that they address. This final action simply withdraws EPA's previous approvals of the VMT emissions offset demonstrations for the South Coast with respect to the 1-hour and 8-hour ozone NAAQS and disapproves the same because they are based on a rationale for compliance with section 182(d)(1)(A) that was rejected by the Ninth Circuit in Association of Irritated Residents v. EPA. EPA is not relying on the non-final and non-binding section 182(d)(1)(A) guidance memorandum for today's final action. If a future SIP submission implements the guidance, EPA will take separate regulatory final action to address that SIP and its satisfaction of section 182(d)(1)(A). Lastly, EPA appreciates CARB's and SCAQMD's willingness to respond promptly to the court decision and this final action, and to submit revisions to the South Coast portion of the California SIP to address the section 182(d)(1)(A) VMT emissions offset requirement for the 1-hour and 8-hour ozone standards.

IV. Final Action and Consequences of Final Disapproval

For the reasons provided in the proposed rule and summarized herein, EPA is taking final action to withdraw our previous approvals of SIP revisions submitted by the State of California to demonstrate compliance with the VMT emissions offset requirement under CAA section 182(d)(1)(A) with respect to the 1-hour and 8-hour ozone standards in the South Coast nonattainment area. EPA is taking this action in response to a decision of the Ninth Circuit in Association of Irritated Residents v. EPA. Under section 110(k), EPA is also taking final action to disapprove those same submittals because they reflect an approach to showing compliance with section 182(d)(1)(A) that was rejected by the court as inconsistent with the CAA section 182(d)(1)(A) VMT emissions offset requirement.

Pursuant to CAA section 179(a), our disapproval of the SIP revisions will trigger the NSR offset sanction in CAA section 179(b)(2) and the highway funding sanction under CAA section 179(b)(1) in the South Coast ozone nonattainment area 18 months, and 24 months, respectively, after the effective date of this action unless we take final action approving SIP revisions meeting the relevant requirements of the CAA prior to the time the sanctions would take effect. If we propose approval of a SIP revision meeting the relevant requirements of the CAA and determine at that time that it is more likely than not the deficiency has been corrected, sanctions will be deferred. See 40 CFR 52.31 which sets forth when sanctions apply and when they may be stopped or deferred.

In addition to the sanctions, CAA section 110(c) provides that EPA must promulgate a FIP addressing the deficiency that is the basis for this disapproval action two years after the effective date of the disapproval unless we have approved a revised SIP before that date.

V. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

B. Paperwork Reduction Act

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Reduction Act

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because SIP approvals or SIP disapprovals under section 110 of the Clean Air Act do not create any new requirements but simply approve or disapprove requirements that the State is already imposing. Therefore, because the withdrawal of previous approvals of certain SIP revisions, and disapproval of the same, do not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities. Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of a flexibility analysis would constitute Federal inquiry into the economic reasonableness of State action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

Under section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate, or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that this action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action withdraws previous approvals of certain pre-existing SIP elements and disapproves the same, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

E. Executive Order 13132, Federalism

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely withdraws previous approvals of certain SIP revisions implementing a Federal standard and disapproves the same, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not apply to this rule.

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

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it withdraws previous approvals of certain SIP revisions implementing a Federal standard and disapproves the same.

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

This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

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

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA lacks the discretionary authority to address environmental justice in this rulemaking. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the Clean Air Act. Accordingly, this action merely withdraws previous approvals of certain SIP revisions implementing a Federal standard and disapproves the same under section 110 of the Clean Air Act and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

K. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

L. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 28, 2013. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compounds

Dated: March 14, 2013.

Jared Blumenfeld,

Regional Administrator, EPA Region IX.

Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart F—California

§ 52.220

[Amended]

2. Section 52.220 is amended by removing and reserving paragraph (c)(339)(ii)(B)( 2).

Footnotes

1.  Under 40 CFR 52.31(d), the application of sanctions shall be deferred or stayed (depending on timing) if the State submits a new SIP that corrects the SIP deficiency and EPA proposes approval of that SIP and issues an interim final determination that the State has corrected the deficiency. This deferral or stay will continue unless and until EPA proposes to or takes final action to instead disapprove the new SIP, in which case sanctions would apply depending on the timing of EPA's action with respect to the relevant 18-month and 24-month periods.

2.  The South Coast includes Orange County, the southwestern two-thirds of Los Angeles County, southwestern San Bernardino County, and western Riverside County (see 40 CFR 81.305).

3.  In 2008, EPA tightened the 8-hour ozone NAAQS to 0.075 ppm, see 73 FR 16436 (March 27, 2008). Today's action relates only to SIP requirements arising from the classifications and designations of the South Coast with respect to the 1979 1-hour ozone and 1997 8-hour ozone standards.

4.  Letter from Elaine Chang, Deputy Executive Officer, South Coast Air Quality Management District, dated September 10, 2008, approved at 40 CFR 52.220(c)(339)(ii)(B)(2).

5.  See pages 6-23 and 6-27 (table 6-12) of the Final 2007 Air Quality Management Plan, June 2007, prepared by the South Coast Air Quality Management District.

6.  Karl Simon, Director, Transportation and Climate Division, EPA Office of Transportation and Air Quality, to Carl Edlund and Deborah Jordan, “Guidance on Implementing Clean Air Act Section 182(d)(1)(A): Transportation Control Measures and Transportation Control Strategies to Offset Growth in Emissions Due to Growth in Vehicle Miles Travelled,” August 30, 2012.