I. Background

Congress enacted the Truth in Lending Act (TILA; 15 U.S.C. 1601 et seq. ) based on findings that economic stability would be enhanced and competition among consumer credit providers would be strengthen by the informed use of credit resulting from consumers' awareness of the cost of credit. TILA directs the Board to prescribe regulations to carry out its purposes. See 15 U.S.C. 1604(a). In 1994, TILA was amended by the Home Ownership and Equity Protection Act (HOEPA). Among other things, HOEPA directs the Board to prohibit, by regulation or order, acts or practices in connection with mortgage loans that the Board finds to be unfair or deceptive. See 15 U.S.C. 1639(l)(2).

TILA is implemented by the Board's Regulation Z (12 CFR part 226). The Board's official staff commentary interprets the regulation, and provides guidance to creditors in applying the regulation to specific transactions. See 12 CFR part 226 (Supp. I). Good faith compliance with the commentary affords protection from liability pursuant to section 130(f) of TILA (15 U.S.C. 1640(f)). The commentary is a substitute for individual staff interpretations; it is updated periodically to address significant questions that arise.

On September 24, 2010, the Board published a final rule amending Regulation Z to prohibit certain practices related to mortgage loan originator compensation (the September 2010 final rule). See 75 FR 58509, Sept. 24, 2010. The purpose of the final rule is to protect consumers in the mortgage market from unfair or abusive practices that can arise from certain loan originator compensation practices, while preserving responsible lending and sustainable homeownership. The September 2010 final rule prohibits payments to loan originators (which include mortgage brokers and loan officers) based on the terms or conditions of the transaction other than the amount of credit extended. The rule also prohibits any person other than the consumer from paying compensation to a loan originator in a transaction where the consumer pays the loan originator directly. Under the September 2010 final rule, loan originators are prohibited from steering consumers to consummate a loan not in their interest based on the fact that the loan originator will receive greater compensation for that loan.

At the time the September 2010 final rule on loan originator compensation was issued, it had an effective date of April 1, 2011. The commentary accompanying the final rule clarified that it would apply to closed-end transactions secured by a dwelling where the creditor receives a loan application on or after April 1, 2011. See comment 36-2. However, on March 31, 2011, the United States Court of Appeals for the District of Columbia Circuit issued an administrative stay to temporarily delay implementation of the September 2010 final rule. (Case No. 11-5078). Consequently, compliance with the final rule on loan originator compensation was not mandatory on April 1, 2011, as originally intended. That administrative stay was dissolved by the Court on April 5, 2011. 1

Accordingly, the Board is revising the commentary so that it conforms to the Court's administrative stay. Based on the Court's order, during the period from April 1, 2011 to April 5, 2011, compliance with the September 2010 final rule on loan originator compensation was not required. Comment 36-2 is revised based on the fact that the mandatory compliance date was April 6, 2011. The example in comment 36-2 has also been revised to conform to the Court's order.

The Administrative Procedures Act (APA), 5 U.S.C. 551 et seq., generally requires public notice before promulgation of regulations. See 5 U.S.C. 553(b). Unless public notice or a hearing is specifically required by statute, however, the APA also provides exceptions “for interpretative rules” and “when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(A) and (B). The APA also requires that rules generally be published not less than 30 days before their effective date. See 5 U.S.C. 553(d). As with the notice and comment requirement, however, the APA provides an exception when “otherwise provided by the agency for good cause found and published with the rule.” 5 U.S.C. 553(d)(3).

TILA does not require Board to provide notice or a hearing with respect to this rulemaking. See TILA Section 105(a), 15 U.S.C. 1604(a). The revisions made to the commentary by this final rule are interpretative and merely explain that the April 1, 2011, mandatory compliance date that was specified in September 2010 was subsequently changed as a result of the Court's issuance of a temporary administrative stay. The Board finds that there is good cause to conclude that providing notice and an opportunity to comment before issuing this final rule is unnecessary and that there is good cause for the final rule to be effective immediately. The change that is noted in this final rule has already occurred as a result of the Court's prior order. The final rule merely makes conforming changes so that the commentary accurately reflects the effect that the Court's order had on mandatory compliance date.

For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below:

The FAA's authority to establish these fees is found in Title 49 of the United States Code. This rulemaking has been conducted under the authority described in Chapter 453, Section 45301 et seq. Under that Chapter, the FAA is charged with prescribing regulations for the collection of fees for air traffic control and related services provided to aircraft, other than military and civilian aircraft of the United States Government or a foreign government, that transit U.S.-controlled airspace, but neither take off from nor land in the United States (“Overflights”). This final rule is within the scope of that authority.

The FAA's Overflight Fees were initially authorized in the Federal Aviation Reauthorization Act of 1996 (Pub. L. 104-264, enacted October 9, 1996). Following enactment of the initial fee authority, and as mandated by that authority, the FAA issued an Interim Final Rule (IFR), “Fees for Air Traffic Services for Certain Flights through U.S.-Controlled Airspace” (62 FR 13496), on March 20, 1997. Under the terms of the IFR, the FAA sought public comment on the IFR while concurrently beginning to assess Overflight Fees 60 days after its publication, on May 19, 1997.

On July 17, 1997, petitions for judicial review of the IFR were filed in the U.S. Court of Appeals for the District of Columbia (the Court) by the Air Transport Association of Canada (ATAC) and seven foreign air carriers. Those petitions were consolidated into a single case ( Asiana Airlines v. FAA, 134 F.3d 393 (DC Cir. 1998)). The litigation proceeded throughout the remainder of 1997 while the FAA continued to collect fees pursuant to the statute.

On January 30, 1998, the Court issued a decision, upholding the FAA on three process and procedure issues, but vacating the Rule because the Court found that the methodology the FAA used to allocate costs did not conform to the statute. The FAA immediately suspended billing operations, and eventually refunded nearly $40 million in fees that had been collected.

Although the 1997 IFR (62 FR 13496) had been set aside by the Court, the statutory requirement that the FAA establish Overflight Fees through an IFR remained in effect. One of the principal criticisms the FAA had received in the public comments on its 1997 IFR concerned the quality of the cost information upon which the Overflight Fees were based. The FAA had already begun developing a new Cost Accounting System (CAS) in 1996. Early data from the new CAS was becoming available in 1998. Thus, when the FAA decided, following the initial litigation, to issue a new IFR, a key element of that decision was that the fees would be derived from cost data from the new CAS.

A new IFR was published in the Federal Register on June 6, 2000 (65 FR 36002), with fees scheduled to go into effect on August 1, 2000. This new IFR was challenged in court by the ATAC and a slightly different group of seven foreign air carriers. The FAA began assessing and collecting the new Overflight Fees as scheduled on August 1, 2000, while public comments were still being received by the FAA on its second IFR. The litigation proceeded concurrently, with oral arguments held on May 14, 2001.

On July 13, 2001, the Court again vacated the FAA's IFR, this time because the Court believed the FAA had failed to explain a key assumption in its costing methodology. ( Air Transport Association of Canada vs. FAA; 00-1344, July 13, 2001). Under the Court's order, there were 45 days before the IFR was to be vacated. As noted above, the FAA had solicited public comment on the IFR at the time it was published. The FAA had received many comments on the several issues raised in the litigation. At the time the Court's decision was issued, the FAA was nearing completion of a Final Rule that would address these issues in the disposition of public comments section of the Rule.

The FAA therefore proceeded on two fronts. It successfully petitioned the Court not to vacate the IFR while it proceeded concurrently with issuance of the Final Rule (“Fees for FAA Services for Certain Flights,” 66 FR 43680) on August 20, 2001, with revised fees effective immediately. In addition to addressing the public comments received on the IFR, the Final Rule reduced fees by about 15 percent due to adjustments in the original cost data. A new challenge to the revised fees was brought after the issuance of the Final Rule by ATAC and the same group of air carriers. The two cases, one challenging the IFR (65 FR 36002) issued in 2000 and the other challenging the Final Rule (66 FR 43680) issued in 2001, were combined by the Court into a single case.

While the litigation was still pending, on November 19, 2001, Congress enacted the Aviation and Transportation Security Act (ATSA), which included a provision that amended the Overflight Fee authorization: (1) To require that the fees be “reasonably” (rather than “directly”) related to costs; (2) to clarify that the Administrator has sole authority to determine the costs upon which the fees are based; and (3) to state explicitly that such cost determinations by the Administrator are not subject to judicial review. Meanwhile, the litigation proceeded into 2003, with the FAA continuing to collect the fees as required by statute.

On April 8, 2003, the Court issued a decision setting aside the Final Rule and remanding it back to the FAA, finding that the agency had not adequately explained its handling of controller labor costs in deriving the fees. ( Air Transport Association of Canada v. FAA, 323 F.3d 1093 (DC Cir. 2003)). The Court also found that the Overflight Fees amendments in the ATSA statute were inapplicable because of a generic “savings” provision in the ATSA legislation that stated that nothing enacted in ATSA was applicable to any litigation ongoing prior to the date of enactment of ATSA. Fee collections were immediately suspended.

On December 12, 2003, Congress enacted VISION 100—CENTURY OF AVIATION REAUTHORIZATION ACT, (Vision 100). Section 229 of that Act explicitly “adopted, legalized, and confirmed” both the IFR published in 2000 and the Final Rule published in 2001. In addition, the FAA was directed to hold a consultation meeting with users (those who pay the Overflight Fees to the FAA) and to submit a report to Congress addressing the issues that had been in dispute in the litigation before resuming the billing and collection of the Overflight Fees.

Because there were ambiguous and potentially conflicting provisions in Vision 100 concerning Overflight Fees, the Administrator issued an Order on July 21, 2004, that set forth her interpretation of the language of the statute and, based on that interpretation, made determinations as to the ultimate disposition of Overflight Fees collected by the FAA under both the 2000 IFR and the 2001 Final Rule. The FAA retained a portion of the funds collected under the Final Rule, while either refunding or providing credits to the airlines for all of the fees collected under the IFR and a portion of the fees collected under the Final Rule. A copy of that Order, “Order Directing the Disposition of Certain Fees Collected by the Federal Aviation Administration Pursuant to 49 USC Section 45301,” was published in the Federal Register on August 4, 2004 (69 FR 47201).

The FAA met with users in September 2004 and submitted a report to Congress at the same time, as mandated by the Vision 100 statute. This cleared the way for the FAA to resume the billing and collection of Overflight Fees. In most cases, amounts previously collected by the FAA under the IFR and under the Final Rule up until the date of the ATSA enactment were provided as credits to frequent payers. These amounts were, in most cases, roughly offset by amounts owed by the carriers and other users for the 1-year period from March 2003 through February 2004. The carriers had not been billed for this period while the litigation was ongoing, but were ultimately determined by the Administrator to be liable for those fees.

Since that time, the FAA has followed the normal process of issuing monthly bills for the services provided to Overflights. The fees currently being charged were derived from cost and activity data for FY 1999. This Final Rule updates the existing fees by using cost and activity data for FY 2008 to derive the fees. The cost methodology applied in this Final Rule is applied in the same manner as in 2001, except that overhead has been included in the cost base for the fees this time as a direct result of the ATSA amendment that changed the previous statutory requirement that fees be “directly” related to costs to a less stringent requirement that the fees be “reasonably” related to costs.

The FAA's CAS has been evolving and improving over time. The CAS has always relied on the best available data, and as new systems and techniques have evolved, the quality and accuracy of the data has improved. There are areas, such as the reporting of labor costs, where costs were allocated or assigned in the past based on estimates, but today are determined by actual data. This is not a difference in how the data are gathered, but rather an improvement in the quality and accuracy of the basic data. A detailed explanation of how the CAS data were assembled can be found in the “Costing Methodology Report, FY 2008,” which has been placed in the docket for this rulemaking.

The evolution and improvement of the FAA's financial management practices over time, including its cost accounting, is worth noting. Following several years in the early days of the CAS, in which the FAA's auditors reported material weaknesses in areas including cost accounting information and accounting for property, plant, and equipment, the FAA received unqualified audit opinions on its financial statements in 9 of the last 10 years (FYs 2001-2010). The auditor's opinion for FY 2006 was initially qualified due to untimely processing of transactions and accounting for construction in progress, but was revised the following year to an unqualified audit opinion after the FAA corrected and restated its FY 2006 financial statements. Thus, following the restatement and revised auditor's opinion, the FAA's financial statements have been unqualified for 10 years. It is also significant that, in 5 of those 10 years, including the last 3, those unqualified opinions were “with no material weaknesses.”

This continuing improvement in the quality and transparency of the FAA's financial statements is a significant contributing factor to the fact that the Association of Government Accountants has awarded the Certificate of Excellence in Accountability Reporting (CEAR) to the FAA for its Performance and Accountability Reports in 7 of the last 8 years (FYs 2003-2010). The CEAR is considered the highest form of recognition for Federal Government financial management reporting.

In 2004, the FAA established an Overflight Fees ARC. That Committee held two meetings in early 2005, but never issued a report or made a recommendation to the FAA before its Charter expired. Subsequently, on December 17, 2008, the FAA issued a new Charter for an Overflight Fees ARC to advise and make recommendations to the FAA on the updating of its Overflight Fees. At the same time, the FAA initiated a rulemaking project to update the Overflight Fees, with the expectation that the activities and the end product(s) of the ARC deliberations would likely become an integral part of this rulemaking. The Overflight Fees ARC met several times in 2009 and issued its report and recommendations to the FAA on August 26, 2009. A copy of this report has been placed in the docket. The report contains three principal recommendations: (1) That the FAA pursue the updating of its Overflight Fees through the normal notice and comment type of rulemaking, rather than through the interim final rule process previously mandated by Congress; (2) that, in updating the fees, the FAA abide by the policies of the International Civil Aviation Organization (ICAO), whereby the principle of gradualism is applied so that any substantial fee increase (as in this case where a 9-year update is involved) is spread over several years; and (3) that, in this instance, the specific increases be accomplished over 4 increments, on October 1st of each year from 2011 through 2014, with annual increases of 14% for Enroute and 8% for Oceanic.

After a careful and thorough review by the FAA of the ARC report and recommendations, the FAA concluded that the ARC recommendations provide a reasonable and workable framework for moving forward on a consensus basis to update the Overflight Fees. Thus, the FAA proceeded to draft a notice of proposed rulemaking (NPRM) to update the fees by implementing the three recommendations of the ARC.

The NPRM laid out an explicit plan to update the Overflight Fees by implementing the three ARC recommendations. This would be accomplished by increasing the fees in four annual increments to the amounts that would have produced full cost recovery in FY 2008. The fee levels that would eventually be achieved reflect increases above current levels of 69% in the Enroute environment and 36% in Oceanic. This would be accomplished by increasing the fees on October 1 in each of the years 2011 through 2014 at annual compounded rates of 14% for Enroute and 8% for Oceanic. The actual dollar amounts of each fee as of each of the four October 1st fee revision dates would be as follows:

The NPRM was published in the Federal Register on September 28, 2010, with public comments due in 90 days, on December 27, 2010 (75 FR 59661). A more detailed discussion of the specifics of the fee update proposal can be found in that document.

The FAA received only one letter of comment on the NPRM. That letter was from Lufthansa German Airlines, and was signed by the individual who had served as the Lufthansa representative on the aforementioned ARC on Overflight Fees. While the letter stated clearly that Lufthansa supports the ARC process and the recommendations of the ARC, it nevertheless went on to identify four topics that it believed should be further examined by the FAA before proceeding with any increase of the existing Overflight Fees. Those four topics are listed below, followed in each case by the FAA's response to the comment.

Noting that there are low activity airports and airfields that are not served by a terminal radar approach control (TRACON) or an air traffic control tower and that, in these instances, ATC services are provided by Enroute controllers, Lufthansa asserts that the costs of these Enroute controllers should be removed from the Enroute (and thus the Overflight Fee) cost base.

The FAA does not agree with Lufthansa's assertion. The FAA notes that while there are low activity airports and airfields where traffic is controlled by Enroute controllers, the level of such activity is low enough that it does not require increased staffing and thus the costs of such services are de minimis. This issue was addressed by the FAA's cost accounting team at the time the Cost Accounting System was being developed. This information was derived from conversations between the cost accounting team and the Air Route Traffic Control Center (ARTCC) managers. The team determined that there was not a significant amount of Enroute controller time spent on aircraft in lower airspace.

The FAA's Air Traffic Organization (ATO) costs do not vary with the altitude of an aircraft. The infrastructure costs are mostly fixed ( e.g., the building is there, the radars are operational, the communication lines are open, the automation system processes the radar targets, and the environmental systems are operational). The costs of controllers in the short term are also fixed. They are paid based on the volume and complexity of the work at the facility to which they are assigned, whether they work a single aircraft or numerous aircraft in a given period of time, and whether those aircraft are in straight and level flight or are in transition. The fact that the job may be more complex at the moment because of crossing traffic or transitioning traffic does not drive their costs. The workload is very dynamic in the radar environment, but a controller costs the same to the ATO whether he or she is working a complex sector at a busy time of day or a less busy sector after the push of traffic is over.

Lufthansa states that there are controllers in most, and possibly all, FAA Centers who are working “flow control” and that the work of these controllers does not benefit the overflight traffic and should therefore be removed from the Enroute (and thus the Overflight Fee) cost base.

The FAA disagrees. As discussed at some length in the Introduction, Overview, and Background sections of the current Final Rule on Overflight Fees (66 FR 43680-43681), the FAA air traffic control system is a large, complex, integrated system with many components, all of which must work together for the benefit of all users, whether they be overflights or non-overflights. Flow control is a small but important and integral part of that system, and benefits all users, including overflights. For example, when weather conditions necessitate changes in the routing and management of air traffic, it is all traffic, overflights and non-overflights, that are affected. There is no rational reason for excluding flow control costs from the Enroute cost base. Moreover, the costs of air traffic flow management are an explicitly allowable item of cost for cost recovery purposes under the International Civil Aviation Organization's (ICAO) Policies on Charges for Airports and Air Navigation Services ( See ICAO Document 9082 ).

Lufthansa notes that the FAA is a large, multi-faceted organization, and suggests, for that reason, it is difficult to properly allocate the correct amount of overhead to the air navigation activity, and suggests that FAA the “only allocate overhead using a marginal cost approach.”

The FAA does not agree with Lufthansa's suggestion. The FAA believes the allocation of FAA overhead costs is in accordance with generally accepted accounting practices. The Lufthansa comments on this topic suggest a possible misunderstanding of how FAA overhead is allocated and assigned, although it was discussed in meetings of the ARC and was addressed in a set of questions given to the FAA by the ARC and answered by the FAA. For example, Lufthansa appears to believe that the presence of other aviation related activities, such as Airport Grants and Standards and Aviation Safety, results in the assignment of some of their costs to the air traffic control activity. That is not the case. Both Airports and Aviation Safety are separate FAA Lines of Business (LOB) that are themselves the recipient of their own shares of overhead, and their costs are kept separate and are not allocated or assigned to the air traffic cost pool. The specific details of how FAA overhead is allocated and assigned to the Air Traffic LOB are set forth in the next several paragraphs, and all of this is explained in greater detail in the Costing Methodology Report that has been placed in the docket for this rulemaking.

The FAA overhead allocation can be described in two steps: (1) FAA Headquarters and Regional Overhead; and (2) ATO Overhead.

(1) FAA Headquarters and Regional Overhead. A series of pro rata allocations are performed in the Cost Accounting System (CAS) to assign the FAA headquarters indirect costs to projects, service delivery points (SDPs), and services within each LOB and other Regional and Center Operations. Then, a series of pro rata allocations are made to assign the Aeronautical Center (AMC) indirect costs to projects, SDPs, and services within each LOB located at the Aeronautical Center. Note that not all LOBs track costs at a service and/or SDP level. In these cases, costs are assigned at the project level.

The FAA Headquarters Overhead (excluding human resources) is assigned to projects, SDPs, and services within each LOB based on a percentage of total direct cost. Human resources services indirect costs are assigned to projects, SDPs, and services within each LOB based on the percentage of direct labor cost. The portion of the AMC cost assigned to each LOB is based on the percentage of total cost assigned to each LOB.

FAA Regional Overhead costs represent the indirect cost of FAA general and administrative services provided to the lines of business by personnel residing at FAA regional headquarters offices. A series of pro rata allocations are performed in the CAS to assign the FAA regional overhead costs to projects, SDPs, and services based on a percentage of total direct cost within the regions.

(2) ATO Overhead. The ATO overhead allocation can be described in three kinds of allocation steps: (i) Service Area Indirect, (ii) Service Unit Indirect and (iii) ATO Indirect.

(i) Service Area Indirect. A pro rata allocation is performed in the CAS to assign each Service Area's indirect costs to the direct projects, SDPs, and services that they support. The portion of the cost that is assigned to each project, SDP, and service is determined based on the percentage of total direct cost that is assigned to each project, SDP, and service for that Service Area.

(ii) Service Unit Indirect. A pro rata allocation is performed in the CAS to assign each Service Unit's Headquarters' indirect costs to the direct projects, SDPs, and services that they support. The portion of the cost that is assigned to each project, SDP, and service is determined based on the percentage of total direct cost that is assigned to each project, SDP, and service for that Service Unit.

(iii) ATO Indirect. A pro rata allocation is performed in the CAS to assign each of ATO's staff offices' indirect costs to the projects, SDPs, and services of all Service Units. The portion of the cost that is assigned to each project, SDP, and service is determined based on the percentage of total direct cost that is assigned to each project, SDP, and service of each Service Unit.

As a final point on the subject of inclusion of overhead in the cost base for Overflight Fees, it should be noted that all overhead costs were excluded from the cost base for the previous Final Rule because the applicable statutory standard at that time required that the fees be “directly related” to the costs of the ATC services provided or made available. Congress has since changed that statutory standard to “reasonably related.” In light of this change, the FAA believes it is reasonable to include overhead in the cost base. That is in accordance with generally accepted accounting practices as well as with guidance on fee setting issued by ICAO (Policies on Charges for Airports and Air Navigation Services, Document 9082).

Lufthansa asserts that, based on its own analysis of its international trans-Atlantic flights to and from the United States (non-overflights), the passengers on those flights are “overpaying” taxes into the Airport & Airway Trust Fund by at least a factor of four. For that reason, they argue that charging an “increased overflight fee renders the system even more unfair.”

The FAA believes this comment is beyond the scope of this rulemaking. The “fairness” of the international aviation taxes has nothing to do with the validity of, or justification for, an increase in Overflight Fees. The two are unrelated. Aviation tax levels are set by the U.S. Congress and are beyond the control of the FAA. Similarly, Congress has directed the FAA to establish cost-based Overflight Fees. Therefore, to retain the cost-based relationship, the FAA must periodically review and revise its Overflight Fees. Fairness of the aviation taxes notwithstanding, the FAA is obliged to update its Overflight Fees.

In conclusion, the FAA does not believe any of the four points raised by Lufthansa and discussed in this section require any change in the process and specificity of the Overflight Fee update proposed in the NPRM. Accordingly, the FAA is adopting the amendment to Appendix B to Part 187—Fees for FAA Services for Certain Flights as proposed in the NPRM without change.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this final rule. The information used to track overflights (including the information collection necessary to implement this final rule) can be accessed from the flight plans filed with the FAA. The collection of information from the Domestic and International Flight Plans is approved under OMB Collection Control #2120-0026.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has reviewed the corresponding ICAO Standards and Recommended Practices and has identified no differences with these regulations.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows:

The benefit of this final rule will be that the overflight fees will be more closely related to the actual costs of providing FAA's services for these flights.

Taxes and government fees are transfer payments, and, by OMB directive, transfers are not considered a societal cost. Therefore, this rule imposes no costs. We do provide an estimate of the transfers. There will be a 4-year phase-in of fees with yearly increases (14% Enroute and 8% Oceanic). Increases would begin in 2011 and end in 2014. We have determined that approximately 80% of Overflight Fees for domestic operators will be Enroute and 20% will be Oceanic (see Table 1).

Most of the transfers from this final rule will be borne by foreign operators. The estimated transfers from this final rule from foreign operators to the FAA are about $73 million ($52 million, present value). See Table 2.

The FAA estimates that the total transfers resulting from this final rule from U.S. entities to the FAA over 5 years will be about $1.1 million ($0.8 million, present value). Again, government fees and taxes are considered transfers and not societal costs, so this final rule does not increase society's costs.

The FAA has, therefore, determined that this final rule is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866 and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

The Regulatory Flexibility Act of 1980 (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objective of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the business, organizations, and governmental jurisdictions subject to regulation.” To achieve that principle, the RFA requires agencies to solicit and consider flexible regulatory proposals and to explain the rationale for their actions. The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations and small governmental jurisdictions.

Agencies must perform a review to determine whether a proposed or final rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the Act.

The FAA ranked in descending order all domestic entities based on their Overflight Fees. Then we identified 5 small entities having publicly-available financial information (using a size standard of 1,500 or fewer employees) in the top 20 percent of the ranking. We retrieved their annual revenue from World Aviation Directory and compared it to their annualized compliance costs. Of these 5 entities, all of them have annualized compliance costs as a percentage of annual revenues lower than 0.1 percent. We believe this economic impact is not significant. Furthermore, we received no comments from small entities in response to the NPRM. Consequently, as the FAA Administrator, I certify that the final rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA has assessed the potential effect of this final rule and determined that it will primarily affect foreign users, generally commercial operators. Foreign operators are charged a fee only if they overfly (do not land in) the United States. The FAA believes it is highly unlikely that foreign commercial users will alter their behavior to avoid paying the fees. We believe that the final rule could enhance the competitiveness of domestic commercial operators relative to international carriers.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $140.8 million in lieu of $100 million. This final rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have federalism implications.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 312d and involves no extraordinary circumstances.

The FAA analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). We have determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

You can get an electronic copy of rulemaking documents using the Internet by—

1. Searching the Federal eRulemaking Portal ( http://www.regulations.gov );

2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/ or

3. Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.

You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the notice, amendment, or docket number of this rulemaking.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc. ). You may review DOT's complete Privacy Act statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://DocketsInfo.dot.gov.

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. If you are a small entity and you have a question regarding this document, you may contact your local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. You can find out more about SBREFA on the Internet at http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

In consideration of the foregoing, the Federal Aviation Administration amends Chapter I of Title 14, Code of Federal Regulations, as follows:

In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 of the regulations (21 CFR part 807).

Section 513(f)(2) of the FD&C Act provides that any person who submits a premarket notification under section 510(k) of the FD&C Act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device into class III under section 513(f)(1) of the FD&C Act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the FD&C Act. FDA will, within 60 days of receiving this request, classify the device by written order. This classification will be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the Federal Register announcing this classification.

In accordance with section 513(f)(1) of the FD&C Act, FDA issued an order on March 14, 2008 classifying the Ulthera TM Focused Ultrasound Stimulator System for Aesthetic Use into class III, because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device which was subsequently reclassified into class I or class II. On April 11, 2008, Ulthera, Inc. submitted a petition requesting classification of the Ulthera TM Focused Ultrasound Stimulator System for Aesthetic Use under section 513(f)(2) of the FD&C Act. The manufacturer recommended that the device be classified into class II (Ref. 1).

In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the petition in order to classify the device under the criteria for classification set forth in section 513(a)(1) of the FD&C Act. FDA classifies devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition, FDA determined that the device can be classified into class II with the establishment of special controls. FDA believes these special controls will provide reasonable assurance of the safety and effectiveness of the device.

The device is assigned the generic name Focused Ultrasound Stimulator System for Aesthetic Use and it is identified as a device using focused ultrasound to produce localized, mechanical motion within tissues and cells for the purpose of producing either localized heating for tissue coagulation or for mechanical cellular membrane disruption intended for noninvasive aesthetic use.

FDA has identified the following risks to health associated specifically with this type of device and the recommended measures to mitigate these risks.

• Thermal injury from focused ultrasound exposure (thermal damage), such as erythema, edema, pigmentary changes, and pain. These are commonly seen risks associated with any energy delivery system that creates tissue heating. This risk is addressed by recommended treatment parameters that have been shown to be safe with little or no adverse effects. In addition, the recommended labeling includes warnings related to patient reaction in terms of pain and information to user in terms of observable skin reactions that are known to be precursors to the potential thermal adverse effects.

• Mechanical injury from focused ultrasound exposure (mechanical damage) induced by either cavitation or noncavitation means. Notable effects are pain and petechial hemorrhage (red spots). Further, skin contour changes due to scar formation are possible. This risk is addressed by recommended treatment parameters that have been shown to be safe with little or no adverse effects.

• Ocular injury represents a potentially unique serious risk from inadvertent ultrasound exposure. The mitigation of this risk is addressed by labeling recommendations to warn the user not to expose the eye to ultrasound radiation, as well as specific directions intended to ensure complete handpiece skin contact, which further reduces the risk of scattered ultrasound energy reaching the eye.

• Electrical shock is addressed by recommended testing of the device according to recognized U.S. and International Standards specifically designed to determine and measure potential electrical safety. Again, the recommended device labeling also includes specific warnings for the user in terms of device placement, appropriate electrical wiring needs, reminders to periodically check device wiring and accessories for damage, and avoidance of use of the device in environments where electrical shock is possible.

• Inflammation/foreign body response relates to possible issues that can occur following any type of therapeutic process in which tissue injury could occur. This risk is typical for any surgical procedure and is addressed by the recommendations to follow routine standard of care for any surgical patient that could include posttreatment skin care including use of moisturizers, antibacterial creams, and avoidance of potential risks such as use of perfumes, facial creams, and sunlight.

• Use error represents those risks to the patient that can occur from improper use of the device. In order to address this potential risk, we recommend the manufacturer provide a detailed operator manual which contains information on possible risks and hazards and how these should be avoided and clear recommended safe treatment procedures that include information on device settings for treatment, clear information on how the device is to be used during treatment, and recommended posttreatment care.

FDA believes that the special controls guidance document, “Class II Special Controls Guidance Document: Focused Ultrasound Stimulator System for Aesthetic Use,” in addition to general controls, addresses the risks to health and provides reasonable assurance of the safety and effectiveness of the device. Therefore, on September 11, 2009, FDA issued an order to the petitioner classifying the device into class II. FDA is codifying the classification of the device by adding § 878.4590.

Following the effective date of this final classification rule, any firm submitting a 510(k) premarket notification for focused ultrasound stimulator system for aesthetic use will need to address the issues covered in the special controls guidance. However, the firm need only show that its device meets the recommendations of the guidance or in some other way provides equivalent assurance of safety and effectiveness.

Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the FD&C Act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this device type is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the focused ultrasound stimulator system for aesthetic use they intend to market.

Elsewhere in this issue of the Federal Register , FDA is issuing a notice announcing the availability of the guidance document entitled “Class II Special Controls Guidance Document: Focused Ultrasound Stimulator System for Aesthetic Use” that will serve as the special control for this device.

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is not a significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because reclassification of this device from class III to class II will relieve manufacturers of the device of the cost of complying with the premarket approval requirements of section 515 of the FD&C Act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs, the Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. Section 4(a) of the Executive order requires Agencies to “construe * * * a Federal statute to preempt State law only where the statute contains an express preemption provision or there is some other clear evidence that the Congress intended preemption of State law, or where the exercise of State authority conflicts with the exercise of Federal authority under the Federal statute.” Federal law includes an express preemption provision that preempts certain state requirements “different from or in addition to” certain federal requirements applicable to devices. 21 U.S.C. 360k; See Medtronic Inc., v. Lohr, 518 U.S. 470 (1996); and Riegel v. Medtronic, Inc., 552 U.S. 312 (2008). The special controls established by this final rule create “requirements” for specific medical devices under 21 U.S.C. 360k, even though product sponsors have some flexibility in how they meet those requirements. Cf. Papike v. Tambrands, Inc., 107 F.3d 737, 740-742 (9th Cir. 1991).

FDA concludes that this final rule contains no new collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520) is not required. This final rule establishes as special controls a guidance document that refers to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by OMB under the PRA.

The following reference has been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

1. Petition from Ulthera, Inc., April 11, 2008.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 878 is amended as follows:

This document amends the Highway Use Tax Regulations (26 CFR Part 41) under section 4481 of the Internal Revenue Code (Code).

Section 4481 imposes a tax on the use in any taxable period of a highway motor vehicle with a taxable gross weight of 55,000 pounds or more. The person in whose name the vehicle is registered at the time of the first use must pay the tax. The rate of tax is based on the weight of the vehicle with a maximum of $550 per vehicle per taxable period (the standard amount).

Generally, a “taxable period” is the year that begins on July 1 and ends on the following June 30. For the taxable period beginning on July 1, 2011, however, section 4482(c)(4) of present law provides that the taxable period ends at the close of September 30, 2011. For this three month period, the tax rate is a reduced amount that is 25 percent of the tax rate for a 12-month period.

Section 41.6011(a)-1(a)(1) requires each person that is liable for the tax imposed by section 4481 to file a return for each taxable period and § 41.6011(a)-1(b) provides that the return is Form 2290, “Heavy Highway Vehicle Use Tax Return.”

The due date for filing Form 2290 is not prescribed by statute and section 6071 provides that when the Code does not set the time for filing a return, the Secretary is to prescribe such time by regulations. Under § 41.6071(a)-1(a), Form 2290 generally must be filed by the last day of the month following the month in which a person becomes liable for tax. For most taxpayers, their first use of a vehicle in a taxable period occurs in July and thus their return is due by August 31.

Section 41.6001-2(b) provides, generally, that a State that receives an application to register a highway motor vehicle must receive from the applicant “proof of payment” of the tax imposed by section 4481(a). Section 41.6001-2(c) specifies that this proof of payment generally consists of a receipted Schedule 1 (Form 2290) that is returned by the IRS to a taxpayer that files Form 2290 and pays the amount of tax due with the return. The taxpayer generally must present proof of payment for the taxable period that includes the date on which the application for registration is filed, but in the case of an application filed in July, August, or September proof of payment for the preceding taxable period may be used.

The tax imposed under section 4481 will expire on September 30, 2011, unless Congress changes the law. Under existing regulations, the person liable for the highway use tax must file a Form 2290 by the last day of the month following the month in which the person becomes liable for the tax. Therefore, under current statutory and regulatory provisions, the person liable for the tax will be required to file a Form 2290 for taxable use during the period of July 1, 2011, through September 30, 2011 (the “2011 short taxable period”). Further, if Congress extends the tax past September 30, 2011, a person who filed Form 2290 for the 2011 short taxable period would have to file a second Form 2290 covering the period after September 30, 2011, through the earlier of the expiration date of the extension or June 30, 2012.

For purposes of efficient tax administration and alleviating taxpayers' potential administrative burden, the temporary regulations postpone the due date of Form 2290 for the 2011 short taxable period until November 30, 2011. If Congress does not extend the tax past September 30, 2011, taxpayers will file one Form 2290 and will pay the reduced amount for the 2011 short taxable period by November 30; if Congress does extend the tax past September 30, 2011, and substitutes a longer taxable period for the 2011 short taxable period, taxpayers who become liable for the highway use tax after June 30, 2011, and before November 1, 2011, also will file a Form 2290 for the period July 1, 2011—June 30, 2012 (or the end of the new taxable period, if earlier), by November 30, 2011. In either case, most taxpayers will have to file only one return for the taxable period beginning July 1, 2011. But for the change made by the temporary regulations, most taxpayers would have to file two returns if Congress extends the tax past September 30.

Further, the temporary regulations state that taxpayers should file a Form 2290 no earlier than November 1, 2011, for taxable use during the 2011 short taxable period. The IRS will not provide a receipted Schedule 1 for a return and associated payment for the taxable period beginning July 1, 2011, before November 1, 2011. Because taxpayers will not be able to receive a receipted Schedule 1 for filing a Form 2290 and paying the tax for the taxable period beginning July 1, 2011, until November 1, 2011, the temporary regulations provide that the receipted Schedule 1 for the taxable period ending June 30, 2010, must be accepted by a State as a substitute proof of payment for registration applications filed during the period of July 1, 2011, through November 30, 2011.

Section 41.6001-2(b)(1) provides that a State may register a highway motor vehicle without proof of payment if the person registering the vehicle presents the original or a photocopy of a bill of sale (or other document evidencing transfer) indicating that the vehicle was purchased by the owner either as a new or used vehicle during the preceding 60 days before the date that the State receives the application for registration of such vehicle. Because taxpayers will not be able to obtain proof of payment during the period between July 1, 2011, and November 1, 2011, the temporary regulations provide that between July 1, 2011, and November 30, 2011, a State must register a highway motor vehicle without proof of payment if the person registering the vehicle presents the original or a photocopy of a bill of sale (or other document evidencing the sale) that demonstrates that the owner purchased the vehicle, either as a new or used vehicle, within 150 days of the date that the State receives the application for registration, and the vehicle has not been registered in any State since the purchase date.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this regulation. For applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the Special Analysis section in the preamble to the cross-referenced notice of proposed rulemaking in the Proposed Rules section in this issue of the Federal Register . Pursuant to section 7805(f) of the Code, this final and temporary regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal author of these regulations is Natalie Payne, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR part 41 is amended as follows:

The Route 35 Bridge, across Cheesequake Creek, mile 0.0, at Morgan, New Jersey, has a vertical clearance in the closed position of 25 feet at mean high water and 30 feet at mean low water. The drawbridge operation regulations are listed at 33 CFR 117.709(a).

The waterway is predominantly used by recreational vessels on a seasonal basis.

The owner of the bridge, the New Jersey Department of Transportation, requested a temporary deviation from the regulations to facilitate a public event, the Rolling Thunder Freedom Ride. The bridge must remain in the closed position to facilitate the above public event.

Under this temporary deviation the Route 35 Bridge may remain in the closed position between 11:30 a.m. and 1 p.m. on September 18, 2011. Vessels that can pass under the bridge in the closed position may do so at any time.

In accordance with 33 CFR 117.35(e), the bridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because any delay encountered in this regulation's effective date by publishing a NPRM would be contrary to public interest, since immediate action is needed to provide for the safety of life and property on navigable waters from the hazards associated with fireworks including unexpected detonation and burning debris; also immediate action is needed to provide for the safety of life and property on navigable waters from the hazards associated with swimmers in the water in or near navigable channels. We spoke with each event sponsor and each indicated they were unable and unwilling to move their event date to a later time. Sponsors for the Fort Hamilton Independence Day Celebration Fireworks Display; Rumson, NJ Fireworks Display; the City of Poughkeepsie Fireworks Display; Larchmont Yacht Club Fireworks Display; City of New Rochelle Fireworks Display; and Keyport Firemen's Fair Fireworks Display stated they are unwilling to reschedule these events because they are being held in conjunction with various Independence Day celebrations. Many community members have made holiday plans based on these fireworks events and changing the date would cause numerous cancelations and hurt small businesses. Rescheduling would not be a viable option because most event venues, entertainers, and venders have fully booked summer schedules making rescheduling nearly impossible. Sponsors for the Brooklyn Bridge Swim, Swim Across America, and Hudson Valley Triathlon stated they are unwilling to reschedule these events because the dates of each swim event were chosen based on optimal tide, current, and weather conditions needed to promote the safety of swim participants. In addition, any change to the dates of the events would cause economic hardship on the marine event sponsors, negatively impacting other activities being held in conjunction with these events and creating unsafe event conditions.

Additionally, due to the dangers posed by the pyrotechnics used in fireworks displays and the hazards associated with swim events, the safety zones are necessary to provide for the safety of event participants, spectator crafts, and other vessels operating near the event areas. For the safety concerns noted, it is in the public interest to have this regulation in effect during these events.

These fireworks displays and swim events are all reoccurring marine events with a proposed permanent rule currently in a public comment period under docket number USCG-2010-1001 titled, Special Local Regulations and Safety Zones; Recurring Events in Captain of the Port New York Sound Zone. Additionally, the Coast Guard has ordered safety zones or special local regulations for all of these areas for past events and has not received public comments or concerns regarding establishment of waterways restrictions.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The rule must become effective on the dates specified in Table 1 and 2 in order to provide for the safety of the public including spectators and vessels operating in the area near these events. Delaying the effective date of this rule until after 30 days have elapsed after publication is impractical and would expose spectators, vessels, and other property to the hazards associated with these marine events.

The legal basis for the temporary rule is 33 U.S.C. 1226, 1231, 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; Pub. L. 107-295, 116 Stat. 2064; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define safety zones.

These fireworks displays and swim events are being held during the month of July on the navigable waters within the COTP New York Zone. In the past, the Coast Guard has established special local regulations, regulated areas, and safety zones for these events on a case by case basis to ensure the protection of the maritime public and event participants from the hazards associated with these events. The Coast Guard has not received public comments or concerns regarding the impact to waterway traffic from these events.

This temporary final rule will apprise the public in a timely manner through publication in the Federal Register .

These events pose significant risk to participants, spectators and the maritime public because of hazardous conditions associated with fireworks displays and swim events. These temporary safety zones are necessary to ensure the safety of participants, spectators and vessels.

This rule establishes temporary safety zones on the waters of the COTP New York zone. These temporary safety zones will encompass various locations, listed in Table 1 and Table 2 below.

All persons and vessels shall comply with the instructions of the COTP New York or the designated on-scene representative. Entry into, transiting, or anchoring within the temporary safety zones are prohibited unless authorized by the COTP New York, or the designated representative. The COTP New York or the designated representative may be reached on VFH Channel 16.

Because large numbers of spectator vessels are expected to congregate around the location of these events, the regulated areas are needed to protect both spectators and participants from the safety hazards created by fireworks displays and swimmers in the water. During the enforcement period of the regulated areas, persons and vessels are prohibited from entering, transiting through, remaining, anchoring or mooring within the zone unless specifically authorized by the COTP or the designated representatives. The Coast Guard may be assisted by other federal, state and local agencies in the enforcement of these regulated areas.

The Coast Guard determined that these regulated areas will not have a significant impact on vessel traffic due to their temporary nature and limited size and the fact that vessels are allowed to transit the navigable waters outside of the regulated areas. Additionally, the Coast Guard has ordered safety zones for all of these nine areas for past events and has not received public comments or concerns regarding the impact to waterway traffic from events.

Advanced public notifications will also be made to the local maritime community by the Local Notice to Mariners as well as Broadcast Notice to Mariners.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, as supplemented by Executive Order 13563, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard's implementation of these temporary special local regulations and safety zones will be of short duration and designed to minimize the impact to vessel traffic on the navigable waters. These safety zones will only be enforced for a short duration. Furthermore, vessels may be authorized to transit the zones with permission of the COTP New York or the designated on-scene representative.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: The owners and operators of vessels intending to transit or anchor in a portion of the navigable waterway in the vicinity of these marine events during the effective period.

This rule will not have a significant economic impact on a substantial number of small entities for the following reasons: Vessel traffic can safely transit around the zone. Before the effective period, we will issue maritime advisories widely available to users of the waterway. This rule will be in effect for a short duration at various times from July 02, 2011 until July 30, 2011.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the establishment of temporary safety zones. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Upon promulgation of a new or revised NAAQS, sections 110(a)(1) and (2) of the CAA require states to address basic SIP requirements, including emissions inventories, monitoring, and modeling to assure attainment and maintenance for that NAAQS. On December 18, 2006, EPA revised the 24-hour average PM 2.5 primary and secondary NAAQS from 65 micrograms per cubic meter (µg/m 3 ) to 35 µg/m 3 , thus states were required to provide submissions to address section 110(a)(1) and (2) of the CAA (infrastructure SIPs) for this revised NAAQS. Alabama provided its infrastructure submission for the 2006 PM 2.5 NAAQS on September 23, 2009. On January 26, 2011, EPA proposed to disapprove the portion of Alabama's September 23, 2009, infrastructure submission related to interstate transport ( i.e., 110(a)(2)(D)(i)(I)) for the 2006 PM 2.5 NAAQS. See 76 FR 4588. A summary of the background for this final action is provided below.

Section 110(a)(2) lists the elements that infrastructure SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. States were required to provide submissions to address the applicable 110(a)(2) infrastructure requirements, including section 110(a)(2)(D)(i), by September 21, 2009. 1

On September 25, 2009, EPA issued a guidance entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (hereinafter referred to as “EPA's 2009 Guidance”). EPA developed the EPA's 2009 Guidance to make additional recommendations to states for making submissions to meet the requirements of section 110, including 110(a)(2)(D)(i) for the revised 2006 24-hour PM 2.5 NAAQS.

As identified in the EPA's 2009 Guidance, the “good neighbor” provisions in section 110(a)(2)(D)(i) require each state to submit a SIP that prohibits emissions that adversely affect another state in the ways contemplated in the CAA. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. Specifically, the SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other states; (2) interfere with maintenance of the NAAQS in other states; (3) interfere with provisions to prevent significant deterioration of air quality in other states; or (4) interfere with efforts to protect visibility in other states.

In the EPA's 2009 Guidance, EPA explained that submissions from states pertaining to the “significant contribution” and “interfere with maintenance” requirements in section 110(a)(2)(D)(i)(I) must contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA described a number of considerations for states for providing an adequate demonstration to address interstate transport requirements in the EPA's 2009 Guidance. First, EPA noted that the state's submission should explain whether or not emissions from the state contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. Second, EPA recommended the various types of information that could be relevant to support the state's submission, such as information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state, and air quality modeling. Third, EPA explained that states should address the “interfere with maintenance” requirement independently which requires an evaluation of impacts on areas of other states that are meeting the 2006 24-hour PM 2.5 NAAQS, not merely areas designated nonattainment. Lastly, EPA explained that states could not rely on the Clean Air Interstate Rule (CAIR) to comply with CAA section 110(a)(2)(D)(i) requirements for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS. CAIR, promulgated by EPA on May 12, 2005 (See 70 FR 25162), required states to reduce emissions of sulfur dioxide and nitrogen oxides that significantly contribute to, and interfere with maintenance of the 1997 PM 2.5 NAAQS and/or ozone in any downwind state. CAIR was intended to provide states covered by the rule with a mechanism to satisfy their CAA section 110(a)(2)(D)(i)(I) obligations to address significant contribution to downwind nonattainment and interference with maintenance in another state with respect to the 1997 ozone and PM 2.5 NAAQS. Many states adopted the CAIR provisions and submitted SIPs to EPA to demonstrate compliance with the CAIR requirements in satisfaction of their 110(a)(2)(D)(i)(I) obligations for those two pollutants.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit or Court) issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (D.C. Circuit, July 11, 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolin a v. EPA, 550 F.3d 1176 (D.C. Circuit, December 23, 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id.

In order to address the judicial remand of CAIR, EPA has proposed a new rule to address interstate transport pursuant to section 110(a)(2)(D)(i), the “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone” (Transport Rule). 2 As part of the proposed Transport Rule, EPA specifically examined the section 110(a)(2)(D)(i) requirements that emissions from sources in a state must not “significantly contribute to nonattainment” and “interfere with maintenance” of the 2006 24-hour PM 2.5 NAAQS by other states. The modeling performed for the proposed Transport Rule shows that Alabama significantly contributes to nonattainment or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents for this action, Alabama in fact contributes to downwind nonattainment in another state or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

On September 23, 2009, the State of Alabama, through ADEM, provided a letter to EPA certifying that the Alabama SIP meets the interstate transport requirements with regard to the 2006 24-hour PM 2.5 NAAQS. 3 Specifically, Alabama certified that its current SIP adequately addresses the elements of CAA section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. CAA section 110(a)(2)(D)(i)(I) requires that implementation plans for each state contain adequate provisions to prohibit air pollutant emissions from sources within a state from significantly contributing to nonattainment in or interfering with maintenance of the NAAQS (in this case the 2006 24-hour PM 2.5 NAAQS) in any other state. On January 26, 2011, EPA proposed to disapprove the portion of Alabama's September 23, 2009, submission related to interstate transport for the 2006 24-hour PM 2.5 NAAQS because EPA made the preliminary determination that Alabama's September 23, 2009, submission does not meet the requirements of section 110(a)(2)(D)(i)(I) of the CAA for this NAAQS. This action is finalizing EPA's disapproval of Alabama's September 23, 2009, submission with regard to section 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. See EPA's January 26, 2011, proposed disapproval rulemaking at 76 FR 4588 for further information on EPA's rationale for this final action.

EPA received three sets of adverse comments on the January 26, 2011, proposed rulemaking to disapprove the portion of Alabama's September 23, 2009, infrastructure submission on the interstate transport requirements of sections 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. A full set of the comments provided by ADEM, the North Carolina Department of Environment and Natural Resources, and the Georgia Environmental Protection Division (hereinafter referred to as “the Commenters”) are provided in the docket for this final action. As a general matter, the comments overlapped on some issues, and as a result, EPA has organized the response to comments by issue. In addition, EPA acknowledges Georgia's comments regarding SIP processing in general. As Georgia is aware, EPA is considering improvements to the SIP process and appreciates Georgia's comments in that regard.

For the most part, the Commenters oppose EPA's proposed disapproval action for the interstate portion of Alabama's September 23, 2009, infrastructure submission for the 2006 24-hour PM 2.5 NAAQS. The comments fall generally into the following categories: (1) Infrastructure SIPs being treated as control strategy SIPs; (2) states' inability to rely on CAIR to satisfy the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS; (3) apparent lack of guidance from EPA on how states should meet the requirements; (4) concerns regarding the procedure of taking action to disapprove Alabama's submittal; (5) acknowledgement of states' efforts and air quality conditions; and (6) concerns related to the Transport Rule. A summary of the comments and EPA's responses are provided below.

Comment 1: One Commenter states that “Recently, it appears that EPA has undertaken the practice of treating infrastructure SIPs as if they are the control strategy SIPs required under CAA Section 110(a)(2), in that EPA requires states to certify that actual rules are in place to meet each CAA Section 110(a)(2) element.” The Commenter goes on to state that “CAA Section 172(b) establishes a separate schedule for submittal of plans meeting the requirements of CAA Section 110(a)(2).” The Commenter concludes by stating that “[t]hese plans are required no later than 3 years after the designation of an area as nonattainment.”

Response 1: EPA disagrees with the Commenter's assertion that EPA is treating the infrastructure SIPs as if they are control strategy SIPs. EPA agrees with the Commenter's assertion that the requirements for SIP submissions under section 110(a)(1) and section 172(b) of the CAA are distinct and separate requirements. Section 172(b) provides the criteria for SIP submissions related to nonattainment areas, whereas section 110(a)(1) provides the requirements for states to provide a SIP submission for all areas within the state. Today's final action only relates to section 110(a)(1) requirements, and an evaluation of whether Alabama's September 23, 2009, submission meets the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. Specifically, section 110(a)(2)(D)(i)(I) (the subject of this disapproval action) requires that the state's submission must explain whether or not the state's SIP contains adequate provisions to prohibit emissions from the state that significantly contribute to nonattainment of or interfere with maintenance of the NAAQS in any other state and, if so, address the impact. The state's conclusion must be supported by an adequate technical analysis, including, but not limited to, information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state and the potentially impacted states, the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling. EPA has concluded that Alabama's September 23, 2009, submission does not meet the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. Further information regarding EPA's rationale for this disapproval can be found in EPA's proposed action to disapprove Alabama's September 23, 2009, submission with regard to meeting the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. See 76 FR 4588. Please also see EPA's 2009 Guidance for additional clarification on section 110(a)(2) requirements.

Comment 2: All Commenters express concern with EPA's proposed disapproval and assert that states should be able to rely on CAIR to address the transport requirements in section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters explain that the Court left CAIR in place and opine that states should be able to rely on emissions reductions from CAIR to address transport. One Commenter also mentions that “[t]he Court did not impose a schedule on EPA for completing the Transport Rule; therefore, states have no assurances that EPA will ever replace the CAIR rule. Since there is no guarantee that the Transport Rule will be promulgated in a timely manner, states cannot rely on the reductions in the proposed Transport Rule and must rely on the CAIR reductions, which are permanent and enforceable.”

Response 2: As discussed in EPA's 2009 Guidance, states cannot rely on the CAIR rule for the submission for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS, and was never intended to address this NAAQS. CAIR was originally put in place to address the 1997 8-hour ozone and PM 2.5 NAAQS. In order to adequately address the requirements of section 110(a)(2)(D)(i)(I), states can only rely on permanent emission reductions to address transport for the 2006 24-hour PM 2.5 NAAQS, and must include an appropriate technical demonstration.

Comment 3: Two Commenters note that that 110(a)(2) infrastructure SIPs for the 24-hour PM 2.5 NAAQS were due September 21, 2009, but EPA's guidance was not released to the states until September 25, 2009.

Response 3: While EPA's 2009 Guidance regarding the 110(a)(2) infrastructure SIPs for the 2006 24-hour PM 2.5 NAAQS was released on September 25, 2009, this guidance did not establish new requirements beyond those already required by section 110(a)(2)(D)(i)(I) of the CAA. Relevant portions of section 110(a)(2) require, as follows, “Each [implementation plan submitted by a State under this chapter] shall * * * contain adequate provisions—(i) Prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard * * *” States are statutorily obligated to address the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. This above-quoted provision provides States with the requirement.

Comment 4: Two Commenters express concern about communication in the SIP process. The Commenters go on to say that “[e]ven though EPA's guidance was released only a short time later, EPA Region 4 gave absolutely no indication to its co-regulators that there would be a fatal flaw with the submittal.” The commenter further states that, “it wasn't until a year later that states were informed via an e-mail on August 27, 2010, that `All Region 4 states submitted complete infrastructure SIPs for the 2006 PM 2.5 NAAQS, and our intention is to disapprove the 110(a)(2)(D)(i)(I) portion of those unless it is withdrawn by the state.'”

Response 4: EPA disagrees with the Commenters' assertion that they were initially notified in an August 27, 2010, e-mail about EPA's expectations and concerns with states' submissions reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. As was explained above, Alabama's obligation stems from the CAA. As is EPA's practice, EPA reminded the States on a number of occasions of the interstate transport obligations in 110(a)(2)(D)(i)(I). In addition to the informal reminders (via e-mail and teleconferences, among other avenues), EPA's January 2011 proposal served as a formal, legal notification and provided for a formal opportunity for public comment.

Although EPA reminded states of EPA's expectations and concerns with states' reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS in an August 27, 2010, e-mail, EPA formally notified states of the expectations and concerns in the EPA's 2009 Guidance. Specifically, EPA noted that SIP submissions that relied on CAIR for satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS would be inadequate, as CAIR did not address this NAAQS. EPA's proposed disapproval of the portion of Alabama's September 23, 2009, submission did not occur until January 2011, which was over a year after EPA's notification (through the release of the EPA's 2009 Guidance) of any states' deficiency for meeting the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hr PM 2.5 NAAQS had that state relied on CAIR. Thus, Alabama had notification and an opportunity to provide supplemental information between the release of EPA's 2009 Guidance and EPA's proposed disapproval action in January 2011.

Comment 5: One Commenter raises concerns with EPA treating its 2009 Guidance as “binding” and suggests that this action is contrary to statements made by EPA in support of EPA and states being “co-regulators.”

Response 5: EPA disagrees with the Commenter's assertion that the proposed disapproval is contrary to EPA treating the states as co-regulators. As was explained earlier, EPA regular contact with its state co-regulators. With regard to the proposed disapproval action, EPA corresponded with Alabama regarding the September 23, 2009, submittal prior to the proposed disapproval. In the past several months, EPA has corresponded with Alabama on a number of occasions regarding other SIP revisions and EPA's consideration of those revisions—as is EPA's typical practice to support the co-regulator relationship.

Further, EPA notes that the January 26, 2011, proposed disapproval of Alabama's September 23, 2009, submission as it relates to satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS is based on EPA's determination that Alabama did not provide adequate information to demonstrate compliance with the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS for Alabama. No new requirements were introduced in EPA's 2009 Guidance. This guidance simply provided additional clarifications but the CAA requirements existed long before Alabama's September 21, 2009, deadline for a SIP submission.

Comment 6: One Commenter mentions that “EPA has not stated the amount of reduction they believe is needed to satisfy the transport requirements. Not only is this a situation where EPA moves the finish line (by releasing guidance AFTER the due date), the finish line isn't even knowable (because EPA refuses to inform the states how much reduction is enough to satisfy the requirements). EPA seems to say that it has to be whatever the final Transport Rule says, even though there is no final Transport Rule.”

Response 6: EPA disagrees with this comment. As was explained earlier, the state obligation stems from the CAA itself. As co-regulators, EPA makes efforts to assist states in submitting approvable revisions—and EPA took such action with EPA's 2009 Guidance. States had an opportunity to conduct their own analyses regarding interstate transport. Section 110(a)(2) requires that the state's submission contain adequate provisions prohibiting emissions from the state that contribute significantly to nonattainment of or interfere with maintenance of the NAAQS in any other state. In order to ensure compliance with the CAA's mandate of “adequate” provisions, the state's SIP revision must be supported by an adequate technical analysis, including, but not limited to, information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state and the potentially impacted states, the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling.

Comment 7: One Commenter notes EPA's statement in the January 26, 2011, proposed disapproval where the Agency states: “* * *without an adequate technical analysis EPA does not believe that states can sufficiently address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM2.5 NAAQS.” The Commenter mentions that they, and possibly other states, were precluded from providing the necessary technical analysis by EPA because EPA did not release the guidance until after the SIP submission deadline. Further, the Commenter notes that EPA did not provide specific criteria for the technical analysis in the EPA's 2009 Guidance, and mentions that “[h]ad EPA provided adequate criteria for an approvable SIP in a timely manner, it is likely that [the state] would have been able to submit an approvable SIP by the statutory deadline.”

Response 7: EPA does not agree with the Commenter's assertions. As was explained earlier, the SIP submission requirement is identified in the CAA. In addition, States were alerted that a technical analysis that involved modeling and permanent, enforceable emission reductions could be used to make an adequate demonstration to satisfy the 110(a)(2)(D)(i)(I) requirement for the 1997 PM 2.5 and ozone NAAQS when EPA promulgated CAIR in 2005. Due to the legal status of CAIR, states relying on CAIR as permanent were taking a risk given EPA's proposed Transport Rule and the court decision on CAIR. Further, states were officially informed that the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hour PM 2.5 NAAQS could not be satisfied by reliance on CAIR (since that rule did not consider the 2006 24-hour PM 2.5 NAAQS) when EPA released EPA's 2009 Guidance . The submittal by Alabama relied on CAIR and it did not include an adequate technical analysis—despite EPA's efforts to alert states that mere reliance on CAIR, on its own, would not meet the CAA requirements.

Consistent with section 110 of the CAA and implementing regulations at 40 CFR part 51, and as a general matter, “adequate technical analyses” are a cornerstone of ensuring that SIP revisions are approvable. EPA has addressed the timing of information in previous comments, but to underscore that point, EPA alerted states formally upon the release of the EPA's 2009 Guidance that CAIR could not be used to meet the 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. In addition, there are formal SIP revision requirements described in 40 CFR part 51, subpart F. Further information regarding the path forward following today's action is described below.

Upon disapproval of Alabama's submittal, EPA has a legal obligation, pursuant to the Act, to promulgate a FIP. Section 110(a)(1) of the Act requires states to submit SIPs that meet certain requirements within three years of promulgation of a NAAQS. These SIPs are required to contain, among other things, adequate provisions “prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will—(I) Contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Section 110(a)(1) gives the Administrator authority to prescribe a period shorter than three years for the states to adopt and submit such SIPs, but does not give the Administrator authority to lengthen the time allowed for submission.

Section 110(c)(1) of the Act, in turn, requires EPA to promulgate FIPs if EPA has found that the state has failed to make a required submission or if EPA has disapproved a state submission or found it to be incomplete. Specifically, section 110(c)(1) requires EPA to promulgate a FIP within two years after the Administrator “(A) Finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section or (B) disapproves a state implementation plan submission in whole or in part.” The Act uses mandatory language, finding that EPA shall promulgate a FIPs at any time within 2 years after the actions identified 110(c)(1)(A) or 110(c)(1)(B) have occurred. EPA's legal obligation to promulgate FIPs arises when those actions occur without regard to the underlying reason for the underlying state SIP deficiency. The obligation to promulgate a FIP must be discharged by EPA unless two conditions are met: (1) The state corrects the deficiency; and (2) the Administrator approves the plan or plan revision, before the Administrator promulgates the FIP.

Under this statutory scheme, EPA has authority and an obligation to promulgate a FIP to correct a SIP deficiency if the actions identified in section 110(c)(1)(A) or (B) have been taken, and the two conditions identified in 110(c)(1) have not been met. The question of whether EPA has authority to promulgate any particular FIP, therefore, must be considered on a state specific basis.

EPA disagrees with the Commenter's suggestion that the rule is inconsistent with the CAA because it does not give states time to develop, submit and receive EPA approval of SIPs before the FIP goes into effect. Section 110(a)(2) calls on states to submit SIPs that contain adequate provisions prohibiting the emissions proscribed by section 110(a)(2)(D)(i)(I). However, when EPA has not received such SIP submission or has disapproved a SIP submission, it has an obligation created by section 110(c)(1) to promulgate a FIP that meets the requirements of section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to adjust the deadlines established in the Act in order to give states additional time, after promulgation of the Transport Rule, to submit SIPs that comply with section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to alter the statutory requirement that it promulgate FIPs within two years of making a finding of failure to submit. EPA sought to discharge this duty with respect to the states covered by CAIR for the PM 2.5 NAAQS by promulgating CAIR; however, the Court found that rule unlawful and not sufficiently related to the statutory mandate of section 110(a)(2)(D)(i)(I). For this reason, EPA does not believe it could argue that the CAIR FIPs completely discharged its duty to promulgate FIPs with respect to the states whose section 110(a)(2)(D)(i)(I) SIPs are disapproved.

EPA is following the SIP process established in the statute. The 110(a) SIPs for the 2006 PM 2.5 standard were due in 2009. In each case, states were given the full 3 years to meet the requirement. The Transport Rule provides the FIP to fulfill the requirement that was unmet by the states through SIPs. EPA is required to promulgate a FIP within 2 years of a state's failure to have an approved SIP. States were in fact given the first chance to fulfill the requirement of Section 100(a)(2)(D)(i)(I). EPA's action is subsequent to the State's opportunity to first fulfill the requirement.

EPA has made every attempt to smooth the transition between the requirements of CAIR and those of the forthcoming Transport Rule. For future requirements, EPA will also make every effort to address transition issues. However, EPA cannot ignore its statutory obligations and therefore cannot ensure that no new requirements will be placed on the sources being regulated by this action. Every time a NAAQS is revised, there is a statutory obligation for states to submit SIPs to address certain CAA requirements. If states fail to meet the deadlines or submit incomplete or inadequate SIPs, EPA must act to ensure that the requirements are put into place.

Even though EPA is issuing a FIP, the State still has the opportunity to submit a SIP that can tailor requirements to the specific needs and concerns of the State in order to meet the applicable state budgets. Prior to this action, states had ample time under the provisions of the CAA to develop and submit approvable SIPs and did not. No state affected by the Transport Rule has submitted a SIP to replace the emission reductions that were required by CAIR, despite the North Carolina opinion issued in December 2008 that clearly said CAIR did not adequately address 110(a)(2)(D)(i)(I). While the remand left CAIR in place and states and sources were required to continue to comply with it, states had the opportunity to develop replacement measures to ensure that 110(a)(2)(D)(i)(I) components of their SIPs would continue to be fulfilled in the future.

Comment 8: Two Commenters express concerns about EPA's proposed disapproval and indicate that EPA had an obligation to use section 110(k)(5) of the CAA. One Commenter states: “EPA continues to be resistant to exploring a legislative approach to fixing some of the SIP issues, yet the correct process under the existing Clean Air Act to appropriately address this issue is not being used.” The Commenter goes on to state: “Section 110(k) requires that when EPA finds a plan to be inadequate, EPA shall (1) Require the state to revise the plan, (2) notify the state of the inadequacy, and (3) may establish reasonable deadlines not to exceed 18 months.” Additionally, the Commenter mentions that in their opinion, “The proposed disapproval completely ignores #1 and #3 and only partially satisfies #2. Regarding #2, the EPA proposal simply states EPA's position that the SIP is inadequate, but fails to notify us `of the inadequacy.' ” The Commenter asserts that “* * * EPA still has failed to provide any specificity on what is required of a state to submit an approvable SIP,” and mentions that “These Clean Air Act requirements are not discretionary, and that `EPA must comply with the provisions of Section 110(k)(5) by providing a reasonable period of time to allow [the state] to satisfy the inadequacy and sufficient and timely instructions on what is required to revise the plan instead of relying on a theoretical FIP as the sole remedy.' ” The Commenter concludes by stating that “EPA may not take final action on this proposal until it complies with Section 110(k)(5) of the Clean Air Act.”

Response 8: The issues raised in this comment are also addressed by Response 7, above. To further clarify what is included in Response 7, Alabama's September 23, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS is being disapproved pursuant to sections 110(k)(2) and (3) of the CAA, not section 110(k)(5). Section 110(k)(5) is applicable to SIPs that have been federally-approved, and are subsequently found to be substantially inadequate. This is not the case for Alabama's September 23, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS as the September 23, 2009, submission was provided to EPA for a new requirement that was triggered by the promulgation of the 24-hour PM 2.5 NAAQS in 2006. EPA is required under section 110(k)(3) to act upon a state submittal with an approval or disapproval, within the time period designated under section 110(k)(2). With this action, EPA is disapproving Alabama's September 23, 2009, submission relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that the Alabama SIP does not satisfy these requirements for the 2006 PM 2.5 NAAQS. Alabama's submission is inadequate for its failure to meet the statutory requirements of 110(a)(2)(D)(i)(I) as noted above. The State can correct the deficiency by submitting a transport SIP that meets the provisions of the forthcoming Transport Rule or otherwise eliminates significant contribution and interference with maintenance. See Response to Comment 7.

Comment 9: One Commenter expresses concern about EPA's statement in the January 26, 2011, proposed disapprovals regarding the Agency not taking action on some elements of the states' 2006 24-hour PM 2.5 infrastructure submissions, and notes the Agency's statutory timeframe for taking action on SIP submissions. Specifically, the Commenter cites the following statement from EPA's January 26, 2011, proposed rule: “[t]herefore, EPA is proposing to disapprove those provisions which relate to the 110(a)(2)(D)(i)(I) demonstration and to take no action on the remainder of the demonstration at this time.” The Commenter mentions that EPA is “clearly in violation of Clean Air Act Section 110(k)(2)” by not taking action on the remainder of the states' submissions.

Response 9: In this action, EPA is disapproving certain elements of the State's submission related to the requirements under section 110(a)(2)(D)(i)(I). EPA has also determined that these elements are severable from the rest of the submission. Comments on elements that are not being addressed here are not relevant to this action. As noted herein, EPA intends to act on those elements in a subsequent action. See Response to Comment 7 for additional information.

Comment 10: One Commenter indicates that EPA could use section 110(k)(4) to conditionally approve the states' implementation plans for the transport requirements related to the 2006 24-hour PM 2.5 NAAQS in anticipation of the promulgation of the final Transport Rule, “[a]ssuming EPA adequately addresses modeling and emissions inventory concerns raised during the comment period* * *”

Response 10: EPA does not agree that the use of 110(k)(4) for a conditional approval is appropriate in this circumstance. Conditional approvals may be used to approve a plan revision based on a written commitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision. If the State does not adopt specific enforceable measures within a year, the conditional approval automatically converts to a disapproval. The forthcoming Transport Rule is an action that is being promulgated from EPA and not the State, so it is unclear what “condition” the State would be responsible for satisfying by relying on the final promulgation of the Transport Rule. Further, as the Commenter implies, use of 110(k)(4) is optional. See Response to Comment 7 for additional information.

Comment 11: Two Commenters mention innovative air pollution control strategies that states have implemented to reduce emissions, and seem to indicate that the adoption of those strategies, in-and-of itself, complies with the interstate transport provisions of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters opine that state laws and rules have resulted in enormous reductions of pollutants that are key pollutants to interstate transport.

Response 11: EPA agrees that states have implemented innovative air pollution control strategies that have provided significant reductions in emissions, and the Agency commends states for their efforts. However, today's action relates to whether Alabama has provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Alabama. It is EPA's final determination that Alabama's September 23, 2009, submission does not provide an adequate technical analysis and emissions reductions for this determination and thus EPA is disapproving the portion of Alabama's September 23, 2009, submission as it relates to the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Alabama.

Comment 12: One Commenter expresses concern regarding EPA's statement in the January 26, 2011, proposed disapproval regarding the modeling used to support the proposed Transport Rule, and the findings in relation to whether states significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. The Commenter states that “based on 2007-2009 monitoring data, all of these areas are currently meeting the 2006 24-hour PM 2.5 NAAQS” and expresses concern that EPA did not note the area's status with regard to the 2006 24-hour PM 2.5 NAAQS in the proposal. The Commenter goes on to say “we noted in our official comments on the proposed Transport Rule, EPA had numerous errors in the modeling inputs and failed to ensure that the model performance was acceptable. This may explain the disparity between EPA's modeling results and the real world monitors.”

Response 12: Today's action relates to whether the State provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Alabama, and is not based on the attainment status of Alabama areas. Alabama did not provide an adequate technical analysis to EPA to demonstrate compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. With regard to the Commenter's concern about the forthcoming Transport Rule, EPA notes that the Agency received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

Comment 13: Two Commenters assert that EPA's proposed finding of significant contribution for the proposed Transport Rule is based on an inaccurate emissions inventory, fails to take into account all of the reductions required by the state rules already in effect, and contains numerous other errors that only compound these problems.

Response 13: EPA received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

EPA is taking final action to disapprove the portion of Alabama's September 23, 2009, submission, relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that Alabama's SIP does not satisfy the requirements for the 2006 24-hour PM 2.5 NAAQS. Although EPA is taking final action to disapprove the portion of Alabama's September 23, 2009, submission relating to section 110(a)(2)(D)(i)(I), EPA acknowledges the State's efforts to address this requirement in its September 23, 2009, submission. Unfortunately, the submittal relies on CAIR and without an adequate technical analysis EPA does not believe that states can adequately address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. The purpose of the Transport Rule that EPA is developing and has proposed is to respond to the remand of CAIR by the Court and address the section 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for the affected states. In today's action, EPA is not taking any disapproval action on the remaining elements of the submission, including other section 110(a)(2) infrastructure elements, and specifically the section 110(a)(2)(D)(i)(II) portion regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility but instead will act on those provisions in a separate rulemaking.

Under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C. sections 7501-7515) or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP call) starts a sanctions clock. Section 110(a)(2)(D)(i)(I) provisions (the provisions being disapproved in today's notice) were not submitted to meet requirements for Part D, and therefore, no sanctions will be triggered. This final action triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the State corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP. The proposed Transport Rule, when final, is the FIP that EPA intends to implement to satisfy the 110(a)(2)(D)(i)(I) requirement for Alabama for the 2006 24-hr PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, because this SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain state requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The RFA generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new requirements but simply disapproves certain state requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences ( e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities. EPA continues to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under state or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this proposed action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely proposes to disapprove certain state requirements for inclusion into the SIP under section 110 and subchapter I, part D of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Upon promulgation of a new or revised NAAQS, sections 110(a)(1) and (2) of the CAA require states to address basic SIP requirements, including emissions inventories, monitoring, and modeling to assure attainment and maintenance for that NAAQS. On December 18, 2006, EPA revised the 24-hour average PM 2.5 primary and secondary NAAQS from 65 micrograms per cubic meter (μg/m 3 ) to 35 μg/m 3 , thus states were required to provide submissions to address section 110(a)(1) and (2) of the CAA (infrastructure SIPs) for this revised NAAQS. Kentucky provided its infrastructure submission for the 2006 PM 2.5 NAAQS on September 8, 2009. On January 26, 2011, EPA proposed to disapprove the portion of Kentucky's September 8, 2009, infrastructure submission related to interstate transport (i.e., 110(a)(2)(D)(i)(I)) for the 2006 PM 2.5 NAAQS. See 76 FR 4597. A summary of the background for this final action is provided below.

Section 110(a)(2) lists the elements that infrastructure SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. States were required to provide submissions to address the applicable 110(a)(2) infrastructure requirements, including section 110(a)(2)(D)(i), by September 21, 2009. 1

On September 25, 2009, EPA issued a guidance entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (hereinafter referred to as “EPA's 2009 Guidance”). EPA developed the EPA's 2009 Guidance to make additional recommendations to states for making submissions to meet the requirements of section 110, including 110(a)(2)(D)(i) for the revised 2006 24-hour PM 2.5 NAAQS.

As identified in the EPA's 2009 Guidance, the “good neighbor” provisions in section 110(a)(2)(D)(i) require each state to submit a SIP that prohibits emissions that adversely affect another state in the ways contemplated in the CAA. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. Specifically, the SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other states; (2) interfere with maintenance of the NAAQS in other states; (3) interfere with provisions to prevent significant deterioration of air quality in other states; or (4) interfere with efforts to protect visibility in other states.

In the EPA's 2009 Guidance, EPA explained that submissions from states pertaining to the “significant contribution” and “interfere with maintenance” requirements in section 110(a)(2)(D)(i)(I) must contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA described a number of considerations for states for providing an adequate demonstration to address interstate transport requirements in the EPA's 2009 Guidance. First, EPA noted that the state's submission should explain whether or not emissions from the state contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. Second, EPA recommended the various types of information that could be relevant to support the state's submission, such as information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state, and air quality modeling. Third, EPA explained that states should address the “interfere with maintenance” requirement independently which requires an evaluation of impacts on areas of other states that are meeting the 2006 24-hour PM 2.5 NAAQS, not merely areas designated nonattainment. Lastly, EPA explained that states could not rely on the Clean Air Interstate Rule (CAIR) to comply with CAA section 110(a)(2)(D)(i) requirements for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS. CAIR, promulgated by EPA on May 12, 2005 (see 70 FR 25162), required states to reduce emissions of sulfur dioxide and nitrogen oxides that significantly contribute to, and interfere with maintenance of the 1997 PM 2.5 NAAQS and/or ozone in any downwind state. CAIR was intended to provide states covered by the rule with a mechanism to satisfy their CAA section 110(a)(2)(D)(i)(I) obligations to address significant contribution to downwind nonattainment and interference with maintenance in another state with respect to the 1997 ozone and PM 2.5 NAAQS. Many states adopted the CAIR provisions and submitted SIPs to EPA to demonstrate compliance with the CAIR requirements in satisfaction of their 110(a)(2)(D)(i)(I) obligations for those two pollutants.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit or Court) issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Circuit, July 11, 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Circuit, December 23, 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id.

In order to address the judicial remand of CAIR, EPA has proposed a new rule to address interstate transport pursuant to section 110(a)(2)(D)(i), the “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone” (Transport Rule). 2 As part of the proposed Transport Rule, EPA specifically examined the section 110(a)(2)(D)(i) requirements that emissions from sources in a state must not “significantly contribute to nonattainment” and “interfere with maintenance” of the 2006 24-hour PM 2.5 NAAQS by other states. The modeling performed for the proposed Transport Rule shows that Kentucky significantly contributes to nonattainment or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents for this action, Kentucky in fact contributes to downwind nonattainment in another state or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

On September 8, 2009, the Commonwealth of Kentucky, through KDAQ, provided a letter to EPA certifying that the Kentucky SIP meets the interstate transport requirements with regard to the 2006 24-hour PM 2.5 NAAQS. 3 Specifically, Kentucky certified that its current SIP adequately addresses the elements of CAA section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. CAA section 110(a)(2)(D)(i)(I) requires that implementation plans for each state contain adequate provisions to prohibit air pollutant emissions from sources within a state from significantly contributing to nonattainment in or interfering with maintenance of the NAAQS (in this case the 2006 24-hour PM 2.5 NAAQS) in any other state. On January 26, 2011, EPA proposed to disapprove the portion of Kentucky's September 8, 2009, submission related to interstate transport for the 2006 24-hour PM 2.5 NAAQS because EPA made the preliminary determination that Kentucky's September 8, 2009, submission does not meet the requirements of section 110(a)(2)(D)(i)(I) of the CAA for this NAAQS. This action is finalizing EPA's disapproval of Kentucky's September 8, 2009, submission with regard to section 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. See EPA's January 26, 2011, proposed disapproval rulemaking at 76 FR 4597 for further information on EPA's rationale for this final action.

EPA received three sets of adverse comments on the January 26, 2011, proposed rulemaking to disapprove the portion of Kentucky's September 8, 2009, infrastructure submission on the interstate transport requirements of sections 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. A full set of the comments provided by KDAQ, the North Carolina Department of Environment and Natural Resources, and the Georgia Environmental Protection Division (hereinafter referred to as “the Commenters”) are provided in the docket for this final action. As a general matter, the comments overlapped on some issues, and as a result, EPA has organized the response to comments by issue. In addition, EPA acknowledges Georgia's comments regarding SIP processing in general. As Georgia is aware, EPA is considering improvements to the SIP process and appreciates Georgia's comments in that regard.

For the most part, the Commenters oppose EPA's proposed disapproval action for the interstate portion of Kentucky's September 8, 2009, infrastructure submission for the 2006 24-hour PM 2.5 NAAQS. The comments fall generally into the following categories: (1) States' inability to rely on CAIR to satisfy the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS; (2) apparent lack of guidance from EPA on how states should meet the requirements; (3) concerns regarding the procedure of taking action to disapprove Kentucky's submittal; (4) acknowledgement of states' efforts and air quality conditions; and (5) concerns related to the Transport Rule. A summary of the comments and EPA's responses are provided below.

Comment 1: The Commenters express concern with EPA's proposed disapproval and assert that states should be able to rely on CAIR to address the transport requirements in section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters explain that the Court left CAIR in place and opine that states should be able to rely on emissions reductions from CAIR to address transport. One Commenter also mentions that “[t]he Court did not impose a schedule on EPA for completing the Transport Rule; therefore, states have no assurances that EPA will ever replace the CAIR rule. Since there is no guarantee that the Transport Rule will be promulgated in a timely manner, states cannot rely on the reductions in the proposed Transport Rule and must rely on the CAIR reductions, which are permanent and enforceable.”

Response 1: As discussed in EPA's 2009 Guidance, states cannot rely on the CAIR rule for the submission for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS, and was never intended to address this NAAQS. CAIR was originally put in place to address the 1997 8-hour ozone and PM 2.5 NAAQS. In order to adequately address the requirements of section 110(a)(2)(D)(i)(I), states can only rely on permanent emission reductions to address transport for the 2006 24-hour PM 2.5 NAAQS, and must include an appropriate technical demonstration.

Comment 2: Two Commenters note that that 110(a)(2) infrastructure SIPs for the 24-hour PM 2.5 NAAQS were due September 21, 2009, but EPA's guidance was not released to the states until September 25, 2009.

Response 2: While EPA's 2009 Guidance regarding the 110(a)(2) infrastructure SIPs for the 2006 24-hour PM 2.5 NAAQS was released on September 25, 2009, this guidance did not establish new requirements beyond those already required by section 110(a)(2)(D)(i)(I) of the CAA. Relevant portions of section 110(a)(2) require, as follows, “Each [implementation plan submitted by a State under this chapter] shall * * * contain adequate provisions—(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard * * *” States are statutorily obligated to address the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. This above-quoted provision provides States with the requirement.

Comment 3: Two Commenters express concern about communication in the SIP process. The Commenters go on to say that “[e]ven though EPA's guidance was released only a short time later, EPA Region 4 gave absolutely no indication to its co-regulators that there would be a fatal flaw with the submittal.” The commenter further states that, “it wasn't until a year later that states were informed via an e-mail on August 27, 2010, that ‘All Region 4 states submitted complete infrastructure SIPs for the 2006 PM 2.5 NAAQS, and our intention is to disapprove the 110(a)(2)(D)(i)(I) portion of those unless it is withdrawn by the state.’ ”

Response 3: EPA disagrees with the Commenters' assertion that they were initially notified in an August 27, 2010, e-mail about EPA's expectations and concerns with states' submissions reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. As was explained above, Kentucky's obligation stems from the CAA. As is EPA's practice, EPA reminded the States on a number of occasions of the interstate transport obligations in 110(a)(2)(D)(i)(I). In addition to the informal reminders (via e-mail and teleconferences, among other avenues), EPA's January 2011 proposal served as a formal, legal notification and provided for a formal opportunity for public comment.

Although EPA reminded states of EPA's expectations and concerns with states' reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS in an August 27, 2010, e-mail, EPA formally notified states of the expectations and concerns in the EPA's 2009 Guidance. Specifically, EPA noted that SIP submissions that relied on CAIR for satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS would be inadequate, as CAIR did not address this NAAQS. EPA's proposed disapproval of the portion of Kentucky's September 8, 2009, submission did not occur until January 2011, which was over a year after EPA's notification (through the release of the EPA's 2009 Guidance) of any states' deficiency for meeting the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hr PM 2.5 NAAQS had that state relied on CAIR. Thus, Kentucky had notification and an opportunity to provide supplemental information between the release of EPA's 2009 Guidance and EPA's proposed disapproval action in January 2011.

Comment 4: One Commenter raises concerns with EPA treating its 2009 Guidance as “binding” and suggests that this action is contrary to statements made by EPA in support of EPA and states being “co-regulators.”

Response 4: EPA disagrees with the Commenter's assertion that the proposed disapproval is contrary to EPA treating the states as co-regulators. As was explained earlier, EPA has regular contact with its state co-regulators. With regard to the proposed disapproval action, EPA corresponded with Kentucky regarding the September 8, 2009, submittal prior to the proposed disapproval. In the past several months, EPA has corresponded with Kentucky on a number of occasions regarding other SIP revisions and EPA's consideration of those revisions—as is EPA's typical practice to support the co-regulator relationship.

Further, EPA notes that the January 26, 2011, proposed disapproval of Kentucky's September 8, 2009, submission as it relates to satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS is based on EPA's determination that Kentucky did not provide adequate information to demonstrate compliance with the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS for Kentucky. No new requirements were introduced in EPA's 2009 Guidance. This guidance simply provided additional clarifications but the CAA requirements existed long before Kentucky's September 21, 2009, deadline for a SIP submission.

Comment 5: One Commenter mentions that “EPA has not stated the amount of reduction they believe is needed to satisfy the transport requirements. Not only is this a situation where EPA moves the finish line (by releasing guidance AFTER the due date), the finish line isn't even knowable (because EPA refuses to inform the states how much reduction is enough to satisfy the requirements). EPA seems to say that it has to be whatever the final Transport Rule says, even though there is no final Transport Rule.”

Response 5: EPA disagrees with this comment. As was explained earlier, the state obligation stems from the CAA itself. As co-regulators, EPA makes efforts to assist states in submitting approvable revisions—and EPA took such action with EPA's 2009 Guidance. States had an opportunity to conduct their own analyses regarding interstate transport. Section 110(a)(2) requires that the state's submission contain adequate provisions prohibiting emissions from the state that contribute significantly to nonattainment of or interfere with maintenance of the NAAQS in any other state. In order to ensure compliance with the CAA's mandate of “adequate” provisions, the state's SIP revision must be supported by an adequate technical analysis, including, but not limited to, information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state and the potentially impacted states, the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling. EPA appreciates that Kentucky has initiated the process of such an analysis (which is included in Kentucky's comment letter).

Comment 6: One Commenter notes EPA's statement in the January 26, 2011, proposed disapproval where the Agency states: “* * * without an adequate technical analysis EPA does not believe that states can sufficiently address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS.” The Commenter mentions that they, and possibly other states, were precluded from providing the necessary technical analysis by EPA because EPA did not release the guidance until after the SIP submission deadline. Further, the Commenter notes that EPA did not provide specific criteria for the technical analysis in the EPA's 2009 Guidance, and mentions that “[h]ad EPA provided adequate criteria for an approvable SIP in a timely manner, it is likely that [the state] would have been able to submit an approvable SIP by the statutory deadline.” The Commenter included a technical analysis as part of their comments on the proposal.

Response 6: EPA does not agree with the Commenter's assertions. As was explained earlier, the SIP submission requirement is identified in the CAA. In addition, States were alerted that a technical analysis that involved modeling and permanent, enforceable emission reductions could be used to make an adequate demonstration to satisfy the 110(a)(2)(D)(i)(I) requirement for the 1997 PM 2.5 and ozone NAAQS when EPA promulgated CAIR in 2005. Due to the legal status of CAIR, states relying on CAIR as permanent were taking a risk given EPA's proposed Transport Rule and the court decision on CAIR. Further, states were officially informed that the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hour PM 2.5 NAAQS could not be satisfied by reliance on CAIR (since that rule did not consider the 2006 24-hour PM 2.5 NAAQS) when EPA released EPA's 2009 Guidance. The submittal by Kentucky relied on CAIR and it did not include an adequate technical analysis—despite EPA's efforts to alert states that mere reliance on CAIR, on its own, would not meet the CAA requirements.

Consistent with section 110 of the CAA and implementing regulations at 40 CFR part 51, and as a general matter, “adequate technical analyses” are a cornerstone of ensuring that SIP revisions are approvable. EPA has addressed the timing of information in previous comments, but to underscore that point, EPA alerted states formally upon the release of the EPA's 2009 Guidance that CAIR could not be used to meet the 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. In addition, there are formal SIP revision requirements described in 40 CFR part 51, subpart F. EPA does not agree that Kentucky's comments on the January 2011 disapproval proposal may be considered a “SIP revision;” nonetheless, EPA did review the comments as was described above. Further information regarding the path forward following today's action is described below.

Upon disapproval of Kentucky's submittal, EPA has a legal obligation, pursuant to the Act, to promulgate a FIP. Section 110(a)(1) of the Act requires states to submit SIPs that meet certain requirements within three years of promulgation of a NAAQS. These SIPs are required to contain, among other things, adequate provisions “prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Section 110(a)(1) gives the Administrator authority to prescribe a period shorter than three years for the states to adopt and submit such SIPs, but does not give the Administrator authority to lengthen the time allowed for submission.

Section 110(c)(1) of the Act, in turn, requires EPA to promulgate FIPs if EPA has found that the state has failed to make a required submission or if EPA has disapproved a state submission our found it to be incomplete. Specifically, section 110(c)(1) requires EPA to promulgate a FIP within two years after the Administrator “(A) finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section or (B) disapproves a state implementation plan submission in whole or in part.” The Act uses mandatory language, finding that EPA shall promulgate a FIPs at any time within 2 years after the actions identified 110(c)(1)(A) or 110(c)(1)(B) have occurred. EPA's legal obligation to promulgate FIPs arises when those actions occur without regard to the underlying reason for the underlying state SIP deficiency. The obligation to promulgate a FIP must be discharged by EPA unless two conditions are met: (1) The state corrects the deficiency; and (2) the Administrator approves the plan or plan revision, before the Administrator promulgates the FIP.

Under this statutory scheme, EPA has authority and an obligation to promulgate a FIP to correct a SIP deficiency if the actions identified in section 110(c)(1)(A) or (B) have been taken, and the two conditions identified in 110(c)(1) have not been met. The question of whether EPA has authority to promulgate any particular FIP, therefore, must be considered on a state specific basis.

EPA disagrees with the Commenter's suggestion that the rule is inconsistent with the CAA because it does not give states time to develop, submit and receive EPA approval of SIPs before the FIP goes into effect. Section 110(a)(2) calls on states to submit SIPs that contain adequate provisions prohibiting the emissions proscribed by section 110(a)(2)(D)(i)(I). However, when EPA has not received such SIP submission or has disapproved a SIP submission, it has an obligation created by section 110(c)(1) to promulgate a FIP that meets the requirements of section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to adjust the deadlines established in the Act in order to give states additional time, after promulgation of the Transport Rule, to submit SIPs that comply with section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to alter the statutory requirement that it promulgate FIPs within two years of making a finding of failure to submit. EPA sought to discharge this duty with respect to the states covered by CAIR for the PM 2.5 NAAQS by promulgating CAIR; however, the Court found that rule unlawful and not sufficiently related to the statutory mandate of section 110(a)(2)(D)(i)(I). For this reason, EPA does not believe it could argue that the CAIR FIPs completely discharged its duty to promulgate FIPs with respect to the states whose section 110(a)(2)(D)(i)(I) SIPs are disapproved.

EPA is following the SIP process established in the statute. The 110(a) SIPs for the 2006 PM 2.5 standard were due in 2009. In each case, states were given the full 3 years to meet the requirement. The Transport Rule provides the FIP to fulfill the requirement that was unmet by the states through SIPs. EPA is required to promulgate a FIP within 2 years of a state's failure to have an approved SIP. States were in fact given the first chance to fulfill the requirement of Section 100(a)(2)(D)(i)(I). EPA's action is subsequent to the State's opportunity to first fulfill the requirement.

EPA has made every attempt to smooth the transition between the requirements of CAIR and those of the forthcoming Transport Rule. For future requirements, EPA will also make every effort to address transition issues. However, EPA cannot ignore its statutory obligations and therefore cannot ensure that no new requirements will be placed on the sources being regulated by this action. Every time a NAAQS is revised, there is a statutory obligation for states to submit SIPs to address certain CAA requirements. If states fail to meet the deadlines or submit incomplete or inadequate SIPs, EPA must act to ensure that the requirements are put into place.

Even though EPA is issuing a FIP, the State still has the opportunity to submit a SIP that can tailor requirements to the specific needs and concerns of the State in order to meet the applicable state budgets. Prior to this action, states had ample time under the provisions of the CAA to develop and submit approvable SIPs and did not. No state affected by the Transport Rule has submitted a SIP to replace the emission reductions that were required by CAIR, despite the North Carolina opinion issued in December 2008 that clearly said CAIR did not adequately address 110(a)(2)(D)(i)(I). While the remand left CAIR in place and states and sources were required to continue to comply with it, states had the opportunity to develop replacement measures to ensure that 110(a)(2)(D)(i)(I) components of their SIPs would continue to be fulfilled in the future.

Comment 7: Two Commenters express concerns about EPA's proposed disapproval and indicate that EPA had an obligation to use section 110(k)(5) of the CAA. One Commenter states: “EPA continues to be resistant to exploring a legislative approach to fixing some of the SIP issues, yet the correct process under the existing Clean Air Act to appropriately address this issue is not being used.” The Commenter goes on to state: “Section 110(k) requires that when EPA finds a plan to be inadequate, EPA shall (1) require the state to revise the plan, (2) notify the state of the inadequacy, and (3) may establish reasonable deadlines not to exceed 18 months.” Additionally, the Commenter mentions that in their opinion, “The proposed disapproval completely ignores #1 and #3 and only partially satisfies #2. Regarding #2, the EPA proposal simply states EPA's position that the SIP is inadequate, but fails to notify us `of the inadequacy.' ” The Commenter asserts that “* * * EPA still has failed to provide any specificity on what is required of a state to submit an approvable SIP,” and mentions that “These Clean Air Act requirements are not discretionary, and that `EPA must comply with the provisions of Section 110(k)(5) by providing a reasonable period of time to allow [the state] to satisfy the inadequacy and sufficient and timely instructions on what is required to revise the plan instead of relying on a theoretical FIP as the sole remedy.' ” The Commenter concludes by stating that “EPA may not take final action on this proposal until it complies with Section 110(k)(5) of the Clean Air Act.”

Response 7: The issues raised in this comment are also addressed by Response 6, above. To further clarify what is included in Response 6, Kentucky's September 8, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS is being disapproved pursuant to sections 110(k)(2) and (3) of the CAA, not section 110(k)(5). Section 110(k)(5) is applicable to SIPs that have been federally-approved, and are subsequently found to be substantially inadequate. This is not the case for Kentucky's September 8, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS as the September 8, 2009, submission was provided to EPA for a new requirement that was triggered by the promulgation of the 24-hour PM 2.5 NAAQS in 2006. EPA is required under section 110(k)(3) to act upon a state submittal with an approval or disapproval, within the time period designated under section 110(k)(2). With this action, EPA is disapproving Kentucky's September 8, 2009, submission relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that the Kentucky SIP does not satisfy these requirements for the 2006 PM 2.5 NAAQS. Kentucky's submission is inadequate for its failure to meet the statutory requirements of 110(a)(2)(D)(i)(I) as noted above. The Commonwealth can correct the deficiency by submitting a transport SIP that meets the provisions of the forthcoming Transport Rule or otherwise eliminates significant contribution and interference with maintenance. See Response to Comment 6.

Comment 8: One Commenter expresses concern about EPA's statement in the January 26, 2011, proposed disapprovals regarding the Agency not taking action on some elements of the states' 2006 24-hour PM 2.5 infrastructure submissions, and notes the Agency's statutory timeframe for taking action on SIP submissions. Specifically, the Commenter cites the following statement from EPA's January 26, 2011, proposed rule: “[t]herefore, EPA is proposing to disapprove those provisions which relate to the 110(a)(2)(D)(i)(I) demonstration and to take no action on the remainder of the demonstration at this time.” The Commenter mentions that EPA is “clearly in violation of Clean Air Act Section 110(k)(2)” by not taking action on the remainder of the states' submissions.

Response 8: In this action, EPA is disapproving certain elements of the State's submission related to the requirements under section 110(a)(2)(D)(i)(I). EPA has also determined that these elements are severable from the rest of the submission. Comments on elements that are not being addressed here are not relevant to this action. As noted herein, EPA intends to act on those elements in a subsequent action. See Response to Comment 6 for additional information.

Comment 9: One Commenter indicates that EPA could use section 110(k)(4) to conditionally approve the states' implementation plans for the transport requirements related to the 2006 24-hour PM 2.5 NAAQS in anticipation of the promulgation of the final Transport Rule, “[a]ssuming EPA adequately addresses modeling and emissions inventory concerns raised during the comment period * * *”

Response 9: EPA does not agree that the use of 110(k)(4) for a conditional approval is appropriate in this circumstance. Conditional approvals may be used to approve a plan revision based on a written commitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision. If the State does not adopt specific enforceable measures within a year, the conditional approval automatically converts to a disapproval. The forthcoming Transport Rule is an action that is being promulgated from EPA and not the State, so it is unclear what “condition” the State would be responsible for satisfying by relying on the final promulgation of the Transport Rule. Further, as the Commenter implies, use of 110(k)(4) is optional. See Response to Comment 6 for additional information.

Comment 10: Two Commenters mention innovative air pollution control strategies that states have implemented to reduce emissions, and seem to indicate that the adoption of those strategies, in-and-of itself, complies with the interstate transport provisions of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters opine that state laws and rules have resulted in enormous reductions of pollutants that are key pollutants to interstate transport.

Response 10: EPA agrees that states have implemented innovative air pollution control strategies that have provided significant reductions in emissions, and the Agency commends states for their efforts. However, today's action relates to whether Kentucky has provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Kentucky. It is EPA's final determination that Kentucky's September 8, 2009, submission does not provide an adequate technical analysis and emissions reductions for this determination and thus EPA is disapproving the portion of Kentucky's September 8, 2009, submission as it relates to the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Kentucky.

Comment 11: Two Commenters expresses concern regarding EPA's statement in the January 26, 2011, proposed disapproval regarding the modeling used to support the proposed Transport Rule, and the findings in relation to whether states significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. The Commenters state that “based on 2007-2009 monitoring data, all of these areas are currently meeting the 2006 24-hour PM 2.5 NAAQS” and express concern that EPA did not note the area's status with regard to the 2006 24-hour PM 2.5 NAAQS in the proposal. The Commenters go on to say “we noted in our official comments on the proposed Transport Rule, EPA had numerous errors in the modeling inputs and failed to ensure that the model performance was acceptable. This may explain the disparity between EPA's modeling results and the real world monitors.”

Response 11: Today's action relates to whether the Commonwealth provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Kentucky, and is not based on the attainment status of Kentucky areas. Kentucky did not provide an adequate technical analysis to EPA to demonstrate compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. With regard to the Commenters' concern about the forthcoming Transport Rule, EPA notes that the Agency received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

Comment 12: Both Commenters assert that EPA's proposed finding of significant contribution for the proposed Transport Rule is based on an inaccurate emissions inventory, fails to take into account all of the reductions required by the state rules already in effect, and contains numerous other errors that only compound these problems.

Response 12: EPA received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

EPA is taking final action to disapprove the portion of the Commonwealth of Kentucky's September 8, 2009, submission, relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that the Kentucky SIP does not satisfy the requirements for the 2006 24-hour PM 2.5 NAAQS. Although EPA is taking final action to disapprove the portion of Kentucky's September 8, 2009, submission relating to section 110(a)(2)(D)(i)(I), EPA acknowledges the Commonwealth's efforts to address this requirement in its September 8, 2009, submission. Unfortunately, the submittal relies on CAIR and without an adequate technical analysis EPA does not believe that states can adequately address the section 110(a)(2)(D)(i)(I) requirement for the 2006 24-hour PM 2.5 NAAQS. The purpose of the Transport Rule that EPA is developing and has proposed is to respond to the remand of CAIR by the Court and address the section 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for the affected states. In today's action, EPA is not taking any disapproval action on the remaining elements of the submission, including other section 110(a)(2) infrastructure elements, and specifically the section 110(a)(2)(D)(i)(II) portion regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility but instead will act on those provisions in a separate rulemaking.

Under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C. sections 7501-7515) or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP call) starts a sanctions clock. Section 110(a)(2)(D)(i)(I) provisions (the provisions being disapproved in today's notice) were not submitted to meet requirements for Part D, and therefore, no sanctions will be triggered. This final action triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the State corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP. The proposed Transport Rule, when final, is the FIP that EPA intends to implement to satisfy the 110(a)(2)(D)(i)(I) requirement for Kentucky for the 2006 24-hr PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., because this SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain state requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The RFA generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new requirements but simply disapproves certain state requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences (e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities. EPA continues to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under state or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this proposed action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely proposes to disapprove certain state requirements for inclusion into the SIP under section 110 and subchapter I, part D of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. These sections provide additional information on this final action:

On March 18, 2011 (76 FR 14831-14835), EPA proposed to disapprove a portion of the “Infrastructure” SIP (CAA 110(a)(1) and (2)) submittal from the State of Kansas relating to the interstate transport element of infrastructure (CAA section 110(a)(2)(D)(i)(I)). For additional detail on this final action, see the proposed rulemaking.

Section 110(a)(2) of the CAA lists the thirteen required elements that “infrastructure” SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. These “good neighbor” provisions require each state to submit a SIP that prohibits emissions which adversely affect another state in the ways contemplated in the statute. The section 110(a)(2)(D)(i), portion of Kansas' SIP must prevent sources in the State from emitting pollutants in amounts which will: (I) Contribute significantly to nonattainment of the NAAQS in other states and interfere with maintenance of the NAAQS in other states and (II) interfere with provisions to prevent significant deterioration of air quality in other states or interfere with efforts to protect visibility in other states.

On April 12, 2010, EPA received a SIP revision from the State of Kansas intended to address the requirements of section 110(a)(2) including the requirements of section 110(a)(2)(D)(i) for the 2006 24-hour PM 2.5 NAAQS. In this final rulemaking, EPA is disapproving only the 110(a)(2)(D)(i)(I) portion of the submittal that pertains to prohibiting sources in Kansas from emitting pollutants that significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in other states. The elements on which we are taking action today are severable portions of the submittal. EPA plans to act on the additional portions of the State's submittal in a subsequent action.

The requirements of section 110(a)(2)(D)(i)(I), as well as EPA's analysis of the State's submission, are explained in detail in the proposal. The reader should refer to the proposal for further explanation of EPA's rationale for the proposed disapproval.

Formal comments were received from commenters on behalf of two utility companies in Kansas (the Kansas City Board of Public Utilities and Westar Energy) regarding EPA's March 18, 2011 proposed disapproval (76 FR 14831). The commenters submitted identical comments regarding EPA's proposed rulemaking. EPA has summarized the comments and responded to each within this section of this final rulemaking.

1. Comment: The commenters argued that EPA's proposed disapproval action did not clearly describe how the State lacked a technical demonstration showing that Kansas sources did not significantly contribute to nonattainment or interfere with maintenance of the 2006 PM 2.5 NAAQS. The commenters stated that the State's demonstration consisted of the following: (1) Kansas met the demonstration requirement “by indicating that” its sources do not significantly interfere with attainment or maintenance in downwind states; and (2) Kansas supported this assertion by stating that Kansas sources had reduced PM 2.5 precursor emissions (below 2005 National Emissions Inventory levels) by 32 percent for nitrogen oxides (NO X ) and 58 percent for sulfur oxides (SO x ), “suggesting the State's emissions would not exceed” the 2006 PM 2.5 NAAQS.

EPA Response: In the proposal, EPA stated two bases for its proposed disapproval: (1) Absence of a technical demonstration showing that Kansas sources do not significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS; and (2) information in the preliminary modeling for EPA's Transport Rule which conflicted with the State's conclusory statement that Kansas sources did not significantly impact downwind nonattainment or interfere with maintenance. The mere “indication” that Kansas sources do not significantly contribute to downwind nonattainment or interfere with maintenance is not a demonstration, but rather an unsupported conclusion. A statement regarding decreases in PM 2.5 precursor emissions compared to a 2005 inventory does not “suggest,” much less demonstrate, that the air quality impact of those emissions reductions on downwind concentrations of PM 2.5 are insignificant.

Kansas included the following information in its attempt to address 110(a)(2)(D)(i) requirements. The submittal described that Kansas has adopted, by reference, the Federal Prevention of Significant Deterioration regulations into the Kansas Air Regulations. In the submission, Kansas articulated its future intent to incorporate the new, 24-hour PM 2.5 NAAQS into the State air regulations. Kansas also described its Regional Haze SIP to address visibility requirements, which is currently pending EPA review. In addition, the submittal included a summary of the emission reductions (in tons per year) of both NO X and SO X anticipated to be achieved from four of the electric generating units (EGUs) in Kansas. Kansas then described the percentage of emission reductions expected from those facilities compared to previous emissions recorded in the National Emissions Inventory from 2005. In the submittal, Kansas described certain projected emissions reductions from EGUs but did not submit any information on the impact of emissions either from the four units discussed in the submittal, or from other sources in the State of Kansas, on downwind nonattainment and maintenance of the 2006 24-hour PM 2.5 NAAQS in other states. Kansas did not submit an analysis of emissions from Kansas sources on downwind areas. In addition, the Regional Haze SIP submission referenced in the infrastructure SIP submission does not contain such analysis. The submittal lacked the needed information and analysis to address the requirements of CAA section 110(a)(2)(D)(i)(I) to demonstrate that: (1) Kansas does not have a significant contribution on nonattainment of the NAAQS and interference with maintenance of the NAAQS in other states; or (2) that the State has adequate measures in place to eliminate any significant contribution to nonattainment of the NAAQS and interference with maintenance of the NAAQS in other states. There was no demonstration that the requirements of section 110(a)(2)(D)(i)(I) have been met with respect to the 2006 PM 2.5 NAAQS.

2. Comment: The commenters argued that EPA's proposed disapproval action 1 improperly relied on the non-final, preliminary modeling performed for the proposed Transport Rule  2 (which showed that emissions from the State of Kansas significantly contributed to nonattainment and interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas). The commenters posit that, by relying on the modeling results of the proposed Transport Rule (completed after Kansas submitted its SIP), EPA had determined that the proposed Transport Rule modeling “superseded” Kansas' submittal, and that Kansas could receive approval of its SIP only if it had anticipated the subsequent modeling and had addressed the modeling in its SIP submittal.

EPA Response: In the proposed disapproval of the Kansas SIP, EPA neither stated nor implied that Kansas could only have avoided a disapproval by addressing the proposed Transport Rule modeling in its original submittal. As stated in response to comment 1 above, in the proposal EPA stated two bases for its proposed disapproval: (1) Absence of a technical demonstration showing that Kansas sources do not significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS (discussed in detail in the response to comment 1, above); and (2) information in the preliminary modeling for the Transport Rule which conflicted with the State's conclusory statement that Kansas sources did not significantly impact downwind nonattainment or interfere with maintenance of the 2006 NAAQS. With respect to the latter basis, the modeling for the proposed Transport Rule was not available to Kansas when it submitted the SIP and could not have been considered by Kansas at that time. The proposed disapproval of the Kansas submittal was not based on the fact that Kansas did not address the proposed Transport Rule modeling. However, the modeling was relevant to EPA's proposed disapproval of the Kansas SIP, particularly in light of the fact that Kansas did not provide any technical demonstration at all regarding the interstate contribution issue, as discussed in the response to Comment 1. Commenters had the opportunity, and in fact did, comment on the applicability of the preliminary modeling to EPA's proposed action. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents (TSDs) for this action, Kansas in fact significantly contributes to downwind nonattainment in another state and interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state. Please see the TSDs for the final modeling and contribution analysis as they relate to this action.

Nevertheless, the lack of any technical demonstration is sufficient basis to disapprove the SIP for this portion of the infrastructure element. However, as discussed in EPA's proposed disapproval, EPA also noted that we had preliminary information from the modeling performed for the proposed Transport Rule showing that Kansas sources significantly contribute to nonattainment and interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. 3 At proposal for this action, it was appropriate for EPA to consider technical information available for the proposed Transport Rule, particularly in light of the complete absence of any air quality analysis in the Kansas submittal regarding downwind impacts of Kansas sources. EPA did not determine, as suggested by the commenters, that the preliminary Transport Rule modeling “superseded” the Kansas submittal. The preliminary modeling merely provided an air quality impact analysis that the Kansas submittal lacked, and provided evidence that the mere assertion by Kansas of noncontribution was not only unsupported, but also incorrect. As noted above, the final modeling for the Transport Rule indicates that Kansas in fact significantly contributes to downwind nonattainment in another state and interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

3. Comment: Based on language in EPA's 2009 Guidance document, 4 commenters argued that EPA should have issued an incompleteness finding for the interstate transport (section 110(a)(2)(D)(i)(I)) portion of the submittal rather than issuing EPA's proposed disapproval action. The commenters argue that if EPA would have issued an incompleteness finding before the end of EPA's six month statutory time-frame for determining completeness, Kansas could have cured its incomplete SIP submittal by addressing the preliminary modeling for the Transport Rule in preparing the required technical demonstration to address interstate transport requirements. The commenters further argue that, by choosing the disapproval option rather than the option of finding the submittal incomplete, the only remedial action is the FIP. Commenters assumed that EPA expected the State of Kansas to respond to the preliminary modeling of the proposed Transport Rule but that, as directed by the 2009 Guidance, Kansas was not allowed to wait until the preliminary Transport Rule modeling was issued to develop the SIP submittal.

EPA Response: EPA reiterates the explanation of its rationale for the disapproval described in response to Comments 1 and 2, above. In addition, the commenters' assertion that EPA put the State at an unfair disadvantage by not finding the submittal incomplete instead of issuing a proposed disapproval is incorrect. We note initially that the commenters' implicit conclusion that an incompleteness finding would not have triggered FIP obligations is not correct. Section 110(c)(1) of the CAA provides that the FIP obligation is triggered either upon disapproval of a SIP, or upon a determination that a state has failed to submit a SIP (or has submitted a SIP determined to be incomplete). In fact, an incompleteness finding would have triggered EPA's FIP obligation sooner than a final disapproval of the SIP. An incompleteness finding and a final disapproval each trigger a FIP clock. If EPA found the submittal to be incomplete, it would trigger a FIP obligation as of the date of the finding. Because such a finding is not subject to notice and comment rulemaking, while a disapproval requires such rulemaking, the FIP obligation would have been triggered much sooner.

Therefore, even if relevant to EPA's disapproval action, EPA did not create any unfair disadvantage for the State by its proposal to disapprove the submittal. Moreover, the State of Kansas did not submit any comments on the proposed rulemaking and did not submit any technical analysis in response to the proposed disapproval. The commenters speculate that, if EPA had determined the SIP was incomplete, Kansas would have submitted a supplement to its SIP submittal addressing the proposed Transport Rule modeling. The commenters imply that the proposed disapproval precluded Kansas from curing defects in the original submittal. However, in fact the proposed disapproval solicited comment on the proposed action, and did not foreclose Kansas from submitting the same information and analysis that the commenters argue would have been submitted after an incompleteness finding. Neither the commenters nor Kansas submitted any analysis in response to the proposed disapproval which might be relevant to downwind impacts of Kansas sources on PM 2.5 concentrations. Therefore, Kansas was not disadvantaged by the proposed disapproval as contrasted with the incompleteness finding option advocated by the commenters.

4. Comment: Commenters suggest that at the time of Kansas' submittal, Kansas' emissions had not “been deemed” by EPA to contribute to or interfere with downwind nonattainment or maintenance in other areas. The commenters assert that Kansas properly followed EPA's 2009 Guidance by “indicating” that “emissions from the State do not significantly interfere with attainment or maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind states.” Furthermore, the commenters state that certain facts (such as NO X and SO X percent reductions over the values used in the preliminary Transport Rule modeling) demonstrate that Kansas submitted the required demonstration.

EPA Response: See also EPA's responses to Comment 1, 2 and 3 above. In addition, the CAA section 110(a)(2)(D)(i)(I) requires that states develop SIPs that demonstrate that a SIP is adequate to prohibit sources in the state from significantly contributing to downwind nonattainment or interference with maintenance of a new or revised NAAQS in another state. The CAA places responsibility on the State to show that this requirement is met. Neither the Act nor the 2009 Guidance referenced by the commenters indicate that this requirement can be met by merely concluding that EPA has not found any significant contribution or interference with maintenance. It is also not sufficient to merely “indicate” that there is no significant downwind contribution. In addition, as discussed in detail in the response to Comment 1, the mere assertion that emissions from a limited number of Kansas sources are projected to be lower than assumed by EPA in the preliminary Transport Rule modeling is not sufficient to demonstrate that this requirement is met.

Furthermore, statements about emission reductions from certain sources in a state do not inform the entire decision about the air quality impacts of sources in the State to a neighboring state. An analysis showing that source emissions are so low as to be insignificant might be some indication that a source could not reasonably be expected to contribute to downwind air quality problems. But that is not the argument made by the commenter or by Kansas in its SIP submission. Kansas' SIP submission merely stated that four sources will reduce emissions of NO X (32 percent total reduction) and SO X (58 percent total reduction), below 2005 National Emissions Inventory levels, “in the coming years.” However, there is no indication of the air quality impact of these anticipated reductions. Therefore, and for reasons also detailed in response to comment 1, the Kansas submission does not provide a demonstration that the SIP prohibits Kansas sources from significantly contributing to downwind nonattainment, or from interfering with maintenance of, the 2006 PM 2.5 NAAQS.

5. Comment: The commenters argue that EPA failed to identify a statutory basis for reliance on preliminary modeling from an ongoing rulemaking (Transport Rule) to support disapproval. The commenters state that this reflects a failure to follow the path set out in the CAA section 110(c)(1). Commenters assert that the CAA authorizes the Administrator to impose a FIP only when a current SIP has been found lacking after promulgation of new rules and the State had not acted to cure the resulting deficiency. They stated that EPA “would have had to promulgate a proposed regulation first and give the State a chance to submit a substitute regulation.” The commenters cite Bethlehem Steel Corporation v. Gorsuch, 742 F.2d 1028 (7th Cir. 1984) as their authority for these arguments.

EPA Response: EPA has described in detail above, particularly in response to comments 1 and 2, the basis for its reliance on the proposed Transport Rule modeling in this disapproval action. The statutory basis for EPA's disapproval action is (1) CAA section 110(a)(2)(D)(i)(I), which requires SIPs to address certain contributions to downwind nonattainment and maintenance, as discussed in response to previous comments, and (2) section 110(k)(1) and (2) which require disapproval of portions of plans which do not meet the requirements of the Act, within 1 year of a determination that a SIP submittal is complete. The requirements of section 110(a)(2)(D)(i)(I) are triggered upon promulgation or revision of a NAAQS (see section 110(a)(1) of the CAA). The requirement that the SIP must address this provision is imposed by the statute, not by promulgation by EPA of any separate rule (other than the rule promulgating or revising a NAAQS). Once EPA promulgated the 2006 revisions to the PM 2.5 standards, all of the applicable requirements of section 110(a)(2) were triggered, including section 110(a)(2)(D)(i)(I). The Kansas submittal was in response to this specific statutory requirement. Because EPA is disapproving the SIP submittal (only as it relates to section 110(a)(2)(D)(i)(I)), EPA's obligation to promulgate a FIP is also triggered, upon disapproval of the SIP submittal, in whole or in part, as required by section 110(c)(1). CAA section 110(c)(1) authorizes EPA to promulgate a FIP “at any time within 2 years after” disapproving a SIP submission.

Commenters reliance on Bethlehem Steel is also misplaced. That case involved an EPA action approving a portion of a state's emissions regulation, but not approving another portion of the same regulation, thus rendering the regulation less stringent than the state intended. In rejecting EPA's approach, the Court stated: “No more can the EPA, in the guise of partial approval, remove words of limitation; it must follow the procedures that the Act prescribes for making state regulations stricter.” ( Bethlehem Steel, 742 F. 2d at 1036.) The procedures described by the Court for that purpose ( i.e., making a state regulation more stringent) are not applicable to the disapproval of the section 110(a)(2)(D)(i)(I) portion of the Kansas SIP submittal. EPA's action has no effect on any Kansas emissions control regulation, and no effect on the stringency of any state requirement. EPA's action merely follows the procedures of the CAA described above.

6. Comment: The commenters argue that the rationale for the proposed disapproval was inconsistent with the rationale for the proposed SIP call for Kansas (relating to interstate transport elements for the 1997 ozone NAAQS), in which EPA stated that it would not finalize the SIP Call if the final Transport Rule modeling does not show significant contribution to downwind nonattainment or interference with maintenance of the ozone standard. The commenter also asserts that this action “reversed the prior findings” that Kansas does not significantly contribute to nonattainment or interfere with maintenance in downwind areas.

EPA Response: The rationale for the proposed SIP Call is explained in detail in the proposed SIP call rule for Kansas (76 FR 763, January 6, 2011). That action involves a different ambient standard (1997 ozone as compared to 2006 PM 2.5 ), and different factual and legal considerations from those relating to this disapproval action. As explained in the proposed SIP Call, EPA had previously determined that Kansas sources did not significantly contribute to downwind nonattainment or interference with maintenance of the 1997 ozone standards (72 FR 10608). Because subsequent information (the proposed Transport Rule modeling) showed that the 2007 determination might be in error, EPA proposed the SIP Call, for the reasons stated in the proposal. However, a final determination of that issue can only be made after EPA finally determines, under the Transport Rule, whether Kansas sources do have downwind contribution to attainment or maintenance of the 1997 ozone standard.

In contrast, this disapproval of the section 110(a)(2)(D)(i)(I) portions of the Kansas 2006 PM 2.5 SIP, contrary to assertions of the commenters, does not implicate any prior EPA determinations with respect to the specific NAAQS (2006 PM 2.5 ). Unlike the Kansas SIP for the 1997 ozone standard, EPA had not previously determined that the SIP is adequate with respect to the 2006 PM 2.5 standard, to meet the requirements of section 110(a)(2)(D)(i)(I). As described in detail in responses to Comments 1 and 2, this disapproval action is based on the lack of a demonstration by Kansas that the SIP is adequate to meet the requirements of section 110(a)(2)(D)(i)(I). Unlike the Kansas SIP Call for 1997 ozone standard (76 FR 763), this determination is not dependent on the outcome of the final Transport Rule. 5 The rationales for the proposed SIP Call and this action are not inconsistent, but merely address different matters, as discussed above.

7. Comment: The commenters argue that the proposed disapproval relating to the 2006 PM 2.5 NAAQS is inconsistent with the approval of Kansas' demonstration of lack of contribution and noninterference with respect to the “1997 NAAQS.” Commenters assert that the “same type of technical demonstration” was made for those NAAQS as for the 2006 PM 2.5 NAAQS, and that EPA is being inconsistent in its treatment of the two submissions.

EPA Response: With respect to the reference to the technical demonstration for the 1997 NAAQS, it is not clear whether the commenter is referencing the demonstration for the ozone or PM 2.5 standards, or both. With respect to ozone, Kansas made a detailed technical demonstration with respect to its downwind contribution for ozone, based on the information available at the time. The demonstration included emissions analyses, analyses of the proximity of Kansas sources to downwind ozone air quality problems, and back-trajectory analyses. As explained in the proposed SIP Call for the 1997 ozone NAAQS referenced above, EPA has preliminarily determined that more recent analyses made in conjunction with the proposed Transport Rule, contradict the conclusions of noninterference with respect to the 1997 ozone NAAQS. This issue is outside the scope of this rulemaking, but notably, the demonstration provided by Kansas with respect to the 1997 ozone NAAQS contained far more information than the conclusory statements in the 2006 PM 2.5 SIP submitted (discussed above particularly in the response to Comment (1) Which is the subject of this rulemaking).

With respect to the demonstration made by Kansas for the 1997 PM 2.5 standards, we note that Kansas relied on the modeling performed for the Clean Air Interstate Rule, which, based on the information available at that time, showed that Kansas did not significantly contribute to downwind nonattainment or interfere with maintenance of the 1997 PM 2.5 standard. This modeling did not consider and is not relevant to contributions with respect to the 2006 NAAQS, but for the 1997 PM 2.5 NAAQS, it was adequate at the time to support a demonstration of noncontribution by Kansas.

For the reasons stated above, and as described further in response to Comment 1, we disagree with the commenters' generalized assertion that the State's documentation regarding contribution for the 1997 NAAQS was “the same type of technical demonstration” utilized for the 2006 PM 2.5 NAAQS. As stated above, there was no technical demonstration with respect to the latter NAAQS.

EPA is taking final action to disapprove a portion of the submission from the State of Kansas intended to demonstrate that Kansas has adequately addressed the elements of CAA section 110(a)(2)(D)(i)(I) that require the Kansas' SIP to include adequate provisions to prohibit air pollutant emissions from sources within the State from significantly contributing to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in any other state. EPA has determined that the Kansas submission does not contain adequate provisions to prohibit air pollutant emissions from within the State that significantly contribute to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in other downwind states. As noted in the Background above, the final modeling for EPA's Transport Rule indicates that Kansas in fact significantly contributes to downwind nonattainment in another state and interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

Any remaining elements of the submittal, including language to address other CAA section 110(a)(2) elements, including section 110(a)(2)(D)(i)(II) regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility, are not addressed in this action. EPA is disapproving only the provisions which relate to the section 110(a)(2)(D)(i)(I) portion of the submittal and intends to act on the remainder of the submittal in a subsequent action.

Also, under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C.A. 7501-7515), or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP Call), starts a sanctions clock. The provisions in the submittal that we are disapproving were not submitted to meet either of those requirements. Therefore, no sanctions are triggered.

The full or partial disapproval of a SIP revision triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the state corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP.

EPA's final Transport Rule and related FIP, if finalized in the manner proposed, may address these interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) for the State of Kansas for the 2006 24-hour PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, because this SIP disapproval under section 110 of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain state requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The Regulatory Flexibility Act generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and of the CAA will not in-and-of itself create any new requirements but simply disapproves certain State requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences ( e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Today's final disapproval does not have federalism implications. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, Section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely disapproves certain state requirements for inclusion into the SIP under section 110 of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register .

A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

The statutory authority for this action is provided by section 110 of the CAA, as amended (42 U.S.C. 7410).

Throughout this document, whenever “we”, “us”, or “our” is used, we mean the EPA.

EPA is fully approving New Mexico's December 1, 2010, SIP submittal, relating to PSD requirements for GHG-emitting sources. Specifically, New Mexico's December 1, 2010, proposed SIP revision establishes appropriate emissions thresholds for determining PSD applicability to new and modified GHG-emitting sources in accordance with EPA's Tailoring Rule. EPA has made the determination that this SIP submittal is approvable because it is in accordance with the Clean Air Act (CAA) and EPA regulations regarding PSD permitting for GHGs.

As explained in our proposed approval of the New Mexico December 1, 2010, SIP revision, 76 FR 20907 (April 14, 2011), since EPA is finalizing its approval of New Mexico's changes to its air quality regulations to incorporate the appropriate thresholds for GHG permitting applicability into New Mexico's SIP, then paragraph (d) in § 52.1634 of 40 CFR part 52, added in EPA's PSD SIP Narrowing Rule to codify the limitation of EPA's approval of New Mexico's PSD SIP to exclude the applicability of PSD to GHG-emitting sources below the Tailoring Rule thresholds, is no longer necessary. In today's action, EPA is also amending § 52.1634 of 40 CFR part 52 to remove this unnecessary regulatory language.

Today, we are approving the December 1, 2010, New Mexico PSD SIP revision as we proposed and find that the SIP revision complies with section 110 and part C of the Federal Clean Air Act and EPA regulations regarding PSD permitting for GHGs.

This section briefly summarizes EPA's recent GHG-related actions that provide the background for today's action. More detailed discussion of the background is found in the preambles for those actions, particularly in the background section of what we call the PSD SIP Narrowing Rule. 1

EPA has recently undertaken a series of actions pertaining to the regulation of GHGs that, although for the most part distinct from one another, establish the overall framework for today's final action on the New Mexico SIP. Four of these actions include, as they are commonly called, the “Endangerment Finding” and “Cause or Contribute Finding,” which EPA issued in a single final action, 2 the “Johnson Memo Reconsideration,”  3 the “Light-Duty Vehicle Rule,”  4 and the “Tailoring Rule.”  5 Taken together and in conjunction with the CAA, these actions established regulatory requirements for GHGs emitted from new motor vehicles and new motor vehicle engines; determined that such regulations, when they took effect on January 2, 2011, subjected GHGs emitted from stationary sources to PSD requirements; and limited the applicability of PSD requirements to GHG sources on a phased-in basis. EPA took this last action in the Tailoring Rule, which, more specifically, established appropriate GHG emission thresholds for determining the applicability of PSD requirements to GHG-emitting sources.

PSD is implemented through the SIP system, and so in December 2010, EPA promulgated several rules to implement the new GHG PSD SIP program. Recognizing that some states had approved SIP PSD programs that did not apply PSD to GHGs, EPA issued a SIP call and, for some of these states, a FIP. 6 Recognizing that other states had approved SIP PSD programs that do apply PSD to GHGs, but that do so for sources that emit as little as 100 or 250 tons per year (tpy) of GHG, and that do not limit PSD applicability to GHGs to the higher thresholds in the Tailoring Rule, EPA issued the GHG PSD SIP Narrowing Rule. Under that rule, EPA withdrew its approval of the affected SIPs to the extent those SIPs applied PSD requirements to GHG emissions from GHG-emitting sources below the Tailoring Rule thresholds.

On June 24, 2010, New Mexico provided a letter to EPA, in accordance with a request to all States from EPA in the Tailoring Rule, with confirmation that the State has the authority to regulate GHG in its PSD program. The letter confirmed that current New Mexico rules require regulating GHGs at the existing 100/250 tpy threshold, rather than at the higher thresholds set in the Tailoring Rule because the state does not have the authority to apply the meaning of the term “subject to regulation” established in the Tailoring Rule. New Mexico also submitted a letter on September 14, 2010, in response to the proposed GHG SIP Call, again confirming that EPA correctly classified New Mexico as a state with authority to apply PSD requirements to GHGs. The September 14, 2010, letter also states that NMED is pursuing rulemaking activity to define the terms “greenhouse gas” and “subject to regulation.” See the docket for this proposed rulemaking for copies of New Mexico's June 24, 2010, and September 14, 2010, letters.

In the PSD SIP Narrowing Rule, published on December 30, 2010, EPA withdrew its approval of New Mexico's SIP—among other SIPs—to the extent that SIP applies PSD permitting requirements to GHG emissions from sources emitting at levels below those set in the Tailoring Rule. 7 As a result, New Mexico's current approved SIP provides the state with authority to regulate GHGs, but only at and above the Tailoring Rule thresholds, and thus federally requires new and modified sources to receive a PSD permit based on GHG emissions only if they emit at or above the Tailoring Rule thresholds.

New Mexico has amended its state regulations to incorporate the Tailoring Rule thresholds, and has submitted the adopted regulations as revisions to the New Mexico SIP. EPA's approval of the New Mexico revisions will clarify the applicable thresholds in the New Mexico SIP and incorporate state law changes adopted at the local level into the federally-approved SIP.

The basis for this SIP revision is that limiting PSD applicability to GHG sources to the higher thresholds in the Tailoring Rule is consistent with the SIP provisions that provide required assurances of adequate resources, and thereby addresses the flaw in the SIP that led to the PSD SIP Narrowing Rule. Specifically, CAA section 110(a)(2)(E) includes as a requirement for SIP approval that States provide “necessary assurances that the State * * * will have adequate personnel [and] funding “ to carry out such [SIP].” In the Tailoring Rule, EPA established higher thresholds for PSD applicability to GHG-emitting sources on grounds that the states generally did not have adequate resources to apply PSD to GHG-emitting sources below the Tailoring Rule thresholds, 8 and no State, including New Mexico, asserted that it did have adequate resources to do so. 9 In the PSD SIP Narrowing Rule, EPA found that the affected states, including New Mexico, had a flaw in their SIPs at the time they submitted their PSD programs, which was that the applicability of the PSD programs was potentially broader than the resources available to them under their SIP. 10 Accordingly, for each affected state, including New Mexico, EPA concluded that EPA's action in approving the SIP was in error, under CAA section 110(k)(6), and EPA rescinded its approval to the extent the PSD program applies to GHG-emitting sources below the Tailoring Rule thresholds. 11 EPA recommended that States adopt a SIP revision to incorporate the Tailoring Rule thresholds, thereby (i) assuring that under State law, only sources at or above the Tailoring Rule thresholds would be subject to PSD; and (ii) avoiding confusion under the federally-approved SIP by clarifying that the SIP applies to only sources at or above the Tailoring Rule thresholds. 12

The portions of the submitted SIP revision at 20.2.70.7(AL)(3) NMAC and 20.2.74.7(AZ)(6) NMAC act to limit the enforceability of the definition of “subject to regulation” in the event of an adverse federal court determination in certain GHG-related matters. EPA received a comment regarding the effect of such court actions, and now clarifies its interpretation of these provisions in response. The provisions state that in the event of a federal court determination that invalidates or renders unenforceable the Tailoring Rule, “the definition ‘subject to regulation’ shall be enforceable by the Department only to the extent that it is enforceable by US EPA.” EPA reads this provision to mean that the state will wait for and follow EPA's interpretation of the effect of such a court decision regarding the enforceability of these SIP revisions by EPA before altering its own application of that term. EPA approves the SIP on the basis of this interpretation. If a court issues such a decision, EPA intends to promptly describe the impact of the court's decision on the enforceability of its regulations.

EPA received one comment letter from Tri-State Generation and Transmission Association, Inc. in response to the proposed rulemaking. The comment letter is available for review in the docket for this rulemaking. A summary of the comments and EPA's responses are provided below.

Comment 1: Commenter states that its comments pertain to EPA's proposed approval of the PSD portion of the New Mexico GHG Tailoring Rule. Commenter maintains a policy position opposing regulation of greenhouse gas emissions under the Clean Air Act, including its permitting provisions. The fact that PSD and Title V permitting thresholds need “tailoring” to be appropriate for greenhouse gases demonstrates that the Clean Air Act is not intended to regulate greenhouse gas emissions.

Response 1: We refer Commenter to the “Tailoring Rule” (Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule” 75 FR 31514 (June 3, 2010)) as well as our proposed rulemaking notice at 76 FR 20907 (April 14, 2011) that cites to and provides information on our national GHG actions and that provides the general basis for the regulation of GHGs under PSD permitting requirements. See footnotes 1-4 at 76 FR 20908, Footnote 6 at 20909. As we have detailed in those notices, EPA established that PSD applies to all pollutants newly subject to regulation, including non-NAAQS pollutants such as GHGs, in prior actions, and EPA has not re-opened that issue in this rulemaking. Accordingly, we do not believe these comments are relevant to this rulemaking.

Comment 2: Commenter is mindful of the many legal challenges to EPA's authority to regulate GHGs, and is concerned about what effect a stay, remand, or vacatur of one or all of the federal GHG-related rules would have on the New Mexico SIP revision. Commenter supports inclusion of “enforceability” language at 20.2.70.7(AL)(3) NMAC and 20.2.74.7(AZ)(6) NMAC.

Response 2: As discussed above, EPA is finalizing its approval of the enforceability clause at 20.2.74.7 and interprets that clause to indicate that the state will wait for and follow EPA's interpretation of the effect of any adverse court decision regarding the enforceability of these SIP revisions. If a court acts adversely, EPA intends to promptly describe the impact of the court's decision on the enforceability of its regulations.

Comment 3: Commenter understands the importance of having the Tailoring Rule amendments in place at the state level. It would create an unreasonable burden on NMED's Air Quality Bureau, and all permit holders, should it be required that GHGs be permitted at the 100/250 tpy levels. Within that context, Commenter remains concerned about the practicalities of regulation of GHGs via air quality permits.

Response 3: We refer Commenter to our proposal for this final action that discusses the basis for a SIP revision that limits PSD applicability to GHG sources to the higher thresholds in the Tailoring Rule. While we appreciate Commenter's general concern about the practicalities of regulating of GHGs through air quality permits, Commenter did not provide any specific examples in the record to be able to adequately respond to this generalized statement. In addition, as discussed above, the requirement that sources seek PSD permits for GHG emissions was not established in this rulemaking, and was not reopened in this rulemaking. In fact, the State makes clear that GHG PSD permitting was required under its SIP prior to this rulemaking. We refer Commenter to New Mexico's June 24, 2010, and September 14, 2010, letters (mentioned elsewhere in this notice) and that are in the docket for this rulemaking.

Comment 4: Commenter states the SIP revision was made in an expedited timeframe, despite the fact that NMED, through its membership in the National Association of Clean Air Agencies (NACAA) and NACAA's December 28, 2009 letter to EPA about the Tailoring Rule, requested that EPA provide more time to states to afford consideration of the effects of and necessary regulatory changes for the implementation of the federal Tailoring Rule. EPA's expedited timeframe contributes to regulatory uncertainty.

Response 4: While we hear Commenter's concerns, we do not believe the comment is relevant to the scope of the action before us and we disagree with Commenter. We refer Commenter to the proposal for this action, which states that New Mexico amended its state regulations to incorporate the Tailoring Rule thresholds and timely submitted the state-adopted regulations as revisions to the state's SIP thereby contributing to regulatory certainty.

Comment 5: Commenter states that in the state administrative rulemaking hearing, several of Commenter's issues were addressed, however inconclusively. Since uncertainty remains on various issues Commenter raised, Commenter re-states some of those issues. In short, Commenter raises issues related to Best Available Control Technology (BACT), New Source Performance Standards (NSPS) for GHG, Carbon Capture Sequestration (CCS) and GHG Reporting and Cap and Trade issues.

Response 5: This current rulemaking action concerns whether the regulatory revisions relating to PSD requirements for GHG-emitting sources that NMED submitted to EPA on December 1, 2010, that seek to establish the appropriate emission thresholds for determining PSD applicability to new and modified GHG-emitting sources in accordance with EPA's Tailoring Rule, are approvable. The above comments raise issues that are outside the scope of this narrow rulemaking action and that we do not believe are relevant to the current action.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions:

EPA is taking final action to disapprove portions of the submissions from the State of New Jersey and the State of New York that were submitted to demonstrate that those states have adequately addressed elements of CAA section 110(a)(2)(D)(i)(I). Those elements require a state's SIP to contain adequate provisions to prohibit air pollutant emissions from sources within a state from significantly contributing to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in any other state. The New Jersey and New York submissions do not contain adequate provisions to prohibit air pollutant emissions from within the states from significantly contributing to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in other downwind states.

The remaining elements of the New Jersey and New York submittals, including the section 110 infrastructure, and section 110(a)(2)(D)(i)(II) regarding interfering with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility, are not addressed in this action and will be acted on in a separate rulemaking.

For additional details on EPA's analysis and findings, the reader is referred to the proposal published in the January 26, 2011 Federal Register (76 FR 4579) which is available on line at http://www.regulations.gov , Docket number EPA-R02-OAR-2010-1025.

EPA received one comment letter on the January 26, 2011 proposal. The letter can be found on the internet in the electronic docket for this action. To access the letter, please go to http://www.regulations.gov and search for Docket No. EPA-R02-OAR-2010-1025, or contact the person listed in the FOR FURTHER INFORMATION CONTACT paragraph above. The discussion below addresses those comments and our response.

Comment: The commenter requests that EPA approve its SIP Revision because New Jersey has adopted multi-pollutant performance standards and met its rule commitments to address the emissions from electric generating units. In addition, New Jersey's air quality levels are in compliance with the 2006 24-hour PM 2.5 NAAQS.

EPA Response: EPA recognizes New Jersey's actions in improving air quality in the state and reducing the transport of emissions to downwind areas, including adopting multi-pollutant performance standards for electric generating units. However, despite such actions by New Jersey, EPA's evaluation, as discussed in the proposed disapproval, demonstrated that New Jersey's submittal is inadequate.

EPA notes that much of the recent improvement in air quality has resulted from the promulgation of the Clean Air Interstate Rule (CAIR). This rule was remanded to EPA in 2008 and will not remain in place indefinitely. Reductions associated with the CAIR thus also cannot be said to be permanent. EPA's modeling analysis, conducted for the proposed Transport Rule, as proposed on August 2, 2010, in the Federal Register (75 FR 45210) demonstrates that emissions from New Jersey significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. Therefore, EPA cannot approve New Jersey's submittal.

EPA has evaluated the New Jersey and New York submittals for consistency with the CAA, EPA regulations, and EPA policy. The demonstrations submitted by New Jersey and New York do not meet the requirements of section 110(a)(2)(D)(i)(I) because the states did not evaluate or demonstrate with a technical analysis that the emissions reduction measures provided in their SIP revisions assure that they do not contribute significantly to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS. Accordingly, EPA is finalizing the disapproval of the portions of the New Jersey and the New York SIP revisions that address the section 110(a)(2)(D)(i)(I) requirement prohibiting a state's emissions from significantly contributing to nonattainment or interfering with maintenance of the NAAQS in any other state.

EPA is taking no action at this time on the remainder of the demonstration, including sections 110(a)(1) and (2) regarding infrastructure requirements, and section 110(a)(2)(D)(i)(II) regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility. They will be addressed in a separate rulemaking.

Under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C. 7501-7515) or is required in response to a finding of substantial inadequacy as described in section 110(k)(5) (42 U.S.C. 7410(k)(5)) (SIP call) starts a sanctions clock. The provisions in the submittal we are disapproving were not submitted to meet either of those requirements. Therefore, no sanctions are triggered for this disapproval.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, because this SIP disapproval under section 110 and subchapter I, part D of the Clean Air Act will not in-and-of-itself create any new information collection burdens but simply disapproves certain State requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and subchapter I, part D of the Clean Air Act will not in-and-of-itself create any new requirements but simply disapproves certain State requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the Clean Air Act prescribes that various consequences (e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain State requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 and subchapter I, part D of the Clean Air Act will not in-and-of-itself create any new regulations but simply disapproves certain State requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

The EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the Clean Air Act.

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

EPA lacks the discretionary authority to address environmental justice in this action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the Clean Air Act. Accordingly, this action merely disapproves certain State requirements for inclusion into the SIP under section 110 and subchapter I, part D of the Clean Air Act and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

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

L. Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

The statutory authority for this action is provided by sections 110 of the CAA, as amended (42 U.S.C. 7410).

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. These sections provide additional information on this final action:

On March 18, 2011 (76 FR 14835), EPA proposed to disapprove a portion of the “Infrastructure” SIP (CAA 110(a)(1) and (2)) submittal from the State of Missouri relating to the interstate transport element of infrastructure (CAA section 110(a)(2)(D)(i)(I)). EPA received no comments on the proposed disapproval. For additional detail on EPA's rationale this final action, see the proposed rulemaking.

Section 110(a)(2) of the CAA lists the thirteen required elements that “infrastructure” SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. These “good neighbor” provisions require each state to submit a SIP that prohibits emissions which adversely affect another state in the ways contemplated in the statute. The section 110(a)(2)(D)(i), portion of Missouri's SIP must prevent sources in the State from emitting pollutants in amounts which will: (I) Contribute significantly to nonattainment of the NAAQS in other states and interfere with maintenance of the NAAQS in other states and (II) interfere with provisions to prevent significant deterioration of air quality in other states or interfere with efforts to protect visibility in other states.

On December 28, 2009, EPA received a SIP revision from the State of Missouri intended to address the requirements of section 110(a)(2) including the requirements of section 110(a)(2)(D)(i) for the 2006 24-hour PM 2.5 NAAQS. In this final rulemaking, EPA is disapproving only the 110(a)(2)(D)(i)(I) portion of the submittal that pertains to prohibiting sources in Missouri from emitting pollutants that significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in other states. The elements on which we are taking action today are severable portions of the submittal. EPA intends to address the additional portions of the submittal in a subsequent action.

The requirements of section 110(a)(2)(D)(i)(I), as well as EPA's analysis of the State's submission, are explained in detail in the proposal. In summary, EPA proposed to disapprove the Missouri submittal because: (1) It described a number of rules Missouri had adopted to reduce PM 2.5 precursors (sulfur dioxide and nitrogen oxides), but did not include any analysis to show that these measures would prohibit the interstate impacts described in section 110(a)(2)(D)(i)(I); and (2) it relied on the Clean Air Interstate Rule provisions in the Missouri SIP, even though those provisions do not address impacts on the 2006 PM 2.5 standards. We also noted that Missouri's conclusion with respect to these interstate impact provisions was inconsistent with the preliminary modeling for EPA's proposed Transport Rule ( see 75 FR 45210, August 2, 2010). The reader should refer to the March 18, 2011 proposed rulemaking (76 FR at 14837-8) for a detailed explanation of EPA's rationale for this determination. In addition, EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents (TSDs) for this action, Missouri in fact significantly contributes to downwind nonattainment in another state and interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state. Please see the TSDs for the final modeling and contribution analysis as they relate to this action.

EPA is taking final action to disapprove a portion of the submission from the State of Missouri intended to demonstrate that Missouri has adequately addressed the elements of CAA section 110(a)(2)(D)(i)(I) that require Missouri's SIP to include adequate provisions to prohibit air pollutant emissions from sources within the State from significantly contributing to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in any other state. EPA has determined that the Missouri submission does not contain adequate provisions to prohibit air pollutant emissions from within the State that significantly contribute to nonattainment in or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS in other downwind states. As noted in the Background above, the final modeling for EPA's Transport Rule indicates that Missouri in fact significantly contributes to downwind nonattainment in another state and interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

Any remaining elements of the submittal, including language to address other CAA section 110(a)(2) elements, including section 110(a)(2)(D)(i)(II) regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility, are not addressed in this action. EPA is disapproving only the provisions which relate to the section 110(a)(2)(D)(i)(I) portion of the submittal. EPA will act on those other provisions in a subsequent action.

Also, under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C.A. 7501-7515), or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP Call), starts a sanctions clock. The provisions in the submittal that we are disapproving were not submitted to meet either of those requirements. Therefore, no sanctions are triggered.

The full or partial disapproval of a SIP revision triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the state corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP.

EPA's final Transport Rule and related FIP, if finalized in the manner proposed, may address these interstate transport requirements of CAA section 110(a)(2)(D)(i)(I) for the State of Missouri for the 2006 24-hour PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, because this SIP disapproval under section 110 of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain State requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The Regulatory Flexibility Act generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 of the CAA will not in-and-of itself create any new requirements but simply disapproves certain State requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences (e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Today's final disapproval does not have federalism implications. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under Section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 of the CAA will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely disapproves certain State requirements for inclusion into the SIP under section 110 of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register .

A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

The statutory authority for this action is provided by section 110 of the CAA, as amended (42 U.S.C. 7410).

Table of Contents I. Background II. EPA's Responses to Comments III. Final Action IV. Statutory and Executive Order Reviews I. Background

Upon promulgation of a new or revised NAAQS, sections 110(a)(1) and (2) of the CAA require states to address basic SIP requirements, including emissions inventories, monitoring, and modeling to assure attainment and maintenance for that NAAQS. On December 18, 2006, EPA revised the 24-hour average PM 2.5 primary and secondary NAAQS from 65 micrograms per cubic meter (µg/m  3 ) to 35 µg/m  3 , thus states were required to provide submissions to address section 110(a)(1) and (2) of the CAA (infrastructure SIPs) for this revised NAAQS. Georgia provided its infrastructure submission for the 2006 PM 2.5 NAAQS on October 21, 2009. On January 26, 2011, EPA proposed to disapprove the portion of Georgia's October 21, 2009, infrastructure submission related to interstate transport (i.e., 110(a)(2)(D)(i)(I)) for the 2006 PM 2.5 NAAQS. See 76 FR 4584. A summary of the background for this final action is provided below.

Section 110(a)(2) lists the elements that infrastructure SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. States were required to provide submissions to address the applicable 110(a)(2) infrastructure requirements, including section 110(a)(2)(D)(i), by September 21, 2009. 1

On September 25, 2009, EPA issued a guidance entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (2006 PM 2.5 NAAQS Infrastructure Guidance). EPA developed the 2006 PM 2.5 NAAQS Infrastructure Guidance to make additional recommendations to states for making submissions to meet the requirements of section 110, including 110(a)(2)(D)(i) for the revised 2006 24-hour PM 2.5 NAAQS.

As identified in the 2006 PM 2.5 NAAQS Infrastructure Guidance, the “good neighbor” provisions in section 110(a)(2)(D)(i) require each state to submit a SIP that prohibits emissions that adversely affect another state in the ways contemplated in the CAA. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. Specifically, the SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other states; (2) interfere with maintenance of the NAAQS in other states; (3) interfere with provisions to prevent significant deterioration of air quality in other states; or (4) interfere with efforts to protect visibility in other states.

In the 2006 PM 2.5 NAAQS Infrastructure Guidance, EPA explained that submissions from states pertaining to the “significant contribution” and “interfere with maintenance” requirements in section 110(a)(2)(D)(i)(I) must contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA described a number of considerations for states for providing an adequate demonstration to address interstate transport requirements in the 2006 PM 2.5 NAAQS Infrastructure Guidance. First, EPA noted that the state's submission should explain whether or not emissions from the state contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. Second, EPA recommended the various types of information that could be relevant to support the state's submission, such as information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state, and air quality modeling. Third, EPA explained that states should address the “interfere with maintenance” requirement independently which requires an evaluation of impacts on areas of other states that are meeting the 2006 24-hour PM 2.5 NAAQS, not merely areas designated nonattainment. Lastly, EPA explained that states could not rely on the Clean Air Interstate Rule (CAIR) to comply with CAA section 110(a)(2)(D)(i) requirements for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS. CAIR, promulgated by EPA on May 12, 2005 ( see 70 FR 25162), required states to reduce emissions of sulfur dioxide and nitrogen oxides that significantly contribute to, and interfere with maintenance of the 1997 PM 2.5 NAAQS and/or ozone in any downwind state. CAIR was intended to provide states covered by the rule with a mechanism to satisfy their CAA section 110(a)(2)(D)(i)(I) obligations to address significant contribution to downwind nonattainment and interference with maintenance in another state with respect to the 1997 ozone and PM 2.5 NAAQS. Many states adopted the CAIR provisions and submitted SIPs to EPA to demonstrate compliance with the CAIR requirements in satisfaction of their 110(a)(2)(D)(i)(I) obligations for those two pollutants.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit or Court) issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Circuit, July 11, 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Circuit, December 23, 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id.

In order to address the judicial remand of CAIR, EPA has proposed a new rule to address interstate transport pursuant to section 110(a)(2)(D)(i), the “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone” (Transport Rule). 2 As part of the proposed Transport Rule, EPA specifically examined the section 110(a)(2)(D)(i) requirements that emissions from sources in a state must not “significantly contribute to nonattainment” and “interfere with maintenance” of the 2006 24-hour PM 2.5 NAAQS by other states. The modeling performed for the proposed Transport Rule shows that Georgia significantly contributes to nonattainment or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents for this action, Georgia in fact contributes to downwind nonattainment in another state or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

On October 21, 2009, the State of Georgia, through GA EPD, provided a letter to EPA certifying that the Georgia SIP meets the interstate transport requirements with regard to the 2006 24-hour PM 2.5 NAAQS. 3 Specifically, Georgia certified that its current SIP adequately addresses the elements of CAA section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. CAA section 110(a)(2)(D)(i)(I) requires that implementation plans for each state contain adequate provisions to prohibit air pollutant emissions from sources within a state from significantly contributing to nonattainment in or interfering with maintenance of the NAAQS (in this case the 2006 24-hour PM 2.5 NAAQS) in any other state. On January 26, 2011, EPA proposed to disapprove the portion of Georgia's October 21, 2009, submission related to interstate transport for the 2006 24-hour PM 2.5 NAAQS because EPA made the preliminary determination that Georgia's October 21, 2009, submission does not meet the requirements of section 110(a)(2)(D)(i)(I) of the CAA for this NAAQS. This action is finalizing EPA's disapproval of Georgia's October 21, 2009, submission with regard to section 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. See EPA's January 26, 2011, proposed disapproval rulemaking at 76 FR 4584 for further information on EPA's rationale for this final action.

EPA received three sets of adverse comments on the January 26, 2011, proposed rulemaking to disapprove the portion of Georgia's October 21, 2009, infrastructure submission on the interstate transport requirements of sections 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. A full set of the comments provided by GA EPD, the North Carolina Department of Environment and Natural Resources, and Georgia Power (hereinafter referred to as “the Commenters”) are provided in the docket for this final action. As a general matter, the comments overlapped on some issues, and as a result, EPA has organized the response to comments by issue. In addition, EPA acknowledges Georgia's comments regarding SIP processing in general. As Georgia is aware, EPA is considering improvements to the SIP process and appreciates Georgia's comments in that regard.

For the most part, the Commenters oppose EPA's proposed disapproval action for the interstate portion of Georgia's October 21, 2009, infrastructure submission for the 2006 24-hour PM 2.5 NAAQS. The comments fall generally into the following categories: (1) Correction for reference to “CSA”; (2) concerns regarding states' inability to rely on CAIR to satisfy the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS; (3) apparent lack of guidance from EPA on how states should meet the requirements; (4) concerns regarding the procedure of taking action to disapprove Georgia's submittal; (5) acknowledgement of states' efforts and air quality conditions; and (6) concerns related to the Transport Rule. A summary of the comments and EPA's responses are provided below.

Comment 1: One Commenter states that on page 4586 of the Federal Register notice of EPA's January 26, 2011, proposed disapproval, that “EPA makes a reference to `CSA' that appears to be completely out of place.” The Commenter goes on to state that “[t]here appears to be no basis for this reference and certainly has no relation to anything that Georgia included in our SIP submittal.”

Response 1: EPA agrees with this comment, and notes that the reference to “CSA” in EPA's January 26, 2009, proposed disapproval action related to a portion of Georgia's October 21, 2009, submission was a typographical error. “CSA” should be replaced with “Georgia Multi-pollutant Rule” and as such is being corrected in this final rule. In reviewing Georgia's SIP revision, EPA was aware of Georgia's multi-pollutant rule.

Comment 2: All Commenters express concern with EPA's proposed disapproval and assert that states should be able to rely on the Clean Air Interstate Rule (CAIR) to address the transport requirements in section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters explain that the Court left CAIR in place and opine that states should be able to rely on emissions reductions from CAIR to address transport. One Commenter also mentions that “[t]he Court did not impose a schedule on EPA for completing the Transport Rule; therefore, states have no assurances that EPA will ever replace the CAIR rule. Since there is no guarantee that the Transport Rule will be promulgated in a timely manner, states cannot rely on the reductions in the proposed Transport Rule and must rely on the CAIR reductions, which are permanent and enforceable.” Another Commenter states: “[b]ased on the belated guidance, EPA prohibits the states from relying in any way on emission reductions required under CAIR even though the rule remains in place today, is federally enforceable and is achieving the anticipated emissions reductions.”

Response 2: As discussed in EPA's September 25, 2009, guidance, “Guidance on SIP Elements Required Under Section 110(a)(1) and (2) for the 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (hereinafter referred to as “EPA's 2009 Guidance”), states cannot rely on the CAIR rule for the submission for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS, and was never intended to address this NAAQS. CAIR was originally put in place to address the 1997 8-hour ozone and PM 2.5 NAAQS. In order to adequately address the requirements of section 110(a)(2)(D)(i)(I), states can only rely on permanent emission reductions to address transport for the 2006 24-hour PM 2.5 NAAQS, and must include an appropriate technical demonstration.

Comment 3: Two Commenters note that that 110(a)(2) infrastructure SIPs for the 24-hour PM 2.5 NAAQS were due September 21, 2009, but EPA's guidance was not released to the states until September 25, 2009.

Response 3: While EPA's 2009 Guidance regarding the 110(a)(2) infrastructure SIPs for the 2006 24-hour PM 2.5 NAAQS was released on September 25, 2009, this guidance did not establish new requirements beyond those already required by section 110(a)(2)(D)(i)(I) of the CAA. Relevant portions of section 110(a)(2) require, as follows, “Each [implementation plan submitted by a State under this chapter] shall * * * contain adequate provisions—(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard * * * ” States are statutorily obligated to address the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. This above-quoted provision provides States with the requirement.

Comment 4: Two Commenters express concern about communication in the SIP process. The Commenters go on to say that “[e]ven though EPA's guidance was released only a short time later, EPA Region 4 gave absolutely no indication to its co-regulators that there would be a fatal flaw with the submittal.” The commenter further states that, “it wasn't until a year later that states were informed via an e-mail on August 27, 2010, that `All Region 4 states submitted complete infrastructure SIPs for the 2006 PM 2.5 NAAQS, and our intention is to disapprove the 110(a)(2)(D)(i)(I) portion of those unless it is withdrawn by the state.' ”

Response 4: EPA disagrees with the Commenters' assertion that they were initially notified in an August 27, 2010, e-mail about EPA's expectations and concerns with states' submissions reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. As was explained above, Georgia's obligation stems from the CAA. As is EPA's practice, EPA reminded the States on a number of occasions of the interstate transport obligations in 110(a)(2)(D)(i)(I). In addition to the informal reminders (via e-mail and teleconferences, among other avenues), EPA's January 2011 proposal served as a formal, legal notification and provided for a formal opportunity for public comment.

Although EPA reminded states of EPA's expectations and concerns with states' reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS in an August 27, 2010, e-mail, EPA formally notified states of the expectations and concerns in the EPA's 2009 Guidance. Specifically, EPA noted that SIP submissions that relied on CAIR for satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS would be inadequate, as CAIR did not address this NAAQS. EPA's proposed disapproval of the portion of Georgia's October 21, 2009, submission did not occur until January 2011, which was over a year after EPA's notification (through the release of the 2006 PM 2.5 NAAQS Infrastructure Guidance) of any states' deficiency for meeting the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hr PM 2.5 NAAQS had that state relied on CAIR. Thus, Georgia had notification and an opportunity to provide supplemental information between the release of EPA's 2009 Guidance and EPA's proposed disapproval action in January 2011.

Georgia did provide some information in its comment letter on the January 2011 proposal. This information was also provided to EPA as part of Georgia's comments on the proposed Transport Rule. EPA's Transport Rule is expected to address those issues as part of the Federal Implementation Plan included as part of the Transport Rule. However, the information provided in Georgia's comment letter is not adequate to meet the requirements of section 110(a)(2)(D)(i)(I) as a formal SIP submittal.

Comment 5: One Commenter raises concerns with EPA treating its 2009 Guidance as “binding” and suggests that this action is contrary to statements made by EPA in support of EPA and states being “co-regulators.”

Response 5: EPA disagrees with the Commenter's assertion that the proposed disapproval is contrary to EPA treating the states as co-regulators. As was explained earlier, EPA has regular contact with its state co-regulators. With regard to the proposed disapproval action, EPA corresponded with Georgia regarding the October 21, 2009, submittal prior to the proposed disapproval. In the past several months, EPA has corresponded with Georgia on a number of occasions regarding other SIP revisions and EPA's consideration of those revisions—as is EPA's typical practice to support the co-regulator relationship.

Further, EPA notes that the January 26, 2011, proposed disapproval of Georgia's October 21, 2009, submission as it relates to satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS is based on EPA's determination that Georgia did not provide adequate information to demonstrate compliance with the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS for Georgia. No new requirements were introduced in EPA's 2009 Guidance. This guidance simply provided additional clarifications but the CAA requirements existed long before Georgia's September 21, 2009, deadline for a SIP submission. Notably, Georgia's submission was provided after EPA's 2009 Guidance.

Comment 6: One Commenter mentions that “EPA has not stated the amount of reduction they believe is needed to satisfy the transport requirements. Not only is this a situation where EPA moves the finish line (by releasing guidance AFTER the due date), the finish line isn't even knowable (because EPA refuses to inform the states how much reduction is enough to satisfy the requirements). EPA seems to say that it has to be whatever the final Transport Rule says, even though there is no final Transport Rule.”

Response 6: EPA disagrees with this comment. As was explained earlier, the state obligation stems from the CAA itself. As co-regulators, EPA makes efforts to assist states in submitting approvable revisions—and EPA took such action with EPA's 2009 Guidance. States had an opportunity to conduct their own analyses regarding interstate transport. Section 110(a)(2) requires that the state's submission contain adequate provisions prohibiting emissions from the state that contribute significantly to nonattainment of or interfere with maintenance of the NAAQS in any other state. In order to ensure compliance with the CAA's mandate of “adequate” provisions, the state's SIP revision must be supported by an adequate technical analysis, including, but not limited to, information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state and the potentially impacted states, the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling. EPA appreciates that Georgia has initiated the process of such an analysis (which is included in Georgia's comment letter).

Comment 7: One Commenter notes EPA's statement in the January 26, 2011, proposed disapproval where the Agency states: “* * * without an adequate technical analysis EPA does not believe that states can sufficiently address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM2.5 NAAQS.” The Commenter mentions that they, and possibly other states, were precluded from providing the necessary technical analysis by EPA because EPA did not release the guidance until after the SIP submission deadline. Further, the Commenter notes that EPA did not provide specific criteria for the technical analysis in the 2006 PM 2.5 Infrastructure Guidance, and mentions that “[h]ad EPA provided adequate criteria for an approvable SIP in a timely manner, it is likely that [the state] would have been able to submit an approvable SIP by the statutory deadline.” Another Commenter states: “EPA has not provided Georgia and other similarly situated states with a meaningful opportunity to develop the required SIP.” Further, the Commenter mentions that “States cannot possibly be expected to develop approvable SIPs without knowing in advance the standards against which those SIPs will be judged.”

Response 7: EPA does not agree with the Commenter's assertions. As was explained earlier, the SIP submission requirement is identified in the CAA. EPA provided guidance before Georgia submitted its October 21, 2009, SIP revision. In addition, States were alerted that a technical analysis that involved modeling and permanent, enforceable emission reductions could be used to make an adequate demonstration to satisfy the 110(a)(2)(D)(i)(I) requirement for the 1997 PM 2.5 and ozone NAAQS when EPA promulgated CAIR in 2005. Due to the legal status of CAIR, states relying on CAIR as permanent were taking a risk given EPA's proposed Transport Rule and the court decision on CAIR. Further, states were officially informed that the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hour PM 2.5 NAAQS could not be satisfied by reliance on CAIR (since that rule did not consider the 2006 24-hour PM 2.5 NAAQS) when EPA released EPA's 2009 Guidance . The submittal by Georgia relied on CAIR and it did not include a technical analysis—despite EPA's efforts to alert states that mere reliance on CAIR, on its own, would not meet the CAA requirements. EPA appreciates that Georgia's comment letter on the January 2011 proposal did provide additional technical support. As Georgia itself noted, some of the information provided by Georgia on the January 2011 disapproval proposal was also provided to EPA in response to the proposed Transport Rule. As was discussed in an earlier response, the technical information provided is not adequate to meet section 110(a)(2)(D)(i)(I) requirements.

Comment 8: One Commenter mentions that “Georgia learned for the first time in this proposed disapproval that the only thing preventing us from having our SIP approved is an adequate technical analysis.” The Commenter then asserts that “* * * since EPA has not provided a `reasonable deadline' to correct the deficiency, we are including our technical analysis as part of our comments on this proposal.”

Response 8: Consistent with section 110 of the CAA and implementing regulations at 40 CFR part 51, and as a general matter, “adequate technical analyses” are a cornerstone of ensuring that SIP revisions are approvable. EPA has addressed the timing of information in previous comments, but to underscore that point, EPA alerted states formally upon the release of the 2006 PM 2.5 NAAQS Infrastructure Guidance that CAIR could not be used to meet the 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. Georgia acknowledges as such in the October 21, 2009, infrastructure submission. With regard to the latter point in the comment and the technical analysis, see Response 7, above. In addition, there are formal SIP revision requirements described in 40 CFR part 51, subpart F. EPA does not agree that Georgia's comments on the January 2011 disapproval proposal may be considered a “SIP revision;” nonetheless, EPA did review the comments as was described in Response 7, above. Further information regarding the path forward following today's action is described below.

Upon disapproval of Georgia's submittal, EPA has a legal obligation, pursuant to the Act, to promulgate a FIP. Section 110(a)(1) of the Act requires states to submit SIPs that meet certain requirements within three years of promulgation of a NAAQS. These SIPs are required to contain, among other things, adequate provisions “prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Section 110(a)(1) gives the Administrator authority to prescribe a period shorter than three years for the states to adopt and submit such SIPs, but does not give the Administrator authority to lengthen the time allowed for submission.

Section 110(c)(1) of the Act, in turn, requires EPA to promulgate FIPs if EPA has found that the state has failed to make a required submission or if EPA has disapproved a state submission our found it to be incomplete. Specifically, section 110(c)(1) requires EPA to promulgate a FIP within two years after the Administrator “(A) finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section or (B) disapproves a state implementation plan submission in whole or in part.” The Act uses mandatory language, finding that EPA shall promulgate a FIPs at any time within 2 years after the actions identified 110(c)(1)(A) or 110(c)(1)(B) have occurred. EPA's legal obligation to promulgate FIPs arises when those actions occur without regard to the underlying reason for the underlying state SIP deficiency. The obligation to promulgate a FIP must be discharged by EPA unless two conditions are met: (1) The state corrects the deficiency; and (2) the Administrator approves the plan or plan revision, before the Administrator promulgates the FIP.

Under this statutory scheme, EPA has authority and an obligation to promulgate a FIP to correct a SIP deficiency if the actions identified in section 110(c)(1)(A) or (B) have been taken, and the two conditions identified in 110(c)(1) have not been met. The question of whether EPA has authority to promulgate any particular FIP, therefore, must be considered on a state specific basis.

EPA disagrees with the Commenter's suggestion that the rule is inconsistent with the CAA because it does not give states time to develop, submit and receive EPA approval of SIPs before the FIP goes into effect. Section 110(a)(2) calls on states to submit SIPs that contain adequate provisions prohibiting the emissions proscribed by section 110(a)(2)(D)(i)(I). However, when EPA has not received such SIP submission or has disapproved a SIP submission, it has an obligation created by section 110(c)(1) to promulgate a FIP that meets the requirements of section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to adjust the deadlines established in the Act in order to give states additional time, after promulgation of the Transport Rule, to submit SIPs that comply with section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to alter the statutory requirement that it promulgate FIPs within two years of making a finding of failure to submit. EPA sought to discharge this duty with respect to the states covered by CAIR for the PM 2.5 NAAQS by promulgating CAIR; however, the Court found that rule unlawful and not sufficiently related to the statutory mandate of section 110(a)(2)(D)(i)(I). For this reason, EPA does not believe it could argue that the CAIR FIPs completely discharged its duty to promulgate FIPs with respect to the states whose section 110(a)(2)(D)(i)(I) SIPs are disapproved.

EPA is following the SIP process established in the statute. The 110(a) SIPs for the 2006 PM 2.5 standard were due in 2009. In each case, states were given the full 3 years to meet the requirement. The Transport Rule provides the FIP to fulfill the requirement that was unmet by the states through SIPs. EPA is required to promulgate a FIP within 2 years of a state's failure to have an approved SIP. States were in fact given the first chance to fulfill the requirement of Section 100(a)(2)(D)(i)(I). EPA's action is subsequent to the State's opportunity to first fulfill the requirement.

EPA has made every attempt to smooth the transition between the requirements of CAIR and those of the forthcoming Transport Rule. For future requirements, EPA will also make every effort to address transition issues. However, EPA cannot ignore its statutory obligations and therefore cannot ensure that no new requirements will be placed on the sources being regulated by this action. Every time a NAAQS is revised, there is a statutory obligation for states to submit SIPs to address certain CAA requirements. If states fail to meet the deadlines or submit incomplete or inadequate SIPs, EPA must act to ensure that the requirements are put into place.

Even though EPA is issuing a FIP, the State still has the opportunity to submit a SIP that can tailor requirements to the specific needs and concerns of the State in order to meet the applicable state budgets. Prior to this action, states had ample time under the provisions of the CAA to develop and submit approvable SIPs and did not. No state affected by the Transport Rule has submitted a SIP to replace the emission reductions that were required by CAIR, despite the North Carolina opinion issued in December 2008 that clearly said CAIR did not adequately address 110(a)(2)(D)(i)(I). While the remand left CAIR in place and states and sources were required to continue to comply with it, states had the opportunity to develop replacement measures to ensure that 110(a)(2)(D)(i)(I) components of their SIPs would continue to be fulfilled in the future.

Comment 9: Three Commenters express concerns about EPA's proposed disapproval and indicate that EPA had an obligation to use section 110(k)(5) of the CAA. One Commenter states: “EPA continues to be resistant to exploring a legislative approach to fixing some of the SIP issues, yet the correct process under the existing Clean Air Act to appropriately address this issue is not being used.” The Commenter goes on to state: “Section 110(k) requires that when EPA finds a plan to be inadequate, EPA shall (1) require the state to revise the plan, (2) notify the state of the inadequacy, and (3) may establish reasonable deadlines not to exceed 18 months.” Additionally, the Commenter mentions that in their opinion, “The proposed disapproval completely ignores #1 and #3 and only partially satisfies #2. Regarding #2, the EPA proposal simply states EPA's position that the SIP is inadequate, but fails to notify us `of the inadequacy.' ” The Commenter asserts that “* * * EPA still has failed to provide any specificity on what is required of a state to submit an approvable SIP,” and mentions that “These Clean Air Act requirements are not discretionary, and that `EPA must comply with the provisions of Section 110(k)(5) by providing a reasonable period of time to allow [the state] to satisfy the inadequacy and sufficient and timely instructions on what is required to revise the plan instead of relying on a theoretical FIP as the sole remedy.' ” The Commenter concludes by stating that “EPA may not take final action on this proposal until it complies with Section 110(k)(5) of the Clean Air Act.” Another Commenter states “[s]ection 110(k)(5) requires EPA to notify the State of the inadequacies and authorizes the Agency to establish reasonable deadlines for the submission of such plan revisions.” That Commenter goes on to conclude that “[t]he proposed disapproval of Georgia's SIP in combination with the proposed FIP violates these requirements.”

Response 9: The issues raised in this comment are also addressed by Response 8, above. To further clarify what is included in Response 8, Georgia's October 21, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS is being disapproved pursuant to sections 110(k)(2) and (3) of the CAA, not section 110(k)(5). Section 110(k)(5) is applicable to SIPs that have been federally-approved, and are subsequently found to be substantially inadequate. This is not the case for Georgia's October 21, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS. The October 21, 2009, submission was provided to EPA for a new requirement that was triggered by the promulgation of the 24-hour PM 2.5 NAAQS in 2006. EPA is required under section 110(k)(3) to act upon a state submittal with an approval or disapproval, within the time period designated under section 110(k)(2). With this action, EPA is disapproving Georgia's October 21, 2009, submission relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that the Georgia SIP does not satisfy these requirements for the 2006 PM 2.5 NAAQS. Georgia's submission is inadequate for its failure to meet the statutory requirements of 110(a)(2)(D)(i)(I) as noted above. The State can correct the deficiency by submitting a transport SIP that meets the provisions of the final Transport Rule or otherwise eliminates significant contribution and interference with maintenance. See Response to Comment 8.

Comment 10: One Commenter expresses concern about EPA's statement in the January 26, 2011, proposed disapprovals regarding the Agency not taking action on some elements of the states' 2006 24-hour PM 2.5 infrastructure submissions, and notes the Agency's statutory timeframe for taking action on SIP submissions. Specifically, the Commenter cites the following statement from EPA's January 26, 2011, proposed rule: “[t]herefore, EPA is proposing to disapprove those provisions which relate to the 110(a)(2)(D)(i)(I) demonstration and to take no action on the remainder of the demonstration at this time.” The Commenter mentions that EPA is “clearly in violation of Clean Air Act Section 110(k)(2)” by not taking action on the remainder of the states' submissions.

Response 10: In this action, EPA is disapproving certain elements of the State's submission related to the requirements under section 110(a)(2)(D)(i)(I). EPA has also determined that these elements are severable from the rest of the submission. Comments on elements that are not being addressed here are not relevant to this action and have no bearing on the appropriateness of this disapproval. As noted herein, EPA intends to act on those elements in a subsequent action.

Comment 11: One Commenter indicates that EPA could use section 110(k)(4) to conditionally approve the states' implementation plans for the transport requirements related to the 2006 24-hour PM 2.5 NAAQS in anticipation of the promulgation of the final Transport Rule, “[a]ssuming EPA adequately addresses modeling and emissions inventory concerns raised during the comment period* * *”

Response 11: EPA does not agree that the use of 110(k)(4) for a conditional approval is appropriate in this circumstance. Conditional approvals may be used to approve a plan revision based on a written commitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision. If the State does not adopt specific enforceable measures within a year, the conditional approval automatically converts to a disapproval. The forthcoming Transport Rule is an action that is being promulgated from EPA and not the State, so it is unclear what “condition” the State would be responsible for satisfying by relying on the final promulgation of the Transport Rule. Further, as the Commenter implies, use of 110(k)(4) is optional.

Comment 12: One Commenter states: “EPA's disapproval of SIPs is part of a larger effort by EPA to bypass the states in addressing interstate transport under the 1997 ozone and annual PM 2.5 standards and the 2006 24-hour PM 2.5 standard.” The Commenter goes on to state that “[i]n EPA's proposed Transport Rule and in the proposed disapproval of the interstate transport portions of states' 24-hour PM 2.5 infrastructure SIPs, EPA is usurping states' rights to address air quality issues within their borders.”

Response 12: EPA disagrees with this comment. The forthcoming Transport Rule will help to protect downwind states from adverse impacts of emissions from upwind states. Otherwise, the remedy for such downwind states would be to individually petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(D)(ii). Further, the October 21, 2009, SIP revision submitted by Georgia was not adequate to meet the requirements of section 110(a)(2)(D)(i)(I). (Similar issues are also discussed in Response 8, above.)

Comment 13: One Commenter mentions that “[g]iven the role reserved to states by Congress, EPA must afford the states a meaningful opportunity to develop SIPs before EPA issues a federal implementation plan (FIP).”

Response 13: EPA disagrees with the Commenter's assertion that the State did not have meaningful opportunity to develop a SIP revision (i.e., in this case, to meet the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS). To the contrary, states had three years from the time the 2006 24-hour PM 2.5 NAAQS were promulgated to develop a SIP revision to meet the 110(a)(2)(D)(i)(I) requirements for this NAAQS. Specifically, the 2006 24-hour PM 2.5 NAAQS was promulgated on September 21, 2006, and thus submissions to address the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS were due from the states on September 21, 2009. EPA released its guidance in September 2009 and did not propose disapproval of the Georgia's October 21, 2009, SIP revision until January 26, 2011, which was more than a year after the State was formally made aware that the State could not rely on CAIR to meet the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. See also Response to comment 8.

Comment 14: One Commenter states: “[w]hile the courts have recognized that EPA has a role to play in resolving interstate transport issues, the Agency has no `roving commission' to effectively leapfrog over the SIP process and impose its own choices on states and regulated parties.” The Commenter indicates that EPA is circumventing the SIP process with the proposed disapproval action, and cites Michigan v. EPA, 268 F.3d 1075, 1084 (DC Cir. 2001) for support of its proposition. Specifically, the Commenter mentions “EPA's disapproval of Georgia's SIP combined with the impending FIP usurps the role of the states in the federal-state partnership.” Further, the Commenter states “[t]he proposed disapproval and the proposed transport rule both suggest that EPA intends to supplant the SIP process with its own Transport Rule FIP this year.”

Response 14: First, EPA disagrees with the Commenter's suggestion that the proposed disapproval action for the portion of Georgia's October 21, 2009, SIP revision and the Agency's option to put the forthcoming Transport Rule in place as a FIP is circumventing the SIP process. As noted in previous responses in this rulemaking (such as Response 8 and 13), states had three years from the date of promulgation of the 2006 24-hour PM 2.5 NAAQS to develop an adequate submission to meet the requirements of section 110(a)(2)(D)(i)(I) for this NAAQS. Specifically, the 2006 24-hour PM 2.5 NAAQS were promulgated on September 21, 2006, and thus submissions to address the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS were due from the states on September 21, 2009. While EPA did not release the 2006 PM 2.5 NAAQS Infrastructure Guidance until September 25, 2009, EPA also did not propose disapproval of the Georgia's October 21, 2009, SIP revision until January 26, 2011, which was more than a year after the State was formally made aware that the State could not rely on CAIR to meet the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. EPA notes that CAIR was not intended to meet the transport requirements for the 2006 24-hour PM 2.5 NAAQS. As was discussed at length in Response 8 above, EPA's process with regard to today's disapproval and the forthcoming Transport Rule follow clear processes described in the CAA. EPA appreciates that commenter would have preferred that another approach be utilized; however, EPA's action today followed an established process for such actions. Lastly, the Michigan v. EPA case cited to by the commenter simply does not apply to the current action. That case involved EPA's implementation of a permitting program (not a SIP action) where there were complicating questions of Indian Law and jurisdiction. In today's action, EPA is acting consistent with the procedures set forth in the CAA, as was described in detail in Response 8.

Comment 15: Two Commenters mention innovative air pollution control strategies that states have implemented to reduce emissions, and seem to indicate that the adoption of those strategies, in-and-of itself, complies with the interstate transport provisions of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters opine that state laws and rules have resulted in enormous reductions of pollutants that are key pollutants to interstate transport.

Response 15: EPA agrees that states have implemented innovative air pollution control strategies that have provided significant reductions in emissions, and the Agency commends states for their efforts. However, today's action relates to whether Georgia has provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Georgia. It is EPA's final determination that Georgia's October 21, 2009, submission (as well as the technical analysis provided in the public comments) do not provide an adequate technical analysis and emissions reductions for this determination and thus EPA is disapproving the portion of Georgia's October 21, 2009, submission as it relates to the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Georgia.

Comment 16: One Commenter expresses concern regarding EPA's statement in the January 26, 2011, proposed disapproval regarding the modeling used to support the proposed Transport Rule, and the findings in relation to whether states significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. The Commenter states that “based on 2007-2009 monitoring data, all of these areas are currently meeting the 2006 24-hour PM 2.5 NAAQS” and expresses concern that EPA did not note the area's status with regard to the 2006 24-hour PM 2.5 NAAQS in the proposal. The Commenter goes on to say “we noted in our official comments on the proposed Transport Rule, EPA had numerous errors in the modeling inputs and failed to ensure that the model performance was acceptable. This may explain the disparity between EPA's modeling results and the real world monitors.”

Response 16: Today's action relates to whether the State provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for Georgia, and is not based on the attainment status of Georgia areas. Georgia did not provide adequate technical analysis to EPA to demonstrate compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. With regard to the Commenter's concern about the forthcoming Transport Rule, EPA notes that the Agency received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

Comment 17: All Commenters assert that EPA's proposed finding of significant contribution for the proposed Transport Rule is based on an inaccurate emissions inventory, fails to take into account all of the reductions required by the state rules already in effect, and contains numerous other errors that only compound these problems.

Response 17: EPA received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

EPA is taking final action to disapprove the portion of Georgia's October 21, 2009, submission, relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that Georgia's SIP does not satisfy the requirements for the 2006 24-hour PM 2.5 NAAQS. Although EPA is taking final action to disapprove the portion of Georgia's October 21, 2009, submission relating to section 110(a)(2)(D)(i)(I), EPA acknowledges the State's efforts to address this requirement in its October 21, 2009, submission. Unfortunately, the submittal relies on CAIR and without an adequate technical analysis EPA does not believe that states can adequately address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. The purpose of the Transport Rule that EPA is developing and has proposed is to respond to the remand of CAIR by the Court and address the section 110(a)(2)(D)(i)(I) requirements for the 2006 PM 2.5 NAAQS for the affected states. In today's action, EPA is not taking any disapproval action on the remaining elements of the submission, including other section 110(a)(2) infrastructure elements, and specifically the section 110(a)(2)(D)(i)(II) portion regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility but instead will act on those provisions in a separate rulemaking.

Under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C.A. section 7501-7515) or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP call) starts a sanctions clock. Section 110(a)(2)(D)(i)(I) provisions (the provisions being disapproved in today's notice) were not submitted to meet requirements for Part D, and therefore, no sanctions will be triggered. This final action triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the State corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP. The proposed Transport Rule, when final, is the FIP that EPA intends to implement to satisfy the 110(a)(2)(D)(i)(I) requirement for Georgia for the 2006 PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. , because this SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain state requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The RFA generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new requirements but simply disapproves certain state requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences (e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities. EPA continues to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under state or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this proposed action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely proposes to disapprove certain state requirements for inclusion into the SIP under section 110 and subchapter I, part D of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Upon promulgation of a new or revised NAAQS, sections 110(a)(1) and (2) of the CAA require states to address basic SIP requirements, including emissions inventories, monitoring, and modeling to assure attainment and maintenance for that NAAQS. On December 18, 2006, EPA revised the 24-hour average PM 2.5 primary and secondary NAAQS from 65 micrograms per cubic meter (μg/m 3 ) to 35 μg/m 3 , thus states were required to provide submissions to address section 110(a)(1) and (2) of the CAA (infrastructure SIPs) for this revised NAAQS. North Carolina provided its infrastructure submission for the 2006 PM 2.5 NAAQS on September 21, 2009. On January 26, 2011, EPA proposed to disapprove the portion of North Carolina's September 21, 2009, infrastructure submission related to interstate transport (i.e., 110(a)(2)(D)(i)(I)) for the 2006 PM 2.5 NAAQS. See 76 FR 4592. A summary of the background for this final action is provided below.

Section 110(a)(2) lists the elements that infrastructure SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions. States were required to provide submissions to address the applicable 110(a)(2) infrastructure requirements, including section 110(a)(2)(D)(i), by September 21, 2009. 1

On September 25, 2009, EPA issued a guidance entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (herein after referred to as “EPA's 2009 Guidance”). EPA developed the EPA's 2009 Guidance to make additional recommendations to states for making submissions to meet the requirements of section 110, including 110(a)(2)(D)(i) for the revised 2006 24-hour PM 2.5 NAAQS.

As identified in the EPA's 2009 Guidance, the “good neighbor” provisions in section 110(a)(2)(D)(i) require each state to submit a SIP that prohibits emissions that adversely affect another state in the ways contemplated in the CAA. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. Specifically, the SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other states; (2) interfere with maintenance of the NAAQS in other states; (3) interfere with provisions to prevent significant deterioration of air quality in other states; or (4) interfere with efforts to protect visibility in other states.

In the EPA's 2009 Guidance, EPA explained that submissions from states pertaining to the “significant contribution” and “interfere with maintenance” requirements in section 110(a)(2)(D)(i)(I) must contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA described a number of considerations for states for providing an adequate demonstration to address interstate transport requirements in the EPA's 2009 Guidance. First, EPA noted that the state's submission should explain whether or not emissions from the state contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. Second, EPA recommended the various types of information that could be relevant to support the state's submission, such as information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state, and air quality modeling. Third, EPA explained that states should address the “interfere with maintenance” requirement independently which requires an evaluation of impacts on areas of other states that are meeting the 2006 24-hour PM 2.5 NAAQS, not merely areas designated nonattainment. Lastly, EPA explained that states could not rely on the Clean Air Interstate Rule (CAIR) to comply with CAA section 110(a)(2)(D)(i) requirements for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS. CAIR, promulgated by EPA on May 12, 2005 ( See 70 FR 25162), required states to reduce emissions of sulfur dioxide and nitrogen oxides that significantly contribute to, and interfere with maintenance of the 1997 PM 2.5 NAAQS and/or ozone in any downwind state. CAIR was intended to provide states covered by the rule with a mechanism to satisfy their CAA section 110(a)(2)(D)(i)(I) obligations to address significant contribution to downwind nonattainment and interference with maintenance in another state with respect to the 1997 ozone and PM 2.5 NAAQS. Many states adopted the CAIR provisions and submitted SIPs to EPA to demonstrate compliance with the CAIR requirements in satisfaction of their 110(a)(2)(D)(i)(I) obligations for those two pollutants.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit or Court) issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Circuit, July 11, 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Circuit, December 23, 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id.

In order to address the judicial remand of CAIR, EPA has proposed a new rule to address interstate transport pursuant to section 110(a)(2)(D)(i), the “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone” (Transport Rule). 2 As part of the proposed Transport Rule, EPA specifically examined the section 110(a)(2)(D)(i) requirements that emissions from sources in a state must not “significantly contribute to nonattainment” and “interfere with maintenance” of the 2006 24-hour PM 2.5 NAAQS by other states. The modeling performed for the proposed Transport Rule shows that North Carolina significantly contributes to nonattainment or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents for this action, North Carolina in fact contributes to downwind nonattainment in another state or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

On September 21, 2009, the State of North Carolina, through NC DENR, provided a letter to EPA certifying that the North Carolina SIP meets the interstate transport requirements with regard to the 2006 24-hour PM 2.5 NAAQS. 3 Specifically, North Carolina certified that its current SIP adequately addresses the elements of CAA section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. CAA section 110(a)(2)(D)(i)(I) requires that implementation plans for each state contain adequate provisions to prohibit air pollutant emissions from sources within a state from significantly contributing to nonattainment in or interfering with maintenance of the NAAQS (in this case the 2006 24-hour PM 2.5 NAAQS) in any other state. On January 26, 2011, EPA proposed to disapprove the portion of North Carolina's September 21, 2009, submission related to interstate transport for the 2006 24-hour PM 2.5 NAAQS because EPA made the preliminary determination that North Carolina's September 21, 2009, submission does not meet the requirements of section 110(a)(2)(D)(i)(I) of the CAA for this NAAQS. This action is finalizing EPA's disapproval of North Carolina's September 21, 2009, submission with regard to section 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. See EPA's January 26, 2011, proposed disapproval rulemaking at 76 FR 4592 for further information on EPA's rationale for this final action.

EPA received two sets of adverse comments on the January 26, 2011, proposed rulemaking to disapprove the portion of North Carolina's September 21, 2009, infrastructure submission on the interstate transport requirements of sections 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. A full set of the comments provided by NC DENR and the Georgia Environmental Protection Division (hereinafter referred to as “the Commenters”) are provided in the docket for this final action. As a general matter, the comments overlapped on some issues, and as a result, EPA has organized the response to comments by issue. In addition, EPA acknowledges Georgia's comments regarding SIP processing in general. As Georgia is aware, EPA is considering improvements to the SIP process and appreciates Georgia's comments in that regard.

For the most part, the Commenters oppose EPA's proposed disapproval action for the interstate portion of North Carolina's September 21, 2009, infrastructure submission for the 2006 24-hour PM 2.5 NAAQS. The comments fall generally into the following categories: (1) States' inability to rely on CAIR to satisfy the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS; (2) apparent lack of guidance from EPA on how states should meet the requirements; (3) concerns regarding the procedure of taking action to disapprove North Carolina's submittal; (4) acknowledgement of states' efforts and air quality conditions; and (5) concerns related to the Transport Rule. A summary of the comments and EPA's responses are provided below.

Comment 1: The Commenters express concern with EPA's proposed disapproval and assert that states should be able to rely on CAIR to address the transport requirements in section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters explain that the Court left CAIR in place and opine that states should be able to rely on emissions reductions from CAIR to address transport. One Commenter also mentions that “[t]he Court did not impose a schedule on EPA for completing the Transport Rule; therefore, states have no assurances that EPA will ever replace the CAIR rule. Since there is no guarantee that the Transport Rule will be promulgated in a timely manner, states cannot rely on the reductions in the proposed Transport Rule and must rely on the CAIR reductions, which are permanent and enforceable.”

Response 1: As discussed in EPA's 2009 Guidance, states cannot rely on the CAIR rule for the submission for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS, and was never intended to address this NAAQS. CAIR was originally put in place to address the 1997 8-hour ozone and PM 2.5 NAAQS. In order to adequately address the requirements of section 110(a)(2)(D)(i)(I), states can only rely on permanent emission reductions to address transport for the 2006 24-hour PM 2.5 NAAQS, and must include an appropriate technical demonstration.

Comment 2: Both Commenters note that that 110(a)(2) infrastructure SIPs for the 24-hour PM 2.5 NAAQS were due September 21, 2009, but EPA's guidance was not released to the states until September 25, 2009.

Response 2: While EPA's 2009 Guidance regarding the 110(a)(2) infrastructure SIPs for the 2006 24-hour PM 2.5 NAAQS was released on September 25, 2009, this guidance did not establish new requirements beyond those already required by section 110(a)(2)(D)(i)(I) of the CAA. Relevant portions of section 110(a)(2) require, as follows, “Each [implementation plan submitted by a State under this chapter] shall * * * contain adequate provisions—(i) prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will—contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard * * *” States are statutorily obligated to address the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. This above-quoted provision provides States with the requirement.

Comment 3: The Commenters express concern about communication in the SIP process. The Commenters go on to say that “[e]ven though EPA's guidance was released only a short time later, EPA Region 4 gave absolutely no indication to its co-regulators that there would be a fatal flaw with the submittal.” The commenter further states that, “it wasn't until a year later that states were informed via an e-mail on August 27, 2010, that ‘All Region 4 states submitted complete infrastructure SIPs for the 2006 PM 2.5 NAAQS, and our intention is to disapprove the 110(a)(2)(D)(i)(I) portion of those unless it is withdrawn by the state.’ ”

Response 3: EPA disagrees with the Commenters' assertion that they were initially notified in an August 27, 2010, e-mail about EPA's expectations and concerns with states' submissions reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. As was explained above, North Carolina's obligation stems from the CAA. As is EPA's practice, EPA reminded the States on a number of occasions of the interstate transport obligations in 110(a)(2)(D)(i)(I). In addition to the informal reminders (via e-mail and teleconferences, among other avenues), EPA's January 2011 proposal served as a formal, legal notification and provided for a formal opportunity for public comment.

Although EPA reminded states of EPA's expectations and concerns with states' reliance on CAIR to meet the requirements for section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS in an August 27, 2010, e-mail, EPA formally notified states of the expectations and concerns in the EPA's 2009 Guidance. Specifically, EPA noted that SIP submissions that relied on CAIR for satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS would be inadequate, as CAIR did not address this NAAQS. EPA's proposed disapproval of the portion of North Carolina's September 21, 2009, submission did not occur until January 2011, which was over a year after EPA's notification (through the release of the EPA's 2009 Guidance) of any states' deficiency for meeting the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hr PM 2.5 NAAQS had that state relied on CAIR. Thus, North Carolina had notification and an opportunity to provide supplemental information between the release of EPA's 2009 Guidance and EPA's proposed disapproval action in January 2011.

Comment 4: One Commenter raises concerns with EPA treating its 2009 Guidance as “binding” and suggests that this action is contrary to statements made by EPA in support of EPA and states being “co-regulators.”

Response 4: EPA disagrees with the Commenter's assertion that the proposed disapproval is contrary to EPA treating the states as co-regulators. As was explained earlier, EPA has regular contact with its state co-regulators. With regard to the proposed disapproval action, EPA corresponded with North Carolina regarding the September 21, 2009, submittal prior to the proposed disapproval. In the past several months, EPA has corresponded with North Carolina on a number of occasions regarding other SIP revisions and EPA's consideration of those revisions—as is EPA's typical practice to support the co-regulator relationship.

Further, EPA notes that the January 26, 2011, proposed disapproval of North Carolina's September 21, 2009, submission as it relates to satisfying the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS is based on EPA's determination that North Carolina did not provide adequate information to demonstrate compliance with the requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS for North Carolina. No new requirements were introduced in EPA's 2009 Guidance. This guidance simply provided additional clarifications but the CAA requirements existed long before North Carolina's September 21, 2009, deadline for a SIP submission.

Comment 5: One Commenter mentions that “EPA has not stated the amount of reduction they believe is needed to satisfy the transport requirements. Not only is this a situation where EPA moves the finish line (by releasing guidance AFTER the due date), the finish line isn't even knowable (because EPA refuses to inform the states how much reduction is enough to satisfy the requirements). EPA seems to say that it has to be whatever the final Transport Rule says, even though there is no final Transport Rule.”

Response 5: EPA disagrees with this comment. As was explained earlier, the state obligation stems from the CAA itself. As co-regulators, EPA makes efforts to assist states in submitting approvable revisions—and EPA took such action with EPA's 2009 Guidance. States had an opportunity to conduct their own analyses regarding interstate transport. Section 110(a)(2) requires that the state's submission contain adequate provisions prohibiting emissions from the state that contribute significantly to nonattainment of or interfere with maintenance of the NAAQS in any other state. In order to ensure compliance with the CAA's mandate of “adequate” provisions, the state's SIP revision must be supported by an adequate technical analysis, including, but not limited to, information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state and the potentially impacted states, the distance to the nearest area that is not attaining the NAAQS in another state, and air quality modeling. EPA appreciates that North Carolina has initiated the process of such an analysis (which is included in North Carolina's comment letter).

Comment 6: One Commenter notes EPA's statement in the January 26, 2011, proposed disapproval where the Agency states: “* * * without an adequate technical analysis EPA does not believe that states can sufficiently address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS.” The Commenter mentions that they, and possibly other states, were precluded from providing the necessary technical analysis by EPA because EPA did not release the guidance until after the SIP submission deadline. Further, the Commenter notes that EPA did not provide specific criteria for the technical analysis in the EPA's 2009 Guidance, and mentions that “[h]ad EPA provided adequate criteria for an approvable SIP in a timely manner, it is likely that [the state] would have been able to submit an approvable SIP by the statutory deadline.” The Commenter included a technical analysis as part of their comments on the proposal.

Response 6: EPA does not agree with the Commenter's assertions. As was explained earlier, the SIP submission requirement is identified in the CAA. In addition, States were alerted that a technical analysis that involved modeling and permanent, enforceable emission reductions could be used to make an adequate demonstration to satisfy the 110(a)(2)(D)(i)(I) requirement for the 1997 PM 2.5 and ozone NAAQS when EPA promulgated CAIR in 2005. Due to the legal status of CAIR, states relying on CAIR as permanent were taking a risk given EPA's proposed Transport Rule and the court decision on CAIR. Further, states were officially informed that the 110(a)(2)(D)(i)(I) requirement for the 2006 24-hour PM 2.5 NAAQS could not be satisfied by reliance on CAIR (since that rule did not consider the 2006 24-hour PM 2.5 NAAQS) when EPA released EPA's 2009 Guidance. The submittal by North Carolina relied on CAIR and it did not include an adequate technical analysis—despite EPA's efforts to alert states that mere reliance on CAIR, on its own, would not meet the CAA requirements.

Consistent with section 110 of the CAA and implementing regulations at 40 CFR part 51, and as a general matter, “adequate technical analyses” are a cornerstone of ensuring that SIP revisions are approvable. EPA has addressed the timing of information in previous comments, but to underscore that point, EPA alerted states formally upon the release of the EPA's 2009 Guidance that CAIR could not be used to meet the 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. In addition, there are formal SIP revision requirements described in 40 CFR part 51, subpart F. EPA does not agree that North Carolina's comments on the January 2011 disapproval proposal may be considered a “SIP revision;” nonetheless, EPA did review the comments as was described above. Further information regarding the path forward following today's action is described below.

Upon disapproval of North Carolina's submittal, EPA has a legal obligation, pursuant to the Act, to promulgate a FIP. Section 110(a)(1) of the Act requires states to submit SIPs that meet certain requirements within three years of promulgation of a NAAQS. These SIPs are required to contain, among other things, adequate provisions “prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Section 110(a)(1) gives the Administrator authority to prescribe a period shorter than three years for the states to adopt and submit such SIPs, but does not give the Administrator authority to lengthen the time allowed for submission.

Section 110(c)(1) of the Act, in turn, requires EPA to promulgate FIPs if EPA has found that the state has failed to make a required submission or if EPA has disapproved a state submission our found it to be incomplete. Specifically, section 110(c)(1) requires EPA to promulgate a FIP within two years after the Administrator “(A) finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section or (B) disapproves a state implementation plan submission in whole or in part.” The Act uses mandatory language, finding that EPA shall promulgate a FIPs at any time within 2 years after the actions identified 110(c)(1)(A) or 110(c)(1)(B) have occurred. EPA's legal obligation to promulgate FIPs arises when those actions occur without regard to the underlying reason for the underlying state SIP deficiency. The obligation to promulgate a FIP must be discharged by EPA unless two conditions are met: (1) The state corrects the deficiency; and (2) the Administrator approves the plan or plan revision, before the Administrator promulgates the FIP.

Under this statutory scheme, EPA has authority and an obligation to promulgate a FIP to correct a SIP deficiency if the actions identified in section 110(c)(1)(A) or (B) have been taken, and the two conditions identified in 110(c)(1) have not been met. The question of whether EPA has authority to promulgate any particular FIP, therefore, must be considered on a state specific basis.

EPA disagrees with the Commenter's suggestion that the rule is inconsistent with the CAA because it does not give states time to develop, submit and receive EPA approval of SIPs before the FIP goes into effect. Section 110(a)(2) calls on states to submit SIPs that contain adequate provisions prohibiting the emissions proscribed by section 110(a)(2)(D)(i)(I). However, when EPA has not received such SIP submission or has disapproved a SIP submission, it has an obligation created by section 110(c)(1) to promulgate a FIP that meets the requirements of section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to adjust the deadlines established in the Act in order to give states additional time, after promulgation of the Transport Rule, to submit SIPs that comply with section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to alter the statutory requirement that it promulgate FIPs within two years of making a finding of failure to submit. EPA sought to discharge this duty with respect to the states covered by CAIR for the PM 2.5 NAAQS by promulgating CAIR; however, the Court found that rule unlawful and not sufficiently related to the statutory mandate of section 110(a)(2)(D)(i)(I). For this reason, EPA does not believe it could argue that the CAIR FIPs completely discharged its duty to promulgate FIPs with respect to the states whose section 110(a)(2)(D)(i)(I) SIPs are disapproved.

EPA is following the SIP process established in the statute. The 110(a) SIPs for the 2006 PM 2.5 standard were due in 2009. In each case, states were given the full 3 years to meet the requirement. The Transport Rule provides the FIP to fulfill the requirement that was unmet by the states through SIPs. EPA is required to promulgate a FIP within 2 years of a state's failure to have an approved SIP. States were in fact given the first chance to fulfill the requirement of Section 100(a)(2)(D)(i)(I). EPA's action is subsequent to the State's opportunity to first fulfill the requirement.

EPA has made every attempt to smooth the transition between the requirements of CAIR and those of the forthcoming Transport Rule. For future requirements, EPA will also make every effort to address transition issues. However, EPA cannot ignore its statutory obligations and therefore cannot ensure that no new requirements will be placed on the sources being regulated by this action. Every time a NAAQS is revised, there is a statutory obligation for states to submit SIPs to address certain CAA requirements. If states fail to meet the deadlines or submit incomplete or inadequate SIPs, EPA must act to ensure that the requirements are put into place.

Even though EPA is issuing a FIP, the State still has the opportunity to submit a SIP that can tailor requirements to the specific needs and concerns of the State in order to meet the applicable state budgets. Prior to this action, states had ample time under the provisions of the CAA to develop and submit approvable SIPs and did not. No state affected by the Transport Rule has submitted a SIP to replace the emission reductions that were required by CAIR, despite the North Carolina opinion issued in December 2008 that clearly said CAIR did not adequately address 110(a)(2)(D)(i)(I). While the remand left CAIR in place and states and sources were required to continue to comply with it, states had the opportunity to develop replacement measures to ensure that 110(a)(2)(D)(i)(I) components of their SIPs would continue to be fulfilled in the future.

Comment 7: Two Commenters express concerns about EPA's proposed disapproval and indicate that EPA had an obligation to use section 110(k)(5) of the CAA. One Commenter states: “EPA continues to be resistant to exploring a legislative approach to fixing some of the SIP issues, yet the correct process under the existing Clean Air Act to appropriately address this issue is not being used.” The Commenter goes on to state: “Section 110(k) requires that when EPA finds a plan to be inadequate, EPA shall (1) require the state to revise the plan, (2) notify the state of the inadequacy, and (3) may establish reasonable deadlines not to exceed 18 months.” Additionally, the Commenter mentions that in their opinion, “The proposed disapproval completely ignores #1 and #3 and only partially satisfies #2. Regarding #2, the EPA proposal simply states EPA's position that the SIP is inadequate, but fails to notify us ‘of the inadequacy.’ ” The Commenter asserts that “* * * EPA still has failed to provide any specificity on what is required of a state to submit an approvable SIP,” and mentions that “These Clean Air Act requirements are not discretionary, and that ‘EPA must comply with the provisions of Section 110(k)(5) by providing a reasonable period of time to allow [the state] to satisfy the inadequacy and sufficient and timely instructions on what is required to revise the plan instead of relying on a theoretical FIP as the sole remedy.’ ” The Commenter concludes by stating that “EPA may not take final action on this proposal until it complies with Section 110(k)(5) of the Clean Air Act.”

Response 7: The issues raised in this comment are also addressed by Response 6, above. To further clarify what is included in Response 6, North Carolina's September 21, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS is being disapproved pursuant to sections 110(k)(2) and (3) of the CAA, not section 110(k)(5). Section 110(k)(5) is applicable to SIPs that have been federally-approved, and are subsequently found to be substantially inadequate. This is not the case for North Carolina's September 21, 2009, submission relating to section 110(a)(2)(D)(i)(I) for the 2006 PM 2.5 NAAQS as the September 21, 2009, submission was provided to EPA for a new requirement that was triggered by the promulgation of the 24-hour PM 2.5 NAAQS in 2006. EPA is required under section 110(k)(3) to act upon a state submittal with an approval or disapproval, within the time period designated under section 110(k)(2). With this action, EPA is disapproving North Carolina's September 21, 2009, submission relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that the North Carolina SIP does not satisfy these requirements for the 2006 PM 2.5 NAAQS. North Carolina's submission is inadequate for its failure to meet the statutory requirements of 110(a)(2)(D)(i)(I) as noted above. The State can correct the deficiency by submitting a transport SIP that meets the provisions of the forthcoming Transport Rule or otherwise eliminates significant contribution and interference with maintenance. See Response to Comment 6.

Comment 8: One Commenter expresses concern about EPA's statement in the January 26, 2011, proposed disapprovals regarding the Agency not taking action on some elements of the states' 2006 24-hour PM 2.5 infrastructure submissions, and notes the Agency's statutory timeframe for taking action on SIP submissions. Specifically, the Commenter cites the following statement from EPA's January 26, 2011, proposed rule: “[t]herefore, EPA is proposing to disapprove those provisions which relate to the 110(a)(2)(D)(i)(I) demonstration and to take no action on the remainder of the demonstration at this time.” The Commenter mentions that EPA is “clearly in violation of Clean Air Act Section 110(k)(2)” by not taking action on the remainder of the states' submissions.

Response 8: In this action, EPA is disapproving certain elements of the State's submission related to the requirements under section 110(a)(2)(D)(i)(I). EPA has also determined that these elements are severable from the rest of the submission. Comments on elements that are not being addressed here are not relevant to this action. As noted herein, EPA intends to act on those elements in a subsequent action. See Response to Comment 6 for additional information.

Comment 9: One Commenter indicates that EPA could use section 110(k)(4) to conditionally approve the states' implementation plans for the transport requirements related to the 2006 24-hour PM 2.5 NAAQS in anticipation of the promulgation of the final Transport Rule, “[a]ssuming EPA adequately addresses modeling and emissions inventory concerns raised during the comment period * * *”

Response 9: EPA does not agree that the use of 110(k)(4) for a conditional approval is appropriate in this circumstance. Conditional approvals may be used to approve a plan revision based on a written commitment of the State to adopt specific enforceable measures by a date certain, but not later than 1 year after the date of approval of the plan revision. If the State does not adopt specific enforceable measures within a year, the conditional approval automatically converts to a disapproval. The forthcoming Transport Rule is an action that is being promulgated from EPA and not the State, so it is unclear what “condition” the State would be responsible for satisfying by relying on the final promulgation of the Transport Rule. Further, as the Commenter implies, use of 110(k)(4) is optional. See Response to Comment 6 for additional information.

Comment 10: Both Commenters mention innovative air pollution control strategies that states have implemented to reduce emissions, and seem to indicate that the adoption of those strategies, in-and-of itself, complies with the interstate transport provisions of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The Commenters opine that state laws and rules have resulted in enormous reductions of pollutants that are key pollutants to interstate transport.

Response 10: EPA agrees that states have implemented innovative air pollution control strategies that have provided significant reductions in emissions, and the Agency commends states for their efforts. However, today's action relates to whether North Carolina has provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for North Carolina. It is EPA's final determination that North Carolina's September 21, 2009, submission does not provide an adequate technical analysis and emissions reductions for this determination and thus EPA is disapproving the portion of North Carolina's September 21, 2009, submission as it relates to the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for North Carolina.

Comment 11: One Commenter expresses concern regarding EPA's statement in the January 26, 2011, proposed disapproval regarding the modeling used to support the proposed Transport Rule, and the findings in relation to whether states significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. The Commenter states that “based on 2007-2009 monitoring data, all of these areas are currently meeting the 2006 24-hour PM 2.5 NAAQS” and expresses concern that EPA did not note the area's status with regard to the 2006 24-hour PM 2.5 NAAQS in the proposal. The Commenter goes on to say “we noted in our official comments on the proposed Transport Rule, EPA had numerous errors in the modeling inputs and failed to ensure that the model performance was acceptable. This may explain the disparity between EPA's modeling results and the real world monitors.”

Response 11: Today's action relates to whether the State provided an adequate technical analysis and emissions reductions to show compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for North Carolina, and is not based on the attainment status of North Carolina areas. North Carolina did not provide an adequate technical analysis to EPA to demonstrate compliance with the 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS. With regard to the Commenter's concern about the forthcoming Transport Rule, EPA notes that the Agency received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

Comment 12: Both Commenters assert that EPA's proposed finding of significant contribution for the proposed Transport Rule is based on an inaccurate emissions inventory, fails to take into account all of the reductions required by the state rules already in effect, and contains numerous other errors that only compound these problems.

Response 12: EPA received numerous comments on the proposed Transport Rule and is considering those comments as it works toward promulgation of a final Transport Rule. All comments on the Transport Rule will be addressed in that context.

EPA is taking final action to disapprove the portion of North Carolina's September 21, 2009, submission, relating to section 110(a)(2)(D)(i)(I), because EPA has made the determination that North Carolina SIP does not satisfy the requirements for the 2006 24-hour PM 2.5 NAAQS. Although EPA is taking final action to disapprove the portion of North Carolina's September 21, 2009, submission relating to section 110(a)(2)(D)(i)(I), EPA acknowledges the State's efforts to address this requirement in its September 21, 2009, submission. Unfortunately, the submittal relies on CAIR and without an adequate technical analysis EPA does not believe that states can adequately address the section 110(a)(2)(D)(i)(I) requirement for the 2006 PM 2.5 NAAQS. The purpose of the Transport Rule that EPA is developing and has proposed is to respond to the remand of CAIR by the Court and address the section 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS for the affected states. In today's action, EPA is not taking any disapproval action on the remaining elements of the submission, including other section 110(a)(2) infrastructure elements, and specifically the section 110(a)(2)(D)(i)(II) portion regarding interference with measures required in the applicable SIP for another state designed to prevent significant deterioration of air quality and protect visibility but instead will act on those provisions in a separate rulemaking.

Under section 179(a) of the CAA, final disapproval of a submittal that addresses a requirement of a Part D Plan (42 U.S.C. sections 7501-7515) or is required in response to a finding of substantial inadequacy as described in section 7410(k)(5) (SIP call) starts a sanctions clock. Section 110(a)(2)(D)(i)(I) provisions (the provisions being disapproved in today's notice) were not submitted to meet requirements for Part D, and therefore, no sanctions will be triggered. This final action triggers the requirement under section 110(c) that EPA promulgate a FIP no later than 2 years from the date of the disapproval unless the State corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP. The proposed Transport Rule, when final, is the FIP that EPA intends to implement to satisfy the 110(a)(2)(D)(i)(I) requirement for North Carolina for the 2006 24-hr PM 2.5 NAAQS.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the Executive Order.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq, because this SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new information collection burdens but simply disapproves certain state requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The RFA generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new requirements but simply disapproves certain state requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the CAA prescribes that various consequences (e.g., higher offset requirements) may or will flow from this disapproval does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities. EPA continues to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. EPA has determined that the disapproval action does not include a federal mandate that may result in estimated costs of $100 million or more to either state, local, or tribal governments in the aggregate, or to the private sector. This action disapproves pre-existing requirements under state or local law, and imposes no new requirements. Accordingly, no additional costs to state, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.”

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain state requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is disapproving would not apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This SIP disapproval under section 110 and subchapter I, part D of the CAA will not in-and-of itself create any new regulations but simply disapproves certain state requirements for inclusion into the SIP.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the NTTAA, Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this proposed action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely proposes to disapprove certain state requirements for inclusion into the SIP under section 110 and subchapter I, part D of the CAA and will not in-and-of itself create any new requirements. Accordingly, it does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

Section 110(a)(1) of the CAA requires states to submit basic or “Infrastructure” SIPs to address a new or revised NAAQS within three years after promulgation of such standards, or within such shorter period as EPA may prescribe. As provided by section 110(k)(2) of the CAA, within twelve months of a determination that a submitted SIP is complete under 110(k)(1) of the CAA, the Administrator shall act on the plan. As authorized in section 110(k)(3) of the CAA, where portions of the state submittals are severable, within that twelve-month period EPA may approve the portions of the submittals that meet the requirements of the CAA, take no action on certain portions of the submittals, and disapprove the portions of the submittals that do not meet the requirements of the CAA. When the deficient provisions are not severable from all of the submitted provisions, EPA must propose disapproval of the submittals, consistent with section 110(k)(3) of the CAA.

Section 110(a)(2) of the CAA lists the elements that such new Infrastructure SIPs must address, as applicable, including section 110(a)(2)(D)(i), which pertains to interstate transport of certain emissions, also known as the CAA “good neighbor” provisions.

On December 18, 2006, EPA revised the 24-hour average PM 2.5 primary and secondary NAAQS from 65 micrograms per cubic meter (µg/m 3 ) to 35 µg/m 3 (see, 71 FR 61144). 1 On September 25, 2009, EPA issued its “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (2009 Guidance). EPA developed the 2009 Guidance for States making submissions to meet the requirements of section 110, including 110(a)(2)(D)(i) for the revised 2006 24-hour PM 2.5 NAAQS.

As identified in the 2009 Guidance, the “good neighbor” provisions in section 110(a)(2)(D)(i) require each state to submit a SIP that prohibits emissions that adversely affect another state in the ways contemplated in the statute. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. The SIP must prevent sources in the state from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other states; (2) interfere with maintenance of the NAAQS in other states; (3) interfere with provisions to prevent significant deterioration of air quality in other states; or (4) interfere with efforts to protect visibility in other states.

In the 2009 Guidance, EPA indicated that SIP submissions from states pertaining to the “significant contribution” and “interfere with maintenance” requirements of section 110(a)(2)(D)(i) should contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA further indicated that the state's submission should explain whether or not emissions from the state have this impact and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. EPA recommended the various types of information that could be relevant to support the state SIP submission, such as information concerning emissions in the state, meteorological conditions in the state and the potentially impacted states, monitored ambient concentrations in the state, and air quality modeling. Furthermore, EPA indicated that states should address the “interfere with maintenance” requirement independently, which requires an evaluation of impacts on areas of other states that are meeting the 2006 24-hour PM 2.5 NAAQS, not merely areas designated nonattainment. Lastly, in the 2009 Guidance, EPA stated that states could not rely on the Clean Air Interstate Rule (CAIR) to comply with the section 110(a)(2)(D)(i) requirements for the 2006 24-hour PM 2.5 NAAQS because CAIR does not address this NAAQS.

EPA promulgated CAIR on May 12, 2005 (see, 70 FR 25162). CAIR required states to reduce emissions of sulfur dioxide and nitrogen oxides that significantly contribute to, and interfere with maintenance of the 1997 NAAQS for PM 2.5 and/or ozone in any downwind state. CAIR was intended to provide states covered by the rule with a mechanism to satisfy their section 110(a)(2)(D)(i)(I) obligations to address significant contribution to downwind nonattainment and interference with maintenance in another state with respect to the 1997 ozone and PM 2.5 NAAQS. Many states adopted the CAIR provisions and submitted SIPs to EPA to demonstrate compliance with the CAIR requirements in satisfaction of their 110(a)(2)(D)(i)(I) obligations for those two pollutants.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Cir. 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008 opinion, but declined to impose a schedule on EPA for completing that action. Id.

In order to address the judicial remand of CAIR, EPA has proposed a new rule to address interstate transport pursuant to section 110(a)(2)(D)(i)(I), the “Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone” (Transport Rule). 2 As part of the proposed Transport Rule, EPA specifically examined the section 110(a)(2)(D)(i)(I) requirement that emissions from sources in a state must not “significantly contribute to nonattainment” and “interfere with maintenance” of the 2006 24-hour PM 2.5 NAAQS by other states. The modeling performed for the final Transport Rule shows that both Indiana and Ohio significantly contribute to nonattainment or interfere with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. 3

IDEM and Ohio EPA made submittals on October 20, 2009, and September 4, 2009, respectively, that were intended to demonstrate satisfaction of all Infrastructure SIP elements for the 2006 24-hour PM 2.5 NAAQS. Both States relied predominantly on their respective EPA-approved CAIR regulations to meet the interstate transport requirements of section 110(a)(2)(D)(i)(I). Indiana further committed to amend its rule once the Federal CAIR is amended or replaced.

The public comment period for EPA's proposal to disapprove the portions of the submittals from Indiana and Ohio addressing the requirements of section 110(a)(2)(D)(i)(I) closed on March 7, 2011. Indiana and Ohio each submitted a comment letter to EPA, and a synopsis of their comments, as well as EPA's response to each comment, is discussed below.

Comment 1: EPA fails to recognize that Indiana was one of a few states that submitted its Infrastructure SIP, and wrongly implies the State was negligent in addressing its CAA requirements. EPA cannot disapprove Indiana's SIP primarily for its reliance on CAIR. There is no way for Indiana or Ohio to cure EPA's failure to have all of the underlying Federal requirements in place for the states to meet the transport provision requirements for section 110(a)(2)(D). Although Indiana understands that the CAIR program cannot be defined as permanent and enforceable for SIP purposes, the Transport Rule is not yet final, and was not proposed until after the Infrastructure SIP deadline. Therefore, Indiana believes its Infrastructure SIP is adequate and contains provisions to address all requirements of Section 110(a)(2)(D). CAIR was the only option states could rely upon at the time the SIPs were due, and Indiana made it clear within its submittal that it would adopt the requirements of the replacement rule for CAIR in a timely manner.

Response 1: EPA recognizes the State's timely efforts in submitting its Infrastructure SIP for the 2006 24-hour PM 2.5 NAAQS. However, as outlined in EPA's proposed action, Indiana's portion of the Infrastructure SIP in addressing section 110(a)(2)(D)(i)(I) is inadequate and must therefore be disapproved.

States were provided with the 2009 Guidance detailing the required elements of an approvable Infrastructure SIP. Specific to the requirements of section 110(a)(2)(D)(i)(I), EPA indicated in the 2009 Guidance that a state's submittal should contain adequate provisions to prohibit air pollutant emissions from within the state that contribute significantly to nonattainment or interfere with maintenance of the NAAQS in any other state. EPA further indicated that the state's submission should explain whether or not emissions from the state have this impact and, if so, address the impact. EPA stated that the state's conclusion should be supported by an adequate technical analysis. IDEM did not provide a technical analysis in its submittal, but instead relied primarily on its approved CAIR regulations to address the requirements of section 110(a)(2)(D)(i)(I) with respect to the 2006 24-hour PM 2.5 NAAQS. In the proposed rulemaking, EPA provided rationale for why other programs already implemented, and cited by Indiana in its October 20, 2009 submittal, e.g., the NO x SIP Call, stack height requirements, and acid deposition control regulations, are not sufficient to meet the requirements of section 110(a)(2)(D)(i)(I).

CAIR was promulgated before the 24-hour PM 2.5 NAAQS were revised in 2006 and does not address interstate transport with respect to the 2006 24-hour PM 2.5 NAAQS. 4 Thus, as EPA's 2009 Guidance explicitly notes, states cannot rely on CAIR to comply with section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. Furthermore, SIPs can only rely on permanent emissions reductions, and because the Transport Rule in its final form will simultaneously replace and “remedy CAIR's flaws,” CAIR will not provide permanent emissions reductions. In conclusion, the portions of Indiana's submittal addressing the requirements of section 110(a)(2)(D)(i)(I) are inadequate, and cannot be approved.

Contrary to Indiana's assertion, CAIR was not the only option states could rely upon at the time Infrastructure SIPs were due. As reflected in the 2009 Guidance, CAIR did not address the 2006 24-hour PM 2.5 NAAQS obligating states under CAA section 110(a)(2)(D)(i)(I) to make the appropriate demonstration. However, the 2009 Guidance did explain the type of technical analysis and justification necessary to make that demonstration. Indiana did not provide any technical analysis or justification in its October 20, 2009 submittal to support any such demonstration.

Comment 2: EPA should provide Indiana the opportunity to revise its Infrastructure SIP once the Transport Rule is completed, especially since there is no court-ordered deadline for EPA to act on this particular SIP submittal.

Response 2: EPA is taking action to disapprove the portions of Indiana's Infrastructure SIP submittal addressing the requirements of section 110(a)(2)(D)(i)(I) under section 110(k)(2) and (3) of the CAA. This section of the CAA requires EPA to approve or disapprove a SIP within 12 months of its completeness determination. Under section 110(k), EPA was required to disapprove or approve Indiana's Infrastructure SIP by April 20, 2011. Indiana has an opportunity to revise and submit a SIP at any time and is invited to do so following final promulgation of the Transport Rule and within the time provided by the CAA.

Comment 3: EPA was not timely in developing the Transport Rule, which states expected to use when addressing the interstate transport requirements of the 2006 24-hour PM 2.5 NAAQS. Therefore, states' Infrastructure SIPs should not be disapproved at this time. Instead, EPA should delay action on the Infrastructure SIPs until states can revise them once the Transport Rule is finalized. EPA also stated that Indiana had failed to provide a modeling analysis. Did EPA expect an analysis from States when States knew that the proposed Transport Rule would adequately address the 2006 24-hour PM 2.5 NAAQS? Why would Indiana, or any other State, do modeling or rulemaking in advance of the Transport Rule being proposed?

Response 3: States must meet their statutory requirements by submitting SIPs with permanent and enforceable measures in a timely manner. Furthermore, all required documents and technical analyses should accompany the submittals. Lastly, as discussed in Response 2, above, section 110(k)(2) and (3) required EPA to disapprove or approve Indiana's Infrastructure SIP by April 2011.

Comment 4: Indiana disagrees with EPA's approach to address Section 110(a)(2)(D) requirements by way of a FIP. A FIP will allow expedient implementation of emission reductions; however, many states prefer to develop SIPs to better fit their needs. A FIP is also contrary to the spirit of the CAA by unnecessarily limiting state authority. When the Transport Rule is finalized, Indiana will be issued a FIP by EPA for failing to develop an adequate Infrastructure SIP—a requirement that Indiana has already fulfilled. Indiana plans to incorporate the Transport Rule into a state rule and replace the transport component of section 110(a)(2)(D) as expeditiously as possible, and does not believe that EPA needs to FIP Indiana in order for this action to occur in a timely manner.

Response 4: In this action, EPA is disapproving only the portions of Indiana's Infrastructure SIP for the 2006 24-hour PM 2.5 NAAQS that address the requirements of section 110(a)(2)(D)(i)(I). Upon disapproval of Indiana's submittal, EPA has a legal obligation, pursuant to the CAA, to promulgate a FIP. See Section 110(c)(1)(B) of the CAA. Section 110(a)(1) of the CAA requires states to submit SIPs that meet certain requirements within three years of promulgation of a NAAQS. These SIPs are required to contain, among other things, adequate provisions “prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the state from emitting any air pollutant in amounts which will—(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any such national primary or secondary ambient air quality standard.” Section 110(a)(1) gives the Administrator authority to prescribe a period shorter than three years for the states to adopt and submit such SIPs, but does not give the Administrator authority to lengthen the time allowed for submission.

Section 110(c)(1) of the Act, in turn, requires EPA to promulgate FIPs if EPA has found that the state has failed to make a required submission or if EPA has disapproved a state submission or found it to be incomplete. Specifically, section 110(c)(1) requires EPA to promulgate a FIP within two years after the Administrator “(A) finds that a state has failed to make a required submission or finds that the plan or plan revision submitted by the state does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section or (B) disapproves a state implementation plan submission in whole or in part.” The CAA uses mandatory language, finding that EPA shall promulgate a FIP at any time within 2 years after the actions identified 110(c)(1)(A) or 110(c)(1)(B) have occurred. EPA's legal obligation to promulgate FIPs arises when those actions occur without regard to the underlying reason for the underlying SIP deficiency. The obligation to promulgate a FIP must be discharged by EPA unless two conditions are met: (1) The state corrects the deficiency; and (2) the Administrator approves the plan or plan revision, before the Administrator promulgates the FIP.

Under this statutory scheme, EPA has authority and an obligation to promulgate a FIP to correct a SIP deficiency if the actions identified in section 110(c)(1)(A) or (B) have been taken, and the two conditions identified in 110(c)(1) have not been met. The question of whether EPA has authority to promulgate any particular FIP, therefore, must be considered on a state specific basis.

EPA disagrees with Indiana's suggestion that the rule is inconsistent with the CAA because it does not give states time to develop, submit and receive EPA approval of SIPs before the FIP goes into effect. Section 110(a)(2) calls on states to submit SIPs that contain adequate provisions prohibiting the emissions proscribed by section 110(a)(2)(D)(i)(I). However, when EPA has not received such SIP submission or has disapproved a SIP submission, it has an obligation created by section 110(c)(1) to promulgate a FIP that meets the requirements of section 110(a)(2)(D)(i)(I). EPA does not believe it has authority to adjust the deadlines established in the Act in order to give states additional time, after promulgation of the Transport Rule, to submit SIPs that comply with section 110(a)(2)(D)(i)(I). Furthermore, EPA does not believe it has authority to alter the statutory requirement that it promulgate FIPs within two years of making a finding of failure to submit. EPA sought to discharge this duty with respect to the states covered by CAIR for the PM 2.5 NAAQS by promulgating the CAIR; however, the Court found that rule unlawful and not sufficiently related to the statutory mandate of section 110(a)(2)(D)(i)(I). For this reason, EPA does not believe it could argue that the CAIR FIPs completely discharged its duty to promulgate FIPs with respect to the states whose section 110(a)(2)(D)(i)(I) SIPs are disapproved.

EPA is following the SIP process established in the statute. The 110(a) SIPs for the 2006 24-hour PM 2.5 NAAQS were due in 2009. In each case, states were given the full 3 years to meet the requirement. The Transport Rule, when final, will provide the FIP to fulfill the requirement that was unmet by the states through SIPs. EPA is required to promulgate a FIP within two years of a state's failure to have an approved SIP. States were in fact given the first chance to fulfill the requirement of Section 100(a)(2)(D)(i)(I). EPA's action is subsequent to the State's opportunity to first fulfill the requirement.

EPA has made every attempt to facilitate the transition between the requirements of CAIR and those of the Transport Rule. For future requirements, EPA will also make every effort to address transition issues. However, EPA cannot ignore its statutory obligations and therefore cannot ensure that no new requirements will be placed on the sources being regulated by this action. Every time a NAAQS is revised, there is a statutory obligation for states to submit SIPs to address certain CAA requirements. If states fail to meet the deadlines or submit incomplete or inadequate SIPs, EPA must act to ensure that the requirements are put into place.

Even though EPA is planning to promulgate a FIP, the State still has the opportunity to submit a SIP that can tailor requirements to the specific needs and concerns of the State in order to meet the applicable state budgets. Prior to this action, states had ample time under the provisions of the CAA to develop and submit approvable SIPs and did not. No state affected by the Transport Rule has submitted a SIP to replace the emission reductions that were required by CAIR, despite the North Carolina opinion issued in December 2008 that clearly stated that CAIR did not adequately address 110(a)(2)(D)(i)(I). While the remand left CAIR in place, resulting in the continued requirement that states and sources comply with it, states had the opportunity to develop replacement measures to ensure that 110(a)(2)(D)(i)(I) components of their SIPs would continue to be fulfilled in the future.

Comment 5: Indiana has met the 2006 24-hour PM 2.5 NAAQS since the end of 2007 and monitoring values continue to trend downward. Indiana does not significantly contribute to violations of the annual standard in downwind areas. Therefore, Indiana does not contribute to any violations of the 2006 24-hour PM 2.5 NAAQS. EPA had not conducted a complete analysis on the contributions at the time the Infrastructure SIPs were due, nor did EPA give states a chance to provide comments on the analysis.

Response 5: As discussed in the proposed disapproval, the modeling performed for the proposed Transport Rule shows that Indiana significantly contributes to nonattainment or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in downwind areas. EPA has now completed the modeling for the final Transport Rule and, as indicated by the technical support documents for this action, Indiana in fact contributes to downwind nonattainment in another state or interferes with maintenance of the 2006 24-hour PM 2.5 NAAQS in another state.

Comment 6: Modeling for the Transport Rule was based on the 1997 annual PM 2.5 NAAQS, not the 2006 24-hour PM 2.5 NAAQS. Also, the base years used in the modeling are not reflective of emissions or monitoring data which show downward trends in more recent years that include benefits from CAIR.

Response 6: The modeling performed by EPA for the final Transport Rule addresses both the 1997 annual PM 2.5 NAAQS and the 2006 24-hour PM 2.5 NAAQS. CAIR cannot be included in the analysis since it does not provide permanent emission reductions nor address the 2006 24-hour PM 2.5 NAAQS.

Comment 7: If EPA proceeds with its disapproval, and Indiana is not permitted to revise its Infrastructure SIP once the Transport Rule is finalized, EPA should properly characterize the circumstances surrounding its need to disapprove the submittal.

Response 7: The circumstances surrounding EPA's need to disapprove the portions of Indiana's Infrastructure SIP submittal for the 2006 24-hour PM 2.5 NAAQS that address the requirements of section 110(a)(2)(D)(i)(I) were discussed in the proposed disapproval. Additionally, Response 1, Response 3, and Response 4, above, reiterate the circumstances surrounding EPA's need to disapprove the portion of Indiana's Infrastructure SIP submittal for the 2006 24-hour PM 2.5 NAAQS that address the requirements of section 110(a)(2)(D)(i)(I). Indiana has an opportunity to revise and submit a SIP at any time, and is invited to do so following final promulgation of the Transport Rule and within the time provided by the CAA.

Response 8: EPA fails to acknowledge states' efforts to meet their requirements on a timely basis. EPA should approve Ohio's transport component of the Infrastructure SIP since the State submitted its SIP on time and in accordance with available guidance.

Response 9: EPA recognizes Ohio's timely efforts in submitting its Infrastructure SIP for the 2006 24-hour PM 2.5 NAAQS. However, in a similar manner as described above in the response to Comment 1, above, the portions of Ohio's submittal addressing the requirements of section 110(a)(2)(D)(i)(I) with respect to the 2006 24-hour PM 2.5 NAAQS are inadequate, and must be disapproved.

Comment 10: Instead of disapproving the portion of the SIP submittal at this time, EPA can issue a SIP deficiency notice and require a new SIP after the Transport Rule is finalized.

Response 10: EPA disagrees with Ohio's statement. EPA is taking action to disapprove the portions of Ohio's submittal under section 110(k)(2) and (3) of the CAA. Under section 110(k) of the CAA, EPA had an obligation to approve or disapprove Ohio's submittal by March 4, 2011.

Comment 11: EPA believes that it must issue this disapproval to address the transport of emissions and pollution for the 2006 PM 2.5 NAAQS through a FIP. The better course is to allow the states to develop their own SIP when adopting the Transport Rule.

Response 11: In this action, EPA is disapproving only the portions of Ohio's Infrastructure SIP for the 2006 24-hour PM 2.5 NAAQS that address the requirements of section 110(a)(2)(D)(i)(I). The full or partial disapproval of a SIP revision triggers the requirement under section 110(c) that EPA promulgate a FIP no later than two years from the date of the disapproval unless the state corrects the deficiency, and the Administrator approves the plan or plan revision before the Administrator promulgates such FIP. Ohio is welcome to submit a revised SIP for EPA approval that addresses the requirements of section 110(a)(2)(D)(i)(I) with respect to the 2006 24-hour PM 2.5 NAAQS after the Transport Rule is finalized, and within the time provided by the CAA.

For the reasons discussed in the proposed rulemaking, EPA is taking final action to disapprove submittals from Indiana and Ohio intended to demonstrate that each respective State has adequately addressed the elements of section 110(a)(2)(D)(i)(I) of the CAA with regard to the 2006 24-hour PM 2.5 NAAQS. This action pertains only to section 110(a)(2)(D)(i)(I); the States' submittals for the remainder of the 2006 24-hour PM 2.5 NAAQS Infrastructure SIPs will be addressed in separate rulemakings. The effect of this action will be an obligation for EPA to promulgate a FIP for Indiana and Ohio no later than two years from the date of disapproval. The final Transport Rule is the FIP that EPA currently intends to promulgate for Indiana and Ohio.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget.

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

This action merely disapproves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Because this rule disapproves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (59 FR 22951, November 9, 2000).

This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely disapproves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA.

This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal Standard.

In reviewing state submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a state submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a state submission, to use VCS in place of a state submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

For questions related to Tennessee, please contact Richard A. Schutt, Chief, Regulatory Development Section, EPA Region IV, Sam Nun Atlanta Federal Center, 61 Forsyth Street, SW., 12th Floor, Atlanta, GA 30303.

On October 17, 2006, EPA published a final rule revising the 24-hour standard for fine particulate matter (PM 2.5 ) from 65 micrograms per cubic meter (μg/m3) to 35μg/m3. Section 110(a)(1) of the CAA requires states to submit revised SIPs that provide for the implementation, maintenance, and enforcement of a new or revised standard within 3 years after promulgation of such standard, or within such shorter period as EPA may prescribe. Section 110(a)(2)(D)(i) contains four elements that revised SIPs must address. This findings notice addresses the first two elements which require each state to submit SIPs which contain adequate provisions to prohibit air pollution within the state that (1) contributes significantly to another state's nonattainment of the NAAQS; or (2) interferes with another state's maintenance of the NAAQS. Section 110(a)(1) imposes the obligation upon states to make a SIP submission for a new or revised NAAQS, but the contents of that submission may vary depending upon the facts and circumstances. In particular, the data and analytical tools available at the time the state develops and submits the SIP for a new or revised NAAQS necessarily affects the content of the submission.

States were required to have submitted complete SIPs that addressed the section 110(a)(2)(D)(i)(I) requirement related to interstate transport for the 2006 24-hour PM 2.5 NAAQS by September 21, 2009. On June 9, 2010, in a separate final rulemaking (75 FR 32763), EPA found that 29 states and territories had not made a SIP submittal that addressed this requirement. Although Tennessee has submitted a SIP intended to address the Section 110(a)(2)(D)(i) requirements, the state subsequently withdrew the Section 110(a)(2)(D)(i) of its infrastructure SIP with respect to the 2006 24-hour PM 2.5 NAAQS on December 2, 2010, because it relied on the Clean Air Interstate Rule. Although deficient to address the transport of pollution as highlighted in recent EPA air quality modeling to support the final Transport Rule, EPA acknowledges the State's efforts in making this SIP submittal. In response to Tennessee's withdrawal of the 110(a)(2)(D)(i)(I) portions of its SIP because it relied on the Clean Air Interstate Rule, EPA is making a finding that Tennessee has failed to submit the required infrastructure SIP elements with respect to nonattainment or interference with maintenance of the 2006 24-hour PM 2.5 NAAQS. In accordance with Section 110(c)(1), this finding creates a 2-year deadline for the promulgation of a Federal Implementation Plan (FIP) by EPA unless, prior to promulgation of a FIP, the state makes a submission to meet and EPA approves such submission as meeting the attainment and maintenance requirements of section 110(a)(2)(D)(i)(I) for the 2006 24-hour PM 2.5 NAAQS. The State's SIP submittal to address other portions of Section 110(a)(2)(D)(i) will be addressed in a separate rulemaking.

This action does not result in sanctions pursuant to CAA section 179 because this finding of failure to submit does not pertain to a part D plan for nonattainment areas, or to a SIP Call pursuant to section 110(k)(5).

By this action, EPA is making the finding that Tennessee has failed to submit a SIP that addresses the requirements of section 110(a)(2)(D)(i)(I) of the CAA for the revised 2006 24-hour PM 2.5 NAAQS. This finding creates a 2-year deadline for the promulgation of a FIP by EPA for Tennessee unless the State submits a SIP to satisfy these section 110(a)(2)(D)(i)(I) requirements, and EPA approves such submission prior to promulgation of a FIP.

This is a final EPA action, which is subject to notice-and-comment requirements of the Administrative Procedures Act (APA), 5 U.S.C. 553(b). However, EPA invokes, consistent with past practice (for example, 61 FR 36294), the good cause exception pursuant to APA, 5 U.S.C. 553(b)(3)(B). Notice and comment are unnecessary because no significant EPA judgment is involved in making a finding of failure to submit SIPs or elements of SIPs required by the CAA, where states have made no submissions to meet the requirement by the statutory deadline.

This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review by the Office of Management and Budget under the EO.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). This action relates to the requirement in the CAA for states to submit SIPs under section 110(a)(1) that implements the CAA requirements for the revised 24-hour PM 2.5 NAAQS. Section 110(a)(1) of the CAA requires that states submit SIPs that implement, maintain, and enforce a new or revised NAAQS which satisfies the requirements of section 110(a)(2) within 3 years of promulgation of such standard, or shorter period as EPA may provide. The present final action does not establish any new information collection requirement apart from that required by law.

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

For the purpose of assessing the impacts of this final action on small entities, small entity is defined as: (1) A small business that is a small industry entity as defined in the U.S. Small Business Administration (SBA) size standards. (See 13 CFR, part 121); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for profit enterprise which independently owned and operated is not dominate in its field.

Courts have interpreted the RFA to require a regulatory flexibility analysis only when small entities will be subject to the requirements of the rule. See, Michigan v. EPA, 213 F.3d 663, 668-69 (DC Cir., 2000), cert. den., 532 U.S. 903 (2001). This rule would not establish requirements applicable to small entities. Instead, it would require states to develop, adopt, and submit SIPs to meet the requirements of section 110(a)(2)(D)(i), and would leave to the states the task of determining how to meet those requirements, including which entities to regulate. Moreover, because affected states would have discretion to choose the sources to regulate and how much emissions reductions each selected source would have to achieve, EPA could not predict the effect of the rule on small entities. After considering the economic impacts of this final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In addition, although the action is subject to the Administrative Procedures Act, the Agency has invoked the “good cause” exemption under 5 U.S.C. 553(b); therefore, it is not subject to the notice and comment requirement.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. The action implements mandate(s) specifically and explicitly set forth by the Congress in CAA section 110(a)(2)(D)(i)(I) without the exercise of any policy discretion by EPA.

This action does not create any additional requirements beyond those of the 2006 24-hour PM 2.5 NAAQS (71 FR 61144, October 17, 2006). Therefore, no UMRA analysis is needed. This rule responds to the requirement in the CAA for states to submit SIPs to satisfy the requirements of section 110(a)(2) of the CAA for the 2006 24-hour PM 2.5 NAAQS. Section 110(a)(1) of the CAA requires that states submit SIPs that implement, maintain, and enforce a new or revised NAAQS within 3 years of promulgation of such standard, or shorter period as EPA may provide. This action does not impose any requirements beyond those specified in the Act.

Therefore, this action is not subject to the requirements of sections 202 or 205 of the UMRA. This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in EO 13132. The CAA establishes the scheme whereby states take the lead in developing plans to meet the NAAQS. This action will not modify the relationship of the states and EPA for purposes of developing programs to implement the NAAQS. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This action responds to the requirement in the CAA for states to submit SIPs to satisfy the requirements of section 110(a)(2) of the CAA for the 2006 24-hour PM 2.5 NAAQS. Section 110(a)(1) of the CAA requires that states submit SIPs that implement, maintain, and enforce a new or revised NAAQS which satisfies the requirements of section 110(a)(2) within 3 years of promulgation of such standard, or shorter period as EPA may provide. The CAA provides for states and tribes to develop plans to regulate emissions of air pollutants within their jurisdictions. The regulations clarify the statutory obligations of states and tribes that develop plans to implement this rule. The Tribal Authority Rule (TAR) gives tribes the opportunity to develop and implement CAA programs, but it leaves to the discretion of the tribe whether to develop these programs and which programs, or appropriate elements of a program, the tribe will adopt.

This action does not have tribal implications as defined by Executive Order 13175. It does not have a substantial direct effect on one or more Indian tribes, because no tribe has implemented an air quality management program related to the 2006 24-hour PM 2.5 NAAQS at this time. Furthermore, this action does not affect the relationship or distribution of power and responsibilities between the federal government and Indian tribes. The CAA and the TAR establish the relationship of the federal government and Tribes in developing plans to attain the NAAQS, and this action does nothing to modify that relationship. Because this action does not have tribal implications, Executive Order 13175 does not apply.

This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. Nonetheless, we have evaluated the environmental health or safety effects of the 2006 24-hour PM 2.5 NAAQS on children. The results of this risk assessment are contained in the final rule for 24-hour PM 2.5 NAAQS (71 FR 61144, October 17, 2006).

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This action does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

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

EPA lacks the discretionary authority to address environmental justice in this final action. This action responds to the requirement in the CAA for states to submit SIPs to satisfy the requirements of section 110(a)(2)(D)(i)(I) of the CAA for the 2006 24-hour PM 2.5 NAAQS. Section 110(a)(1) of the CAA requires that states submit SIPs that implement, maintain, and enforce a new or revised NAAQS which satisfies the requirements of section 110(a)(2) within 3 years of promulgation of such standard, or shorter period as EPA may provide. EPA is merely determining whether Tennessee has complied with this statutory requirement.

The Congressional Review Act (CRA), 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of August 19, 2011. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the action in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 808(2).

Section 307(b)(1) of the CAA indicates which Federal Courts of Appeal have venue for petitions of review of final actions by EPA. This section provides, in part, that petitions for review must be filed in the Court of Appeals for the District of Columbia Circuit: (i) When the EPA action consists of ”nationally applicable regulations promulgated, or final actions taken, by the Administrator,” or (ii) when such action is locally or regionally applicable, if “such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and publishes that such action is based on such a determination.”

The Administrator is determining that this action making a finding of failure to submit SIPs related to the section 110(a)(2)(D)(i)(I) requirements for the 2006 24-hour PM 2.5 NAAQS is of nationwide scope and effect for the purposes of section 307(b)(1). This is particularly appropriate because in the report on the 1977 Amendments that revised section 307(b)(1) of the CAA, Congress noted that the Administrator's determination that an action is of “nationwide scope or effect” would be appropriate for any action that has “scope or effect beyond a single judicial circuit.” H.R. Rep. No. 95-294 at 323, 324, reprinted in 1977 U.S.C.C.A.N. 1402-03. Here, the scope and effect of this rulemaking extends to numerous judicial circuits since the finding of failure to submit a SIP applies to a rulemaking of national scope and effect. In these circumstances, section 307(b)(1) and its legislative history call for the Administrator to find the rule to be of “nationwide scope or effect” and for venue to be in the District of Columbia Circuit.

Thus, any petitions for review of this action related to a finding of failure to submit SIPs related to the requirements of section 110(a)(2)(D)(i)(I) of the CAA must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date final action is published in the Federal Register .

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

On May 19, 2011 (76 FR 28942), EPA proposed to approve the following rule that was submitted for incorporation into the California SIP.

We proposed to approve this rule because we determined that it complied with the applicable CAA requirements. Our proposed rule and related Technical Support Document (TSD) contain more information on the basis for this rulemaking and on our evaluation of the submittal.

On May 19, 2011 (76 FR 28942), EPA also proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.

We proposed a limited approval because we determined that this rule improves the SIP and is largely consistent with the applicable CAA requirements. We simultaneously proposed a limited disapproval because some rule provisions do not satisfy the requirements of section 110 and part D of the CAA.

Specifically:

• The rule is missing definitions for the terms “begin actual construction,” “federally enforceable” and “necessary preconstruction approvals or permits.”

• The rule is missing adequate public notice requirements for minor sources.

• The rule is missing provisions meeting the requirements of 40 CFR 51.165(a)(5)(ii) and 40 CFR 51.307(b)(2).

• The rule contains a cross reference to Rule 207—Title V—Federal Operating Permit Program, which is not SIP approved.

Our proposed rule and related TSD contain more information on the basis for this rulemaking and on our evaluation of the submittal.

EPA's proposed action provided a 30-day public comment period. During this period, we received no comments.

No comments were submitted that change our assessment that the submitted SMAQMD Rule 203 complies with the applicable CAA requirements. Therefore, under CAA section 110(k)(3) and for the reasons set forth in our May 19, 2011 proposed rule, we are finalizing a full approval of Rule 203. Additionally, no comments were submitted that change our basis for proposing a limited approval and limited disapproval of submitted SMAQMD Rule 214. Therefore, under CAA sections 110(k)(3) and 301(a), we are finalizing a limited approval and limited disapproval of Rule 214. We are finalizing a limited approval of the submitted rule because we continue to believe that the rule improves the SIP and is largely consistent with relevant CAA requirements. This action incorporates the submitted rule into the District portion of the California SIP, including those provisions identified as deficient. As authorized under sections 110(k)(3) and 301(a), EPA is simultaneously finalizing a limited disapproval of Rule 214. As a result, sanctions will be imposed unless EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the effective date of this action. These sanctions will be imposed under section 179 of the Act according to 40 CFR 52.31. In addition, EPA must promulgate a federal implementation plan (FIP) under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months. Note that the submitted rule has been adopted by the SMAQMD, and EPA's final limited disapproval does not prevent the local agency from enforcing it. The limited disapproval also does not prevent any portion of the rule from being incorporated by reference into the federally enforceable SIP, as discussed in a July 9, 1992 EPA memo found at: http://www.epa.gov/nsr/ttnnsr01/gen/pdf/memo-s.pdf.

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

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

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

This rule will not have a significant impact on a substantial number of small entities because SIP approvals and limited approvals/limited disapprovals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. Therefore, because this limited approval/limited disapproval action does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of State action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

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

EPA has determined that the limited approval/limited disapproval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

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

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

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

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

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

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

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

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

EPA lacks the discretionary authority to address environmental justice in this rulemaking.

The Congressional Review Act, 5 U.S.C. section 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. section 804(2). This rule will be effective on August 19, 2011.

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

On September 4, 1992, EPA promulgated 40 CFR part 55, which established requirements to control air pollution from OCS sources in order to attain and maintain federal and state ambient air quality standards and to comply with the provisions of part C of title I of the CAA. Part 55 applies to all OCS sources offshore of the States except those located in the Gulf of Mexico west of 87.5 degrees longitude. Section 328 of the CAA requires that for such sources located within 25 miles of a State's seaward boundary, the requirements shall be the same as would be applicable if the source were located in the COA. Because the OCS requirements are based on onshore requirements, and onshore requirements may change, section 328(a)(1) requires that EPA update the OCS requirements as necessary to maintain consistency with onshore requirements.

To comply with this statutory mandate, EPA must incorporate applicable rules of the COA into 40 CFR part 55 as they exist onshore. This limits EPA's flexibility in deciding which requirements will be incorporated into part 55 and prevents EPA from making substantive changes to the requirements it incorporates. As a result, EPA may be incorporating rules into part 55 that do not conform to all EPA's state implementation plan (SIP) guidance or certain requirements of the CAA. Consistency updates may result in the inclusion of state or local rules or regulations into part 55, even though the same rules may ultimately be disapproved for inclusion as part of the SIP. Inclusion in the part 55 rule does not imply that a state or local rule meets the requirements of the CAA for SIP approval, nor does it imply that the state or local rule will be approved by EPA for inclusion in the SIP.

In updating 40 CFR part 55, EPA reviewed the state rules for inclusion in part 55 to ensure that they are rationally related to the attainment or maintenance of federal or state ambient air quality standards or part C of title I of the CAA; that they are not designed expressly to prevent exploration and development of the OCS; and that they are applicable to OCS sources. 40 CFR 55.1. EPA has also evaluated the rules to ensure they are not arbitrary or capricious. 40 CFR 55.12(e). In addition, EPA has excluded administrative or procedural rules. 1 In addition, EPA has excluded requirements that regulate toxics which are not related to the attainment and maintenance of federal and state ambient air quality standards.

EPA is taking direct final action to incorporate the applicable provisions of the Virginia Administrative Code (VAC) into 40 CFR part 55 as required under section 328(a)(1) of the CAA.

EPA is publishing this rule without prior proposal because the Agency views this as a non-controversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate document that will serve as the proposal to approve this consistency update if adverse comments are filed. This rule will be effective on September 19, 2011 without further notice unless EPA receives adverse comment by August 19, 2011. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

Under the CAA, the Administrator is required to establish requirements to control air pollution from OCS sources located within 25 miles of States' seaward boundary that are the same as onshore air control requirements. To comply with this statutory mandate, EPA must incorporate applicable onshore rules into 40 CFR part 55 as they exist onshore. 42 U.S.C. 7627(a)(1); 40 CFR 55.12. Thus, in promulgating OCS consistency updates, EPA's role is to maintain consistency between OCS regulations and the regulations of onshore areas, provided that they meet the criteria of the CAA. Accordingly, this action simply updates the existing OCS requirements to make them consistent with requirements onshore, without the exercise of any policy discretion by EPA. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, nor does it impose substantial direct compliance costs on tribal governments, nor preempt tribal law.

Under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., OMB has approved the information collection requirements contained in 40 CFR part 55 and, by extension, this update to the rules, and has assigned OMB control number 2060-0249. Notice of OMB's approval of EPA Information Collection Request (ICR) No. 1601.07 was published in the Federal Register on February 17, 2009 (74 FR 7432). The approval expires January 31, 2012. As EPA previously indicated (73 FR 66037 (November 6, 2008)), the annual public reporting and recordkeeping burden for collection of information under 40 CFR part 55 is estimated to average 112 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9 and are identified on the form and/or instrument, if applicable. In addition, the table in 40 CFR part 9 of currently approved OMB control numbers for various regulations lists the regulatory citations for the information requirements contained in 40 CFR part 55.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 19, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This OCS consistency update action for Virginia may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations, is amended as follows:

The modified BFEs are not listed for each community in this interim rule. However, the address of the Chief Executive Officer of the community where the modified BFE determinations are available for inspection is provided.

Any request for reconsideration must be based on knowledge of changed conditions or new scientific or technical data.

The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq., and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The changes in BFEs are in accordance with 44 CFR 65.4.

National Environmental Policy Act. This interim rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

Regulatory Classification. This interim rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

Executive Order 13132, Federalism. This interim rule involves no policies that have federalism implications under Executive Order 13132, Federalism.

Executive Order 12988, Civil Justice Reform. This interim rule meets the applicable standards of Executive Order 12988.

Accordingly, 44 CFR part 65 is amended to read as follows:

This is a summary of the Commission's Report and Order (Order) in WC Docket No. 11-39, FCC 11-100, adopted June 20, 2011, and released June 22, 2011. In this Order, the Commission adopts rules to implement the Truth in Caller ID Act of 2009. Caller ID services typically identify the telephone numbers and sometimes the names associated with incoming calls, thus allowing consumers to decide whether or how to answer a phone call based on who appears to be calling. However, caller ID information can be altered or manipulated (“spoofed”). Increasingly, bad actors are spoofing caller ID information in order to facilitate a wide variety of malicious schemes. In response to the increasing use of caller ID spoofing to facilitate schemes that defraud consumers and threaten public safety, Congress passed the Truth in Caller ID Act. The Truth in Caller ID Act, and the Commission's implementing rules, prohibit any person or entity from knowingly spoofing caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value.

1. Having considered the record in this proceeding, we adopt rules that prohibit any person or entity in the United States, acting with the intent to defraud, cause harm, or wrongfully obtain anything of value, from knowingly causing, directly or indirectly, any caller identification service to transmit or display misleading or inaccurate caller identification information. The revisions to the Commission's Calling Party Number (CPN) rules are modeled on the Act's prohibition against knowingly engaging in caller ID spoofing with fraudulent or harmful intent. The rules include exemptions based on conduct the Act identifies as exempt from its prohibitions. The revised rules also include new definitions, including several modeled after definitions in the Act. As proposed in the Caller ID Act NPRM, 76 FR 16367, the revised rules also specify that blocking or attempting to block one's own caller ID is not a violation of the new rules, while clarifying that telemarketers are not relieved of their obligation to transmit caller identification information.

2. The principal implementing rule we adopt provides that “no person or entity in the United States shall, with intent to defraud, cause harm, or wrongfully obtain anything of value, knowingly cause, directly or indirectly, any caller identification service to transmit or display misleading or inaccurate caller identification information.” The wording of the prohibition in our rules generally tracks the wording of the prohibition in the Act, and is unchanged from the rule the Commission proposed in the Caller ID Act NPRM.

3. The Act specifies that the prohibited conduct is “in connection with any telecommunications or IP-enabled voice service.” Because we define the terms “caller identification service” and “caller identification information” to encompass the use of telecommunications services and “interconnected VoIP services,” we do not need to specify in the rule that the prohibition encompasses calls made using telecommunications services and IP-enabled voice services, as specified in the Act.

4. We also note that the Act is directed at “any person,” but does not define the term “person.” In order to make clear that the rules are not limited to natural persons and to be consistent with the Commission's current rules concerning the delivery of CPN, our amendments to the CPN rules use the phrase any “person or entity.” By contrast, the amendments to the Commission's forfeiture rules use the term “person” in order to be consistent with use of the term “person” in the forfeiture rules. In both cases, we intend for the entities covered to be those within the scope of the definition of “person” in the Communications Act. The only commenter that addressed the use of the phrase “person or entity” in the proposed rules supported the Commission's clarification that the rule applies to both natural persons and other entities.

5. In the Caller ID Act NPRM, the Commission asked about the placement of the term “knowingly” in the proposed rules. As with the proposed rules, the rules we adopt today provide that in order to violate the rules, the person or entity “knowingly” causing transmission or display of inaccurate or misleading caller identification must be the same person or entity that is acting with intent to defraud, cause harm, or wrongfully obtain anything of value. The Truth in Caller ID Act is aimed at prohibiting the use of caller ID spoofing for ill intent. Therefore, we believe that an entity subject to liability for violating the Act must knowingly spoof caller identification information and do so with intent to defraud, cause harm, or wrongfully obtain something of value.

6. Most commenters agreed with the Commission's proposal to clarify that the word “knowingly” modifies the action of the person or entity engaged in malicious caller ID spoofing because this is the most logical reading of placement of the word in the Truth in Caller ID Act. However, in its reply comments, the Privacy Rights Clearinghouse (PRC) recommends that the Commission change the placement of the word “knowingly” so that it modifies the actions of the caller identification service or modify the rule so that spoofing services are prohibited from knowingly transmitting misleading or inaccurate caller identification information for a party violating the Act. PRC argues that requiring that the same person or entity knowingly cause the transmission or display of misleading or inaccurate caller identification information and have the requisite intent to “defraud, cause harm, or wrongfully obtain anything of value” imposes an unnecessary hurdle to enforcement efforts.

7. We disagree with PRC's arguments. Based on our reading of the statute, it is not enough that a person or entity intend to defraud, cause harm, or wrongfully obtain anything of value to violate the Truth in Caller ID Act. Rather, the person or entity intending to defraud, cause harm or wrongfully obtain anything of value must facilitate the scheme through the manipulation or alteration of caller identification information. Moreover, adopting a rule in which “knowingly” modifies the action of the caller identification service would not impose liability on caller ID spoofing services for knowingly manipulating caller identification information absent intent to defraud, cause harm, or wrongfully obtain anything of value. Nor would it ease the burden on law enforcement of proving a violation of the Act. Instead, it would require law enforcers to show that the provider of the caller ID service—usually a terminating carrier or VoIP provider—knew that the incoming caller identification information was manipulated or altered. As the Commission noted in the Caller ID Act NPRM, “in many instances the caller identification service has no way of knowing whether or not the caller identification information it receives has been manipulated.” We do not believe Congress intended to impose liability on caller ID spoofers acting with malicious intent only upon proof that the provider of the call recipient's caller ID service knew that the caller identification information was manipulated or altered. That would be a perverse result, wholly inconsistent with the intent of the Act and its legislative history.

8. As for PRC's suggestion that we modify the rule to hold spoofing providers liable for transmitting inaccurate or misleading caller identification information on behalf of someone violating the Act, as discussed below, we choose to follow Congress' lead in not imposing additional obligations on spoofing providers. We find that the proposed rules and the rules we adopt today are consistent with Congressional intent to focus on whether a person or entity has knowingly manipulated the caller identification information in order to defraud, cause harm, or wrongfully obtain anything of value, and therefore we adopt the prohibition on caller ID spoofing as proposed in the Caller ID Act NPRM. The person or entity that knowingly causes caller ID services to transmit or display misleading or inaccurate information may, in some cases, be a carrier, spoofing provider or other service provider, and we do not exempt such conduct from the purview of our rules. Indeed, we believe that caller ID spoofing done to wrongfully avoid payment of intercarrier compensation charges—whether by the originating provider, an intermediate carrier, or other intermediate entity—would be a violation of our rules.

9. Like the proposed rules, the rules we adopt today address both transmission and display of misleading or inaccurate caller identification information to make clear that, even if a carrier or interconnected VoIP provider transmits accurate caller identification information, it would be a violation for a person or entity to knowingly cause, directly or indirectly, a device that displays caller identification information to display inaccurate or misleading information with the intent to defraud, cause harm, or wrongfully obtain anything of value. We also note that the rules we adopt today cover situations in which a person or entity is “directly or indirectly” causing a caller identification service to transmit or display misleading or inaccurate caller ID. We include the concept of “indirect” action in our rules to foreclose those acting with the requisite harmful intent from arguing that they are not liable merely because they have engaged a third party to cause the transmission or display of inaccurate or misleading caller identification information.

10. In the Caller ID Act NPRM, the Commission sought comment on whether the proposed prohibition on causing any caller identification service to transmit or display “misleading or inaccurate” caller identification information with the “intent to defraud, cause harm, or wrongfully obtain anything of value” provides clear guidance about what actions are prohibited. Commenters generally agreed that the terms in the proposed rule were sufficiently clear. We agree. Although we do not believe it is necessary to offer additional definitions to clarify the meaning of the prohibited actions, we do agree with the National Network to End Domestic Violence (NNEDV) that the term “harm” is a broad concept that encompasses financial, physical, and emotional harm, include stalking, harassment, and the violation of protection and restraining orders. Moreover, NNEDV offers substantial evidence that abusive spouses use third-party caller ID services to harass and stalk their victims. We consider knowing manipulation or alteration of caller identification information for the purpose of harassing or stalking someone to be an egregious violation of the Act and of our rules implementing the Act. We intend to enforce our rules vigorously, including against those who engage in such malicious practices, and we encourage spoofing providers to notify their customers in no uncertain terms that such actions are illegal.

11. The Act directs the Commission to exempt from its regulations (i) any authorized activity of a law enforcement agency; and (ii) court orders that specifically authorize the use of caller identification manipulation. Separately, the Act also makes clear that it “does not prohibit any lawfully authorized investigative, protective, or intelligence activity of a law enforcement agency of the United States, a State or a political subdivision of a State, or of an intelligence agency of the United States.” DOJ requested that the Commission explicitly incorporate lawfully authorized investigative, protective, or intelligence activities into the exemptions to the Commission's implementing rule. In light of the statutory language specifying that such activities are not prohibited by the Act and DOJ's request that such activities be included in the exemptions to the Commission's implementing rule, the proposed rule incorporated the two exemptions specified in the Act, and expanded the exemption for law enforcement activities to cover protective and intelligence activities. No commenters objected to the proposed rule, and AT&T, the only commenter other than DOJ that addressed the exemptions in the proposed rule, supported their adoption. Thus, the record supports our decision to include those exemptions in the rule we adopt today.

12. We decline to adopt any other exemptions from the Act. Commenters have proposed a number of additional exemptions, all of which cover practices that, as described by the commenters themselves, would not violate the plain language of the Act. Some commenters assert that absent additional exemptions, the rules might be misinterpreted to prohibit normal and helpful business practices, such as those designed to facilitate communications with customers. As a result some commenters ask for broad exemptions to the Act. AT&T, for example, asks the Commission to make clear that caller ID manipulation “for legitimate business reasons” is exempt; inContact asks the Commission to “exempt all uses not specifically intended to defraud or deceive consumers”; and USTelecom and Verizon ask the Commission to exempt “any action required by law or permitted under § 64.1601(d).” Still other commenters propose exemptions for caller identification manipulation involving specific types of practices or actors. For example, a number of commenters representing telecommunications and VoIP providers express support for an exemption for carriers and providers that transmit caller ID information they receive from their customers or other providers, even if it turns out to be inaccurate. Commenters that provide call management services for telemarketers and debt collectors, and those that provide caller ID spoofing services to the public, suggest that they should be exempt from responsibility for bad actors, unless the service provider has the necessary intent to defraud, cause harm, or wrongfully obtain anything of value. Companies that provide call management services to telemarketers and debt collectors have also asked the Commission for an exemption allowing manipulation of caller ID information so that a call recipient's caller ID displays a local number, regardless of where the calling party is located. NNEDV suggests that the Commission exempt victim service providers, and a private investigator requests that the Commission include an exemption for lawful use by licensed private investigators. We do not find any of these exemptions to be necessary or appropriate.

13. We note that those commenters that requested that the Commission exempt manipulation of caller ID information in order to display a local phone number, asked in the alternative that the Commission clarify that manipulating caller ID to display a local number is not a violation of the Act. We agree that such a practice is not in and of itself a violation of the Act. We note, however, that if the display of a “spoofed” local number is done as part of a scheme to defraud, cause harm, or wrongfully obtain anything of value, then the person or entity perpetrating the scheme would be in violation of the Act.

14. The legislative history of the Act makes clear that manipulation or alteration of caller ID information done without the requisite harmful intent does not violate the Act. Nothing in our implementing rules changes that fact. Likewise, the transmission of incorrect caller ID information by carriers and providers acting without the requisite intent to defraud, cause harm or wrongfully obtain anything of value does not violate the Truth in Caller ID Act or our rules implementing the Truth in Caller ID Act. Moreover, we agree with DOJ that “none of the commenters who advocated for a status-based exemption to the Truth in Caller ID Act were able to articulate any scenario whereby legitimate conduct would fall within the prohibitions of the Act.” Like DOJ, we fear that allowing any such exemptions could “create dangerous loopholes under the Act that could be exploited by criminals.” Therefore, we decline to adopt any further exemptions from the Act at this time, primarily because the ones that have been presented to us are unnecessary.

15. The Caller ID Act NPRM proposed adding definitions to the Commission's CPN rules for “Interconnected VoIP service”; “Caller identification information”; “Caller identification service”; and “information regarding the origination” of a call. We adopt the proposed definitions for all four of those terms, with slight modifications to the definitions of “Caller identification service” and “information regarding the origination.”

16. Interconnected VoIP service. The Truth in Caller ID Act covers caller ID spoofing done “in connection with any telecommunications service or IP-enabled voice service.” As mentioned above, the rules we adopt today use the term “interconnected VoIP service” instead of “IP-enabled voice service.” We define “interconnected VoIP service” to have the same meaning given that term in § 9.3 of the Commission's rules. We do this because the Act defines “IP-enabled voice service” by reference to § 9.3 of the Commission's regulations, as they may be amended. Section 9.3 of the Commission's rules defines “interconnected VoIP service,” not “IP-enabled voice service.” Therefore, to be consistent with the apparent intent of Congress in enacting the Truth in Caller ID act, we limit the scope of the rule's coverage to telecommunications services and interconnected VoIP services.

17. DOJ and some other commenters recommend that we adopt rules that cover VoIP services more expansively than the Commission's definition of “Interconnected VoIP” service in § 9.3 of its rules does. We find that the Act's incorporation of the Commission's rule defining interconnected VoIP service calls for applying the current definition found in § 9.3 (as it may be amended over time). Consequently, the rules we adopt today use the term “interconnected VoIP service” and specify that it has the same meaning given the term “interconnected VoIP service” in 47 CFR 9.3 as it currently exists or may hereafter be amended. However, we are cognizant of the importance of protecting consumers from malicious caller ID spoofing as broadly as possible. To that end, we raise this issue in the Report to Congress for further consideration.

18. Caller identification information. We define “caller identification information” to mean “information provided by a caller identification service regarding the telephone number of, or other information regarding the origination of, a call made using a telecommunications service or interconnected VoIP service.” This is the definition the Commission proposed in the Caller ID Act NPRM and no commenters offered any reason not to use this definition.

19. Caller identification service. We define “caller identification service” to mean “any service or device designed to provide the user of the service or device with the telephone number of, or other information regarding the origination of, a call made using a telecommunications service or interconnected VoIP service.” Unlike the proposed rule, the definition of “caller identification service” that we adopt today does not explicitly reference automatic number identification (ANI) because, as discussed below, we have defined “information regarding the origination” to include “billing number information, including charge number, ANI, or pseudo-ANI.” By including such billing number information in the definition of “information regarding the origination” we effectively include within the definition of “caller identification service” any service or device designed to provide the user with any form of the calling party's billing number, including charge number, ANI, or pseudo-ANI.

20. Information regarding the origination (of a call). The definitions of “caller identification information” and “caller identification service” in the Act and in the rules we adopt today both use the phrase “the telephone number of, or other information regarding the origination of, a call.” We define “information regarding the origination” to mean any: (1) Telephone number; (2) portion of a telephone number, such as an area code; (3) name; (4) location information; (5) billing number information, including charge number, ANI, or pseudo-ANI; or (6) other information regarding the source or apparent source of a telephone call. The definition we adopt today mirrors the proposed definition, but adds “billing number information including charge number, ANI, or pseudo-ANI” to the types of information that constitute “information regarding the origination.” We add these types of information to the definition of “information regarding the origination” in response to commenters' concerns about the importance of transmission of accurate billing information, including charge number, ANI and pseudo-ANI, to caller identification services used by emergency services providers.

21. Our current rules relating to the delivery of CPN services define ANI as referring to the “delivery of the calling party's billing number by a local exchange carrier to any interconnecting carrier for billing or routing purposes, and to the subsequent delivery of such number to end users.” The Caller ID Act NPRM sought comment on whether the Commission should use a different definition of ANI for purposes of the Truth in Caller ID Act, and in particular, whether the Commission should include a definition of ANI that encompasses charge party numbers delivered by interconnected VoIP providers. Some commenters requested that the Commission revise the current definition of ANI to encompass billing numbers delivered by interconnected VoIP providers. The terms ANI, calling party number, and charge number in § 64.1600 of our rules are used in sections of the rule that we have not addressed in this rulemaking; therefore we decline to amend those definitions at this time. Other commenters more generally suggested that the Commission make sure to include billing numbers, charge number, ANI and pseudo-ANI information within the ambit of the rule.

22. Spoofing caller identification information transmitted to emergency services providers is a particularly dangerous practice, and one that Congress was particularly concerned about when adopting the Truth in Caller ID Act. ANI and pseudo-ANI are the foundations of the emergency services routing infrastructure in the United States and derive their data exclusively from information maintained in the records of the originating carrier. The delivery of accurate information for any person who dials 911 or seeks assistance via 10-digit emergency and non-emergency numbers is fundamental to ensuring that the correct identifying information is transmitted with those calls. While this information may not be subject to manipulation by callers in the ordinary course, if an individual or entity did spoof ANI, the individual could conceal his or her identity and location, and could tie up public response capacity by initiating spoofed calls designed to cause the dispatch of responders to locations where no emergency is at hand. Given the rapid evolution of technology, and the consequences of spoofing ANI and pseudo-ANI, we find that the delivery of caller identification information to E911 public safety answering points (PSAPs), which use ANI or pseudo-ANI to look up the caller's name and location information on emergency calls, should be considered a type of “information regarding the origination” of a call.

23. The Caller ID Act NPRM sought comment on whether there are other things that should be included in the definition, specifically, information transmitted in the SS7 Jurisdiction Information Parameter (JIP) code that provides information about the location of a caller who has ported his number or is calling over a mobile service. As the record demonstrates, use of the JIP code can benefit law enforcement and public safety, and can be used for improved routing for emergencies. Therefore, we clarify that “location information” includes information transmitted in the SS7 JIP code. However, in encompassing information transmitted in the JIP code within our definition, we do not require that any providers, including CMRS and VoIP providers, populate the JIP in signaling data.

24. The Truth in Caller ID Act specifies that it is not intended to be construed to prevent or restrict any person from blocking the transmission of caller identification information. The legislative history shows that Congress intended to protect and preserve subscribers' ability to block the transmission of their own caller identification information to called parties. Consequently, like the proposed rules, the rules we adopt today provide that a person or entity that blocks or seeks to block a caller identification service from transmitting or displaying that person or entity's own caller identification information shall not be liable for violating our rules implementing the Truth in Caller ID Act.

25. Although our rules generally allow callers to block caller ID, as discussed in the Caller ID Act NPRM, telemarketers are required to transmit caller identification information, and the phone number they transmit must be one that a person can call to request placement on a company-specific do-not-call list. This requirement allows consumers to more easily identify incoming telemarketing calls and to make informed decisions about whether to answer particular calls. It also facilitates consumers' ability to request placement on company-specific do-not-call lists. Additionally, the requirement assists law enforcement investigations into telemarketing complaints. Therefore, our rules make clear that persons or entities engaged in telemarketing remain obligated to transmit caller identification information.

26. As discussed above, one of the reasons that it is easy for anyone to spoof their caller ID is that third-party caller ID spoofing services are widely available and inexpensive. There are typically four steps to the process of using a third-party caller ID spoofing service to spoof a call. First, the customer places a call to a company-controlled toll free or POTS line number. Second, after the first call is connected, the customer enters a personal identification number and then enters the number he or she wants to substitute as the caller ID that is transmitted to the called party. Third, the customer enters the phone number he or she wants to call; and fourth, the spoofing provider—or the carrier it uses—delivers the call to the terminating carrier serving the called number with the requested substitute number transmitted as the caller's CPN.

27. Recognizing the role spoofing providers play in facilitating caller ID spoofing, the Commission sought comment on whether the Commission may, and should, adopt rules imposing obligations on providers of caller ID spoofing services when they are not themselves acting with intent to defraud, cause harm, or wrongfully obtain anything of value. More specifically, the Commission also sought comment on whether it should impose record-keeping requirements on caller ID spoofing providers. In addition, the Commission sought comment on a proposal made by DOJ, and supported by the Minnesota Attorney General, to adopt rules requiring “public providers of caller ID spoofing services to make a good-faith effort to verify that a user has the authority to use the substituted number, such as by placing a one-time verification call to that number.”

28. Although Itellas and Teltech, the two third-party caller ID spoofing services that commented on the Caller ID Act NPRM, indicate that they do maintain records of the calls they facilitate and that they cooperate with law enforcement investigations, there is little support among the commenters for the adoption of rules requiring third-party spoofing providers to maintain records. The third-party spoofing providers strongly object to any rule requiring them to verify that their customers have a right to use the phone number they choose to spoof. Itellas and TelTech both argue that requiring users of caller ID services to verify that they have authority to use the spoofed number would be pointless and ineffective, because people or entities using caller ID spoofing to carry out a criminal enterprise can purchase the software to spoof caller ID rather than use a third-party provider. They also argue that verification cannot establish a caller's intent, and absent malintent there can be no violation of the Truth in Caller ID Act. As TelTech explains, “[u]sing a number you do not have permission to spoof is not illegal under the Act.” In its reply comments, NNEDV agrees that verification requirements would be inconsistent with the intent expressed in the legislative history of the Act, which recognized the importance of caller ID spoofing to protect victims of domestic violence. According to NNEDV, a verification requirement “would endanger victims and `domestic violence shelters that provide false caller ID number (sic) to prevent call recipients from discovering the location of victims.'” Although NNEDV objects to DOJ's proposal that the Commission impose verification requirements on caller ID spoofing services, it does propose that the Commission require spoofing services to give prominent notice that use of their services in violation of the Truth in Caller ID Act is unlawful.

29. We are very concerned about the harmful effects of caller ID spoofing done with malicious intent. We also recognize that requiring caller ID spoofing services to verify that users have the authority to use the substitute number would likely reduce the use of caller ID spoofing to further criminal schemes, and could simplify law enforcement efforts to determine who is behind a caller ID spoofing scheme. Likewise, the public would benefit from having third-party caller ID spoofing providers clearly and conspicuously notify their users about the practices prohibited by the Truth in Caller ID Act. However, we are not convinced that it is appropriate for the Commission to impose such obligations on third-party caller ID spoofing service providers at this time. In crafting the Truth in Caller ID Act, we believe that Congress intended to balance carefully the drawbacks of malicious caller ID spoofing against the benefits provided by legitimate caller ID spoofing. The Act prohibits spoofing providers, like all other persons and entities in the United States, from knowingly spoofing caller ID with malicious intent. However, the Act does not expressly impose additional obligations on providers of caller ID spoofing services. Following Congress' lead, we decline to impose additional obligations on third-party spoofing providers at this time.

30. We are cognizant of the fact that spoofing providers can, and sometimes do, detect and prevent some types of illegitimate manipulation of caller ID spoofing. Itellas, for example, noted in its comments that its system does not allow customers to call or display 911, in order to prevent use of its service for swatting. Itellas' system also prevents its customers from using a specific spoofed number when placing calls to toll free numbers in order to prevent users from using the phone number associated with a stolen credit card or with a specific bank account to activate the credit card, or to transfer money from the compromised bank account. In its comments, TelTech represents that it has closed accounts that it has identified as appearing to be used to commit crimes, including money transfer fraud, activation of stolen credit cards, or identity theft. However, spoofing services do not necessarily know the intent with which their customers place spoofed calls. Once the Commission's rules are in force, we will have the opportunity to determine whether the current rules are sufficient to deter malicious caller ID spoofing. If they are not, we can revisit the issue. In the meantime, we raise the issue of liability for third-party providers in the report the Act requires the Commission to submit to Congress.

31. We want to make clear that our decision not to impose additional obligations on third-party caller ID spoofers in no way immunizes them from the obligation to comply with the Act. Where a caller ID spoofing service causes, directly or indirectly, the transmission or display of false or misleading caller ID information with the intent to defraud, cause harm, or wrongfully obtain anything of value, such service will be in violation of the Truth in Caller ID Act and our rules. Our conclusion follows from a natural reading of the statute, which applies to any “person” who causes caller ID services to transmit misleading or inaccurate caller ID information. Likewise, although we do not decide the matter here, liability questions would arise if the totality of the circumstances demonstrated that a third-party spoofing provider had promoted its services to others as a means to defraud, cause harm, or wrongfully obtain anything of value.

32. Caller ID Unmasking. As mentioned in the Caller ID Act NPRM, some entities—often the same ones that offer spoofing services—also offer the ability to unmask a blocked number, effectively stripping out the privacy indicator chosen by the calling party. We remain deeply concerned about these unmasking services, which circumvent the privacy protections afforded by the Commission's CPN rules. The record reflects concern regarding these services as well. However, the record is not sufficiently robust to support amendments to our rules at this time. The Commission will consider whether to take further rulemaking action to address these services in the future. In the meantime, we take this opportunity to remind carriers of their obligations to honor callers' privacy requests.

33. The Act provides for additional forfeiture penalties for violations of subsection 227(e) of the Communications Act, and new procedures for imposing and recovering such penalties. In order to fully implement the Truth in Caller ID Act, the Commission proposed amendments to its forfeiture rule, 47 CFR 1.80. The proposed amendments specified the forfeiture penalties the Commission proposed to assess for violations of the Truth in Caller ID Act, and proposed procedures for imposing penalties and recovering such penalties. The Commission also proposed some minor revisions to our forfeiture rules to address issues not directly related to the Truth in Caller ID Act. For the reasons discussed below, we now adopt the proposed amendments to our forfeiture rules, with some minor modifications.

34. Amount of Penalties. The Act specifies that the penalty for a violation of the Act “shall not exceed $10,000 for each violation, or 3 times that amount for each day of a continuing violation, except that the amount assessed for any continuing violation shall not exceed a total of $1,000,000 for any single act or failure to act.” These forfeitures are in addition to penalties provided for elsewhere in the Communications Act. Therefore, to implement these provisions of the Truth in Caller ID Act, we adopt the Commission's proposal to amend section 1.80(b) of our rules to include a provision specifying the maximum amount of additional fines that can be assessed for violations of the Truth in Caller ID Act. In the interest of consistency and clarity, we also amend the text and chart in Section III of what is now the “Note to Paragraph (b)(5)” to include information about the maximum additional forfeitures provided for by the Truth in Caller ID Act.

35. The Truth in Caller ID Act establishes the maximum amount of additional forfeiture penalties the Commission can assess for a violation of the Act, but it does not specify how the Commission should determine the forfeiture amount in any particular situation. In order to provide guidance about the factors the Commission will use in determining the amount of penalty it will assess for violations of the Truth in Caller ID Act, we adopt the Commission's proposal to employ the balancing factors the Commission typically considers when determining the amount of a forfeiture penalty. Those factors are set out in section 503(b)(2)(E) of the Communications Act and § 1.80(b)(4) of the Commission's rules. The balancing factors include “the nature, circumstances, extent, and gravity of the violation, and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.” These factors allow the Commission to properly consider the specific facts of each case when determining an appropriate forfeiture penalty.

36. Procedure for Determining Penalties. With respect to the procedure for determining or imposing a penalty, the Act provides that “[a]ny person that is determined by the Commission, in accordance with paragraphs (3) and (4) of section 503(b) [of the Communications Act], to have violated this subsection shall be liable to the United States for a forfeiture penalty.” It also states that “[n]o forfeiture penalty shall be determined under clause (i) against any person unless such person receives the notice required by section 503(b)(3) or section 503(b)(4) [of the Communications Act].” As the Commission indicated in the Caller ID Act NPRM, taken together, sections 503(b)(3) and 503(b)(4) allow the Commission to impose a forfeiture penalty against a person through either a hearing or a written notice of apparent liability (NAL), subject to certain procedures. The Truth in Caller ID Act makes no reference to section 503(b)(5) of the Communications Act, which states that the Commission may not assess a forfeiture under any provision of section 503(b) against any person, who: (i) “Does not hold a license, permit, certificate, or other authorization issued by the Commission”; (ii) “is not an applicant for a license, permit, certificate, or other authorization issued by the Commission”; or (iii) is not “engaging in activities for which a license, permit, certificate, or other authorization is required,” unless the Commission first issues a citation to such person in accordance with certain procedures. As the Commission explained in the Caller ID Act NPRM, that omission suggests that Congress intended to give the Commission the authority to proceed expeditiously to stop and, where appropriate, assess a forfeiture penalty against, any person or entity engaged in prohibited caller ID spoofing without first issuing a citation. Having received no comments disagreeing with the Commission's proposed approach, we find that it is appropriate and consistent with Congressional intent to adopt rules that allow the Commission to determine or impose a forfeiture penalty for a violation of section 227(e) against “any person,” regardless of whether that person holds a license, permit, certificate, or other authorization issued by the Commission; is an applicant for any of the identified instrumentalities; or is engaged in activities for which one of the instrumentalities is required.

37. We also adopt rules that amend § 1.80(a) of our rules to add a new subsection (4) providing that forfeiture penalties may be assessed against any person found to have “violated any provision of section 227(e) of the Communications Act or of the rules issued by the Commission under section 227(e) of that Act.” In contrast to section 503(b)(1)(B) of the Communications Act, which provides for a forfeiture penalty against anyone who has “willfully or repeatedly” failed to comply with any provisions of the Communications Act, or any regulations issued by the Commission under the Act, the Truth in Caller ID Act does not require “willful” or “repeated” violations to justify imposition of a penalty. Therefore, we adopt new § 1.80(a)(4), in accordance with Congressional direction that the Commission have authority to assess a forfeiture penalty for all violations of section 227(e) or of the rules issued by the Commission under that section of the Act.

38. Statute of Limitations. The Truth in Caller ID Act specifies that “[n]o forfeiture penalty shall be determined or imposed against any person under [section 227(e)(5)(i)] if the violation charged occurred more than 2 years prior to the date of issuance of the required notice or notice of apparent liability.” We note that this differs from the more general limitations provision of section 503(b)(6) of the Communications Act, which provides for a one-year statute of limitations in most cases. Given the explicit language of the Truth in Caller ID Act, however, we find that the longer two-year statute of limitations applies to enforcement of the Truth in Caller ID Act.

39. Miscellaneous. We also take this opportunity to revise the undesignated paragraph in § 1.80(a) to address issues not directly related to implementation of the Truth in Caller ID Act and to redesignate that undesignated text as “Note to paragraph 1.80(a).” First, with respect to the proposed revisions, in order to ensure that the language in the rule encompasses the language used in all of the statutory provisions, we amend the rule to specify that the forfeiture amounts set forth in § 1.80(b) are inapplicable “to conduct which is subject to a forfeiture penalty or fine” under the various statutory provisions listed. (Emphasis added.) Second, we amend the rule to change the references to sections 362(a) and 362(b) to sections 364(a) and 364(b) respectively, in order that the statutory provision references match those used in the Communications Act, rather than the sections of the U.S. Code. Third, we delete section 503(b) from the list of statutory provisions to which the forfeiture amounts in § 1.80(b) do not apply, because the inclusion was in error; § 1.80(b) implements the forfeiture amounts of section 503(b), and so the penalties set forth in § 1.80(b) apply to forfeiture under section 503(b).

40. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified information collection burdens for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

41. The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

42. The Regulatory Flexibility Act of 1980, as amended (RFA) requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

43. In this Report and Order, the Commission adopts rules implementing the Truth in Caller ID Act. The Truth in Caller ID Act and the implementing rules we adopt today prohibit any person or entity in the United States from knowingly altering or manipulating caller identification information with the intent to defraud, cause harm, or wrongfully obtain anything of value. The Caller ID Act NPRM sought comment on benefits and burdens that would be imposed on small entities by the proposed rules and sought comment on an initial regulatory flexibility analysis (IRFA). No commenters sought to argue that the proposed rules would have a significant impact on a substantial number of small entities. Indeed, no commenters raised any concerns about the impact of the proposed rules on small entities, as such.

44. The NPRM also sought comment on whether the Commission may, and should, adopt rules imposing obligations on providers of caller ID spoofing services when they are not themselves acting with intent to defraud, cause harm, or wrongfully obtain anything of value. It also sought comment more specifically on whether the Commission should impose record-keeping requirements on caller ID spoofing providers, as well as on a proposal made by DOJ and supported by the Minnesota Attorney General to adopt rules requiring “public providers of caller ID spoofing services to make a good-faith effort to verify that a user has the authority to use the substituted number, such as by placing a one-time verification call to that number. In this Order, we decline to impose any additional obligations on providers of caller ID spoofing services at this time. Therefore, to the extent that such requirements would have had an economic impact on some small entities, that impact will not occur. Indeed, the record contains nothing showing that the cost of compliance obligations would be economically significant or would affect a substantial number of small entities. Indeed, based on the record before us, we are persuaded that a substantial number of small businesses do not engage in caller ID spoofing with the intent to defraud, cause harm, or wrongfully obtain anything of value, and those that do are already prohibited from doing so by the Truth in Caller ID Act. Therefore, we certify that the requirements of this Report and Order will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the Report and Order including a copy of this final certification, in a report to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. See 5 U.S.C. 801(a)(1)(A). In addition, the Report and Order and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register . See 5 U.S.C. 605(b).

45. Accordingly, it is ordered that, pursuant to section 2 of the Truth in Caller ID Act of 2009, Public Law 11-331, and sections 1, 4(i), 4(j), 227, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 227 and 303(r), this Report and Order, with all attachments, is adopted.

46. It is further ordered that parts 1 and 64 of the Commission's rules are amended.

47. It is further ordered that pursuant to §§ 1.4(b)(1) and 1.103(a) of the Commission's rules, 47 CFR 1.4(b)(1), 1.103(a), this Report and order shall be effective 30 days after publication of a summary in the Federal Register.

48. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 1 and 64 as follows:

This is a synopsis of the Commission's Report and Order (Order), FCC 11-92, adopted and released on June 9, 2011. The full text of the Order is available for inspection and copying during regular business hours in the FCC Reference Center, 445 Twelfth Street, SW., Room CY-A257, Portals II, Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 Twelfth Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their Web site, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and Braille). Persons with disabilities who need documents in these formats may contact the FCC by e-mail: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.

1. In the ETFS Notice of Proposed rulemaking (NPRM), the Commission provided a detailed description of the Commission's implementation of the statutory tariff streamlining requirements and the development and implementation of the ETFS. To summarize briefly, on September 6, 1996, the Commission released the Tariff Streamlining NPRM, 61 FR 49,987, September 24, 1996, proposing measures to implement the tariff streamlining requirements of section 204(a)(3) of the Communications Act of 1934, as amended (Act), including a proposal that would require LECs to file tariffs electronically. The Commission began implementing the electronic filing of tariffs on January 31, 1997, when it released the Streamlined Tariff Order. On May 28, 1998, the Common Carrier Bureau (Bureau) released the ETFS Order, 63 FR 35,539, June 30, 1998, in which it established July 1, 1998, as the date after which incumbent LECs would be required to use the ETFS to file tariffs and associated documents. Although the Tariff Streamlining NPRM proposed mandatory electronic filing by all local exchange carriers, the Bureau limited the scope of the ETFS Order to incumbent LECs.

2. In 1996, the Commission ordered mandatory detariffing of most interstate, domestic interexchange services of nondominant interexchange carriers, but permitted some exceptions to the mandatory detariffing requirement. In addition, nondominant carriers continued to file tariffs for other services that were unaffected by the Detariffing Order. Competitive LECs are permitted to tariff interstate switched access charges if the charges are no higher than the rate charged for such services by the competing incumbent LEC except where the rural exemption applies. Competitive LECs are also permitted to tariff other interstate access services such as special access. In contrast to tariff filings by incumbent LECs, tariff filings by nondominant carriers are currently submitted on diskette, CD-ROM accompanied by a cover letter, and paper for informational tariffs, all of which are cumbersome and costly for the carrier and the Commission, and make it difficult for interested parties to review the documents due to internal distribution and storage barriers.

3. On July 15, 2010, the Commission released the ETFS NPRM, 75 FR 48,629, August 11, 2010, which proposed to modify the Commission's rules to require all tariff filers to file tariffs and other associated documents via the ETFS. The Commission requested comments on the benefits these rule modifications would produce. The Commission also requested comment on a number of technical rule modifications that would be necessary to implement the new electronic filing requirements. Four comments were received, all urging the Commission to quickly adopt the proposed rules.

4. As shown below, electronic filing for all tariff filers will greatly benefit the public, carriers, and the Commission. Accordingly, we adopt rule modifications that require electronic tariff filing for all tariff filers. Specifically, we require all tariff filers to follow the Commission's rules for electronic tariff filing and file using the ETFS for their tariffs, tariff revisions, Base Documents, and associated documents, including applications for special permission, and petitions and replies to petitions against tariff filings.

5. After review of the record, we conclude that electronic filing of all tariffs and associated documents will facilitate the administration of nondominant tariffs and therefore is in the public interest. We also find that the same benefits realized from electronic tariff filing by incumbent LECs, as outlined in the Tariff Streamlining NPRM, will be realized by enabling electronic filing of tariffs and associated documents by nondominant carriers. These anticipated benefits include: reducing burdens on carriers and the Commission; facilitating access to tariffs and associated documents by the public; increasing the ease with which interested parties can review all tariffs; making all tariff information available to state and other federal regulators; and facilitating the compilation of aggregate carrier data for industry analysis purposes. In addition, electronic filing of tariffs should enable the Commission and interested parties to more efficiently identify tariffs that may be unlawful and/or in violation of Commission rules and precedent. We conclude that including all tariffs on the ETFS will improve public access to these filings and will greatly enhance the transparency and efficiency of the tariff filing process. For these reasons, we also require international dominant carriers filing pursuant to section 61.28 of the Commission's rules to be subject to electronic filing.

6. Filing Requirements. In the ETFS NPRM, we proposed that all tariff filers file electronically subject to §§ 61.14, 61.15, and 61.16 of the Commission's rules. No comments were filed opposing this proposal. Accordingly, we conclude that it is appropriate to apply the same electronic filing requirements to all tariff filers and we expand the applicability of §§ 61.14, 61.15, and 61.16 of the Commission's rules to include all tariff filers.

7. We also adopt our proposals with regard to § 61.15's FCC Registration Number (FRN) requirements. We require that, consistent with this rule, each letter of transmittal must contain the filing carrier's FRN. If more than one carrier participates in the tariff, the FRN for the filing carrier and the FRNs for each individual carrier that participates in the tariff must be included in the letter of transmittal. This will ensure that it is clear to Commission staff and the public which issuing, concurring, and other carriers are participating in a tariff. We also conclude that the use of consecutive transmittal numbers for letters of transmittal pursuant to the proposed revision of § 61.15 facilitates the Commission's ability to electronically match the mandatory tariff filing fee with the appropriate carrier's filing.

8. In the ETFS NPRM, we invited specific comment on the use of transmittal numbers if mandatory electronic filing is required. For carriers converting from non-electronic filing, we asked whether transmittal numbers should continue sequentially from the last non-electronic tariff or associated document transmission or whether transmittal numbers should start anew at the number one. Similarly for special permission applications, we asked whether the first special permission application filed electronically for a carrier should start with number one or whether the special permission application should continue to be numbered sequentially from the last non-electronically filed special permission request.

9. Commenters recommend that the existing sequential numbering be followed for both transmittal numbers and special permission applications. For example, Sprint argues that it would be confusing for the Commission and customers who review tariff filings to have the numbering restart at number one for the electronic filings because there would be duplicate transmittal and application numbers. We agree and clarify that for carriers converting from non-electronic filings, transmittal numbers must continue sequentially from the last non-electronic filing, consistent with § 61.15 of our rules. Special permission application numbers must also continue to be numbered sequentially from the last non-electronically filed application.

10. Currently, §§ 61.52 and 61.54 of our rules, which require specific formatting and composition of tariffs, apply only to dominant carriers. Because we will be requiring all carriers to file tariffs electronically, in the ETFS NPRM, we proposed that all carriers be required to comply with the formatting and composition requirements of our rules. This would ensure that all tariffs have a basic uniformity that will facilitate an ease of review for customers and other entities examining such tariffs. In its comments, Sprint argues that certain of the § 61.54 requirements would be burdensome for nondominant carriers. For example, Sprint argues that nondominant carriers should not be required to comply with § 61.54(b)(2), which requires the exact name of the carrier, a brief statement showing each class of service provided, the geographic application, and the type of facilities used to provide service be included in the tariff. Sprint also expresses concern about nondominant carriers having to comply with § 61.54(c)(3)(ii), which requires the carrier to “indicate the transmittal number under which that page was submitted.”

11. We provide the following clarifications to address Sprint's concerns that the filing requirements, particularly the requirements of § 61.54, would be overly burdensome for nondominant carriers. Section 61.54(b)(2) requires the following information: (1) The exact name of the carrier; (2) a brief statement showing each class of service provided; (3) the geographical application; and (4) the type of facilities used to provide service to be included in the tariff. We note that most incumbent LECs comply with this requirement by including a brief statement on the Title page of the tariff, and we would expect that nondominant carriers would comply in a similar manner. Thus, we conclude that this is not an overly burdensome requirement and is helpful to Commission staff and the public reviewing the tariff by including some descriptive information on the Title page of the tariff. Therefore, we require that nondominant tariffs comply with § 61.54(b)(2), as proposed in the ETFS NPRM. With regard to the § 61.54(c)(3)(ii) transmittal number requirement, we clarify that this will be applied to nondominant carriers filing revisions to their tariff, on a prospective basis, once their initial Base Document has been filed electronically. This information is helpful in tracing modifications made to tariffs, so we conclude that it must be applied to all tariff filers. However, we do not expect nondominant carriers to research their previously filed tariff revisions to include different transmittal numbers on the initial Base Document. In the future, if a page is modified, the carrier must include the transmittal number under which the revised page is being submitted.

12. In the ETFS NPRM, we proposed amending the notice requirements of § 61.58 of our rules to add a provision requiring nondominant carriers that are eligible to file pursuant to the streamlining requirements of section 204(a)(3) of the Act, but choose not to file using these statutory timeframes, to file tariffs on at least one day's notice. This addition to § 61.58 would permit us to delete § 61.23 as duplicative, and instead require all carriers to comply with the general notice requirements of § 61.58. No carriers filed comments objecting to this proposal. To streamline our rules, we adopt this proposal to require all carriers to comply with § 61.58 of the Commission's rules and we delete § 61.23 as duplicative.

13. In the ETFS NPRM, we noted that a number of nondominant carriers operate under a “doing business as” or d/b/a name, and proposed to clarify that § 61.54 of the Commission's rules requires carriers to use their legal names in tariffs and associated documents when filing via the ETFS. If carriers use a d/b/a name in addition to their legal name, we proposed that the d/b/a name be noted on the Title page of the tariff in addition to the “exact name of the carrier.” No commenters objected, and we adopt this proposal to ensure that the legal name of the carrier is clear.

14. Compliance Deadline. We note that ETFS has been available for use since November 17, 1997 and its use has been mandatory for incumbent LECs since July 1, 1998. Given that the ETFS has been used by the public for more than a decade, in the ETFS NPRM, we sought comment on the amount of time parties believe all tariff filers will need before they can comply with the mandatory tariff filing requirement. Specifically, we proposed that all tariff filers must use the ETFS for all tariff and associated document filing 120 days after a final order in this docket implementing such a requirement (or summary thereof) is published in the Federal Register. We also proposed that affected carriers must file their currently effective tariffs on the ETFS no later than 120 days after the revised rules become effective, which will be the carrier's initial Base Document.

15. Commenters generally supported this time period. For example, Sprint stated that 120 days should be sufficient for carriers to modify and file their tariffs. Qwest also noted that the time period was reasonable. We reject AT&T's proposal that the time period for filing electronic tariffs should be shortened to 30 days after the Commission has upgraded the ETFS to accept competitive LEC filings. We want to ensure that nondominant carriers have sufficient time to prepare for the change and Commission staff has sufficient time to respond to nondominant carrier inquiries. Accordingly, we adopt our proposal to provide a 120-day transition period, but to ensure that the ETFS will be able to process all of the new tariff filings, we also provide a window to allow carriers time to file their tariffs using the ETFS. We, therefore, conclude that the revised rules will become effective 120 days after this order is published in the Federal Register . Once the rules are effective, we require all tariff filers to use ETFS to file their currently effective tariffs within 60 days after the revised rules become effective. This filing will be the carrier's initial Base Document. The two-stage process will provide nondominant carriers with sufficient notice to prepare for electronic filing, and will allow greater flexibility as to the timing of the filings and help ensure that the ETFS can handle all of the new incoming filings. Therefore, once the revised rules become effective, nondominant tariff filers may file their initial Base Document any time within the 60-day period.

16. We encourage tariff filers to plan appropriately and not wait until the last day of the 60-day period, to ensure that the ETFS will be able to accept their filing. Once the initial Base Documents are filed on the ETFS, all future tariff revisions also are required to be filed electronically on the ETFS. To ensure that carriers will not continue to rely on manually filed tariffs, all tariffs previously filed with the Commission not using ETFS will be cancelled pursuant to § 61.87 of the Commission's rules. Cancellation will be effective on filing of the initial Base Document replacing the tariff or at the end of the 60-day filing window if no initial Base Document has been filed in ETFS. Because § 61.87 requires carriers, once they cancel a tariff, to revise the Title page to indicate the tariff is no longer effective, for the purpose of this initial Base Document filing only, we waive, on our own motion, the requirements to file new Title pages when a carrier cancels a tariff pursuant to § 61.87 of the Commission's rules. After the rules become effective, tariff filers will no longer be permitted to file diskette, CD-ROM and/or paper copies of tariffs and associated documents that otherwise would be filed with the Secretary, the Chief of the Pricing Policy Division of the Wireline Competition Bureau, and the Commission's commercial contractor.

17. For consistency and administrative clarity, we proposed changes to additional sections in Part 61 of the Commission's rules as shown in Appendix A of the ETFS NPRM. For example, we proposed consolidating the requirements for letters of transmittal and cover letters in § 61.15 of the Commission's rules, and therefore, proposed to delete §§ 61.21 and 61.33 of our rules because those rules would be duplicative of § 61.15. Commenters did not object to these proposals, and we adopt the rule revisions in Appendix A.

18. Administration. As we proposed in the ETFS NPRM and consistent with the Streamlined Tariff Order, we conclude that the Chief of the Wireline Competition Bureau will be responsible for administering the adoption of electronic tariff filing requirements for all tariff filers.

19. An initial Regulatory Flexibility Analysis (IRFA) was incorporated in the ETFS NPRM. The Commission sought written public comment on the proposals in the ETFS NPRM, including comment on the IRFA. No comments were received. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

20. Today, the Commission adopts a Report and Order to extend the requirement to file tariffs and associated documents electronically via the Electronic Tariff Filing System (ETFS) to all tariff filing entities. The Commission concludes that requiring the electronic filing of all tariffs and associated documents would benefit the public. The Commission concludes that the proposed rules will become effective, and therefore, the ETFS will be available for all tariff filers to use 120 days after a final order in this docket implementing such a requirement (or summary thereof) is published in the Federal Register . After the final rules are effective, tariff filers will have a 60-day transition to begin using the ETFS system to file their tariffs and associated documents. The Commission also concluded that the Chief of the Wireline Competition Bureau would administer the adoption of this extended electronic filing requirement.

21. There were no comments raised that specifically addressed the rules and policies proposed in the IRFA.

22. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A “small-business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration.

23. Total Number of Telephone Companies Affected. The United States Bureau of the Census (Census Bureau) reports that, at the end of 1992, there were 3,497 firms engaged in providing telephone services, as defined therein, for at least one year. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, covered specialized mobile radio providers, and resellers. It seems certain that some of these 3,497 telephone service firms may not qualify as small entities or small incumbent LECs because they are not “independently owned and operated.” For example, a personal communications service (PCS) provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It is reasonable to conclude that fewer than 3,497 telephone service firms are small entity telephone service firms or small incumbent LECs that may be affected by the proposed rules, herein adopted.

24. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access services providers (CAPs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent data, there are 349 CAPs and competitive LECs engaged in the provision of competitive local exchange services. We do not have data specifying the number of these carriers that are not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of CAPs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are less than 349 small entity CAPs providing competitive local exchange services that may be affected by the Report and Order.

25. Interexchange Carriers. Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to interexchange services (IXCs). The closest applicable definition under the SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. According to the most recent data, there are 204 carriers engaged in the provision of interexchange services. We do not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are less than 204 small entity IXCs that may be affected by the Report and Order.

26. Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a small business size standard specifically for operator service providers. The appropriate size standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 28 carriers have reported that they are engaged in the provision of operator services. Of these, an estimated 27 have 1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission estimates that the majority of OSPs are small entities.

27. In this Report and Order, the Commission is expanding mandatory electronic filing to all tariff filers, which include competitive LECs. The Report and Order requires that all tariff filers must follow the Commission's rules for electronic tariff filing and file via ETFS their tariffs, tariff revisions, base documents and associated documents, including applications for special permission. Moreover, in order to provide uniformity for tariff filings, the Report and Order extends certain procedural requirements to all tariff filing entities, including: specific formatting and composition requirements, the use of FCC registration numbers and the use of transmittal numbers.

28. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

29. In the ETFS NPRM, we sought comment from all interested parties and no parties objected to the electronic filing proposals. The Commission believes that most carriers are familiar with the Electronic Tariff Filing System, if not currently using it. As such, the Commission believes the burden on small entities will be minimal. In addition, to assist tariff filers that have not used ETFS previously, including small entity filers, the Commission is allowing carriers a 180-day transition period before they will be required to begin using ETFS.

30. None.

31. This order contains new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It has been submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees.

32. In this order, we have assessed the effects of electronic filing on small entities and believe the burden will be minimal. In addition, to assist tariff filers that have not used the ETFS previously, including small entity filers, the Commission is allowing carriers a 180-day transition period to begin using the ETFS.

33. The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

34. Accordingly, it is ordered, pursuant to Sections 1, 4(i), 201-205, and 226(h)(1)(A) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 201-205, 226(h)(1)(A), that this Report and Order is adopted.

35. It is further ordered that the final rules and rule revisions adopted in this Report and Order shall become effective either November 17, 2011 or following approval by the Office of Management and Budget, whichever date is later. The Commission will publish a document at a later date establishing the effective date.

36. It is further ordered that nondominant carriers shall file their initial Base Document using the Electronic Tariff Filing System no later than sixty (60) days after the final rules and revisions adopted in this Report and Order become effective.

37. It is further ordered, that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 61 and 64 as follows: