Nonattainment Major New Source Review Implementation Under 8-Hour Ozone National Ambient Air Quality Standard: Reconsideration, 39413-39426 [05-13483]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 70, Number 130 (Friday, July 8, 2005)]
[Rules and Regulations]
[Pages 39413-39426]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13483]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[E-Docket ID No. OAR-2003-0079, FRL-7934-9]
RIN 2060-AJ99


Nonattainment Major New Source Review Implementation Under 8-Hour 
Ozone National Ambient Air Quality Standard: Reconsideration

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule; notice of final action on reconsideration.

-----------------------------------------------------------------------

SUMMARY: On April 30, 2004, the EPA (we)(in this preamble, the terms 
``we'' and ``us'' refers to the EPA, and ``our'' refers to EPA's. All 
other entities are referred to by their respective names (e.g., 
commenter)) took final action on key elements of the program to 
implement the 8-hour ozone national ambient air quality standard (NAAQS 
or 8-hour standard). In that final action, we addressed certain 
implementation issues related to the 8-hour standard, including the 
nonattainment major New Source Review (NSR) program mandated by part D 
of title I of the Clean Air Act (``the Act'' or ``CAA''). Following 
this action, EarthJustice filed a petition on behalf of several 
organizations requesting reconsideration of several aspects of the 
final rule including implementation of the nonattainment major NSR 
program, among other issues. By a letter, dated September 23, 2004, we 
granted

[[Page 39414]]

reconsideration of three issues raised by the petition for 
reconsideration filed by EarthJustice. One of these issues relates to 
implementation of the major NSR program.
    On April 4, 2005, in response to the request for reconsideration 
relating to aspects of the nonattainment major NSR program for the 8-
hour standard, we proposed to retain the final rule as promulgated on 
April 30, 2004. (70 FR 17018). We requested comment on and provided 
additional information related to whether we should interpret the Act 
to require areas to retain major NSR requirements that apply to certain 
1-hour ozone nonattainment areas in implementing the 8-hour standard. 
We also requested comment on whether we properly concluded that a 
State's request to remove 1-hour major NSR provisions from its State 
Implementation Plan (SIP) will not interfere with any applicable 
requirement within the meaning of section 110(l) of the Act.
    Today, we are re-affirming our April 30, 2004 final rule. We 
conclude that the requirements for nonattainment major NSR under the 8-
hour standard will be based on a nonattainment area's classification 
for the 8-hour standard, and that States may remove their 1-hour major 
NSR programs from their SIPs now that we have revoked the 1-hour 
standard. We believe that our conclusions are consistent with the Act, 
including section 110(l), our anti-backsliding policy we established 
for the 8-hour standard, and the ability of areas to achieve reasonable 
further progress (RFP) and attainment.

DATES: This final action is effective on August 8, 2005.

ADDRESSES: The EPA docket for this action is Docket ID No. OAR-2003-
0079. All documents in the docket are listed in the EDOCKET index at 
https://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the Internet and will be publicly available only in hard 
copy form. Publicly available docket materials are available either 
electronically in EDOCKET or in hard copy at the Air Docket, 
Environmental Protection Agency, EPA West, 1301 Constitution Avenue, 
NW., Room B-102, Washington, DC. The Public Reading Room is open from 
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 
holidays. The telephone number for the Public Reading Room is (202) 
566-1744, and the telephone number for the Air Docket is (202) 566-
1742.

FOR FURTHER INFORMATION CONTACT: Ms. Lynn Hutchinson, Office of Air 
Quality Planning and Standards, (C339-03), U.S. EPA, Research Triangle 
Park, North Carolina 27711, telephone number (919) 541-5795, fax number 
(919) 541-5509, e-mail address: hutchinson.lynn@epa.gov.

SUPPLEMENTARY INFORMATION: 

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected by the subject rule for today's 
action include sources in all industry groups. The majority of sources 
potentially affected are expected to be in the following groups.

------------------------------------------------------------------------
                                   SIC
         Industry group            \a\              NAICS \b\
------------------------------------------------------------------------
Electric Services..............     491  221111, 221112, 221113, 221119,
                                          221121, 221122.
Petroleum Refining.............     291  324110.
Industrial Inorganic Chemicals.     281  325181, 325120, 325131, 325182,
                                          211112, 325998, 331311,
                                          325188.
Industrial Organic Chemicals...     286  325110, 325132, 325192, 325188,
                                          325193, 325120, 325199.
Miscellaneous Chemical Products     289  325520, 325920, 325910, 325182,
                                          325510.
Natural Gas Liquids............     132  211112.
Natural Gas Transport..........     492  486210, 221210.
Pulp and Paper Mills...........     261  322110, 322121, 322122, 322130.
Paper Mills....................     262  322121, 322122.
Automobile Manufacturing.......     371  336111, 336112, 336211, 336992,
                                          336322, 336312, 336330,
                                          336340, 336350, 336399,
                                          336212, 336213.
Pharmaceuticals................     283  325411, 325412, 325413, 325414.
 
------------------------------------------------------------------------
\a\ Standard Industrial Classification.
\b\ North American Industry Classification System. Entities potentially
  affected by the subject rule for today's action also include State,
  local, and Tribal governments that are delegated authority to
  implement these regulations.

B. Where Can I Get a Copy of This Document and Other Related 
Information?

    In addition to being available in the docket, an electronic copy of 
this final action will also be available on the World Wide Web. 
Following signature by the EPA Administrator, a copy of this notice 
will be posted in the regulations and standards section of the our NSR 
home page located at https://www.epa.gov/nsr.

C. How Is This Notice Organized?

    The information presented in this notice is organized as follows:

I. General Information
    A. Does This Action Apply to Me?
    B. Where Can I Get a Copy of This Document and Other Related 
Information?
    C. How Is This Notice Organized?
II. Background
III. Today's Final Action on Reconsideration
    A. Final Decision
    B. Effective Date
    C. Significant Comments: Summary and Response
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA), as Amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
V. Statutory Authority
VI. Judicial Review

[[Page 39415]]

II. Background

    On July 18, 1997, we revised and strengthened the ozone NAAQS to 
change from a standard measured over a 1-hour period (1-hour standard) 
to a standard measured over an 8-hour period (8-hour standard). 
Previously, the 1-hour standard was 0.12 parts per million (ppm). We 
established the new 8-hour standard at 0.08 ppm. (62 FR 38856). 
Following revision of the standard, we initially promulgated a rule 
that provided for implementation of the 8-hour standard under the 
general nonattainment area provisions of subpart 1 of Part D of the 
Act. (62 FR 38421). Subsequently, the Supreme Court ruled that our 
implementation approach was unreasonable because we did not provide a 
role for the generally more stringent ozone-specific provisions of 
subpart 2 of Part D of the Act in implementing the 8-hour standard. See 
Whitman v. Amer. Trucking Assoc., 531 U.S. 457, 471-476, 121 S. Ct. 
903, 911-914 (2001). The Court remanded the rule to us to develop a 
reasonable approach for implementation. Id.
    On June 2, 2003, we proposed various options for transitioning from 
the 1-hour to the 8-hour standard, and for how the 8-hour standard 
would be implemented under both subpart 1 and subpart 2. (68 FR 32802). 
On August 6, 2003, we published a notice of availability of draft 
regulatory text to implement the 8-hour standard. (68 FR 46536). Among 
other things, this proposed rule included certain provisions for 
implementing major NSR. Specifically, we proposed that major NSR would 
generally be implemented in accordance with an area's 8-hour ozone 
nonattainment classification, but we would provide an exception for 
areas that were designated nonattainment for the 1-hour standard at the 
time of designation for the 8-hour standard. If the classification for 
a 1-hour nonattainment area was higher than its classification under 
the 8-hour standard, then under the proposed rule, the major NSR 
requirements in effect for the 1-hour standard would have continued to 
apply under the 8-hour standard even after we revoked the 1-hour 
standard. (68 FR 32821).
    On April 30, 2004, we promulgated Phase I of the new implementation 
rule. (69 FR 23951). In response to comments received on the proposal, 
we revised the implementation approach for major NSR under the 8-hour 
standard. Specifically, we determined that major NSR would be 
implemented in accordance with an area's 8-hour ozone nonattainment 
classification. For those areas that we classify marginal and above, 
major NSR is implemented under subpart 2. We also indicated that, when 
we revoke the 1-hour standard, a State is no longer required to retain 
a nonattainment major NSR program in its SIP based on the requirements 
that applied by virtue of the area's previous classification under the 
1-hour standard. We further indicated that we would approve a request 
to remove these requirements from a State's SIP because we determined, 
based on section 110(l) of the Act, that such changes will not 
interfere with any applicable requirements of the Act, including a 
State's ability to reach attainment of the 8-hour standard or RFP 
towards that standard. (69 FR 23985). We noted that States will be 
required to implement a major NSR program based on the 8-hour 
classifications. We also emphasized that emission limitations and other 
requirements in major NSR permits issued under 1-hour major NSR 
programs will remain in effect even after we revoke the 1-hour 
standard. (69 FR 23986).
    Following publication of the April 30, 2004 final rule, the 
Administrator received three petitions, pursuant to section 
307(d)(7)(B) of the Act, requesting reconsideration of certain aspects 
of the final rule.\1\ On June 29, 2004, Earthjustice submitted one of 
the three petitions that we received. This petition seeks 
reconsideration of certain elements of the Phase I Ozone Implementation 
Rule, including elements of the major NSR provisions. With respect to 
major NSR, Petitioners contend that the final rules are unlawful 
because the rules violate section 110(l) and section 172(e) of the Act 
by not requiring 8-hour ozone nonattainment areas to continue to apply 
major NSR requirements based on the area's prior 1-hour ozone 
nonattainment classification. Petitioners also allege that we acted 
unlawfully by stating that we will approve a State's request to remove 
1-hour requirements from the SIP based on our finding that such a 
revision would not violate section 110(l) for any State. Petitioners 
assert that these major NSR provisions and our rationale for them were 
added to the final action after the close of the public comment period. 
Thus, Petitioners claim, we failed to provide notice and opportunity 
for public comment concerning these provisions as required under 
section 307(d)(5) of the Act.
---------------------------------------------------------------------------

    \1\ Petitioners are: (1) Earthjustice on behalf of the American 
Lung Association, Environmental Defense, Natural Resources Defense 
Council, Sierra Club, Clean Air Task Force, Conservation Law 
Foundation, and Southern Alliance for Clean Energy; (2) the National 
Petrochemical and Refiners Association and the National Association 
of Manufacturers; and (3) the American Petroleum Institute, American 
Chemistry Council, American Iron and Steel Institute, National 
Association of Manufacturers and the U.S. Chamber of Commerce.
---------------------------------------------------------------------------

    On September 23, 2004, we granted reconsideration of three issues 
raised in the Earthjustice Petition, including the NSR issues. In an 
action dated February 3, 2005, we issued a Federal Register notice 
addressing two of those issues: (1) The provision that section 185 fees 
would no longer apply for a failure to attain the 1-hour standard once 
we revoke the 1-hour standard; and (2) the timing for determining what 
is an ``applicable requirement.'' (70 FR 5593). On May 26, 2005, we 
took final action on these issues. (70 FR 30592).
    On April 4, 2005, as part of our reconsideration process, we 
requested comment on: (1) Whether we must interpret the Act to require 
States to continue major NSR requirements under the 8-hour standard 
based on an area's higher classification under the 1-hour standard; and 
(2) whether revising a State SIP to remove 1-hour major NSR 
requirements is consistent with section 110(l) of the Act. However, we 
proposed to retain the nonattainment major NSR requirements as outlined 
in our April 30, 2004 final rules. (70 FR 17018).

III. Today's Final Action on Reconsideration

A. Final Decision

    Today, we re-affirm our April 30, 2004 final rules. Accordingly, 
States must issue permits to regulate construction and major 
modifications of major stationary sources consistent with the major NSR 
requirements that apply based on that area's classification under the 
8-hour standard.\2\ If a State currently lacks an approved NSR program 
that applies for the 8-hour standard, the State must submit an NSR 
program to EPA for our approval. The deadline for submission will be 
established in Phase II of the ozone implementation rule. Moreover, we 
find that section 110(l) does not preclude us from approving a State's 
request to revise its SIP to remove 1-hour nonattainment major NSR 
requirements.
---------------------------------------------------------------------------

    \2\ In implementing a program consistent with the major NSR 
requirements that apply based on that area's classification under 
the 8-hour standard, section 116 of the Act allows States to adopt 
regulations which are not less stringent than the federal minimum 
requirements.
---------------------------------------------------------------------------

    After reviewing comments we received on the proposal, we continue 
to interpret the Act as not requiring States to retain major NSR 
requirements related to the 1-hour standard in implementing 
nonattainment major NSR

[[Page 39416]]

for the 8-hour standard.\3\ Consistent with the mandates of the Supreme 
Court in Whitman v. American Trucking, we crafted a reasonable approach 
for implementing major NSR requirements under the 8-hour standard. 531 
U.S. 457 (2001). Moreover, we interpret the requirements of section 
172(e) as not applying in these circumstances, and believe that we have 
reasonably interpreted this provision in crafting our anti-backsliding 
policies for the 8-hour standard to exclude major NSR programs as a 
``control measure.'' We further believe that basing an area's major NSR 
requirements on that area's classification under the 8-hour standard 
will assure that any new emissions from the construction or 
modification of major stationary sources will be sufficiently mitigated 
to ensure that such emissions will not interfere with RFP or 
attainment.
---------------------------------------------------------------------------

    \3\ On April 18, 2005, we held a hearing to afford the public an 
opportunity to provide oral testimony on our reconsideration of the 
nonattainment major NSR provisions in the Phase I Ozone 
Implementation rule. One person attended the hearing and provided 
testimony supporting the concerns raised in the Earthjustice 
petition. Following the public hearing, we received public comment 
letters from approximately 20 individuals or groups. Section III. B. 
of this preamble contains a summary of significant comments we 
received and our responses to those comments.
---------------------------------------------------------------------------

B. Effective Date

    In granting reconsideration of the EarthJustice petition, the 
Administrator elected not to stay or vacate the existing regulations. 
Accordingly, these requirements remained in effect following the April 
30, 2004 promulgation. Several environmental, industry, and 
governmental petitioners subsequently challenged the April 30, 2004 
rule implementing the 8-hour ozone standard. South Coast Air Quality 
Management District v. U.S. EPA, No. 04-1200 (and consolidated cases) 
(DC Cir.). After we granted portions of the EarthJustice petition for 
reconsideration, the Court, at our request, severed the challenges to 
the three issues for which EPA granted reconsideration from the main 
consolidated cases challenging the implementation rule. However, 
because we committed to an expeditious determination of the three 
issues under reconsideration, the parties subsequently agreed that it 
would serve judicial economy and the parties' resources to consolidate 
the severed case relating to the three issues under reconsideration 
back into the main case challenging our April 30, 2004 implementation 
rule. We filed a motion seeking such consolidation. The EPA represented 
in that motion that it would not take final action on any SIP 
submittals relating to those provisions earlier than 30 days after it 
has signed a final action on the aspect of the reconsideration to which 
the SIP pertains. Accordingly, we will not take final action on a 
State's request to revise its SIP relative to the 1-hour and 8-hour 
nonattainment major NSR programs until that time.

C. Significant Comments: Summary and Response

    In our April 4, 2005 proposal, we requested comment on five issues 
related to our reconsideration:
    (1) Our determination that the Act does not require States to apply 
major NSR requirements under the 8-hour standard based on an area's 
higher classification under the 1-hour standard after we revoke the 1-
hour standard;
    (2) Our interpretation that the term ``control'' as used in section 
172(e) of the Act does not include major NSR requirements;
    (3) Our conclusion that a State's removal of 1-hour major NSR 
programs from its SIP will not interfere with any applicable 
requirements of the Act including attainment and RFP;
    (4) Our discussion regarding State and local agency emissions 
projections used for RFP and attainment, including whether the 
statements we have made regarding those emissions projections are 
accurate; and
    (5) Information on any instance in which a State or local agency 
relied on major NSR as a control measure to reduce overall base year 
emissions in a rate of progress (ROP) plan or attainment demonstration.
    Below we consolidated the comments that we received to these 
questions into four main topic areas, and provide our response to those 
comments.
1. Does the Act Require States To Apply Major NSR Requirements Under 
the 8-Hour Standard Based on an Area's Higher Classification Under the 
1-Hour Standard?
    a. Comments
    Several commenters supported our position that the Act does not 
require States to apply major NSR requirements under the 8-hour 
standard based on an area's higher classification under the 1-hour 
standard. Nonetheless, several commenters disagreed with our position, 
that section 172(e) is an expression of Congressional intent that 
States may not remove control measures in areas which are not attaining 
a NAAQS when we revised that standard to make it more stringent, 
because the plain language of section 172(e) applies only when we make 
a NAAQS less stringent. One commenter stressed that section 172(e) 
could not logically be applied to a new 8-hour standard. Moreover, many 
of these commenters agreed with us, that even if section 172(e) applies 
to the 8-hour implementation rule, we properly concluded that the major 
NSR program does not impose emissions reduction ``controls.''
    One commenter indicated that we would violate equal protection laws 
if we established different requirements for different areas based on 
their attainment status under the revoked 1-hour standard when both are 
classified the same under the 8-hour standard. Another commenter stated 
that we appropriately looked into the Congressional history of the Act 
to determine the underlying purpose of the major NSR program and found 
that its purpose is to manage growth in a manner consistent with the 
goals and objectives of the Act. (70 FR 17022), H.R. Rpt. 95-294 at 210 
(May 12, 1977).
    Conversely, several commenters contend that our decision that 
States need not retain nonattainment major NSR requirements based on 
the area's classification under the 1-hour standard is contrary to the 
two anti-blacksliding provisions in the Act, sections 172(e) and 193. 
42 U.S.C. sections 7502(e) and 7515. Several commenters also alleged 
that in a Senate floor debate on the 1990 amendments, Senator John 
Chafee described the purpose of section 193 of the Act as ``intended to 
ensure that there is no backsliding on the implementation of adopted 
and currently feasible measures that EPA has approved as part of a 
[SIP] in the past, or that EPA has added to State plans on its own 
initiative or pursuant to a court order or settlement.'' 136 Cong. Rec. 
S17, 232, S17, 237 (Oct 26, 1990). The commenters claim that our narrow 
interpretation of control measure cannot be reconciled with this broad 
definition. At least one commenter believes that the final rule is 
contrary to the provisions of the Act, because it allows major sources 
in 1-hour nonattainment areas that are designated with a lower 8-hour 
nonattainment classification to be subject to less stringent NSR 
requirements by raising the tonnage threshold for defining a major 
source and lowering the required offset ratio.
    b. Response
    As stated in our April 4, 2005 notice on NSR reconsideration, after 
reviewing a variety of information including the statutory 
requirements, Congressional intent as expressed in legislative history, 
the history of the NSR regulatory program, and our actions on 1-hour 
ozone ROP plans and attainment demonstrations in general as they relate

[[Page 39417]]

to nonattainment major NSR programs, we concluded that the Act does not 
require States to retain a nonattainment program in their SIPs based on 
the requirements that applied by virtue of the area's previous 
classification under the 1-hour standard. After considering the 
comments received on this issue that both support and oppose our 
position, we continue to believe that our conclusion on this issue is 
correct.
    We agree with commenters that section 172(e) does not apply to the 
requirements for the 8-hour ozone standard. Nonetheless, because the 
Act does not specifically address what requirements apply when we 
strengthen a NAAQS, we stated that we viewed the provisions in section 
172(e) as an expression of Congressional intent that States may not 
remove control measures in areas which are not attaining a NAAQS when 
EPA revises that standard to make it more stringent. (70 FR 17021). We 
continue to believe that Congress intended States to retain control 
measures in SIPs when we strengthen a NAAQS, but we do not believe that 
Congress intended to restrict States from amending their SIPs to adjust 
for future management of growth based on current day air quality needs.
    We agree with the commenters that even if section 172(e) applies 
when we strengthen a NAAQS, it would still not preclude a State from 
adjusting its nonattainment major NSR requirements because major NSR is 
not a control within the meaning of section 172(e) of the Act. We 
discuss this interpretation in more detail in section III.C.2. of 
today's preamble. Moreover, we disagree with commenters who indicate 
that our final rules violate section 193 of the Act. First, as noted, 
we do not believe that NSR programs are ``control measures'' within the 
meaning of section 193. Secondly, section 193 applies to certain 
requirements that were in effect before 1990. Today's final rules 
address how the post-1990 requirements contained in subpart 2 of the 
Act will apply in 8-hour nonattainment areas.
    Before 1990, the nonattainment major NSR requirements were 
contained in section 173 of the 1977 CAA and they did not include the 
higher offset ratios and lower major stationary source thresholds found 
in subpart 2 of the 1990 CAA. In 1990, Congress added additional 
requirements to section 173 and added subpart 2. Nothing in today's 
final rule allows any jurisdiction to adopt nonattainment NSR 
requirements for the 8-hour standard that do not meet the minimum 
requirements the State used to satisfy section 173 before 1990. 
Accordingly, section 193 of the Act is not implicated by our final 
action.
    We disagree with the commenter that argues that Congress meant for 
section 193 of the Act to have broader application. In fact, by its 
terms, section 193 precludes broader application at least as it relates 
to subpart 2 requirements. Congress added the subpart 2 requirements at 
the same time it added section 193. Congress expressed an intent to 
exclude the new requirements it added in 1990 by limiting section 193 
to pre-1990 requirements. The clear intent of this action is that 
Congress did not mean to use section 193 to limit the ability of States 
to revise SIPs relative to subpart 2 requirements. Instead, Congress 
added section 110(l) to the Act to guide such SIP changes. Section 
110(l) allows States to make changes to a State SIP with respect to 
measures not covered by section 193 if the change does not interfere 
with any applicable requirement concerning attainment and RFP or any 
other applicable requirement of the Act. We discuss how our final rule 
satisfies the requirements of section 110(l) of the Act in section 
III.C.3. of this preamble.
    Viewing these two statutory changes in section 193 and section 
110(l) together, Congress expressed an intent to have the pre-1990 
requirements establish the foundation for the nonattainment program. 
However, Congress did not expressly require that States retain subpart 
2 requirements, which were added by the 1990 Amendments, in all 
circumstances. Accordingly, we reject the alternative interpretations 
expressed by commenters which essentially result in sections 110(l), 
172(e), and 193 of the Act as having identical meanings notwithstanding 
their different wording.
    In Chevron v. NRDC, 467 U.S. 837 (1984), the Supreme Court 
considered a challenge to EPA regulations implementing the NSR program 
which defined the term ``source.'' The Court concluded that neither the 
statutory language nor legislative history revealed Congress' intent 
regarding the meaning of the term, and observed that Congress had 
intended to accommodate competing objectives but did not do so with 
specificity in its statutory language. Under these circumstances, the 
Court upheld EPA's regulations as a reasonable accommodation of 
competing interests because the agency considered the matter in a 
detailed and reasoned fashion, and the decision involved reconciling 
conflicting policies. Id. at 865. The Court concluded that EPA's 
regulations reasonably sought to accommodate progress in reducing air 
pollution with economic growth despite the fact that EPA's regulatory 
changes would result in fewer sources going through major NSR. Id. at 
866.
    Here, for the 8-hour standard, the Supreme Court directed us to 
develop a reasonable approach for implementing subpart 2 of Part D of 
the Act in implementing the 8-hour standard. Whitman v. Amer. Trucking 
Assoc., 531 U.S. 457, 471-76 (2001). For purposes of implementing major 
NSR, we considered whether States should be required to implement 
subpart 2 in accordance with an area's previous classification under 
the 1-hr standard, or with its new classification under the 8-hour 
standard. After determining that either approach would be consistent 
with the Act and Congressional intent, we selected, and now re-affirm, 
the latter approach. We choose to require States to implement major NSR 
based on an area's classification under the 8-hour standard because we 
believe that such a classification better reflects the current day air 
quality needs of the area. Additionally, like the plantwide definition 
of ``source'' at issue in Chevron, this approach allows States to 
retain flexibility to better balance environmental objectives with 
economic growth. ``When a challenge to an agency construction of a 
statutory provision centers on the wisdom of the agency's policy, 
rather than whether it is a reasonable choice within a gap left open by 
Congress, the challenge must fail.'' Chevron v. NRDC, 467 U.S. at 866.
2. Does the Term ``Control'' as Used in Section 172(e) Include Major 
NSR Requirements?
    a. Comments
    Several commenters agree that major NSR programs are not 
``controls'' that must be preserved in implementing the 8-hour 
standard. Some reasoned that major NSR does not contribute to emissions 
reductions below baseline levels. Others contend that ``controls'' and 
``growth measures'' have distinct meanings and that ``controls'' are 
designed to target existing emissions. Others reasoned that if Congress 
was referring to all requirements within a SIP by using ``controls'' in 
section 172(e), then Congress simply could have said that no SIP 
requirements can be relaxed when a standard is relaxed. For this 
reason, the commenters agree with EPA that by limiting section 172(e) 
to control measures Congress intended that only some SIP requirements 
would continue when a standard is relaxed, and major NSR is not one of 
these requirements. Importantly, one commenter reasoned that greater 
offset

[[Page 39418]]

ratios may discourage growth altogether and that areas with slightly 
eased offset ratios may in fact experience more growth which would 
theoretically result in more offset reductions in the area than would 
occur if higher offset ratios were imposed.
    Other commenters argued that the structure of the Act and its 
legislative and regulatory history clearly supports the intent that the 
major NSR permitting program is a ``growth measure,'' rather than a 
``control measure.'' One commenter pointed out that our conclusion that 
NSR is not a ``control measure'' is clear in the context of section 
175A of the Act maintenance plans. (68 FR 25418, 25436).
    One commenter participated in the regulatory development process 
for Illinois' RFP and nonattainment NSR SIP programs. The commenter 
indicates Illinois did not intend its nonattainment NSR rules (i.e., 35 
Ill. Adm. Code part 203) to be a ``control measure,'' but rather a 
procedural methodology to be used under defined circumstances.
    Conversely, several commenters disagreed with our assertion that 
the nonattainment NSR program is not a ``control'' requirement or 
measure. Some commenters reasoned that we drew an artificial 
distinction between a ``growth measure'' and a ``control measure.'' The 
commenters contend that our interpretation is too limited as they 
believe that NSR operates both to reduce emissions and to control 
emissions growth.
    One commenter asserts that EPA did not provide evidence 
substantiating our definition of ``control'' and why it does not 
include ``growth measures.'' The commenter further stated that we never 
discuss why it limits the reading of section 172(e) solely to measures 
that reduce emissions to assure attainment.
    Several commenters stated that nonattainment NSR imposes 
``controls'' through the offset requirement and that there is 
legislative support for this position where the NSR program is 
described as a ``graduated control program'' involving increasingly 
protective requirements for higher classifications. One commenter 
reasoned there is nothing in section 172(e) or elsewhere in the Act 
that limits the definition of control to programs whose benefits can be 
quantified and accounted for by a State in its attainment 
demonstration. Another commenter stated that NSR is a control measure 
because offsets are certain and are obtained from the same 
nonattainment area.
    Two commenters reiterate comments raised by Earthjustice's petition 
that we characterized NSR as a pollution control measure in briefs we 
submitted to the court. The commenters stated that an emission 
limitation is a ``control measure'' or ``requirement.'' The commenters 
believe an interpretation that NSR is merely a ``growth measure'' is at 
odds with legislative history indicating that Congress sought to foster 
the development of control technology when it enacted Prevention of 
Significant Determination (PSD) and nonattainment NSR.
    One commenter cited several Federal Register notices in which we 
analyzed changes to a State's SIP in light of section 193 requirements 
and argued that we would have not needed to evaluate whether a SIP 
change satisfies section 193 unless NSR is a ``control requirement.''
    b. Response
    As we previously stated, Section 172(e) does not apply to the 
requirements for the 8-hour ozone standard. In this action, we are not 
attempting to assign a comprehensive definition to the term 
``controls'' as used in section 172(e) of the Act. Rather, we interpret 
the term solely as it relates to our anti-backsliding policy, and 
whether Congress would have intended States to retain the major NSR 
program as imposed on 1-hour ozone nonattainment areas as far back as 
1990 in implementing the new, more stringent 8-hr ozone NAAQS.
    The term ``controls'' as used in section 172(e) of the Act is 
ambiguous. As we stated in our April 4, 2005 proposal, Petitioners and 
others present a possible interpretation of this term. Nonetheless, 
based on our review of Congressional history and the structure of the 
Act, we believe Congress' primary purpose in creating the major NSR 
program was to manage growth in a way that balances economic 
development with the air quality needs of specific nonattainment areas.
    Just as the Supreme Court recognized in Chevron, Congress intended 
to accommodate the competing objectives of progress in reducing air 
quality with economic growth, but did not always reconcile both of 
those interests with specificity in its language. We looked at several 
sections of the Act for direction in interpreting the term ``control'' 
in Section 172(e). (70 FR 17018, 17022). In particular, we looked at 
the Section 172(a)(2) requirement that areas attain ``as expeditiously 
as practicable.'' Unlike control measures, such as reasonably available 
control technology (RACT) and transportation control measures (TCM), we 
do not believe that Congress intended to link the major NSR program to 
the section 172(a)(2) requirement that areas attain ``as expeditiously 
as practicable.'' This is evident by Congress's recognition and 
acceptance that economic growth will result in ``some worsening of air 
quality or delay in actual attainment * * *'' See H.R. Rpt. 95-294, 
214-215 (May 12, 1977). We distinguished Sections 172(c)(1) and (c)(6) 
which require implementation of all reasonably available control 
measures as expeditiously as practicable to provide for attainment of 
the NAAQS from the Section 173(a)(1)(A) requirement that growth due to 
proposed sources be considered together with other plan provisions 
required under Section 172 to ensure RFP toward attainment. After 
carefully reviewing the statute and statement of Congressional intent, 
we continue to conclude that Congress did not intend to include major 
NSR requirements within the scope of section 172(e) of the Act.
    Moreover, as explained in our April 4, 2005 proposal, unlike 
control measures for which emissions reductions can be quantified and 
relied on in a modeling demonstration to show how the measure helps an 
area reach attainment, the generation of offsets are uncertain and 
generally cannot be quantified in advance by States. (70 FR 17018, 
17023). In 1990, Congress recognized that some States were not 
accurately predicting the growth within their attainment 
demonstrations. We believe it is reasonable to assume that Congress 
included major NSR in its ``graduated control program'' in subpart 2 to 
provide an extra buffer for growth in areas with more severe air 
quality problems.\4\
---------------------------------------------------------------------------

    \4\ In 1990, Congress recognized that many of the Nation's air 
pollution problems failed to improve or grew more serious. In 
assessing the reasons for these failures, Congress identified 
several problems that lead to this result, including inadequate 
inventories, deficient models, and uncertainties that exist in the 
assumptions used in the models. Congress noted that EPA indicated 
that emissions growth and inaccurate emissions inventories were 
predominant problems. H.R. Rpt. 101-490(I) at 144 (May 17, 1990). In 
response, Congress took many steps to improve air quality, including 
invalidating some of the existing growth allowances and shifting the 
emphasis from managing growth using growth allowances to using the 
case-by-case offset approach. In light of the past difficulties 
States experienced in attainment planning, Congress established a 
strategy that differentiates among areas with regard to attainment 
dates based on the severity of the area's ozone problem, including 
increased offset ratios to compensate for uncertainties in 
predicting growth.
---------------------------------------------------------------------------

    We do not believe that the structure of the Act and purpose of 
major NSR support a conclusion that Congress included major NSR in 
subpart 2 for the purpose of generating emissions reductions. The Act 
does not support the view that Congress intended the major NSR program 
to generate

[[Page 39419]]

emissions reductions in the State's base year inventory to move the 
area forward in attainment, nor have States implemented the program in 
that manner. The purpose and historical implementation of major NSR 
distinguish it from the other requirements that we determined in the 
Phase I implementation rule that nonattainment areas must retain in 
implementing the 8-hour standard.
    To the extent that a nonattainment area is currently designated 
with a lower classification under the more stringent 8-hour standard, 
it is because that area now has cleaner air than when it was designated 
under the 1-hour standard. This improvement demonstrates that the State 
has more effectively managed efforts to address its air quality problem 
than in the past. We believe Congress expressed an intent to allow 
States the flexibility to regulate economic growth in nonattainment 
areas consistent with efforts to address the severity of the area's air 
quality problem. Accordingly, we are requiring States to implement a 
nonattainment major NSR program in accordance with its 8-hour 
nonattainment classification.
    We do not dispute that major NSR requires certain sources to apply 
control technologies to mitigate pollutant increases and that Congress 
intended this aspect of the program to advance pollution control 
technology over time. Moreover, requiring higher offset ratios could 
theoretically lead to emissions reductions in an area. Nonetheless, as 
we explained in our proposal, unlike ``control measures,'' States are 
not relying on the application of these control technologies or offsets 
to advance the area toward attainment. There is also no guarantee that 
major NSR will reduce base year emissions, because it is uncertain 
whether any new emissions sources will be constructed and if offsets 
will be obtained from the same nonattainment area. See State of New 
York v. U.S. Environmental Protection Agency, -- F.3d --, 2005 WL 
1489698 (DC Cir.) (C.A.D.C., 2005). (Recognizing that the purpose of 
emission offsets is to produce no increase in overall regional 
emissions.)
    We do not believe that the statutory framework, legislative 
history, or common sense require us to characterize a program that only 
applies when emissions increase in an area as an emissions reduction 
program irrespective of whether some control technologies or offset 
requirements are components of the program. Moreover, we agree that it 
is possible that higher offset ratios may discourage growth and 
actually result in fewer offset reductions than areas implementing a 
lower offset ratio, as one commenter stated.\5\ \6\
---------------------------------------------------------------------------

    \5\ Transcript July 19, 1994. (OAR-2001-0004-0650 to -0651). NSR 
Reform Subcommittee Meeting. U.S. EPA. Statement by Mr. Barr. (To 
require a traditional offset equivalent in attainment areas would 
be, in most cases, equivalent to ``establishing a zone where there 
is a construction ban in effect.'')
    \6\ Southern California Air Quality Alliance. (OAR-2001-0004-
0418). Letter to Docket. August 25, 2003. (Comment states that high 
offset levels in California dissuaded a facility from replacing 3 
old, high emitting boilers, with new, lower emitting boilers because 
the cost of offsets was prohibitive. Stated that ``this is but one 
of many actual examples of ``stringency'' interfering with the 
emission reductions.'')
---------------------------------------------------------------------------

    We disagree with the commenter who indicated that offset benefits 
are certain and that they must always come from the nonattainment area. 
The commenter provides no evidence to support this statement in light 
of the provisions of section 173(c) of the Act that allow sources to 
obtain offsets from other nonattainment areas. Under our final rule for 
implementing major NSR under the 8-hour standard, we retain the 
technology forcing aspect of the program by requiring certain sources 
to install control technologies, and we mandate an offset ratio 
commensurate with the severity of the area's nonattainment problem.
    Even assuming arguendo that the term ``controls'' in section 172(e) 
of the Act includes the major NSR program, the language in section 
172(e) does not resolve which elements of major NSR we must require 
States to apply in a given nonattainment area. Section 172(e) only 
requires that when EPA relaxes a NAAQS, it must promulgate regulations 
requiring the controls that are not less stringent than the controls 
applicable to areas designated nonattainment before such designation. 
While section 172(e) provides EPA with the authority to impose 
requirements for each nonattainment area after it changes a NAAQS 
standard that are not less stringent than the controls that existed 
prior to the NAAQS change, section 172(e) does not mandate that EPA's 
regulations require nonattainment areas to continue to comply with each 
and every requirement that applied under the previous standard.
    Accordingly, it is reasonable to interpret section 172(e) as 
requiring that, at a minimum, we regulate nonattainment areas under the 
new standard in a manner consistent with, and not less stringent than, 
the way similarly-designated nonattainment areas were regulated under 
the old standard. We satisfy this minimum standard by requiring areas 
to apply a nonattainment major NSR program consistent with the area's 
8-hour classification. That is, all nonattainment areas remain subject 
to the technology forcing requirements to impose LAER controls but 
areas need only impose the major source thresholds and offset ratios 
appropriate for the 8-hour classification.
    We concur with the commenter who indicates that it is also clear in 
the context of section 175A maintenance plans that we should not 
interpret major NSR as a ``control measure.'' In Greenbaum v. EPA, the 
Court held that our interpretation of the term ``measure'' in section 
175A was reasonable, and that we appropriately considered the statutory 
structure in section 110 in determining that the term as used in 
section 175A did not include major NSR. Moreover, the Court found 
persuasive EPA's argument that the very nature of the NSR permit 
program supports its interpretation that it is not intended to be a 
contingency pursuant to section 175A(d). The Court noted that 
contingency measures (like control measures) require immediate 
emissions reductions on emissions sources. In contrast the Court 
observed that ``[t]he NSR program would have no immediate effect on 
emissions.'' 370 F.3d at 537-38. We believe that the structure and 
purpose of the Act similarly supports our view that major NSR 
requirements are not ``controls'' as that term is used in section 
172(e).
    We disagree with commenters who argue that section 193 of the Act 
compels us to require nonattainment areas to retain the NSR 
requirements that apply based on their 1-hour classifications. We 
previously explained in section III.C.1 of this preamble that section 
193 is not applicable since it applies to certain requirements that 
were in effect before 1990. In evaluating changes to State NSR SIPs, we 
have stated that section 193 of the Act does not clearly apply to 
revisions in the NSR programs, but we have nonetheless proceeded to 
analyze the change under an assumption that it may. (69 FR 31056, 
31063). Even proceeding on this assumption, we have relied on a 
holistic, qualitative assessment of all elements of the SIP to 
determine if a given action related to NSR complies with section 193 of 
the Act. We have found that no assessment can be made as to the number 
of sources affected by the revisions, and in some instances the number 
of sources regulated by major NSR in a State are so few that reducing 
the number of sources that might have to comply with the program in the 
future would result in an insignificant increase in emissions. (64 FR 
29563, 29564). Moreover, we have stated that although section 193 uses 
the phrase ``equivalent or greater emissions

[[Page 39420]]

reductions,'' in the context of NSR, which does not produce emissions 
reductions, we evaluate SIP changes to see whether the program as a 
whole provides equivalent or greater mitigation of new source growth. 
(69 FR 54006, 54012).
    We note that the language used by Congress in section 193 of the 
Act is different from the language used in section 172(e) of the Act. 
Rather than use the term ``controls'' as found in section 172(e), 
Congress begins section 193 by stating that, `` [e]ach regulation, 
standard, rule, notice, order, and guidance promulgated or issued * * * 
shall remain in effect * * *'' Congress goes on to require that ``[no] 
control requirement in effect * * * may be modified * * * unless the 
modification insures equivalent or greater emissions reductions of such 
air pollutant.'' Arguably, the language in section 193 is more-
inclusive than section 172(e). On the other hand, the use of the phrase 
``in effect'' in section 193 arguably encompasses only those permits 
currently issued and does not affect the ability of a State to change 
who would be required to obtain a permit in the future.
    Given the ambiguity in section 193 of the Act, we have chosen a 
conservative approach in our review of NSR SIP changes. Our past option 
to review changes for consistency with section 193 is not conclusive of 
the scope of section 193. Moreover, it holds no precedential value in 
evaluating Congress' purpose in using the different term ``controls'' 
in section 172(e). The Act, ``is too complex a compromise, and has been 
amended too many times, to indulge the assumption that all of its words 
must be used consistently in all of its subsections.'' Sierra Club v. 
EPA, 375 F.3d 537 (7th Cir. 2004). (Holding that the word 
``applicable'' did not have the same meaning when used in different 
parts of the Act.)
    In sum, we do not believe that by its terms, section 172(e), which 
imposes requirements on EPA if it relaxes a NAAQS, applies to our final 
action. However, we view this provision as an expression of 
Congressional intent that States may not remove control measures in 
areas which are not attaining a NAAQS when EPA revises a standard to 
make it more stringent, and we rely on the principles of section 172(e) 
in crafting our anti-backsliding policy under the 8-hour standard.
    Moreover, we believe that Congress created the major NSR program as 
a measure to mitigate emissions growth rather than a measure to 
generate emissions reductions from existing sources to reduce the base 
year emissions inventory in a given nonattainment area. To the extent 
that subpart 2 requires higher offset ratios and lower major stationary 
source thresholds, Congress included these requirements not to 
specifically generate emissions reductions but to provide a buffer to 
compensate for under projections of growth in state planning. Even if 
Congress broadly intended major NSR to be included within section 
172(e), section 172(e) only requires that we impose the subpart 2 major 
NSR requirements on similarly-designated nonattainment areas and does 
not mandate that we retain each and every element of the NSR program 
under the 1-hour standard in each and every previous nonattainment 
area, specifically those portions of the NSR program that do not impose 
control requirements.
3. Will a State's Removal of 1-Hour Major NSR Programs From Its SIP 
Interfere With Any Applicable Requirements of the Act Including 
Attainment and RFP?
    a. Comments
    Several commenters concurred with our finding that applying major 
NSR requirements based on an area's 8-hour nonattainment classification 
will not interfere with RFP and attainment or any other applicable 
requirement of the Act. One commenter noted that section 110(l) of the 
Act is not an anti-backsliding provision, but merely a requirement to 
assure that a State continues to meet RFP and attainment despite 
changes in the SIP. Another commenter indicated that section 110(l) 
could not be interpreted to require a State to maintain requirements 
for a standard that we revoked. The commenter argues that such an 
interpretation of section 110(l) would act to freeze all State rules in 
the SIP regardless of whether they make economical sense or are 
necessary for air quality. Many commenters agreed that States do not 
rely on emissions reductions from major NSR within their attainment 
demonstrations. Nonetheless, one commenter noted that the fact that 
States do not include reductions from major NSR in its attainment 
demonstrations does not mean that major NSR is not an important tool 
for achieving attainment. Several commenters noted that States use a 
conservative approach to planning by not including reduction credits 
from NSR in its attainment demonstration or ROP plan.
    Several commenters noted that our own policy indicates that section 
110(l) requires a case-by-case, fact-specific review in each 
circumstance to determine whether the requirements are being met. One 
commenter indicated that EPA cannot evaluate the effect of major NSR 
changes on the SIP until it knows the full complement of control 
measures that States will use to reach attainment of the 8-hour 
standard. Another commenter argued that higher major source thresholds 
that will apply in nonattainment areas given a lower nonattainment 
designation under the 8-hour standard will result in additional 
unmitigated emissions increases. The commenter asserts that by 
definition, the change will interfere with the ability of such areas to 
achieve attainment, and is inconsistent with section 110(l) of the Act. 
One commenter proposed that a State can only remove NSR requirements if 
the continued implementation of the program would interfere with 
progress or timely attainment, or if the State demonstrates that it is 
no longer feasible to implement the program.
    b. Response
    Many comments received on our proposal support our understanding of 
how States account for growth within attainment demonstrations. We 
address comments related to specific SIP demonstrations in section 
III.C.4. of today's preamble.
    As explained in detail in our April 4, 2004 proposal (70 FR 17023-
17025), we conclude that States are not relying on major NSR to 
generate emissions reductions in the State's attainment modeling. The 
growth projection methods used in preparing attainment demonstrations 
and the 8-hour major NSR program requirements will provide overlapping 
assurances that removing the 1-hour major NSR program from the SIP, 
will not interfere with RFP or attainment in any 8-hour nonattainment 
area. Basing an area's major NSR program requirements on its 
classification under the 8-hour standard assures that emissions 
increases from major stationary sources are mitigated and provide an 
ample margin of safety against poor State planning in areas with more 
severe air quality problems. Accordingly, we find that removing major 
NSR program requirements from the SIP based on an area's previous 
classification under the 1-hour standard will not violate section 
110(l) of the Act.
    We disagree with commenters that our own policy requires a case-by-
case, fact-specific review in each circumstance to determine whether 
the requirements of section 110(l) of the Act are met. Although we have 
generally conducted case-by-case reviews of SIP changes, we have not 
always required a detailed analysis for every element within the 
requested change. For

[[Page 39421]]

example, when we approved revisions to the Illinois SIP, commenters 
objected to Illinois' removal of lowest achievable emission rate (LAER) 
and offset requirements, and NOX (RACT) requirements as a 
relaxation of the SIP. Commenters based their objections on the fact 
that neither Illinois or the EPA conducted a modeling demonstration 
showing that these requirements were not needed for attainment. We 
concluded that modeling was not needed to show that these measures were 
not needed for attainment because Illinois did not rely on 
NOX (reasonably available control technology) RACT to attain 
the ozone standard, and all sources already implementing major NSR 
requirements were required to retain these controls. (68 FR 25458-9). 
Where the record supports generalized determinations on compliance with 
section 110(l), we conclude that it is appropriate for us to make them.
    Moreover, our actions today are consistent with the guidance we 
issued for approving State SIP changes to remove the dual source 
definition from State SIPs. In 1981, we revised the major NSR 
regulations to allow a State to adopt a plantwide definition of 
stationary source in its nonattainment NSR program. (46 FR 50766). 
Previously, our regulations required a dual definition of stationary 
source (including both the entire plant and individual emissions 
units). We predicted that use of a plantwide definition would bring 
fewer plant modifications into the nonattainment permitting process, 
but emphasized that this change would not interfere with RFP and timely 
attainment because States remained under an independent obligation to 
demonstrate attainment and maintenance of the NAAQS. (46 FR 50767).
    We determined that our action was consistent with Congress' intent 
that States are to play the primary role in pollution control and 
Congress' desire that States retain the maximum possible flexibility to 
balance environmental and economic concerns in designing plans to clean 
up nonattainment areas. Although section 110(l) was added to the Act in 
1990, prior to that date EPA required States, pursuant to section 
110(a)(3)(A), to demonstrate that revisions to an implementation plan 
would not interfere with the ability of an area to attain the NAAQS. 
See Navistar Int'l Transp. Corp. v. EPA, 941 F.2d 1339, 1342 (6th Cir. 
1991). When we revised our regulations to allow States to adopt the 
plantwide definition of stationary source, we determined that States 
that adopt the less inclusive stationary source definition, would have 
to demonstrate that their plans continue to demonstrate RFP and 
attainment only if the State relied on emissions reductions that it 
projected would result from the dual source definition in its 
attainment planning. (46 FR 50767; Memorandum from J. Craig Potter, 
Assistant Administrator for Air and Radiation to Director, Air 
Management Division Regions I, III, V and IX, et al., ``Plantwide 
Definition of Major Stationary Sources of Air Pollution,'' February 27, 
1987).
    Today, we have determined that with the exception of one 
jurisdiction,\7\ discussed below, no State or local entity has 
accounted in the past for any emissions reductions relating to the 
higher offset ratios and lower major source thresholds under the NSR 
program within their attainment demonstrations. Accordingly, consistent 
with our policy for demonstrating RFP and attainment established in 
1981, no State need submit an individual demonstration to satisfy the 
requirements of section 110(l) related to RFP and attainment.
---------------------------------------------------------------------------

    \7\ We are referring to South Coast Air Quality Management 
District. There are several other State and local agencies, 
including some in California, in which the classification under the 
8-hour standard is lower than that under the 1-hour standard. We are 
not aware of any of these agencies relying on the major stationary 
source thresholds or the offset ratios under the 1-hour 
classification to assure RFP or attain the 1-hour standard.
---------------------------------------------------------------------------

    We also disagree that EPA cannot know whether removing the 1-hour 
major NSR program from SIPs will be a relaxation until we know the full 
complement of control measures that each State will use to reach 
attainment of the 8-hour standard. We believe that a major NSR program 
based on the 8-hour classifications will provide a sufficient margin of 
safety to address major source growth in nonattainment areas, because 
it will ensure that any growth in major stationary source emissions 
will be offset in at least a one to one ratio. Moreover, States have 
other mechanisms to control growth of sources not subject to major NSR 
through minor NSR programs. Further, under our interpretation of 
section 110(l), areas need not wait for development of full attainment 
demonstrations to make SIP changes, provided they can demonstrate no 
increase in emissions or impediment to achieving NAAQS. Since major NSR 
at the levels required by the 8-hour classifications will still provide 
at least 1 for 1 offsets, such major NSR programs will not increase 
emissions or result in an impediment to achieving NAAQS, and thus will 
satisfy section 110(l) until States submit a full attainment 
demonstration.
    Notwithstanding the ability of the 8-hour nonattainment major NSR 
program to ensure that new emissions do not interfere with RFP or 
attainment, States have every incentive to include adequate control 
measures in a SIP to move an area as expeditiously as practicable to 
attainment. If a State predicts that growth will interfere with the 
ability of existing control measures to bring the area into attainment, 
it would need to impose additional measures to mitigate growth. If the 
State fails to plan adequately, ``and as a result slips out of 
compliance as its population or industry changes, then it must pay a 
steep price for backsliding. It is sensible for the Federal agency to 
give localities that must pay the piper some opportunity to call the 
tune.'' See Sierra Club, 357 F.3d at 540.
    We also disagree that any changes to the major NSR program may 
result in unmitigated emissions increases, and that by definition, the 
change interferes with the area's ability to achieve attainment, and is 
inconsistent with section 110(l). First, no unmitigated growth should 
occur in any nonattainment area. Every State must develop an attainment 
demonstration that accounts for growth within its attainment plan. 
Accordingly, States would need to mitigate all growth projected within 
the attainment plan through control measures within the SIP to develop 
an approvable attainment plan. The major NSR program provides an extra 
measure of benefit on top of the control measures already contained in 
the SIP to address any further unanticipated future growth.
    Moreover, we disagree with the assumption of some commenters that 
any change in a SIP requirement is necessarily subject to review under 
section 110(l) of the Act. The Supreme Court upheld our plantwide 
stationary source definition as a reasonable balance between reducing 
air pollution and economic growth even though this change allowed fewer 
sources to go through major NSR permitting. See Chevron, 467 U.S. at 
866. The Act allows us to approve SIP revisions if the State shows that 
the revision does not interfere with any requirement concerning 
attainment and RFP. We conclude that this will be the case in all areas 
removing 1-hour NSR programs as 8-hour NSR will still be required and 
thus no emissions increases will result.
    We also disagree with the commenter who indicates that revisions 
under section 110(l) of the Act may not be approved unless a State 
shows that maintaining the requirement would

[[Page 39422]]

interfere with progress toward attainment or that the requirement is 
not feasible. We do not believe that such an overly restrictive 
interpretation of section 110(l) is consistent with Congress' intent 
that States retain flexibility in carrying out their responsibilities 
for pollution control. We conclude that the words of section 110(l) 
simply do not provide for such a strict interpretation.
4. Has Any Individual State or Local Agency Relied on Major NSR as a 
``Control Measure'' To Reduce Overall Base Year Emissions in a Rate of 
Progress Plan or Attainment Demonstration?
    a. Comment and Response--A
    Comment. One commenter argued that our assumption that ``(S)tates 
do not rely on Major NSR to achieve emissions reductions and reach 
attainment,'' is erroneous. According to the commenter, the South Coast 
Air Quality Management District's (SCAQMD's) NSR program was an 
important element of its attainment demonstration. Their 1989 Air 
Quality Management Plan (AQMP) contained Control Measure F-8, which, as 
adopted in final form in 1990 was estimated to result in emissions 
reductions of 44 tons per day (TPD) of ROG, 33 TPD of NOx, 4 
TPD of SOx, 21 TPD of CO, and 29 TPD of PM10. The commenter 
argued that while the NSR program no longer appears as a control 
strategy in SCAQD's latest AQMP because the rule has been adopted, the 
reductions from this measure are contained in the current SIP revision 
in the baseline and are still being relied upon to demonstrate 
attainment. According to the commenter, they do not understand how any 
area could not rely on NSR as part of its a