FINAL MEETING MINUTES

SUBCOMMITTEE FOR OZONE, PARTICULATE MATTER AND REGIONAL HAZE

IMPLEMENTATION PROGRAMS

February 20-21, 1997

Hyatt Regency Hotel

400 New Jersey Avenue, NW

Washington, DC 20001

Opening Remarks - William Hamilton, U.S. Environmental Protection Agency, Designated Federal Officer for the Federal Advisory Committee Act (FACA) Subcommittee

Mr. Hamilton introduced Mr. Alan Krupnick (Resources for the Future) as moderator for the meeting, and Mr. John Seitz - Director of Office of Air Quality Planning & Standards (OAQPS). Speakers were reminded to state their name and affiliation prior to speaking. Mr. Hamilton announced three meetings to be held concurrently for later that night. The meetings will cover the following topics:

NAAQS Update

Regulatory Impact Analysis (RIA) Update

PM Fine Monitoring

It was announced that the meeting minutes for the November 1996 meeting of the Subcommittee are now final, and are located on the Technology Transfer Network (TTN). Participants were reminded about two documents that have been presented to each member of the Subcommittee. Those documents are:

Draft Phase II Management Plan

Conceptual Model, Volume I

The schedule for upcoming meetings was announced. The next Meeting is scheduled for April 7-9, and will be held in Falls Church, VA. Additional meetings are scheduled for June 10-12 in RTP, NC, and for August 12-14 in San Francisco, CA. An additional meeting is being considered for October. The date and location remain to be determined.

Introductions and Opening Remarks - John Seitz/Alan Krupnick

Mr. Seitz (OAQPS) welcomed the Subcommittee members to the meeting and apologized for not being able to attend the last meeting. He announced that the National Ambient Air Quality Standards (NAAQS) schedule for public comment has been extended to March 12, 1997. July 19, 1997 is the final promulgation date for the NAAQS. This is good news, because it gives the Subcommittee a few extra weeks to work on these projects.

Mr. Seitz told the Subcommittee that invitations will be extended to add some additional people to the FACA Subcommittee to increase the representation by small businesses and environmental groups.

Concerning the status of the Phase I Report, Mr. Seitz indicated that the Coordination committee was reviewing and completing that report now and that he hoped to have it out to the full Subcommittee for review by next week.

With respect to a discussion held earlier, EPA is looking at individual issues such as attainment dates, Area of Influence (AOI), Area of Violation (AOV) and it is getting difficult to see what the total picture looks like. Therefore, EPA is going to pull these pieces together in a summary paper that will give the Subcommittee an idea of where we are going, what to expect, and in what time frame to expect it. EPA will not mandate any decisions, but instead will include all the options that have been discussed so far, so that all of the information is open and on the table. The paper will include institutional mechanisms & timelines for AOI/AOV etc. This paper is not meant to be a final document but rather a working tool for the Subcommittee. This was a request made several meetings ago. So, during the next month EPA will try to develop this document.

The Subcommittee members were asked to introduce themselves.

Alan Krupnick offered some introductory comments concerning Carol Browner's testimony in front of the Senate. Mr. Krupnick was struck by Ms Browner's reliance on the work of this Subcommittee on reducing the cost of meeting the proposed standards. Ms. Browner referred to the work of this Subcommittee several times when the issue of costs was raised in the Senate Subcommittee hearing. Emphasis on process is important when you have a group of stakeholders as large as we have here. Mr. Krupnick charged the committee to spend more energy on cost issues with emphasis on cost effectiveness, cost incentives, etc. He stressed the need to reduce the cost of meeting any air quality goals set by the EPA.

Robert Palzer (Sierra Club) commented that in consideration of costs the Subcommittee should also consider the avoided costs, which are shown as benefits (e.g. for every dollar put in, you get back x dollars in benefits). Mr. Palzer thinks that this Subcommittee must look at the benefit costs as well.

Monitoring Ad Hoc Group Report - Rich Halvey

Rich Halvey (Western Governors Association) presented the Monitoring Incentives Status Report. He reviewed the proposals that have been set out and the working groups' discussion of these proposals.

Proposal 2:

Provide financial incentives by revising EPA guidance to allow the use of Title V funds for ambient monitoring at National Air Monitoring Stations (NAMS), State & Local Air Monitoring Stations (SLAMS) and certain Special Purpose Monitoring Stations (SPMS). Discussion:

-	should be allowed where Title V sources contribute to ambient problems

-	removes any federal impediments to allowing states to make decisions on whether or not to use Title V funds

Proposal 4:

Allow the use of both public and private monitoring data to allow for boundary determination.

Discussion:

-	provides incentive for private sources to increase monitors because it may assist in Area of Influence (AOI)/Area of Violation (AOV) delineation

-	can better focus control strategies

-	must follow strict Quality Assurance (QA) guidelines

Proposal 5:

Encourage the formation of public/private partnerships to expand the monitoring network from HMOs, environmental groups, private foundations, industry, Federal Land Managers FLMs and SEPs (Supplemental Environmental Projects).

The working group is not sure that this idea represents an incentive.

Proposal 6:

Accelerate implementation of PM-2.5 monitors to improve the information base upon which initial decisions will be made.

-	Should there be a push in the first year for accelerated monitoring? The group did discuss this issue.

Proposal 3:

Expand mandatory national ambient monitoring requirements via rulemaking and provide funding for such activities.

-	Expansion is necessary for multiple purposes (e.g. health, AOI/AOV determination, transport, trading program support).

-	National group of affected parties to revise current requirements, including funding levels and sources.

Issues:

-	Should group be national or regional?

-	Not consensus on efficacy of using stakeholder groups.

Proposal 1: (most contentious proposal; most of the calls were spent discussing this)

Decouple immediate link between a measured violation and mandatory nonattainment regulatory sanctions.

The working group considered the following editorial change to the proposed language:

In addition, decoupling has the potential should be designed to produce measured results (i.e. equivalent or better public health benefits) in an equivalent or shorter time frame than the current nonattainment/State Implementation Plan (SIP) process.

Discussion:

-	Nonattainment designation is seen as a disincentive to additional monitors

-	May promote early implementation of control strategies

-	It is critical to expand the monitoring network to identify AOIs/AOVs

Conceptual Implementation:

-	Violation measured and confirmed by EPA

-	Attainment agreement negotiated

-	Planning requirements

-	Technical requirements

-	Control strategy commitments

-	Timing

Advantages (i.e. "The carrot")

-	Flexibility for the implementing agency

-	Early implementation of control strategies

The group discussed how this would work under the current discussions of AOI/AOV. It appears to work where transport is not an issue; it is less clear at this time how it would work in situations where transport is important.

Assurances (i.e. "The Stick")

-	EPA prepares a notice of nonattainment, but agrees to hold publication until area fails to implement or fails to achieve by the specified time.

Additional Issues/Discussion Points

-	Applicable primarily to areas avoiding monitoring due to prescriptive requirements

-	Timing (nonattainment clock potentially not running)

-	Question of overlap with existing nonattainment timing

Additional Issues/Discussion Points (which were not resolved at the meeting on the previous day)

-	Early reductions triggered by exceedance

-	Group did not have consensus, but generally agreed the idea was worth pursuing, must add detail to concept.

Additional Issues:

-	15 additional possibilities to consider

-	Many are variations on previous proposals

-	Averaging, Federal Reserve Method(FRM) monitors, population weighting

Next Steps:

-	Consensus on existing proposals

-	Continuation of ad hoc group

-	Development of details on decoupling proposal

Questions Before the Committee:

Are the issues and preliminary recommendations accurately framed?

Have all the options been identified?

Should the Ad Hoc Group continue to address the additional issues identified in the issue matrix?

John Seitz was curious about the proposal of using Title V fees to support an ambient monitoring network.

Proposal 2:	Provide financial incentives by revising EPA guidance to allow the use of Title V funds for ambient monitoring at NAMS, SLAMS, PAMS, and certain SPMs.

Beverly Hartsock (Texas, NRCC) added that the group did not really discuss increased fees. If an individual State wants to pursue this option, then yes, they would be able to do this. The group was simply trying to provide the flexibility to allow individual states to operate.

Shawn Kendall (Phelps Dodge) commented that since the funds for a monitoring program must come from somewhere, then the individual states should be able to implement monitoring in this manner, if funds are available from Title V fees.

John Elston (New Jersey Department of Environmental Protection) agreed that it is important to conduct monitoring. Mr. Elston doesn't think the committee has had enough time to identify and consider all the options. For example, Prevention of Significant Deterioration (PSD) is a monitoring program in essence. A subset of monitoring could certainly be attributable to Title V. It would be desirable to clear away the impediments to using Title V funds, but being realistic, he does not think this will happen. However, it is important to understand exactly what monitoring does for a particular community.

Molly Ross (Department of Interior) raised the point that when these issues are considered, the Subcommittee needs to be concerned about the secondary standard, regional haze and perhaps other violations, which could be defined within the concept of monitoring an AOV. Thus, this issue goes beyond the traditional requirements of monitoring. To fill these needs to the extent that there is funding available from Title V or wherever else, ways should be found to allocate these funds to operate expanded monitoring programs.

Ron Methier (State of Georgia) agreed with the comments from other states. There needs to be flexibility in implementing the monitoring program. Title V fees can be a key aspect of this concept.

Larry Feldcamp (Baker and Botts) suggested that industry would endorse giving the states as much flexibility as possible. Mr. Feldcamp stressed the importance of giving the states and industry as much flexibility as possible.

John Seitz asked if Mr. Feldcamp saw support from a broad selection of industry.

Larry Feldcamp answered "yes", that he would agree with that statement. Mr. Feldcamp also offered that an important consideration in the Subcommittee process is trying to provide incentives to increase industry participation.

John Seitz stated that he is aware of this network, but added that in the past Title V fees have been restricted to the implementation of Title V activities, and that industry has been quite hostile in the past on using these fees in any other manner. Therefore, he was trying to understand potential views from both industry groups.

Larry Feldcamp answered that there needs to be more credits/mechanisms to deal with these fees and stated that he would like to see this line of thought pursued. This is a preliminary comment, and there has not really been detailed discussions about this specific proposal. Mr. Feldcamp suggested that the committee needs to get more people from the private sector to support monitoring. Additionally, there needs to be some degree of support from the fee programs - it does not need to be limited to Title V fees.

John Seitz then offered the assessment that the fees don't change, but you would receive some credit for the monitor placement. He then asked if that is what Mr. Feldcamp was saying.

Larry Feldcamp answered "yes". He recognized the need to work out the details. There is still the need to retain enough fees within the Title V program to run that program.

Dick Wilson (U.S. Environmental Protection Agency-Headquarters) suggested that the current Title V fees are not nearly enough to cover all the Title V program requirements. Thus, fees would have to be increased to fund additional efforts.

Larry Feldcamp disagreed and believes that there are enough fees, but maybe in specific regions there would be limited funding availability.

Dennis Lawler (U.S. Environmental Protection Agency-Illinois ) agreed with comments made by representatives of other states. Mr. Lawler stressed that States need flexibility. In his state, Title V fees are substantially less than had been anticipated, and, of course, they still have to run the Title V program. While using Title V fees is an alternative, it should not be viewed as the long-term solution. Mr. Lawler suggested that it will be difficult to get states to increase Title V fees.

Richard Dworek (U.S. Steel) added comments as a member of the ad hoc group. Mr. Dworek stated that there is not consensus on using Title V fees to fund monitoring programs. The real meaning was that if Title V funds were available, then they could be used for monitoring programs. The bottom line was that perhaps EPA needs a budget increase, because good monitoring data is the foundation for everything that we are attempting to do in this Subcommittee. According to State & Territiorial Air Pollution Program Adminstators (STAPPA)/Association of Local Air Pollution Control Officials (ALAPCO), 88% of emissions leading to PM-2.5 come from rural sources. Therefore, it is necessary to increase rural monitoring networks. As of now, monitoring is highly focused in urban areas.

Vincent Brisini (Pennsylvania Electric Company) agreed that using Title V fees as a source of funding is a reasonable approach to get some money for monitoring programs. Mr. Brisini adds, however, that Title V is concerned only with stationary source problems and there are a lot of other source categories which are not included in Title V. Therefore, there needs to be a way to apportion the costs across the other source categories relative to their contribution to the inventory. Mr. Brisini doesn't think that it is such a stretch to justify the use of Title V fees, however, he doesn't think it is appropriate to raise Title V fees every time you need money for additional monitoring. There are sources other than point sources that contribute to the problem, and those sources should bear their respective share of the burden/cost.

Tom Maslaney (U.S. Environmental Protection Agency) suggested that compliance monitoring at given facilities could be done under Title V.

Sarah Pierce-Sandner (Eastman Kodak) commented that in terms of enhanced monitoring, more data is definitely better. As an industry member, she thinks it is okay to look at Title V as a source of the funding, but agrees with Mr. Brisini that it is important to address the equity issue and find ways to get other contributors to pay their fare share.

Steve Gerritson (Lake Michigan Air Director's Consortium) indicated that the proposal is reasonable, and agreed that the lack of money is one reason why more monitoring isn't done routinely. A second reason is the disincentive/linkage issue. He added that he doesn't feel that this has been a useful discussion because of the focus on the individual issues, one at a time. He suggests that the working group produce a one page summary of the recommendations so that the committee could discuss all of the recommendations together.

Alan Krupnick recognized the point.

Beverly Hartsock offered that if the states were given the flexibility to apply Title V funds to monitoring, then EPA would believe that the funding would be there and available (paraphrasing John Seitz). She suggests that this is not what the states are saying. Her opinion is that the states are simply trying to explore additional possibilities for funding and asking if there would be an EPA requirement to support these approaches. These proposals do not take the responsibility away from the Federal Government for supporting enhanced monitoring.

Glenn Cass (Califorina Institute of Technology) added that issues associated with the placement of new monitors and the linkage to the cost are also important. Network design has not been discussed at all. It is necessary to plan the requirements to understand the network needs prior to attempting to answer the first two questions. He would recommend a review of the network design for all monitoring and thinks that if that is done, some economies of scale could be discovered among neighboring states that would help to alleviate some of these cost concerns.

Richard Phelps (Eastman Chemical Company) expressed his opinion that the group is doing an outstanding job, however, he would like see more attention given to issue number 25. There needs to be more attention to the Reference Method and all the siting issues discussed as part of that issue. He would like to see the Work Group elevate this issue to a higher priority.

Alan Krupnick indicated that there seems to be a consensus for using Title V funds for additional monitoring, as well as identifying other groups that can contribute to the process.

George Lauer (ARCO) expressed the idea that there needs to be a consideration of research grade monitoring. There should also be consideration for using I/M funds, as a means of evening out the playing surface. In addition, there are other federal agencies that are doing monitoring/measuring (e.g. NOAA). To provide the necessary data there needs to be surface and upper air monitoring as well.

John Elston commented on monitoring incentives. He seriously questioned some of the incentives and some of the missed incentives. A monitor is not a person, and does not have an opinion. The data that comes out of the monitor is generally regarded as truth. The public relies on daily air monitoring reports and he asked if that is not an incentive? He suggested that the communications committee start to look at this alternative. He suggested that there have been few problems increasing the number of monitors in New Jersey. They have been restricted solely by the lack of funding. People want monitors and they want to know what they are breathing.

Larry Feldcamp offered that the most important issue was #1, and asked if members could get a copy of those transparencies? He also asked if the meeting held the day before included the Coordination Committee?

Rich Halvey answered that it did not, and was just the Ad Hoc Group. Members of the group had spoken with the Coordination Committee on the previous Friday to inform them of what they would be discussing with the committee today.

Larry Feldcamp asked if the committee was trying to reach closure on this issue today? He suggested that this concept of decoupling the monitoring from the AOV is important and the committee members need to understand this better before trying to reach closure.

Alan Krupnick offered that the Subcommittee will take consensus wherever it can be found. No one thinks that there will be consensus on this entire paper today. We would like consensus from the committee that the Ad Hoc Group is at least going in the right direction.

John Seitz added that the Ad Hoc Group addressed three issues: Costs (providing states flexibility; federal sharing of the responsibility; take a look at the whole monitoring issue), Technical Aspects, and Data Usage. Mr. Seitz suggests that the data usage issue is the most important concept of the three.

Rich Halvey replied that the group struggled to understand what the charge was to the group. The group simply started with the concept of how could more monitors be implemented (e.g. throw more money at the problem, remove impediments, etc.).

John Seitz agreed that conceptually that is the framework, but now the Ad Hoc Group needs to move forward.

Vincent Brisini expressed the idea that it is possible to have a monitor with an opinion dependent on where you sight the monitor. He suggests that what is important is that there is a need for more monitors and they are needed now. There are potential other methods for generating the funding: vehicle licensing fees, state income tax contributions for $1 for monitoring; designer license plates, the great "environmental lottery". He suggests that mechanisms exist to get the funding; there is simply a need to communicate the needs and benefits adequately to the public. In the process it is important to recognize all the available opportunities and all the available economies.

Dick Wilson expressed the need for the states to look at short-term efforts to get more money for monitoring. He doesn't think the amount of money needed is that large. He went on to stress that the group and Subcommittee needs to get some basic information/messages delivered at both the state and federal levels. It is important that everyone on this group lobby for additional funding for monitoring at their respective levels. He feels that there is a need for the Subcommittee to come to consensus that more monitors are good and necessary.

Shawn Kendall stated that, generally, he likes the entire package that the group has put together. One area of concern is the flexibility. He is concerned about EPA writing-up an issue, and then holding off on the publication of that issue and suggests that someone could hold EPA accountable for such a judgement, which goes unissued. Additionally, the Federal Reference method should not disregard previous, historic monitoring information.

Elsie Munsell (Department of Navy) agrees that there is an acknowledged need for additional data. The inspiration should come from the fact that the system should respond to that data in a satisfactory manner. This should be incentive enough to monitor.

David Hawkins (Natural Resources Defense Council) questioned that the decoupling recommendation appears to be linked to the decision that federal, state, and local agencies are frequently finding instances where a monitor is measuring a problem that is not really occurring. This does not seem fundamentally correct to him. He stated that he sees a different planning process outlined in this proposal (i.e. if you don't like the current solution, just generate your own new process) and as such he doesn't think that this is a viable proposal.

Rich Halvey answered that he thinks the larger issue here is the auto-prescriptive procedures that come with designation. It is not the actual act of designation for the area of violation, based on the location and siting of a monitor. He also sees the proposal as facilitating incentives for early reductions.

Alan Krupnick added that there is a presumption that in the new implementation plan there will be a lot of the inflexibilities that one might want to escape. Our plan here is to remove as many of these disincentives as possible.

David Hawkins indicated that he is not intending to demean any of the work of the Ad Hoc Group. He just don't think that this approach is the solution.

Langdon Marsh (Oregon Department of Environmental Quality) endorsed Dick Wilson's approach. He added that the group needs to address the level of monitoring which is necessary to support the protection of public health and environmental welfare. Once that level of monitoring is determined, EPA and the states need to invest whatever it takes to support that level of monitoring.

Christine Shaver (Evironmental Defense Fund) addressed the issues of control regions, or AOI, and suggested that the incentive for monitoring may be created over the next year or so to support decisions related to the definition of these regions. Secondly, with respect to decoupling, she expressed concern about the measures which may be utilized in the interim period and stressed that emissions reductions during this interim period must be both measurable and enforceable.

Alan Krupnick stated that the Coordination Group wants this group to continue, and that the discussion seems to support the need for general charges to come from this group (e.g. better design, reduction in monitoring costs). In addition the Subcommittee seems to agree that all parts of society need to participate in funding this effort. He asked that the working group provide a summary of these issues for the benefit of the entire Subcommittee.

John Seitz expressed the opinion that EPA has the legal authority to work with the concepts addressed by the working group under the SIP and SIP Call process.

That concluded the discussion of monitoring issues. A short break was taken.

Discussion of the Conceptual Model - Harvey Jeffries (Univ. of North Carolina)

Dr. Jeffries introduced the session by informing the Subcommittee that Volume 1 has been completed and it is available for review and comment. He did not give a formal presentation and asked the Subcommittee to give their comments.

Discussion of RAMPs and AOI - Don Theiler ( State of Wisconsin)

The basic principle of this issue is the decoupling of the concepts encompassed in the traditional nonattainment designation process, and the need to separate regions based on:

-	Areas that are in violation of standards, and

-	Areas that include sources that influence violations

Objective is to ensure:

-	Identification of an adequate array of sources contributing to violations in order to prepare a plan to correct the violation.

-	Establish a stepped planning process which will result in a cost-effective allocation of clean-up responsibility.

-	Attainment of standards in a timely fashion.

Regional Air Management Partnership (RAMP)

-	Contiguous multi-state areas

-	Common air quality characteristics

-	Share common air quality concerns

-	Responsible for air quality analysis

-	Needed to identify primary AOIs

AOIs

2 Phases:

(1)	Preliminary AOI - Adequate array of sources to prepare a regionally integrated plan.

(2)	Final AOI - Area in which regulatory control of emissions will be needed to bring AOV back into attainment (also called "the control region").

Five Step Process

(1)	Formation of RAMPs

(2)	Initial RAMP activities

(3)	Identification of AOV and preliminary AOI

(4)	Preparation of Regional Implementation Plan (RIP) and SIP/Tribal Implementation	Plan (TIP) Calls

(5)	SIP/TIP Formation and Implementation

Step 1 - Formation of the RAMP

Identify areas with common air quality characteristics/concerns

-	Established through a two track process

- technical considerations

- political concerns

-	Include all states/tribes in RAMP

-	Number of RAMPs needed is currently undetermined

Legal Mechanisms for Setting-Up RAMPs - Presented by Christine Shaver

Authority for Creation

-	Transport Commissions if interstate pollution contributes significantly to violation of NAAQS or visibility impairment in Class I Areas

-	1970s vintage Air Quality Control Regions (AQCRs) if necessary and appropriate for the attainment and maintenance of NAAQS

-	FACA Subcommittees

-	Interstate Compacts (initiated by the States, and not EPA)

Federal guidance can be provided through general EPA rulemaking authority (which is quite broad in nature). Federal financial and technical assistance is available through Sections 103 and 106 of the CAA, (i.e. funding exists for AQCRs, etc.)

In summary, there is sufficient authority in place to identify and implement RAMPs.

RAMP Structure

Membership Issues

-	All States in the region will be included in the RAMP

-	Negotiate number of Tribes and Tribal votes

-	Federal cabinet level officials with land management responsibilities (voting status TBD)

-	EPA -- full partner but non-voting if federal action is required

Membership could remain voluntary, but participation through a SIP would be mandatory.

Opt-out and Opt-in process are still under consideration and the processes governing the options have not been fully resolved at this time.

Participants

-	Stakeholders

RAMP Operations and Authority

-	Facilitate a consensus based decision process

-	Voting by members on issues as needed

-	No regulatory authority

-	Objective; to provide consensus recommendations for appropriate actions to EPA

-	Retain EPA, SIP call, and Federal Implementation Plan (FIP) authority

Don Theiler added that the regional integrated plan is an important concept here, and additional effort is needed to work out the specifics of the linkages between the RAMPs and the AOIs. The purpose of the RAMP organization is to determine who "is needed at the table" to start the planning process.

Step 2 - Initial RAMP Activities - presented by Don Theiler (State of Wisconsin)

The following initial activities are needed before an AOV is formally identified:

- identify the AOI

- assist in the development of a RIP

Examples:

- identify possible AOVs

- emissions inventory procedures

- modeling protocols

- process for identifying emission reduction credits

Step 3 - Identify AOV and Preliminary AOI

-	Designation of an AOV by state or tribe

-	Identification of preliminary AOI by RAMP approved by EPA

-	May include areas outside of RAMP area

-	Complex AOVs/AOIs may be identified.

Currently, there is proposed to be a 3 month period between designation and the identification of a preliminary AOI.

Science & Technical Support Work Group (STSWG) is being asked to help define the requirements for determining the preliminary AOI.

States/Tribes Opt Out

-	A state or tribe within a RAMP may take sole responsibility for RIP development for one or more AOVs

-	RAMP would have no further responsibility for AOI identification for these AOVs. This would devolve to the state or tribe.

-	The RIP and SIP/TIP development would be the sole responsibility of the state or tribe.

Evolution of Institutional Mechanisms - presented by Christine Shaver

Once the preliminary AOI has been identified, states and tribes within AOI will assess the following issues within the construct of the RAMP:

-	Need for AOI-based institution

-	Whether existing or new institutional mechanisms are needed

-	How to formalize such a mechanism (e.g. establishment of transport commissions, Memorandums of Understanding (MOUs), interstate compacts)

-	What continuing role RAMP may have

Any decisions would be brought to the attention of EPA for concurrence about structure, organization, and content. The structure, operations, and authority of any subsequent institutions that are put in place to implement would be similar to RAMP.

Step 4 - Preparation of RIP and SIP/TIP Calls - presented by Don Theiler

-	States and tribes in AOI will prepare the RIP

-	RIP provides the basis for SIP/TIP calls

-	EPA issues SIP/TIP calls with or without RIP

Step 4 - Preparation of RIP (from previous meeting slide)

-	RIP would contain the following components at a minimum:

-	Definition of the control region (final AOI)

-	Level of control/culpability for each state/tribe covered in the RIP

-	New source control recommendations

-	Conformity requirements recommendations

-	market-based program recommendations

-	reasonable progress objectives for Class I areas

-	Federal regulatory actions needed

Step 5 - SIP/TIP Preparation and Implementation

-	Individual states/tribes prepare and implement SIPs/TIPs

-	EPA would develop and implement national/subnational measures

-	Implement requirements on a schedule to meet attainment and reasonable further progress proposal

Major Outstanding Issues

-	Timing

-	Legal Authority

-	Decision Process

-	New Source Review (NSR)

-	Reasonable Further Progress (RFP)

-	AOVs subject to overwhelming transport

-	Existing nonattainment requirements in current Clean Air Act (CAA)

-	Complex AOIs (e.g. overlapping issues; different pollutants; etc.)

-	Others

Timing

Draft Timetable Assuming promulgation of Phase I Regulations on or before June 1998

Step 1:	RAMP formation - on or before June 1998

Step 2:	Initial RAMP activities - undertaken until formal identification of AOV

Step 3:	Identification of Preliminary AOI - 3 months following AOV identification

Step 4:	RIP development/final AOI - 21 months following preliminary AOI identification

Step 5:	SIP/TIP development - 24 months following final AOI identification

Draft Integrated Timetable - whole process completed by June 2003 (assuming that everything starts on/before June 1998).

EXAMPLE - Lake Michigan Area

(1)	RAMPs coincide with current EPA Regions

(2)	AOV encompasses the entire Lake Michigan area, and few a kilometers inland on the Wisconsin side of the lake, and a little bit further inland on the Michigan side of the lake, including a little bit of northern Indiana.

(3)	Preliminary AOI - (based for this example on the information gained from Ozone Transport Assesment Group (OTAG) process); covers SE Wisconsin, eastern Iowa, eastern Missouri, most of Kentucky, Illinois, Indiana and most Ohio). Thus, central and northern Wisconsin are excluded as well Minnesota. Some of these states are outside of Region V, thus a mechanism to encourage communication among the parties is necessary.

(4)	Final AOV - don't really know at this point. OTAG will tell us this. Regardless, it most likely will be some subset of the original preliminary AOI.

Christine Shaver explained that while this may look like a complicated process, it is not. This is essentially the process that is used now. A state has a problem, it involves other states, and then EPA gets involved. Thus, this process is not that different than what is currently going on. The methodology offered is an attempt to streamline the process and make it easier. Second, the approach does not start from square one: we have dates and we have a time line to implement this approach. Thus, the responsibility for dealing with air quality problems is spread out over all the culpable parties (e.g. States and tribes). Finally, the National & Regional Strategies Work Group (NRSWG) has reached general consensus on this approach. Thus, we're looking for consensus from the Subcommittee on whether this approach is valid, and how we should proceed.

Don Theiler posed two questions to the Subcommittee.

-	Is this 5-step process acceptable?

-	Is the suggested timetable appropriate?

Chris Shaver added the following questions related to institutional concerns:

-	Who establishes the RAMP?

-	Who should be included in the organizational structure of the RAMP?

-	What role(s) should the RAMP have?

This concluded the presentation of the working group on RAMPs and AOI. The Subcommittee took a lunch break.

Coordination Group Report - Pat Raher (Hogan and Hartson)

The presentation of the Coordination Group was postponed.

Combined Discussion on RAMPs and AOI/Institutional Mechanisms - Don Theiler/Christine Shaver

Comments and questions from the Subcommittee.

Ben Henneke (Clean Air Corporation) expressed the opinion that before the Subcommittee begins the joint discussion, details related to the planning process and the post-planning process need to be discussed.

Don Theiler answered that the working group has not formulated subsequent steps at this time. The working group is merely seeking consensus on what has been presented up to this point.

Christine Shaver added that some of the concepts related to planning are discussed in the full Issue Paper. Those issues were not presented during the morning in the discussions.

Ben Henneke provided the following example. Consider a situation where the RAMP agrees on what should happen; and an individual state proposes to correct the problems in a SIP. EPA then approves/disapproves the SIP. This whole process takes time, all the while little if any progress goes on to improve the air quality.

Don Theiler stated that the RAMP as proposed does not make regulations/recommendations. The group of states will do that. He recognized that the paper did not really address this issue, although it is discussed somewhat in Ms. Shaver's paper. The Work Group has not addressed remedies for failure to keep this process moving so far, but rather, has assumed that the process will start and keep moving.

John Seitz asked Mr. Henneke is he was asking for a "backstop" provision to prevent a state from saying it will do something and then not doing it?

Ben Henneke confirmed that it is his concern, as well as a state implementing something that is not what was originally planned for by the RAMP.

John Seitz replied that he doesn't see it as a problem if the state implements an alternative approach, which meets the goals of the original RAMP. If the state implements something that does not provide for clean air as an alternative strategy, however, it will fall back on EPA under the CAA to do something.

Steve Gerritson expressed strong support for this proposal. He was curious as to why the proposal did not include participation from local air quality jurisdictions, especially when they have significant autonomy on these issues. Also, there was no discussion of transaction costs (e.g. attending monthly meetings, etc.). He stated that the OTAG process has shown that these costs can easily run into millions of dollars. Mr. Gerritson also indicated the need for discussion of a regional approach, to avoid a situation where a group of states would be left pointing fingers at each other. Finally, there needs to be allowances for incentives for early reductions and compliance.

Christine Shaver agreed that these concerns will be added to the paper (i.e. local jurisdictions) as issues to be discussed. The transactions costs do need to be addressed from the standpoint of how many of these types of planning meetings one has to attend.

Don Theiler reminded the group that the RAMP will only be used to determine who comes to the table to participate. It will not generate any regulations/recommendations.

Steve Gerritson indicated that there were more responsibilities than that listed on the slide presented earlier.

Don Theiler stated that individual states will be allowed to choose appropriate activities from that earlier list, and as such none of them is mandatory.

Joe Williams (WESTAR) asked who else could be invited to participate. For example the paper doesn't talk about issues related to areas such as British Columbia or Mexico. What about international transport across the U.S.'s borders? Can the paper be modified to incorporate such ideas/concepts? For instance could the U.S./Canada Clean Air Accord be used as a mechanism?

Secondly, Mr. Williams asked how do AOVs fit into the process and schedule. For example, there is no PM-2.5 data, and there will not be sufficient data for another 3 years. How does that situation affect the timetable.

Christine Shaver answered yes in response to the question about international cooperation. The international community will be invited to participate in this process. In fact, Canada did participate in Grand Canyon Visibility Transport Commision (GCVTC).

Don Theiler answered the second concern by reminding the Subcommittee that the time line was expressed in months following designation of a violation. Thus, if it takes 3 years to designate, then the preliminary AOI would be due 3 months from whenever that area was designated as an AOV.

David Hawkins complemented Ms. Shaver and Mr. Theiler for their clear, concise definition of the issues. He did express concern about the central role of this process, within the overall responsibility of the states' air quality management process, and the general timing which has been presented. He doesn't see anything in this process that really changes the fact that the individual states are responsible for the implementation of overall air quality management.

He asked "Is this the main ring of the three-ring circus or the sideshow?" He expressed a concern that there is a fundamental flaw in the process because it does not screenout the situations where the governor has the authority to reduce emissions within a given state before the whole RAMP process is implemented. There is no need to delay the process while the regional plan is developed when individual states have the authority to immediately begin the reduction process.

David Hawkins also added that just having the group get together and complete analyses, and then to assume that this process is going to provide a joint acceptance of controls, is presumptuous.

John Seitz reaffirmed that the SIP obligation is still due in the time frame provided in the statute. If it is recognized that the SIP obligation is the same as currently provided for in the statute, he doesn't understand what is lost in this process.

David Hawkins replied that under the proposed schedule, the submittal of an SIP is required in the middle of the year 2003. NRDC believes that having a policy recommendation that allows the passage of time until 2003, prior to implementing control strategies, is simply unacceptable. In Mr. Hawkins opinion, this approach is an admission of failure, and simply takes too long to implement. He suggests that it will take longer to implement a multi-state process and offers the experience of OTAG as an example.

John Seitz asked for clarification that Mr. Hawkins concern is that emissions reductions that can be claimed immediately should be claimed as soon as possible.

David Hawkins agreed with that statement. He stressed that procedures should be formulated to encourage progress prior to completion of the planning process.

Don Theiler reiterated that the group never said that credits or reductions should wait. He offered that those issues will be discussed in the RFP paper that will be presented later this afternoon.

Robert Palzer added that rural sources need to be included in this process.

Jim Souby (Western Governor's Association) suggested that it seems like every innovation gets characterized as a way to escape the process and he does not interpret these proposals in that way. With respect to the presentation, he reemphasized a couple of things. First, it was pointed out that the RAMP idea was not brought up in isolation. He doesn't think that RAMPs should be created out of "new cloth", and there is sufficient information already available to help make these determinations. Secondly, He cautioned the Subcommittee (the whole FACA process), that we take heed to the importance of not violating the sovereignty of states and tribal entities. RAMPs as proposed can be very effective in dealing with these problems.

One of the advantages is obviously flexibility. He reiterated, however, that sufficient resources are essential in making these regional processes work effectively. RAMPs must be properly financed.

Beverly Hartsock added that the initial preliminary AOI designation is very important. She expressed concerned that 3 months is not sufficient time to adequately make this determination. If the planning area and process is too large, this procedure will not be productive and will not allow for a good regionally integrated plan. There needs to be proper guidance from EPA on this process. Ms. Hartsock requested more definition on the RAMP prodigy, and suggested that these issues were not discussed in detail. She also suggests that there is a need for more definition on the RIP and thinks that this will need a considerable amount of work, prior to us all buying into the concept.

Beverly Hartsock asked how coordination among these RAMPs and the EPA Regional Offices will work. For instance what about the case where the RAMP boundaries don't match the regional boundaries. In the institutional mechanisms paper, she thinks this was getting a little too specific, especially relative to option 5. Finally, she is concerned about publishing a default contingency plan at the beginning of this process, and is not sure that, if it went into effect, would be constructive.

Dick Dworek offered that individual states will implement the SIPs. Then what happens when there are two or more sources in different states in a given AOI? Can there be a provision that will allow, from a cost standpoint, similar controls to be implemented.

Sarah Peirce-Sandner recognized that this is a new concept, and Ms. Shaver and Mr. Theiler have done an excellent and persistent job in bringing this to FACA. She fully accepts the RAMP concept, given that it will recognize the importance of transport, and given that each state fully understands its own local emissions sources. She is concerned, however, about "large" RAMPs, where little or no work is accomplished over a long period of time. It might be desirable to structure the RAMP as a small entity, and that the RAMP should include some industrial (e.g., stakeholders) representatives, perhaps as non-voting members. Obviously, if industry is invited, then the environmental groups should also be included.

Christine Shaver agreed that stakeholders should be included in this process. Stakeholder involvement is necessary; but, she is not sure how you would include them as voting members. This remains a gray area when you have stakeholders involved in policy making decisions.

David Baron (Arizona Center for Law) also commends Ms. Shaver and Mr. Theiler for a very cogent presentation of this paper. Mr. Baron shares the concerns of Mr. Hawkins that this presentation opens the possibilities for delay. There are numerous situations which do not need this process. Using the whole, lengthy drill in these situations is simply an obvious attempt to delay. He would propose that states who say they cannot attain solely due to transport, must come to EPA and demonstrate this. The issue of what happens to the existing nonattainment process under these RAMPs is simply not clear. RAMPs allow the opportunity to get around the current nonattainment prescriptive measures. If this is what is being offered then he is not in agreement.

There is a recognized need to deal with transport where transport is a problem. But, there is no need to sweep away the current regulations which are effective, in favor of this filibuster approach to implementing air quality management practices. At least under the current CAA guidelines, there are prescriptive measures to ensure that we are improving the quality of the air that we breathe. If RAMPs draw the boundaries for the AOIs, we are simply going to politicize this process; and could merely become horse-trading at best. We need to stick to our current approach, which puts the onus on the individual states.

If the state was doing everything that it could do, and still could not demonstrate attainment, then I don't think we would be bothering EPA.

Don Theiler responded that this is not a plan to reduce the amount of controls. Concerning the issue of mandatory controls, nothing has been offered that implies that there will not be mandatory controls. The Work Groups spent all yesterday afternoon doing an exercise to determine what mandatory controls would be necessary under which certain circumstances. He believes that more is being read into the proposal than has been offered to date. It is important to understand what is and what is not being said.

David Hawkins replied that the problem is not in the suggestions that have been offered, rather the problems are that the paper has not clearly defined what will be done.

Don Theiler recognized that such an interpretation is totally understandable, but the working group is not prepared to put everything on the table at this time. The working group wants to have the sense that it is working toward the right goal.

Shawn Kendall expressed the opinion that the process is a good one. It's basically the model that the GCVTC followed. He did have a problem with Step 4 (the 21 months), if it applies to regional haze. The first thing that will need to be done in this process is to start filling the tool box. In doing so, then the planning organization needs to start understanding regional haze. As the planning group begins to make regional haze determinations, the idea is that the tool box is already in place, and it should be possible to make a quick determination of whether it is a local or regional issue. In general, this should work, and it should expedite planning related to the regional haze issue. As local plans are proposed and implemented, they need to be factored back up to the regional level for inclusion in the regional analyses.

Kelly Brown (Ford Motor Company) asked for an explanation of how it is possible to identify an area such as Kentucky as being a contributor to violations in Michigan.

Don Theiler responded that this is in fact what OTAG is saying, that Kentucky does influence the air quality situation in Michigan.

Harvey Jeffries stated that there is 100% agreement in STSWG with the AOI/AOV methodology, because the approach is seen as a means of identifying cause and effect relationships. If the process allows final -AOIs to span RAMPs, then their determination is seen as 90% political and 10% sound science, and the STSWG will decline to do this. Most of the technical work is in the definition of the preliminary AOI, however, STSWG sees this process as being iterative. The scientific community is increasingly recognizing that episodic analyses are simply not productive and the analyses really need to be more seasonal in nature. Thus, this change in approach causes a change in tools, a change in necessary data and a change in analysis techniques.

We don't understand how all the mechanisms work within the confines of the RAMP process, especially if AOIs are allowed to cross RAMPS, which has to occur to allow this process to work effectively. There are tools that can be used to produce defensible cause and effect relationships. There is a paper called AOITOOLS.wpf, which discusses the availability of these tools.

STSWG also considered the recommendations from the GCVTC Report at improving visibility issues. The first recommendation was to secure adequate long-term funding and the fifth one was to secure adequate trained human resource personnel. Since the issued are similar, these new requirements are going to place enormous technical responsibilities on both the states and industry.

Vincent Brisini suggests that the devil is in the detail, and this is one of the dilemmas of this process. This is an opportunity to get things in place and force participation by those who may not really want to participate. Answers to question like; "Will there be classifications?", "What are Areas of Violations?", and "Is there a need for national programs on certain source categories?" will allow some of these issues to be addressed. Until those questions are answered, what agreement for general participation and buy-in is needed. First and foremost, violations must be identified, and then the planning process will use technical expertise to define the AOI.

Do you want every entity with an AOI within a given RAMP to do everything exactly the same?

In response to the statement that these things are not going to work, there are examples where they have already worked: for example GCVTC, Ozone Tranport Commission (OTC), southwestern Pennsylvania. These things were implemented because the previous control scenarios were simply not working effectively.

If there are areas that are moving faster than the prescribed plans, then there needs to be a provision for those areas to recapture those credits. Mr. Brisini believes that RAMPs need to be larger than EPA regions and there should be fewer RAMPs than AOIs.

Nadar Monsour (Southern California Edison) expressed a problem with the proposal in that it presumes that every state and every tribal group must be a part of a RAMP. In the west, this may not make sense. In the case of regional haze in the west it might, but he is really not sure. He recommends that certain criteria be developed as to whether or not a RAMP is even needed. He suggests that the process not just assume that every party has to be in a RAMP.

James Lentz (SCAQMD) agrees that the RAMP, AOI/AOV concept is needed. He believes that the bulk of the problems are with the individual states and the bulk of the problems can be handled within state boundaries.

Bruce Hill (AMC) expressed appreciation for the advantages of the AOI/AOV approach, however, science by consensus may not be able to effectively function towards meeting the end goal of clean air. He is not convinced that the currently available science can address the AOI issue very effectively and expressed concern that this process will simply get too big and too complex. He also is not convinced that the tools for addressing PM and regional haze are available, although he does believe that they may exist for ozone.

He also raised the issue of identifying resources to fund these RAMPS, especially for smaller states like the New England states.

He also agreed with both Mr. Hawkins and Mr. Baron that there should be a clean hands policy, and that states should implement mandatory control options where they are obviously needed. There has to be technical uniformity in the methods used to identify individual AOIs, other wise the debate will revert to a "my model is better than your model" dialogue.

John Seitz expressed some frustration. He stated that he is hearing that the group doesn't want to lose reductions while waiting for the new process to catch up. The reality of the matter is that if political jurisdictions fail to step up, then EPA will step in. This process will also take time. What we are all after is progress toward cleaner air, but it must be recognized that cleaner air will take time. He thinks the proposals are on the right track, and that this method has to be better than the current 110(D)(2) method which is used with SIP calls. He reiterated his belief that the group is exactly on track, and is moving toward a good solution to the problem, and that the Subcommittee needs to pursue this methodology. The guiding principle here is progress, and he noted that the current Act will only save a couple of months.

Don Theiler again brought up the issue of resources, however, the Subcommittee has to prepare plans, and funding issues will simply have to be addressed when the time comes. Under the approach, every AOV will have an AOI. Stating that the county that measures the violation is in nonattainment simply does not work. Ultimately there needs to be a better process by which to make these determinations.

Larry Feldcamp added that the group is trying to deal with new technical issues (i.e. transport). The chances for success are much higher under the process being discussed than under the existing Act. He thinks the process will be shortened in the end and he raised concerns with respect to the new nonattainment areas and dealing with reasonable further progress in these areas. There needs to be an effective way of dealing with this.

Molly Ross expressed the opinion that it has been a long afternoon. As she listens to wonderful brand new brainstorms (e.g. decoupling, etc.) she finds herself coming back to the original act. How can this Subcommittee realistically discuss ozone, fine particles, and regional haze without recognizing the impact of transport. This has been recognized in the east for years, e.g. OTC, Acid Rain, etc. Thus, the CAA was amended to account for this process and this has been a good, productive process.

John Elston repeated a state perspective. This process is building upon an air quality management concept that was envisioned 25 years ago. Perhaps there is a need to simplify and streamline this air quality management process. Perhaps a cost analyses is needed to determine how we can continue to support these types of programs. In 1999, EPA is coming back to states and asking them to consolidate; therefore, where will the resources and the personnel come from to implement this approach? This management concept could work, given the necessary resources, but without them the process is doomed to failure. States simply cannot live up to all these things that they are being asked to commit to.

Alan Krupnick suggested that EPA is and will be the backstop.

John Elston stated that the problem is much more complex than this.

Tom Maslaney commented that he is hearing things a little bit differently on RAMP, AOI, and AOV than some others. He understands that states do not have to be on a RAMP; rather, that they had the opportunity to be on a RAMP. He also understands that RAMPs would not make recommendations; rather the States would make recommendations. In short, he sees this process as one to build consensus.

David Howecamp (U.S. Environmental Protection Agency) asked if RAMPs would actually get involved in the intrastate problems.

Don Theiler answered that if it is an intrastate problem, and the state so recognizes, then the state would take on the RIP and the SIP process in one deal.

David Baron responded to Mr. Seitz statement that it appears with the way things are now we'll end-up at the same place that the RAMPs are, only more contentious. Mr. Baron does not see it this way. Under the current process, there is incentive for states to solve their own problems and he does not see that incentive in the RAMP process at all. He suggests that the difference is that the current process lights the fire under states sooner as opposed to later, as is exemplified in the RAMP process.

John Seitz made the observation that the group has done an excellent job. A number of the issues that have been raised in these discussions need to be addressed, and will be in part dealt with by other papers. Mr. Seitz will ask the Coordination Group to review this paper, and ensure that these issues are dealt with and that the paper is adjusted as necessary.

David Hawkins suggested that this paper needs to be tabled until there is more discussion about RFP and the Subcommittee has more information to react to.

John Seitz replied that this would mean no further work on it in the near term, and he didn't think that would be productive.

This concluded the discussion of RAMPs, AOI, and Institutional Mechanisms.

AOV Boundaries - John Crouch (Hearth Products Association)

Status

-	Paper was discussed at 2/19/97 Base Programs Analysis & Policies (BPAP) Work Group meeting

-	Options have not been fully discussed

Recommendations from 7/25/96 Designation Issues for New NAAQS Paper

-	An AOV boundary defines the area violating the standard. Class I areas are treated as AOVs for regional haze planning.

-	AOV Boundaries should be:

-	determined with monitored data or a combination of monitored and modeled data

-	refined with analytical methods (e.g. modeling, reviewing source and emissions data, using statistical tools, etc.)

Assumptions

-	This paper does not assume:

-	any geographic relationship between the sources influencing the violation (i.e. the AOI) and the violation itself;

-	Which emission sources should be controlled (i.e. the control region); or,

-	whether or not AOV and nonattainment area are synonymous.

-	This paper only assumes that state(s) or other jurisdiction(s) will need to work together to identify which emission sources need to be controlled to address the violation.

Issue 1

-	What is the purpose behind defining AOV boundaries?

-	Count and track where violations occur

-	Identify people exposed

-	Identify areas for planning and applying regulatory requirements

-	Start the process

-	Revise the monitoring network

-	Gauge progress made toward the NAAQS and regional haze objectives

Issue 2

-	How should AOV boundaries be determined given that a NAAQS is based on a single monitor?

-	The AOV should have no boundaries

-	Use the county boundary

-	Use the metropolitan statistical area (MSA)

-	Conduct analyses

-	Use a zonal approach

Issue 3

-	Given a potential standard based on a spatial average, how should AOV boundaries be set around these predefined areas?

-	Same as the predefined area

-	Larger than the predefined area (options build from bullets 2-5 listed under issue #2)

-	Smaller than the predefined area (e.g. around a single monitor)

Issue 4

-	Who makes the initial determination of AOV boundaries?

-	EPA with opportunity for states, tribes, and public to comment

-	States/tribes with EPA comment and final approval

Issue 5

-	If violations are measured with a monitor, what tools are available to determine the entire	area where the violation occurs?

-	Modeling

-	Emission Inventories

-	Other

-	Combination

-	None

Issue 6

-	Should AOV boundaries be defined for individual pollutants, or should the boundaries encompass both ozone and PM-fine violations?

-	Establish separate PM-fine and ozone AOVs

-	Merge overlapping PM-fine and ozone AOVs into a single AOV

-	Establish a third AOV for the area of intersection

Issue 7

-	How should the timing of AOV determinations be addressed in the event that ozone and PM-fine designations are not simultaneous?

Issue 8

-	Should regional haze AOV boundaries be addressed in this issue paper?

-	No, regional haze technical and political considerations differ significantly from those of ozone and PM-fine

-	Yes, the considerations are the same

Issue 9

-	How should regional haze AOV boundaries be determined?

-	Split the country into eastern and western regions

-	Use Class I area boundaries

-	Use Class I area boundaries, and group the Class I areas

Mr. Crouch asked for comments and input from the Subcommittee on the following four questions.

(1)	What is the purpose of defining AOV boundaries?

Options:

-	to delineate an area for mandatory controls

-	notify public

(2)	How are AOV boundaries drawn?

(3)	How are the issues accurately framed?

(4)	Have all the options been identified?

Beverly Hartsock stated that since this is just an introduction to the issues, it is difficult to discuss anything in detail until some recommendations are put forward.

Shawn Kendall asked how would an area of violation go away? How might it be modified or expanded after initial designation?

Molly Ross suggested that in defining the boundaries, some definitions are needed. First, it is necessary to understand what an area of violation is meant to represent.

Steve Gerritson agreed with Mr. Kendall's comments. There are a lot of areas in the country that are on the cusp, because of meteorology that will cause them to flip in and out of nonattainment (area of violation).

Richard Phelps indicated that he strongly supports the concept of spatial averaging of monitoring data. Regional haze is basically an untractable issue at this point.

Molly Ross added that EPA has committed to consideration of the concept of having SIPs acknowledge the effects on Class I areas. She raised this issue because it is relevant to the discussions. However, initially the discussion focused on the implementation process, and therefore, more definition of what it means to be designated an AOV is needed. There is a need for more understanding and definition of this issue.

David Hawkins expressed the opinion that any line-drawing exercise tends to consume time and resources. Thus, he would focus on the areas rather than the boundaries and thinks it would be a mistake to try to get an agreement on the definition of the boundary, since that type of bright line is probably not going to be very useful to this entire process. Area of violation really isn't the rationale to adopt the controls - the controls are adopted because they think they will improve air quality. He suggests that the answer to question #2 is to move quickly and not spend a lot of efforts exploring some false sense of precision. There needs to be an understandable communication of what is known about regions that currently do not have good air quality. It is not critical to deal with the concept of the boundaries right now, whether that be an MSA or a county.

Alan Krupnick agreed that there will not be a bright line and he also agrees that there should not be much effort on drawing boundaries. He doesn't think there should be much argument over which county is the violator; rather that county boundaries are logical places to draw the boundaries. The control areas imply boundaries.

Shawn Kendall stated that counties are too big in the west, but they might be suitable in the east. This approach creates a great deal of useless baggage.

Alan Krupnick clarified his statement in that he meant political boundaries in general, not necessarily just county boundaries.

Robert Palzer suggested that the highest concentration areas be identified, and then effort expended to reduce concentrations in those areas. For PM, there is no threshold; at higher concentrations, higher mortality rates are experienced. He prefers the "more at risk" concept.

Christine Shaver added that the AOVs are not necessarily seen as the only area within a control region.

John Crouch observed that this dialog exactly defines the purpose of AOV. BPAP will have to come up with a recommendation.

Dennis Lawler addressed a feature of issue #2 and implied in #5, "there will be no defining boundaries for AOV". One of the first questions will be how big is the AOV, and he thinks this is a fundamental assessment, and that the discussion should not get away from this issue.

Elsie Munsell suggested that there has been difficulty defining AOVs by political boundaries, and that is the least desirable means of doing this. Is there an interface for the classification issue here for use in defining AOV. This allows the process to communicate severity of the violation through the classification process.

Alan Krupnick asked "What is the problem with political boundaries?"

Elsie Munsell replied with an example. Camp Pendleton is part of two counties, and two air quality districts. This causes some real problems.

Donna Lamb (U.S. Department of Agriculture/Forest Service) expressed appreciation for including the Class I areas in the discussion in the paper and urged that Class I areas continue to be addressed in the discussions.

John Crouch responded that the working group wants regional haze representatives to respond and assist in the consideration of Class 1 areas. He asked specifically if a special AOV that would be different from the ozone and PM NAAQS issues is needed for regional haze. That is the kind of feedback that the group wants over the next couple of weeks.

Dave Howecamp asked if the paper is going to apply strictly to interstate problems? He asked if he read it correctly as dealing solely with the complex areas?

John Crouch replied that no, there is no geographic limitation on this paper. At this stage, this paper does not carry this assumption with it.

George Lauer indicated that one option that is missing, is that the AOV is really the design area, or the area that needs to be cleaned up. Mandatory controls could be counterproductive, but notification of the public is important.

Reasonable Further Progress - Sarah Peirce-Sandner

Status of RFP Paper

-	Brainstorm sessions to identify

-	Key Issues

-	Spectrum of options

-	No recommendations re: preferred option at this stage

-	Request for FACA input

-	Have all key issues been identified?

-	Has the full range of options for each issue been identified?

-	Next steps: flesh out issues, recommend options

RFP Background

-	Pre-Clean Air Act Amendments of 1990

-	Section 171: the term reasonable further progress means such annual incremental reductions in emissions of the relevant air pollutants as are required by this part or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable national ambient air quality standard by the applicable date.

RFP Background

-	Post-Clean Air Act Amendments of 1990 (ozone example, Section 182)

-	"moderate" areas: 15% VOC reduction from 1990 baseline by 1996

-	"serious" and above: 3%/year VOC reductions (averaged over 3 years) until attainment date

What is the purpose of RFP?

-	Getting to attainment is the ultimate goal. RFP is the path traveled to get to attainment.

-	When do you start this journey?

-	How do you achieve progress toward attainment?

RFP - 2 Phases

-	pre-SIP Phase

-	SIP Phase

RFP Paper - Organization

-	SIP Phase: Key Issues

-	Uniform nationwide or customized?

-	RFP: What is the metric? How frequently should RFP be demonstrated? What is the appropriate rate? What is the base year?

SIP Phase: Should RFP be Standardized or Customized?

-	Standardized - metric and frequency of demonstration are uniform nationwide

-	Customized - metric and frequency determined at the AOI (or RAMP) level

-	Hybrid - uniform metric with frequency customized at the AOI (or RAMP) level

What Should RFP Metric Be?

-	Demonstrated reductions precursor/direct emissions

-	Demonstrated reduction in precursor/direct emissions weighted for efficacy

-	Demonstrated reduction in NAAQS pollutant concentration weighted for population exposure

-	Administrative actions

-	Any combination of the above

How Frequently Should RFP be Demonstrated?

-	If demonstrated through inventories

-	annual

-	every 2-3 years

If demonstrated through monitoring data

-	annual

-	every 2-3 years

-	dependent on control program implemented

What is the Base Year for RFP?

-	Fixed year - uniform nationwide

-	Variable according to SIP process, e.g.,

-	Prior promulgation of new NAAQS

-	Upon promulgation of new NAAQS

-	Upon designation of an area

-	SIP submittal date

-	SIP approval date

-	Upon availability of EPA guidance

What Should Rate of RFP be?

-	Standardized

-	example, if emissions are metric - standard percent reduction from base year emissions

-	Customized

-	example, if emissions are metric - reduction estimated necessary for attainment divided by time to attain

Can Measures that are Part of End-Loaded Strategies be Credited Toward RFP Early?

-	No, measures are credited only at the time of actual reductions

-	Yes, if activity is real or meets a specific milestone, for example,

-	Investment

-	achievement of administrative/planning milestones

-	achievement of construction milestones

Additional SIP Issues to be Developed

-	What is the corrective mechanism to get an area back on-track in the event of missed RFP milestone?

-	Can voluntary control measures be credited toward RFP?

-	Should RFP for ozone and PM-2.5 be integrated?

-	Should RFP for ozone, PM-2.5, and regional haze be integrated?

-	Is there an "out" for RFP should attainment prove "infeasible"?

Pre-SIP Phase Issues

-	For areas designated as AOV under new NAAQS, what should RFP requirements be until SIP approval?

-	No additional measures required

-	RFP measures required

Pre-SIP Phase Issues

-	If RFP required

-	when should requirements start?

-	what actions should constitute RFP?

-	in the final AOI/control region?

-	in the preliminary AOI?

-	in an AOV that is not part of an AOI?

Request for FACA Input

-	Are there additional issues to be addressed?

-	in SIP Phase?

-	in pre-SIP Phase?

-	For issues where options have been listed, is the full range of options listed?

-	Preferences for specific options?

Discussion by the Subcommittee.

Alan Krupnick thanked Ms. Pierce-Sandner for a clear presentation.

Tom Godar (American Lung Association) suggested that from the environmental standpoint, it could take three years to set up a PM monitoring network, then it would take SIP preparation time, so the process could be delayed as much as 6 years. He asked if there were any examples that would be longer than 6-7 years.

Sarah Pierce-Sandner answered "no", and offered her understanding that the target for having plans in place would be 2003. If the process gets derailed, then some kind of hammer should be available to force progress.

Elsie Munsell asked if it is possible to have an AOI that is itself not an AOV? If so, how do you handle this?

Sarah Pierce-Sandner answered that she assumes that all of the AOIs are going to have an RFP commitment.

Elsie Munsell then asked what is the target, and how would areas measure progress?

Sarah Pierce-Sandner responded that those concerns would be defined at the RAMP level.

Elsie Munsell replied that she did not think that RAMPs would be setting this type of recommendations/regulations. Under that system, when would AOIs know what their issues are?

Sarah Pierce-Sandner answered that currently the paper does not address this, and it should.

Alan Krupnick asked whether it would be AOIs or AOVs that would have a requirement for RFP?

Sarah Pierce-Sandner replied that it would be only AOIs.

Vincent Brisini stated that the AOI or control region will develop the RIP and that the RIP would require some reduction goal towards attainment. Once the reduction goals are defined, then the requirements to get those reductions would be the responsibility of that jurisdiction. That jurisdiction would also be required to implement RFP.

Elsie Munsell then stated that the pre-SIP, RFP may not be so clear cut.

Vincent Brisini agreed that it would no be clear cut at all.

Molly Ross offered that this all brings up another important question, that of the metric, whether it be emissions (e.g. AOI) or ambient monitoring (e.g. AOV)? It seems that it is difficult to answer these questions at this point in the process.

David Hawkins suggested a new option related to the issue of credits for end-loaded strategies, i.e. a portfolio approach for end-loaded strategies. He urged that the discussion not be restricted to only a yes or no answer when considering end-loaded strategies. Second, on the additional SIP issues, concerning the bullet on whether there should be a way to get out of RFP, should attainment prove infeasible. He was having trouble with that logic and doesn't think infeasibility is a rational outcome for not proceeding with the next step.

Alan Krupnick brought up the situation where the only options left on the table are some really expensive control measures and you know that the area is approaching the infeasibility result. Is there a set of criteria that could be applied to determine that you have done the best you could.

David Hawkins responded that it is simply the cost of next step, not infeasibility.

Harvey Jeffries explained that the STSWG has addressed this issue to some extent. RFP could be used as the only measure of success and as such it could be even more significant for these trouble areas than in the normal regions.

David Hawkins then raised a question related to the pre-SIP issue. The paper does not address the option for areas that are dirty now and would continue to be dirty under the new standards. From National Resources Defense Council's (NRDC) standpoint, the IIP that says "no backsliding" is not an acceptable outcome. NRDC thinks the purpose of the RFP discussion for the pre-SIP phase is to supplement the interim implementation principles during the pre-SIP phase. To simply say no backsliding is not an acceptable alternative in his view. The working group needs to address this issue in the future discussions.

Mr. Hawkins offered the following as an example of policy that is showing no backsliding under a revised standard. Serious areas, under the current act, are supposed to attain the current ozone standard by 1999. Thus, any new proposal should ensure at least that level of progress in those areas by 1999.

Harvey Jeffries summarized work completed by applying data analysis techniques to 15-years of AIRS data, in which there are cities which are dirty for the current 1-hour standard, but will be clean for the new 8-hour standard because of land/sea breezes and mountain/valley winds.

Shawn Kendall addressed one of the issues under the rate of RFP. He stated that there is a question about how to deal with the possibility of a need for an adjustment in base controls. This becomes an equity issue. He also reacted to the issue on the credits and agreed with crediting RFP for future reductions.

Steve Gerritson suggested that today's voluntary measures have a way of becoming tomorrows SIP reductions and agrees more and more with Mr. Hawkins that there has to be a way to acknowledge long-range strategies (e.g. control of urban sprawl). Whenever a multi-year attainment demonstration is developed, there are long-range options that are simply the ones that take effect in the out years. In terms of the metric, some of the questions may be redundant. It would be misleading to use ozone reductions as the metric, because ozone is caused by precursors. Using ozone reductions as a metric really does ignore meteorological variability.

Sarah Pierce-Sandner responded that she was aware that there were some areas that would go from nonattainment into attainment. In terms of the metric, she is seeking advice while admitting that she is not an authority on this.

Harvey Jeffries stated that there are people in our group that say that they can remove the meteorological variability from ozone time series. No form of the standard, new or old, resolves the meteorological variability. So, unless you do meteorological evaluations and remove this from the data, you are going to have areas that flip in and out of violation.

Vincent Brisini brought up the idea of voluntary early reductions, and stated that before the discussions get into that there are some real issues to deal with first (including trading programs). Thus, the working group needs to explore these areas, prior to accepting voluntary reductions. In response to the question of whether or not the RFP should be standardized or customized? His opinion is that they have to be customized, because that is the only way to get results in the future. There will have to be flexibility at each and every locale, and the ability to take any available credits. As far as the meteorological effects, that is why RFP has to be related to demonstrated effects in emissions and not in ambient data. The choice is to apply the emissions magnitude metric, or require averaging of ambient data over longer and longer time periods. Concerning the definition of the base year for RFP. He suggests the inclusion of multiple years in determining the base year for RFP and finally, concerning what the rate should be, he suggests that it must be customized, and flexible for developing future strategies. The process should be guided by the end target and include the required flexibility to achieve that target successfully.

David Baron offered another option for the rate of progress. His suggestion is a combination of two of the ideas previously discussed. It would be a combination of some annual percentage reductions, along with some reduction on a straight-line method toward attainment. I concur in the pre-SIP notion to maintain progress outlined in the current act as the system moves toward the new standards for both ozone and PM. He also urged the Subcommittee not to forget that the concept of nonattainment areas has still not been abandoned.

He also suggested that the paper include a specific section on the procedures for determining exactly when RFP has been achieved. There are a lot of states taking emission credits based on some real incredible techniques. It is essential to verify that these emission reductions are actually occurring. If they are in fact not occurring, then there needs to be measures to deal with those situations. It is very easy for states to predict/project that they will achieve RFP and that currently there is no consequence for not doing so, they can simply resubmit a new plan.

Sarah Pierce-Sandner added that even if the emissions reductions are achieved, if there is not a corresponding change in the ambient concentrations, then RFP has not really been met and there are alternative hammers which will kick in.

Alan Krupnick offered an additional option. He present the following example. Consider the implementation of an international global warming agreement, in which the U.S. commits to reduce emissions of greenhouse gasses by reducing Vechicle Miles Traveled (VMT). Since that action would also reduce ozone and PM precursors, he believes states should be allowed credits for these type of reductions. He also suggested that there should be a cost cap on RFP control demonstrations. In response to the question of whether RFP for ozone, PM, and regional haze should be integrated? Mr. Krupnick thinks that this is an interesting concept and he urged the working group to do a lot of work on that last concept. He also agreed that if a real future reduction can be demonstrated, it ought to count towards RFP.

Richard Phelps explained that industry does take compliance certification pretty seriously with respect to emission limits and permitted limitations. A good metric might be a cumulative cap on cost of investments in achieving emissions reductions.

William Hamilton recessed the meeting until the next morning at 8:00 a.m.

February 21,1997

William Hamilton (U.S. Environmental Protection Agency) announced that the meeting would begin by accepting comments on the RFP report given in yesterday's meeting.

Comments from the Subcommittee on the Reasonable Further Progress Paper

Tom Maslaney stated that RFP requirements should continue in existing nonattainment areas on an emissions-based methodology. The problem arises for the new areas that will be designated as nonattainment. He would like to discuss a new metric for RFP. If one considers air quality and does not see an RFP improvement, he questioned what air quality metrics really meant. The goal of RFP is to improve air quality. Thus, if noticeable air quality improvements are not ascertained, there is a problem in determining who is not doing their job. Successfully completing this procedure will require that some judgements be made.

Thus, using air quality as an RFP metric will repeatedly cause problems. If emissions are the metric, then there exists the dilemma of determining the baseline. Currently, 1990 is the base year. However, some of these new areas may not have complete 1990 inventories, and it may be difficult or impossible to go back and reconstruct these inventories for 1990. Thus, a very difficult choice has to be made on which year we choose as the base year.

Voluntary programs are also problematic. Title V is not the sole mechanism for realizing voluntary objectives. The Title V process cannot recognize such efforts as energy conservation.

Beverly Hartsock addressed SIP issues. The group needs to look at when, if ever, RFP no longer needs to be applied. Also, under the pre-SIP issues, RFP is going to be a very difficult policy to implement. Prior to having a SIP in place, if the area has not dealt with nonattainment in the past, the infrastructure will most likely not be in place to implement successful programs. Thus, it will take significant resources to ramp-up these new programs in new areas to ensure a sound long-term plan.

Sarah Peirce-Sandner asked if Ms. Hartsock was indicating issues related to extreme transport.

Ms. Hartsock indicated that she was not. She was referring to the special provisions under section 818 for International Border regions. These issues need to be raised in the paper.

Dave Howecamp stated that the Work Group needs legal input from Office of General Counsel (OGC) on existing constraints under the Act for RFP. Section 171 was discussed in the presentation, and this law is most likely still relevant and will definitely affect the metric which is implemented. He thinks this law gives explicit credence to using emissions as the metric.

Sally Shaver (U.S. Environmental Protection Agency) stated that her group could assist the Work Group.

Richard Dworek highlighted a couple of issues. First, monitoring was discussed right up front. Thus, monitoring is a key element of this proposal, and must be done first. All of these programs start with a good monitoring base.

Jeb Stuart (Construction Industry Air Quality Coalition) mentioned a third option other than emissions and ambient level reductions - each state or local agency could be listing specific measures in their plans that would implemented in the subsequent out-of-compliance years. These measures could be used as an indicator of RFP in these out years.

Alan Krupnick thinks that this is covered in the paper under Administrative Actions.

Mr. Stuart thinks that they need to be a little more specific than that.

Stephen Gerritson wanted to know if the concept of RFP could be linked to some of the other papers that have timetables in them. It makes a difference as to whether RFP is considering 3 or 4 percent per year as opposed to 15 to 20 percent per year. This degree makes a big difference on how the program is implemented, and addressing it would level the playing field.

James Shrouds (Department of Transportation) thinks the paper John Seitz mentioned the previous day will address this. He has always understood RFP to mean incremental emissions reductions. It is less clear to him how the pre-SIP process is going to work before the inventory, control measure reviews, etc. are available.

Mr. Krupnick thinks that Ms. Pierce-Sandner indicated yesterday that they had not spent a great deal of time dealing with the pre-SIP period. Thus, there will probably be further discussions on this issue.

David Hawkins indicated that there is a need for better ambient and emissions monitoring. Emissions information is the key input to all of the modeling tools that we have been discussing. The chemistry in these models is at best an approximation. Thus, when using faulty inputs, accurate results cannot be expected from these tools. Mr. Hawkins would like to see an initiative from this Subcommittee that would shore up the emissions monitoring procedures across the country.

David Baron indicated that another aspect of RFP would be to assign Rate of Progress milestones to different sectors of the emission producing activities, in particular, in reference to the conformity requirements of the Act. If we had better emissions monitoring, we might be in better shape. It could be helpful, for example, to have conformity requirements for the transportation sector to assess RFP. This is not a substitute for an area-wide RFP but would be an additional measure which could be implemented.

A lot of people have assumed wrongly that the IIP takes care of RFP in the interim or pre-SIP period. There is some language in the IIP which addresses some of this (e.g., no backsliding), but it is extremely limited. There is no language here though to fix "broken" plans, or failed plans during the interim. We should not be sanguine about the IIP taking care of RFP in the interim.

Mr. Krupnick had a comment regarding Sector Specific RFP. Once you start targeting sectors under the RFP requirements, you immediately start reducing your flexibility. He agrees that the transportation sector has not gotten the emissions reductions which are out there and recognizable but does not think that this is the means to get it.

Mr. Hawkins stated that allocating RFP to a particular sector is not necessarily a reduction of flexibility. Duties can be assigned to specific institutions, and subsequent trading can allow both sector-specific requirements and flexibility.

Robert Palzer indicated that sector-specific requirements can be extremely misleading. It can be difficult to relate real-time emissions reductions to changes in ambient air quality data. He supports David Hawkins' assessment that better emissions data is required to make quality determinations of RFP in the future. All too often, emissions reductions which come from one category are assumed to have come from another sector/category.

Mr. Maslaney addressed attainment areas which are moving towards nonattainment. For these areas, front-loading is a good idea. For areas out of attainment which are moving into attainment with the old standards, and then out under the proposed standards, this policy is not so clear cut.

Richard Phelps agreed that better emissions data is needed. However, better meteorological data is also needed. The new Compliance Assurance Monitoring (CAM) procedures implemented recently by EPA is a step in the right direction. These procedures can effectively demonstrate that control equipment is working properly. This is a more cost-effective means than using Continuous Emissions Monitoring (CEM) to document source emissions. If CEM is continued, there should be some de minimis size at which these controls are no longer required.

Mr. Krupnick asked if Mr. Hawkins was referring to emissions of large point sources or area sources.

Mr. Hawkins responded that both should be examined. There are huge errors in both point and area sources. The electric utility industry is well characterized, but other industries are not. The compliance assurance monitoring program will not give us the comfort zone that we all desire on the emissions front.

Mr. Maslaney stated CAMs provide a lot of good information, but this is not the answer. This type of measurement must be coupled with some type of credible evidence rule.

Mr. Phelps stated that CAMs is not an audit program but a continuous monitoring program. Credible evidence rules are interesting, and they do provide hammers, often big hammers for relatively minor violations. I would be very careful about using a credible evidence rule to implement this.

Bruce Hill (Appalachian Mountain Club) seconded David Hawkins' earlier comments on increased emissions monitoring. A coal plant was projected to produce 1.2 tons/BTU of NOx, but after the Continous Emissions Monitoring Systems (CEMS) were put on-line, it was determined that the emissions were actually 2.6 tons/BTU. He is concerned with both public health and ecological health and suggested the Work Group should look at the secondary standards as a metric as well.

Mr. Hawkins stated that many metrics are already being used, and the EPA can provide some guidance in these areas.

John Elston suggested that the EPA should provide leadership in these environmental indicator programs that are being discussed.

Dr. Palzer expanded the ideas of continuous emissions monitors with a wood smoke example from Oregon. Initially, they thought that wood smoke particulate was linked solely to residential wood burning. However, there were a number of large industrial point sources which were using wood for fuel in boilers which had few, if any, emissions control devices. Once the CEMS were installed, these industries began to change their methods for firing the boilers in order to keep their permits. Sources voluntarily switched to oil firing to meet permit restrictions. Based on this example, Dr. Palzer considers it crucial to see RFP done sector by sector.

Mr. Krupnick did not object at all to reporting progress on a sector by sector basis.

Mr. Dworek disagreed with Mr. Phelps and said that both stationary and fugitive sources need some work. Data published by STAPPA/ALAPCO show that eighty-eight percent of the emissions sources are generally not stationary sources (e.g., road dust, agricultural practices, and prescribed burning). By completing a good emissions inventory, you will save costs in the long run and will help both industry and the environment.

Mr. Phelps (or Mr. Henneke?) agreed with Mr. Dworek and Mr. Hawkins. He seeked to address the major point sources, and their inventories can be identified in a number of ways. After all, an emissions inventory is really only a snapshot. The real problem comes when the emissions inventory is stagnant - changes occur in both processes and controls. Emissions inventory work should be based on ongoing verification, which can be accomplished by CAM (in a less expensive fashion).

Dick Wilson feels that the science is in the dark ages on PM fine relative to some of the issues being discussed. Money needs to be spent up front to identify the basic science issues or an enormous amount of money will be wasted here. There are some basic, fundamental facts that need to be compiled prior to dealing with the finer details.

Mr. Krupnick asked if Mr. Wilson wanted to do an issue paper on the topic.

George Lauer expressed concern that the errors are not in the inventories and the emission factors, but in the activity data. He mentioned the example of bad traffic activity data.

Molly Ross summarized that everyone is talking about a uniform benefit from more data collection and more data analysis. She echoed Dr. Hill's comments on the secondary standard. The secondary standard is just as important as the primary standard, and this is expressed in the law. This standard should be pursued expeditiously.

Rewards and Sanctions Paper-- Steve Gerritson (LADCO)

This paper was combined from two previous papers whose subject matter overlapped this topic.

Paper Objective

Identify rewards and sanctions to:

-	Encourage early submissions of state/tribal implementation plans (SIP/TIP)

-	Encourage early emission reductions

-	Encourage early actions to support integration of ozone, PMfine, and regional haze timelines

The Work Group also wants to provide some realistic sanctions, especially for minor infractions. The current sanctions are like nuclear weapons you really do not want to use them unless necessary.

General Principles

-	No proposal should make any situation worse

-	Positive incentives should encourage early compliance

-	Negative incentives should be applicable immediately and should "fit the crime"

No backsliding can be allowed. Legislation in Colorado, Washington, and other states will encourage early compliance.

Rewards for Sources

-	Public recognition

-	Awards from governor

-	National and local media coverage

-	Financial rewards

-	Reductions in corporate income taxes

-	Low- or no-interest loans

-	Accelerated permit processing

-	Reduced state oversight

-	Greater flexibility and certainty

-	Consolidation and simplification of reporting requirements

Media coverage is difficult to control. Wisconsin has a program in place to help dry cleaners retrofit their existing operations. Extending more trust to companies is another possibility. Companies are more likely to make changes to their processes if the entire program is laid out initially.

Rewards for States/Tribes

-	Improved air quality

-	Flexibility to tailor strategies to local conditions

-	Avoidance of nonattainment area designation or redesignation

-	Reduction in future administrative burden

Issue 1:	How can states/tribes be encouraged to plan and implement early?

(1)	Reduce offset ratio for new sources

(2)	Provide additional offset credits for the bank or pool

(3)	Give additional item and flexibility to address violations

(4)	Set aside federal highway money

These options are geared toward flexibility within the current system and assuming that offset ratios and emissions credits will remain in place. In return for a state's efforts, designation might be delayed.

Issue 2:	How can states/tribes be discouraged from missing deadlines?

(1)	Accelerate future deadlines

(2)	Lower RACT thresholds

(3)	Deny variances or alternative emission limits

(4)	Discount banked emission reduction credits by some percentage (under a trading program)

(5)	Add requirements

Issue 3:	How can sources be encouraged to reduce emissions early?

-	Stationary Sources

-	Safe Harbors

-	provides certainty

-	increases flexibility

-	Corporate Income Tax reduction

-	Mobile Sources

-	Flexibility in new vehicle certification

-	Exempt post-1996 models with onboard diagnostics from I&M programs

-	Clean fuel fleet rebuild every 100,000 miles

-	Trading program for mobile sources

The certainty aspect of safe harbors is probably the most attractive idea on this page. The larger vehicle categories can be combined for new vehicle certification. Trading for more mobile sources should be available and is important to the program.

Additional Issues

-	Given a possible multiple-step planning process and multiple jurisdictions, where should sanctions be applied?

-	What if all existing sources qualify for positive incentives (e.g., safe harbor), but additional controls are needed to attain the NAAQS?

-	Should emission reductions resulting from national programs count toward RFP only if states meet deadlines?

These are either potential problems that we see, or issues that we feel need to be addressed up front. We do not want to sanction everybody - the sanction process is more political, and contains very few technical issues. The second concept is difficult - do we allow ourselves to violate the safe harbor agreement if the reductions were not sufficient to meet attainment? If nationwide emissions reduction programs do not count toward RFP, the reductions may be significantly affected.

Questions

(1) How can planning bodies and sources be encouraged to plan and implement early? What should the minimum requirements be to qualify for positive incentives?

(2) Are the issues accurately framed?

(3) Have all the options been identified?

I think the answer to (3) is clearly "no". This system of incentives to encourage compliance is much more realistic than command and control; however, I understand that some level of command and control will be necessary.

Comments from the Subcommittee on the Rewards and Sanctions Paper

Mr. Krupnick mentioned that Mr. Gerritson talked about missing deadlines and delays as part of the scope of the paper. He asked if the Work Group is interested in missing attainment deadlines.

Mr. Gerritson said that the Work Group is talking about stepping up the process to prevent us from missing these deadlines. This paper could certainly apply to the situation that Mr. Krupnick raised.

Mr. Krupnick said that there was a dialog in the group several meetings ago which dealt with missing nonattainment dates. He did not see this in the paper at all.

Mr. Gerritson stated that the group is primarily concerned with getting the process started, and not specifically with meeting attainment.

Mr. Krupnick asked the EPA if this issue is being taken up by any other papers.

Joseph Paisie (U.S. Environmental Protection Agency) responded that he did not think so.

Mr. Krupnick said that they could discuss this later.

Mr. Lauer was concerned that the early reductions end up with the silver bullet syndrome - ideas which are not well thought out and result in industry spending a good deal of capital. He recommended that the paper incorporate something about planning and analysis of the reductions prior to making recommendations.

Mr. Hawkins addressed early reduction incentives and the concept of emission fees. These could be designed to be revenue neutral, where the good performers get money back and the poorer performers do not. The best incentive is to stop allowing emissions to be released for free.

Georgia Callahan (Texaco) mentioned that there has been a good deal of work already done by EPA through their Project XL, which deals with early reduction incentives.

Mr. Phelps stated that he is a member of an industry which has dealt with Section 112 and the HAPs program. The problems the industry encountered under the existing early reductions program is that the EPA has put so many constraints and validations on them to render the program almost useless and impractical. Project XL is much more practical and does show great promise for providing early reduction incentives.

Regarding the Safe Harbors approach, Mr. Phelps applauded Mr. Gerritson and his group for generating this thinking. I think industry has incentive to overcontrol in anticipation of source growth and should be allowed to take advantage of this under the Safe Harbors provision. Industry must have some incentive to do more and to do it early.

Mr. Gerritson asked if Mr. Phelps was suggesting that the Work Group get rid of restrictions on validating early reductions.

Mr. Phelps could not speak for all industry reactions, but industries took a long look at the incentives provided in the initial early reductions program. The validation, record-keeping, and reporting requirements were simply not worth the effort. He would make the early reductions program less prescriptive and more realistic; the programs were more onerous than those provided for under command and control and in some cases were more costly than the emissions control devices themselves.

He went on to say that the Consolidated Air Rule (CAR), which is in pre-proposal phase now, is exactly what is being dealt with here. The CAR will consolidate the reporting requirements and make them more easily implemented by industry.

Sarah Peirce-Sandner thinks the early reduction program can be summarized nicely by the industries which are currently participating. The requirements, in her opinion, are too prescriptive and establish additional restrictions for early reductions.

Richard Chastain (or Charles Goodman??) (Southern Company Services) stated that Mr. Gerritson implied the sanctions would actually be applied to the sources. These sanctions should be applied to the sources not meeting compliance, and the complying sources should not be penalized.

Mr. Gerritson responded that this would be a political issue in the real world.

Mr. Krupnick was concerned about motivating the states. There is not a discussion in the paper on what it takes to motivate the states to move. He thinks the paper could benefit from addressing state motivation.

Mr. Gerritson agreed. There was some ambivalence about this whole concept in the first place. Representing the public sector, Mr. Gerritson said that we all operate in good faith, and we take these deadlines seriously and rarely fail to meet them. However, we do occasionally miss deadlines and make mistakes based on administrative errors or shortfalls in technology. EPA's current guidance calls for the sanction clock to start immediately upon the infraction. Thus, it was difficult to deal with this issue. Mr. Gerritson disagrees with David Baron that anyone is out to get him; if they do not perform, they get sued. The Work Group is open to suggestions and would welcome comments.

Dennis Lawler stated that the concepts of early submittals and early reductions are a good idea. Some of the larger major metropolitan areas have done just about all they can do toward reaching attainment for ozone, and they still cannot show attainment. Thus, the Work Group needs to recognize that if something is done on time, it may not always work. The only recourse is to implement major life-changing activities. Some credits should be given for implementation of these big programs. EPA has an obligation to come through with guidance, tools, and potentially national regulations.

Mr. Gerritson mentioned that, regarding alternative control techniques guidance, the EPA only produced 3 of the 13 documents; however, states were still required to produce their regulations on time. Thus, there is a close relationship between the states and EPA. There is need for EPA to perform and be held accountable in some other way than being dragged into court.

William Luneburg (University of Pittsburgh School of Law) talked about baseline offsets. He asked if you reduce from the baseline, or from some baseline offset ratio, to accomplish some meaningful reductions. He also wondered if the EPA would consider offset ratios of 1.2 to 1.3. The Safe Harbor concept, combined with all the uncertainties, means that the attainment date considerations all go out the window.

Christine Shaver said it might be useful in the paper to explain that Safe Harbors and early reductions do not really apply to areas that are nonattainment and will remain in nonattainment. She also wanted to know how to deal with early reductions in an integrated program. The equities need to be addressed for the integrated program concept. Under principles, the Work Group talks about making things no worse, doing no harm. Ms. Christine Shaver wants to know how you avoid rewarding mediocrity. Thus, one of the principles must be to reward significant reductions, not just run-of-the-mill reductions.

Mr. Gerritson asked Ms. Christine Shaver to define the level of significant reductions.

Ms. Christine Shaver suggested that the Work Group look at the best sources in the group to determine this level, perhaps BACT or LAER. We are going to need the most reductions we can get. She asked if a combination of a baseline date and a benchmark could be used as a means of determining when you are going to achieve your early reduction credits.

Langdon Marsh added a pitch for voluntary measures. He thinks they can play a role, and perhaps voluntary is not the appropriate terminology. There are control measures out there that can be implemented outside of command and control procedures. Mass transit subsidies are a good example of this type of approach. In the initial years, some type of contingency measures will be needed in case the anticipated reductions are not met. Additional examples involved using paints with reduced emissions and the establishment of a process by which individuals can use their own ideas.

Vincent Brisini wanted to know where the EPA stood on some of these options and whether or not they had potential. The Title IV early NOx election is an excellent example of a Safe Harbor. Under Issue 1, one of the things that must be considered is the placement of a hurdle which can be met in the specified timeframe. The hurdle and timeline should be attainable. On Issue 2, the punishments must be focussed on those that are causing the problems. He likes early reductions, but the disincentives to early reductions must be removed. His preliminary experience with Project XL is less than pleasing because he did not get to take credit for those early reductions. In a market-based system, credit must be received for reductions above and beyond the requirements.

Mr. Shrouds brought up the fact that there has always been a concern in the transportation industry about the equity issues. The industry certainly supports incentives and prefers sanctions as a last resort or fallback approach. He would like to find another acronym for tribal implementation plans (TIPs) since DOT already has transportation implementation plans.

Mr. Shrouds added that set-aside money has always been very controversial, especially with Federal highway funds. Existing legislation has a set-aside program in place which puts half of the money toward mass transit, some to high occupancy vehicles, and the rest to inspection and maintenance programs. Other funding sources can also be linked to transit as well. One area of concern is on Page 6 of the paper: mandating these types of controls (car pools) has been very unsuccessful since the 1970s and they are not politically acceptable. He would suggest that the Work Group take a long look at these mandates.

Mr. Krupnick addressed the principle of not wanting to make the situation worse by asking Mr. Gerritson to define "worse." It could be defined in terms of raising costs. Sanctions should not be used that raise inefficiency or costs (including car pools). Tightening RACT raises costs; taking away credits from RFP from national plans affects costs. The Subcommittee does not want sanctions which will simply raise costs. Again, this goes back to the earlier point about trying to make the sanctions meet the crime: if the problem is at the state level, then the hammer should be at the state level and not at the source level. Trading programs can provide the proper incentives for sources.

Mr. Gerritson agreed. The Work Group is groping in the dark about how to deal with states that do not meet the obligations. Any suggestions would be appreciated.

Dr. Palzer reiterated his earlier comment on cost - there are costs on both sides of this issue. You must look at both the costs and the benefits of the issue of implementing controls.

Mr. Krupnick stated that the first cut through should be irrelevant to the benefits gained. Once the ambient air quality is set, then perhaps costs and benefits should overrule.

Dr. Palzer could not disagree more. He stated that the increased costs are still real.

Mr. Hawkins addressed the issue of punishing the guilty, in particular, the irresponsible state sitting there, not willing to implement a program. It is important that a dynamic exists here between emitters and regulators. When emitters operate in a cost-free environment, they will take great advantage of it. It does not seem productive to punish states in this type of system. The group whose behavior is providing a disbenefit to the process should be punished. There is an incentive for delay from emitters, and the challenge is to find an incentive/disincentive approach.

Mr. Hamilton mentioned that Carol Browner would step in and interrupt in about fifteen minutes.

Mr. Baron echoed Mr. Hawkins' comments on sanctions being of no benefit if compliance is cost free. He basically liked the paper. A requirement for SIP revisions or control strategies should also be included in the paper. An increased Rate of Progress could also be required in the SIP revision, above and beyond the RFP milestone. He believed that the range of sanctions was good, but they should not be expanded too far. Sanctions should be a supplement, not a substitute. Sanctions should be consistently applied - EPA almost never uses them, and when they do, they are used in an inconsistent way which undermines their credibility. Incentives need to provide for reductions above and beyond those required. An early reduction plan submission should not receive any reward - the state should have to wait until the plan is implemented and the reductions are actually realized. He wanted to understand how replacement of I/M is an improvement.

Mr. Gerritson said that there are incentives to the states since I/M programs are not very popular with the general public. If onboard diagnostic systems allow you to avoid I/M programs, there is a benefit. Second, there is also an incentive to the manufacturers to improve the vehicles.

Mr. Baron asked if people will want to buy a car which has an onboard diagnostics system.

Mr. Gerritson responded "yes", and that is one benefit.

Mr. Baron expressed skepticism and did not see how eliminating I/M gets you to that point.

Mr. Gerritson explained that his group is not proposing to eliminate I/M programs. It is simply excluding those vehicles with onboard diagnostics.

Mr. Baron stated that there has to be a pretty heavy burden on the states to create incentives for early emissions reductions.

Ms. Hartsock had five points to make. First, her group supports the concept that negative incentives should fit the crime. The current disincentives are like death penalties. Second, a large disincentive to early planning currently exists. Under the current system, it makes sense to wait since the deals get better later in the planning cycle. The first plans reviewed are done totally by the book, so waiting is a good thing. Thus, this disincentive needs to be removed. Third, when EPA is late on the guidance, this creates a very real problem for the states. Fourth, the Work Group should look at examining incentives and sanctions for federal facilities and federal agencies. The states struggle with other federal partners in this process - DOE, DOD, DOT, etc. Fifth, see if you can look at incentives which are directed at the public and may be taken by the general public willingly (e.g., the I/M and new car exchange programs).

Mr. Henneke said that Mr. Hawkins was on target. He complimented the job of the Work Group which has started to link the problems of the federal, state, and industrial systems. The private sector, the state, and the EPA have to be linked to ensure that the system will work, as opposed to the historical measure of failure. He thinks it would be useful to look at the states who have complied and those who have not. Mr. Henneke thinks the group is on the right track. The group could show how bad the current system is and show the benefits the new programs offer. He feels that the group could go further with the incentives.

Mr. Krupnick said that this has been a good discussion.

Mr. Hamilton asked the Subcommittee members to submit written comments to Mr. Gerritson if they did not get a chance to speak.

Economic Incentives to Implement the Revised Ozone and PM Standards and the Regional Haze Rules - Joe Belanger (U.S. Envrionmental Protection Angency-Connecticut )

Context of Economic Incentives

Economy with

-	Certainty

-	Timeliness/Effectiveness

-	Equity

-	Technology Innovation

Recommendation

That the Subcommittee endorse the broad utilization of economic incentive-market based programs designed to:

-	minimize the cost of achieving air quality goals

-	ensure the certainty of program effectiveness, and

-	provide equitable distribution of responsibilities

Reasons for Economic Incentives Program

-	Develop a well-integrated attainment strategy on a least-cost basis

-	Address residual nonattainment

-	Replace or provide flexibility for existing command and control

-	Focus on emissions, not emissions rates (emission factors and activity levels)

Types of Economic Incentives

-	Emission fees

-	Emission trading programs

-	Others

-	tax programs (e.g., recycling fees)

-	light changes

-	park and ride lots

The group is not talking about Title V fees since these have historically not been used to affect changes in lifestyle.

Design Considerations

-	Scope

-	Attainment strategy

-	Adjunct to another strategy

-	Regional/local nature of pollution problem

-	Type, size, and location of sources

-	Meteorology and geographical characteristics

-	Needs of small entities (e.g., addressing hot spots)

-	Environmental justice

These last two features are very important, and the group is constantly reminded to take these into account in the type of program that we consider/adopt.

Goals of Incentive-Based Regulations

-	Limit emissions

-	Increase flexibility to sources for meeting federal requirements

-	Encourage early emissions reductions

-	Increase rule effectiveness

-	Encourage emissions reductions from non-traditional sources

-	Promote control technology innovation and diffusion

-	Reduce residual nonattainment

These goals are the same as those of Command and Control approaches.

Issues

-	Timing of emissions

-	Interpollutant trading

-	Allocation of initial allowances and allowances in future years

-	Treatment of new emissions (opportunity for using these programs)

-	Sources that should be included in the program (who is in, who is out)

-	Geographic size for a market-based emission reduction program

-	Inclusion of area and mobile source emissions

Timing of Emissions

-	Ton of emissions covered by ton of allowances

-	During episodes and critical periods, ton of emissions covered by more than one ton of allowances

Carol Browner - Administrator of EPA

Adminstrator Browner was in the hotel for a meeting on children's health. She thanked the Subcommittee for giving its time and energies for this very important effort. It is absolutely essential that this form of dialog continue, regardless of what EPA should propose. We must continue to improve public health and environmental welfare. She then let the Subcommittee get back to its important work as the nuts and bolts of public dialog.

The presentation was returned to Mr. Belanger.

Interpollutant Trading

-	Formal interpollutant trading

-	Set emission budget for "limiting" precursor low enough (e.g. at or below some limiting level)

-	Allow only single pollutant trades (e.g., short-term, or near-term solution; similar to OTAG process)

Groups such as OTAG, OTC, and DNR should help with the early parts of the RFP program.

Allocation of Initial Allowances and Allowances in Future Years

-	Auction off all allowances (e.g., internalize all costs)

-	Allocate some and auction off remainder

-	Allocate all allowances (either on historic basis or some type of projected basis)

Treatment of New Emissions

-	Sources purchase allowances from other sources for new emissions

-	Allowance reserve exclusively for new sources

-	In emission fee program, source pay fees on all new emissions

Massachusetts and Connecticut already have programs in place to allow new small sources.

Sources that Should be Included

-	Cover only traditional, well-measured sources (e.g., power plants)

-	Cover all large sources

-	Cover all sources to the extent possible, including area and mobile sources

-	Cover large sources and allow smaller sources to opt-in

Geographic Size

-	Use market-based program to reduce background emissions throughout the AOI, and impose additional controls in smaller areas

-	Reduce target emission level for regional program (RAMP-wide)

-	Use economic and air-quality influence criteria to determine geographic size

Inclusion of Area and Mobile Sources

-	Grant emission allowances to groups that represent source categories and assign emission reduction responsibilities to sources collectively

-	Grant emission allowances and assign emission reduction responsibilities to individual owners/operators

Discrete Emission Reduction (DER) provides the basis for this type of approach. Allowances here are being used in a very broad sense.

Residual Nonattainment

-	Include additional sources in existing programs

-	Reduce emission budget in existing cap-and-trade programs

-	Increase fee rate in existing emission fee programs

-	Implement graduated emission fees, or fees on emissions above a specified threshold, and use revenue to obtain emission reductions

Fees can be an effective means of accomplishing this goal, through creating revenue sources to provide funds for things that need to get done.

Future Activities

-	Develop options and recommendations for economic incentives to address residual nonattainment

-	Develop options and recommendations for including area and mobile sources in incentive-based regulations

-	Develop options and recommendations for upwind area/downwind area emissions trading programs (proposed in Institutional Mechanisms issue paper)

Questions:

(1)	Should the framework for geographically integrated (nested) control strategies be developed?

Options should include a regional program to reduce "background" concentration and local programs aimed at eliminating AOVs.

The mechanics of this are at this time uncertain. You need to know more about the benefits and disbenefits for implementing these types of emissions changes/controls. A move toward an impact-based trading program would get rid of the significant challenges.

(2)	Should incentive-based regulations be developed to address:

-	growth in mobile and area source emissions;

-	residual nonattainment;

-	encourage early reductions; or

-	increase source options for complying with RACT and other technology-based performance standards?

(3)	Can mandated controls in the nonattainment areas be substituted for new measures in the new AOI?

Mr. Belanger asked the group members if he missed anything.

Comments from the Subcommittee on the Economic Incentives Paper

Dr. Palzer said that Mr. Belanger did a good job in presenting the material. He has difficulty with some of the examples you have used as economic examples because he is not sure some of them work as well as they should. For example, regarding park and ride lots, cold starts emit the majority of emissions. Dr. Palzer advocates that feeder systems into a mass transit system would be more appropriate. Fleet turnover in mobile sources is a good thing. He thought it might be possible to have something similar for point sources (e.g., old source review). In terms of an equity issue, the turnover of process technologies and control technologies for industry would be beneficial to this process. Thus, he is reluctant for this committee to make specific reductions at this time. They should maximize the efficiency and minimize the time required to meet these standards.

Mr. Belanger thinks that the committee would agree with Dr. Palzer wholeheartedly. He agrees with Mr. Hawkins' comments on not allowing a source to emit for free.

Dr. Palzer observed that this would work if you applied those fees to all emitters, and not just point sources.

Dr. Jane Hall (California State University-Fullerton) suggested that in Chapter 6 of the conceptual model, the information needs for economic incentives and how people behave socioeconomically should be addressed. This basic information is necessary to proceed with this paper.

Mr. Chastain thinks that this paper provides a good summary of the issues. He addressed the size of the area selected since the ultimate goal is to bring an area into attainment. The responsibility should be assigned as broadly as possible, and the assignment should represent the responsibility of the problem. His sector believes that the distribution of allowances based on historical activities is the best approach. This approach would minimize the overall disruption of the process. The weighted trading program concept is a good one and warrants further investigation. It is appropriate that Mr. Belanger has asked for general support of the principles listed here, but Mr. Chastain thinks it would be unwise to get very specific at this point. The specifics should be left to the individual areas.

Ms. Ross is very supportive of Mr. Belanger's presentation. She cautioned him about the limits he discussed. He runs the danger of considering only the economic process at the sacrifice of some of our fundamental social goals. Alan commented about the Rewards and Sanctions paper, that it could lead to bad results because of costs. However, there are a lot of things at this time that cannot be quantified in terms of cost. The Subcommittee wants to establish a system that everyone is interested in talking about. The Department of the Interior is trying to get cooperation of industry for ecosystem management, by being prescriptive up front, with long- term flexibility. This program is based on increased monitoring, and this is the only way to come back in the future and fix mistakes. Any efforts made should benefit the public health and the protection of the environment. Allowing interpollutant trading right up front requires the ability to check this premise over time and also having the mechanism to go back and fix it at some later time.

Mr. Belanger stated that he agrees but command and control is a different program. The program must be carefully designed and should not be expected to deliver miracles.

Ms. Ross responded that she was warning that no one should count on this program to be the end-all program for all of these issues. No one should think that they have a totally safe ticket from the get go. There must be a way to adjust the program over time.

Mr. Brisini had some page-by-page comments. On Page 2 a lot of discussion on issues is presented, but banking is missing. This issue is in fact very contentious, and should be included. The paper needs to discuss inter-temporal as well as inter-spatial trades. The discussion on emission trading programs and geographic representativeness could be debated by someone from New York. A cap-and-trade budget will become an emissions fee type of program, and cap-and- trade can act as an incentive. This program could in fact operate as a disincentive as opposed to an incentive. Discrete Emission Reduction trading is a compliance option and not an incentive. Also, multiple programs need to be discussed. The RAMP-level should and will determine the geographic size of the trading region. The timing section does not discuss year-to-year issues. Interpollutant trading needs the involvement of STSWG who can establish an equivalency among the various pollutants. Mr. Brisini asked if the tools were available to perform these types of analyses. You need this information to perform an economic analysis. This is a design for a consistent national program which allocates to a specific source, and not an individual planning region. His biggest concern is that the paper is written toward a national program targeted at individual sources and this approach is not effective. This methodology should be applied at the RAMP or the regional level to establish the Regional Implementation Plan, and the State Implementation Plans decide how the emissions get distributed.

Mr. Belanger responded that the sense of the group is not to go in the direction of Mr. Brisini's strongest concern. The AOI is the fundamental planning entity in which most of these decisions would be made. The group did not spend a great deal of time discussing the details of how this would be done, but that is the way they are heading.

Mr. Brisini observed that this needs to be clearly enunciated within this paper, because at this time it is not clear.

Mr. Krupnick wanted to establish the future direction for this process since it appears that Mr. Belanger is on track. He wanted to know if this was the consensus of this group. The paper should not dictate to the individual RAMP/AOI prescriptive measures, but they should provide a menu of options. Mr. Krupnick solicited any direct comments on the direction this Group should take in the future.

Ms. Hartsock asked for clarification. She wanted to know if Mr. Krupnick was asking if the Subcommitte endorses this recommendation or if they endorse the continued meeting of this group.

Mr. Krupnick wanted to know if the Subcommittee wanted the Group to continue to develop ideas and sharpen the argument, deepen the thinking for this paper and other related papers as jumping-off points for RAMPs and AOIs.

Ms. Hartsock wished there was not a recommendation slide. A number of the other groups are moving forward without making recommendations. She is reluctant to vote on this, because she wants to know exactly what concepts she is buying into. Government and industry need to know the baselines, approach to growth management, etc. She would like to see the Group not just focus on recommendations but to examine in great detail all of the options which are on the table. A lack of understanding for most of these processes precludes determining exactly how to implement these sort of economic programs. She felt that a lot was being asked of this group, and she did not know if the Subcommittee can give the answers to the RAMPs.

Mr. Krupnick stated that he never suggested a model regulation or rule. Perhaps this paper should give Ms. Hartsock the comfort that these techniques can accomplish the goals outlined.

Mr. Brisini stated that if a RAMP or AOI decides that they want a model rule, then they should have the option to do so. The level to have consistency is a choice that Mr. Brisini does not think should be compromised. Some target reductions will have to be left with a lot of flexibility for the RAMPs, AOIs, and SIPs.

Mr. Maslaney commented on market-based incentives. This approach is totally about economics driving the process. A single source is only one entity, and it does not represent society. Large sources must champion the emissions reductions (e.g., utilities, gasoline companies) in their respective areas/sectors. The inclusion of all society is necessary to be economically fair to society. The past corporate decisions need to be reviewed to remove the disincentive for early reductions. As Ms. Hartsock stated earlier, it has always been beneficial to industry to wait to implement control programs. Programs have to be carefully designed not to benefit industry at the cost to society.

Mr. Hamilton annouced that the session would break for lunch and resume at 12:45.

*** LUNCH ****

Mr. Krupnick started the session by asking to pick up where the Subcommittee left off.

Elsie Munsell addressed the issue of market trading areas. The Department of Defense is interested in which programs would mean what to them in terms of compliance. They think that the market trading areas would give them the flexibility to achieve compliance. General conformity requirements require them to do puts and takes to meet the necessary requirements. It appears to be that when DOD (or any Federal agency) puts together documentation for emissions reductions and then puts those reductions up for sale, the proceeds of that sale end up in the General Treasury. DOD is attempting to keep these monies for further environmental activities. They strongly support the need for mobile source trading and desire to work with the mobile source trading program. The closure and movement of federal facilities is also a problem, so she suggests the issuance of shutdown credits for both Federal agencies and industry.

Mr. Krupnick asked Ms. Munsell if she wanted the paper to deal with shutdown credits.

Ms. Munsell responded that this would be helpful.

Carter Keithley (Hearth Products Association) would like to see an increase in the visibility of area sources in general. There are areas in the country where the new standards will not be achievable without the inclusion and regulation of area sources. Economic incentives may be the only palatable way to achieve the necessary emissions reductions. Mr. Keithley represents the homeowner/fireplace user but could essentially extend this to lawnmowers, etc. (counterseasonal issues). His industries' customers are very independent codgers, and indeed they "live free or die." These people however, are on the side of clean air and stronger regulations. Regulators cannot simply march in and take away their fireplaces and woodstoves. The mandate of this FACA Subcommittee was to find innovative ways to achieve these reductions, and there should be the development of more creative methods. A lot of these are under development and require further investigation. The economic incentives for area sources should be larger in the paper.

Mr. Krupnick observed that a reorganization of this paper may be in order. Perhaps a separate paper should address the issue. However, someone needs to head-up this effort.

Mr. Keithley volunteered John Crouch.

William Luneburg expressed concern that the paper creates false expectations. He just does not think that it is based on realistic science. Secondly, the Rewards and Sanctions paper should be related to these economic incentives.

Mr. Krupnick agreed that there is a linkage which should be exploited. However, he did not think the costs should be higher for an area just because they are not complying.

Mr. Shrouds observed that DOT is interested in this area of economic incentives. He thinks that looking at a reduction in the number of trips instead of reducing VMT would be a profitable avenue to pursue. The CAA for the past 25 years has focused on work-related trips, which only account for five to ten percent of the trips into the central business district. HOV and mass transit costs approach $200,000 per ton. Mr. Shrouds thinks other trips and other times of the day need to be examined to offer incentives for reducing emissions from motor vehicles. DOT definitely supports the concept of congestion relief planning, energy conservation, and emissions reductions and has looked at the feasibility of implementing these types of measures. Episodic control measures may also be beneficial as well.

Ms. C. Shaver stated that the paper is written mainly in the context of providing information to the RAMPs or their prodigies. However, the Subcommittee also needs to look at the Federal Implementation Plan as an economic incentive option here. This would allow the use of the FIP as a form of hammer, instead of a sanction. If the FIP is perceived as a disincentive plan, then emission trading may be part of the FIP instead of a sanction.

Joe Belanger stated that Connecticut has offsets for traffic reductions. They do not focus on the trip elimination or the length of trip reduction. We are looking for reductions however and wherever we can get them, and interpollutant trading should not be written off.

Classifications of Areas under New NAAQS - Eric Skelton (Spokane Company)

Paper Objective

Paper addresses the following questions:

-	Should classifications, based on the severity of air quality, be used in conjunction with designations?

-	How should the classification system be modified, if at all?

-	Is the current CAA classification scheme workable under a regional scale approach?

Problems with Current Classification Scheme

-	Lacks flexibility to address local problems

-	Promotes a "one-size-fits-all" strategy

-	Creates a sense of complacency and thus delays expeditious actions (when a relatively distant attainment data is included)

Spokane was in nonattainment based on windblown dust, and the Act did not leave the flexibility to address this issue.

Being bumped up into a higher classification shows some advantages in terms of time frames.

Possible Classification Goals

-	To establish national or regional consistency

-	To inform the public about air quality problems

-	To establish hierarchy of planning and control requirements and attainment dates

-	To provide method for "bump ups"

-	To distinguish between local and transport problems

-	To distinguish between single- and multiple-pollutant problems

Summary of Options

(1)	Retain current approach

(2)	Two-tiered approach (5 or 10 years)

(3)	Classify to address regional transport

(4)	Classify to emphasize AOI versus AOV

(5)	Classify "areas at risk"

(6)	Classify by control region (within AOI)

(7)	Classify to identify core requirements

(8)	No classifications

Options 1 and 8 are the only stand-alone options.

Option 1: Retain the current approach to classification

Classify based on one or more factors, such as attainment date, severity, control measure availability, and complexity of problem

-	This approach is the most prescriptive and the most familiar

-	Are there enough differences to establish classifications?

Option 2: Two-Tiered Approach

-	Establish up to 5- or 10-year attainment dates based on easy versus complex problems

-	Section 172(a)(2) addresses this already

-	Option 2a - Give areas up to 5 years to attain initially. Grant an extension of up to 5 additional years to qualifying areas

-	Option 2b - Decisions are made up front about each area's ability to have a 5- or 10-year attainment status

Option 3: Classify areas specifically to address regional transport

-	Place areas needing only local controls into one category (i.e., a quick fix solution)

-	Classify areas impacted by transport based on complexity (e.g., simple, complex, compound)

Option 4: Classify to emphasize differences between AOIs and AOVs

-	Option 4a - Classify the AOV to reflect severity and to prescribe public education measures. Prescribe a core of planning and control requirements in the AOI

-	Option 4b - Classify the AOVs as in Option 4a. Classify AOIs to address complexity or the length of time necessary to attain the standard

Option 5: Classify areas close to nonattainment

-	Classify areas where trends indicate risk of becoming an AOV as "areas at risk"

-	Provide some appropriate level of effort to reduce chances of becoming nonattainment

Option 6: Classify by control region

-	Subdivide AOI into different control regions with accompanying classifications

-	Prescribe core requirements which become more stringent as the control region's impact on the AOV increases

Option 7: Classify to identify core requirements

-	Classify as a means to impose core requirements and progressive requirements (bump ups)

-	Establish rebuttable presumption of core requirements: areas may substitute measures achieving equivalent air quality benefits or eliminate requirements

Option 8: No classification

-	If control and planning issues are not significantly different between areas, classification system may not be needed to address nonattainment issues

Questions:

(1) What is the purpose of a classification scheme under the AOI/AOV Construct? How do we implement it?

(2) Are they accurately framed?

(3) ????

(4) Do we need it at all?

Comments from the Subcommittee on the Classifications of Designated Areas Paper

Mr. Luneburg wanted to know if the current system is working. He does not think that it is working in the manner in which it was designed. The bottom line is answering whether this classification scheme accomplishes anything. It appears to him that some options cause more confusion than benefit to generating clean air.

Donna Lamb suggests that the group look at what it might do for a classification system (under Option 3) where multiple pollutants are recognized as part of the problem. Option 5 sounds a lot like Class 2 areas under the current PSD regulations. Finally, it is not clear exactly what is being classified: the AOI, the AOV, or the control region.

Mr. Skelton replied that under some of the options the AOIs would be classified and under others the AOVs. In one option the AOI and the AOV would be subdivided. Thus, the door is open to do it either way.

Mr. Krupnick responded that if control requirements are the issue, then the AOI should be classified. If the attainment data is being classified, it really does not matter.

Mr. Skelton pointed out that air quality still has to be measured in the AOV. The classifications affect the attainment dates and thus affect the air quality in the AOV.

Mr. Krupnick is nervous about the starting point from the current system of stringent mandates and bump ups. He would like the paper to take a more open approach to this process. The Subcommittee may ultimately have to return to this approach, but he would prefer to start with more flexibility and a more creative approach.

Mr. Skelton had been operating under the presumption that if there are not a lot of mandates on different control strategies, then a classification system is not needed.

Mr. Krupnick stated that Mr. Skelton's comments on hierarchy and complexity justify the classification scheme, even if mandates are not present. Areas which are going to be more costly and complex could have different classifications.

Mr. Skelton suggested a classification system simply for prescribing attainment dates.

Mr. Wilson added that part of the complexity here is all the things that can be done with classifications. He would like some discussion on the incentives for implementing a classification system. He would like to know if the stigma of avoiding the nonattainment classification is sufficient incentive for communities to have clean air. He stated that there should be ways to use classifications to get communities to work together to avoid bump ups.

Larry Feldcamp (Baker and Botts) would favor the no-classifications approach. There is enough complexity here that it is already difficult to get hold of this issue. However, the main point here is that we need flexibility in how RAMPs are set up.

Ron Methier (Georgia Environmental Protection Department) has mixed feelings about classifications. It takes away the flexibility as a planning agency but can be used to get things done politically. Moving to the revised standard, he would like to know how to set the classification system since the current classifications are based on the one-hour standard. He asked if the EPA has done any analyses on the 8-hour data and how a classification scheme would be developed and implemented. On the other hand, some type of classification might be useful in planning for emissions reductions in certain areas.

Mr. Brisini stated that this paper captures the framework of the options, with no intention to lead to any decision.

Glen Cass observed that it seems that one of the purposes of classifications is to establish the attainment date and how/when it will be reached. He wanted to know if the classifications could be based on the sources needed to control in order to reach attainment. Instead of changing attainment dates with the classifications, the time schedule could be different for various industries. Compliance occurs when everything is in place.

Ms. Pierce-Sandner leans toward no classifications because this maximizes the flexibility of the individual RAMPs. This also requires that strict attention be placed in SIP to milestones and the penalties for not reaching these milestones. This approach could be subsumed into the RFP group. On Option 5, areas that are close to nonattainment must be placed on notice early to allow them the opportunity to correct their problems, without the full weight of regulatory issues being dumped on them.

Patrick Raher asked if the data is available to identify the sources that Dr. Cass was discussing.

Dr. Cass responded that any attainment demonstration for the future must have a list of the sources to be controlled and the methodology for bringing them under control. Thus, there must be a schedule at that time which could be used to implement the process that he previously proposed. Simple problems will be taken care of quickly. In other words, classify the sources and not the air quality control regions.

Mr. Raher asked if this policy would put controls in other regions on sources that do not need them.

Dr. Cass replied that these controls would be RAMP/AOI specific and would not be implemented nationally.

Mr. Krupnick did not see how this program would work because it seems like a massive mandate. It is not compatible with a trading program if the program calls for Command and Control measures. It also presumes that all sources within a RAMP are identical. The classifications idea is set up with attainment dates as the issue.

Dr. Cass was not thinking of this in terms of a trading program, rather a Command and Control program. The argument over classifications is really an argument over time schedules. Dr. Cass was trying to focus on this concept and give time appropriations based on the complexity of the control problem.

Ms. Christine Shaver could see this policy within a trading scheme where early reductions could create, sufficient incentives for sources that could control quickly.

Dr. Cass would throw his vote with the folks who favor no classifications. He thinks the technical details of the control programs are where the attention needs to be focused.

Communications Work Group Activities Report - Tom Curran

(U.S. Environmental Protection Agency)

Topics

-	Work Group activities

-	Successes

- INTERNET Usage Statistics

-	EPA Outreach Activities

More outreach for this standard has been done than on any previous EPA regulations. Tthe states wished that they had more warning, and the list of potential counties not meeting the proposed standards was controversial.

EPA Outreach Activities

-	Documents are available on INTERNET

- In two weeks of standards going on-line, the equivalent of 1.5 million pages had been downloaded

-	Public Hearings (1/14-15/97)

- Over 400 citizens and organizations gave testimony

-	Satellite Broadcast (12/9/96)

-	EPA/AWMA Implementation Workshops

- January/February - over 10 cities

-	Regional Office Activities

- Public forums being held nationwide

- Staff participating in hearings held by States (e.g,. CA, TX, WA)

Ron White continued the presentation.

Action Items

-	Distribution Plans (EPA drafts/Work Group reviews)

- Brochure in blueline draft is in EPA Product Review and is not a FACA product

- Phase I Report is a FACA product and will not be as widely distributed

- "User-Friendly" Issue Summaries will be issued if they are ready to go out as part of the package

-	Review Contractor Approach for Preparing Issue Summaries

- To develop template

-	Discuss Status of Issues with Co-Chairs

Comments on the Communications Work Group Activities Report

Mr. Krupnick asked why this brochure was not reviewed by FACA.

Mr. Curran responded that the communications Work Group has reviewed this document, but it is not a FACA product. It is undergoing EPA Product Review, which they thought was the quicker process.

Mr. White stated that a funding resource must be developed for the communications and outreach of the issues surrounding the new standards.

Mr. Lauer commended the EPA on the good service on the BBS. He suggested that the sanitization of the homepages be removed: it appears that there are no issues associated with FACA and that the Subcommittee is one big happy family. He thinks the Subcommittee needs to explain to the public that there are issues of national importance being discussed.

Mr. Curran will check on setting up the appropriate links.

Mr. White said that the hearings were on the proposed health standard. That kind of information should not be mixed with the FACA information.

Mr. Lauer agreed and said that it could be placed on another EPA bulletin board. The Web pages are misleading by assuming that there are no issues.

Mr. Hamilton called for any members of the public who would like to comment to see him during Mr. Jeffries' presentation.

Science and Technical Support Work Group Update - Harvey Jeffries

Source Attribution Workshop

Purpose

- Assess the applicability of source attribution techniques for:

- Estimating AOIs

- Complementing use of nested regional grid models

The Source Attribution Workshop would be related to preliminary and final AOIs. A second workshop will discuss the policy side of these issues.

Everything will be peer reviewed and screened for relevancy, prior to the workshop. The reviewers will then review these materials, and then their presentations will be evaluated by the paid peer reviewers. A report will be compiled and then returned to the STSWG for evaluation and distribution.

This workshop will identify the techniques that are currently out there as tools to use in the evaluation process.

Comments on the Science and Technical Support Work Group Activities Report

Mr. Krupnick asked when the workshop is scheduled.

Dr. Jeffries answered the end of April or early May.

Ms. Lamb asked if the workshop was for AOI determination.

Dr. Jeffries responded that it only covers modeling, and AOI determination would be a separate issue.

Jean Vernet (U.S. Department of Energy) asked if this workshop was limited to FACA.

Dr. Jeffries responded "no," but this workshop is very technical, and its purpose is only to identify the available tools.

Ms. Lamb asked Dr. Jeffries how the group is handling visibility.

Dr. Jeffries said that anyone who has tools is welcome to come in and talk to the group. They are not preselecting participants and have asked GCVTC to participate and be heavily involved. Any form of any tool that deals with source attribution is welcome - modeling, monitoring, emissions, etc.

Ms. Lamb asked if the group is advertising regional haze models because it was not mentioned on his slide.

Dr. Jeffries apologized, but he did not make this slide.

Mr. Brisini asked if the first Workshop is for technical experts to assemble a package of tools.

Dr. Jeffries responded that this workshop is not being conducted by the STSWG. EPA is interested in identifying the tools available for source attribution identification. There are several techniques currently on the table, and the EPA is simply trying to gather information at this point. The reviewers are not members of the STSWG.

Mr. Brisini asked if the EPA is funding these technical experts to discuss what options are out there and if the second workshop is to tell the non-technical people how to determine AOIs.

Dr. Jeffries answered that he was not exactly correct. Through the workshop the EPA is trying to identify the tools that are currently available. Once they are available, the EPA will discuss how those tools answer the questions presented. The first workshop is not limited to the determination of AOIs. There will probably be a way to define a RAMP in about three months.

Ms. Christine Shaver said that it would be interesting to subject those who have a tool to a standardized data set, to determine how common the results would be for a given data set. This would give FACA a level of comfort with their results.

Dr. Jeffries responded that the STSWG does not have the resources to accomplish all of the questions that have been laid before them. Thus, they are using this as a vehicle to get manpower to answer some of these questions. STSWG will help provide guidance, based on what they learn from the available tools at this time.

Mr. Lauer asked if the group has issued a call for papers to the various papers. He thinks this might generate a lot of interest and European scientists should be involved because they have done a great deal of source attribution work.

Dr. Jeffries did not think the call had gone out to the European community, but the EPA does exchange people who are familiar with European methods.

Mr. Hamilton closed the meeting at this point since no one from the public came forward for comments.

Alan Krupnick - Thanks to the logistics staff, you did a great job.

Sally Shaver - We will hear back from the Ad Hoc Monitoring group. For the remainder of the discussion topics, we will have reworks of those papers. Thanks, see you next time.

List of Acroymns

ALAPCO	Association of Local Air Pollution Control Officials

AOI	Area of Influence

AOV	Area of Violation

AQCRs	Air Quality Control Region

AWMA	Air & Waste Management Association

BPAP	Base Program Analysis and Policies Workgroup

CAA	Clean Air Act

CAR	Consolidated Air Rule

CAM	Compliance Assurance Monitoring

CEMS	Continous Emissions Monitoring System

DER	Discrete Emission Reduction

FACA	Federal Advisory Committee Act

FIP	Federal Implementation Plan

FLMs	Federal Land Managers

FRM	Federal Reserve Method

GCVTC	Grand Canyon Visibility Transport Commission

HMO	Health Maintenance Organization

I/M	Inspection and Maintenance

MOUs	Memorandum of Understanding

MSA	Metropolitan Statistical Areas

NAAQS	National Ambient Air Quality Standards

NAMS	National Air Monitoring Stations

NOAA	National Oceanic and Atmospheric Administration

NRDC	National Resources Defense Council

NRSWG	National & Regional Strategies Work Group

NSR	New Source Review

OAQPS	Office of Air Quality & Planning Standards

OGC	Office of General Counsel

OTAG	Ozone Transport Assessment Group

OTC	Ozone Transport Commission

PAMS	Photochemical Assessment Monitoring Stations

PSD	Prevention of Significant Deterioration

QA	Quality Assurance

QC	Quality Control

RACT	Reasonably Available Control Technology

RAMP	Regional Air Management Partnership

RFP	Reasonable Further Progress

RIA	Regulatory Impact Analysis

RIP	Regional Implementation Plan

SEPs	Supplemental Environmental Project

List of Acroymns

SLAMS	State/Local Air Monitoring Station

SPMS	Special Purpose Monitoring Stations

STAPPA	State & Territorial Air Pollution Program Adminstrators

STSWG	Science & Technical Support Work Group

TBD	To Be Determined

TIPs	Tribal Implementation Plan

TTN	Technology Transfer Network

VMT	Vehicle Miles Traveled