  SEQ CHAPTER \h \r 1 6560-50-P

  

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[EPA-HQ-OAR-2003-0090; FRL-      ]

RIN 2060-AO05

Final Extension of the Deferred Effective Date for 8-hour Ozone National
Ambient Air Quality Standards for the Denver Early Action Compact

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Final Rule.

SUMMARY:  The EPA is finalizing the extension of the deferral of the
effective date of the 8-hour ozone National Ambient Air Quality Standard
(NAAQS) designation for the Denver Early Action Compact (EAC) from July
1, 2007 to April 15, 2008.  The EAC areas have agreed to reduce
ground-level ozone pollution earlier than the Clean Air Act (CAA)
requires.  On November 29, 2006, EPA extended the deferred effective
date for the Denver EAC area from December 31, 2006, to July 1, 2007. 
In that final rulemaking, EPA noted that there were issues with
Denver’s EAC that would need to be addressed before EPA would extend
their deferral until April 15, 2008.  Those issues have been addressed
and EPA is now extending the effective date of Denver’s designation
for the 8-hour ozone standard from July 1, 2007 to April 15, 2008.

EFFECTIVE DATE: This final rule is effective on [INSERT DATE 30 DAYS
AFTER PUBLICATION IN THE FEDERAL REGISTER].

ADDRESSES:  EPA has established a docket for this action under Docket ID
No.EPA-HQ-OAR-2003-0090.  All documents in the docket are listed on the 
 HYPERLINK "http://www.regulations.gov"  www.regulations.gov  web site.
Although listed in the index, some information is not publicly
available, e.g., 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 through   HYPERLINK "http://www.regulations.gov" 
www.regulations.gov  or in hard copy at the Docket, EPA/DC, EPA West,
Room 3334, 1301 Constitution Ave., NW, 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 Office of Air
and Radiation Docket is (202) 566-1742.  In addition, we have placed a
copy of the rule and a variety of materials relevant to Early Action
Compact areas on EPA’s Web site at
http://www.epa.gov/ttn/naaqs/ozone/eac/.

FOR FURTHER INFORMATION CONTACT: Ms. Barbara Driscoll, Office of Air
Quality Planning and Standards, U.S. Environmental Protection Agency,
Mail Code C539-04, Research Triangle Park, NC 27711, phone number (919)
54l-1051 or by e-mail at:     HYPERLINK "mailto:cole.david@epa.gov" 
driscoll.barbara@epa.gov  or Mr. David Cole, Office of Air Quality
Planning and Standards, U.S. Environmental Protection Agency, Mail Code
C304-05, Research Triangle Park, NC 27711, phone number (919) 54l-5565
or by e-mail at:     HYPERLINK "mailto:broadwell.valerie@epa.gov" 
cole.david@epa.gov .

SUPPLEMENTARY INFORMATION:

General Information

 Does this Action Apply to me?

This action applies only to the Denver EAC area.

B.  How is This Notice Organized?

	The information presented in this preamble is organized as follows:

Outline

General Information

A.  Does this Action Apply to Me?

B.  How is This Notice Organized?

II.  What is the Purpose of This document?

III. What Action has EPA Taken to Date for Early Action Compact Areas?

IV.  What Progress has the Denver Early Action Compact Area Made?

V.	What comments did EPA receive on the March 1, 2007 proposal to extend
the deferral of the effective date of the nonattainment designation for
the Denver Early Action Compact?

VI.  What is the Final Action for the Denver Early Action Compact Area?

VII. What is EPA’s Schedule for Taking Further Action for Early Action
Compact Areas?

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

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 and Safety Risks

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

I. National Technology Transfer Advancement Act

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

K. Congressional Review Act

L. Petitions for Judicial Review

II. 	What is the Purpose of this Document?

	The purpose of this document is to finalize the deferred effective date
of the 8-hour ozone nonattainment designation for the Denver EAC area
from July 1, 2007 to April 15, 2008.

III.	What Action has EPA Taken to Date for Early Action Compact Areas?

	This section discusses EPA’s actions to date with respect to
deferring the effective date of nonattainment designations for certain
areas of the country that are participating in the EAC program.  The
EPA’s April 30, 2004, air quality designation rule (69 FR 23858)
provides a description of the compact approach, the requirements for
areas participating in the compact and the impacts of the compact on
those areas.  

	On December 31, 2002, we entered into compacts with  33 communities. 
To receive the first deferral, these EAC areas agreed to reduce
ground-level ozone pollution earlier than the CAA would require.  The
EPA agreed to provide an initial deferral of the nonattainment
designations for those EAC areas that did not meet the 8-hour ozone
NAAQS as of April 30, 2004, and to provide subsequent deferrals
contingent on performance vis-à-vis certain milestones.  On December
16, 2003 (68 FR 70108), we published our proposed rule to defer until
September 30, 2005, the effective date of designation for EAC areas that
did not meet the 8-hour ozone NAAQS.  Fourteen of the 33 compact areas
did not meet the 8-hour ozone NAAQS. 

	Our final designation rule published April 30, 2004 (69 FR 23858), as
amended June 18, 2004 (69 FR 34080), included the following actions for
compact areas: deferred the effective date of nonattainment designation
for       14 compact areas until September 30, 2005; detailed the
progress compact areas had made toward completing their milestones;
described the actions/milestones required for compact areas in order to
remain eligible for a deferred effective date for a nonattainment
designation; detailed EPA’s schedule for taking further action to
determine whether to further defer the effective date of nonattainment
designations; and described the consequences for compact areas that do
not meet a milestone.  

	In the April 2004 action, we also discussed three compact areas which
did not meet the March 31, 2004, milestone; Knoxville, Memphis, and
Chattanooga, Tennessee.  Knoxville and Memphis were designated
nonattainment effective June 15, 2004.  Chattanooga was later determined
to have met the March 31, 2004, milestone, and we deferred the
designation date until September 30, 2005 (69 FR 34080).  This brought
the number of participating compact areas to 31.  Since then, two
additional areas, Haywood and Putnam Counties, Tennessee have withdrawn
from the program leaving the participating number of compact areas at
29.  

On August 29, 2005, we published a final rule extending the deferred
effective date of designation from September 30, 2005, to December 31,
2006, for the same    14 compact areas.  In order to receive this second
deferral, EAC areas needed to submit a State Implementation Plan (SIP)
with locally adopted measures and a modeled attainment demonstration by
December 31, 2004.  The EPA approved the SIP revisions as meeting the
EAC Protocol and EPA’s EAC regulations at 40 CFR 81.300, and these
approvals were the basis for extending the deferred effective date until
December 31, 2006.  Information on local measures, SIP submittals and
background on the EAC program may be found on EPA’s website
at:/www.epa.gov/ttn/naaqs/ozone/eac/.

On November 29, 2006, we published a final rule extending the deferred
effective date of designation for 13 EAC areas from December 31, 2006,
to April 15, 2008, and for the Denver EAC area until July 1, 2007.  For
that deferral, all compact areas were required to submit two progress
reports, one by December 30, 2005, and the other by June 30, 2006.  In
these progress reports, the States provided information on progress
towards implementing local control measures that were incorporated in
their SIPs.  Each of the EAC areas submitted the required progress
reports and these reports are available at   HYPERLINK
"http://www.epa.gov/ttn/naaqs/ozone/eac/" 
http://www.epa.gov/ttn/naaqs/ozone/eac/ .   Issues were noted by the
State of Colorado with the Denver EAC area regarding emissions from oil
and gas exploration and production condensate tanks.  In a report and
action plan submitted by the State of Colorado to EPA, dated June 2,
2006, the State provided information that indicated volatile organic
compound (VOC) emissions from oil and gas operations within the Denver
EAC area were higher than had been estimated in the attainment
demonstration modeling.  In response to this issue, the State of
Colorado initiated public rulemaking activities to amend Colorado’s
Regulation No. 7 to require additional emissions reductions from oil and
gas exploration and production condensate tanks to achieve the level of
reductions relied on in the EPA-approved modeled attainment
demonstration.  However, an issue arose because the State’s rulemaking
efforts before the Colorado Air Quality Commission (AQCC) in the latter
part of 2006 would not be completed before EPA needed to publish a final
rule for the last deferral of the effective date of the nonattainment
designations for all of the EAC areas (see 71 FR 69022, November 29,
2006).  

Based on the above information, EPA decided to defer the effective date
of the nonattainment designation for the Denver EAC area only until July
1, 2007.  This decision was designed to accommodate the necessary State
rulemaking activities and to also ensure that continued progress was
made on the Regulation No. 7 rulemaking actions as they proceeded before
the AQCC and State Legislature.  In our November 29, 2006, final
rulemaking, we detailed a timeline for subsequent rulemaking action for
the Denver EAC area which included finalizing any rulemaking by the end
of May 2007 and then publication in the Federal Register of that
rulemaking by June 1, 2007, with a 30-day effective date.

Since the November 29, 2006, rulemaking, all compact areas submitted
their six month progress reports in December 2006 as required.  These
reports were reviewed and approved by EPA.  You may find copies of the
December progress reports at   HYPERLINK
"http://www.epa.gov/ttn/naaqs/ozone/eac/index.htm#List" 
http://www.epa.gov/ttn/naaqs/ozone/eac/index.htm#List 

IV. What Progress has the Denver Early Action Compact Area 	Made?

On December 31, 2006, the State of Colorado submitted their progress
report for the Denver EAC area to EPA indicting that progress had been
made in several areas.   On September 21, 2006 the Colorado Department
of Public Health and Environment’s (CDPHE) Air Pollution Control
Division (APCD) presented proposed revisions to Colorado’s Regulation
No. 7, before the Colorado AQCC, for a more stringent regulatory scheme
to control VOC’s from oil and gas exploration and production
condensate tanks located in the Denver EAC area.  These proposed
revisions to Section XII of Regulation No. 7 were amended and adopted by
the AQCC on December 17, 2006 along with associated revisions to the
EPA-approved Denver EAC Ozone Action Plan.  These AQCC rulemaking
actions will achieve the required VOC emissions reductions from the oil
and gas exploration and production condensate tanks that are located
within the Denver EAC area boundary.  In addition, the State continues
working with all parties to reduce emissions of ozone and its
precursors. 

The EPA’s final deferral of the effective date of the nonattainment
designation of the Denver EAC area to April 15, 2008, was based upon the
actions of the AQCC on December 17, 2006, to approve revisions to
Colorado’s Regulation No.7 and also in consideration of the review of
those AQCC-approved revisions, from January 15, 2007, to February 15,
2007, by the Colorado State Legislature.  The State Legislature did not
object or seek further review of the December 17, 2006, actions of the
AQCC, which meant that the all changes to Regulation No.7 were
automatically adopted and to be submitted to EPA for final approval and
incorporation into the SIP.  The changes in Regulation 7 contain a
compliance date of May 1, 2007, which is just before the beginning of
the Colorado high ozone season. The CDHPE submitted their revised SIP
for EPA approval in late May 2007.

V.  What comments did EPA receive on the March 1, 2007 proposal to
extend the deferral of the effective date of the nonattainment
designation for the Denver Early Action Compact?

We received 12 comments on the proposed rule to extend the deferred
effective date of the nonattainment designation for the Denver EAC to
April 15, 2008.  We have responded to the comments in this section.

Comment: Two commenters stated that EPA lacks authority under the CAA to
defer the effective date of nonattainment designations (in particular as
this applies to the Denver EAC); enter into EACs with areas; and allow
areas to be relieved of obligations under Title I, Part D of the CAA
while they are violating the 8-hour ozone standard or are designated
nonattainment for that standard.

Response:  We have determined that EACs as designed, give local areas
and the State the flexibility to develop their own approach to meeting
the 8-hour ozone standard. In this case, the State of Colorado is
serious in its commitment and has made progress implementing State and
local measures for controlling emissions from sources earlier than the
CAA would otherwise require.  People living in the Denver metropolitan
area and other EAC areas are already breathing healthier air due to
reductions in ozone pollution achieved by the EAC attainment plan and
these benefits would not otherwise have been realized until after June
2007 if the Denver EAC and other EAC areas had been designated
nonattainment.

Comment: One commenter expressed concerns that if Denver violated the
8-hour ozone standard, EPA would not designate the area nonattainment.  

Response:  EPA’s requirements for EAC areas are codified at 40.CFR
81.300, and ensure that if Denver violates the 8-hour ozone standard,
the nonattainment designation for the area will take effect.  The State
has until December 31, 2007, to demonstrate attainment of the 8-hour
ozone NAAQS.  If Denver does not attain the 8-hour ozone standard, the
nonattainment designation becomes effective as of the deferred effective
date (which under this rule would be April 15, 2008).  See 40 CFR
81.300(e)(3)(ii)(C).  The area will then be subject to the full planning
requirements of title I, part D of the CAA.  40 CFR 81.300 requires
former EAC areas that are designated nonattainment to submit a revised
attainment demonstration SIP within 1 year of the effective date of the
nonattainment designation.   

Comment:  The emissions reductions from the final revised Regulation No.
7 will be less than reductions that would have been achieved by the
original proposed revisions.

Response:  We believe the modeled attainment demonstration is the
appropriate benchmark for our consideration, not whether the original
proposed revisions would have achieved a 77% reduction versus a 75%
reduction achieved by the adopted rules.  After EPA initially approved
the attainment demonstration for the area, the State and EPA realized
that the rules requiring reductions of VOC emissions from condensate
tanks did not achieve the level of reduction relied on as part of the
modeled attainment demonstration.  This is because growth in condensate
tank flash emissions was significantly greater than anticipated. 
According to the State’s updated inventory projections and
calculations, the 75% reduction of VOC emissions required by Section XII
of Colorado’s revised Regulation No.7 is consistent with the control
scenario inventory value for 2007(91.3 tons per day)relied on in the
modeled attainment demonstration. See the Colorado Air Pollution Control
Division’s presentation for the rulemaking hearing on the revisions to
Regulation No. 7, which can be found at   HYPERLINK
"http://www.cdphe.state.co.us/ap/reg7/Reg7AQCCDec.pdf" 
http://www.cdphe.state.co.us/ap/reg7/Reg7AQCCDec.pdf .

Comment:  Due to the change to weekly calculations of emissions and the
use of a system-wide approach, APCD and citizens won’t know if
required reductions are met until after the fact.  Citizens will not be
able to react in time to prevent unhealthy ozone pollution if companies
fail to meet the required emissions reductions.

Response:   While we originally favored the threshold approach, we
believe the system-wide approach is enforceable and will lead to the
projected reductions.  We already approved a system-wide approach when
we approved the previous revisions to Regulation No.7 (See 70 FR 48652,
August 19, 2005).  We believe the current revisions make significant
improvements to the original approach that will lead to improved
compliance.  We note that with any emission limit, compliance is judged
after the fact.  The commenter did not provide (and EPA is not aware of)
any support for his concern that weekly calculations will significantly
alter EPA’s, the State’s or a citizen’s ability to address
violations in a timely way.

Comment:  The commenter is concerned that the Denver EAC area’s ozone
levels approached unhealthy levels in 2006.

Response:  EPA agrees that several exceedances of the 8-hour ozone NAAQS
were observed in the Denver EAC area’s air quality monitoring network
in 2006.  However, even with these exceedances none of the ambient air
quality monitors in the 8-hour ozone monitoring network recorded a
violation of the 8-hour ozone NAAQS.  Further, we note that the ambient
air quality monitors for the Denver EAC area have shown attainment of
the 8-hour ozone NAAQS for the periods, 2002 through 2004, 2003 through
2005, and 2004 through 2006.  Although the Denver EAC area has not
violated the standard for the past three 3-year periods, EPA notes that
air quality in the area remains very close to the standard, indicating
that the additional emission reductions revised Regulation No.7 will
achieve are important to ensure that air quality in the area remains
below the standard.  EPA notes the commenter’s concerns for the
potential for a violation of the 8-hour ozone NAAQS during the 2007
ozone season.  If this happens, the area will be designated
nonattainment.

Comment:  It is unclear how deferring Denver’s nonattainment
designation will further the goal of reducing ozone pollution/protecting
health.

Response:  We believe that the EAC has already achieved reductions in
ozone precursor emissions that would not yet have been achieved had
Denver followed the traditional nonattainment designation pathway. The
State’s and the area’s desire to achieve an attainment designation
has led to two rounds of significant revisions to Colorado’s
Regulation No.7, revisions that are already reducing ozone pollution in
the area.  If the area had been designated nonattainment on June 15,
2004, an attainment demonstration SIP wouldn’t have been due until
June 15, 2007.  Thus, with the EAC, emission reductions have been
achieved earlier than they would have been under the standard
designation procedures.

Comment:  The commenter notes that the Denver EAC has fallen short of
achieving the planned reductions in emissions of ozone forming compounds
from condensate tanks.

Response:  The commenter is correct that actual growth in flash
emissions of VOCs has significantly exceeded the State’s projections
in the original Denver EAC SIP as approved by EPA on August 19, 2005 (70
FR 48652).  The State identified this issue in its June 2, 2006, EAC
progress report and has since taken steps to address it.  

We explain this more fully in our final rule of November 29, 2006 (71 FR
69022).  In that final rule, we discuss the State’s acknowledgement of
the increase in VOC emissions from oil and gas activities, the State’s
report of June 2, 2006, detailing these findings (see 71 FR 69023), and
the State’s rulemaking efforts to achieve the necessary additional
emission reductions to meet the projections relied upon in the
EPA-approved attainment demonstration (see 71 FR 69025.)  As noted in
our proposed rule of March 1, 2007 (72 FR 9285), the State revised
Colorado’s Regulation No.7, “Emissions of Volatile Organic
Compounds,” to require additional emission reductions from oil and gas
exploration and production condensate tanks to achieve the level of
reductions relied on in the EPA-approved modeled attainment
demonstration.  The Colorado AQCC approved these revisions to Regulation
No. 7 on December 17, 2006.  Thus, the State has taken the steps
necessary to address the shortfall in emission reductions under the
prior version of Colorado’s Regulation No. 7.  

Comment:  The commenter expresses concerns with emissions of ozone
forming compounds from other oil and gas exploration and production
activities that were not addressed as part of the Denver EAC attainment
demonstration, such as emissions from drill rigs, well completions,
fugitive leaks, water tanks, and heater treaters.  According to the
commenter, oil and gas drilling has increased north of Denver, and
infrared photography shows the potentially large amount of fugitive
emissions from condensate tanks. 

Response:  We note that the State is not required to control all
emission sources as part of its SIP.  Instead, the goal of the SIP
program is to ensure that sources are controlled to ensure that the area
will attain and maintain the relevant NAAQS. The State is free to choose
the mix of sources necessary to achieve that goal and EPA cannot second
guess the State if the plan demonstrates compliance with the NAAQS.  At
the time the State was conducting the modeling for the attainment
demonstration, flash emissions from condensate tanks were considered the
most significant source of largely uncontrolled VOC emissions. As a
result, the State targeted control of these emissions as the best means
to attain the 8-hour ozone standard. By correcting the defects in the
regulation regulating these sources, we believe the State’s plan
demonstrates attainment and maintenance of the 8-hour NAAQS and we
cannot disapprove the plan on the basis that the State has not chosen to
regulate certain other sources to reach this goal.

Regarding fugitive emissions and infrared photography, we note that
photos at one source may not be representative of emissions at another
source, and the infrared photos shown tell us nothing about the VOC
concentrations in the emissions.

 Comment:  The commenter is concerned that 29 reciprocating internal
combustion engines have been granted exemptions from installing
pollution controls to reduce emissions of VOCs and nitrogen oxide (NOx).
 The commenter indicates that Kerr-McGee has simply failed to install
the controls at 11 of its internal combustions engines. 

Response:  Certain reciprocating internal combustion engines have been
granted exemptions from controlling emissions of VOCs because they meet
the exemption criteria stipulated in section XVI of Colorado’s
Regulation No. 7.  EPA approved the control requirements and these
exemption criteria for internal combustion engines when it approved the
rest of Colorado’s Regulation No. 7 on August 19, 2005 (see 70 FR
48652). 

Regarding Kerr-McGee’s 11 engines, the State has issued a Notice of
Violation and is currently negotiating a settlement with Kerr-McGee to
control emissions from these engines.  In other words, the State is
taking appropriate steps to ensure compliance with the EAC plan and
Colorado’s Regulation No. 7.

Comment:  The commenter is concerned that the modeling for the EAC may
have underestimated emissions due to the reactivity of VOC emissions.

Response:  The reactivity of VOC emissions is embedded as a function in
the EPA-approved CAMx dispersion model that the State used to model
attainment in the Denver EAC area.  Measured values for the various VOCs
are input into the CAMx model, and the model’s embedded Carbon Bond
photochemical algorithm processes these values to produce an estimate of
ozone concentrations. This algorithm has reactivity profiles for each
VOC chemical species already built into it. We don't adjust the
reactivities for individual SIP applications - the Carbon Bond mechanism
is a "canned" algorithm. While the commenter is correct that alkanes as
a group may be more reactive as an ozone precursor in an urban
atmosphere where there are more compounds with which to react, the
Carbon Bond mechanism already accounts for this; the reactivity profiles
account for a higher degree of chemical reactivity in a polluted urban
environment. We note that the State’s contractor utilized the most
current version of CAMx when it conducted the dispersion modeling in
2003 and early 2004.

Comment:  The commenter noted that industry is failing to fully comply
with the required emission reductions from flash emissions from
condensate tanks as required under the EAC. 

Response:  While EPA agrees that compliance with the control
requirements in the approved attainment demonstration has not been 100%,
we note that the State is taking appropriate steps to achieve the
compliance effectiveness to support the EAC. We note the table provided
in the commenter’s letter presents historical information from 2005.  

On December 31, 2006, the State submitted a progress report for the
Denver EAC area to EPA indicating that progress has been made in several
areas. Additional compliance data collected by the State indicated
overall control for the 2006 ozone season met Regulation No. 7’s 47.5%
VOC emission reduction requirement. This is because some larger sources
achieved greater reductions than required. For those sources that did
not meet the regulation’s requirements, the State is pursuing
enforcement/negotiations to ensure compliance.  

Additionally, the table the commenter cites may not accurately address
those condensate tanks that were exempt from the requirements of section
XII of Regulation No. 7.  For example, the entry for Machii Ross shows
uncontrolled emissions of 17.04 tons per year which would have made this
an exempt facility; at that time, controls were only required if
emissions were 30 tons per year or greater.  

Finally, compliance shortcomings are not unusual when an activity or
industry is first regulated.  We have no reason to think that compliance
would have been better if the area had been designated nonattainment. 
If the State had not moved to rectify the problems, we would be very
concerned.  However, we believe the State is taking appropriate steps to
ensure compliance with the EAC attainment plan and Colorado’s
Regulation No. 7, and we believe these steps will result in rates of
compliance consistent with projections.  

 Comment:  The commenter raises a concern that the revisions to
Colorado’s Regulation No. 7, adopted by the AQCC on December 17, 2006,
have not been incorporated into the Colorado SIP.  

Response:  The commenter is correct that the revisions to Regulation No.
7 have not been federally-approved and incorporated into Colorado’s
SIP.  However, as described in our proposed rule of March 1, 2007 (72 FR
9285), the revisions to Colorado’s Regulation No. 7 made it through
Colorado’s Legislative review process without changes, and we expect
to receive the Governor’s submittal of the revisions for our approval
shortly.  Once we receive the submittal, we intend to expedite our
action on it.

In the meantime, the Regulation No. 7 revisions have been adopted by the
State and are fully enforceable by the State.  Sources must start
complying with the revised regulation by May 1, 2007.  As indicated in
response to previous comments, the State is taking appropriate steps to
ensure compliance with the regulation and we fully expect the State will
continue its efforts.

VI. What is the Final Action for the Denver Early Action Compact Area?

	We are extending the deferred effective date of the nonattainment
designation for the Denver EAC from July 1, 2007 to April 15, 2008.  We
have considered the actions of the State of Colorado and determined that
they have made good progress by passing Regulation No. 7 and
implementing State and local measures in controlling emissions from
sources.  People in the Denver EAC area are breathing healthier air as a
result of these State actions.

VII. What is EPA’s Schedule for Taking Further Action for Early Action
Compact Areas?

All EAC areas have one remaining milestone which is to demonstrate
attainment with the 8-hour ozone NAAQS by December 31, 2007.  No later
than April 15, 2008, we will determine whether the compact areas that
received a deferred effective date of April 15, 2008, attained the
8-hour ozone NAAQS by December 31, 2007, and met all compact milestones.
 If the area did not attain the standard, the nonattainment designation
will take effect.  If the compact area attained the standard, EPA will
designate the area as attainment.  Any compact area that did not attain
the NAAQS and thus has an effective nonattainment designation will be
subject to the full planning requirements of title I, part D of the CAA,
and the area will be required to submit a revised attainment
demonstration SIP within 1 year of the effective date of designation.  

VIII. Statutory and Executive Order Reviews

A.  Executive Order 12866: Regulatory Planning and Review  

	Under Executive Order (EO) 12866   SEQ CHAPTER \h \r 1 (58 FR 51735,
October 4, 1993), this action is a "significant regulatory action”  
SEQ CHAPTER \h \r 1 in that it may raise novel legal or policy issues
arising out of legal mandates, the Presidents priorities, or the
principles set forth in the EO.  Accordingly, EPA submitted this action
to the Office of Management and Budget (OMB) for review under EO 12866
and any changes made in response to OMB recommendations have been
documented in the docket for this action. 

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.  This
final rule does not require the collection of any information.

Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency.  This includes the time needed
to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to comply
with any previously applicable instructions and requirements; train
personnel to be able to respond to a collection of 

information; search data sources; complete and review the collection of
information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to
respond to a collection of information unless it displays a currently
valid Office of Management and Budget (OMB) control number.  The OMB
control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR  
 part 9.

C.  Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an Agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedures
Act or any other statute unless the Agency certifies the rule will not
have a significant economic impact on a substantial number of small
entities.  Small entities include small businesses, small organizations,
and small governmental jurisdictions. 

For purposes of assessing the impacts of this proposed rule on small
entities, small entity is defined as: (1) a small business that is a
small industrial entity as defined in the Small Business
Administration’s (SBA) regulations at 13 CFR 121.201; (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; and (3) a small organization that is any not-for-profit
enterprise which is independently owned and operated and is not dominant
in its field.

After considering the economic impacts of this proposed rule on small
entities, I certify that this rule will not have a significant economic
impact on a substantial number of small entities.  This final rule will
not impose any requirements on small entities.  Rather, this rule would
extend the deferred effective date of the nonattainment designation for
the Denver area to implement control measures and achieve emissions
reductions earlier than otherwise required by the CAA in order to attain
the 8-hour ozone NAAQS. 

D.  Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector.  Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with “Federal mandates” that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
1 year.  Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule.  The provisions of section 205
do not apply when they are inconsistent with applicable law.  Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted.  Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan.  The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.

This final rule does not contain a Federal mandate that may result in
expenditures of $100 million or more for State, local, and Tribal
governments, in the aggregate, or the private sector in any 1 year.  In
this final rule, EPA is deferring the effective date of nonattainment
designation for the Denver EAC.  Thus, this final rulemaking is not
subject to the requirements of sections 202 and 205 of the UMRA.  

EPA has determined that this rule contains no regulatory requirements
that might significantly or uniquely affect small governments because
this rule does not contain Federal mandates.

E.  Executive Order 13132: Federalism

Executive Order 13132, entitled “Federalism” (64 FR 43255, August
10, 1999), 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 E.O.
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.”

This final rule does not have federalism implications.  It 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.  The CAA establishes the scheme
whereby States take the lead in developing plans to meet the NAAQS. 
This proposed rule would not modify the relationship of the States and
EPA for purposes of developing programs to implement the NAAQS.  Thus,
E.O. 13132 does not apply to this proposed rule.

F.  Executive Order 13175: Consultation and 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 final rule does not have “Tribal
implications” as specified in E.O. 13175.  It does not have a
substantial direct effect on one or more Indian Tribes, since no Tribe
has implemented a CAA program to attain the 8-hour ozone NAAQS at this
time or has participated in a compact.

G.  Executive Order 13045: Protection of Children from Environmental
Health and Safety Risks

Executive Order 13045: “Protection of Children From Environmental
Health and Safety Risks” (62 FR 19885,   April 23, 1997) applies to
any rule that (1) is determined to be “economically significant” as
defined under E.O. 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have disproportionate
effect on children.  If the regulatory action meets both criteria, the
Agency must evaluate the environmental health or safety effects of the
planned rule on children, and explain why the planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.

This final rule is not subject to the Executive Order because it is not
economically significant as defined in Executive Order 12866, and
because the Agency does not have reason to believe the environmental
health or safety risks addressed by this action present a
disproportionate risk to children.  This final rule is not subject to
E.O. 13045 because it does not establish an environmental standard
intended to mitigate health or safety risks.

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

	This final rule is not subject to E.O. 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 E.O. 12866.

I.  National Technology Transfer Advancement Act

Section 12(d) of the National Technology Transfer Advancement Act of
1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards (VCS) in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by VCS
bodies.  The NTTAA directs EPA to provide Congress, through OMB,
explanations when the Agency decides not to use available and applicable
VCS.

This final rule does not involve technical standards.  Therefore, EPA is
not considering the use of any VCS.  The EPA will encourage States that
have compact areas to consider the use of such standards, where
appropriate, in the development of their SIPs.

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

Executive Order 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.  

The EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not affect
the level of protection provided to human health or the environment. 
The health and environmental risks associated with ozone were considered
in the establishment of the 8-hour, 0.08 ppm ozone NAAQS.  The level is
designed to be protective with an adequate margin of safety. 

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.   The 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). 
This rule will be effective [INSERT DATE 30 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER]

L. Petitions for Judicial Review

Under section 307(b)(1) of the CAA, petitions for judicial review of
this action must be filed in the United States Court of Appeals for the
District of Columbia Circuit by [INSERT DATE 60 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER]. 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 must 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 CAA Section 307(b)(2).

Final Extension of the Deferred Effective Date for 8-Hour Ozone NAAQS
for the Denver EAC – page 36 of 38

LIST OF SUBJECTS in 40 CFR PART 81  

	Environmental protection, Air pollution control.

AUTHORITY: 42 U.S.C. 7408; 42 U.S.C. 7410; 42 U.S.C. 7501-7511f; 42
U.S.C. 7601(a)(1).

________________________________

Dated:

			

________________________________

Stephen L. Johnson,

Administrator.	

For the reason set out in the preamble, title 40, chapter I of the Code
of Federal Regulations is amended as follows:

PART 81 - [Amended]

1.   The authority citation for part 81 continues to read as follows:  

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

Subpart C - Section 107 Attainment Status Designations

2.   Section 81.300 is amended by revising paragraphs (e)(3)(i) and
(e)(3)(ii)(B) and (C) to read as follows:

§81.300 Scope.

* * * * * 

(e) * * * 

(3) * * *

(i) General.  Notwithstanding clauses (i) through (iv) of section
107(d)(1)(B) of the Clean Air Act (42 U.S.C. 7407(d)(1)(B)), the
Administrator shall defer until April 15, 2008, the effective date of a
nonattainment designation of any area subject to a compact that does not
meet (or that contributes to ambient air quality in a nearby area that
does not meet) the 8-hour ozone national ambient air quality standard if
the Administrator determines that the area subject to a compact has met
the requirements in paragraphs (e)(2)(i) through (v) of this section.   

(ii) * * * 

* * * * * 

3.  In §81.306, the table entitled “Colorado-Ozone (8-Hour
Standard)” is amended by revising footnote 2 to read as follows:

§81.306 Colorado.

* * * * * 

Colorado-Ozone (8-Hour Standard)

* * * * * * * 

2 Early Action Compact Area, effective date deferred until April 15,
2008.

* * * * * 

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