Background

The FFVP began as a pilot program funded by the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171) to determine the best practices for increasing fruit (both fresh and dried) and fresh vegetable consumption in schools. The pilot program limited participation to a maximum of 25 schools per state. Selected primary and secondary schools in Indiana, Ohio, Michigan, Iowa and the Zuni Tribe of New Mexico participated in the pilot and were provided funds to purchase and serve free fruits and vegetables during school year 2002-2003. An evaluation conducted after the first year of operation disclosed that schools considered the pilot to be a success and wanted to continue the Program beyond the pilot if funding were provided. The pilot demonstrated student acceptance and interest in fresh fruit and vegetable consumption.

The pilot's success led to expansion of the FFVP. Congress viewed the continuation and expansion of the pilot as a positive step to combat childhood overweight and obesity. The Child Nutrition and WIC Reauthorization Act of 2004 (Pub. L. 108-265) added Pennsylvania, North Carolina, Mississippi, and Washington, and two Indian Tribal Organizations in South Dakota and Arizona starting in school year 2004-2005. In addition, the Reauthorization Act of 2004 permanently authorized the FFVP in those States by adding section 18(g), the Fresh Fruit and Vegetable Program, to the Richard B. Russell National School Lunch Act (NSLA). Section 18(g) required, to the maximum extent practicable, the selection of low-income schools and established the statutory requirements for FFVP operation.

In 2006, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (Pub. L. 109-97), provided one-time funding to further expand the FFVP to Utah, Wisconsin, New Mexico, Texas, Connecticut and Idaho for one year. Subsequently, the Consolidated Appropriations Act of 2008 (Pub. L. 110-161) provided one time funding to expand the FFVP to add non-participating States, allowed FNS to reallocate recovered FFVP funds from previous years and for the first time provided funds for the Federal administration of the FFVP.

The Food, Conservation and Energy Act of 2008 (Pub. L. 110-234), also known as the Farm Bill, continued the Program and, most significantly, permanently authorized the FFVP as a nationwide program. In addition, other important changes were also made to the FFVP. It eliminated references to the FFVP in section 18(g) of the NSLA and transferred the program authorization and all operational procedures to section 19 of the NSLA. It established selection criteria, requiring State agencies to conduct outreach to schools serving low income students and to select those schools with the highest number of students certified for free or reduced-price meals for participation in the FFVP. It also provided a significant funding increase, established a funding formula, and, for the first time, provided funds for States to administer the FFVP. The statute also made dried fruit ineligible to be served in the Program. Prior to the 2008 Farm Bill, the FFVP was available to secondary schools. The 2008 Farm Bill limited program participation to elementary schools beginning in school year 2010-2011. Additionally, the number of schools that a State agency can select to participate in the FFVP is no longer limited to 25 schools per state as was required in the pilot program and subsequent legislation. The Program continues to operate on a reimbursement basis and many of the responsibilities of the State agencies remain the same.

Based upon the record of continued support and expansion of the FFVP, the Program is highly regarded by Members of Congress, nutrition advocates, the health care community, parents and students. It is perceived as an effective strategy to help school children develop positive dietary habits during their formative years. The Program is also of interest to farm to school advocates because it provides opportunities to link schools with local farms and increase children's access to fresh fruit and vegetables in schools. Most children do not achieve the recommended intakes of fruits and vegetables. Fruits and vegetables provide a variety of micronutrients and fiber and, therefore, are one of the key food groups emphasized by the 2010 Dietary Guidelines for Americans to maintain overall health and reduce the risk of chronic diseases, overweight and obesity.

The Farm Bill directed FNS to conduct an evaluation of the FFVP. The principle objectives of this evaluation are to determine whether children increase consumption of fruits and vegetables as a result of their participation in the FFVP and experience other dietary changes, such as a decrease in the consumption of less nutritious foods, as a result of their FFVP participation. Additionally, the evaluation will look at FFVP implementation and assess the role that additional factors—such as characteristics of schools selected for the program, method of fruit and vegetable distribution, level and role of nutrition education, etc.—may have with regard to the FFVP's impact on the dietary intake of participating children. An interim evaluation report was delivered to Congress in September. 1 That report finds that students consume an additional 1/4 cup of fruits and vegetables, on average, on days when the program is operating. That is nearly 15 percent higher than average fruit and vegetable consumption of children in non-FFVP schools. In addition, the report finds no statistically significant increase in total calorie consumption by program participants. That finding suggests that fruits and vegetables are replacing other foods in the diets of participating children, rather than adding excess calories. The report is available on the FNS Web site at http://www.fns.usda.gov/ora/MENU/Published/CNP/cnp.htm.

This proposed rule reflects the statutory requirements found in section 19 of the NSLA and the policy memoranda issued by FNS to implement the changes prompted by the 2008 Farm Bill. Although the statutory requirements are already implemented, this proposed rule would set forth the regulatory requirements which will be codified upon adoption of a final rule. This preamble also discusses a few additional parameters established by FNS to ensure that the FFVP is administered similarly to the National School Lunch Program (NSLP) and School Breakfast Program (SBP), when appropriate, and in accordance with applicable Federal requirements.

This proposed rule would establish requirements for the administration and operation of the FFVP consistent with section 19 of the NSLA. FNS is seeking public comments that will help the agency establish regulatory requirements that reflect the intent of the law and are feasible for States and local program operators. Following the public comment period, FNS will issue a final rule to codify the program requirements in Title 7, Part 211 of the Code of Federal Regulations. While the rulemaking process is underway, State and local operators must continue to follow implementation memoranda and guidance materials issued by FNS based on section 19 of the NSLA.

The FFVP is administered by FNS in collaboration with the State agencies responsible for the NSLP. In cases in which the State agency is not permitted by their State law to disburse funds paid to it under the Richard B. Russell National School Lunch Act (42 U.S.C. 1759), administration of the Program shall be in accordance with § 210.3 of the NSLP regulations. Section 211.3(b) of this proposed rule would require each State agency to amend its permanent Federal/State agreement to include administration of the FFVP. State agencies may use the prototype addendum in FNS memorandum SP 31-2008, which was issued to the State agencies on July 11, 2008. The FFVP would be administered by the State agencies as the NSLP and the SBP are administered. Unlike the pilot, during which State agencies worked directly with participating schools, this proposed rule requires that the State agencies work with School Food Authorities (SFAs) that are charged with administering the FFVP in the State. SFAs would be responsible for administering the program in their participating schools, including training such schools in the requirements of the Program as well as approving, consolidating and submitting monthly reimbursement claims to the State agency for all participating schools, as they do in the NSLP and the SBP.

Program funding is available to all State agencies on a school year basis to reimburse school food authorities for the service of fresh fruit and vegetables in selected elementary schools. Section 19 of the NSLA provides funding as follows: $101 million for school year 2010-2011; and $150 million for school year 2011-2012. For the subsequent school years, funding is based on the amount received in the preceding year, adjusted to reflect changes in the Consumer Price Index for the 12-month period ending the preceding April 30. Funds for Federal administration of the Program ($500,000) are deducted from the available funding before allocating funds to each State agency.

The amount received by each State agency is based on the funding formula established in section 19 of the NSLA, which provides a minimum annual grant of 1 percent of the available funds to each State and the District of Columbia. Remaining funds are allocated to each State, the District of Columbia, Guam, Puerto Rico and the Virgin Islands based on the percentage of their population in relation to the United States total population. In States in which FNS administers the program in some or all schools, FNS shall have available applicable funds to administer and operate the program. In terms of administrative funds, it is proposed that for FNS Regional Office Administered Programs (ROAPs), funding for the FFVP would be determined by the proportion of the number of schools participating in the FFVP administered by the State agency compared to the number of schools participating in the FFVP administered by the FNS Regional Office. The funding provisions are in § 211.4 of the proposed regulatory text.

Under the proposed rule, each State agency would determine how to administer the FFVP within its existing personnel structure, workload, and other factors. A State agency would be allowed to set aside a portion of their total annual grant to cover the cost of State agency administration of the Program. As stated in § 211.6 of the proposed regulatory text, such an amount would be the lesser of 5 percent of the State agency's total FFVP funding for the school year or the amount required to pay the cost of one full-time coordinator for the Program, as included in the language of the Farm Bill. These options are intended to assist the State agency in developing a reasonable estimate for State agency costs of administering the FFVP. However, the statute does not require that the State agency employ a full-time program coordinator. The amount of funds required for State administrative costs would have to be determined prior to selecting schools or allocating FFVP funds for schools. A State agency would also have the option of retaining no FFVP funds for State administrative costs, or may retain less State administrative funding than the formula allows, in order to increase the availability of Program funds for the purchase of fresh fruits and vegetables by the schools. In addition, this rule proposes to amend 7 CFR part 235, State Administrative Expense Funds, to allow the use of SAE funds for the administration of the FFVP. The FFVP is an eligible program, since it is authorized under the NSLA. If such funds are used for the administration of the FFVP, all necessary requirements for the use of such funds shall be followed in accordance with 7 CFR part 235.

To enable State agencies to administer the Program on a fiscal year basis, like other Child Nutrition Programs, FNS would provide Program funds in two allocations on or around July 1st and October 1st of each year. The July allocation would be a small portion of each State's total allocation and would reflect what the State and schools anticipate that they will expend or obligate for the first quarter of the school year. The October allocation would consist of the remaining balance of the State's grant. States would be required to expend or obligate the July and October allocations by the following September 30. For example, funds allocated to the States on July 1, 2011 would have to be obligated or expended by September 30, 2011 (the following September 30). Subsequent funds allocated in October of 2011 shall be obligated or expended by the following September 30, 2012. A state's unobligated funds would be returned to the Program and reallocated at a later date. . The provisions on funding allocation are found in § 211.5 of the proposed regulatory text.

As provided by statute, each State agency will determine the distribution of funds to each school and provide Program funding to those schools through the SFAs. Each school selected to participate in the FFVP would be allotted funds based on a per-student amount. As required by the statute, funding for participating schools must equal an amount of no less than $50 and not more than $75 per child per school year. Schools would be required to submit expenditure data to the SFA. SFAs would be required to consolidate school expenditure information and submit their claims for reimbursement to the State agency on a monthly basis.

As provided in § 211.5(a)(1)(iii) and § 211.5(a)(2)(ii), respectively, participating SFAs must ensure that funds are allocated to participating schools for the school year and any unobligated or unspent funds will be recovered for reallocation in a future school year.

Prior to selecting schools for participation in the Program, section 19 of the NSLA requires that each State agency conduct outreach to schools serving the highest percentage of children certified for free and reduced price meals. Outreach would be conducted on a schedule that would enable the school application and selection processes to be completed in a timely manner to ensure that the selected schools are able to offer the Program at the start of the school year.

It is recognized that available funding may not be sufficient to institute the FFVP in each of the schools that have a student population where at least 50 percent of the enrolled students are certified eligible for free or reduced price school meals. Since the statute requires that participation priority be given to schools serving the highest percentage of free and reduced price certified students, State agencies should rank their schools starting with those at which 100 percent of the students are certified for free and reduced-price meals down to those in which 50 percent of the students are certified for free and reduced-price meals in order to actively target the most needy schools. In States in which FNS operates Regional Office Administered Programs (ROAPs), it is proposed that the State agency coordinate the ranking of schools with FNS to determine the number of ROAP schools that may be eligible for the FFVP in the State and for which outreach activities shall be targeted. States may actively target those elementary schools with the highest need to encourage participation in the Program. States that have more low-income elementary schools than could possibly be funded may choose to contact only those schools with the highest documented need. Schools with fewer than 50 percent of their students certified for free and reduced-price meals that meet the other FFVP eligibility criteria would only be considered for participation in the Program after all schools with higher documented percentages of free and reduced price student populations that applied for FFVP have been selected for participation in the Program. Section 211.10(c)(2) proposes that such schools must be ranked in order of the percentage of free and reduced price certified students that they serve and be selected for participation in the FFVP on that basis.

Targeting schools with the highest need is one of the key statutory requirements in section 19 of the NSLA. Compliance with this requirement is nondiscretionary. This statutory requirement cannot be waived to give all schools in a State an equal chance to participate in the Program or to avoid restricting the Program to a few areas. Requiring outreach to schools that serve low income children is feasible because State agencies have access to the free and reduced-price data from all participating SFAs and should be able to easily target the elementary schools with the highest need. The SFAs may assist the State agencies with this outreach process. The outreach provision is found in § 211.10 of the proposed regulatory text.

The intent of Congress to target Program participation to those elementary schools that serve the highest percentage of low income students precludes the use of a competitive process for selecting schools for participation in the FFVP. State agencies would be required to use the criteria specified in § 211.10 to select schools for participation in the Program. An inadequate or incomplete application from a school with a high free and reduced price certified enrollment may not be a reason to reject an application from such a school. As part of the outreach effort, a State agency would be required to assist eligible schools in meeting the application requirements for participation. However, SFAs or schools that have been documented as being deficient in managing FNS programs or there have been administrative findings documenting violations of the requirements of any FNS programs shall not be authorized to operate the FFVP.

Each State agency would be responsible for ensuring that the FFVP reaches elementary schools with the highest percentage of students certified as eligible for free and reduced-price meals. This is a key, nondiscretionary selection criterion that ensures that Program benefits are targeted in accordance with Congressional intent.

In order to determine the number of elementary schools that can be funded each year, section 19 of the NSLA requires State agencies to establish a per-student allocation. As required by law, the per-student allocation shall not be less than $50 or more than $75 per school year. The State agency would be allowed to set a different per-student allocation for participating schools provided that the amount allotted per student is within the $50-$75 range established by law and the rationale for the differing allocations can be provided. In States in which FNS administers the program, ROAP schools in the State must be included when establishing such per-student funding allocations.

In summary, a State agency would need to consider the following criteria when selecting schools for participation in the Program:

• Only elementary schools that offer the NSLP may participate in the FFVP;

• Eligible schools must have at least 50 percent or more of their students certified as eligible for free and reduced-price school meals, except for those situations provided for in § 211.10(c)(2);

• Priority must be given to elementary schools with the highest need based upon the percentage of free and reduced-price children;

• Schools must submit an application for participation in the FFVP; and

• Schools must not have been documented as being deficient in managing any FNS program or there are no outstanding administrative findings documenting violations of the requirements of any FNS program.

Prior to submission of a consolidated claim for reimbursement to the State agency, the SFA would review the FFVP expenditure information submitted to them by the participating schools to ensure that the FFVP expenses submitted by the schools are allowable. SFAs are required to maintain appropriate records to substantiate the claims submitted for reimbursement. As stated in § 211.9 of the proposed regulatory text, upon review, the State agency would be able to disallow payment for unallowable costs or disallow any claim that is otherwise inconsistent with the Program requirements.

Other State agency functions would involve standard procedures found in all Child Nutrition Programs designed to ensure efficiency and integrity. As stated in § 211.14 of the proposed regulatory text, the State agency would be required to provide training and technical assistance to enable schools to operate the Program correctly. The State agency would review a participating school in conjunction with any administrative review or oversight activity they may conduct under the NSLP or SBP. FNS intends to provide guidance to facilitate State agency reviews of the FFVP.

Since the FFVP is a relatively simple program and FNS has already provided ample technical assistance and guidance through memoranda, conference calls, webinars and annual conferences, we expect minor need for corrective action and anticipate that technical assistance will suffice in most cases. However, this proposed rule would give the State agency authority to withhold payment and to suspend or terminate a school's participation in the FFVP due to repeated failure to meet Program requirements. See § 211.15 and § 211.16 of the proposed regulatory text.

The State agency would be required to submit an annual report disclosing the number of schools that applied and the number of schools selected, the enrollment and percentage of free and reduced-price participation for each selected school as well as the per student allocation being made to each selected school. In addition, the State agency must provide the number of schools that applied for participation and were not selected and the percentage of certified free and reduced price eligible students served by such schools. This information would demonstrate that the Program is reaching schools with the highest need. The State agency would also be required to submit a quarterly financial status report (currently the SF-425) via the Food Programs Reporting System (FPRS). The SF-425 has been designated in FPRS for the FFVP. A final financial status report (SF-425) would also be submitted for each fiscal year. State agency recordkeeping retention requirements would be for the same period of time required in the NSLP, i.e., a minimum of three years. The proposed reporting and recordkeeping provisions are in § 211.11 of the proposed regulatory text.

An SFA is responsible for the operation of the FFVP in schools within its jurisdiction. SFAs would enter into a written agreement, or amend an existing written agreement, with the State agency to offer the FFVP in the selected schools in conformance with the requirements established by law, regulations and FNS guidance that reflects current program operations. As part of the agreement, the SFA would commit to using funds primarily for the purchase of fresh fruits and vegetables, offering the Program separately from the NSLP and SBP at a minimum of twice a week, but as frequently as possible during the school week and integrating the Program with other wellness activities. These and other responsibilities that would be included in the agreement are listed in § 211.10 of the proposed regulatory text. The State agency would have authority to amend, suspend or terminate the agreement if an SFA or a school repeatedly fails to operate the Program in accordance with the provisions of the agreement and/or the requirements of this part.

Eligible schools that wish to participate in the Program would be required to submit an application through the SFA. Such applications shall be submitted by the SFA to the State agency for FFVP approval. At a minimum, the application submitted to the State agency shall contain the following information for each school applying for Program participation:

• The total number of students enrolled in the school and the percentage of those students certified as eligible for free and reduced-price meals;

• A certificate of support for participation in the FFVP signed by all of the following: (1) The school food manager, (2) the school principal, and (3) the district superintendent (or equivalent position); and

• A program implementation plan that includes efforts to integrate the FFVP with other efforts to promote children's health, nutrition and physical activity, and to reduce overweight and obesity in children.

In addition, as a part of the implementation plan, each school would be encouraged to include a description of partnership activities undertaken or planned to enhance the operation of the FFVP in the school. FNS has developed an on-line FFVP Toolkit for States to submit “Best Practices”. Both the toolkit and the FFVP Handbook may be found at http://www.fns.usda.gov/cnd/FFVP/toolkit.htm and at http://www.fns.usda.gov/cnd/FFVP/handbook.pdf .

Schools are encouraged to develop partnerships with one or more entities that can provide non-Federal resources to the FFVP operating in the school. Such entities could include representatives of the fruit and vegetable industries, grocery stores, local colleges and universities and local health promotion resources. The FFVP handbook specifically encourages schools to use training materials and develop partnerships with all entities to promote the goals of program.

SFAs submitting information on behalf of schools reapplying to the Program based on their continued high need would be allowed, at the discretion of the State agency, to simply update the information the State agency has on file rather than submit a complete application package. This would simplify the application process for the SFA, the returning school and the State agency. However, SFAs wishing to add new schools to the Program would be required to submit a complete application for such schools that include all of the required elements noted above.

Schools that demonstrate both compliance with the FFVP requirements outlined in the regulations and continue to meet the Program eligibility requirements may be reapproved to continue FFVP participation. However, this does not eliminate the need for the State agency to evaluate FFVP eligibility priority for schools on an annual basis to ensure that schools serving the highest percentage of free and reduced price certified students are provided the opportunity to participate in the FFVP, in accordance with the eligibility criteria established by statute.

Once selected for participation, a school would be responsible for announcing the availability of free fresh fruits and vegetables to children within the school. If the school has a Head Start program, a split-session kindergarten class, or a child care center, the school would notify these groups as well. When publicizing the Program, it is important that schools note that the FFVP is not intended to serve teachers, parents or other adults who are in the school. The only exception to this prohibition against serving FFVP components to adults who are in the school concerns specific teachers. It is proposed that it be acceptable for teachers who are in the classroom with the children during the FFVP service to partake of the fruit or vegetable being served to the children in order to reinforce the nutrition education message of the FFVP. Anecdotal information acquired through the operation of the FFVP indicates that teachers provide a positive role model if they consume fruits and vegetables with their students. However, no additional funding for the service of such components may be claimed for reimbursement by the SFA or participating schools.

Each school selected to participate in the FFVP would have the flexibility to operate the Program within the basic statutory and regulatory requirements and FNS guidance. Each school would decide when, where, and how to serve the fresh fruit and vegetables, what mix of fresh fruits and vegetables to serve, how to involve teachers, parents and community members, how to incorporate nutrition education, how to publicize the availability of free fruits and vegetables, and other Program logistics. The actual operation of the Program would have to be consistent with the agreement between the SFA and the State agency, as described in § 211.10 of the regulatory text.

Although Congress funded the FFVP on a school year basis, we expect that the actual service of fresh fruits and vegetables in schools will begin when school begins for the students and end by June 30th. Schools would be expected to offer the Program during the entire school year (first to last day of school) to effect a positive change in the dietary habits of participating students. Schools that operate year-round may participate in the FFVP during their entire “school year”. However, schools are not allowed to offer the Program during scheduled holidays, summer school sessions or when the Summer Food Service Program or the Seamless Summer option of the NSLP is in operation at the school.

Participating schools would be required to make the fresh fruits and vegetables available during the school day, separate and distinct from the NSLP and SBP meal service, at one or more locations in the school. This rule also proposes that such a food service would occur in each participating school at least twice a week. The Program would not operate before or after school hours. The school would also need to consider the time and place available to eat the fruits and vegetables and other logistical issues. The FFVP tool kit ( http://www.fns.usda.gov/cnd/FFVP/toolkit.htm ) encourages the collection of “Best Practices” and the FFVP manual ( http://www.fns.usda.gov/cnd/FFVP/handbook.pdf ) provides a number of suggestions in this area.

The purpose of the Program is to encourage the increased consumption of fresh fruits and fresh vegetables in elementary schools serving low income students. Schools participating in the Program would provide access to fresh fruits and fresh vegetables that are appropriate for the grade levels of the enrolled children and that represent a variety of whole or pre-cut fresh fruits and vegetables. Frozen, canned, dried, certain types of vacuum packed and other types of processed fruits and vegetables would be prohibited from being served in the FFVP. In addition, schools would be required to limit the service of cooked fresh vegetables to a maximum of one service per week as part of a nutrition education lesson. Other ingredients of the cooked fresh vegetable dish would not be reimbursable under the Program. Low fat or non-fat dip for fresh vegetables is permitted in the Program in order to encourage consumption and enhance acceptability. Many vegetables may otherwise not be palatable to students. However, fruit is acceptable on its own and does not need to be enhanced for acceptability. Since fruit has naturally occurring sugar, we determined that dips for fruit will increase not only sugar but fat in children's diets and would be counterproductive to the goals of the Program.

The definition of the term “Fresh fruits and vegetables” as proposed in this rule has been based upon the definition of the term “fresh” included in § 101.95(a) of Title 21 Part 101 of the Food and Drug Administration Food Labeling regulations as well as an adaptation of FNS' approach to defining “unprocessed” agricultural products appropriate to the FFVP. We believe that this proposed definition best represents the types of fresh fruits and vegetables that Congress intended to be served to children enrolled in this Program. The proposed definition is included in § 211.2.

As required in § 211.21 of this proposed rule, the requirements found in § 210.10(g) of the NSLP regulations regarding accommodations for children with disabilities also exists in the FFVP. Schools must consider how this accommodation requirement may be applied in the operation of the FFVP. For example, in providing accommodations for the FFVP, schools may have to provide texture modifications. In doing so, it is recommended that schools consider starting with fresh fruit or vegetable products and avoid puréeing canned, frozen and vacuum packed fruits and vegetables and those in jars, including baby foods. In most instances, fresh fruits can be easily puréed; however, we recognize that this is not the case for most vegetables. Fresh vegetables may be used, but in most circumstances, will need to be cooked, then puréed.

The puréeing of fresh produce for these students must be done within the constraints of their medical requirements as allowed by their physician. However, schools should make sure that both the parent and the child's doctor are aware of the program and its intent to provide fresh produce in order to determine if the fresh items are acceptable choice for texture modifications.

Section 4302 of Public Law 110-246, the Food, Conservation, and Energy Act of 2008, amended section 9(j) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(j)) to require the Secretary of Agriculture to encourage institutions operating all Child Nutrition Programs to purchase unprocessed locally grown and locally raised agricultural products. We initially implemented the provisions through policy memoranda and explanatory question and answer communications dated January 9, 2009, July 22, 2009 and October 9, 2009. Most recently, a final rule entitled “Geographic Preference Option for the Procurement of Unprocessed Agricultural Products in Child Nutrition Programs”, was published at 76 FR 22603 on April 22, 2011.

The geographic preference procurement option is applicable to purchases made in the FFVP. However, this provision shall only be applied within the context of the FFVP requirement that produce utilized in the program be fresh. The definition of “unprocessed agricultural products” in this proposal has been modified from the definition used for the rest of the Child Nutrition Programs since the geographic preference provisions of the Food, Conservation, and Energy Act of 2008 do not change the basic regulatory and statutory requirement that only fresh produce is allowed to be purchased in the FFVP. This definition may be found in § 211.13(b).

By utilizing the statutorily established geographic preference option in Child Nutrition Programs, purchasing institutions, such as States and SFAs, may specifically identify the geographic area within which unprocessed locally raised and locally grown fresh fruits and vegetables will originate. These procurements may be accomplished through informal or formal procurement procedures, as required by the FFVP regulations, which are consistent with the regulations of the other Child Nutrition Programs.

Should SFA's choose to exercise the geographic preference option, it basically allows schools operating the FFVP to specifically define geographic areas from which they will seek to procure unprocessed local fresh fruits and vegetables. It is up to each school or SFA to determine how to define the geographic area from which such products will be procured. As previously stated, utilizing a geographic preference is an option that may or may not be utilized when procuring fresh fruits and vegetables for the Program.

To ensure that the fresh fruits and vegetables are safe for consumption by the students, schools must follow the applicable sanitation and health standards established under State and local law and regulations, as well as the school's food safety program. Food safety requirements for schools are already in place under § 210.13 and § 220.7, respectively, of this chapter for schools participating in the school lunch and breakfast programs.

Section 19(d)(1)(E) of the statute encourages schools to submit a plan for implementation that includes partnerships with one or more entities that will provide non-Federal resources to the Program such as promotional materials, speakers, etc. Schools would also be expected to encourage the involvement of parents and the community in activities that enhance the Program such as seeking program partners and speakers, and other activities in support of the FFVP and nutrition education efforts.

Schools shall use the majority of the Program funds for the purchase of fresh fruits and vegetables, including services for produce to be pre-cut and for the production of ready-made produce trays. FNS expects that the resources of the school foodservice operation would be available for the FFVP. However, FNS acknowledges that participating schools may have some additional expenses in connection with the Program such as buying new equipment to maintain food safety. As stated in § 211.6 of the proposed regulatory text, schools would be allowed to use no more than 15 percent of a school's total grant for non-food costs necessary to operate the Program. Such non-food costs would include, for example, the purchase of disposable supplies, equipment leases and purchases, and salaries and fringe benefits for employees that wash and cut produce, prepare food trays, distribute produce to classrooms, set up kiosks, restock vending machines, and clean up after the food service. Based on previous experience and information on the FFVP operations, the 15 percent limitation on non-food costs seems reasonable and appropriate. However, we invite comments on this proposed limitation.

All FFVP expenditure information submitted to the SFA by a school for reimbursement would be reviewed by the SFA to ensure that such costs are allowable and reasonable given the number of children benefiting from the Program. The SFA claim for reimbursement submitted to the State agency must be signed by an SFA official and must be supported by records maintained by the SFA.

Non-reimbursable costs would include any food items that do not meet the definition of fresh fruits and vegetables included in § 211.2, such as processed or preserved fruits and vegetables (i.e., canned, frozen, dried and certain types of vacuum packed products), dip for fruit, fruit leather, jellied fruit, trail mix, nuts, fruit or vegetable pizza, fruit smoothies, promotional items such as posters and buttons, and nutrition education materials.

A variety of free nutrition education materials, both printed and online, are available from State and federal partners identified in the FFVP page of the Child Nutrition Programs public Web site, http://www.fns.usda.gov/cnd/FFVP/FFVPResources.htm as well as the FNS Team Nutrition site. Local partners, such as food retailers, health departments, and the USDA Extension Service, are also good sources for nutrition education and promotional materials that may be used in the Program.

The fruits and vegetables offered in the Program are intended to be consumed by children enrolled in the participating school during the school day at school, where there is the opportunity to monitor the distribution of the food and talk about the link between nutrition and health, as well as the importance of good hygiene before and during meals. Schools are not allowed to give children fruits and vegetables to take home.

Each participating school would submit monthly expenditure information to the SFA in order to enable the SFA to submit the monthly claim for reimbursement to the State agency for the purchase of fresh fruits and vegetables and for allowable non-food costs in conformance with § 211.9 of the proposed regulatory text. Schools would be required to submit supporting documentation and would be required to maintain such information for review for a period of three years after the date of submission of the final Financial Status Report. Purchase orders that commingle orders placed for fresh fruit and vegetables used in the FFVP as well as in other school meal programs would have to indicate which fresh produce is for the use in the FFVP.

It is proposed that expenditure information submitted by each participating school would be reviewed by the SFA to ensure that the school expenditures are appropriate to be claimed and are correct. The SFA would then consolidate the information submitted by the participating schools into a single claim for reimbursement for submission to the State agency. Such monthly claims for reimbursement shall be submitted by the SFAs to the State agency not later than 60 days following the last day of the full month covered by the claim in accordance with § 211.9 of the proposed rule. The State agency maintains responsibility to ensure the claims are accurate and reasonable.

This proposed rule has been determined to be significant and was reviewed by the Office of Management and Budget (OMB) in conformance with Executive Order 12866.

The following summarizes the conclusions of the regulatory impact analysis.

This proposed rule seeks to establish the regulatory requirements for the administration and operation of the FFVP, a new program which began as a pilot in a small number of schools in the year 2002 and is now available to over 4,640 selected schools nationwide. Given the incremental funding process, FNS expects that the Program will continue to grow. Currently, FFVP operators at the State and local levels follow policy memoranda and practical guidance.

The intent of the proposed rule is to encourage the consumption of fresh fruits and vegetables by elementary school children. The 2010 Dietary Guidelines for Americans   2 discusses the importance of fruits and vegetables to a healthful diet. Most current consumption patterns of children and adults do not achieve the recommended intakes of many varieties of fruits and vegetables. The program is expected to be successful in introducing school children to a variety of produce that they otherwise might not have the opportunity to sample. By providing increased access to fruits and vegetables, the FFVP will address a key inconsistency between the diets of elementary school children and the 2010 Dietary Guidelines.

The September 2011 interim evaluation of the FFVP finds that students are consuming more fruits and vegetables, an additional 1/4 cup of fruits and vegetables on average, on days when the program is operating. 3 That is nearly 15 percent higher than average fruit and vegetable consumption of children in non-FFVP schools. The report also finds no statistically significant increase in calorie consumption among program participants. That important finding indicates that fruits and vegetables are replacing other foods rather than adding calories to the diets of participants and increasing the risk of weight gain.

This proposed rule would help FNS develop regulatory requirements in consultation with stakeholders and the public. The rulemaking process also provides the opportunity to consolidate all the FFVP requirements into Title 7, part 211 of the Code of Federal Regulations.

Although this proposed rule has been designated significant, the costs associated with implementing the proposed regulatory requirements are not expected to significantly add to current program costs at the State and local levels. The total cost of the proposed rule is projected to be $778 million for FY2011-2015. One half million dollars per fiscal year is retained by USDA for the administration of the program. The rest of the funds are distributed to the States for the purchase of fresh fruit and vegetables, served free to all children enrolled in selected elementary schools, and administration of the program at the State and local levels. This cost is estimated as $776 million for FY2011-2015. From this statutory grant, funds are made available to offset the costs incurred by State agencies, SFAs and schools for administration of the program, including required reporting and recordkeeping, and for other allowable non-food costs.

The key responsibilities of the State agency would be: (1) Disseminate information about the Program to low-income schools; (2) solicit applications from eligible schools and select those with the highest percentage of free and reduced-price participation; (3) provide training and technical assistance to new schools and monitor program operation: and (4) submit quarterly financial reports and an annual report to FNS. These activities are not expected to be time consuming because the FFVP is a relatively simple program. FNS anticipates that many of these activities, including monitoring, would be conducted in conjunction with activities required under the NSLP. In addition, FNS has issued implementation memoranda and provided technical assistance through conference calls, online webinars, regional and state conferences, and workshops at the School Nutrition Association annual conference. The total State agency administrative 5-year cost (FY2011-2015) is estimated as $23 million.

At the local level, schools are reimbursed for the food and allowable non-food costs. Schools would be required to submit expenditure data to the SFA and keep supporting records for three years. We expect that the staff, facilities and equipment used for the lunch program will be available to the FFVP. Food preparation (e.g., washing, peeling and cutting fruits and vegetables) may occasionally be necessary and could result in an added cost to the school. Other possible costs would include purchases of additional equipment and disposable supplies for the FFVP. For FY2011-2015, the total SFA and school administrative cost and allowable non-food cost is estimated as $113 million. The total State agency, SFA and school administrative cost and allowable non-food 5-year cost is estimated as $136 million.

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (RFA) of 1980, (5 U.S.C. 601-612). Pursuant to that review it has been certified that this rule would not have a significant impact on a substantial number of small entities. The administrative and operational requirements of the Program are simple. The Federal government provides funds for the purchase of fresh fruit and vegetables and general administration of the Program. Therefore, FNS does not expect that the proposed rule will have a significant economic impact on small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local and tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local or tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, Section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.

This proposed rule does not contain Federal mandates (under the regulatory provisions of Title II of the UMRA) that would result in expenditures for State, local and tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

The FFVP is listed in the Catalog of Federal Domestic Assistance Programs under 10.582. For the reasons set forth in the final rule in 7 CFR part 3015, subpart V, and related Notice (48 FR 29115, June 24, 1983), this program is included in the scope of Executive Order 12372 which requires intergovernmental consultation with State and local officials. The Child Nutrition Programs are federally funded programs administered at the State level. FNS headquarters and regional office staff engage in ongoing formal and informal discussions with State and local officials regarding program operational issues. This structure of the Child Nutrition Programs allows State and local agencies to provide feedback that forms the basis for any discretionary decisions made in this and other rules.

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under Section (6)(b)(2)(B) of Executive Order 13121.

FNS headquarters and regional offices have formal and informal discussions with State agency officials on an ongoing basis regarding the Child Nutrition Programs and policy issues. Prior to drafting this proposed rule, FNS held several conference calls and meetings with the State agencies to discuss the statutory requirements addressed in this proposed rule. In response, FNS received a number of questions which were summarized in practical guidance distributed to the State and local program operators. FNS also discussed the FFVP statutory requirements with program operators at national, regional and state conferences and received input which has been considered in drafting this proposed rule.

State agencies requested clarification on school applications and selection, allowable foods, and general program operation. These and other requirements are based on section 19 of the National School Lunch Act and FNS policy memoranda are discussed in the preamble.

FNS has considered the impact of this proposed rule on State and local operators. We have attempted to balance the goal of increasing the opportunities for low-income children to consume fresh fruits and vegetables against the need to establish basic regulatory requirements for a new program. At the State agency level, seeking applications from low-income schools could require persistence and assistance from the school food authorities. For schools, adequate staff resources to wash, cut, and serve the fresh fruits and vegetables could pose an occasional challenge. FNS has provided and continues to provide guidance and technical assistance to program operators, and expects that schools will only have minor difficulties in meeting the proposed requirements.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect unless so specified in the Effective Dates section of the final rule. Prior to any judicial challenge to the provisions of the final rule, appeal procedures in § 210.18(q) and § 235.11(f) of this chapter must be exhausted.

E.O. 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects 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. In late 2010 and early 2011, USDA engaged in a series of consultative sessions to obtain input by Tribal officials or their designees concerning the impact of this rule on the tribe or Indian Tribal governments, or whether this rule may preempt Tribal law. Reports from these consultations will be made part of the USDA annual reporting on Tribal Consultation and Collaboration. USDA will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule and will provide additional venues, such as webinars and teleconferences, to periodically host collaborative conversations with Tribal officials or their designees concerning ways to improve this rule in Indian country. We are unaware of any current Tribal laws that could be in conflict with the proposed rule. We request that commentors address any concerns in this regard in their responses.

FNS has reviewed this proposed rule in accordance with the Department Regulation 4300-4, “Civil Rights Impact Analysis,” to identify any major civil rights impacts the rule might have on children on the basis of age, race, color, national origin, sex, or disability. A careful review of the rule's intent and provisions revealed that this rule is not intended to reduce children's ability to participate in the National School Lunch Program, School Breakfast Program, Fresh Fruit and Vegetable Program, or Special Milk Program.

The Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35; see 5 CFR part 1320) requires that OMB approve all collections of information by a Federal agency from the public before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number. This proposed rule contains information collections that are subject to review and approval by OMB; therefore, FNS has submitted an information collection under 0584-NEW, which contains the burden information in the proposed rule for OMB's review and approval.

Comments on the information collection in this proposed rule must be received by April 24, 2012. Send comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for FNS, Washington, DC 20503. Please also send a copy of your comments to Lynn Rodgers-Kuperman, Child Nutrition Division, Food and Nutrition Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 636, Alexandria, Virginia 22302. For further information, or for copies of the information collection requirements, please contact Lynn Rodgers-Kuperman at the address indicated above. Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the Agency's functions, including whether the information will have practical utility; (2) the accuracy of the Agency's estimate of the proposed information collection burden, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

All responses to this request for comments will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

Title: Fresh Fruit and Vegetable Program (FFVP).

OMB Number: [Not Yet Assigned] 0584-XXXX.

Expiration Date: [Not Yet Determined].

Type of Request: New Collection.

Abstract: Section 120 of the Child Nutrition and WIC Reauthorization Act of 2004 amended the Richard B. Russell National School Lunch Act, 42 U.S.C. 1769(g) to authorize the Fresh Fruit and Vegetable pilot as a permanent program effective July 1, 2004. The Food, Conservation, and Energy Act of 2008 expanded the Program and significantly increased funding.

The purpose of the Program is to encourage increased consumption of fresh fruits and vegetables by children enrolled in elementary schools that serve low-income students. Schools interested in participating in the Program must submit an application annually. Participating schools must submit monthly expenditure data to their school food authority (SFA) for the purchase of fruits and vegetables. SFAs must review, approve, and forward the consolidated claims to the State agency (SA) for payment. Program violations identified in any review conducted by the SA and/or SFA must be documented. As necessary, schools or SFAs must document any required corrective action.

SAs must submit financial reports on FFVP expenditures to FNS five times per year to include four quarterly reports and one final report. In addition, SAs must submit an annual report to FNS disclosing program data such as the number of schools that apply, the number that are selected for participation, their total enrollment, the percentage of students eligible for free and reduced-price meals to ensure that the Program is reaching low-income schools with the highest need and the per student allocation provided to each school.

The average burden per response and the annual burden hours are explained below and summarized in the charts which follow.

Respondents for This Proposed Rule: State agencies, School Food Authorities, Schools.

Estimated Number of Respondents for This Proposed Rule: 54 Stage agencies; 4,983 School Food Authorities; 4,983 Schools.

Estimated Number of Responses per Respondent for This Proposed Rule: 5.5.

Estimated Total Annual Responses: 55,515.

Estimated Total Annual Recordkeeping Burden on Respondents for This Proposed Rule: 264,413 hours.

Respondents for this Proposed Rule: State agencies, School Food Authorities, Schools.

Estimated Number of Respondents for This Proposed Rule: 54 State agencies; 4,983 School Food Authorities; 4,983 Schools.

Estimated Number of Responses per Respondent for This Proposed Rule: 9.96.

Estimated Total Annual Responses: 99,822.

Estimated Total Annual Reporting Burden on Respondents for This Proposed Rule: 111,034 hours.

The Food and Nutrition Service is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services and for other purposes.

For the reasons set forth in the preamble, 7 CFR part 211 is proposed to be added as follows:

Title III, Part B of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified), established the Energy Conservation Program for “Consumer Products Other Than Automobiles.” Part C of Title III of EPCA (42 U.S.C. 6311-6317) established a similar program for “Certain Industrial Equipment,” including distribution transformers. The Energy Policy Act of 1992 (EPACT 1992), Public Law 102-486, amended EPCA and directed DOE to prescribe energy conservation standards for distribution transformers. (42 U.S.C. 6317(a)) On October 12, 2007, DOE published a final rule that established energy conservation standards for liquid-immersed distribution transformers and medium-voltage, dry-type distribution transformers (72 FR 58190). The Energy Policy Act of 2005 (EPACT 2005), Public Law 109-25, amended EPCA to establish energy conservation standards for low-voltage, dry-type distribution transformers. (42 U.S.C. 6295(y)) On February 10, 2012, DOE published a proposed rule with amended energy conservation standards for liquid-immersed, medium-voltage dry-type, and low-voltage, dry-type distribution transformers (77 FR 7282).

As published, values in certain tables of the proposed rule are inaccurate or absent. DOE solicits public comment on the changes contained in this document as part of the February 10 NOPR.

In proposed rule FR Doc. 2012-2642 appearing on page 7282 in the issue of Friday, February 10, 2012, the following corrections should be made:

1. On page 7285, Table I.5 is corrected to read as follows:

2. On page 7344, Table V.9 is corrected to read as follows:

3. On page 7346, Table V.20 is corrected to read as follows:

4. On page 7363, Table V.39 is corrected to read as follows:

To determine eligibility for Federal small business assistance, SBA establishes small business size definitions (referred to as size standards) for private sector industries in the United States. SBA uses two primary measures of business size: average annual receipts and average number of employees. SBA uses financial assets, electric output, and refining capacity to measure the size of a few specialized industries. In addition, SBA's Small Business Investment Company (SBIC), Certified Development Company (504), and 7(a) Loan Programs use either the industry based size standards or net worth and net income based alternative size standards to determine eligibility for those programs. At the beginning of the current comprehensive size standards review, there were 41 different size standards covering 1,141 NAICS industries and 18 sub-industry activities (referred to as “exceptions” in SBA's table of size standards). Thirty-one of these size levels were based on average annual receipts, seven were based on average number of employees, and three were based on other measures.

Over the years, SBA has received comments that its size standards have not kept up with changes in the economy, in particular the changes in the Federal contracting marketplace and industry structure. The last time SBA conducted a comprehensive review of all size standards was during the late 1970s and early 1980s. Since then, most reviews of size standards were limited to a few specific industries in response to requests from the public and Federal agencies. SBA also reviews the effect of inflation on its size standards and makes necessary adjustments to its monetary based size standards at least once every five years. SBA's latest inflation adjustment to size standards was published in the Federal Register on July 18, 2008 (73 FR 41237).

SBA proposed new size standards for a number of industries in NAICS Sector 62 on May 4, 1999 (64 FR 23798), when the Standard Industrial Classification (SIC) System was in use. Subsequently, effective October 1, 2000, SBA adopted NAICS as the basis for small business size standards, thereby replacing the SIC System. Therefore, when SBA issued a final rule on November 17, 2000 (65 FR 69432), the adopted size standards in the final rule were based on the NAICS. The industries that are now in NAICS Subsector 621(Ambulatory Health Care Services), NAICS Subsector 622 (Hospitals), and NAICS Subsector 623 (Nursing and Residential Care Facilities) were part of SIC Major Industry Group 80, Health Services, while industries now in NAICS Subsector 624 (Social Assistance) were part of the SIC Major Industry Group 83, Social Services.

Because of changes in the Federal marketplace and industry structure since the last comprehensive size standards review, SBA recognizes that current data may no longer support some of its existing size standards. Accordingly, in 2007, SBA began a comprehensive review of all size standards to determine if they are consistent with current data, and to adjust them when necessary. In addition, on September 27, 2010, the President of the United States signed the Small Business Jobs Act of 2010 (Jobs Act). The Jobs Act directs SBA to conduct a detailed review of all size standards and to make appropriate adjustments to reflect market conditions (Sec. 1344, Pub. L. 111-240, 124 Stat. 2545). Specifically, the Jobs Act requires SBA to conduct a detailed review of at least one-third of all size standards during every 18-month period from the date of its enactment . In addition, the Jobs Act requires that SBA conduct a review of all size standards not less frequently than once every five years thereafter. Reviewing existing small business size standards and making appropriate adjustments based on current data are also consistent with Executive Order 13563 on improving regulation and regulatory review.

Rather than review all size standards at one time, SBA is reviewing size standards on a Sector by Sector basis. A NAICS Sector generally consists of 25 to 75 industries, except for NAICS Sector 31-33, Manufacturing, which has considerably more industries. Once SBA completes its review of size standards for industries in a NAICS Sector, it issues a proposed rule to revise size standards for those industries for which it believes currently available data and other relevant factors support doing so.

Below is a discussion of the size standards methodology for establishing receipts based size standards that SBA applied to this proposed rule, including analyses of industry structure, Federal procurement trends and other factors for industries reviewed in this proposed rule, the impact of the proposed revisions to size standards on Federal small business assistance, and the evaluation of whether a revised size standard would exclude dominant firms from being considered small.

As stated above, SBA has developed a “Size Standards Methodology” for developing, reviewing, and modifying size standards when necessary. SBA has published the document on its Web site at www.sba.gov/size for public review and comments and included it as a supporting document in the electronic docket of this proposed rule at www.regulations.gov. SBA does not apply all features of its “Size Standards Methodology” to all industries because not all features are appropriate. For example, since all industries in NAICS Sector 62 have receipts based size standards, the methodology described in this proposed rule applies to establishing receipts based size standards. However, the methodology is made available in its entirety for parties who have an interest in SBA's overall approach to establishing, evaluating, and modifying small business size standards. SBA always explains its analysis in individual proposed and final rules relating to size standards for specific industries.

SBA welcomes comments from the public on a number of issues concerning its “Size Standards Methodology,” such as whether there are other approaches to establishing and modifying size standards; whether there are alternative or additional factors that SBA should consider; whether SBA's approach to small business size standards makes sense in the current economic environment; whether SBA's use of anchor size standards is appropriate; whether there are gaps in SBA's methodology because the data it uses are not current or sufficiently comprehensive; and whether there are other data, facts, and/or issues that SBA should consider. Comments on SBA's methodology should be submitted via (1) the Federal eRulemaking Portal: www.regulations.gov, using docket number SBA-2009-0008 and following the instructions for submitting comments; or (2) Mail/Hand Delivery/Courier: Khem R. Sharma, Ph.D., Chief, Size Standards Division, 409 Third Street SW., Mail Code 6530, Washington, DC 20416. As with comments received to this and other proposed rules, SBA will post all comments on its methodology on www.regulations.gov. As of December 9, 2011, SBA has received 13 comments to its “Size Standards Methodology.” The comments are available to the public at www.regulations.gov. SBA continues to welcome comments on its methodology from interested parties. SBA will not accept comments to its “Size Standards Methodology” submitted by email.

Congress granted SBA's Administrator discretion to establish detailed small business size standards. 15 U.S.C. 632(a)(2). Specifically, Section 3(a)(3) of the Small Business Act requires that “* * * the [SBA] Administrator shall ensure that the size standard varies from industry to industry to the extent necessary to reflect the differing characteristics of the various industries and consider other factors deemed to be relevant by the Administrator.” 15 U.S.C. 632(a)(3). Accordingly, the economic structure of an industry is the basis for developing and modifying small business size standards. SBA identifies the small business segment of an industry by examining data on the economic characteristics defining the industry structure (as described below). In addition, SBA considers current economic conditions, its mission and program objectives, the Administration's current policies, suggestions from industry groups and Federal agencies, and public comments on the proposed rule. SBA also examines whether a size standard based on industry and other relevant data successfully excludes businesses that are dominant in the industry.

This proposed rule includes information regarding the factors SBA evaluated and the criteria it used to propose adjustments to certain size standards in NAICS Sector 62. The rule also explains why SBA has proposed to adjust some size standards in NAICS Sector 62 but not others. This proposed rule affords the public an opportunity to review and to comment on SBA's proposals to revise size standards in NAICS Sector 62, as well as on the data and methodology it uses to evaluate and revise a size standard. The public can also comment on those industries for which SBA did not propose changes to their size standards.

For the current comprehensive size standards review, SBA has established three “base” or “anchor” size standards: $7 million in average annual receipts for industries that have receipts based size standards, 500 employees for manufacturing and other industries that have employee based size standards (except for Wholesale Trade), and 100 employees for industries in the Wholesale Trade Sector. SBA established 500 employees as the anchor size standard for manufacturing industries at its inception in 1953. Shortly thereafter SBA established $1 million in average annual receipts as the anchor size standard for nonmanufacturing industries. SBA has periodically increased the receipts based anchor size standard for inflation, and today it is $7 million. Since 1986, the size standard for all industries in the Wholesale Trade Sector for SBA financial assistance and for most Federal programs has been 100 employees. However, the 100 employee size standards do not apply to Federal procurement programs. Rather, for Federal procurement the size standard for all industries in Wholesale Trade and for all industries in Retail Trade (NAICS Sector 44-45) is 500 employees under SBA's nonmanufacturer rule. See 13 CFR 121.406(b).

These long-standing anchor size standards have stood the test of time and gained legitimacy through practice and general public acceptance. An anchor is neither a minimum nor a maximum size standard. It is a common size standard for a large number of industries that have similar economic characteristics and serves as a reference point in evaluating size standards for individual industries. SBA uses the anchor in lieu of trying to establish precise small business size standards for each industry. Otherwise, theoretically, the number of size standards might be as high as the number of industries for which SBA establishes size standards (1,141). Furthermore, the data SBA analyzes are static, while the U.S. economy is not. Hence, absolute precision is impossible. Therefore, SBA presumes an anchor size standard is appropriate for a particular industry unless that industry displays economic characteristics that are considerably different from others with the same anchor size standard.

When evaluating a size standard, SBA compares the economic characteristics of the industry under review to the average characteristics of industries with one of the three anchor size standards (referred to as the “anchor comparison group”). This allows SBA to assess the industry structure and to determine whether the industry is appreciably different from the other industries in the anchor comparison group. If the characteristics of a specific industry under review are similar to the average characteristics of the anchor comparison group, the anchor size standard is generally appropriate for that industry. SBA may consider adopting a size standard below the anchor when (1) all or most of the industry characteristics are significantly smaller than the average characteristics of the anchor comparison group, or (2) other industry considerations strongly suggest that the anchor size standard would be an unreasonably high size standard for the industry.

If the specific industry's characteristics are significantly higher than those of the anchor comparison group, then a size standard higher than the anchor size standard may be appropriate. The larger the differences are between the characteristics of the industry under review and those in the anchor comparison group, the larger will be the difference between the appropriate industry size standard and the anchor size standard. To determine a size standard above the anchor size standard, SBA analyzes the characteristics of a second comparison group. For industries with receipts based size standards, including those in NAICS Sector 62 that are the subject of this proposed rule, SBA developed a second comparison group consisting of industries that have the highest levels of receipts based size standards. To determine a size standard above the anchor size standard, SBA analyzes the characteristics of this second comparison group. The size standards for this group of industries range from $23 million to $35.5 million in average annual receipts; the weighted average size standard for the group is $29 million. SBA refers to this comparison group as the “higher level receipts based size standard group.”

The primary industry factors that SBA evaluates include average firm size, startup costs and entry barriers, industry competition, and distribution of firms by size. SBA evaluates, as an additional primary factor, the impact that revising size standards might have on Federal contracting assistance to small businesses. These are, generally, the five most important factors SBA examines when establishing or revising a size standard for an industry. However, SBA will also consider and evaluate other information that it believes is relevant to a particular industry (such as technological changes, growth trends, SBA financial assistance, other program factors, etc.). SBA also considers the possible impacts of size standard revisions on eligibility for Federal small business assistance, current economic conditions, the Administration's policies, and suggestions from industry groups and Federal agencies. Public comments on a proposed rule also provide important additional information. SBA thoroughly reviews all public comments before making a final decision on its proposed size standards. Below are brief descriptions of each of the five primary factors that SBA has evaluated for each industry in NAICS Sector 62 being reviewed in this proposed rule. A more detailed description of this analysis is provided in SBA's “Size Standards Methodology,” available at http://www.sba.gov/size.

1. Average firm size. SBA computes two measures of average firm size: simple average and weighted average. For industries with receipts based size standards, the simple average is the total receipts of the industry divided by the total number of firms in the industry. The weighted average firm size is the sum of weighted simple averages in different receipts size classes, where weights are the shares of total industry receipts for respective size classes. The simple average weighs all firms within an industry equally regardless of their size. The weighted average overcomes that limitation by giving more weight to larger firms.

If the average firm size of an industry is significantly higher than the average firm size of industries in the anchor comparison industry group, this will generally support a size standard higher than the anchor size standard. Conversely, if the industry's average firm size is similar to or significantly lower than that of the anchor comparison industry group, it will be a basis to adopt the anchor size standard, or in rare cases, a standard lower than the anchor.

2. Startup costs and entry barriers. Startup costs reflect a firm's initial size in an industry. New entrants to an industry must have sufficient capital and other assets to start and maintain a viable business. If new firms entering a particular industry have greater capital requirements than firms in industries in the anchor comparison group, this can be a basis for establishing a size standard higher than the anchor size standard. In lieu of actual startup costs data, SBA uses average assets as a proxy to measure the capital requirements for new entrants to an industry.

To calculate average assets, SBA begins with the sales to total assets ratio for an industry from the Risk Management Association's Annual eStatement Studies. SBA then applies these ratios to the average receipts of firms in that industry. An industry with average assets that are significantly higher than those of the anchor comparison group is likely to have higher startup costs; this in turn will support a size standard higher than the anchor. Conversely, an industry with average assets that are similar to or lower than those of the anchor comparison group is likely to have lower startup costs; this will support the anchor standard or one lower than the anchor.

3. Industry competition. Industry competition is generally measured by the share of total industry receipts generated by the largest firms in an industry. SBA generally evaluates the share of industry receipts generated by the four largest firms in each industry. This is referred to as the “four-firm concentration ratio,” a commonly used economic measure of market competition. SBA compares the four-firm concentration ratio for an industry to the average four-firm concentration ratio for industries in the anchor comparison group. If a significant share of economic activity within the industry is concentrated among a few relatively large companies, all else being equal, SBA will establish a size standard higher than the anchor size standard. SBA does not consider the four-firm concentration ratio as an important factor in assessing a size standard if its value for an industry under review is less than 40 percent. For industries in which the four-firm concentration ratio is 40 percent or more, SBA examines the average size of the four largest firms in determining a size standard.

4. Distribution of firms by size. SBA examines the shares of industry total receipts accounted for by firms of different receipts and employment size classes in an industry. This is an additional factor SBA evaluates in assessing competition within an industry. If most of an industry's economic activity is attributable to smaller firms, this generally indicates that small businesses are competitive in that industry. This can support adopting the anchor size standard. If most of an industry's economic activity is attributable to larger firms, this indicates that small businesses are not competitive in that industry. This can support adopting a size standard above the anchor.

Concentration is a measure of inequality of distribution. To determine the degree of inequality of distribution in an industry, SBA computes the Gini coefficient by constructing the Lorenz curve. The Lorenz curve presents the cumulative percentages of units (firms) along the horizontal axis and the cumulative percentages of receipts (or other measures of size) along the vertical axis. (For further detail, please refer to SBA's “Size Standards Methodology” on its Web site at www.sba.gov/size. ) Gini coefficient values vary from zero to one. If receipts are distributed equally among all the firms in an industry, the value of the Gini coefficient will equal zero. If an industry's total receipts are attributed to a single firm, the Gini coefficient will equal one.

SBA compares the Gini coefficient value for an industry with that for industries in the anchor comparison group. If the Gini coefficient value for an industry is higher than it is for industries in the anchor comparison industry group, all else being equal, this may warrant a higher size standard than the anchor. Conversely, if an industry's Gini coefficient is similar to or lower than that for the anchor group, the anchor standard, or in some cases a standard lower than the anchor, may be adopted.

5. Impact on Federal contracting and SBA loan programs. SBA examines the possible impact a size standard change may have on Federal small business assistance. This most often focuses on the share of Federal contracting dollars awarded to small businesses in the industry in question. In general, if the small business share of Federal contracting in an industry with significant Federal contracting is appreciably less than the small business share of the industry's total receipts, there is justification for considering a size standard higher than the existing size standard. The disparity between the small business Federal market share and industry-wide small business share may be due to various factors, such as extensive administrative and compliance requirements associated with Federal contracts, the different skill set required by Federal contracts as compared to typical commercial contracting work, and the size of Federal contracts. These, as well as other factors, are likely to influence the type of firms within an industry that compete for Federal contracts. By comparing the small business Federal contracting share with the industry-wide small business share, SBA includes in its size standards analysis the latest Federal contracting trends. This analysis may support a size standard larger than the current size standard.

SBA considers Federal contracting trends in the size standards analysis only if (1) the small business share of Federal contracting dollars is at least 10 percent lower than the small business share of total industry receipts, and (2) the amount of total Federal contracting averages $100 million or more during the latest three fiscal years. These thresholds reflect significant levels of contracting where a revision to a size standard may have an impact on contracting opportunities to small businesses.

Besides the impact on small business Federal contracting, SBA also evaluates the impact of a proposed size standard revision on SBA's loan programs. For this, SBA examines the volume and number of SBA's guaranteed loans within an industry and the size of firms obtaining those loans. This allows SBA to assess whether the existing or the proposed size standard for a particular industry may restrict the level of financial assistance to small firms. If the analysis shows that the current size standards have impeded financial assistance to small businesses, higher size standards may be supportable. However, if small businesses under current size standards have been receiving significant amounts of financial assistance through SBA's loan programs, or if the financial assistance has been provided mainly to businesses that are much smaller than the existing size standards, this factor is not considered for determining the size standard.

SBA's primary source of industry data used in this proposed rule is a special tabulation of the 2007 Economic Census ( see www.census.gov/econ/census07/ ) prepared by the U.S. Bureau of the Census (Census Bureau) for SBA. The 2007 Economic Census data are the latest available. The special tabulation provides SBA with data on the number of firms, number of establishments, number of employees, annual payroll, and annual receipts of companies by NAICS Sector (2-digit level), Subsector (3-digit level), Industry Group (4-digit level), Industry (6-digit level). These data are arrayed by various classes of firms' size based on the overall number of employees and receipts of the entire enterprise (all establishments and affiliated firms) from all industries. The special tabulation enables SBA to evaluate average firm size, the four-firm concentration ratio, and distribution of firms by various receipts and employment size classes.

In some cases, where data were not available due to disclosure prohibitions in the Census Bureau's tabulation, SBA either estimated missing values using available relevant data or examined data at a higher level of industry aggregation, such as at the NAICS 2-digit (Sector), 3-digit (Subsector), or 4-digit (Industry Group) level. In some instances, SBA's analysis was based only on those factors for which data were available or estimates of missing values were possible.

To calculate average assets, SBA used sales to total assets ratios from the Risk Management Association's Annual eStatement Studies ( see http://www.statementstudies.org/ ) from 2008 to 2010.

To evaluate Federal contracting trends, SBA examined data on Federal contract awards for fiscal years 2008 to 2010. The data are available from the U.S. General Service Administration's Federal Procurement Data System—Next Generation (FPDS-NG).

To assess the impact on financial assistance to small businesses, SBA examined data on its own guaranteed loan programs for fiscal years 2008 to 2010.

Data sources and estimation procedures SBA uses in its size standards analysis are documented in detail in SBA's “Size Standards Methodology” White Paper, which is available at www.sba.gov/size.

Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) defines a small business concern as one that is (1) Independently owned and operated, (2) not dominant in its field of operation, and (3) within a specific small business definition or size standard established by the SBA Administrator. SBA considers as part of its evaluation whether a business concern at a proposed size standard would be dominant in its field of operation. For this, SBA generally examines the industry's market share of firms at the proposed standard. Market share and other factors may indicate whether a firm can exercise a major controlling influence on a national basis in an industry where a significant number of business concerns are engaged. If a contemplated size standard includes a dominant firm, SBA will consider a lower size standard to exclude the dominant firm from being defined as small.

To simplify size standards, for the ongoing comprehensive review of receipts based size standards, SBA has proposed to select size standards from a limited number of levels. For many years, SBA has been concerned about the complexity of determining small business status caused by a large number of varying receipts based size standards ( see 69 FR 13130 (March 4, 2004) and 57 FR 62515 (December 31, 1992)). At the beginning of the current comprehensive size standards review, there were 31 different levels of receipts based size standards. They ranged from $0.75 million to $35.5 million, and many of them applied to one or only a few industries. SBA believes that size standards with such a large number of small variations among them are both unnecessary and difficult to justify analytically. To simplify managing and using size standards, SBA proposes that there be fewer size standard levels. This will produce more common size standards for businesses operating in related industries. This will also result in greater consistency among the size standards for industries that have similar economic characteristics.

SBA proposes, therefore, to apply one of eight “fixed” receipts based size standards to each industry in NAICS Sector 62. All size standards in NAICS Sector 62 are based on average annual receipts. The eight “fixed” receipts based size standard levels are $5 million, $7 million, $10 million, $14 million, $19 million, $25.5 million, $30 million, and $35.5 million. SBA established these eight receipts based size standard based on the current minimum, the current maximum, and the most commonly used current receipts based size standards. At the start of the current comprehensive review, the most commonly used receipts based size standards clustered around the following: $2.5 million to $4.5 million, $7 million, $9 million to $10 million, $12.5 million to $14 million, $25 million to $25.5 million, and $33.5 million to $35.5 million. SBA selected $7 million as one of eight fixed levels of receipts based size standards because it is an anchor standard for receipts based standards. The lowest or minimum receipts based size level will be $5 million. Other than the size standards for agriculture and industries with receipts based on commissions (such as real estate brokers and travel agents), the $5 million size standard includes those industries with the lowest receipts based standards, which ranged from $2 million to $4.5 million at the start of comprehensive size standards review. Among the higher level size clusters, SBA has set four fixed levels: $10 million, $14 million, $25.5 million, and $35.5 million. Because of large intervals between some of the fixed levels, SBA established two intermediate levels, namely $19 million between $14 million and $25.5 million, and $30 million between $25.5 million and $35.5 million. These two intermediate levels reflect roughly the same proportional differences as between the other two successive levels.

To simplify size standards further, SBA may propose a common size standard for closely related industries. Although the size standard analysis may support a separate size standard for each industry, SBA believes that establishing different size standards for closely related industries may not always be appropriate. For example, in cases where many of the same businesses operate in the same multiple industries, a common size standard for those industries might better reflect the Federal marketplace. This might also make size standards among related industries more consistent than separate size standards for each of those industries. This led SBA to establish a common size standard for the information technology (IT) services (NAICS 541511, NAICS 541112, NAICS 541513, NAICS 541519, and NAICS 811212), even though the industry data might support a distinct size standard for each industry ( see 57 FR 27906 (June 23, 1992)). In NAICS Sector 62, currently all industries in NAICS Industry Group 6211 (Offices of Physicians), all industries in NAICS Industry Group 6213 (Offices of Other Health Practitioners), and all industries in NAICS Industry Group 6215 (Medical and Diagnostic Laboratories) have common size standards. Similarly, all industries in NAICS Subsector 622 (Hospitals) and all industries in NAICS Subsector 624 (Social Assistance) have common size standards. In this proposed rule, SBA proposes to retain common size standards for NAICS Industry Group 6211, NAICS Industry Group 6213, NAICS Subsector 622, and NAICS Industry Group 6241 (Individual and Family Services) and proposes a new common size standard for NAICS Industry Group 6232 (Residential Mental Retardation, Mental Health and Substance Abuse Facilities). Whenever SBA proposes a common size standard for closely related industries, it will provide its justification.

SBA evaluated the structure of the 39 industries in NAICS Sector 62, Health Care and Social Assistance, to assess the appropriateness of the current size standards. As described above, SBA compared data on the economic characteristics of each industry to the average characteristics of industries in two comparison groups. The first comparison group consists of all industries with a size standard of $7 million size and is referred to as the “receipts based anchor comparison group.” Because the goal of SBA's size standards review is to assess whether a specific industry's size standard should be the same as or different from the anchor size standard, this is the most logical group of industries to analyze. In addition, this group includes a sufficient number of firms to provide a meaningful assessment and comparison of industry characteristics.

If the characteristics of an industry are similar to the average characteristics of industries in the anchor comparison group, the anchor size standard is generally considered appropriate for that industry. If an industry's structure is significantly different from industries in the anchor group, a size standard lower or higher than the anchor size standard might be appropriate. The level of the new size standard is based on the difference between the characteristics of the anchor comparison group and a second industry comparison group. As described above, the second comparison group for receipts based standards consists of industries with the highest receipts based size standards, ranging from $23 million to $35.5 million. The average size standard for this group is $29 million. SBA refers to this group of industries as the “higher level receipts based size standard comparison group.” SBA determines differences in industry structure between an industry under review and the industries in the two comparison groups by comparing data on each of the industry factors, including average firm size, average assets size, the four-firm concentration ratio, and the Gini coefficient of distribution of firms by size. Table 1, Average Characteristics of Receipts Based Comparison Groups, (below) shows the average firm size (both simple and weighted), average assets size, four-firm concentration ratio, average receipts of the four largest firms, and the Gini coefficient for both anchor level and higher level comparison groups for receipts based size standards.

For each industry factor in Table 1, SBA derives a separate size standard based on the differences between the values for an industry under review and the values for the two comparison groups. If the industry value for a particular factor is near the corresponding factor for the anchor comparison group, SBA will consider the $7 million anchor size standard appropriate for that factor.

An industry factor significantly above or below the anchor comparison group will generally imply a size standard for that industry above or below the $7 million anchor. The new size standard in these cases is based on the proportional difference between the industry value and the values for the two comparison groups.

For example, if an industry's simple average receipts are $3.3 million, that can support a $19 million size standard. The $3.3 million level is 52.8 percent between $1.32 million for the anchor comparison group and $5.07 million for the higher level comparison group (($3.30 million − $1.32 million) ÷ ($5.07 million − $1.32 million) = 0.528 or 52.8%). This proportional difference is applied to the difference between the $7 million anchor size standard and average size standard of $29 million for the higher level size standard group and then added to $7 million to estimate a size standard of $18.61 million ([{$29.0 million − $7.0 million} * 0.528] + $7.0 million = $18.61 million). The final step is to round the estimated $18.61 million size standard to the nearest fixed size standard, which in this example is $19 million.

SBA applies the above calculation to derive a size standard for each industry factor. Detailed formulas involved in these calculations are presented in SBA's “Size Standards Methodology,” which is available on its Web site at www.sba.gov/size. (However, it should be noted that figures in the “Size Standards Methodology” White Paper are based on 2002 Economic Census data and are different from those presented in this proposed rule. That is because when SBA prepared its “Size Standards Methodology,” the 2007 Economic Census data were not yet available). Table 2, Values of Industry Factors Supported Size Standards, (below) shows ranges of values for each industry factor and the levels of size standards supported by those values.

Besides industry structure, SBA also evaluates Federal contracting data to assess how successful small businesses are in getting Federal contracts under the existing size standards. For industries where the small business share of total Federal contracting dollars is 10 to 30 percent lower than the small business share of total industry receipts, SBA has designated a size standard one level higher than their current size standard. For industries where the small business share of total Federal contracting dollars is more than 30 percent lower than the small business share of total industry receipts, SBA has designated a size standard two levels higher than the current size standard.

Because of the complex relationships among several variables affecting small business participation in the Federal marketplace, SBA has chosen not to designate a size standard for the Federal contracting factor alone that is more than two levels above the current size standard. SBA believes that a larger adjustment to size standards based on Federal contracting activity should be based on a more detailed analysis of the impact of any subsequent revision to the current size standard. In limited situations, however, SBA may conduct a more extensive examination of Federal contracting experience. This may support a different size standard than indicated by this general rule and take into consideration significant and unique aspects of small business competitiveness in the Federal contract market. SBA welcomes comments on its methodology for incorporating the Federal contracting factor in the size standard analysis and suggestions for alternative methods and other relevant information on small business experience in the Federal contract market.

Of the 39 industries in NAICS Sector 62 reviewed in this proposed rule, 13 industries averaged $100 million or more annually in Federal contracting during fiscal years 2008 to 2010. In five of those 13 industries, the Federal contracting factor was significant (i.e., the difference between the small business share of total industry receipts and small business share of Federal contracting dollars was 10 percentage points or more), and a separate size standard was derived for that factor for each of them.

Table 3, Size Standards Supported by Each Factor for Each Industry (millions of dollars), shows the results of analyses of industry and Federal contracting factors for each industry covered by this proposed rule. Many of the NAICS industries in columns 2, 3, 4, 6, 7, and 8 show two numbers. The upper number is the value for the industry or Federal contracting factor shown on the top of the column, and the lower number is the size standard supported by that factor. For the four-firm concentration ratio, SBA estimates a size standard if its value is 40 percent or more. If the four-firm concentration ratio for an industry is less than 40 percent, no size standard is estimated for that factor. If the four-firm concentration ratio is more than 40 percent, SBA indicates in column 6 the average size of the industry's top four firms together with a size standard based on that average. Column 9 shows a calculated new size standard for each industry. This is the average of the size standards supported by each factor, rounded to the nearest fixed size level. Analytical details involved in the averaging procedure are described in SBA's “Size Standard Methodology.” For comparison with the new standards, the current size standards are in column 10 of Table 3.

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2010-1095; Directorate Identifier 2009-NE-40-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

On June 24, 2011, we issued AD 2011-14-07, amendment 39-16742 (76 FR 47056, August 4, 2011), for all PW PW4074 and PW4077 turbofan engines with 15th stage HPC disks, part number (P/N) 55H615, installed. That AD requires removing the 15th stage HPC disk within 12,000 CSN or, for any disks that exceed 12,000 CSN after the effective date of this AD, using a drawdown plan that includes a BSI or ECI of the disk outer rim front rail for cracks. That AD resulted from multiple shop findings of cracked 15th stage HPC disks. We issued that AD to prevent cracks from propagating into the disk bolt holes, which could result in a failure of the 15th stage HPC disk, uncontained engine failure, and damage to the airplane.

Since we issued AD 2011-14-07 (76 FR 47056, August 4, 2011), we received a request from an operator that we clarify our inspection schedule for 15th stage HPC disks that have accumulated more than 9,685, but less than 12,000 CSN, on the effective date of the AD. The operator indicated that AD 2011-14-07 did not require a BSI or ECI for 15th stage HPC disks that had more than 9,685, but less than 12,000 CSN, on the effective date of the AD. Based on the comment, we reviewed the AD and found that this new AD action was necessary to ensure that the disc was inspected before accumulating 12,000 CSN. This proposed AD would ensure that inspection will occur.

We reviewed and approved the technical contents of Pratt & Whitney Service Bulletin (SB) PW4G-112-72-309, Revision 1, dated July 1, 2010. The SB describes procedures for performing a BSI or ECI for cracks in the front rail of the outer rim of the 15th stage HPC disk.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would retain all requirements of AD 2011-14-07 (76 FR 47056, August 4, 2011). This proposed AD would also clarify that 15th stage HPC disks that have accumulated more than 9,685, but less than 12,000 CSN, require a BSI or ECI of the disk outer rim front rail for cracks prior to accumulating 12,000 CSN.

We estimate that this proposed AD would affect 44 engines installed on airplanes of U.S. registry. Prorated parts life would cost about $66,000 per 15th stage HPC disk. Based on these figures, we estimate the total cost of the proposed AD to U.S. operators to be $2,904,000. The new requirements of this proposed AD add no additional economic burden.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in subtitle VII, part A, subpart III, section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect 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.

For the reasons discussed above, I certify that the proposed regulation:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

(3) Will not affect intrastate aviation in Alaska, and

(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2012-0008; Directorate Identifier 2011-NE-43-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, to http://www.regulations.gov , including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this proposed AD. Using the search function of the Web site, anyone can find and read the comments in any of our dockets, including, if provided, the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You may review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2011-0232, dated December 13, 2011 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

You may obtain further information by examining the MCAI in the AD docket.

RRD has issued Alert Service Bulletin No. SB-BR700-72-A900503, Revision 4, dated June 16, 2011, and RRD SB No. SB-BR700-72-101683, dated September 20, 2010. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by EASA and is approved for operation in the United States. Pursuant to our bilateral agreement with the European Community, EASA has notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

Based on the service information, we estimate that this proposed AD would affect about 96 engines installed on airplanes of U.S. registry. We also estimate that it would take about 5 work-hours per engine to perform one inspection, and about 8 work-hours per engine to perform the rework. The average labor rate is $85 per work-hour. Based on these figures, if all engines are reworked, we estimate the cost of the proposed AD on U.S. operators to perform one inspection and to perform the rework to be $106,080.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect 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.

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

Public Participation: This notice of proposed rulemaking is available through the Federal Register and the http://www.regulations.gov Web site. You may also access this document via the Department's Web site at http://www.dol.gov/federalregister. To comment electronically on federal rulemakings, go to the Federal eRulemaking Portal at http://www.regulations.gov, which will allow you to find, review, and submit comments on federal documents that are open for comment and published in the Federal Register. Please identify all comments submitted in electronic form by the RIN docket number (1235-AA05). Because of delays in receiving mail in the Washington, DC area, commenters should transmit their comments electronically via the Federal eRulemaking Portal at http://www.regulations.gov, or submit them by mail early to ensure timely receipt prior to the close of the comment period. Submit one copy of your comments by only one method.

The Department is proposing to revise the Fair Labor Standards Act minimum wage, overtime and recordkeeping regulations pertaining to the exemptions for companionship services and live-in domestic services. The Department proposes to amend the regulations to revise the definitions of “domestic service employment” and “companionship services.” The Department also proposes to more specifically describe the type of activities and duties that may be considered “incidental” to the provision of companionship services. In addition, the Department proposes to amend the recordkeeping requirements for live-in domestic workers. Finally, the Department proposes to amend the regulation pertaining to employment by a third party of companions and live-in domestic workers. This change would continue to allow the individual, family, or household employing the worker's services to apply the companionship and live-in exemptions and would deny all third party employers the use of such exemptions.

On December 15, 2011, President Obama announced that the Department of Labor was proposing the rule changes. The Department posted a Notice of Proposed Rulemaking (NPRM), complete with background information, economic impact analyses and proposed regulatory text, on its Web site that day. The Department published the NPRM in the Federal Register on December 27, 2011 (76 FR 81190), requesting public comments on the proposed revisions to the regulations pertaining to the exemption for companionship services and live-in domestic services. Interested parties were requested to submit comments on or before February 27, 2012.

The Department has received requests to extend the period for filing public comments from members of Congress and various business organizations. Because of the interest that has been expressed in this matter, the Department has decided to extend the period for submitting public comment for 14 additional days.

Throughout this document whenever “we,” “us,” or “our” is used, we mean the EPA. Information is organized as follows:

In the CAA Amendments of 1977, Congress established a program to protect and improve visibility in the national parks and wilderness areas. See CAA section 169A. Congress amended the visibility provisions in the CAA in 1990 to focus attention on the problem of regional haze. See CAA section 169B. EPA promulgated regulations in 1999 to implement sections 169A and 169B of the Act. These regulations require states to develop and implement plans to ensure reasonable progress toward improving visibility in mandatory Class I Federal areas  1 (Class I areas). 64 FR 35714 (July 1, 1999); see also 70 FR 39104 (July 6, 2005) and 71 FR 60612 (October 13, 2006).

The Alaska Department of Environmental Conservation (ADEC) adopted and transmitted its “Alaska Regional Haze State Implementation Plan” (Alaska Regional Haze SIP) to EPA Region 10 in a letter dated March 29, 2011. EPA determined the plan complete by operation of law on September 4, 2011. As a result of the Alaska's participation with 13 other states, tribal nations and Federal agencies in the Western Regional Air Partnership (WRAP), Alaska's Regional Haze SIP reflects a consistent approach toward addressing regional visibility impairment at 116 Class I areas in the West.

In this action, EPA is proposing to approve all provisions of Alaska's Regional Haze SIP submission, including the requirements for the calculation of baseline and natural visibility conditions, statewide inventory of visibility-impairing pollutants, best available retrofit technology (BART), Reasonable Progress Goals (RPGs), and Long-Term Strategy (LTS). EPA is also proposing to approve the Alaska Department of Environmental Conservation (ADEC) BART regulations at 18 AAC 50.260.

Regional haze is impairment of visual range, clarity or colorization caused by emission of air pollution produced by numerous sources and activities, located across a broad regional area. The sources include but are not limited to, major and minor stationary sources, mobile sources, and area sources including non-anthropogenic sources. These sources and activities may emit fine particles (PM 2.5 ) ( e.g., sulfates, nitrates, organic carbon, elemental carbon, and soil dust), and their precursors ( e.g., SO 2 , NO X , and in some cases, ammonia (NH 3 ) and volatile organic compounds (VOC)). Atmospheric fine particulate reduces clarity, color, and visual range of visual scenes. Visibility-reducing fine particulates are primarily composed of sulfate, nitrate, organic carbon compounds, elemental carbon, and soil dust, and impair visibility by scattering and absorbing light. Fine particulate can also cause serious health effects and mortality in humans, and contributes to environmental effects such as acid deposition and eutrophication. See 64 FR at 35715.

Data from the existing visibility monitoring network, the “Interagency Monitoring of Protected Visual Environments” (IMPROVE) monitoring network, show that visibility impairment caused by air pollution occurs virtually all the time at most national parks and wilderness areas. The average visual range in many Class I areas in the Western United States is 100-150 kilometers, or about one-half to two-thirds the visual range that would exist without anthropogenic air pollution. Id. Visibility impairment also varies day-to-day and by season depending on variation in meteorology and emission rates.

In section 169A of the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the “prevention of any future, and the remedying of any existing, impairment of visibility in Class I areas which impairment results from manmade air pollution.” CAA section 169A(a)(1). On December 2, 1980, EPA promulgated regulations to address visibility impairment in Class I areas that is “reasonably attributable” to a single source or small group of sources, i.e., “reasonably attributable visibility impairment”. See 45 FR 80084. These regulations represented the first phase in addressing visibility impairment. EPA deferred action on regional haze that emanates from a variety of sources until monitoring, modeling, and scientific knowledge about the relationships between pollutants and visibility impairment were improved.

Congress added section 169B to the CAA in 1990 to address regional haze issues. EPA promulgated a rule to address regional haze on July 1, 1999 (64 FR 35713), the regional haze rule or RHR. The RHR revised the existing visibility regulations to integrate into the regulation provisions addressing regional haze impairment and established a comprehensive visibility protection program for Class I areas. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in EPA's visibility protection regulations at 40 CFR 51.300-309. Some of the main elements of the regional haze requirements are summarized in section II of this proposed rulemaking. The requirement to submit a regional haze SIP applies to all 50 states, the District of Columbia and the Virgin Islands. 2 40 CFR 51.308(b) requires states to submit the first implementation plan addressing regional haze visibility impairment no later than December 17, 2007.

Successful implementation of the regional haze program will require long-term regional coordination among states, tribal governments, and various Federal agencies. As noted above, pollution affecting the air quality in Class I areas can be transported over long distances, even hundreds of kilometers. Therefore, to effectively address the problem of visibility impairment in Class I areas, States need to develop strategies in coordination with one another, taking into account the effect of emissions from one jurisdiction on the air quality in another.

Because the pollutants that lead to regional haze impairment can originate from across state lines, EPA has encouraged the States and Tribes to address visibility impairment from a regional perspective. Five regional planning organizations  3 (RPOs) were created nationally to address regional haze and related issues. One of the main objectives of the RPOs is to develop and analyze data and conduct pollutant transport modeling to assist the States or Tribes in developing their regional haze plans.

The Western Regional Air Partnership (WRAP)  4 , one of the five RPOs nationally, is a voluntary partnership of State, Tribal, Federal, and local air agencies dealing with air quality in the West. WRAP member States include: Alaska, Arizona, California, Colorado, Idaho, Montana, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. WRAP Tribal members include Campo Band of Kumeyaay Indians, Confederated Salish and Kootenai Tribes, Cortina Indian Rancheria, Hopi Tribe, Hualapai Nation of the Grand Canyon, Native Village of Shungnka, Nez Perce Tribe, Northern Cheyenne Tribe, Pueblo of Acoma, Pueblo of San Felipe, and Shoshone-Bannock Tribes of Fort Hall.

As a result of the regional planning efforts in the West, all states in the WRAP region contributed information to a Technical Support System (TSS) which provides an analysis of the causes of haze, and the levels of contribution from all sources within each state to the visibility degradation of each Class I area. The WRAP States consulted in the development of reasonable progress goals, using the products of this technical consultation process to co-develop their reasonable progress goals for the Western Class I areas. The modeling done by the WRAP relied on assumptions regarding emissions over the relevant planning period and embedded in these assumptions were anticipated emissions reductions in each of the States in the WRAP, including reductions from BART and other measures to be adopted as part of the State's long term strategy for addressing regional haze. The reasonable progress goals in the draft and final regional haze SIPs that have now been prepared by States in the West accordingly are based, in part, on the emissions reductions from nearby States that were agreed on through the WRAP process.

Regional haze SIPs must assure reasonable progress towards the national goal of achieving natural visibility conditions in Class I areas. Section 169A of the CAA and EPA's implementing regulations require states to establish long-term strategies for making reasonable progress toward meeting this goal. Implementation plans must also give specific attention to certain stationary sources that were in existence on August 7, 1977, but were not in operation before August 7, 1962, and require these sources, where appropriate, to install BART controls for the purpose of eliminating or reducing visibility impairment. The specific regional haze SIP requirements are discussed in further detail below.

The RHR establishes the deciview (dv) as the principal metric for measuring visibility. This visibility metric expresses uniform changes in haziness in terms of common increments across the entire range of visibility conditions, from pristine to extremely hazy conditions. Visibility is determined by measuring the visual range (or deciview), which is the greatest distance, in kilometers or miles, at which a dark object can be viewed against the sky. The deciview is a useful measure for tracking progress in improving visibility, because each deciview change is an equal incremental change in visibility perceived by the human eye. Most people can detect a change in visibility at one deciview. 5

The deciview is used in expressing reasonable progress goals (which are interim visibility goals towards meeting the national visibility goal), defining baseline, current, and natural conditions, and tracking changes in visibility. The regional haze SIPs must contain measures that ensure “reasonable progress” toward the national goal of preventing and remedying visibility impairment in Class I areas caused by manmade air pollution by reducing anthropogenic emissions that cause regional haze. The national goal is a return to natural conditions, i.e., anthropogenic sources of air pollution would no longer impair visibility in Class I areas.

To track changes in visibility over time at each of the 156 Class I areas covered by the visibility program (40 CFR 81.401-437), and as part of the process for determining reasonable progress, States must calculate the degree of existing visibility impairment at each Class I area at the time of each regional haze SIP submittal and periodically review progress every five years midway through each 10-year implementation period. To do this, the RHR requires states to determine the degree of impairment (in deciviews) for the average of the 20% least impaired (“best”) and 20% most impaired (“worst”) visibility days over a specified time period at each of their Class I areas. In addition, states must also develop an estimate of natural visibility conditions for the purpose of comparing progress toward the national goal. Natural visibility is determined by estimating the natural concentrations of pollutants that cause visibility impairment, and then calculating total light extinction based on those estimates. EPA has provided guidance to states regarding how to calculate baseline, natural and current visibility conditions in documents titled, EPA's Guidance for Estimating Natural Visibility Conditions Under the Regional Haze Rule, September 2003, (EPA-454/B-03-005 located at http://www.epa.gov/ttncaaa1/t1/memoranda/rh_envcurhr_gd.pdf ), (hereinafter referred to as “EPA's 2003 Natural Visibility Guidance”), and Guidance for Tracking Progress Under the Regional Haze Rule (EPA-454/B-03-004 September 2003 located at http://www.epa.gov/ttncaaa1/t1/memoranda/rh_tpurhr_gd.pdf )), (hereinafter referred to as “EPA's 2003 Tracking Progress Guidance”).

For the first regional haze SIPs that were due by December 17, 2007, “baseline visibility conditions” were the starting points for assessing “current” visibility impairment. Baseline visibility conditions represent the degree of visibility impairment for the 20% least impaired days and 20% most impaired days for each calendar year from 2000 to 2004. Using monitoring data for 2000 through 2004, States are required to calculate the average degree of visibility impairment for each Class I area, based on the average of annual values over the five-year period. The comparison of initial baseline visibility conditions to natural visibility conditions indicates the amount of improvement necessary to attain natural visibility, while the future comparison of baseline conditions to the then-current conditions will indicate the amount of progress made. In general, the 2000-2004 baseline time period is considered the time from which improvement in visibility is measured.

Section 169A of the CAA directs States to evaluate the use of retrofit controls at certain larger, often uncontrolled, older stationary sources in order to address visibility impacts from these sources. Specifically, section 169A(b)(2)(A) of the CAA requires States to revise their SIPs to contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing major stationary sources  6 built between 1962 and 1977 procure, install, and operate the “Best Available Retrofit Technology” (“BART”) as determined by the state. States are directed to conduct BART determinations for such sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. Rather than requiring source-specific BART controls, States also have the flexibility to adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART.

On July 6, 2005, EPA published the Guidelines for BART Determinations Under the Regional Haze Rule at appendix Y to 40 CFR part 51 (hereinafter referred to as the “BART Guidelines”) to assist States in determining which of their sources should be subject to the BART requirements and in determining appropriate emission limits for each applicable source. In making a BART applicability determination for a fossil fuel-fired electric generating plant with a total generating capacity in excess of 750 megawatts, a State must use the approach set forth in the BART Guidelines. A State is encouraged, but not required, to follow the BART Guidelines in making BART determinations for other types of sources.

States must address all visibility-impairing pollutants emitted by a source in the BART determination process. The most significant visibility-impairing pollutants are sulfur dioxide, nitrogen oxides, and fine particulate matter. EPA has indicated that states should use their best judgment in determining whether volatile organic compounds or ammonia compounds impair visibility in Class I areas.

Under the BART Guidelines, States may select an exemption threshold value for their BART modeling, below which a BART-eligible source would not be expected to cause or contribute to visibility impairment in any Class I area. The State must document this exemption threshold value in the SIP and must state the basis for its selection of that value. Any source with emissions that model above the threshold value would be subject to a BART determination. The BART Guidelines acknowledge varying circumstances affecting different Class I areas. States should consider the number of emission sources affecting the Class I areas at issue and the magnitude of the individual sources' impacts. Generally, an exemption threshold set by the State should not be higher than 0.5 deciviews (dv).

In their SIPs, States must identify potential BART sources and BART-eligible sources that have a visibility impact in any Class I area above the “BART subject” threshold established by the State and thus, are “subject” to BART. States must document their BART control analysis and determination for all sources subject to BART.

The term “BART-eligible” source used in the BART Guidelines means the collection of individual emission units at a facility that together comprises the BART-eligible source. In making BART determinations, section 169A(g)(2) of the CAA requires that States consider the following factors: (1) The costs of compliance, (2) the energy and non-air quality environmental impacts of compliance, (3) any existing pollution control technology in use at the source, (4) the remaining useful life of the source, and (5) the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology. States are generally free to determine the weight and significance to be assigned to each factor.

The regional haze SIP must include source-specific BART emission limits and compliance schedules for each source subject to BART. Once a State has made its BART determination, the BART controls must be installed and in operation as expeditiously as practicable, but no later than five years after the date EPA approves the regional haze SIP. See CAA section 169A(g)(4); 40 CFR 51.308(e)(1)(iv). In addition to what is required by the RHR, general SIP requirements mandate that the SIP must also include all regulatory requirements related to monitoring, recordkeeping, and reporting for the BART controls on the source.

The vehicle for ensuring continuing progress towards achieving the natural visibility goal is the submission of a series of regional haze SIPs that establish two Reasonable Progress Goals (RPGs) ( i.e., two distinct goals, one for the “best” and one for the “worst” days) for every Class I area for each (approximately) ten-year implementation period. The RHR does not mandate specific milestones or rates of progress, but instead calls for states to establish goals that provide for “reasonable progress” toward achieving natural visibility conditions. In setting reasonable progress goals (RPGs), States must provide for an improvement in visibility for the most impaired days over the (approximately) ten-year period of the SIP, and ensure no degradation in visibility for the least impaired days over the same period.

States have significant discretion in establishing RPGs, but are required to consider the following factors established in section 169A of the CAA and in EPA's RHR at 40 CFR 51.308(d)(1)(i)(A): (1) The costs of compliance; (2) the time necessary for compliance; (3) the energy and non-air quality environmental impacts of compliance; and (4) the remaining useful life of any potentially affected sources. States must demonstrate in their SIPs how these factors are considered when selecting the RPGs for the best and worst days for each applicable Class I area. States have considerable flexibility in how they take these factors into consideration, as noted in EPA's Guidance for Setting Reasonable Progress Goals under the Regional Haze Program, July 1, 2007, Memorandum from William L. Wehrum, Acting Assistant Administrator for Air and Radiation, to EPA Regional Administrators, EPA Regions 1-10 (pp. 4-2, 5-1) (“EPA's Reasonable Progress Guidance”). In setting the RPGs, States must also consider the rate of progress needed to reach natural visibility conditions by 2064 (referred to as the “uniform rate of progress” (URP) or the “glide path”) and the emission reduction measures needed to achieve that rate of progress over the ten-year period of the SIP. Uniform rate of progress represents a rate of progress that states are to use for comparison to the amount of progress they expect to achieve over the ten-year period. In setting RPGs, each State with one or more Class I areas (“Class I state”) must also consult with potentially “contributing States,” i.e., other nearby States with emission sources that may be affecting visibility impairment at the Class I State's areas. See 40 CFR 51.308(d)(1)(iv).

Consistent with the requirement in section 169A(b) of the CAA that States include in their regional haze SIP a ten to fifteen-year strategy for making reasonable progress, section 51.308(d)(3) of the RHR requires that States include a long-term strategy (LTS) in their regional haze SIPs. The LTS is the compilation of all control measures a State will use during the implementation period of the specific SIP submittal to meet applicable RPGs. The LTS must include “enforceable emissions limitations, compliance schedules, and other measures needed to achieve the reasonable progress goals” for all Class I areas within and affected by emissions from the State. 40 CFR 51.308(d)(3).

When a state's emissions are reasonably anticipated to cause or contribute to visibility impairment in a Class I area located in another state, the RHR requires the impacted state to coordinate with contributing states to develop coordinated emissions management strategies. 40 CFR 51.308(d)(3)(i). In such cases, the contributing state must demonstrate that it has included in its SIP all measures necessary to obtain its share of the emission reductions needed to meet the RPGs for the Class I area. The RPOs have provided forums for significant interstate consultation, but additional consultation between states may be required to sufficiently address interstate visibility issues ( e.g., where two states belong to different RPOs).

States should consider all types of anthropogenic sources of visibility impairment in developing their LTS, including stationary, minor, mobile, and area sources. At a minimum, states must describe how each of the following seven factors listed below are taken into account in developing their LTS: (1) Emission reductions due to ongoing air pollution control programs, including measures to address RAVI; (2) measures to mitigate the impacts of construction activities; (3) emissions limitations and schedules for compliance to achieve the RPG; (4) source retirement and replacement schedules; (5) smoke management techniques for agricultural and forestry management purposes including plans as currently exist within the state for these purposes; (6) enforceability of emissions limitations and control measures; and, (7) the anticipated net effect on visibility due to projected changes in point, area, and mobile source emissions over the period addressed by the LTS. 40 CFR 51.308(d)(3)(v).

As part of the RHR, EPA revised 40 CFR 51.306(c) regarding the LTS for RAVI to require that the RAVI plan must provide for a periodic review and SIP revision not less frequently than every three years until the date of submission of the state's first plan addressing regional haze visibility impairment, which was due December 17, 2007, in accordance with 40 CFR 51.308(b) and (c). On or before this date, the state must revise its plan to provide for review and revision of a coordinated LTS for addressing RAVI and regional haze, and the state must submit the first such coordinated LTS with its first regional haze SIP. Future coordinated LTSs, and periodic progress reports evaluating progress towards RPGs, must be submitted consistent with the schedule for SIP submission and periodic progress reports set forth in 40 CFR 51.308(f) and 51.308(g), respectively. The periodic review of a state's LTS must provide the status of both regional haze and RAVI impairment, and must be submitted to EPA as a SIP revision.

Section 51.308(d)(4) of the RHR requires a monitoring strategy for measuring, characterizing, and reporting on regional haze visibility impairment that is representative of all mandatory Class I areas within the state. The strategy must be coordinated with the monitoring strategy required in 40 CFR 51.305 for RAVI. Compliance with this requirement may be met through “participation” in the Interagency Monitoring of Protected Visual Environments (IMPROVE) network, i.e., review and use of monitoring data from the network. The monitoring strategy is due with the first regional haze SIP, and it must be reviewed every five years. The monitoring strategy must also provide for additional monitoring sites if the IMPROVE network is not sufficient to determine whether RPGs will be met. The SIP must also provide for the following:

• Procedures for using monitoring data and other information in a state with mandatory Class I areas to determine the contribution of emissions from within the state to regional haze visibility impairment at Class I areas both within and outside the state;

• Procedures for using monitoring data and other information in a state with no mandatory Class I areas to determine the contribution of emissions from within the state to regional haze visibility impairment at Class I areas in other states;

• Reporting of all visibility monitoring data to the Administrator at least annually for each Class I area in the state, and where possible, in electronic format;

• Developing a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area. The inventory must include emissions for a baseline year, emissions for the most recent year for which data are available, and estimates of future projected emissions. A state must also make a commitment to update the inventory periodically; and,

• Other elements, including reporting, recordkeeping, and other measures necessary to assess and report on visibility.

The RHR requires control strategies to cover an initial implementation period through 2018, with a comprehensive reassessment and revision of those strategies, as appropriate, every ten years thereafter. Periodic SIP revisions must meet the core requirements of 40 CFR 51.308(d) with the exception of BART. The requirement to evaluate sources for BART applies only to the first regional haze SIP. Facilities subject to BART must continue to comply with the BART provisions of 40 CFR 51.308(e), as noted above. Periodic SIP revisions will assure that the statutory requirement of reasonable progress will continue to be met.

Each state also is required to submit a report to EPA every five years that evaluates progress toward achieving the RPG for each Class I area within the state and outside the state if affected by emissions from within the state. 40 CFR 51.308(g). The first progress report is due five years from submittal of the initial regional haze SIP revision. At the same time a 5-year progress report is submitted, a state must determine the adequacy of its existing SIP to achieve the established goals for visibility improvement. See 40 CFR 51.308(h).

The RHR requires that states consult with Federal Land Managers (FLMs) before adopting and submitting their SIPs. See 40 CFR 51.308(i). States must provide FLMs an opportunity for consultation, in person and at least 60 days prior to holding any public hearing on the SIP. This consultation must include the opportunity for the FLMs to discuss their assessment of visibility impairment in any Class I area and to offer recommendations on the development of the reasonable progress goals and on the development and implementation of strategies to address visibility impairment. Further, a state must include in its SIP a description of how it addressed any comments provided by the FLMs. Finally, a SIP must provide procedures for continuing consultation between the state and FLMs regarding the state's visibility protection program, including development and review of SIP revisions, 5-year progress reports, and the implementation of other programs having the potential to contribute to impairment of visibility in Class I areas.

Alaska has four Class I areas within the state. These four Class I areas are Denali National Park, Simeonof Wilderness Area, Tuxedni National Wildlife Refuge, and Bering Sea Wilderness Area. ADEC has not identified any other state that is impacting the Class I areas in Alaska, and Alaska has not been identified as a contributor to impacts in other state's Class I areas. However, in accordance with 40 CFR 51.308(d)(1)(iv) and 51.308(d)(3)(i), ADEC commits to continue consultation with states which may reasonably be anticipated to cause or contribute to visibility impairment in Federal Class I areas located within Alaska. ADEC will also continue consultation with any state for which Alaska's emissions may reasonably be anticipated to cause or contribute to visibility impairment in that state's Federal Class I areas.

Alaska, using data from the IMPROVE monitoring network and analyzed by WRAP, calculated current baseline and natural visibility conditions, and the uniform rate of progress (URP)  7 for Denali National Park, Simeonof Wilderness Area and Tuxedni Wildlife Refuge. Baseline visibility for the most-impaired (20% worst) days and the least-impaired (20% best) days was calculated from monitoring data collected by IMPROVE monitors. The IMPROVE monitoring sites for each Class I area are:

• Denali National Park—Denali National Park has two visibility monitors. One site is located at the Denali National Park Headquarters (DENA1), which has operated since 1988, and the second is the Trapper Creek monitoring site (TRCR1) located 100 yards east of the Trapper Creek Elementary School, west of the Town of Trapper Creek. The monitor located at Trapper Creek is the official IMPROVE site for Denali National Park and was established in September 2001 to evaluate the long-range transport of pollution into the Park from the south.

• Simeonof Wilderness Area—The Simeonof Wilderness Area is located on a remote, isolated island in the Aleutian chain approximately 58 miles from mainland Alaska. The Fish and Wildlife Service has placed an IMPROVE air monitor in the community of Sand Point, Alaska to represent this wilderness area. The community is on a more accessible island approximately 60 miles north west of the Simeonof Wilderness Area. The monitor has been operating since September 2001.

• Tuxedni National Wildlife Refuge—Tuxedni National Wildlife Refuge is located on a relatively remote pair of islands in Tuxedni Bay off of Cook Inlet in Southcentral Alaska. The Fish and Wildlife Service has installed an IMPROVE monitor near Lake Clark National Park to represent conditions at Tuxedni Wilderness Area. This site is located on the west side of Cook Inlet, approximately 5 miles from the Tuxedni National Wildlife Refuge. The site was operational as of December 18, 2001, and represents regional haze conditions for the wilderness area.

• Bering Sea Wilderness Area—This wilderness area encompasses St. Matthew Island, Hall Island, and Pinnacle Island and is part of the larger Bering Sea unit of the Alaska Maritime National Wildlife Refuge. The Bering Sea Wilderness area is extremely remote and located approximately 350 miles southwest of Nome, Alaska and is surrounded on all sides by the Bering Sea. There is essentially no electricity or other infrastructure to support a monitor. Additionally, the area is hundreds of miles away from population centers or major stationary sources. This area had a DELTA-DRUM sampler (a mobile sampler) installed during a field visit in 2002. However, difficulties were encountered with the power supply and no viable data are available, therefore ADEC is not able to determine baseline visibility conditions for this site. Due to its inaccessibility, remoteness, and harsh environment, no IMPROVE monitoring is available or is currently planned for the Bering Sea Wilderness Area.

In general, WRAP based their estimates of natural conditions on EPA's 2003 Natural Visibility Guidance, but incorporated refinements which EPA believes provides results more appropriate for Alaska than the general EPA default approach. These refinements include the use of an updated IMPROVE algorithm which uses a higher ratio of organic mass concentration to organic carbon mass, which better accounts for haze from organic mass, and includes a term for sea salt, which causes a significant amount of haze in the Tuxedni and Simeonof Class I areas. See WRAP Technical Support Document, February 28, 2011 (WRAP TSD) section 2.D and 2.E, supporting this action.

Table 1 below shows visibility conditions in Denali National Park, Simeonof Wilderness Area and Tuxedni National Wildlife Refuge for the 20% worst natural visibility days, the 20% worst baseline days, the 2018 URP, and the visibility improvement needed between 2002 and 2018 to achieve the URP. Table 2 shows visibility conditions on the 20% best days.

Based on IMPROVE data collected in the Class I areas in Alaska during the baseline period (2000-2004), the major pollutants that contribute to light extinction on the 20% worst days at the Simeonof site are: sea salt (47%), sulfates (29%), and organic mass concentration (OMC) (9%); at the Denali DENA1 site are: OMC (54%), sulfates (25%), elemental carbon (8%); at the Denali TRCR1 site are: OMC (43%), sulfates (35%), coarse matter (7%); and at the Tuxedni site are: OMC (28%), sea salt (26%), sulfate (28%).

As noted previously, due to the remote location of the Class I area in the Bering Sea, no monitoring site exists in this Class I area and insufficient data are available to accurately calculate baseline values for this Class I area. The area is located a considerable distance off shore in the Bering Sea and is hundreds of miles from any other monitoring location. Alaska evaluated and discussed the origins and influence of aerosols to this Class I area, and concluded that significant impacts from local industrial, commercial or community developments are unlikely. Future impacts from potential offshore oil and gas development is a remote possibility, but is also unlikely as there are no offshore oil and gas developments currently planned for the St. Matthew-Hall area, or the adjoining Aleutian Basin, Bowers Basin, and Aleutian Arc areas. Finally Alaska indicates that it will continue to evaluate the possibility for portable sampling in remote locations as resources allow. Alaska Regional Haze SIP submittal III.K.3-17. EPA acknowledges the provision in the RHR which provides that for Class I areas without monitoring data for 2000-2004 the state should establish baseline values using the most representative available monitoring data for 2000-2004 in consultation with the Administrator. 40 CFR 51.308 (d)(2)(i). However, as explained above and more fully described the SIP submission, representative data is not available for the Bering Sea Wilderness Area. Additionally, given the location of this Wilderness Area in the middle of the Bering Sea hundreds of miles off the coast of Alaska, it is likely that any sources impacting visibility in the area would be beyond Alaska's jurisdiction or ability to control. Also EPA expects the state to update any available monitoring or visibility impact analyses in its 5-year progress reports. Therefore, given the unique, extremely remote and isolated location and the associated difficulties with monitoring at the area EPA proposes to accept Alaska's approach to the Bering Sea Wilderness Area.

Based on our evaluation of the State's baseline and natural conditions analysis, EPA is proposing to find that Alaska has appropriately determined baseline visibility for the average 20% worst and 20% best days, and natural visibility conditions for the average 20% worst days, and the visibility glidepath from the baseline conditions to natural conditions in the three Class I areas. See sections 2.D and 2.E of the WRAP TSD supporting this action. We also believe the State's analysis accurately determined the individual aerosol species causing impairment in the three Class I areas.

There are three main categories of visibility-impairing air pollution sources: point sources, area sources, and mobile sources. Point sources are larger stationary sources that emit air pollutants. Area sources are large numbers of small sources that are widely distributed across an area, such as residential heating units, re-entrained dust from unpaved roads or windblown dust from agricultural fields. Mobile sources are sources such as motor vehicles, including agricultural and construction equipment, locomotives, and aircraft.

EPA's Regional Haze Rule requires a statewide emission inventory of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any mandatory Class I area. 40 CFR 51.308(d)(4)(v). ADEC compiled emission inventories for all visibility impairing source categories in Alaska for the 2002 baseline year, and projected future emission inventories for these source categories in 2018. See Appendix III.K.5 of the SIP submittal. The fire sector of the baseline inventory was developed using 2000-2004 average data obtained from the WRAP Fire Inventory efforts. Emission estimates for 2018 were generated from anticipated population growth, growth in industrial activity, and emission reductions from implementation of control measures, e.g., implementation of BART limitations and motor vehicle tailpipe emissions. Chapter 5 of the Alaska Regional Haze SIP submittal discusses how emission estimates were determined for statewide emission inventories by pollutant and source category.

Key factors that were considered in the development of these regional haze emission inventories were:

Pollutants —Inventories were developed for the following pollutants: hydrocarbons (HC), carbon monoxide (CO), oxides of nitrogen (NO X ), sulfur oxides (SO X ), ammonia (NH 3 ), volatile organic compounds (VOC), and coarse and fine particulate matter (PM 10 and PM 2.5 , respectively).

Areal Extent and Spatial Resolution —The inventories represent sources within the entire state of Alaska, encompassing a total of 27 boroughs/counties. Emissions were allocated to individual grid cells, of 45 square kilometers each, in a rectangular grid domain covering all of Alaska. This grid domain was based on domain developed under an earlier WRAP study for which a modeling protocol was developed. See Figure III.K.5-2 of the SIP submittal.

Included Sources —Emission sources included known stationary point and area sources including fugitive dust and both anthropogenic and natural fires, and on-road and non-road mobile sources. As discussed later in this section, biogenic (trees and vegetation) and geogenic sources (gas/oil seeps, wind erosion, and geothermal and volcanic activity) were not included.

Temporal Resolution —The inventories were expressed in the form of annual emissions for 2002 and 2018. For all source categories, except the fire sector, the baseline inventory was represented using calendar year 2002 annual emission estimates. The fire sector of the baseline inventory was developed using 2000-2004 average data obtained from the WRAP Fire Inventory efforts. These data reflect fire activity (from wildfires, wildland fires, and prescribed burns) averaged over this five-year period and are less likely to be biased by fire emissions from any individual year. See Alaska Regional Haze submittal III.K.5-3.

The 2018 inventory was developed to reflect emission levels projected to calendar year 2018, accounting for forecasted changes in source activity and emission factors. Population projections compiled by the Alaska Department of Labor and Workforce Development at five-year intervals through 2030 by individual borough and census area were used to grow 2002 baseline activity to 2018 for most of the source categories, with a couple of exceptions.

In developing its 2018 emission inventory, Alaska first determined that emission estimates for wildfires should be held constant between 2002 and 2018. However, as explained later, modest reductions in prescribed burn emissions were assumed, consistent with WRAP 2018b Phase III Fire Inventory forecast. Second, activity from small port commercial marine vessel activity in 2002 was assumed to be identical to that obtained for calendar year 2005.

Alaska also developed emission factors specific to calendar year 2018 for sources affected by regulatory control programs and technology improvements. These source sectors included on-road and non-road mobile sources (except commercial marine vessels and aviation) and stationary point sources. Alaska explained that the emissions forecast for 2018 does not include emissions from new or permitted sources that are not currently operating but which may be in operation in 2018. However, where the status of these facilities is known, Alaska further discussed the sources' influence on predicted emissions or visibility impact on a particular Class I area.

The SIP submittal identifies total annual emission estimates for visibility-impairing pollutants including SOx, NO X , VOC HC, CO, PM 2.5 , PM 10 and NH 3 for 2002 and 2018. These emission estimates were partitioned into eight emission source categories: point sources, stationary area sources (excluding fires), on-road mobile, non-road mobile, commercial marine vessels, aviation, anthropogenic fire (human caused), and natural wildfires. Biogenic emissions were not included in these regional haze inventories because no biogenic inventories have been developed for Alaska. Alaska indicates that given its northerly location, preponderance of snow and ice cover, and short growing season, it would be problematic to extrapolate “lower 48” biogenic emission factors and activity to it. Similarly, geogenic emissions were also excluded due to lack of available data. Additionally, Alaska did not include internationally transported emissions but cites to a number of studies that have attributed atmospheric aerosols measured in Alaska to contributions from upwind regions as far away as portions of Asia and Russia based on back trajectory analysis and identification of unique chemical source signatures. Alaska explains that robust emission estimates from these source areas are not available and thus there is no accounting of these international, long-range transported sources. See Alaska Regional Haze SIP submittal III.K.5 for additional discussion of Alaska's emission estimates and inventory. See also WRAP TSD Chapter 3. Tables 2 and 3 below show total statewide emissions (in tons/year), by source sector and pollutant, for the calendar years 2002 and 2018, respectively. In addition to the totals across all source sectors, anthropogenic emission fractions (defined as all sectors except natural fires divided by total emissions) are also shown at the bottom of each table.

Significant changes in anthropogenic sector emission inventories of the primary visibility impairing pollutants, NO X , PM 10 , PM 2.5 , and SO X , between 2002 and 2018 are summarized below:

1. Non-road: NO X (−18.9%), PM 10 (−19.1%), and PM 2.5 (−20.2%).

2. On-road: NO X (−59.3%), PM 10 (−32.3%), PM 2.5 (−53.2%), and SO X (−87.9%).

3. Commercial Marine Vessels: NO X (+43.9%), PM 10 (+55.5%), PM 2.5 (+85.3%), and SO X (−77.3%).

4. Aviation: NO X (+16.7%), PM 10 (+13.6%), PM 2.5 (+13.5%), and SO X (15.5%).

5. Point: NO X (−12.4%), PM 10 (−69.9%), PM 2.5 (−71.1%), and SO X (+26.0%).

6. Anthropogenic Fires: NO X (−43.8%), PM 10 (−46.2%), PM 2.5 (−46.0%), and SO X (−43.8%).

The overall changes in the above pollutants between 2002 and 2018, across all source sectors, are NO X (−3.3%), PM 10 (+0.9%), PM 2.5 (+0.4%), and SO X (−4.4%). EPA is proposing to find that Alaska has appropriately determined the emissions for visibility impairing pollutants in Alaska for 2002 and 2018.

Each pollutant species has its own visibility impairing property; for example, 1 μg/m 3 of sulfate at high humidity is more effective in scattering light than 1 μg/m 3 of organic carbon, and therefore impairs visibility more than organic carbon. Following the approach recommended by the WRAP, and as explained more fully below, Alaska used a two-step process to identify the contribution of each source or source category to existing visibility impairment. First, ambient pollutant concentration by species (such as sulfate, nitrate, organic carbon, and elemental carbon) was determined from the IMPROVE data collected for each Class I area. These concentrations were then converted into deciview values to distribute existing impairment among the measured pollutant species. The deciview value for each pollutant species was calculated by using the “revised IMPROVE equation” (See WRAP TSD, Section 2.C) to calculate extinction from each pollutant species concentration. Second, two regional visibility models, a back-trajectory model and a Weighted Emissions Potential (WEP) model, were used to determine which source categories contributed to the ambient concentration of each pollutant species.

As further explained in the SIP submittal, due to a number of constraints in developing a comprehensive Alaska emission inventory, rather than conducting photochemical modeling to determine current and future visibility conditions in Class I areas in Alaska, the WRAP selected alternate meteorological modeling techniques to determine current and future visibility conditions. WRAP used the two modeling techniques described below to determine visibility conditions in the Denali, Tuxedni, and Simeonof Class I areas:

Back-trajectory modeling was conducted to determine the path of air parcels impacting each Class I area. Back-trajectory analyses use interpolated measured or modeled meteorological fields to estimate the most likely central path over geographical areas that provided air to a receptor at any given time. The method essentially follows a parcel of air backward in hourly steps for a specified period of time. Back trajectories account for the impact of wind direction and wind speed on delivery of emissions to the receptor, but do not account for chemical transformation, dispersion, and deposition of samples during transport.

Weighted Emissions Potential (WEP) analysis was used to determine how much each emission source area (sources within each gridded emission area) contributes to visibility impairment in the Denali, Simeonof, and Tuxedni Class I areas, based on both the baseline 2002 and the 2018 Alaska emissions inventories. This method does not account for chemistry and removal processes. Instead, the WEP analysis relies on an integration of gridded emissions data, meteorological back trajectory residence time data, a one-over-distance factor to approximate deposition and dispersion, and a normalization of the final results.

The results of the WEP analysis, conducted by WRAP for Alaska, identified the following source areas and source categories impacting visibility at the Denali National Park (measured at both the Denali and Trapper Creek IMPROVE sites), Simeonof Wilderness Area, and Tuxedni National Wildlife Refuge:

Table III.K.7-1 of the SIP submittal summarizes the WEP values for Denali, based on data collected at the DENAL1 IMPROVE site, for the top three boroughs (Yukon-Koyukuk, Southeast Fairbanks, and Fairbanks North Star) for each pollutant on the 20% worst days. WEP predicts that 95% of the total PM 2.5 for 2002 came from these boroughs, and of that amount, 95% came from natural fires in Yukon-Koyukuk and Southeast Fairbanks boroughs. For VOCs, natural wildfires in Yukon-Koyukuk and Southeast Fairbanks boroughs are the largest source, and stationary area sources in Denali Borough are the second largest source. For NO X contributions in 2002, 77% came from wildfires in Yukon-Koyukuk and Southeast Fairbanks boroughs, and about 13% came from point sources in the Fairbank North Star borough. For SO X contributions in 2002, 64% came from natural fires in Yukon-Koyukuk and Southeast Fairbanks boroughs, and 29% came from point sources in Fairbanks North Star borough. For ammonia contributions in 2002, 97% came from natural fires in Yukon-Koyukuk and Southeast Fairbanks boroughs. The State noted that natural fires are the dominant source for all of the pollutants identified at this monitoring site, and there are no other significant sources of PM 2.5 other than natural fires. Overall, the information presented in Table III.K.7-1of the SIP submittal demonstrates that the only significant anthropogenic sources of concern impacting Denali are Fairbanks SO 2 point sources.

Table III.K.7-3 of the SIP submittal shows the WEP values for Denali based on data collected at the Trapper Creek site. This table shows that natural fires are the largest source of emissions impacting this site, although there is also significant contribution from several anthropogenic source categories. In summary, 82% of the PM 2.5 in 2002 came from natural fires in Yukon-Koyukuk and Southeast Fairbanks boroughs, and 11% of the PM 2.5 came from point sources in the Matanuska-Susitna borough. For NO X , 32% of the contributions for 2002 came from natural fires in Yukon-Koyukuk borough, 20% came from point sources on the Kenai Peninsula and 16% came from on-road mobile sources in the Matanuska-Susitna borough. The contribution of NO X from on-road mobile sources is expected to drop to about half this value by 2018 due to the benefits of fleet turnover and increasingly stringent Federal motor vehicle emissions standards. For SO X , 57% of the contributions for 2002 came from natural fires in the Yukon-Koyukuk borough, while 19% of the SO X came from stationary sources in the Matanuska-Susitna borough. Alaska has determined that natural fires are the dominant source for all of the visibility impairing pollutants at the Trapper Creek monitor in Denali National Park, but there is also a significant contribution from point sources on the Kenai Peninsula, and from on-road and stationary sources in the Matanuska-Susitna borough.

A summary of the WEP values for the boroughs impacting Simeonof is presented in Table III.K.7-2 of the SIP submittal. The WEP analysis for this site shows that natural fires in the Yukon-Koyukuk borough are the dominant source of all pollutants impairing visibility. The WEP analysis concluded that 96% of the PM 2.5 , 87% of the VOCs, 76% of the NO X , 91% of the SO X , and 95% of the ammonia impacting Simeonof during 2000-2004 was from natural fires in the Yukon-Koyukuk borough. Alaska indicated that the forecast for emissions from natural fires in 2018 impacting the Simeonof Class I area are the same as for the baseline, which means that the visibility impacts from anthropogenic sources is expected to remain relatively small compared to contributions from natural fires through 2018 at this site.

The information presented in Table III.K.7-4 of the SIP submittal shows a complex mixture of anthropogenic and natural source contributions that impact visibility at the Tuxedni National Wildlife Refuge. While natural fires are still the most significant source for many of the pollutants, (including 78% of the PM 2.5 , 41% of the VOCs, 44% of the SO X , and 54% of the ammonia), 64% of the NO X that impacts Tuxedni comes from point sources on the Kenai Peninsula. Anthropogenic sources projected to significantly impact Tuxedni in 2018 are: (1) point and stationary sources on the Kenai Peninsula, which will contribute 44% of the VOCs impacting Tuxedni, and (2) stationary areas sources on the Kenai Peninsula, which will contribute 37% of the SO X impacting Tuxedni.

EPA is proposing to find that Alaska has used appropriate air quality models to identify the primary pollutants, and source areas for these pollutants, impacting the Denali, Simeonof, and Tuxedni Class I areas. EPA is also proposing to find that the SIP submittal contains an appropriate analysis of the impact of these pollutants on visibility in each of the Class I areas in Alaska. See WRAP TSD Chapter 6.B (EPA's analysis of the WRAP's WEP analysis for Alaska).

Alaska has adopted new regulations at 18 AAC 50.260 (a)-(q) which provide the State with the authority to regulate BART sources in Alaska. In April 2007, ADEC proposed regulations to adopt the Federal BART rules into 18 AAC 50.260 to establish the process and specific steps for the BART eligible sources to follow to provide the analysis necessary for ADEC to make BART determinations. ADEC's regulations adopting the Federal BART rules were promulgated on December 30, 2007 and submitted to EPA for inclusion in the SIP on February 7, 2008. The essential elements of these regulations are summarized below.

In 18 AAC 50.260(a), ADEC adopts the Federal BART guidelines at 40 CFR part 51 Appendix Y and the definitions at 40 CFR 51.301 with specified exceptions where the definition at AS 46.14.990 is used. 18 AAC 50.260(b) specifies that sources subject to BART be identified in accordance with Section III of the BART guideline and sets the date by which ADEC will notify subject sources of their status.

18 AAC 50.260(c) establishes the procedures by which a source can request an exemption from BART by submitting a visibility impact analysis showing that the source is not reasonably anticipated to cause or contribute to any impairment of visibility in a Class I area.

18 AAC 50.260(d)-(l) establish the process that sources that did not request or receive an exemption or an Owner Requested Limit (ORL) must undertake to conduct a BART analysis, including visibility impact analysis modeling, to determine BART emission limits for sources that are subject to BART.

18 AAC 50.260(m) establishes how a final BART determination may be appealed.

18 AAC 50.260(n) establishes the deadline by which a source must implement a final BART determination.

18 AAC 50.260(o) requires the owner or operator of a source required to install control technology to maintain the equipment and conduct monitoring, recordkeeping, and reporting in accordance with the final BART determination.

18 AAC 50.260(p) explains the billing process for ADEC services under this section.

18 AAC 50.260(q) includes the definitions related to regional haze in the rules that are not in 18 AAC 50.990. These new regulations are consistent with the definitions and requirements for BART under the RHR. EPA proposes to approve these regulations.

In order to identify sources that could potentially be eligible for BART, ADEC conducted a preliminary review of its Title V permits. ADEC then worked in conjunction with WRAP's contractor, Eastern Research Group, Inc. (ERG), to identify BART-eligible sources from this preliminary source list. ERG's report of April 2005, found that the following seven sources were BART-eligible sources:

• Chugach Electric, Beluga River Power Plant (Chugach Electric);

• Alyeska Pipeline Service Company, Valdez Marine Terminal (Alyeska);

• Tesoro, Kenai Refinery (Tesoro);

• Anchorage Municipal Light and Power, George Sullivan Plant 2 (Anchorage Municipal);

• ConocoPhillips Alaska Inc., Kenai LNG Plant (CPAI);

• Agrium, Chemical-Urea Plant (Agrium); and

• Golden Valley Electric Association, Healy Power Plant (GVEA).

Chugach Electric was determined to not be BART-eligible due to the replacement of the BART-eligible emission units with ones that were not BART-eligible. In April 2007, ADEC sent a letter to Chugach officials regarding the status of its BART-eligible emission units. Chugach responded with information that the BART-eligible emission units had been replaced and the plant had become a “steam electric plant” after the BART timeframe. EPA concurs with ADEC that Chugach Electric is not a BART-eligible source.

After identifying the BART-eligible sources, the second phase of the BART evaluation is to identify those BART-eligible sources that may reasonably be anticipated to cause or contribute to visibility impairment at any Class I area, i.e., those sources that are `subject' to BART. The BART Guidelines allow states to consider exempting some BART-eligible sources from further BART review because they may not reasonably be anticipated to cause or contribute to any visibility impairment in a Class I area. Consistent with the BART Guidelines and Alaska's regional haze regulations, ADEC provided BART source emission rates to WRAP, which conducted modeling to determine which BART-eligible sources could be reasonable anticipated to cause or contribute to visibility impairment in two Class I areas, Denali National Park and Tuxedni National Wildlife Refuge. 8 In WRAP's analyses, a 0.5 dv threshold was used to determine if a source was causing or contributing to visibility impairment in either of these two Class I areas.

Alaska also established a 0.5 dv threshold to determine if a BART-eligible source was subject to BART (see p. III.K.6-4 of the SIP submittal). This threshold was based on the following reasons:

(1) Baseline visibilities at all Alaska IMPROVE sites are within 0.5 dv of the 2018 goal (See Table III.K.4-3 of the SIP submittal), and calculations conducted by ADEC demonstrate that the 2018 goal will be achieved in all Alaska Class I areas (see Alaska Regional Haze SIP submittal, III.K.9-33 through 9-40), except the Bering Sea Wilderness Area, for which there is no baseline data.

(2) Insight into selecting a threshold was also gained from a review of the uncertainty observed in historical visibility measurements at each of the Class I area monitoring sites. Uncertainty values computed for each site ( i.e., standard deviation) vary from 0.5 dv for Denali, to 0.8 dv at Simeonof, to 0.6 dv at Trapper Creek, to 1.0 dv at Tuxedni. A BART threshold of 0.5 dv would either be less than or equal to each of these visibility uncertainty values, thus visibility impacts of sources meeting this significance threshold would not be distinguished from historical variations observed at each of the monitoring sites.

Based on these reasons, Alaska selected the 0.5 dv threshold to determine which sources are subject to BART. Any source with an impact of greater than 0.5 dv in any Class I area, would be subject to a BART analysis and BART emission limitations. In the BART Guidelines, EPA recommended that States “consider the number of BART sources affecting the Class I areas at issue and the magnitude of the individual sources' impacts. In general, a larger number of BART sources causing impacts in a Class I area may warrant a lower contribution threshold.” 70 FR 39104, 39161 July 6, 2005.

EPA reviewed the modeled impacts of the BART-eligible sources that Alaska decided were BART-exempt. These sources, Alyeska, Tesoro, Anchorage Municipal, Conoco-Phillips, and Agrium, were modeled to have a cumulative visibility impact of just over 1 dv on Tuxedni, and a 0.98 dv impact at Denali. See Table III.K.6-2 in SIP submittal. Given the number and location of sources and the cumulative impact from these sources, it is reasonable for Alaska to conclude that a 0.5 dv threshold was appropriate for capturing those BART-eligible sources with significant impacts on visibility in Class I areas. For these reasons and in consideration of the facts specific to Alaska, EPA is proposing to approve the 0.5 dv threshold adopted by Alaska for determining which sources in Alaska are subject to BART.

To initially identify sources subject to BART, based on a 0.5 dv threshold, Alaska used the CALPUFF dispersion model results generated by WRAP. CALPUFF was used to assess the impact of emissions from BART-eligible sources on visibility at Denali and Tuxedni. CALPUFF used meteorological data forecast data, surface meteorological measurements, and major source specific emission estimates to calculate visibility impacts due to emissions of SO 2 , NO X and primary PM emissions. See Alaska Regional Haze SIP submittal Section III.K.6 for a summary of source specific modeling results and deciview impacts.

ADEC subsequently refined the CALPUFF modeling results by using a more accurate three-year meteorological data set, Additionally, the sources, ADEC, EPA, and the FLMs worked together to develop a more detailed CALMET modeling protocol along with the additional meteorological data. The results of this second dispersion modeling were compared to the 0.5 dv threshold to determine which sources were subject to BART. The modeling result for three of the six remaining BART-eligible sources (Alyeska Pipeline Service Company, Valdez Marine Terminal, Tesoro, Kenai Refinery and Anchorage Municipal Light & Power, Sullivan Plant) demonstrated that their visibility impacts were less than 0.5 dv. Therefore, Alaska determined that these three sources are not subject to BART.

The Agrium, Chem-Urea Plant is not currently operating and it is not known when it might reopen, and operating data necessary to conduct a BART analysis was not available. Agrium notified ADEC that it would be requesting the suspension of the renewal of its Title V permit as well as the termination of its current Title V permit for this facility. Given these conditions, ADEC issued a BART determination for Agrium which stated that Agrium has a zero emission limit for its BART eligible units, and must pursue a new air permit if and when it plans to restart this facility. Therefore, Agrium currently has a zero emission limit for its BART eligible units and that if this facility restarts operation, a new PSD air permit would be required that includes all units (including the BART units) at the facility. As a result, if this facility restarts operation, all BART-eligible units at the facility would be reclassified as PSD units and therefore would be subject to PSD emission limits. Therefore, ADEC has determined that this source is not subject to BART.

Alaska's review of the more refined CALPUFF modeling of the Conoco Phillips Alaska, Inc. (CPAI), Kenai LNG Plant found that its impact on the Tuxedni Class I area was greater than 0.5 dv. Subsequently, ADEC issued a Compliance Order by Consent (COBC) to the facility providing that after December 31, 2013, the emissions from the identified BART eligible units at the CPAI Kenai LNG Plant will be limited to a level that will not cause or contribute to visibility impairment in any Class I area at equal to or greater than 0.5 dv. The specific operating conditions, and allowable maximum daily NO X emission limits, required to remain below a 0.5 dv impact, are specified in Exhibit B of the COBC. ADEC has determined that this source is not subject to BART. EPA proposes to approve this determination.

EPA proposes to approve ADEC's determination that Alyeska Pipeline Service Company Valdez Marine Terminal; Tesoro, Kenai Refinery; Anchorage Municipal Light & Power, Sullivan Plant; the Agrium, Chem-Urea Plant, and the CPAI Kenai LNG Plant are not subject to BART.

Modeling for the remaining BART eligible source, the GVEA Healy Power Plant Unit #1, demonstrated baseline visibility impacts of greater than 3.4 dv, and therefore is subject to BART. A summary of the modeling results and proposed actions to control emissions from this facility is summarized below.

ADEC determined that the Golden Valley Electric Association (GVEA), Healy coal fired power plant is a BART-eligible source located approximately 5 miles from Denali National Park. The BART-eligible units consist of one primary coal-fired boiler, a 25-MW Foster-Wheeler boiler, referred to as “Healy Unit #1”, and one auxiliary boiler (Auxiliary Boiler #1). GVEA undertook a full assessment of control options for Healy Unit # 1 under 18 AAC 50.260(d)-(e) and used the WRAP modeling protocol and submitted its initial BART control analysis report on July 28, 2008. In this revised BART report, GVEA concluded that the existing NO X , SO 2 , and PM limits were BART for Healy Unit #1.

Subsequently, ADEC through its contractor Enviroplan, conducted a thorough BART analysis following the steps outlined in the BART Guidelines. Followings ADEC's consultation with the FLM and receipt and review of public comments, Enviroplan completed a final BART determination report for GVEA on January 19, 2010, and revised this report on June 1, 2010. See Alaska Regional Haze SIP submittal, Appendix III.6-62 through 6-179. (Final Enviroplan BART Determination Report for GVEA, revised June 1, 2010 (“Enviroplan GVEA Healy BART Report”)). This report, based on updated site-specific cost information on control technologies, and on the assumption that the useful life of installed control technologies would be 8 years (based on installation by 2016 and plant shutdown in 2024), concluded that the following control technologies are BART for Healy Unit #1: (1) Selective Non Catalytic Reduction (SNCR) added to the existing Low NO X Burners (LNB) with Over Fired Air (OFA) for NO X , (2) the existing dry sodium bicarbonate dry sorbent injection (DSI) system for SO 2 , and (3) the existing reverse-gas baghouse system for PM 10

The Enviroplan GVEA Healy BART Report concluded that SNCR was BART for NO X because it would be cost effective at $4,208/ton (based on a 2024 closure of Healy Unit #1), and because SNCR would provide an 0.62 deciview improvement in visibility at the Denali Class I area for 51 days per year (a reduction from 3.36 dv impact to a 2.74 dv impact). The State determined that Selective Catalytic Reduction (SCR) was not cost effective at $15,762/ton and was therefore was rejected as BART for NO X control for this unit. Enviroplan also concluded that Rotating Over Fire Air (ROFA®), even though cost effective, would not be incrementally cost effective over SNCR because the cost per deciview improvement for the ROFA® equivalent emission limit would be 50 percent higher than the cost for the SNCR limit (for a visibility improvement of only 0.05 dv), and the capital cost of installing ROFA® would be 180 percent higher than installing SNCR.

For SO 2 controls, Enviroplan indicated that increased sorbent injection, with a potential visibility improvement of 0.25 dv, was the only cost-effective option that could improve visibility in Denali National Park. However, after evaluating this alternative according to the required BART criteria, Enviroplan concluded that this option was cost prohibitive because it would cost $3,578 for each ton of SO 2 removed and would result in a visibility improvement of only 0.25 dv. Enviroplan also noted that increasing the sorbent injection rate, could potentially cause a visibility impairing “brown plume” effect (due to the oxidation of nitrogen oxide (NO) to nitrogen dioxide (NO 2 ) prior to discharge from the stack), which would adversely impact visibility in Denali National Park.

Based on the results of Enviroplan's evaluation, and in response to public comments received on the proposed BART for Healy Unit #1, ADEC determined that the BART emission limits for GVEA Healy Unit #1, based on a 2024 shutdown, are 0.20 lb/mmBtu for NO X , the current limit of 0.30 lb/mmBtu for SO 2 , and the current limit of 0.015 lb/mmBtu for PM.

The BART Guidelines provide that a source's remaining useful life may be considered as an element of the cost analysis in a BART determination for a particular source and recognizes that if the remaining useful life represents a relatively short time frame it may affect the annualized costs of the retrofit controls. BART Guidelines IV.D.4.k.1. As explained in the BART Guidelines, where the facility will be shut down earlier than its normal expected life, the remaining useful life is the difference between the date the controls are put in place and the date the facility permanently ceases operations. The BART Guidelines further provide that “Where this date affects the BART determination this date should be assured by a federally, or State-enforceable restriction preventing further operation.” BART Guidelines, IV.D.4.k.2.(2). In the case of the Healy Unit #1, EPA recognizes that the 2024 shutdown date relied on in the cost effectiveness calculation described above is not enforceable. However, the BART Guidelines provide that the methods specified in EPA's Control Cost Manual used to calculate annualized costs should reflect the specified time period for amortization that varies depending on the type of control. Therefore, based on our review, EPA considers 15 years to be a reasonable estimated remaining useful lifetime for the particular control technologies under consideration for NO X or SO 2 control technologies for Healy Unit #1.

Based on a 15-year lifetime, EPA found that SCR was not cost effective for controlling NO X emissions at $10,170/ton. This cost effectiveness value does not include the cost to replace lost electricity generation during installation of SCR because there is insufficient evidence that the cost is a necessary consequence of SCR installation. When this element is removed from the cost estimate, the overall cost effectiveness over a 15-year lifetime for SCR decreases from $11,765/ton to $10,170/ton (see EPA's Healy BART Report-addendum). EPA finds that SCR is still not cost effective at this lower rate. However, the following NO X control technologies were considered cost effective: SNCR at $3,125/ton, ROFA at $3,476/ton, and ROFA® with Rotamix® at $4,325/ton.

EPA next considered the environmental impacts of each of these cost effective technologies. ROFA® with Rotamix® when operated to achieve the quoted NO X emission rate of 0.11 lb/MMbtu, reportedly carries some risk of increased emissions of carbon monoxide (CO), carbon dioxide (CO 2 ), and “loss-on-ignition” (un-burnt carbon particulate matter). Increased particulate matter emissions could result in additional visibility impairment at the Denali Class I area. However, EPA found that data quantifying this risk is not readily available, since facilities employing ROFA® with Rotamix® are typically allowed slightly higher NO X emission limits than those quoted by the vendors of these technologies. EPA's review did not identify a facility utilizing ROFA® with Rotamix® that was subject to an emission limit near 0.11 lb/mmBTU, the level quoted by the vendor for ROFA® with Rotamix® for Healy Unit #1. Installation of the ROFA® technology alone (without Rotamix®) is cost effective, and could achieve an emission rate of 0.15 lb/mmBtu according to the vendor quote, but would only result in a visibility improvement of approximately 0.05 dv beyond the improvement achievable using SNCR. ADEC considered this incremental visibility improvement not significant enough to warrant the increased cost for ROFA®, and EPA agrees with this decision.

ADEC selected the BART NO X emission limit for Healy Unit #1 based on a consideration of the BART five-step control review process, information provided by GVEA in their BART analyses, the Enviroplan GVEA Healy BART Report, and a decision by ADEC to grant GVEA's request to allow for some operational variability in the NO X emission rate for Healy Unit #1. GVEA conducted an analysis of 2003-2008 (5 years) 30-day rolling NO X and SO 2 emissions from Healy Unit #1, applied three standard deviations to the mean of these values, and requested that their BART emission limits reflect the resultant rates at three standard deviations. In response, ADEC determined that an additional allowance of 5% higher than the emission rate identified in the findings report (0.19 lb/mmBtu) would sufficiently allow for operating variability. Specifically, ADEC determined that the flexibility provided by a 0.20 lbs/mmBtu NO X emission limit instead of a 0.19 lb/mmBtu NO X emission limit would require GVEA to stay within the specified emission limit, while allowing for a reasonable amount of operational variability. See Appendix III.K.6-114 of the SIP submittal. EPA believes that this minor NO X emission allowance would not significantly change the visibility impairment at Denali National Park due to emissions from Healy Unit #1. Therefore, EPA proposes to approve the State's determination that an emission limit of 0.20 lbs/mmBtu for NO X is BART for Healy Unit #1.

For SO 2 , EPA found that optimizing the existing Dry Sorbent Injection (DSI) system to achieve an emission limit of 0.18 lb/mmBtu, by increasing the sorbent injection rate, is cost effective at $3,578/ton. However, increased sorbent injection rate carries the risk of a “brown plume” effect. Brown plume refers to the oxidation of nitrogen oxide (NO) to nitrogen dioxide (NO 2 ) prior to discharge from the stack. NO 2 is brown in color, while NO is colorless; the two together form NO X . Combustion emissions are initially NO, and oxidize in the atmosphere to NO 2 . High sorbent injection rates can increase the potential for this oxidation to occur prior to discharge, potentially resulting in a visible brown plume from the exhaust stack. Due to the proximity of Healy Unit #1 to Denali National Park, a brown plume may result in increased visibility impairment in the sections of the Park closest to Healy Unit #1, even though overall visibility impairment would be reduced. Two other SO 2 control options, a spray dryer, and wet limestone flue gas desulfurization, were considered not to be cost effective at $7,198/ton and $7,763/ton, respectively. Therefore, EPA proposes to approve the SO 2 emission limit achievable by the current DSI control technology, 0.30 lb/mmBtu, as BART for Healy Unit #1.

ADEC determined that the existing reverse-gas baghouse system is the state- of-the-art particulate emissions (PM) control technology for utility boiler applications, and therefore, the existing high-efficiency reverse-gas baghouse installed on the Healy Unit #1 is BART for PM. EPA proposes to approve the PM emission limit achievable by the current reverse-gas baghouse control technology, 0.015 lb/mmBtu, as BART for Healy Unit #1.

Regarding the Auxiliary Boiler #1, the State indicated that this unit is just used during shutdown periods or emergency repairs to Healy Unit #1 to supply heat to the Healy 1 building or to provide steam and potable hot water to Healy Unit #2, if needed, when Healy Unit #1 is not operating and that it is fired monthly for maintenance checks. Additionally, refined modeling for the State also indicated that that the predicted visibility impacts attributable to the boiler were less than .067 dv. The State determined that the existing uncontrolled configuration and current Title 5 permit limits for the Auxilliary Boiler #1 were BART, and that no additional controls were required. See Enviroplan GVEA Healy BART Report Table E-1 for BART emission limits specific to the Auxiliary Boiler #1. EPA agrees that given the low annual emissions for the boiler, add-on pollution controls equipment for NO X and PM are not cost effective. EPA found that the only viable method to control SO 2 emission from the Auxiliary Boiler #1 would be to switch to ultra-low sulfur diesel. However, due to the cost differential between high sulfur diesel and ultra-low sulfur diesel in the Fairbanks area, it would cost approximately $28,000/t on to reduce SO 2 emission from the Auxiliary Boiler #1 by switching fuels. Based on this cost, EPA has determined that this approach would not be cost effective. EPA proposes to approve the State's BART determination for the Auxiliary Boiler #1.

The RHR requires States to show “reasonable progress” toward natural visibility conditions over the time period of the SIP, with 2018 as the first milestone year. The RHR at 40 CFR 51.308(d)(1) requires states to establish a goal, expressed in deciviews, for each Class I area within the state that provides for reasonable progress toward achieving natural visibility conditions by 2064. As such, the State must establish a Reasonable Progress Goal (RPG) for each Class I area that provides for visibility improvement for the most-impaired (20% worst) days and ensures no degradation in visibility for the least-impaired (20% best) days in 2018. RPGs are estimates of the progress to be achieved by 2018 through implementation of the Long Term Strategy (LTS), which includes anticipated emission reductions from all State and Federal regulatory requirements implemented between the baseline and 2018, including but not limited to BART and any additional controls for non-BART sources or emission activities including any Federal requirements that reduce visibility impairing pollutants.

As explained above, ADEC relied on the WEP analysis conducted by the WRAP to project visibility conditions at Denali National Park, Simeonof Wilderness Area, and Tuxedni National Wildlife Area in 2018. The visibility projections were based on estimates of emissions reductions from all existing and known controls resulting from Federal and state CAA programs as of December 2010.

In setting the RPGs for its Class I areas, ADEC considered a number of different factors. These factors included: (1) Attainment of the URP in each Class I area by 2018, (2) results of the Four Factor Analysis, (3) additional improvements in visibility due to BART controls, (4) evidence that there is significant contribution to visibility impairment from international sources (such as Asian Dust, and Arctic Haze) and substantial contributions from natural sources (such as wildfires and sea salt), and (5) additional improvements in visibility in Alaskan Class I areas due to new maritime emission regulations that will achieve substantial reductions by 2015 in SO 2 and NO X emissions from commercial marine vessels. These five factors are further described in the following paragraphs.

(1) Attainment of the 2018 URPs—ADEC conducted a statistical analysis of historical visibility data from the Denali, Tuxedni, and Simeonof Class I areas to demonstrate that the visibility in the Class I areas in Alaska in 2018 projected by the WEP analysis falls within the bounds of the 2018 URP glide path, with a 95% degree of confidence. This indicates that there is no difference between the WEP forecast of visibility impairment in the Class I areas, and the URP determined for each Class I area in 2018.

(2) Results of the Four Factor Analysis—As described in section II.D. above, when establishing RPGs the RHR requires the states to consider (1) The costs of compliance; (2) the time necessary for compliance; (3) the energy and non-air quality environmental impacts of compliance; and (4) the remaining useful life of any potentially affected sources. 40 CFR 51.308(d)(1)(i)(A). This is referred to as the Four Factor Analysis. As reflected in the information presented in Table III.K.9-2 of the SIP submittal, the WEP analysis indicates that three categories of point sources may be significant contributors to regional haze and warrant further analysis under the four factors. These three categories are: industrial boilers, petroleum refineries, and reciprocating engines and turbines. Based on the four-factor analyses of these three source categories, ADEC concluded that it is not reasonable to require additional controls for these source categories at this time. Alaska explained its reasons to support this decision include: (1) The Class I areas in Alaska do not need large visibility improvements to reach natural conditions in 2064, (2) the Class I areas are predicted to attain the URP in 2018, (3) emissions from natural sources (primarily wildfires) contribute the most significant visibility impacts, and (4) it is uncertain, at this time, how much visibility improvements could be attained by controlling individual point sources, since each contributing point source has not been individually modeled for visibility impact to the nearest Class I area.

(3) Additional Improvements not included in the WEP Analysis—Additional improvements at several sources that were not factored into ADEC's WEP analysis reduce visibility impairing pollutants impacting Denali, and Tuxedni, within the next 5 years. GVEA's Healy Power Plant Unit #1 will install SNCR as BART for NO X , which will reduce NO X impacts at Denali by 0.62 dv. The Conoco Philips Kenai LNG plant will also reduce its emissions to below 0.5 dv under the conditions of a consent order. Finally, the Agrium, Chem-Urea Plant in the Kenai has stopped operating and therefore has dramatically reduced NH 3 , NO X and PM 2.5 emissions impacting Tuxedni (by 98%, 18%, and 93%, respectively). These reductions in emissions from sources on the Kenai Peninsula indicate that visibility at Tuxedni should improve even more rapidly than predicted by the WEP analysis.

(4) Contribution from International Sources and Natural Sources—Significant contributions to haze in the Class I areas is Alaska include natural sources (biogenic aerosols, sea salt, volcanic emissions) and international sources. See generally, Alaska Regional Haze SIP submittal, III.K.3-4 to 3-8. There is also evidence that natural wildfire is a substantial contributor to visibility impairment in the three modeled Class I areas, but particularly in the Denali Class I area. The speciation analysis, clearly demonstrate that natural fires are the dominant source of pollutants impacting all Class I areas within Alaska on the 20% worst days. In Denali, natural fires contribute 97% of the PM 2.5 , 68% of the VOCs, 79% of the NO X , and 65% of the SO 2 that cause visibility impairment in that Class I area. At Trapper Creek (also in Denali), natural fires contribute 86% of the PM 2.5 , 65% of the VOCs, 34% of the NO X , and 62% of the SO 2 that cause visibility impairment. In Simeonof, natural fires contribute 99% of the PM 2.5 , 89% of the VOCs, 76% of the NO X , and 92% of the SO 2 that cause visibility impairment on the worst 20% days. In Tuxedni, natural fires contribute 78% of the PM 2.5 , 41% of the VOCs, 15% of the NO X , and 44% of the SO 2 that cause visibility impairment on the worst days. See generally Alaska Regional Haze SIP submittal, Section III.K.4, and WEP analyses shown in Tables III.K.7-1 through III.K.7-4.

(5) Additional Improvements due to New Maritime Emission Regulations—Alaska also found that new emission control requirements on commercial marine vessels, which will be fully in effect by 2015, will reduce SO 2 , NO X , and PM 2.5 emission contributions to visibility impairment in Simeonof Wilderness Area and Tuxedni National Wildlife Refuge. In October 2008, the International Maritime Organization (IMO) adopted Annex VI amendments which specify (1) New fuel quality requirements for commercial marine vessels beginning from July 2010, (2) Tier II and III NO X emission standards for new commercial marine engines, and (3) Tier I NO X requirements for existing pre-2000 commercial marine engines. The Annex VI amendments designate waters within 200 miles of the North American coast (including Alaska) as an emission control area (ECA). The requirements of Annex VI ensure large reductions in particulate matter, NO X , and SO 2 emission from commercial marine vessels operating in the ECA. These reductions were not factored into the Alaska 2018 emissions inventory projections or the WEP analysis, but are expected to further improve visibility at Tuxedni, and to a lesser extent Simeonof, which are both significantly impacted by emissions from commercial marine vessels.

Alaska acknowledged that its emission inventory and 2018 reasonable progress forecasts and emission inventory do not include emissions from the 50 MW coal-fired unit at the GVEA facility in Healy (Healy Unit #2) The State explained, the unit has not operated for a number of years, is not currently operating and that the available information to analyze the potential visibility impact of the Healy Unit #2 emissions on Denali is inconclusive. The State does recognize however that if the unit is brought on line, the point source NO X and SOx emissions emitted from within the Denali Borough would increase by a factor of 4.0 and 2.8 respectively. Alaska Regional Haze SIP submittal III.K.9-32, 9-37. EPA is aware that on February 3, 2012, ADEC issued a revised Title 5 permit to GVEA allowing Healy 2 to resume operations, and that emissions from Healy 2 could have an impact on visibility in Denali. Final Air Quality Operating Permit No. AQ0173TVP02 (Feb. 3, 2012). However, since the visibility impacts of these future emissions have not yet been modeled, the exact amount of impact cannot be determined at this time. Therefore, for reasonable progress purposes, it is not reasonable to require additional controls on the facility at this time. If or when the unit begins operating again, ADEC commits to assessing the impact of these additional emissions on visibility in Denali and will evaluate control options for the facility as part of its 5 year progress report. In light of the uncertainty regarding the facility at this time, we propose to approve the State's consideration of the Healy Unit #2 in its reasonable progress evaluation. EPA will consider additional relevant information it receives during public comment period regarding the emissions or visibility impact of this source as it relates to Alaska's reasonable progress goals.

EPA is proposing to agree with the State's analysis and conclusion that it is not reasonable to seek additional controls on other emission sources within the State at this time to achieve further reasonable progress. Importantly, the RPGs for the Class I areas in Alaska are projected to meet the URP in 2018. Alaska has demonstrated that the RPGs provide for visibility improvement on the worst days, and no degradation of visibility on the best days compared to the baseline average. EPA finds that the State's decision not to seek additional control measures is supported by the fact that there is significant contribution to haze in the Class I areas due to international sources and some natural sources (biogenic aerosols, sea salt, and volcanic emissions), as well as substantial contributions to haze from wildfires. In addition, the State expects reductions in statewide emissions of SO 2 and NO X due to BART emission limits on Healy Unit #1, emission limits on the Conoco Phillips Kenai LNG Plant specified in the consent order between Alaska and Conoco Philips, and the shutdown of the Agrium, Chem-Urea Plant. Based on the above reasons, EPA is proposing to approve ADEC's demonstration that its RPGs provide for reasonable progress in all its Class I areas for the first planning period, as required in CFR 51.308(d)(1)(i), (ii) and (vi).

Alaska relied on monitoring, emission inventories and modeling information from the WRAP as the technical basis for its LTS. Coordination and consultation occurred with other states through the WRAP, in which all western states participated in developing the technical analysis upon which their SIPs are based. This included identifying all anthropogenic sources of visibility impairment including major and minor stationary sources, mobile sources, and area sources. The anticipated net effect on visibility over the first planning period due to changes in point, area, and mobile source emissions is a significant reduction in regional haze in the Denali, Tuxedni, and Simeonof Class I areas. In particular, ADEC considered the following factors in developing its long-term strategy.

Alaska has a number of ongoing programs and regulations that directly protect visibility or provide for improved visibility by generally reducing emissions.

The two primary regulatory programs for addressing visibility impairment from industrial sources are the BART and Prevention of Significant Deterioration/New Source Review (PSD/NSR) rules. The PSD/NSR rules require that emissions from new industrial sources and major changes to existing sources protect visibility in Class I areas through attainment of air quality related values, including visibility, in Class I areas.

Section 51.308(e) of the RHR includes the requirements for states to implement Best Available Retrofit Technology for eligible sources within the State that may reasonably cause or contribute to any impairment of visibility in any mandatory Class I area. Alaska's BART regulations (18 AAC 50.260) specify how to determine if a source is subject to BART, and identify the process for determining BART emission limits for BART-subject sources. As discussed in section II.E. above, ADEC has completed analysis of identified BART-eligible sources in Alaska and has determined BART emission limits for all BART-subject sources. Each source subject to BART is required to install and operate BART as expeditiously as practicable, but in no case more than five year after EPA approval of the regional haze SIP.

ADEC implements a Title V operating permit program as well as a minor source permit program for stationary sources of air pollution. The Title V permits are consistent with the requirements of 40 CFR part 71 and requirements are found in 18 AAC 50 Article 3, Major Stationary Source Permits. The requirements for minor source permits are found in 18 AAC 50 Article 5, Minor Permits. These permit programs, coupled with PSD/NSR requirements, serve to ensure that stationary industrial sources in Alaska are controlled, monitored, and tracked to prevent deleterious effects of air pollution.

Alaska has previously established open burning regulations in 18 AAC 50.065. These regulations are intended to prevent particulate matter emitted from open burning from adversely impacting visibility in Class I areas. For example,18 AAC 50.065 (b)-(f) provide ADEC the authority to require pre-approvals for controlled burning to manage forest land, vegetative cover, fisheries, or wildlife habitat if the area to be burned exceeds 40 acres yearly. The open burning regulations, working in conjunction with the state's Enhanced Smoke Management Plan, control visibility impairing pollutants resulting from planned open burning activities.

Mobile source emissions show decreases in NO X , SO 2 , and VOCs in Alaska during the period 2002-2018. These declines in emissions are due to numerous rules already in place, most of which are Federal regulations. The State of Alaska has established regulations related to mobile sources that primarily impact the Fairbanks and Anchorage CO maintenance areas, Alaska's two largest cities. These programs have resulted in NO X and hydrocarbon emission reductions from motor vehicles in Alaska's two largest communities.

The Federal Motor Vehicle Control Program (FMVCP) is a Federal certification program that requires all new cars sold in all states except California to meet more stringent emission standards. As a result, motor vehicle emissions will be reduced as the older vehicle fleet is replaced with newer cleaner vehicles. Additionally, a variety of Federal rules establishing emission standards and fuel requirements for diesel on-road and non-road equipment will significantly reduce emissions of particulate matter, nitrogen oxides, and sulfur oxides from emission sources over the first planning period in Alaska. Alaska reports that as of 2010, all on-road and non-road diesel engines in Alaska have meet EPA's national requirements for 15 ppm sulfur diesel fuel. In addition to these regulatory programs, ADEC is also promoting voluntary projects to reduce diesel emission reductions throughout the state.

The community of Eagle River and the Mendenhall Valley in Juneau are either currently or formerly nonattainment areas with respect to the NAAQS for coarse particulate matter (PM 10 ). These areas exceeded the standards due primarily to wood burning and road dust sources, and now have strict controls in place that regulate wood burning and control road dust, the two major sources of PM 10 in these communities.

In developing its LTS, ADEC has considered the impact of construction activities on visibility in the Class I areas. ADEC regulations at 18 AAC 50.045(d) require that entities who cause or permit bulk materials to be handled, transported, or stored or who engage in industrial activities or construction projects shall take reasonable precautions to prevent particulate matter from being emitted into the ambient air. This regulation allows the state to take action on fugitive dust emissions from construction activities. Based on the general knowledge of growth and construction activity in Alaska, ADEC believes that current state and Federal regulations adequately address this emission source category.

Emission limits and compliance schedules for affected sources are specified under Alaska and Federal regulations in accordance with the Clean Air Act. Additionally, as discussed above, Alaska has established specific emission limits and compliance schedules for sources subject to BART. The state anticipates future SIP updates may identify additional emission controls that could be implemented at that time and commits to include limits and compliance schedules as needed in future plan updates.

Alaska's continued implementation of NSR and PSD requirements, with the FLMs reviewing impacts to Class I areas, will assure that there is no degradation of visibility in Alaska Class I areas on the least impaired days from expansion or growth of stationary sources in the state. ADEC will continue to track source retirement and replacement and include known schedules in periodic revisions to its Air Quality Control (ACC) Plan and Regional Haze SIP.

Smoke from wildland fires is a major contributor to visibility impairment Class I areas in Alaska. Alaska found that implementation of effective smoke management techniques through regulation and an Enhanced Smoke Management Plan (ESMP) will mitigate impacts of planned burning on visibility in its Class I areas. Additionally, ADEC has developed and implemented an ESMP, and includes this plan as part of this long-term strategy. Specifically, the ESMP, which will be revised at least every 5 years or sooner if needed, outlines the process, practices and procedures to manage smoke from prescribed and other open burning to help ensure that prescribed fire ( e.g. controlled burn) activities minimize smoke and air quality problems.

BART emission limits and control measures will enforceable as a matter of State law by virtue of Alaska's BART regulations at 18 AAC 50.260 and federally enforceable once approved as part of its State Implementation Plan. ADEC has adopted this Regional Haze Plan into the Alaska Air Quality Control Plan (Alaska's State Implementation Plan) at 18 AAC 50.030, which ensures that all elements in the plan are federally enforceable once approved by EPA.

EPA is proposing to find that ADEC adequately addressed the RHR requirements in its long-term strategy (LTS). EPA believes that this LTS provides sufficient measures to ensure that Alaska will meet its emission reduction obligations to achieve adequate visibility protection for the Class I areas in the State.

The primary monitoring network for regional haze in Alaska is the IMPROVE network. As discussed in section III.B. of this notice, there are currently two IMPROVE monitoring sites at Denali National Park, one at Simeonof, and one at Tuxedni. There is no IMPROVE site for the Bering Sea Wilderness Area. As previously explained, one of the monitoring challenges in Alaska is the logistical difficulty of monitoring at remote locations in the harsh arctic environment. The challenges for ongoing air and visibility monitoring in Alaska include transportation and site maintenance in isolated and remote areas where access may be intermittently available only by air or water, and electrical power may be lacking. Alaska is working with EPA and the FLMs to ensure that the monitoring network in Alaska provides data that are representative of visibility conditions in each affected Class I area within the State. In the SIP submittal, Alaska commits to rely on the IMPROVE network for complying with the regional haze monitoring requirement in EPA's RHR for the current and future regional haze implementation periods. See Alaska Regional Haze SIP submittal III.K.3.C.2.

Through the WRAP, member states and Tribes worked extensively with the FLMs from the U.S. Departments of the Interior and Agriculture to develop technical analyses that support the regional haze SIPs for the WRAP states. The State of Alaska provided an opportunity for FLM consultation, at least 60 days prior to holding any public hearing on the SIP. This SIP was submitted to the FLMs on June 24, 2010, for review and comment. Comments were received from the FLMs on August 23, 2010. As required by 40 CFR 51.308(i)(3), the FLM comments and State responses are included the SIP submittal.

40 CFR 51.308(f-h) establish requirements and timeframes for states to submit periodic SIP revisions and progress reports that evaluate progress toward the reasonable progress goal for each Class I area. As required by 40 CFR 51.308(i)(4), ADEC will continue to coordinate and consult with the FLMs during the development of these future progress reports and plan revisions, as well as during the implementation of programs having the potential to contribute to visibility impairment in mandatory Class I areas. This consultation process shall provide on-going and timely opportunities to address the status of the control programs identified in this SIP, the development of future assessments of sources and impacts, and the development of additional control programs.

Section 51.308(f) of the Regional Haze Rule requires that regional haze plans be revised and submitted to EPA by July 31, 2018, and every ten years thereafter. In accordance with those requirements, ADEC commits to revising and submitting this Plan by July 31, 2018, and every ten years thereafter. See Alaska Regional Haze SIP submittal section III.K.10.

40 CFR 51.308(g) requires states to submit a progress report to EPA every five years evaluating progress towards the reasonable progress goal(s). The first progress report is due five years from the submittal of the initial implementation plan and must be in the form of an implementation plan revision that complies with 40 CFR 51.102 and 51.103. ADEC commits to submitting a report on reasonable progress to EPA every five years following the initial submittal of the SIP. The reasonable progress report will evaluate the progress made towards the reasonable progress goal for each mandatory Class I area located within Alaska and in each mandatory Class I area located outside Alaska, which may be affected by emissions from Alaska.

The Alaska Regional Haze SIP submittal included amendments to the Air Quality Control Plan at 18 AAC 50.30. More specifically, Volume II., Section III. F: Open Burning is revised to include the “In Situ Burning Guidelines for Alaska, Revision 1” (August 2008) and to update the open burn application requirements in Alaska's Enhanced Smoke Management Plan. ADEC's “In Situ Burning Guidelines” apply to specified situations involving oil spills. Alaska's Enhanced Smoke Management Plan applies to prescribed burning and for land clearing approvals. Additionally, Volume II, Section III. K: Area Wide Pollution Control Program for Regional Haze is a new section and, as discussed above, is intended to meet the RHR requirements, and Volume II: Appendices to Volume II is amended to include the Appendices for Alaska's Areawide Pollutant Control Program for Regional Haze.

EPA proposes to approve the amendments at 18 AAC 50.30.

EPA is proposing to approve the Alaska Regional Haze plan, submitted on April 4, 2011, as meeting the requirements set forth in section 169A of the Act and in 40 CFR 51.308 regarding Regional Haze. EPA is also proposing to approve ADEC's BART regulations in 18 AAC 50.260. Additionally, EPA is proposing to approve the amendments to 18 AAC 50.30 to adopt by reference Volume II., Section III. F. Open Burning; Volume II, Section III. K. Area Wide Pollution Control Program for Regional Haze; and Volume II, Appendices to Volume II.

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 proposed 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 proposed 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.

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of this proposal, memoranda to the docket, and all other related information will also be available through the WWW on EPA's greenhouse gas reporting rule Web site at http://www.epa.gov/climatechange/emissions/ghgrulemaking.html.

Additional information on submitting comments. To expedite review of your comments by agency staff, you are encouraged to send a separate copy of your comments, in addition to the copy you submit to the official docket, to Carole Cook, U.S. EPA, Office of Atmospheric Programs, Climate Change Division, Mail Code 6207-J, Washington, DC 20460, telephone (202) 343-9263, email address: GHGReportingRule@epa.gov.

Acronyms and Abbreviations. The following acronyms and abbreviations are used in this document.