SBA adopted NAICS 1997 industry definitions as a basis for its table of small business size standards, replacing the Standard Industrial Classification (SIC) System, effective October 1, 2000 (65 FR 30836 (May 5, 2000)). Since then, OMB has issued three modifications to NAICS. SBA incorporated OMB's first modification, NAICS 2002 (66 FR 3825 (January 16, 2001)), into its table of size standards, effective October 1, 2002 (67 FR 52597 (August 13, 2002)). SBA incorporated the second modification, NAICS 2007 (71 FR 28532 (March 16, 2006)), into its table of size standards, effective October 1, 2007 (72 FR 49639 (August 29, 2007)). OMB published its third modification, NAICS 2012, in its “Notice of NAICS 2012 Final Decisions” in the Federal Register on August 17, 2011 (76 FR 51240). SBA is adopting the latest modifications into its table of small business size standards, as explained below, effective October 1, 2012.

NAICS 2012 has created 66 new industry codes with new content either by splitting or merging some of the industries in NAICS 2007. It has also assigned new codes to 10 industries in NAICS 2007 without changing their definition and title. NAICS 2012 has reused 13 NAICS 2007 industry codes (including six with the same industry title) with additional or modified definitions. All these changes have impacted 199 industries under NAICS 2007, of which 179 are in NAICS Sector 31-33, Manufacturing. The vast majority of changes among the manufacturing industries relate to aggregation of many small, detailed industries in NAICS 2007 into fewer industries in NAICS 2012. As a result, the number of 6-digit manufacturing codes has decreased from 472 in NAICS 2007 to 364 in NAICS 2012.

Complete information on the relationship between NAICS 2007 and NAICS 2012 is available on the U.S. Bureau of the Census (Census Bureau) Web site at http://www.census.gov/eos/www/naics/. The Web site provides detailed documentation on establishment and implementation of NAICS 2012, including the August 17, 2011 “Notice of NAICS 2012 Final Decisions.” The Census Bureau's Web site also provides concordances ( i.e., correspondence tables) between SIC and NAICS 1997 and NAICS 2002, and between subsequent NAICS revisions.

On October 22, 1999, SBA published in the Federal Register (64 FR 57188) a proposed rule to incorporate NAICS 1997 into its table of small business size standards. The proposed rule put forth guidelines or rules that SBA applied to convert the size standards from the SIC System to NAICS. The guidelines were intended to minimize the impact of applying a new industry classification system on SBA's small business size standards. SBA received no negative comments to the proposed guidelines. SBA published a final rule on May 5, 2000 (corrected on September 5, 2000, 65 FR 53533) adopting the resulting table of size standards based on NAICS 1997, as proposed. SBA applied and adopted the same guidelines when it updated its table of size standards based on NAICS 2002 and NAICS 2007. In this interim final rule, SBA is, in most part, following the same guidelines in adopting NAICS 2012 for its table of size standards. Those guidelines are shown in Table 1, Guidelines (Rules) to Establish Size Standards for Industries under NAICS 2012, below.

Table 2, NAICS 2012 Codes Matched to NAICS 2007 Codes and Size Standards, matches 2012 NAICS Codes and size standards to the affected NAICS 2007 industry codes and parts and their current size standards. Table 2 includes only those NAICS 2007 industries or parts that are either reclassified into other industries or parts or assigned a new code under NAICS 2012.

As shown above in Table 2, NAICS 2012 Codes Matched to NAICS 2007 Codes and Size Standards, most of the size standards for the affected NAICS 2007 industries are not impacted and therefore remain unchanged under NAICS 2012. The vast majority of the changes consist of revised industry titles or the reclassification of one or more NAICS 2007 industries or parts into other industries or parts in NAICS 2012 without impacting their size standards.

As shown in Table 2, the adoption of the NAICS 2012 modification leads to a revision to the current size standard for 42 NAICS 2007 industries or parts. SBA applied the guidelines in Table 1 to update the size standards for industries in NAICS 2007 to NAICS 2012. This resulted in increases to the size standard for 40 NAICS 2007 industries (including 36 in Manufacturing) and one exception, and a change to the size standard from average annual receipts to number of employees for one industry. Specifically, the $25.5 million size standard for Aircraft Dealers, an exception under NAICS (2007) 441229, All Other Motor Vehicle Dealers, is no longer necessary. NAICS (2012) 441228, Motorcycle, ATV, and All Other Motor Vehicle Dealers, includes aircraft dealers, for which SBA is adopting a $30 million size standard. In addition, the small business size standards for both NAICS (2007) 454311, Heating Oil Dealers, and NAICS (2007) 454312, Liquefied Petroleum Gas (Bottled Gas) Dealers, are 50 employees. However, the size standard for NAICS (2007) 454319, Other Fuel Dealers, is $7 million. Under NAICS 2012, a single NAICS industry, namely 454310, Fuel Dealers, includes all three activities, and 50 employees is therefore the appropriate size standard. In all cases, the adopted size standards were based on the correspondence between NAICS 2007 and NAICS 2012 industry definitions.

In addition to changing industry definitions and codes, NAICS 2012 has adopted several NAICS industry title changes to more clearly describe the existing content of industries. These title changes do not change the content or NAICS code of industries, but rather refine how they are described. The title changes affecting the NAICS industry titles in SBA's table of size standards are shown in Table 3, Industry Title Changes in NAICS 2012. Because the title changes do not alter NAICS industry codes or definitions, size standards are not affected. SBA adopts NAICS 2012 industry titles for its table of size standards.

Under NAICS 2012 “Factoryless Goods Producers” (FGPs) are defined as manufacturers that outsource manufacturing transformation activities ( i.e., the actual physical, chemical or mechanical transformation of inputs into new outputs) to specialized establishments, both foreign and domestic. See 76 FR 51240 (August 17, 2011). An FGP also undertakes all of the entrepreneurial steps and arranges for all required capital, labor, and material inputs required for outsourced companies to make a good. The Economic Classification Policy Committee (ECPC) studied the issue of how to categorize FGPs in NAICS and provided guidance for consistent classification of manufacturing outsourcing establishments across various Federal statistical programs. The ECPC recommended classification of establishments that bear the overall responsibility and risk for bringing together all processes necessary for the production of a good in the manufacturing sector, even if the actual transformation is 100 percent outsourced. The ECPC's full recommendation is available at http://www.bea.gov/about/pdf/ECPC_Recommendation_for_Classification_of_Outsourcing_1.pdf. OMB accepted the ECPC's recommendation that FGPs be classified in manufacturing, and therefore be included for statistical purposes in manufacturing under NAICS 2012.

Although this classification of FGPs changes the traditional definition of manufacturing for statistical purposes, SBA's current regulations for Federal government procurement will continue to apply. In other words, the NAICS 2012 definition of manufacturing includes FGPs, but it does not affect eligibility for Federal procurement programs when a concern must be small to receive available benefits and preferences as a small business. Specifically, the Small Business Act and SBA's regulations generally require that an offeror on a supply contract set aside for small businesses, including 8(a), small businesses located in Historically Underutilized Business Zones (HUBZones), service-disabled veteran-owned small businesses (SDVOSB) and woman-owned small businesses (WOSB), provide the product of a small business made in the United States. Generally, a manufacturer must perform work for at least 50 percent of the cost of manufacturing the supplies, not including the cost of materials. 15 U.S.C. 637(a)(14)(A)(ii), 644(o)(1)(B), and 13 CFR 125.6. For size purposes, there can be only one manufacturer of the end item being acquired. The manufacturer is the concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired. The end item must possess characteristics which, as a result of mechanical, chemical or human action, it did not possess before the original substances, parts or components were assembled or transformed. The end item may be finished and ready for utilization or consumption, or it may be semi-finished as a raw material to be used in further manufacturing. Firms that perform only minimal operations upon the item being procured do not qualify as manufacturers of the end item. In addition, firms that add substances, parts, or components to an existing end item to modify its performance will not be considered the end item manufacturer where those identical modifications can be performed by and are available from the manufacturer of the existing end item. 13 CFR 121.406(b)(2). Accordingly, FGPs that do not comply with these requirements will not qualify as small for Federal procurement programs. However, none of these requirements precludes an FGP from qualifying as a nonmanufacturer when it meets the requirements of 13 CFR 121.406. Under this regulatory provision, for a small business set aside supply contract (including 8(a), SDVO and WOSB, but not HUBZone), SBA can waive the requirement that an offeror supply the product of a small business made in the United States if no small business manufacturers exist.

SBA considered retaining the NAICS 2007 industry codes as the basis for small business size standards. That would, however, lead to inconsistency among Federal agencies that adopt NAICS 2012 for their statistical and other programs. OMB stated in its August 17, 2011 “Notice of NAICS 2012 Final decisions” that “Federal statistical establishment data published for reference years beginning on or after January 1, 2012, should be published using the 2012 NAICS United States codes.” SBA is not a statistical agency, but uses the establishment data collected from other Federal agencies, such as the Economic Census data from the Bureau of the Census for its size standards analysis. If SBA does not adopt NAICS 2012, it will not be able to analyze and evaluate small business size standards adequately and accurately because the forthcoming Economic Census data based on NAICS 2012 industries will not be compatible with NAICS 2007 industries. Without useful data, SBA cannot properly evaluate industry structure and its effect on small business size standards.

SBA welcomes the public to comment on this interim final rule. If SBA adopts NAICS 2012 for its table of size standards either as outlined in this rule or with modifications, it will publish a final rule. The final rule will address any comments received and explain the basis for the Agency's final decision. If SBA receives substantive comments supporting size standards that it has not adopted in this interim final rule, and if SBA agrees with those comments, SBA will modify the size standards in its final rule accordingly.

In general, SBA publishes a rule for public comment before issuing a final rule in accordance with the Administrative Procedure Act (APA) and SBA regulations. 5 U.S.C. 553 and 13 CFR 101.108, respectively. The APA provides an exception to this standard rulemaking process, where an agency finds good cause to adopt a rule without prior public participation. 5 U.S.C. 553(b)(B). The good cause requirement is satisfied when prior public participation is impracticable, unnecessary, or contrary to the public interest. Under such circumstances, an agency may publish an interim final rule without soliciting public comment.

To reiterate, the changes adopted in this interim rule reflect the NAICS 2012 modifications issued by OMB in August 2011. The NAICS 2012 modifications were adopted after careful consideration of the public comments OMB received in response to two Federal Register notices (published on 1/7/2009 and 5/12/2010) detailing the proposed modifications. It is neither necessary nor in the public's interest to revisit the modifications in this rule, after such an extensive comment process. In addition, as discussed further below, in compliance with OMB's direction, this rule necessarily takes effect on October 1, 2012. It would therefore be impractical to solicit public participation prior to implementing the changes outlined in this rule. We note that this rule does provide an opportunity for the public to comment on the changes. Accordingly, SBA finds that good cause exists to publish this as an interim final rule.

SBA's small business size standards matched to NAICS 2012 will be effective on October 1, 2012, and will apply to all solicitations issued on or after that date, for the following reasons:

1. OMB stated in its August 17, 2011 “Notice of NAICS 2012 Final decisions” that “Federal statistical establishment data published for reference years beginning on or after January 1, 2012, should be published using the NAICS 2012 United States codes.” SBA is not a statistical agency, but it uses the establishment data collected from other Federal agencies, such as the Economic Census data from the U.S. Bureau of the Census for its size standards analysis. Similarly, other Federal program databases, such as the Federal Procurement Data System—Next Generation (FPDS-NG) and Central Contractor Registration (CCR), are based on NAICS codes from SBA's table of size standards, which is currently based on NAICS 2007. If SBA does not adopt NAICS 2012 for its table of size standards, it will result in inconsistency among various Federal databases. October 1, 2012 is the start of the new Federal Government fiscal year following OMB's adoption of NAICS 2012 effective January 1, 2012, and is consistent with SBA's adoption of previous NAICS revisions effective at the start of the next fiscal year after the OMB's effective date.

2. With the updated size standards based on NAICS 2012, Federal agencies that use NAICS and SBA's size standards could collect data on their small business programs using the latest NAICS industry definitions. Such data will be comparable and consistent with future Federal statistics that will be based on NAICS 2012 industry codes. Using comparable data enhances the credibility of program and industry analyses.

3. With the October 1, 2012 effective date, Federal agencies that use NAICS and SBA's small business size standards for their programs will have sufficient time to plan and implement the updated size standards, and assess its impact on their programs.

4. To establish, review, and revise, where necessary, small business size standards, SBA uses a special tabulation of industry data that the Agency obtains from the Census Bureau based on its quinquennial Economic Census of U.S. industries and businesses. The next tabulation that SBA will obtain from the Census Bureau will be based on the 2012 Economic Census. Because the 2012 Economic Census and special tabulation will be based on NAICS 2012 industry definitions, SBA needs to use NAICS 2012 as the basis for its table of small business size standards.

5. For the above reasons, it is important that SBA update its size standards to NAICS 2012 prior to the beginning of the next fiscal year. Issuing a proposed rule under the normal rulemaking making process would take considerably more time to implement this action.

OMB has determined that this interim final rule is not a “significant regulatory action” for purposes of Executive Order 12866. This interim final rule incorporates the latest revisions of the NAICS, which SBA uses to identify industries in the United States economy for purposes of establishing small business size standards. As discussed in the Supplementary Information above, the size standard of some activities would change because of the NAICS revisions. However, all businesses currently defined as small under the NAICS 2002 industries will continue to be small under the NAICS 2012 industries, as indicated. The interim final rule also affects Federal Government programs that provide a benefit for small businesses. SBA welcomes comments describing the impact on small businesses of the size standard changes resulting from this rule. In order to help explain the need of this rule and the rule's potential benefits and costs, SBA is providing a Cost Benefit Analysis in this section of the rule. This is also not a “major rule” under the Congressional Review Act, 5 U.S.C. 800.

SBA believes that revising its small business size standards based on NAICS 2012 is in the best interests of small businesses. SBA's mission is to aid and assist small businesses through a variety of financial, procurement, business development, and advocacy programs. To assist the intended beneficiaries of these programs effectively, SBA establishes distinct definitions to determine which businesses are deemed small businesses. NAICS 2012 provides the latest industry definitions. The Small Business Act (The Act) delegates to SBA's Administrator the responsibility for establishing definitions for small business. The Act also requires that small business definitions vary to reflect industry differences. 15 USC 632(a). By analyzing and reviewing size standards based on the latest and most comprehensive NAICS definitions, SBA can more accurately and appropriately fulfill its mandate. If SBA does not use the latest industry definitions, size standards would not accurately reflect differences among industries. In addition, the Small Business Jobs Act of 2010 (Jobs Act) requires the Administrator to review one-third of all size standards within each 18-month period from the date of its enactment and to review all size standards at least every five years thereafter. For this, SBA needs data based on the latest NAICS industry definitions available. In this interim final rule, SBA mostly followed the same guidelines that the Agency used for adopting prior NAICS industry modifications, as spelled out under the supplemental information section, above. Size standards based on NAICS 2012 industry definitions and corresponding data will be more accurate and serve SBA's mission more effectively.

As stated previously, the vast majority of the changes from NAICS 2007 to NAICS 2012 consist of revision to industry titles or reclassification of one or more NAICS 2007 industries or parts into other industries or parts in NAICS 2012 without impacting their size standards. The adoption of NAICS 2012 has resulted in increases to size standards for 40 NAICS 2007 industries and one sub-industry (“exception”) and the change of size standard from average annual receipts to number of employees for one industry. The most significant benefit to businesses as a result of these changes is gaining eligibility for Federal small business assistance programs, including SBA's financial assistance programs, economic injury disaster loans, and Federal procurement opportunities intended for small businesses. Federal small business programs provide targeted opportunities for small businesses under SBA's various business development and contracting programs. These include the 8(a) Business Development program and programs benefiting small businesses located in HUBZones, WOSBs, and SDVOSBs. Other Federal agencies also may use SBA's size standards for a variety of regulatory and program purposes. These programs help small businesses become more knowledgeable, stable, and competitive. Some businesses that exceed current size standards will become small under the higher size standards resulting from the adoption of NAICS 2012. However, SBA cannot estimate with precision the number of businesses that become small because there are no data based on NAICS 2012 industry definitions. Based on the 2007 Economic Census data for the affected NAICS 2007 industries, SBA estimates that approximately 300 additional businesses would gain small business status under the revised size standards. That represents a 0.9 percent increase to the number of small businesses in the affected industries.

The benefits of adopting NAICS 2012 and the resulting revisions to size standards will accrue to three groups in the following ways: (1) Some businesses that are above their current size standards may gain small business status, thereby becoming eligible to participate in Federal small business assistance programs; (2) growing small businesses that are close to exceeding the current size standards for their NAICS 2007 industry may retain their small business status under NAICS 2012, and can continue participating in the programs; and (3) Federal agencies will have a larger pool of small businesses from which to draw for their small business procurement programs because they will be able to define more accurately the principal purposes of their procurements under NAICS 2012, as required by 12 CFR 121.402(b).

Additional firms gaining small business status under NAICS 2012 may receive more Federal contracts, but their number and value cannot be estimated because of lack of procurement data based on NAICS 2012. Added procurement competition may also result in lower prices to the Government for procurements reserved for small businesses, although SBA cannot quantify this benefit.

Under SBA's 7(a) Loan and 504 Loan Programs, SBA will be able to guarantee more loans, although, in this case too, the number and amount cannot be estimated accurately. Based on data for fiscal years 2008 to 2010, SBA estimates that about 2 to 5 additional loans, totaling about $1.0 million to $1.3 million in Federal loan guarantees could be made to these newly defined small businesses under the revised size standards. Under the Jobs Act, SBA can now guarantee substantially larger loans than in the past. In addition, the Jobs Act established an alternative size standard for SBA's 7(a) and 504 Loan Programs for those applicants that do not meet the size standards for their industries. That is, under the Jobs Act, if a firm applies for a 7(a) or 504 loan but does not meet the size standard for its industry, it might still qualify if, including its affiliates, it has a tangible net worth that does not exceed $15 million and also has an average net income after Federal income taxes (excluding any carry-over losses) for its preceding two completed fiscal years that does not exceed $5.0 million. Thus, increasing the size standards may result in an increase in small business guaranteed loans to small businesses in these industries, but it would be impractical to try to estimate the extent of their number and the total amount loaned.

Newly defined small businesses will also benefit from SBA's Economic Injury Disaster Loan (EIDL) Program. Since this program is contingent on the occurrence and severity of a disaster, SBA cannot make a meaningful estimate of future EIDL benefit.

To the extent that newly defined small firms under NAICS 2012 could become active in Federal procurement programs, this may entail some additional administrative costs to the Federal Government associated with additional bidders for Federal small business procurement opportunities. More firms may seek SBA's guaranteed loans. More will be eligible to enroll in the CCR Dynamic Small Business Search database. Since more firms will qualify as small, more may also seek certification as 8(a) or HUBZone firms, or qualify as WOSB, SDVOSB, and/or small disadvantaged business (SDB) status. However, it is important to point out that most business entities that are already registered in CCR will not be required to update their CCR profiles. However, it will be incumbent on registrants to review their profiles to ensure that they have correct NAICS codes. CCR requires that registered companies update review and update their profiles annually, and therefore, businesses will need to pay particular attention to the changes to determine if they might affect them. They will also have to verify and update, if necessary, their Online Representations and Certification (ORCA) certifications. Among businesses in this group seeking SBA assistance, there could be some additional costs associated with compliance and verification of small business status and protests of small business status. These added costs are likely to be minimal because mechanisms are already in place to handle these administrative requirements.

The costs to the Federal Government may be higher on some Federal contracts under the higher revised size standards under NAICS 2012. With more businesses defined as small, Federal agencies might choose to set aside more contracts for competition among small businesses rather than use full and open competition. The movement from unrestricted to set-aside contracting will likely result in competition among fewer total bidders, although there will be more small businesses in the bidding pool eligible to submit offers. In addition, higher costs may result when additional full and open contracts are awarded to HUBZone businesses because of a price evaluation preference. The additional costs associated with fewer bidders, however, will likely be minor since, as a matter of law, procurements may be set aside for small businesses or reserved for the 8(a), HUBZone, WOSB, or SDVOSB Programs only if awards are expected to be made at fair and reasonable prices.

The revised size standards may have some distributional effects among large and small businesses. Although SBA cannot estimate with certainty the actual outcome of gains and losses among small and large businesses, there are several likely impacts. There may be a transfer of some Federal contracts from large businesses to small businesses. Large businesses may have fewer Federal contract opportunities as Federal agencies decide to set aside more Federal contracts for small businesses. In addition, some agencies may award more Federal contracts to HUBZone concerns instead of large businesses since HUBZone concerns may be eligible for price evaluation adjustments when they compete on full and open bidding opportunities. Similarly, currently defined small businesses may receive fewer Federal contracts due to the increased competition from more businesses defined as small under NAICS 2012. This transfer may be offset by more Federal procurements set aside for all small businesses. The number of newly defined and expanding small businesses that are willing and able to sell to the Federal Government will limit the potential transfer of contracts away from large and small businesses under the existing size standards. The SBA cannot estimate with precision the potential distributional impacts of these transfers.

SBA's adopting NAICS 2012 and revising its size standards accordingly is consistent with SBA's statutory mandate to assist small business. This regulatory action promotes the Administration's objectives. One of SBA's goals in support of the Administration's objectives is to help individual small businesses succeed through fair and equitable access to capital and credit, Government contracts, and management and technical assistance. Appropriate size standards ensure that intended beneficiaries have access to small business programs designed to assist them. The Small Business Act states that “the 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.” 15 U.S.C. 632(a)(3). To do that, SBA should use the most current and relevant industry definitions. NAICS 2012 provides the most current and relevant industry definitions.

A description of the need for this regulatory action and benefits and costs associated with this action including possible distributions impacts that relate to Executive Order 13563 are included above in the Cost Benefit Analysis.

To engage interested parties in this action, SBA has advised Federal agencies that it intends to adopt NAICS 2012 effective October 1, 2012, consistent with other size standard updates based on prior NAICS updates. SBA also has advised Federal agencies to continue using NAICS 2007 until SBA updates its size standards to NAICS 2012.

This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect.

For purposes of Executive Order 13132, SBA has determined that this interim final rule will not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, SBA has determined that this interim final rule has no Federalism implications warranting preparation of a Federalism assessment.

For the purpose of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA has determined that this interim final rule would not impose any new reporting or record keeping requirements.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires an initial and final regulatory flexibility analysis only when 5 U.S.C. 553 requires publication of a notice of proposed rulemaking. See 5 U.S.C. 603(a), 604(a). As discussed above, SBA has found good cause under 5 U.S.C. 553(b)(3)(B) to conclude that, with respect to this interim final rule, publication of a notice of proposed rulemaking is impracticable, unnecessary and not in the public's best interest. Accordingly, SBA is not required to perform an initial or final regulatory flexibility analysis for this interim final rule.

For the reasons set forth in the preamble, SBA amends 13 CFR part 121 as follows:

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the Federal Register expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26,1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows:

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAP and the corresponding effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs.

The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows:

Statutory Authority

Pursuant to section 2(c)(2) of the Commodity Exchange Act, as well as the Exchange Act as amended, the Commission amended Exchange Act Rule 15b12-1T on July 16, 2012, and with this document correctly adds a comment date and the pertinent addresses.

The Event Director for “The Wild Half” run, with approval from the Cape May County Department of Public Works, owner of the drawbridge, has requested a temporary deviation from the current operating schedule to accommodate “The Wild Half” run.

The Grassy Sound Channel (Ocean Drive) Bridge across Grassy Sound Channel, mile 1.0, a bascule-lift type drawbridge, in Middle Township, NJ, has a vertical clearance in the closed position of 15 feet, above mean high water.

The Grassy Sound Channel (Ocean Drive) Bridge operating regulations are set out in 33 CFR 117.721. Under normal operating conditions, the draw would open on signal from 6 a.m. to 8 p.m. from May 15 through September 30. From 9:15 a.m. to 2:30 p.m. on the fourth Sunday in March of every year, the draw need not open for vessels. If the fourth Sunday falls on a religious holiday, the draw need not open from 9:15 a.m. to 2:30 p.m. on the third Sunday of March of every year. Two hours advance notice is required for all other openings.

Under this temporary deviation, the drawbridge will be allowed to remain in the closed-to-navigation position from 7:30 a.m. to 11 a.m. on Sunday, August 26, 2012 to accommodate “The Wild Half” run.

Vessels able to pass under the closed span may transit under the drawbridge while it is in the closed position. Mariners are advised to proceed with caution. The Coast Guard will inform users of the waterway through our local and broadcast Notices to Mariners of the limited operating schedule for the drawbridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation. There are alternate routes for vessels and the bridge will be able to open in the event of an emergency.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period.

This deviation from the operating regulations is authorized under 33 CFR 117.35.

Multnomah County has requested a temporary deviation from the operating schedule for the Broadway Bridge, mile 11.7, crossing the Willamette River at Portland, OR. The requested deviation is to accommodate the Pints to Pasta event. The Broadway Bridge crosses the Willamette River at mile 11.7 and provides 90 feet of vertical clearance above Columbia River Datum 0.0 while in the closed position. Vessels which do not require a bridge opening may continue to transit beneath this bridge during the closure period. Under normal conditions this bridge operates in accordance with 33 CFR 117.897 which allows for the bridge to remain closed between 7 a.m. and 9 a.m. and 4 p.m. and 6 p.m. Monday through Friday. This deviation period is from 8 a.m. on September 9, 2012 through 9 a.m. September 9, 2012. The deviation allows the Broadway Bridge across the Willamette River, mile 11.7, to remain in the closed position and need not open for maritime traffic from 8 a.m. through 9 a.m. on September 9, 2012. The bridge shall operate in accordance to 33 CFR 117.897 at all other times. Waterway usage on this stretch of the Willamette River includes vessels ranging from commercial tug and barge to small pleasure craft. Mariners will be notified and kept informed of the bridge's operational status via the Coast Guard Notice to Mariners publication and Broadcast Notice to Mariners as appropriate. The bridges will be required to open, if needed, for vessels engaged in emergency response operations during this closure period.

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

The Coast Guard will enforce the Safety Zone; Chicago Harbor, Navy Pier Southeast, Chicago, IL listed in 33 CFR 165.931 for the following events:

(1) Navy Pier Fireworks; on August 1, 2012 from 9:15 p.m. through 9:45 p.m.; on August 4, 2012 from 10 p.m. through 10:30 p.m.; on August 8, 2012 from 9:15 p.m. through 9:45 p.m.; on August 11, 2012 from 10 p.m. through 10:30 p.m.; on August 15, 2012 from 9:15 p.m. through 9:45 p.m.; on August 18, 2012 from 10 p.m. through 10:30 p.m.; on August 22, 2012 from 9:15 p.m. through 9:45 p.m.; August 25, 2012 from 10 p.m. through 10:30 p.m. and on August 29, 2012 from 9:15 p.m. through 9:45 p.m.

All vessels must obtain permission from the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative to enter, move within or exit the safety zone. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice is issued under authority of 33 CFR 165.931 and 5 U.S.C. 552(a). In addition to this notice in the Federal Register , the Coast Guard will provide the maritime community with advance notification of these enforcement periods via broadcast Notice to Mariners or Local Notice to Mariners. The Captain of the Port, Sector Lake Michigan, will issue a Broadcast Notice to Mariners notifying the public when enforcement of the safety zone established by this section is suspended. If the Captain of the Port, Sector Lake Michigan, determines that the safety zone need not be enforced for the full duration stated in this notice, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the safety zone. The Captain of the Port, Sector Lake Michigan, or his or her on-scene representative may be contacted via VHF Channel 16.

The Coast Guard will enforce the Safety Zone; Chicago Harbor, Navy Pier Southeast, Chicago, IL listed in 33 CFR 165.931 for the following events:

(1) Navy Pier Fireworks; on September 1, 2012 from 10:15 p.m. through 10:30 p.m.; on October 20, 2012 from 9 p.m. through 9:20 p.m.; and on October 27, 2012 from 9 p.m. through 9:20 p.m.

All vessels must obtain permission from the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative to enter, move within or exit the safety zone. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice is issued under authority of 33 CFR 165.931 and 5 U.S.C. 552(a). In addition to this notice in the Federal Register , the Coast Guard will provide the maritime community with advance notification of these enforcement periods via broadcast Notice to Mariners or Local Notice to Mariners. The Captain of the Port, Sector Lake Michigan, will issue a Broadcast Notice to Mariners notifying the public when enforcement of the safety zone established by this section is suspended. If the Captain of the Port, Sector Lake Michigan, determines that the safety zone need not be enforced for the full duration stated in this notice, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the safety zone. The Captain of the Port, Sector Lake Michigan, or his or her on-scene representative may be contacted via VHF Channel 16.

The Coast Guard will enforce the safety zone listed in 33 CFR 165.935, Safety Zones, Milwaukee Harbor, Milwaukee, WI, for the following events:

(1) Indian Summer fireworks display on September 7 and 8, 2012 from 9:15 p.m. through 10:45 p.m.

All vessels must obtain permission from the Captain of the Port, Sector Lake Michigan, or his or her on-scene representative to enter, move within or exit the safety zone. Vessels and persons granted permission to enter the safety zone shall obey all lawful orders or directions of the Captain of the Port, Sector Lake Michigan, or a designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

This notice is issued under authority of 33 CFR 165.935 Safety Zone, Milwaukee Harbor, Milwaukee, WI and 5 U.S.C. 552(a). In addition to this notice in the Federal Register , the Coast Guard will provide the maritime community with advance notification of these enforcement periods via Broadcast Notice to Mariners or Local Notice to Mariners. The Captain of the Port, Sector Lake Michigan, will issue a Broadcast Notice to Mariners notifying the public when enforcement of the safety zone established by this section is suspended. If the Captain of the Port, Sector Lake Michigan, determines that the safety zone need not be enforced for the full duration stated in this notice, he or she may use a Broadcast Notice to Mariners to grant general permission to enter the safety zone. The Captain of the Port, Sector Lake Michigan, or his or her on-scene representative may be contacted via VHF-FM Channel 16.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Coast Guard did not receive necessary information regarding the event with sufficient time to publish an NPRM and to receive public comments prior to the event. Any delay in the effective date of this rule would be contrary to the public interest because immediate action is needed to minimize potential danger to air show participants, participant aircraft, spectators, and the general public.

The legal basis for the rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.

The purpose of the rule is to protect air show participants, participant aircraft, spectators, and the general public from the hazards associated with aircraft performing low-flying aerobatic maneuvers, and the gathering of large numbers of spectator craft over navigable waters of the United States.

On Saturday, September 22, 2012, and Sunday, September 23, 2012, the Brevard Air, Sea and Space foundation, is hosting the Cocoa Beach Air Show. The Cocoa Beach Air Show will include approximately 20 aircraft engaging in aerobatic maneuvers over the Atlantic Ocean east of Cocoa Beach, Florida. It is expected that 50 spectator vessels will be present in the area during the event. The high speed at which participant aircraft will be travelling and the maneuvers they will be performing pose a safety hazard to air show participants, participant aircraft, spectators, and the general public.

The safety zone encompasses certain navigable waters of the Atlantic Ocean in the vicinity of Cocoa Beach, Florida. The safety zone will be enforced from 10 a.m. until 5:30 p.m. on Saturday, September 22, 2012, and from 10 a.m. until 5:30 p.m. on Sunday, September 23, 2012. Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within the safety zone unless authorized by the Captain of the Port Jacksonville or a designated representative. Persons and vessels desiring to enter, transit through, anchor in, or remain within the safety zone may contact the Captain of the Port Jacksonville by telephone at 904-564-7511, or a designated representative via VHF radio on channel 16, to request authorization. The Coast Guard will provide notice of the safety zone by Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene designated representatives.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. The economic impact of this rule is not significant for the following reasons: (1) The safety zone will be enforced for less than a total of 23 hours; (2) although persons and vessels will not be able to enter, transit through, anchor in, or remain within the safety zone without authorization from the Captain of the Port Jacksonville or a designated representative, they may operate in the surrounding area during the enforcement periods; (3) persons and vessels may still enter, transit through, anchor in, or remain within the safety zone if authorized by the Captain of the Port Jacksonville or a designated representative; and (4) the Coast Guard will provide advance notification of the safety zone to the local maritime community by Local Notice to Mariners and Broadcast Notice to Mariners.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: The owners or operators of vessels intending to enter, transit through, anchor in, or remain within that portion of the Atlantic Ocean encompassed within the safety zone from 10 a.m. until 5:30 p.m. on September 22, 2012 and September 23, 2012. For the reasons discussed in the Executive Order 12866 and Executive Order 13563 section above, this rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

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

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

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

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

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

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

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

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a temporary safety zone that will be enforced for less than a total of 23 hours during the specified operating hours of the event. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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

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

On July 28, 2011 (76 FR 45212), EPA proposed to approve the following rule into the California SIP.

EPA also proposed to approve SJVUAPCD's fee-equivalent program, which includes Rule 3170 and state law authorities that authorize SJVUAPCD to impose supplemental fees on motor vehicles, as an equivalent alternative to the program required by section 185 of the Act for the 1-hour ozone standard as an anti-backsliding measure.

In addition, on July 28, 2011 (76 FR 45199), EPA published an Interim Final Rule to defer the implementation of sanctions that would have resulted from EPA's final limited approval and limited disapproval of an earlier version of Rule 3170 (75 FR 1716, January 13, 2010).

In proposing this action regarding the SJVUAPCD, EPA proposed to allow states to meet the section 185 obligation arising from the revoked 1-hour ozone NAAQS through a SIP revision containing either the fee program prescribed in section 185 of the Act, or an equivalent alternative program. 76 FR 45213 (July 28, 2011). Since our proposed action on SJVUAPCD's alternative section 185 program, EPA has also proposed to approve an alternative section 185 program submitted by the State of California on behalf of the South Coast Air Quality Management District as an equivalent alternative program. 77 FR 1895-01 (January 12, 2012). As further explained below, EPA is today approving through notice-and-comment rulemaking, SJVUAPCD Rule 3170 into the California SIP. We are also approving SJVUAPCD's alternative program as an equivalent alternative program consistent with the principles of section 172(e) of the CAA and not less stringent than a program prescribed by section 185. 1

Section 172(e) is an anti-backsliding provision of the CAA that requires EPA to develop regulations to ensure that controls in a nonattainment area are “not less stringent” than those that applied to the area before EPA revised a NAAQS to make it less stringent. In the Phase 1 Ozone Implementation Rule for the 1997 ozone NAAQS published on April 30, 2004 (69 FR 23951), EPA determined that although section 172(e) does not directly apply where EPA has strengthened the NAAQS, as it did in 1997, it was reasonable to apply to the transition from the 1-hour NAAQS to the more stringent 1997 8-hour NAAQS, the same anti-backsliding principle that would apply to the relaxation of a standard. Thus, as part of applying the principles in section 172(e) for purposes of the transition from the 1-hour standard to the 1997 8-hour standard, EPA can either require states to retain programs that applied for purposes of the 1-hour standard, or can allow states to adopt equivalent alternative programs, but only if such alternatives are determined through notice-and-comment rulemaking to be “not less stringent” than the mandated program. EPA has previously identified three types of alternative programs that could satisfy the section 185 requirement: (i) Those that achieve the same emissions reductions; (ii) those that raise the same amount of revenue and establish a process where the funds would be used to pay for emission reductions that will further improve ozone air quality; and (iii) those that would be equivalent through a combination of both emission reductions and revenues. 2 We are today determining through notice-and-comment rulemaking that states can demonstrate an alternative program's equivalency by comparing expected fees and/or emissions reductions directly attributable to application of section 185 to the expected fees, pollution control project funding, and/or emissions reductions from the proposed alternative program. Under an alternative program, EPA concludes that states may opt to proceed as here, shifting the fee burden from a specific set of major stationary sources to non-major sources, such as owners of mobile sources that also contribute to ozone formation. EPA also believes that alternative programs, if approved as “not less stringent” than the section 185 fee program, would encourage one-hour ozone NAAQS nonattainment areas to reach attainment as effectively and expeditiously as a section 185 fee program, if not more so, and therefore satisfy the CAA's goal of attainment and maintenance of the NAAQS.

While section 185 focuses most directly on assessing emissions fees, we believe it is useful to interpret anti-backsliding requirements for section 185 within the context of the CAA's ozone implementation provisions of subpart 2 (which includes section 185). The subpart 2 provisions are designed to promote reductions of ozone-forming pollutant emissions to levels that achieve attainment of the ozone NAAQS. In this context, to satisfy the anti-backsliding requirements for section 185 associated with the 1-hour NAAQS, we believe it is appropriate for states to implement equivalent alternative programs that maintain a focus on achieving further emission reductions, whether that occurs through the incentives created by fees levied on pollution sources or other funding of pollution control projects, or some combination of both. For any alternative program adopted by a state, the state's demonstration that the program is not less stringent should consist of comparing expected fees and/or emission reductions directly attributable to application of section 185 to the expected fees, pollution control project funding, and/or emissions reductions from the proposed alternative program. For a valid demonstration to ensure equivalency, the state's submissions should not underestimate the expected fees and/or emission reductions from the section 185 fee program, nor overestimate the expected fees, pollution control project funding, and/or emission reductions associated with the proposed alternative program.

We also note that the structure established in Subparts 1 and 2 of the CAA recognizes that successful achievement of clean air goals depends in great part on the development by states of clean air plans that are specifically tailored to the nature of the air pollution sources in each state. The Act recognizes that states are best suited to design plans that will be most effective. Allowing states to put forward an equivalent program under the circumstances that pertain here, and under the authority of section 172(e), is consistent with this principle of the Act.

In sum, in order for EPA to approve an alternative program as satisfying the 1-hour ozone section 185 fee program SIP revision requirement, the state must demonstrate that the alternative program is not less stringent than the otherwise applicable section 185 fee program by collecting fees from owner/operators of pollution sources, providing funding for emissions reduction projects, and/or providing direct emissions reductions equal to or exceeding the expected results of the otherwise applicable section 185 fee program. We have previously accepted public comment on whether it is appropriate for EPA to consider equivalent alternative programs. We have concluded that it is appropriate to do so, and that SJVUAPCD's program is approvable as an equivalent alternative program consistent with the principles of section 172(e) of the Act.

EPA's proposed action provided a 30-day public comment period. During this period, we received comments from several parties. The comments and our responses are summarized below.

a. Comment: One commenter stated that Rule 3170, sections 4.1 and 4.2, exempt so-called “clean emission units,” but section 185 does not allow for such an exemption. The Act provides no exemption for any major stationary source, regardless of the emission control technology employed. Congress assumed that areas subject to 185 will have adopted reasonably available control technologies (“RACT”) for major stationary sources, that other sources will have gone through new source review and be subject to the lowest achievable emission rate (“LAER”) requirement, and that SIPs may have targeted certain categories for more stringent controls than others. All of this is laid out in subparts 1 and 2 of Title I, Part D of the Act. Section 185 applies when, despite all of these controls, the area still fails to attain. Another commenter stated that Rule 3170 allows exemptions for “clean emissions units” and stated that the Act provides no exemption for any major stationary source, regardless of the emission control technology employed.

Response: We agree that section 185 applies when an ozone nonattainment area designated Severe or Extreme fails to reach attainment by its attainment date and requires assessment of a fee for each source, with no exemption for clean emission units. Today's action, however, is to approve Rule 3170, in the context of the revoked 1-hour ozone NAAQS. We conclude that Rule 3170 is approvable into the California SIP and as part of the District's equivalent alternative program because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). We also note that the program will raise this amount by a combination of fees from sources that do not qualify as “clean units” as defined in Rule 3170 and from a fee on vehicles, which are responsible for approximately 80 percent of ozone formation in SJVUAPCD. 3 Our proposed action contains our analysis of how the District's equivalent alternative program meets the “not less stringent than” criterion of section 172(e), and we provide additional explanation below.

b. Comment: Congress' decision was to make each major stationary source pay a penalty based on their individual contribution to the continuing problem. Larger emitters pay a larger fee and small emitters pay a smaller fee. There is no suggestion that the best controlled sources are entitled to any other “reward” or exemption. Section 185 is not a program to penalize only the less-well regulated sources.

Response: We do not agree with the commenter's statement that section 185 does not provide a “reward” or exemption for well-controlled sources. In fact, we believe that section 185 clearly “rewards” well-controlled sources by exempting those that reduce emissions by 20 percent or more from the fee requirements. This “reward,” however, is available only if the source acts to decrease its emissions after the attainment deadline has passed, which in San Joaquin's case was 2010. Rule 3170, on the other hand, provides an exemption from fees for “clean emission units,” which are units that have air pollution controls that reduce pollution by at least 95 percent or units that installed Best Available Control Technology (BACT) anytime between 2006 and 2010. The “clean unit exemption” in Rule 3170 is thus not consistent with the timing envisioned by Congress; therefore, we agree with the commenter that the exemption is not consistent with the express language in section 185. We note, however, that in the context of the revoked 1-hour ozone NAAQS, we are approving Rule 3170 into the California SIP and as part of the District's equivalent alternative program because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). Our proposed action contains our analysis of how the District's equivalent alternative program meets the “not less stringent than” criterion of section 172(e), and we provide additional explanation below.

We also do not agree with the comment that, “Congress' decision was to make each major stationary source pay a penalty based on their individual contribution to the continuing problem. Larger emitters pay a larger fee and small emitters pay a smaller fee.” In fact, under section 185 large emitters can completely avoid penalties in any year that they emit 20 percent less than they emitted in the applicable attainment year (2010 for the District). As a result, a source in the District that emits 500 tons of NO X in 2010 would not pay a section 185 fee in any subsequent year in which its NO X emissions are 400 tons or less. On the other hand, a source that emits 50 tons of NO X in 2010 will still have to pay a section 185 fee in every subsequent year that it emits more than 40 tons. Thus, under these scenarios, after the attainment year of 2010, the source that emits 400 tons would pay no fee and the source that emits 41 tons would pay a fee (albeit a nominal one based on 1 ton of emissions above the reduction target). In this respect, then, section 185 does not distinguish between sources based on their relative contribution to ozone non-attainment.

c. Comment: That Congress understood that the level of control between sources could vary is expressly acknowledged in section 185(b)(2), which specifies that the baseline comes from the lower of actuals or allowables, and that the allowables baseline is to be based on the emissions allowed “under the permit” unless the source has no permit and is subject only to limits provided under the SIP. It would defeat this express language to exempt sources from paying a fee based on some arbitrary notion of being “clean enough.”

Response: The commenter's characterization of Rule 3170's clean unit exemption as “arbitrary” or as based on “being clean enough” is inaccurate. In fact, Rule 3170, section 3.3 defines a “clean unit” as: an emission unit that (i) has emissions control technology with a minimum control efficiency of at least 95 percent (or at least 85 percent for leanburn, internal combustion engines); or (ii) has emission control technology that meets or exceeds achieved-in-practice BACT as accepted by the Air Pollution Control Officer (APCO) during the period from 2006—2010.” We believe Rule 3170 reflects the District's considered determination of what it views as “clean” sufficient to qualify for an exemption from fees as part of an equivalent alternative program for anti-backsliding purposes.

Nevertheless, we agree with the commenter that Congress did not differentiate between sources according to the “level of control.” Thus, section 185 does not distinguish a source with a control efficiency of 1 percent from a source with a control efficiency of 99 percent. Under either scenario, sources are subject to section 185 fees if those reductions occurred prior to the attainment year. This aspect of section 185 does not affect our action to approve Rule 3170 into the California SIP and as part of SJVUAPCD's equivalent alternative program, as discussed further below.

a. Comment: Two commenters stated that Rule 3170 fails to meet the requirements of section 185 by allowing an alternative baseline period for major stationary sources. They claim there is no statutory basis for section 3.2.2 of Rule 3170, which allows for the establishment of “[a]n alternative baseline period reflecting an average of at least two consecutive years within 2006 through 2010, if those years are determined by the APCO as more representative of normal source operation.” They further claim that:

• Section 185 requires the baseline to be the lower of actual emissions or emissions allowed during the attainment year.

• Only sources with emissions that are irregular, cyclical, or otherwise vary significantly from year to year can extend the baseline period to account for that variation.

• The possibility of extending the baseline is not available at the option of the source or at the discretion of the APCO.

• Section 185 allows the option of extending the baseline only with respect to determining actual emissions; section 5.1 suggests that the APCO might be able to change the baseline period for determining allowable emissions, which is not allowed.

Response: Section 185(b)(2) authorizes EPA to issue guidance that allows the baseline to be the lower of average actuals or average allowables determined over more than one calendar year. Section 185(b)(2) further states that the guidance may provide that the average calculation for a specific source may be used if the source's emissions are irregular, cyclical or otherwise vary significantly from year to year. Pursuant to these provisions, EPA developed and issued a memorandum to EPA Regional Air Division Directors, “Guidance on Establishing Emissions Baselines under Section 185 of the Clean Air Act (CAA) for Severe and Extreme Ozone Nonattainment Areas that Fail to Attain the 1-hour Ozone NAAQS by their Attainment Date,” William T. Harnett, Director, Air Quality Division, March 21, 2008 (EPA's Baseline Guidance). EPA's Baseline Guidance suggests as an alternative baseline for sources whose annual emissions are “irregular, cyclical, or otherwise vary significantly from year to year,” the baseline calculation in EPA's Prevention of Significant Deterioration (PSD) regulations at 40 CFR 52.21(b)(48). As explained in EPA's Baseline Guidance, the PSD regulations allow a baseline to be calculated using “any 24-consecutive month period within the past 10 years (`2-in-10' concept) to calculate an average actual annual emissions rate (tons per year).”

Rule 3170, section 3.2.2 allows for an alternative baseline based on the average of at least two consecutive years within 2006 through 2010, “if those years are determined by the APCO as more representative of normal source operation.” Therefore, Rule 3170 differs from the PSD-based 2-in-10 concept described in EPA's Baseline Guidance because it allows for an alternative baseline based on 2006-2010, rather than the “2-in-10” concept.

In response, we note that EPA's Baseline Guidance stated that the 2-in-10 concept was “an acceptable alternative method that could be used for calculating the `baseline amount,' ” leaving open the possibility that other methods might also be appropriate. We also note that EPA's Baseline Guidance described the 2-in-10 concept as warranted because it allows for a determination of a baseline “that represents normal operation of the source” over a full business cycle; the similar terminology leads to a reasonable expectation that determinations under Rule 3170 will be similar to those contemplated by EPA's Baseline Guidance. In addition, we believe that Rule 3170's use of a 5 year “look back,” rather than a 10 year “look back” actually limits the amount of flexibility allowed by Rule 3170's alternative baseline, rather than expanding it beyond the scope of EPA's Baseline Guidance.

We do not agree with the commenter's criticism that Rule 3170 section 5.1 “suggests that the APCO might be able to change the baseline period for determining allowable emissions” whereas section 185 allows for extending a baseline based only on actual emissions. Section 185 plainly states that EPA may issue guidance authorizing a baseline reflecting an emissions period of more than one year based on the “lower of average actual or average allowables”.

Furthermore, we note that the District's equivalent alternative program uses the attainment year, 2010, as the baseline period to determine the fees that would have been assessed under a direct implementation of section 185 and as the point of comparison for the equivalency demonstration. See Rule 3170, Section 7.2.1.3. In this way, we believe the District will be able to make a proper comparison between fees owed under section 185 and revenues resulting from the alternative fee program.

Finally, we note that in the context of the revoked 1-hour ozone NAAQS, we are approving Rule 3170 into the California SIP and as part of the District's equivalent alternative program because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). Our proposed action contains our analysis of how the District's equivalent alternative program meets the “not less stringent than” criterion of section 172(e).

a. Comment: Cross-references are a bad practice because they create a potential for conflicts between the locally-applicable rule and the SIP-approved rule.

Response: EPA believes that cross-references to other district rules can be problematic and has commented to our state and local agencies to that effect. There are also cases where cross-referencing is an efficient and reasonable approach to local rule development. We do not find that Rule 3170's cross-reference to Rule 2201, New and Modified Stationary Source Review Rule, is an appropriate basis for disapproval, nor does the commenter seem to claim that we should disapprove the rule on that basis.

b. Comment: Rule 2201's definition of “major source” does not match the definition of 182(e) of the Act, which includes all emissions of VOC or NO X , with no exemption for fugitive emissions, and looks at the larger of actual or potential emissions. Rule 2201 excludes fugitive emissions for certain sources.

Response: EPA does not agree that Rule 3170's reference to Rule 2201 is clearly inconsistent with the requirements of section 185. First, we note that section 182(e) is silent with respect to whether fugitive emissions should be included when determining whether a source's actual or potential emissions exceed the 10 ton per year threshold. That is, section 182(e) neither expressly includes nor excludes fugitive emissions. Second, we note that Congress' definition of “major stationary source” at CAA 302(j) expressly delegates to EPA the authority to address the inclusion of fugitive emissions in major source determinations by rule. EPA has promulgated such definitions in the context of our rules for non-attainment major new source review, prevention of significant deterioration, state operating permit programs, and federal operating permit programs. See 40 CFR part 51, Appendix S, part 52, part 70 and part 71. Each of these regulations excludes a source's fugitive emissions from major source determinations unless the source belongs to one of 28 specifically listed categories. Third, we believe that the District's use of its permitting program's definition of major source to implement the section 185 fee program is reasonable and consistent with congressional intent because Congress itself recognized the relevancy of permit programs to section 185 fee programs when it provided that the baseline amount for calculating 185 fees should be “the lower of the amount of actual VOC emissions (`actuals') or VOC emissions allowed under the permit applicable to the source”. Fourth, we note that CAA section 185 fee programs are new and that neither EPA nor the states have a history of interpreting or implementing section 185 in a way that would suggest that states should include fugitive emissions when determining which sources are subject to the program or that failure to do so would provide a basis for disapproving Rule 3170.

The commenter's reference to section 182(e) “look[ing] at the larger of actual or potential emissions” is not entirely clear. To the extent that the commenter is saying that section 182(e) defines a major source as a source whose actual emissions exceed 10 tons per year or whose potential to emit exceeds 10 tons per year, we agree with the comment. Rule 2201, section 3.23 also defines major stationary source as one whose post-project emissions or post-project PTE exceeds 20,000 pounds (10 tpy).

c. Comment: Rule 2201 only includes potential emissions from units with valid permits.

Response: The comment is vague and unclear in its reference to Rule 2201. To the extent the commenter is complaining that a source's potential emissions are included only if the unit has a valid permit, EPA infers that the commenter is referencing Rule 2201, section 4.10, which provides that the calculation of post-project stationary source potential to emit shall include the potential to emit from all units with a valid Authority to Construct (ATC). To the extent that the commenter is concerned that some sources will not be considered major sources subject to section 185 fees because the source includes unpermitted emission units, EPA believes this problem is not an inherent defect in either Rule 2201 or Rule 3170, but rather a problem that should be addressed through enforcement action, which presumably will result in the issuance of an ATC if appropriate, followed by a determination of major source status if warranted.

d. Comment: Rule 2201 credits limits in authorities to construct that may or may not reflect actual emissions.

Response: The commenter's complaint that Rule 2201 “credits limits in authorities to construct that may or may not reflect actual emissions” is also vague and unclear—both in reference to the application of Rule 2201 itself and to how this aspect of Rule 2201, if it exists, affects determinations of major source status for the purposes of Rule 3170. To the extent the commenter is claiming that the application of Rule 2201 would not result in a calculation of major source status consistent with the CAA, we disagree. Rule 2201, section 3.23 clearly allows for major source determinations to be made based on a source's post-project actual emissions or its post-project PTE and applies the correct trigger for either NO X or VOCs of 20,000 pounds or 10 tons per year. Furthermore, we note that Rule 3170, section 6.2, requires sources to report actual emissions on an annual basis and that Rule 2201, sections 3.26 and 4.10 provide a clear means to determine a source's potential to emit. Thus, we do not agree with the commenter that Rule 3170 is flawed because of its reference to Rule 2201 as the basis for defining “major source.”

Comment: Motor vehicle fees do not qualify SJVUAPCD for either of the fee exemptions provided by the Act: (i) extension years under 7511(a)(5), and (ii) areas with population below 200,000 that can demonstrate transport.

Response: As explained in our proposed action, we are approving Rule 3170 into the California SIP and as part of the District's equivalent alternative program as an anti-backsliding measure for the revoked 1-hour ozone standard because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). Thus, it is irrelevant that Rule 3170 does not meet the precise requirements of section 185.

Comment: One commenter stated that nothing in the plain language of the Act, the “principles” behind that language, or South Coast Air Quality Management District v. EPA, 472 F.3d 882 (D.C. Cir. 2006) gives EPA the power to rewrite the terms of section 185. EPA's argument that it can invent alternatives that fail to comply with the plain language of section 185 has no statutory basis. Another commenter stated that section 185's plain language is unambiguous, that Congress has specified the parameters of the section 185 program and that to approve a fee alternative program that does not meet the minimal requirements explicitly set out in section 185 violates the plain language of the Act. This commenter also stated that the South Coast court upheld retention of section 185 nonattainment fees for regions that fail to meet the 1-hour ozone standard. Other commenters supported EPA's action as a reasonable interpretation of the Act and consistent with the South Coast decision.

Response: In a 2004 rulemaking governing implementation of the 1997 8-hour ozone standard, EPA revoked the 1-hour ozone standard effective June 15, 2005. 69 FR 23858 (April 30, 2004) and 69 FR 23951 (April 30, 2004) (“2004 Rule”); see also, 40 CFR 50.9(b). EPA's revocation of the 1-hour standard was upheld by the Court of Appeals for the District of Columbia Circuit. South Coast Air Quality Management District v. EPA, 472 F.3d 882 (D.C. Cir. 2006) reh'g denied, 489 F.3d. 1245 (D.C. Cir.) 2007) (clarifying that the vacatur was limited to the issues on which the court granted the petitions for review)(“ South Coast ”). Thus, the 1-hour ozone standard that the District failed to attain by its attainment date no longer exists and a different standard now applies.

Section 172(e) provides that, in the event of a relaxation of a primary NAAQS, EPA must promulgate regulations to require “controls” that are “not less stringent” than the controls that applied to the area before the relaxation. EPA's 8-hour ozone standard is recognized as a strengthening of the NAAQS, rather than a relaxation; however, EPA is applying the “principles” of section 172(e) to prevent backsliding of air quality in the transition from regulation of ozone pollution using a 1-hour metric to an 8-hour metric. Our application of the principles of section 172(e) in this context was upheld by the D.C. Circuit in the South Coast decision: “EPA retains the authority to revoke the one-hour standard so long as adequate anti-backsliding provisions are introduced.” South Coast, 472 F.3d at 899. Further, the court stated, that in light of the revocation, “[t]he only remaining requirements as to the one-hour NAAQS are the anti-backsliding limitations.” Id.

As stated above, section 172(e) requires State Implementation Plans to contain “controls” that are “not less stringent” than the controls that applied to the area before the NAAQS revision. EPA's 2004 Rule defined the term “controls” in section 172(e) to exclude section 185. See 2004 Rule, 69 FR at 24000. The D.C. Circuit ruled that EPA's exclusion of section 185 from the list of “controls” for Severe and Extreme non-attainment areas was improper and remanded that part of the rule back to EPA. See South Coast, 472 F.3d at 902-03. The court did not, however, address the specific issue of whether the principles of section 172(e) required section 185 itself or any other controls not less stringent, and section 172(e) clearly on its face allows such equivalent programs. Further, the court in NRDC v. EPA, 643 F.3d 311 (D.C. Cir. 2011), specifically noted with respect to equivalent alternative programs that “neither the statute nor our case law obviously precludes [the program alternative.]” 643 F.3d at 321. In this rulemaking approving SJVUAPCD Rule 3170, EPA is fully recognizing section 185 as a “control” that must be met through the application of the principles of section 172(e). As explained above, the D.C. Circuit stated that EPA must apply the principles of section 172(e) to non-attainment requirements such as section 185. Thus, we are following the D.C. Circuit's holding that the principles of section 172(e) apply in full to implement 185 obligations.

Comment: CAA section 172(e) does not apply to this situation because EPA has adopted a more health protective ozone standard. EPA acknowledges that section 172(e) by its terms does not authorize EPA's action because the newer 8-hour ozone standard is not a relaxation of the prior 1-hour ozone standard. EPA claims that its authority to permit States to avoid the express requirements of section 185 derives from the “principles” of section 172(e). But there is no principle in the CAA that Congress intended to give EPA authority to rewrite the specific requirements of section 185 when EPA finds that the health impacts related to ozone exposure are even more dangerous than Congress believed when it adopted the detailed requirements in the 1990 Clean Air Act Amendments. The South Coast court upheld retention of section 185 nonattainment fees for regions that fail to meet the 1-hour ozone standard. Other commenters supported EPA's action as a reasonable application of section 172(e).

Response: The South Coast court agreed with the application of the principles of section 172(e) despite the fact that section 172(e) expressly refers to a “relaxation” of a NAAQS, whereas the transition from 1-hour to 8-hour is generally understood as increasing the stringency of the NAAQS. As the court stated, “Congress contemplated * * * the possibility that scientific advances would require amending the NAAQS. Section 109(d)(1) establishes as much and section 172(e) regulates what EPA must do with revoked restrictions * * *. The only remaining requirements as to the one-hour NAAQS are the anti-backsliding limitations.” South Coast, 472 F.3d at 899. (citation omitted).

Comment: One commenter stated that the Supreme Court in Whitman v. Am. Trucking Assns, interpreted the CAA as showing Congressional intent to limit EPA's discretion. The D.C. Circuit in SCAQMD also held that EPA's statutory interpretation maximizing agency discretion was contrary to the clear intent of Congress in enacting the 1990 amendments. EPA's approach [with respect to 185] would allow EPA to immediately void the specific statutory scheme Congress intended to govern for decades. EPA cannot reasonably claim that Congress meant to give EPA the discretion to revise the carefully prescribed statutory requirements like section 185 that Congress adopted to address these exposures. EPA proposes to accept a program other than that provided by Congress in section 185. Given that Congress provided a specific program, EPA has no discretion to approve an alternative. Another commenter also stated that given that Congress provided a specific program, EPA has no discretion to approve an alternative.

Response: While one holding in Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001) stands for the general proposition that Congress intended to set forth prescriptive requirements for EPA and states, particularly the requirements contained in Subpart 2, the D.C. Circuit has noted that the Court did not consider the issue of how to implement Subpart 2 for the 1-hour standard after revocation. See, South Coast, 472 F.3d at 893 (“when the Supreme Court assessed the 1997 Rule, it thought that the one- and eight-hour standards were to coexist.”). Thus, the Court did not consider how section 172(e)'s anti-backsliding requirements might be applied in the current context of a revoked NAAQS.

We also believe that the commenter's reliance on South Coast to argue that it precludes EPA's use of section 172(e) principles to implement section 185 is similarly misplaced. The holding cited by the commenter relates to an entirely different issue than EPA's discretion and authority under section 172(e)—whether EPA had properly allowed certain 8-hour ozone non-attainment areas to comply with Subpart 1 in lieu of Subpart 2. In fact, the South Coast court not only upheld EPA's authority under section 109(d) to revise the NAAQS, it recognized its discretion and authority to then implement section 172(e):

Although Subpart 2 of the Act and its table 1 rely upon the then-existing NAAQS of 0.12 ppm, measured over a one-hour period, elsewhere the Act contemplates that EPA could change the NAAQS based upon its periodic review of `the latest scientific knowledge useful in indicating the kind and extent of all identifiable effects on public health' that the pollutant may cause. CAA sections 108(a), 109(d), 42 U.S.C. sections 7408(a), 7409(d). The Act provides that EPA may relax a NAAQS but in so doing, EPA must `provide for controls which are not less stringent than the controls applicable to areas designated nonattainment before such relaxation.' CAA 172(e), 42 U.S.C. 7502(e). South Coast, 472 F.3d at 888.

Further, as noted above, EPA believes that South Coast supports our reliance on section 172(e) principles to approve Rule 3170 and SJVUAPCD's alternative program as fulfilling section 185 requirements for the revoked 1-hour standard. As the court stated, “EPA was not, as the Environmental petitioners contend, arbitrary and capricious in withdrawing the one-hour requirements, having found in 1997 that the eight-hour standard was `generally even more effective in limiting 1-hour exposures of concern than is the current 1-hour standard.' * * * The only remaining requirements as to the one-hour NAAQS are the anti-backsliding limitations.” Id. (citation omitted).

Comment: EPA's different and inconsistent tests for determining “not less stringent” undermine the reasonableness of these options as valid interpretations of the Act. EPA's interpretation means that a program that achieves the same emission reductions as section 185 and a program that achieves fewer emission reductions than section 185 can both be considered “not less stringent.” However, stringency is either a measure of the emission reductions achieved or it is not. If it is, then a program that does not achieve equivalent reductions cannot pass the test. EPA did not actually interpret the term “stringent” and offers no basis for claiming that Congress intended this term to have different meanings and allow for different metrics for guarding against backsliding.

Response: We believe that the three alternatives we identified in our proposed action (i.e., same emission reductions; same amount of revenue to be used to pay for emission reductions to further improve ozone air quality; a combination of the two) are reasonable and consistent with Congress' intent. First, we note that Congress did not define the phrase “not less stringent” or the term “stringent” in the Act. EPA, therefore, may use its discretion and expertise to reasonably interpret section 172(e). Furthermore, we note that the D.C. Circuit, in NRD.C. v. EPA, 643 F.3d 311 (D.C. Cir. 2011), while finding that EPA's guidance document providing our initial presentation of various alternatives to section 185  4 should have been promulgated through notice-and-comment rulemaking, declined to rule on whether the types of alternative programs we considered in connection with our proposed action on SJVUAPCD Rule 3170 were illegal, stating, “neither the statute nor our case law obviously precludes [the program alternative].” Id. at 321.

We do not agree that evaluating a variety of metrics (e.g., fees, emissions reductions, or both) to determine whether a state's alternative program meets section 172(e)'s “not less stringent” criterion undermines our interpretation. On its face, section 185 results in assessing and collecting emissions fees, but the fact that section 185 is also part of the ozone nonattainment requirements of Part D, Subpart 2, suggests that Congress also anticipated that section 185 might lead to emissions reductions that would improve air quality, and ultimately facilitate attainment of the 1-hour ozone standard. 5 Thus, EPA believes it is reasonable to assess stringency of alternative programs on the basis of either the monetary or emissions-reduction aspects of section 185 or on the combination of both.

Lastly, as discussed in our proposal, SJVUAPCD has demonstrated that Rule 3170 will result in the collection of at least as much revenue from owners/operators of relevant emission sources as a fee program directly implemented under section 185. In addition, it is reasonable to expect that SJVUAPCD's alternative program will achieve more emission reductions than direct implementation of section 185 because the District's alternative program uses fees to reduce emissions, while section 185 has no such direct requirement. While the comment suggests that EPA's logic, if unreasonably extended, might theoretically lead it to approve a program that achieves fewer emission reductions than a program directly implemented under section 185, we are clearly not doing that here, and have no intention of doing so in the future.

a. Comment: To be “not less stringent,” a control must be no less rigorous, strict, or severe; all of these qualities focus on the burden to the entities responsible for complying with the rule or standard. The purpose of Rule 3170 is less stringent than section 185 because Rule 3170 exempts large categories of major industrial sources and dilutes section 185's target by spreading its impact across the millions of individuals registering cars in the SJV.

Response: It is difficult to try to assess the relative stringency of section 185 and Rule 3170 based on a comparison of which entities are responsible for paying fees. The two types of fee programs target different types of sources, such that all stationary sources have the fee obligation under section 185 while less well-controlled stationary sources, along with motor vehicle owners have the obligation under Rule 3170. Overall, however, we believe that SJVUAPCD's alternative program is not less stringent than section 185 because it will generate at least as much revenue as a program that directly implements section 185. Rule 3170 by its explicit terms requires a demonstration that the revenue generated by the alternative program will equal or exceed the amount that would have been generated by a 185 program.

In addition, we believe that SJVUAPCD's alternative program will result in emissions reductions because the demonstration required by Rule 3170 must rely on “California Vehicle Code fees” to offset any fees that would otherwise be due from direct implementation of section 185. Rule 3170's definition of “California Vehicle Code fees” specifies that these fees “are required by Health and Safety Code Section 40612 to be expended on establishing and implementing incentive-based programs * * *. These fees shall therefore be used in programs designed to reduce NO X and VOC emissions in the San Joaquin Valley.” In addition, state law clearly requires that the fees be directed towards programs that reduce NO X and VOC emissions in the San Joaquin Valley. Cal. Health and Safety Code 40612.

Furthermore, we note that, according to the District, stationary sources currently contribute approximately 20 percent of the ozone precursor emissions, while mobile sources are responsible for approximately 80 percent of such emissions in the SJVUAPCD. 6 The District also states that most stationary sources in its jurisdiction have already installed air pollution controls as a result of new source review or retrofitting requirements and that the only options to such businesses to avoid fees would be to either curtail production or to cease operation. 7 Rule 3170 places the burden of fees under its equivalent alternative program on major stationary sources that do not qualify as “clean emissions units” and on motor vehicle owners. To the extent that stringency can be evaluated based on which entities are subject to fees, we believe that SJVUAPCD's alternative program is not less stringent than section 185 because it imposes the fee obligation on the sources most responsible for continuing ozone pollution in the Valley. And, as noted, it also requires that the fees be used to fund ozone reduction, something section 185 does not do.

b. Comment: Rule 3170 is less stringent than section 185. Section 185 is not a standard-based provision, nor is it based on a specific fee collection amount. The purpose of section 185 is to penalize major stationary sources in Severe and Extreme nonattainment areas. The stringency of section 185 does not stem from a dollar figure or emission target, but rather from three requirements: (i) Each major stationary source pay a fee; (ii) the fee be equal to $5000, adjusted for inflation, per ton of VOC or NO X emitted in excess of 80 percent of the baseline; and (iii) the baseline amount be established from the attainment year inventory, unless the source's emissions are irregular, cyclical, or otherwise varying significantly from year to year. Charging motor vehicle fees merely adds a revenue stream. It fails to make up for the shortfall of not charging all major stationary sources penalty fees and basing those fees on the attainment year baseline, etc.

Response: We do not agree that an alternative program must adhere to the specific criteria identified by the commenter. In the context of the revoked 1-hour ozone NAAQS, and applying the principles of section 172(e) as upheld by the D.C. Circuit, the alternative program must be demonstrated to be “not less stringent” than the otherwise applicable required “control,” i.e., section 185. We are approving Rule 3170 into the California SIP and as part of the District's equivalent alternative program because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). Moreover, as explained above, we believe that the District's alternative program, by imposing fees on mobile sources—the sources most responsible for the Valley's continuing ozone nonattainment problems—advances the legislative policy of creating incentives to facilitate attainment that underlay section 185 when it was enacted by Congress in 1990.

In addition, we note that Rule 3170 allows only money generated by motor vehicle registration fees and spent on ozone pollution reduction projects in the Valley to offset fees that would otherwise be due from direct implementation of section 185. In addition, state law requires that these fees be used to reduce NO X and VOC pollution in the San Joaquin Valley which is consistent with section 185's place within the ozone non-attainment provisions of CAA Title 1, part D, subpart 2.

Comment: A program that raises an equivalent amount of money is not supported by section 185's structure and legislative history. Section 185 was not intended as a revenue generating provision.

Response: Section 185 explicitly mandates a specific fee, requires that the fee be indexed for inflation, establishes a baseline for measuring such fees, and authorizes an alternative method for calculating that fee. For those reasons, and the additional reasons discussed above, we believe that section 185 has both monetary and emissions-related aspects and that it is reasonable for EPA to assess stringency of alternative programs on the basis of either aspect of section 185 or on the combination of both. Nevertheless, EPA notes that Rule 3170 imposes fees on those major stationary sources that do not meet the criteria for the “clean emissions unit” exemption and thereby provides an incentive for those stationary sources to reduce their emissions. 8 In addition, SJVUAPCD's alternative program imposes a fee on motor vehicles, the largest source of emissions in the Valley, thereby supporting emissions reductions from that source as well and in that respect will be no less effective in reducing ozone-formation than a section 185 fee program on major sources not meeting the “clean emissions unit” exemption would be. We further note that SJVUAPCD's alternative program will direct the revenues generated from the motor vehicle registration fee to VOC and NO X emissions reductions programs.

a. Comment: The measure of equivalency should be section 185's emission reduction incentive. Penalties end if an area attains the standard or a source reduces its emissions by 20 percent. As the DC Circuit noted, “these penalties are designed to constrain ozone pollution.” Nothing in the legislative history indicates that Congress' intent was to collect a certain amount of money.

Response: The comment correctly points to the fact that section 185 states that fees must be paid until an area is redesignated to attainment for ozone and that section 185 does not require fees from sources that reduce emissions by 20 percent (compared to emissions during the baseline period). Thus, one consequence of a section 185 fee program may be a reduction in VOC and/or NO X emissions. However, EPA does not agree with the comment to the extent it is saying that emission reductions must be the sole basis for determining whether an alternative program is “not less stringent” than a section 185 program. As we stated above, we believe the stringency of an alternative program may be evaluated by comparing either the fees (which must be used to pay for emissions reductions) or emission reductions otherwise achieved from the proposed alternative program to the fees or emissions reductions directly attributable to application of section 185 (or by comparing a combination of fees and reductions).

In addition, the comment does not acknowledge that section 185 allows major sources to pay fees and not reduce emissions. The comment also does not acknowledge that SJVUAPCD is required by state law to use the revenues generated by the alternative fee program to fund incentive-based programs that will result in NO X and VOC emissions reductions in the San Joaquin Valley. We believe this aspect of the District's alternative program reflects the emission reductions aspects of section 185. We also believe that it is possible that SJVUAPCD's alternative program could result in more emission reductions than a section 185 program that funds unrelated programs.

b. Comment: Section 185 is a market-based policy device to internalize the external costs of pollution and thereby incentivize emission reductions at major stationary sources. EPA should assess how the incentives in Rule 3170 compare to the incentives in section 185. This analysis would look at how a pollution tax might drive sources to improve controls, and how the potential increase in the price of goods would cause consumers to look for alternatives that are not subject to the same tax.

Response: We do not agree that the comparison of “incentives” or a pollution tax proposed by the commenter is the only approach to evaluating the relative stringency of an alternative program, as explained above. In addition, we believe that Rule 3170 will have a beneficial effect on air quality in the San Joaquin Valley because state law requires that the fees generated by the rule be spent on air pollution reduction programs in the Valley.

c. Comment: Rule 3170 severs the link between the fee and pollution levels. A new Prius is subject to the same fee as a dirty clunker, while stationary sources exempted from the fee have no incentive to improve performance.

Response: While we agree that in theory a section 185 program may reduce emissions, section 185 in itself does not mandate such reductions. Moreover, the link between section 185 and emission reductions is uncertain to the extent that section 185 requires fees from a unit that lowered its emissions by less than 20 percent at any time, or even by more than 20 percent if it did so before the attainment year deadline, but creates a perverse incentive by exempting a source that defers 20 percent emission reductions until after the attainment year.

In addition, as stated above, Rule 3170 continues to impose section 185 fees on emissions units that have not taken the emission reduction measures needed to qualify for the “clean emissions unit” exemption. Moreover, the District has determined that most stationary sources have installed pollution controls that meet BARCT or BACT standards and thus there is little more these sources can do to reduce emissions other than curtailing production or ceasing operation.

Comment: Rule 3170 is less stringent because it exempts certain stationary sources from paying penalty fees and because it allows sources to use an alternative baseline of a 2 year average even if the source's emissions are not irregular, cyclical or otherwise vary from year to year.

Response: We do not agree that the District's alternative program is less stringent than section 185. As explained above, section 185 has both monetary and emissions reductions characteristics. We believe that the District's alternative program implements both aspects of section 185 by assessing fees on major contributors to air pollution in the San Joaquin Valley (major sources not qualifying for the clean unit exemption and motor vehicles), and by obligating these fees to NO X and VOC pollution reduction programs. Moreover, as explained previously, we are approving SJVUAPCD's program as a not less stringent alternative program for anti-backsliding purposes and therefore determine that it complies with the statute even though it does not strictly follow the requirements of 185.

a. Comment: EPA's analysis did not demonstrate that Rule 3170 includes a process for revenues to be spent on emission reductions to improve ozone air quality. EPA states that alternative programs might include those that raise the same amount of revenue and establish a process where the revenues would be used to pay for emission reductions that will further improve ozone air quality. But Rule 3170 includes no process or mention of how fees will be spent.

Response: Rule 3170, section 7.2 requires the District to prepare an “Annual Fee Equivalency Demonstration Report.” Section 7.2.2 specifies that the report must demonstrate whether the sum total of fees collected under Rule 3170 and “California Vehicle Code fees” is equal to or greater than the fees that would be due under a direct implementation of section 185. Rule 3170's definition of “California Vehicle Code fees” specifies that these fees “are required by Health and Safety Code Section 40612 to be expended on establishing and implementing incentive-based programs * * * These fees shall therefore be used in programs designed to reduce NO X and VOC emissions in the San Joaquin Valley.” We believe that Rule 3170, therefore, will result in the expenditure of fees on ozone air pollution reduction programs.

In addition, we note that Health & Safety Code section 40612(a)(1) authorizes SJVUAPCD to increase motor vehicle fees by up to $30 per motor vehicle per year to establish and maintain incentive-based programs that are intended to address air pollution caused by motor vehicles and achieve and maintain state and federal air quality standards. Health & Safety Code section 40612(b) specifies that at least ten million dollars of motor vehicle registration fees be used to mitigate air pollution impacts on disadvantaged communities. Section 40612(c) requires the District and the California Air Resources Board (CARB) to take certain steps to effectuate the supplemental motor vehicle fee: (1) The District must notify CARB that it has adopted the fee and provide an estimate of the amount of revenue that will be generated; (2) CARB must file with the California Secretary of State written findings that the District has performed the above requirements and that the District has undertaken all feasible measure to reduce nonattainment air pollutants from sources within the District's jurisdiction and regulatory control.

To demonstrate its authority to charge the supplemental motor vehicle registration fee, the District submitted Governing Board Resolution No. 10-10-14 dated October 21, 2010 to document that its governing board had exercised its authority to increase motor vehicle fees by $12 per year per motor vehicle and that it estimated the additional fee would generate approximately $34 million in additional funds. The District also submitted California Air Resources Board Executive Order G-10-126, dated December 10, 2010, to document that CARB had made the findings required by Health & Safety Code 40612, as well as documentation that the findings had been submitted to the California Secretary of State.

b. Comment: Although the state law AB2522 requires the District to use revenues to fund incentive based programs resulting in NO X and VOC emission reductions in the SJVUAPCD, there is no analysis or demonstration of how or whether the District will comply with this requirement.

Response: In our above response to the preceding comment, we explained how Rule 3170 will result in the expenditure of fees on ozone air pollution reduction programs. We also provided additional explanation of how state law requires the District to use the supplemental motor vehicle fees to fund incentive-based programs that will result in NO X and VOC emission reductions in the San Joaquin Valley. We believe it is reasonable to presume that the District will obey the law and the documents noted above indicated that it has done so for 2010 and 2011.

c. Comment: EPA has not previously given emission reduction credit for incentive based programs. It is arbitrary for EPA to now assume that funds collected by Rule 3170 will in any way improve ozone air quality.

Response: Our basis for approving Rule 3170 is that it is not less stringent than the requirements of section 185 because it will result in the collection of fees equal to the fees that would be collected under section 185. Furthermore, we have determined that Rule 3170 provides adequate oversight and enforcement mechanisms though an annual demonstration of fee equivalency that will be made available to the public and mailed to EPA by November 1 of each year. Additionally, we believe that the District's alternative program will result in improvements in air quality by providing the District with approximately $34 million annually to use on projects that will reduce NO X and VOC emissions in the Valley. Finally, we note that section 185 does not require that the fees paid pursuant to a directly implemented section 185 program be directed to any particular purpose. This finding is consistent with our actions referenced in the comment regarding other incentive programs. In those cases, we acknowledged that SJVUAPCD's incentive programs would result in some emission reductions but noted that SJVUAPCD had not adequately demonstrated a specific amount of reductions. Similarly, while SJVUAPCD has not demonstrated a specific amount of emission reductions from Rule 3170's fees, it is reasonable to expect that it could be more than the reductions resulting from direct implementation of section 185, which does not require that fees be directed towards emission reductions.

a. Comment: Section 110(a)(2)(A) requires each SIP to include enforceable emission limitation and control measures such that any person can enforce such standards or limitations under section 304(a). Rule 3170 provides no standards or limitations and is unenforceable.

Response: Section 110(a)(2)(A) provides that each SIP shall “include enforceable emissions limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance, as may be necessary or appropriate to meet the applicable requirements of this chapter.” Rule 3170 contains enforceable requirements such as annual emissions reporting and annual equivalency demonstrations. Therefore, we disagree that Rule 3170 does not meet the enforceability requirements of the Act and should not be approved.

b. Comment: Because the equivalency demonstration is not an emission standard or limitation, citizens are not able to enforce the manner in which the District demonstrates equivalency. The air district methodology provided to calculate equivalency is not an emission standard or limitation upon which citizens can bring suits.

Response: We note that CAA section 304(f)(4) defines the term “emission standard or limitation” for the purposes of citizen suit enforcement, including “any other standard, limitation, or schedule established * * * under any applicable State implementation plan approved by the Administrator.” Further, we note that Rule 3170, section 6 contains affirmative obligations on subject sources to report emissions and Rule 3170, section 7 requires the District to track actual emissions and to demonstrate equivalency between fees obtained through the alternative program and fees that would have been due under a direct implementation of a section 185 fee program. We believe the obligations set forth in these provisions are sufficiently clear and specific that they meet the definition of emissions standard or limitation and thus the failure of a source or the District to comply could be enforced.

Comment: Enforcement of Rule 3170 is not practical because it is virtually impossible for citizens or EPA to determine whether CARB and the District have, in fact, raised funds equivalent to that which would be generated under the section 185 penalty fee program.

Response: We disagree that it is virtually impossible to determine if the District has demonstrated equivalent funds. Section 7.2.1.3 of Rule 3170 specifically requires the District to calculate the fees that would have been collected from major stationary sources under Section 185 of the Act. This provision is consistent with Section 185. The fee obligation is calculated based on a source's actual emissions in 2010 for the baseline year as well as actual emissions in the relevant demonstration year.

Sections 7.1 and 7.2 specify the procedures for the equivalency demonstration and require the District to track collected fees and demonstrate equivalency. The tracking provisions are clear and straightforward. If the amount of fees collected is not at least equal to the amount of fees that would have been collected under a direct implementation of section 185, Rule 3170 requires the District to collect additional fees from stationary sources to make up the shortfall. If approved into the SIP, Rule 3170, including the District's obligations, become federally enforceable and may serve as the basis of citizen suits. We do not agree that citizens cannot enforce the manner in which the District demonstrates equivalency.

Comment: CARB and the District propose to implement the $12 motor vehicle fee through state law mechanisms which are not federally enforceable. Neither EPA nor private citizens can enforce the state mandated $12 motor vehicle fee. Rule 3170 does not include the motor vehicle registration funding mechanism itself, but rather relies on state law to implement and enforce the fee. Even if Rule 3170 becomes part of the California SIP, EPA will have no way to enforce the fee.

Response: As the commenter states, the District's alternative program relies in part on the collection of a $12 motor vehicle fee. The commenter is correct that EPA's action will not make the payment of the motor vehicle fee federally enforceable. However, the requirement for the District to demonstrate equivalency under Rule 3170 is federally enforceable, as is the requirement to collect additional fees from major stationary sources if necessary to cover any shortfall and demonstrate equivalence.

Comment: The proposed rule fails to include any analysis or make any finding with respect to enforceability. The TSD sets forth a single, conclusory sentence stating that the rule is enforceable. EPA must articulate a rational connection between the facts found and the choice made. Because EPA fails to make any factual finding of enforceability, and fails to articulate a rational basis for concluding that Rule 3170 is enforceable, EPA's decision to approve Rule 3170 is arbitrary and capricious.

Response: EPA's proposed rule described the various requirements of Rule 3170 that the District is obligated to perform. For example, our proposed rule described Rule 3170's requirements for the APCO to track emissions data, calculate, assess and collect fees from stationary sources and track motor vehicle registration fees. 76 FR 45214. Our proposal also described Rule 3170's requirement for the APCO to prepare and submit to EPA an annual report that shows that the sum of fees collected from stationary sources and motor vehicle registrations are equal to or greater than the fees that would have been collected under a direct implementation of section 185. Id. Our proposal also described Rule 3170's requirement that the APCO collect additional funds from stationary sources if the annual demonstration shows a shortfall. Id. Our intention in describing these provisions and referring to them as “requirements” was to communicate our conclusion that Rule 3170 contained enforceable provisions that “will result in the collection of fees equal to the fees that would be collected under section 185.” Id. at 45215.

To further clarify our determination with respect to the enforceability of Rule 3170, we add that the provisions of Rule 3170 are sufficiently clear and specific as to what is required and when these obligations must be completed. In particular, we are referring to the requirements in Sections 6 and 7 of Rule 3170. Section 6 requires sources to report baseline period actual emissions information by a date certain and to provide annual emission statements for the prior calendar year. See Rule 3170, Sections 6.1 and 6.2. Section 7 requires the APCO to track emissions and to conduct an annual reconciliation process comparing fees under Rule 3170 to fees that would have been collected under a direct implementation of section 185 and to submit a report with the results of this analysis to EPA by November 1 of each year. See Rule 3170, Sections 7.1 and 7.2. Finally, if there is a shortfall in funding, section 7.3 requires the District to bill major sources, within 90 days following the demonstration of the shortfall, “sufficient fees to recover the entire amount of the shortfall.” See Rule 3170, Section 7.3. Because these provisions are clear and specific and compliance can be determined by a date certain, we determined that Rule 3170 is enforceable.

Comment: Rule 3170 penalizes vehicle owners instead of owners of major stationary sources. Because the motor vehicle owners in the Valley are largely low-income and people of color, where owners of major stationary sources are not, this rule disparately impacts low-income and people of color, in violation of Title VI of the Civil Rights Act, EPA's regulations implementing Title VI, and President Clinton's Executive Order 12898. Because the District receives federal funding, it is EPA's duty to ensure that the District does not administer its Clean Air Act programs in a manner that violates Title VI.

Response: In response to the comment on environmental justice, this action 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). Specifically, 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 and EPA regulations. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action 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 response to the comment on Title VI, EPA Region 9 forwarded a copy of this comment to the Office of Civil Rights in Washington, DC, which as provided in EPA's regulations implementing Title VI of the Civil Rights Act, has the responsibility to administer Title VI in the Agency, including the decision to accept, reject or refer to another Federal agency the matter for investigation. 40 CFR 7.20, 7.125.

Finally, we note that enabling legislation for the District's alternative fee program, AB2522, provides: “At least ten million dollars ($10,000,000) shall be used to mitigate the impacts of air pollution on public health and the environment in disproportionately impacted environmental justice communities in the San Joaquin Valley.” Cal. Health & Safety Code, § 40612((b).

Comment: One commenter asked EPA to clarify in our final action that alternative programs meeting the “not less stringent” criteria would not be limited to just fee-equivalent, emissions reduction-equivalent, or a hybrid of the two. The commenter suggested other options, including (1) programs that have a broader environmental purpose and would not be limited to only those programs that can reduce NO X and VOC emissions, and (2) result in reductions of NO X and VOC in different proportion to that on which the 185 fees were assessed.

Response: Our action relates to SJVUAPCD Rule 3170 and SJVUAPCD's alternative program, which rely on an annual fee equivalency demonstration to show that it is not less stringent than section 185. We acknowledge the comment and the possibility that another program could use different elements to demonstrate that it meets the not less stringent than standard in section 172(e). EPA has not assessed any such elements in this rulemaking and will do so if and when such alternatives are submitted.

Comment: One commenter recommended that EPA allow sources to apply the calculated section 185 fees to a number of projects at the major stationary source or at other sources in either the nonattainment area or upwind areas. The commenter suggested ten examples of eligible projects including installing emissions control technology, enhancing existing pollution control equipment, energy efficiency and renewable energy measures, lower emitting fuels, retirement or repowering of a higher emitting facility, mobile source retrofit program, clean vehicle fleets, and increasing mass transit ridership.

Response: EPA is acting on SJVUAPCD's Rule 3170 and SJVUAPCD's alternative program, which do not include these program features. If these program features are included in a specific SIP submittal for another alternative program, EPA would evaluate them at that time.

Comment: Rule 3170 is deficient because it exempts “clean units” from fee requirements and because it allows for an alternative baseline period of two consecutive years if the APCD determines it would be more representative of normal operations.

Response: Our proposed action was to approve Rule 3170 and SJVUAPCD's alternative program in the context of the revoked 1-hour ozone NAAQS. We concluded that Rule 3170 is approvable into the California SIP and as part of the District's alternative fee-equivalent program because we have determined that Rule 3170 will result in the collection of fees at least equal to the amount that would be collected under section 185, that the fees will be used to reduce ozone pollution, and that the program therefore satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). Our proposed action contained our analysis of how the District's alternative fee-equivalent program meets the “not less stringent than” criterion of section 172(e), and we are providing additional explanation in this notice. For these reasons we conclude that the SIP deficiency has been corrected and sanctions would no longer be appropriate.

a. Comment: EPA did not provide an opportunity for comment before the action took effect. Considering whether public comments warrant a reversal of action is not the same as providing an opportunity to participate in the rulemaking.

Response: As explained in our Interim Final Rule, we invoked the good cause exception under the APA as the basis for not providing public comment before the action took effect. Our review of the State's submittal indicated that it was more likely than not that the State had submitted a revision to the SIP that addressed the issues we identified in our earlier action that started the sanctions clocks. We concluded that it was therefore not in the public interest to impose sanctions. We also explained that the offset sanction was due to be imposed 18 months after February 12, 2010, or August 12, 2011, which was approximately 15 days from the date of publication of the Interim Final Rule. Therefore, it would not have been possible for us to provide an opportunity for comment before the offset sanction would have been imposed. Our use of the good cause exception thus relieved a restriction and avoided the imposition of sanctions that, as explained below, were unnecessary because the State had already taken the steps it needed to take to submit an approvable rule. The only action that remained to be taken was EPA's action to complete our rulemaking, including reviewing and responding to public comments on our proposed action. As explained in our Interim Final Rule, we could have disapproved the rule, if justified by public comments. However, we are now finalizing our action with an approval of the State's submittal, which further supports the reasonableness of our use of the good cause exception to avoid needless hardship on entities and individuals in the San Joaquin Valley.

b. Comment: The Good Cause exception does not apply because deferring sanctions does not present an “imminent threat” or otherwise qualify for the exception. The danger is actually in deferring monetary pressure because it relieves pressure to achieve cleaner air.

Response: At the time of our Interim Final Rule, the State had already taken the steps necessary to correct the issues we had identified in a previous action. Specifically, on May 19, 2011, SJVUAPCD adopted a revised version of Rule 3170 and on June 14, 2011, CARB submitted the revised rule to EPA. Thus, the deferral of sanctions accomplished by EPA's Interim Final Rule did not “relieve pressure” on the District or CARB. For the same reasons, EPA believes that the imposition of sanctions would not have had any effect towards achieving clean air, as the local agency and the State had already revised the rule and submitted it to EPA for incorporation into the State Implementation Plan.

EPA is finalizing approval of Rule 3170, “Federally Mandated Ozone Nonattainment Fee,” as a revision to SJVUAPCD's portion of the California SIP. EPA is also finalizing approval of SJVUAPCD's fee-equivalent program, which includes Rule 3170 and state law authorities that authorize SJVUAPCD to impose supplemental fees on motor vehicles, as an alternative to the program required by section 185 of the Act for anti-backsliding purposes with respect to the 1-hour ozone standard.

No comments were submitted that change our assessment that Rule 3170 and SJVUAPCD's alternative program comply with the relevant CAA requirements. Therefore, as authorized in section 110(k)(3) of the Act, EPA is fully approving Rule 3170 into the California SIP and SJVUAPCD's alternative program as an equivalent alternative program, consistent with the principles of section 172(e) of the Act. Final approval of Rule 3170 and SJVUAPCD's equivalent alternative program satisfy California's obligation under sections 182(d)(3), (e) and (f) to develop and submit a SIP revision for the SJVUAPCD 1-hour ozone nonattainment area to meet the requirements for a program no less stringent than that of section 185. Final approval of Rule 3170 and SJVUAPCD's equivalent alternative program also permanently terminates all sanctions and the Federal Implementation Plan (FIP) implications associated with section 185 for the 1-hour ozone NAAQS and previous action (75 FR 1716, January 13, 2010) regarding SJV.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 19, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

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

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

The background for today's action is discussed in detail in our February 9, 2012, proposal (77 FR 6711). In that notice, we proposed to partially approve and partially disapprove submittals from the State of Arkansas, pursuant to the CAA, that address the infrastructure elements specified in the CAA section 110(a)(2), necessary to implement, maintain, and enforce the 1997 8-hour ozone, the 1997 and 2006 PM 2.5 NAAQS. Those submittals are dated December 17, 2007, March 28, 2008, and September 16, 2009, respectively. We noted that those submittals did not include revisions to the SIP, but documented how the current Arkansas SIP already included the required infrastructure elements. Therefore, we proposed to find that the following section 110(a)(2) elements were contained in the current Arkansas SIP and provided the infrastructure for implementing the 1997 8-hour ozone standard: CAA Sections 110(a)(2)(A), (B), (E), (F), (G), (H), (K), (L), (M), and portions of (C), (D)(ii), and (J). EPA also proposed to find that the following section 110(a)(2) elements were contained in the current Arkansas SIP and provided the infrastructure for implementing the 1997 and 2006 PM 2.5 standards: CAA Sections 110(a)(2)(A), (B), (E), (F), (G), (H), (K), (L), and (M). EPA also proposed to find that the current Arkansas SIP does not meet the infrastructure requirements for the 1997 8-hour ozone NAAQS and the 1997 and 2006 PM 2.5 NAAQS at 110(a)(2) for portions of (C), (D)(ii), and (J) because the EPA-approved SIP prevention of significant deterioration (PSD) program does not apply to greenhouse gas (GHG) emitting sources. We also proposed to find that the current Arkansas SIP does not meet the infrastructure requirements for the 1997 and 2006 PM 2.5 NAAQS at 110(a)(2) for (C), (D)(ii), and (J) because Arkansas has not submitted the PSD SIP revision required by EPA's Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (73 FR 28321, May 16, 2008). Further, for the 1997 8-hour ozone NAAQS, we proposed to partially approve and partially disapprove the provisions of SIP submissions intended to satisfy the section 110(a)(2)(D)(i)(II) infrastructure element pertaining to emissions from sources in Arkansas not interfering with measures required in the SIP of any other State under part C of the CAA to prevent significant deterioration of air quality. For the 2006 PM 2.5 NAAQS, we proposed to disapprove the provisions of SIP submissions intended to satisfy this section 110(a)(2)(D)(i)(II) infrastructure element. Finally, for purposes of the 1997 8-hour ozone NAAQS, EPA proposed to approve four severable portions of SIP revisions to modify the Arkansas PSD SIP to include NO X as an ozone precursor.

Our February 9, 2012, proposal provides a detailed description of the submittals and the rationale for EPA's proposed actions, together with a discussion of the opportunity to comment. The public comment period for these actions closed on March 12, 2012, and we did not receive any comments.

We are partially approving and partially disapproving the submittals provided by the State of Arkansas to demonstrate that the Arkansas SIP meets the requirements of Section 110(a)(1) and (2) of the Act for the 1997 ozone and 1997 and 2006 PM 2.5 NAAQS. For the 1997 ozone standard, we are finding that the current Arkansas SIP meets the infrastructure elements listed below:

Emission limits and other control measures (110(a)(2)(A) of the Act);

Ambient air quality monitoring/data system (110(a)(2)(B) of the Act);

Program for enforcement of control measures (110(a)(2)(C) of the Act), except for the portion that addresses GHGs;

Interstate Transport, pursuant to section 110(a)(2)(D)(ii) of the Act, except for the portion that addresses GHGs;

Adequate resources (110(a)(2)(E) of the Act);

Stationary source monitoring system (110(a)(2)(F) of the Act);

Emergency power (110(a)(2)(G) of the Act);

Future SIP revisions (110(a)(2)(H) of the Act);

Consultation with government officials (110(a)(2)(J) of the Act);

Public notification (110(a)(2)(J) of the Act);

Prevention of significant deterioration and visibility protection (110(a)(2)(J) of the Act), except for the portion that addresses GHGs;

Air quality modeling data (110(a)(2)(K) of the Act);

Permitting fees (110(a)(2)(L) of the Act); and

Consultation/participation by affected local entities (110(a)(2)(M) of the Act).

For the 1997 ozone standard, we are finding that the current Arkansas SIP does not meet the infrastructure elements listed below:

Program for enforcement of control measures (110(a)(2)(C) of the Act), only as it relates to GHGs;

Interstate transport, pursuant to section 110(a)(2)(D)(ii) of the Act, only as it relates to GHGs; and

Prevention of significant deterioration (110(a)(2)(J) of the Act), only as it relates to GHGs.

We are also approving the Arkansas Interstate Transport SIP provisions that address the requirement of section 110(a)(2)(D)(i)(II) that emissions from sources in Arkansas do not interfere with measures required in the SIP of any other State under part C of the CAA to prevent significant deterioration of air quality, except as they relate to GHGs for the 1997 ozone NAAQS.

We are disapproving the portion of the Arkansas Interstate Transport SIP provisions that address the requirement of section 110(a)(2)(D)(i)(II), as it relates to GHGs, that emissions from sources in Arkansas do not interfere with measures required in the SIP of any other State under part C of the CAA to prevent significant deterioration of air quality, for the 1997 ozone NAAQS.

For the 1997 and 2006 PM 2.5 standards, we are finding that the current Arkansas SIP meets the infrastructure elements listed below:

Emission limits and other control measures (110(a)(2)(A) of the Act);

Ambient air quality monitoring/data system (110(a)(2)(B) of the Act);

Adequate resources (110(a)(2)(E) of the Act);

Stationary source monitoring system (110(a)(2)(F) of the Act);

Emergency power (110(a)(2)(G) of the Act);

Future SIP revisions (110(a)(2)(H) of the Act);

Consultation with government officials (110(a)(2)(J) of the Act);

Public notification (110(a)(2)(J) of the Act);

Air quality modeling data (110(a)(2)(K) of the Act);

Permitting fees (110(a)(2)(L) of the Act); and

Consultation/participation by affected local entities (110(a)(2)(M) of the Act).

For the 1997 and 2006 PM 2.5 standards, we are finding that the current Arkansas SIP does not address the 110(a)(2) infrastructure elements listed below:

Program for enforcement of control measures (110(a)(2)(C) of the Act);

Interstate Transport, pursuant to section 110(a)(2)(D)(ii) of the Act; and

Prevention of significant deterioration and visibility protection (110(a)(2)(J) of the Act).

We are also disapproving the portion of the Arkansas Interstate Transport SIP that addresses the requirement of section 110(a)(2)(D)(i)(II)—that emissions from sources in Arkansas do not interfere with measures required in the SIP of any other State under part C of the CAA to prevent significant deterioration of air quality—for the 2006 PM 2.5 NAAQS.

Under section 110(c) of the Act, disapproval of a SIP in whole or in part requires EPA to promulgate a federal implementation plan (FIP) at any time within two years following final disapproval, unless the State submits a plan or plan revision that corrects the deficiency—and the EPA approves the plan or plan revision—before the EPA promulgates such FIP. This two-year period is commonly referred to as the “FIP clock.” Here, based on Arkansas's failure to submit the required PM 2.5 PSD SIP revision, and because Arkansas cannot issue permits for GHG emissions, we are disapproving for the 1997 and 2006 PM 2.5 standard and partially disapproving for the 1997 ozone NAAQS certain severable elements of the Arkansas infrastructure SIP. Accordingly, EPA is required by law to promulgate a FIP at any time within two years of this final rulemaking, unless Arkansas submits and we approve a new SIP or SIP revisions that correct the deficiencies, or unless EPA has already fulfilled its FIP obligation.

EPA is also approving the following revisions to APCEC Regulation 19, Chapter 9, submitted by the State of Arkansas on February 17, 2010:

1. The substantive change adding NO X to the definition of Major Modification through incorporation by reference of 40 CFR 52.21(b) and 40 CFR 51.301 as of November 29, 2005.

2. The substantive change adding NO X to the definition of Major Stationary Source through incorporation by reference of 40 CFR 52.21(b) and 40 CFR 51.301 as of November 29, 2005.

3. The substantive change adding NO X as a precursor to the table's criteria and other pollutants listing for ozone through incorporation by reference of 40 CFR 52.21(b)(23)(i).

4. The substantive change allowing for an exemption with respect to ozone monitoring for a source with a net emissions increase less than 100 tpy of NO X through incorporation by reference of 40 CFR 52.21(i)(5)(i).

EPA is taking these actions in accordance with section 110 and part C of the Act and EPA's regulations and consistent with EPA guidance. We are also making ministerial corrections to the attainment status table in 40 CFR 81.304 to accurately reflect the redesignation date of Crittenden County, Arkansas to attainment for the 1997 8-hour ozone standard. On March 24, 2010, we redesignated the county with an effective date of April 23, 2010 (75 FR 14077).

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

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

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

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

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

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

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

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

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the action EPA is finalizing neither imposes substantial direct compliance costs on tribal governments, nor preempts tribal law. Therefore, the requirements of section 5(b) and 5(c) of the Executive Order do not apply to this rule. Consistent with EPA policy, EPA nonetheless is offering consultation to Tribes regarding this rulemaking action. EPA will respond to relevant comments in the final rulemaking action.

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 19, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purpose of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR parts 52 and 81 are amended as follows:

Table of Contents I. Introduction II. NPL Deletion Criteria III. Deletion Procedures IV. Basis for Site Deletion V. Deletion Action I. Introduction

EPA Region 2 is publishing this direct final Notice of Deletion of the Hooker (Hyde Park) Superfund Site (Site), from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in § 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.

Because EPA considers this action to be noncontroversial and routine, this action will be effective September 30, 2012 unless EPA receives adverse comments by September 19, 2012. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent To Delete in the “Proposed Rules” section of the Federal Register . If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion, and the deletion will not take effect. EPA will, as appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Hyde Park Landfill Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to deletion of the Site:

(1) EPA consulted with the state of New York prior to developing this direct final Notice of Deletion and the Notice of Intent to Delete co-published today in the “Proposed Rules” section of the Federal Register .

(2) EPA has provided the state 30 working days for review of this notice and the parallel Notice of Intent to Delete prior to their publication today, and the State, through the New York Department of Environmental Conservation, has concurred on the deletion of the Site from the NPL.

(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent to Delete is being published in Niagara Gazette, a major local newspaper. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.

(4) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent To Delete and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the Site from the NPL:

The Site, EPA ID No. NYD00831644, consists of approximately fifteen acres and is located in the northwest corner of the Town of Niagara, New York. The Site is immediately surrounded by several industrial facilities and property owned by the New York Power Authority. Residential neighborhoods are located to the northwest and south of the landfill. The Niagara River, an international boundary, is located 2,000 feet to the northwest, down the Niagara Gorge which descends approximately 350 feet below the surface of the landfill. The Niagara River flows into Lake Ontario approximately 10 miles downstream of the Site. Lake Ontario is a drinking-water source for millions. Niagara University, which has three thousand students, is less than one mile in distance from the Site.

The Bloody Run is a small drainage area flowing north from the landfill and considered part of the Site. The stream flows under a neighboring industry via a storm sewer, and under University Drive via a storm sewer which emerges at the Niagara Gorge.

The geology underlying the Site is glacial overburden overlying the fractured Lockport Dolomite bedrock. Groundwater in the vicinity of the landfill flows in both the overburden and the bedrock. Generally, the overburden is saturated at depths below ten feet. The groundwater movement from the landfill is both downward and horizontal. Some of this groundwater exits the Niagara Gorge Face in the form of seeps which flow into the Niagara River. Contaminants migrate from the landfill in two forms: Aqueous phase liquid (APL or contaminated groundwater) and dense non-aqueous phase liquid (NAPL).

Hooker Chemical and Plastic Corporation, now Occidental Chemical Corporation (OCC), disposed of approximately 80,000 tons of waste (drummed and bulk liquids, and solids) at the Site, from 1953 to 1975, primarily chlorobenzenes, chlorotoluenes, halogenated aliphatics and 2,4,5-trichlorophenol (TCP) still bottoms. An estimated 3,300 tons of TCP were disposed of at the Site; TCP wastes are known to contain significant amounts of 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). EPA has estimated that approximately 0.7-1.6 tons of TCDD were associated with the TCP wastes at the Site.

The Site was proposed to the NPL in December 1982 (47 FR 58476) and was listed on the NPL in September 1983 (48 FR 40658).

EPA filed a lawsuit in 1979 in federal district court under the authority of the Resource Conservation and Recovery Act and the Clean Water Act seeking to require that OCC remediate the Site. EPA, New York State and OCC filed a Stipulation and Judgment Approving Settlement Agreement (Settlement Agreement) in January 1981, which the Court approved in April 1982. The Settlement Agreement required OCC to perform an Aquifer Survey (which can be compared to a Remedial Investigation) to define the extent of contamination in the overburden and bedrock and assess remedial alternatives. OCC completed this effort in 1983. The results of the aquifer survey were used by the negotiation team (EPA/NY State and OCC) to agree on remedial actions to be performed at the Site. These required remedial actions were documented in a Stipulation on Requisite Remedial Technology (RRT Stipulation), which was approved by the Court in August 1986. During the RRT negotiations, EPA performed a risk assessment using worst case exposure scenarios which indicated that the greatest risk from the Site was the consumption of fish contaminated with TCDD.

EPA issued an Enforcement Decision Document (EDD—a precursor and equivalent to a Record of Decision) on November 26, 1985, which documented the remedial action selected for Site cleanup. EPA acknowledged that the APL and NAPL plumes would not be remediated to drinking water standards because of the persistent nature of NAPL. Therefore, the goal of the remedies selected in the EDD was to hydraulically contain contaminated groundwater (APL plume) in the vicinity of the Site, while extracting as much NAPL as is practicable.

The major components of the 1985 EDD included the following:

• Source control (prototype extraction wells);

• Containment and collection of APL and NAPL in the overburden;

• Containment and collection of APL and NAPL in the bedrock;

• Treatment of collected APL and NAPL;

• Community Monitoring Program (monitoring wells for early detection of Site chemicals);

• Intermediate and Deep Formations Study (monitoring wells);

• Industrial Protection Program (remediation of sumps and sealing of manholes);

• Perimeter Capping (clay cap around perimeter of landfill);

• Gorge face seeps remediation;

• Bloody Run Excavation or Capping;

• Final capping and Site closure; and,

• TCDD Bioaccumulation Study in Lake Ontario.

The RRT established APL Plume Flux Action Levels for the following chemicals: TCDD (0.5 grams/year); perchloropentacyclodecane [Mirex] (0.005 lbs/day); Aroclor 1248 (0.005 lbs/day); and, chloroform (1.7 lbs/day). These action levels represent concentrations of these contaminants that, if detected entering the river (flux of contaminants to the river) at or above these concentrations, would cause OCC to take additional remedial actions ( e.g. increased pumping, installing additional wells or other remedial measures) to reduce these contaminant levels.

On May 7, 2012, EPA issued an ESD which had two components. This ESD documented the placement of an institutional control, a Declaration of Restrictive Covenants and Environmental Easement, on the property which constitutes the former Hyde Park Landfill. In addition, this ESD clarifies that the selected remedy for the Site in the EDD is a containment remedy and not an aquifer restoration remedy intended to restore the aquifer to its best beneficial use (i.e., a source of drinking water). The goal of a containment remedy is to prevent the migration of disposed waste and leachate along with affected groundwater from a landfill or site.

The purpose of the source control program is to reduce the amount of chemicals migrating downward from the landfill by removing any mobile NAPL remaining in the landfill. OCC installed 6 source controls wells (two 36-inch wells and four 2-inch wells) in the landfill. Nine monitoring wells were also installed in the landfill. One source-control well has since been converted to a monitoring well because of low NAPL collection. The source control program has not yielded large amounts of NAPL. EPA believes that most of NAPL which was once present in the overburden in the landfill has either sorbed to the bedrock, been captured, or remains in pockets or pools that are not hydraulically connected to the source control wells. In addition, the installation of the final cap on the landfill has eliminated the continued production of leachate from rainfall and thereby dramatically reduced the hydraulic head of APL within the landfill, removing the driving force for the NAPL.

NAPL is extracted by the source-control wells and flows into a decanter at the onsite Storage and Treatment Facility. NAPL is transported by truck to a permitted offsite facility for incineration. To date, more than 300,000 gallons of NAPL have been removed and destroyed.

The Overburden Barrier Collection System (OBCS), a drain around the entire landfill to contain and collect contaminated groundwater, was installed by OCC in 1991. Pumping wells create an inward hydraulic gradient. Water-level measurements indicate that an inward gradient is being achieved in the overburden, thereby capturing the contaminated groundwater associated with the Site. Both APL (above MCLs) and NAPL were not observed in any of the overburden monitoring well locations after 1996, indicating that the OBCS serves as an effective barrier to offsite NAPL migration.

The Bedrock NAPL Plume Containment System, consisting of extraction (pumping) wells, was designed and installed by OCC in a phased approach between 1990 and 1997. A total of 16 extraction wells were installed and are pumped to achieve an inward hydraulic gradient. Water-levels are measured quarterly to ensure capture of contaminated groundwater.

The APL Plume Containment System, consisting of three purge wells installed at the Niagara Gorge Face in 1994, contains and collects a significant portion of the APL plume. The portion of the APL plume not collected by these wells is monitored by 3 flux monitoring well clusters to the west of the Site and 3 piezometer clusters in the northern and eastern portion of the APL plume.

APL is treated onsite at the Leachate Storage and Treatment Facility constructed by OCC which began operating in April 1990. The APL/NAPL mixture is pumped from the wells through force mains into a decant tank. The NAPL, denser than water, settles to the bottom. APL is taken off the top of the decanter and pumped into the storage tanks. The APL first passes through sacrificial activated carbon beds (which cannot be recycled because of the dioxin and are disposed of offsite). The APL is then treated in an activated carbon system. The facility currently has a capacity to treat 400 gallons per minute.

The perimeter cap of the landfill was completed in 1991, and the entire landfill was capped in 1994. The final cap consisted of the following: 36 inches of low-permeability clay; a synthetic membrane; a drainage layer and topsoil seeded with native vegetation for barrier protection. EPA routinely inspects the landfill cap for erosion. The current condition of the cap is excellent.

The Bloody Run received drainage from the landfill prior to any remedial measures being conducted at the Site. OCC excavated approximately thirty thousand cubic yards of contaminated sediment from the Bloody Run drainage area. The area was then backfilled and covered with riprap. This work was completed in January 1993. The Bloody Run now flows via a storm sewer which surfaces at the Niagara Gorge. The restored area was observed to have abundant vegetation during a Site visit in June 2011.

Groundwater seeps from the rock at the Niagara Gorge, approximately 2000 feet from the Site. TCDD was detected in one sample from a seep during remedial investigations at 0.2 parts per trillion (ppt). EPA and New York State determined that humans should be isolated from the seeps to prevent an exposure pathway to the contaminants. The Gorge Face Seeps were remediated in 1988, except for the Bloody Run portion, which was remediated in 1994. Access by humans to the seeps has been prevented by the installation of fences and the diversion of seeps into culverts. All contaminated sediments were scraped away. Annual inspections of the Gorge Face are conducted by representatives of EPA, New York State and OCC. The pumping of the APL wells has strongly influenced the seeps, drying many.

A Declaration of Restrictive Covenants and Environmental Easement was placed on the property and lodged with the County of Niagara on October 7, 2010. The Grantor (OCC) grants a permanent restrictive covenant and an environmental easement to the Grantee (Town of Niagara) to provide a right of access over the approximately twenty-one acre property (the “Property”) for purposes of implementing, facilitating and monitoring the remedial action. The Property includes the Site as well as the Bloody Run Drainage area. The covenant/easement also imposes on the property use restrictions that will run with the land for the purpose of protecting human health and the environment in the future.

The following restrictions apply to the use of the Property, run with the land, and are binding on the Grantor: The Property shall not be used in any manner that would interfere with or adversely affect the implementation, integrity, or effectiveness of the remedial action performed at the Site, including, but not limited to: (a) The extraction of on-site groundwater; (b) any digging, excavation, extraction of materials, construction, or other activity outside the requirements of the remedial action that would disturb the cap placed upon the Landfill at the Site; or (c) other activity that would disturb or interfere with any portion of the remedial action for the Site enumerated in the RRT Stipulation. The Property may not be used for residential use. However, the Property may be used for commercial or industrial use as long as designated, and long term engineering controls are employed and remain effective, specifically, the operation of the portion of the Response Action pertaining to the extraction wells, treatment facility and maintenance of the cap.

In addition to the Site-specific institutional control, the Niagara County Department of Health imposes restrictions on the drilling and usage of wells. These restrictions ensure that drinking-water wells are not installed in areas of contaminated groundwater, effectively preventing exposure to Site-related contaminants through ingestion.

OCC has performed additional remedial actions at the Site in addition to those previously discussed. The onsite lagoons were remediated in 1991. NAPL in the lagoons was pumped into the leachate storage facility and the lagoons were closed. NAPL was also pumped from four railroad tank cars, which had been used onsite for years as storage for NAPL generated from remedial investigations because there was no facility permitted to destroy dioxin. In 1991, the tank cars were placed in the waste disposal cells.

OCC also remediated sewers in the area. Sewers provided preferential pathways for contaminants to migrate through the overburden. OCC relocated a sewer at TAM Ceramics and remediated the College Heights sewer. The remediation of the University Drive (bordering Niagara University) sewer was completed in August 1993. NAPL contaminated soils were removed from under University Avenue.

OCC conducted an Intermediate Formations Study to determine if contaminants from the Site had penetrated the Rochester Shale (aquitard) formation below the Lockport Dolomite. Most of the parameters were not detected above the concentrations of Lower Formation Survey Parameters listed in the RRT Stipulation. However, phenol, total organic halogen, PCB-1248 and conductivity did exceed the survey levels. OCC calculated a flux in the monitoring report which was four to five orders of magnitude below the Flux Action Level. OCC was not required to install monitoring wells in the Deep Formations because the Intermediate Formations' investigation indicated that Site contaminants had not migrated through the shale and were not present in the Intermediate Formations.

The RRT established APL Plume Flux Action Levels based on EPA's worst-case bioaccumulation assumptions for the following chemicals: TCDD (0.5 grams/year); perchloropentacyclodecane [Mirex] (0.005 lbs/day); Aroclor 1248 (0.005 lbs/day); and, chloroform (1.7 lbs/day). These action levels represent concentrations of these contaminants that, if detected entering the river (flux of contaminants to the river) at or above these concentrations, would require OCC to take additional remedial actions (e.g. increased pumping, installing additional wells or other remedial measures) to reduce these contaminant levels. The only parameter detected in 2001 was TCDD. OCC calculated the flux of TCDD to the Niagara River as 7.06 × 10−5 grams/year, which is several orders of magnitude below the Flux Action.

The predicted steady-state TCDD concentrations for an input comparable to the TCDD APL Plume Flux Action Level of 0.5 grams/year are 0.026 nanograms/year (sorbed sediment concentrations) and 9.5 × 10−5 picograms/liter (water column dissolved concentration).

The TCDD Study, together with the model, indicated that TCDD was bioaccumulating in the tissues of various species of Lake Ontario fish at a range of rates such that the overall TCDD APL Plume Flux Action Level of 0.5 grams/year stipulated by the RRT remains protective.

The Community Monitoring Wells, a system of wells installed in 1987 in both the overburden and shallow bedrock throughout the neighborhood, provide early warning of the presence of Site-related contaminants in the groundwater. These wells are sampled and analyzed quarterly. Should Site-related contaminants be detected, OCC must take further remedial action. Site-related contaminants have never been detected in these wells. The data collected have demonstrated that the groundwater flow is vertically downward in the nearby community. EPA and New York State review the analytical results from sampling of these wells to ensure the community is being protected.

Vapor monitoring is performed in the overburden community monitoring wells annually during the third quarter when temperature is high and the volatilization potential is greatest. If vapor readings for total VOCs exceed 0.050 parts per million by volume (ppmv), OCC is required to take a groundwater quality sample. Vapor readings, as documented in the 2011 Annual Report, have been at 0 parts per billion by volume (ppbv) for all Community Monitoring Wells.

The RRT established APL Plume Flux Action Levels for the following chemicals: TCDD (0.5 grams/year); perchloropentacyclodecane [Mirex] (0.005 lbs/day); Aroclor 1248 (0.005 lbs/day); and, chloroform (1.7 lbs/day). Sampling results from December 2011 indicate that the concentrations of the APL Flux parameters are significantly below their respective Flux Action Levels. None of the APL Flux Parameters were detected above their detection levels and calculation of the flux to the Niagara River Gorge was not required. The detection levels for the Polychlorinated Biphenyls (PCBs) are as follows: Pentachlorobiphenyl is 0.20 micrograms per liter (μg/L), Tetrachlorobiphenyl is 0.20 μg/L and Trichlorobiphenyl is 0.098 μg/L. The detection levels for the pesticides are as follows: alpha-BHC 0.050 μg/L, beta-BHC 0.050 μg/L, delta-BHC 0.050 μg/L, gamma-Chlordane 0.050 μg/L. The detection limit for Mirex is 0.050 μg/L and for 2,3,7,8-TCDD) is 9.52 picograms/L.

The performance goal for the remedy is containment of contaminated groundwater. EPA utilized multiple lines of evidence to determine that site related contamination is being hydraulically contained. These multiple lines of evidence include: Potentiometric surface maps for the eight monitored flow zones; groundwater quality data; groundwater flow budget and particle tracking analysis using a numerical groundwater flow model; vertical hydraulic gradient data; historical groundwater quality trends from the NAPL Performance Monitoring Wells; groundwater relative age dating based on sulfate concentrations; and, comparison of the chemistry of the seeps in the Niagara River gorge to the chemistry of the bedrock groundwater.

Following all these lines of evidence, EPA concluded that the performance objectives of the remedy were maintained throughout the year. Based upon these results, the EDD remedy selected for the Site is deemed to be effective in protecting human health and the environment. Groundwater monitoring continues to demonstrate that hydraulic containment is being achieved at the Site. The results of the groundwater monitoring are presented in the Site annual reports which document containment.

Although cleanup levels were not developed for Bloody Run, post excavation sampling indicated that contaminants were remediated to concentrations below 1 microgram per kilogram (μg/kg) for TCDD and 25 milligram per kilogram (mg/kg) for Arochlor 1248. The excavated area was backfilled with clean soil and covered in riprap, further reducing exposure.

OCC and CRA prepared the Hyde Park Collection and APL Treatment System Operation and Maintenance Manual (O&M Manual) in December 2003, which was approved by EPA and NYSDEC. The O&M Manual was subsequently revised and incorporated into the Performance Monitoring Plan in 2006.

The treatment system treats more than fifty million gallons of water each year and is monitored on a daily, weekly and quarterly basis to ensure compliance with the discharge requirements. There are nine locations in the system where water samples are collected to monitor system performance. The carbon beds at the Treatment Facility are routinely changed and regenerated. The sacrificial carbon beds, which cannot be regenerated, must also be changed and disposed.

OCC must perform extensive well and pump maintenance, as NAPL often fouls wells and pumps. Annual inspections of the monitoring wells are conducted to ensure that the casings and caps are in good condition.

Hazardous substances remain at the Site above levels that would allow for unlimited use with unrestricted exposure. Pursuant to Section 121(c) of CERCLA, EPA reviews site remedies where such hazardous substances, pollutants, or contaminants remain no less often than every five years after the initiation of a remedy at a site.

Three Five-Year Reviews have been completed at this Site. The fourth Five-Year Review, completed in September 2011, concluded that the remedy is functioning as intended by the Site's decision documents. There have been no changes in the physical conditions of the Site that would affect the protectiveness of the remedy. The hydraulic containment stipulated in the EDD and RRT has been achieved. There have been no changes in the toxicity factors for the contaminants of concern and there has been no change to the standardized risk assessment methodology that could affect the protectiveness of the remedy. There is no other information that calls into question the protectiveness of the remedy. The next Five-Year Review is scheduled to be completed before September 2016.

Public participation activities for this Site have been satisfied as required in CERCLA Section 113(k), 42 U.S.C. 9613(k), and Section 117, 42 U.S.C. 9617. EPA held numerous public meetings through the remedy selection process and subsequent implementation of remedial activities by OCC. All other documents and information which EPA relied on or considered in recommending this deletion are available for the public to review at the information repositories.

All of the completion requirements for this Site have been met, as described in the August 2012 Final Close-Out Report. The State of New York, in a July 29, 2008 letter, concurred with the proposed deletion of this Site from the NPL.

The NCP specifies that EPA may delete a site from the NPL if “all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate.” 40 CFR 300.425(e)(1)(ii). EPA, with the concurrence of the State of New York, through NYSDEC, believes that this criterion for deletion has been met because landfill cap has decreased leachate generation and as a result, NAPL mobility has decreased. In addition, overburden and bedrock hydraulic containment is effective in containing both NAPL and APL plumes within the TI zone documented in the 2011 ESD and prevent contaminants from seeping into the Niagara River. Finally, ICs prevent disturbance of the landfill cap and consumption of contaminated groundwater. Consequently, EPA is deleting this Site from the NPL. Documents supporting this action are available in the Site files.

The EPA, with concurrence of the State of New York through the Department of Environmental Conservation, has determined that all appropriate response actions under CERCLA, other than operation, maintenance, monitoring and Five-Year Reviews have been completed. Therefore, EPA is deleting the Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective on September 30, 2012 unless EPA receives adverse comments by September 19, 2012. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion, and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

EPA Region II is publishing this direct final Notice of Deletion of the Site, from the NPL The NPL constitutes Appendix B of 40 CFR part 300, which is the NCP, which EPA promulgated pursuant to section 105 of CERCLA, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.

Because EPA considers this action to be noncontroversial and routine, this action will be effective on September 30, 2012, unless EPA receives adverse comments by September 19, 2012. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent To Delete in the “Proposed Rules” section of the Federal Register . If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion, and the deletion will not take effect. EPA will, as appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent To Delete and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the state, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

The following procedures apply to deletion of the Site:

(1) EPA consulted with the State of New Jersey prior to developing this direct final Notice of Deletion and the Notice of Intent to Delete co-published today in the “Proposed Rules” section of the Federal Register .

(2) EPA has provided the State 30 working days for review of this notice and the parallel Notice of Intent to Delete prior to their publication today, and the state, through the Department of Environmental Protection, has concurred on the deletion of the Site from the NPL.

(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent to Delete is being published in a major local newspaper, The North Jersey Herald & News. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.

(4) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent to Delete and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the W.R Grace & Co., Inc./Wayne Interim Storage (USDOE) Superfund Site (the Site) from the NPL:

The Site is approximately 6.5 acres located at 868 Black Oak Ridge Road at the intersection with Pompton Plains Cross Road in Wayne Township, Passaic County, New Jersey. The Vicinity Properties (VPs) are commercial and residential areas, and a Township Park, all located within one-half mile to the west and west-southwest of the Site which were affected by contaminant migration from the Site along Sheffield Brook, which flows downstream to the Pompton River. The Site is in a highly developed area of northern New Jersey, approximately 20 miles north-northwest of Newark, New Jersey. The Site CERCLIS ID Number is NJ1891837980.

From 1948 through 1957, Rare Earths, Inc. processed monazite sand at the Site to extract thorium and rare earth metals. The Davison Chemical Division of W.R. Grace acquired the Site in 1957 and processing activities continued until July 1971. After processing ceased in 1971, the facility was licensed by the Atomic Energy Commission (AEC) for storage only. In 1974, W.R. Grace partially decontaminated the Site. Some buildings were razed and the rubble and processing equipment were buried on the property.

In 1974, the Nuclear Regulatory Commission (NRC) assumed licensing responsibilities formerly held by the AEC. In 1975, the storage license for radioactive materials was terminated by the NRC following Site decommissioning and the Site was released without radiological restriction; the only stipulation was that the property deed state that radioactive materials were buried on the property.

In 1981, as part of the review of formerly licensed facilities, the NRC measured direct radiation levels and radionuclide concentrations in soil on the Site. Elevated survey measurements were noted, indicating the Site was contaminated with radium (Ra)-226, thorium (Th)-232, and uranium (U)-238, and associated daughter products. The chemical contaminants of concern (COC) are antimony, arsenic, chromium, lead, mercury, molybdenum, and thallium.

In July 1983, the U.S. Department of Energy (USDOE) was authorized by the Energy and Water Development Appropriations Act of 1984 to conduct a decontamination research and development project at the Site. From 1984 to October 1997, the USDOE managed the Site under the Formerly Utilized Sites Remedial Action Program (FUSRAP). The Site was proposed to the NPL on September 8, 1983, (48 FR 40674). The Site was included on the NPL on September 21, 1984 (49 FR 37070). In September 1985, ownership of the Site transferred from W.R. Grace & Co. to the U.S. Government.

In July 1990, the USDOE signed a Federal Facility Agreement (FFA) that established cleanup responsibilities under CERCLA. The FFA was signed by the EPA in September 1990.

In October 1997, Congress transferred administration and execution of the FUSRAP program from the USDOE to the U.S. Army Corps of Engineers (USACE) in the Energy and Water Development Appropriations Act of 1998. In March 1998, the original USDOE/EPA Site FFA was renegotiated between EPA and the USACE.

Between 1985 and 1987, the USDOE conducted removal actions to remove contaminated material from some of the off-site VP locations in the vicinity of the Site. The adjacent VPs had received contaminants during historical W.R. Grace processing operations, which required remediation. Excavated soils and debris were stored at the Site where the historic thorium processing operations occurred because no disposal facilities were available which were licensed or permitted to accept radiological wastes at the time. These actions were outlined in the Action Description Memorandum, Proposed FY 1984 Remedial Actions at Wayne, New Jersey (1984).

During 1993, removal actions at the remaining Site VPs were conducted under the Engineering Evaluation/Cost Analysis (EE/CA) for the Proposed Removal of Contaminated Materials from Vicinity Properties at the Wayne Site (1993). The majority of the waste from the 1993 cleanup actions was shipped directly to a commercial disposal facility. A small amount of contaminated soil from the 1993 cleanup actions was added to the interim storage pile at the Site due to off-site waste disposal constraints in effect at the time.

For the VPs surrounding the Site, the USDOE implemented residual contamination guidelines governing the release of formerly contaminated property for unrestricted use. The DOE Guidelines for Residual Radioactivity at FUSRAP and Remote SPMP Sites (1985), provided the following guidelines:

• External gamma radiation levels on a site released for unrestricted use to not exceed 20 microRems/hour above the ground surface;

• Maximum permissible concentration of Ra-226 and Th-232 in soil above background levels averaged over 100 cubic meters; 5 picoCuries/gram (pCi/g) averaged over the first 15 centimeters (cm) of soil at the surface; 15 pCi/g when averaged over 15-cm thick soil layers more than 15 cm below the surface (i.e., for sub-surface soils at depths greater than 15 cm); and,

• Maximum permissible concentration of U-238 in soil; 150 pCi/g above background.

The guidelines were derived using conservative assumptions protective of human health and the environment. The USDOE applied the surface and subsurface soil criteria when evaluating the effectiveness of the removal actions. The USDOE implemented the guidelines on the basis of compatibility with the criteria used for the same purpose by the EPA. No further removal was conducted when sampling data demonstrated that the residual contamination guidelines for soil were met for that property.

The USDOE revised the guidelines in the early 1990's by the application of the As Low As Reasonably Achievable (ALARA) principle. In applying the principle of reducing exposure to levels ALARA, the USDOE established cleanup goals for properties of 5 pCi/g, regardless of depth of contamination. These guidelines applied to Th-232 and Ra-226 concentrations; however, they were not applicable to naturally occurring background radioactivity in soils near the Site.

In 1997, when disposal facilities which were licensed or permitted to accept radiological wastes came online, the approximately 38,500-cubic yard interim storage pile was removed by the USDOE and shipped off-site for disposal.

Approximately 41,500 cubic yards of buried contaminated materials within the footprint of the former interim storage pile were removed and shipped off-site for disposal by the USACE under a separate CERCLA removal action that began in 1998. This action is documented in the Engineering Evaluation/Cost Analysis for the Removal of Subsurface Materials at the Wayne Site (1998).

The Site was addressed through a Remedial Investigation/Feasibility Study (RI/FS) process which evaluated the conditions at the Site, the need for remedial action, and the possible cleanup alternatives. In late 1989, the USDOE began an intensive study of the remaining contamination at and around the Site. The field work was completed in December 1991. Historical data and the results documented in the RI Report (1993) delineated the nature and extent for contamination. The Baseline Risk Assessment (BRA) evaluated potential health and ecological risks if no remedial action was taken at the Site. The BRA determined that remedial action was warranted because of the potential for cancer risks above the upper risk threshold of 10 −4 identified by EPA as protective to occur if existing institutional controls are not maintained in the future. The main exposure pathway of concern was direct contact with radiologically contaminated soils remaining at the Site.

The FS Report (1999) evaluated the alternatives for remedial action at the Site. The evaluation of a range of remedial actions for the Site was based upon the risk assessment presented in the FS. The overall strategy was to address the radioactively contaminated wastes which had been disposed at the Site. The FS evaluated technologies that were appropriate for the media of concern, developed and screened alternatives capable of addressing the contaminated media, and evaluated in detail a subset of the developed alternatives using evaluation criteria specified under CERCLA.

In May 2000, the EPA and the USACE issued a Record of Decision (ROD) identifying the selected remedy to address the remaining radioactive wastes, chemical waste, operations building demolition, and groundwater at the Site. The Remedial Action Objectives specified in the ROD were:

• To eliminate or minimize the potential for humans to ingest, come into dermal contact with, or inhale particulates of radioactive constituents, or to be exposed to external gamma radiation to achieve the level of protection required by the NCP (10 −4 to 10 −6 risk range) and meet the substantive requirements of 10 CFR part 20, subpart E.

• To reduce chemical COC levels in impacted media to levels that would be protective based on site-specific risk and groundwater impact evaluations.

• To return impacted groundwater to conditions consistent with groundwater applicable or relevant and appropriate requirements (ARARs).

• To protect the integrity of the clay layer in order to ensure protection of the lower groundwater aquifer.

• To reduce potential exposure to radium and thorium in soil to levels that would be protective for the intended land use as established by site-specific risk analysis.

• To reduce exposure to uranium to levels that would be protective for the intended land use.

• To eliminate or minimize toxicity, mobility, and/or volume of impacted soils.

• To eliminate or minimize the potential migration of contaminants into stream and storm drain sediments by surface water runoff, or by infiltration or percolation that would result in contamination of the groundwater.

• To comply with chemical and action-specific ARARs.

• To prevent exposures from radioactivity in buildings and structures greater than the guideline limits.

• To access and address the contaminated soils beneath the building.

• To eliminate or minimize potential exposure to external gamma radiation.

• To eliminate or minimize toxicity or mobility, and/or volume of contaminants.

• Excavation and disposal of the remaining contaminated subsurface materials to an average concentration of 5 pCi/g of Ra-226 and Th-232 combined, above naturally occurring background concentrations at the Site, and an average concentration of 100 pCi/g of total uranium above naturally occurring background, as determined by surveys consistent with the Multi-Agency Radiation Survey and Site Investigation Manual (MARSSIM) (2000).

• Excavation and disposal of chemically contaminated soils above levels calculated to be protective of groundwater or above levels protective for unrestricted uses of the property (with regard to chemicals of concern) as specified in the ROD.

• Decontamination and demolition of the site operations building on the Site, removal and off-site disposal of demolition debris, and removal and off-site disposal of contaminated materials under this building.

• Removal and treatment of groundwater encountered during excavation to meet the pretreatment discharge standards of the receiving Publicly Owned Treatment Works prior to release.

• Implementation of a five-year groundwater monitoring program to establish groundwater quality after contaminated soil has been removed.

• Maintenance of the integrity of the subsurface clay layer that acts as a hydraulic barrier protecting the lower aquifer at the Site.

• Site restoration activities that will allow for beneficial unrestricted use in the future.

Under the May 2000 ROD, an additional 55,410 cubic yards of contaminated material and building debris were excavated and disposed of at an off-site licensed disposal facility. The elements of the remedial construction activities and construction quality assurance and quality control (QC) are detailed in the Post Remedial Action Report Wayne Interim Storage Site (PRAR) (2004). The USACE managed and supervised all construction activities to ensure compliance with the remedial design, work plans, and construction specifications. The EPA provided oversight of the cleanup actions.

Following the remedial actions at the Site, the USACE reviewed the cleanup actions previously taken by the USDOE at the VPs. The review consisted of comparing the USDOE radiological screening and sampling data from the VPs and the unrestricted use criteria applied by the USDOE to the cleanup values established in the ROD, and as appropriate, the State of New Jersey Administrative Code.

A Technical Memorandum documented the evaluation of the VPs and specifically identified and listed each property previously remediated by the USDOE. On the basis of this paper review, the USACE conducted additional subsurface soil sampling at four VPs in May and June 2003. Following the review and sampling, the USACE determined that prior USDOE actions were sufficient to meet the ROD cleanup criteria at all VPs, with the exception of the Wayne Township (Sheffield) Park and a small right-of-way (ROW) area adjacent to the Pompton Plains Cross Road.

The USACE conducted additional excavation and off-site disposal of contaminated residual soils in July and August 2003 at the Wayne Township (Sheffield) Park and the road ROW property consistent with the cleanup levels documented in the ROD. These actions were documented in an Explanation of Significant Differences (ESD) (2003). Final Status Surveys performed in compliance with MARSSIM demonstrated that ROD cleanup levels were achieved for radiological and chemical constituents of concern. Approximately 2,300 cubic yards of additional soil were excavated from these two VPs.

The elements of the remedial construction activities including construction QC requirements, the USACE inspections, post-excavation final status surveys, and final as-built drawings, are described in the Post Remedial Action Report Wayne Interim Storage Site Vicinity Properties Wayne Township (Sheffield) Park (2008) and Post Remedial Action Report Wayne Interim Storage Site Vicinity Properties Pompton Plains Crossroad Right-of-Way Property (2008). The USACE managed and supervised all construction activities at the VPs to ensure compliance with the remedial action work plans and construction specifications. The EPA provided oversight of the cleanup actions.

Transfer of the real property at 868 Black Oak Ridge Road, Wayne Township, New Jersey from the U.S. Government to the Township of Wayne was completed in 2006.

After the remediation of the Site, documented in the PRAR, it became necessary to examine the then-current status of a section of Black Oak Ridge Road and Pompton Plains Cross Road that is adjacent to the Site. In August 2004, a characterization survey of this roadway was performed and the results showed areas of subsurface contamination remained along certain roadway and utility features. These findings were also documented in the EPA Five-Year Review, indicating that this area would need to be addressed in the future.

The previously inaccessible soils in this area were made accessible and addressed in 2009 and 2010. During the 2009 remediation at the Black Oak Ridge Road, a total of 13 intermodal containers were filled with 475,000 pounds (237 tons) of contaminated soil and disposed of at U.S. Ecology in Grandview, Idaho (USEI). During the 2010 remediation, 43 containment sacks containing 447,550 pounds (224 tons) of contaminated soil, pipe, and debris were disposed of at USEI.

For radiologically-contaminated soil below the Black Oak Ridge Road roadway, the selected remedy in the ROD, complete excavation and off-site disposal, was applied. All regions of contamination in previously inaccessible soils under the Black Oak Ridge Road have been completely remediated. The analytical data presented in the Construction Close-Out Report for Roadways and Inaccessible Soils (2011) demonstrate compliance with the unrestricted use cleanup criteria as set forth in the ROD.

A Long-Term Groundwater Monitoring Program was implemented to monitor groundwater quality at the Site within the unconfined and confined aquifers for a period of five years from the conclusion of remedial activities. Criteria in the ROD were used to evaluate radioactive and chemical constituent results. A total of 21 wells were monitored from 2002 until 2006 in accordance with the Wayne Interim Storage Site Long-Term Groundwater Monitoring Plan Addendum for USACE In-House Sampling (2003).

Over the course of the five-year monitoring period, a few results did exceed ROD and other criteria, but did not impact the conclusion that all groundwater criteria in the ROD had been met. Arsenic was detected in one well in excess of the ROD criteria, but did not exceed the EPA maximum contaminant level. This well was in a confined aquifer located up-gradient of all former disposal areas and was considered representative of background conditions. Chromium was detected above the ROD criteria in one monitoring well during the May 2006 sampling event. The elevated result was found in a well that was in a confined aquifer located up-gradient of all former disposal areas. The well was considered to be representative of background conditions. The source of the elevated reading was attributed to chromium leaching into the well water column from the stainless steel well casing and screen. Previously, an on-site stainless steel well demonstrated similar elevated chromium results and was replaced by a polyvinyl chloride (PVC) well. The PVC-cased well demonstrated true groundwater chromium much less than the ROD criteria.

Following the March 2006 sampling event, the USACE determined that all monitoring requirements set forth in the ROD had been met. The Five-Year Review Report completed by EPA in September 2008 stated that the groundwater monitoring program requirements, as established in the ROD, had been met. The 21 monitoring wells were abandoned in September 2011 in accordance with New Jersey Department of Environmental Protection (NJDEP) regulations, specifically Well Construction and Maintenance; Sealing of Abandoned Wells, N.J.A.C. 7:9D.

The cleanup levels for contaminated soils and groundwater at the Site and VPs are listed in Table 1, of the Final Close-Out Report for the W.R. Grace and Co./Wayne Interim Storage Site (2012). Attainment of these levels will allow for unrestricted use and unlimited exposure of the properties, as demonstrated in the risk assessment.

Post remedial action sampling was conducted following excavation at the Site property and VPs including the Wayne Township (Sheffield) Park, a small ROW area adjacent to the Pompton Plains Cross Road, and a section of Black Oak Ridge Road. Access was obtained to all properties and soil was excavated. Post excavation sampling indicated all cleanup levels for these soils had been met.

After five years of groundwater monitoring, the USACE determined that all monitoring requirements set forth in the ROD had been met. This was stated in the 2008 Five-Year Review Report.

No ongoing monitoring or maintenance is required by the U.S. Government at the Site. The remediation of previously inaccessible soils in 2009 and 2010 allowed for the Site to be closed with no land use controls to monitor.

The EPA published a Five-Year Review Report for the Site in September 2008. The assessment of this five-year review was that the selected remedy was functioning as intended by the decision documents and was protective of human health and the environment in the short-term.

The Issues, Recommendations, and Follow-Up Actions and Protectiveness Statement of the Five-Year Review Report both state that “the implemented remedy has left all groundwater and soils suitable for use without restriction, except for two suspected sub-soil areas which are currently not accessible.” The areas in question were located beneath a roadway to which the USACE could not gain access for characterization and remediation. The Five-Year Review Report went on to explain that there were no current risks for either groundwater or soils and none were expected, as long as access controls for the inaccessible areas were maintained, resulting in the likely need for a deed restriction on the areas. However, funds made available through the American Reinvestment and Recovery Act of 2009 allowed the USACE to work with Passaic County and remediate the areas consistent with the selected remedy in the ROD and ESD. This remediation is documented in the Construction Close-Out Report for Roadways and Inaccessible Soils (2011).

The remediation of previously inaccessible soils under the roadway allowed for the Site to be released for unrestricted use with no need for further Five-Year Reviews.

Public participation activities for this Site have been satisfied as required in CERCLA sections 113(k) and 117, 42 U.S.C. 9613(k) and 9617. Throughout the removal and remedial process, EPA and the NJDEP have kept the public informed of the activities being conducted at the Site by way of public meetings, progress fact sheets, and the announcement through local newspaper advertisements on the availability of documents such as the RI/FS, Risk Assessment, ROD, Proposed Plan and the Five-Year Review Report.

The Site meets all site completion requirements as specified in the OSWER Directive 9320.2-22, Close-Out Procedures for National Priorities List Sites. All remedial activities at the Site are complete and the implemented remedy achieves the degree of cleanup specified in the ROD and ESD, for all pathways of exposure. Therefore, EPA has determined that no further response action is necessary at the Site to protect human health and the environment.

The EPA, with concurrence of the State of New Jersey, through the Department of Environmental Protection, dated on June 22, 2012, has determined that all appropriate response actions under CERCLA have been completed. Therefore, EPA is deleting the Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective on September 30, 2012, unless EPA receives adverse comments by September 19, 2012. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion, and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

This is a summary of the Commission's Second Order on Reconsideration, adopted on July 17, 2012, and released on July 19, 2012 (FCC 12-79). The full text of this document is available for inspection and copying during normal business hours in the Commission Reference Center, 445 12th Street SW., Washington, DC 20554. The document is also available for download over the Internet at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0719/FCC-12-79A1.doc. The complete text may also be purchased from the Commission's copy contractor, Best Copy and Printing, in person at 445 12th Street SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-5300, via facsimile at (202) 488-5563, or via email at Commission@bcpiweb.com.

On December 15, 2004, the Commission adopted the ESV Report and Order in IB Docket No. 02-10 ( ESV Order ) (70 FR 4775-01, January 31, 2005, as amended at 40 FR 34665-01, June 15, 2005), establishing licensing and service rules for ESVs operating in the 5925-6425 MHz/3700-4200 MHz (C-band) and 14.0-14.5 GHz/11.7-12.2 GHz (Ku-band) frequencies. On July 30, 2009, the Commission adopted the Order on Reconsideration ( ESV Reconsideration Order ), (74 FR 47100-01, September 15, 2009, as amended at 75 FR 7975-01, February 23, 2010) which revises some of the ESV licensing and service rules adopted in the ESV Order. In this Second Order on Reconsideration ( Second Reconsideration Order ), the Commission revises the ESV rules by adopting requirements for a certain type of ESV system: a system that operates multiple co-frequency terminals simultaneously, with each terminal using a different data rate or power level (variable power ESV system). Specifically, the Second Reconsideration Order adopts an aggregate power-density rule that will allow variable power ESV systems to operate their individual transmitters simultaneously while using varying off-axis EIRP-density levels instead of requiring each transmitter within the system to use the same EIRP-density. The aggregate power-density rule requires variable power ESV systems to operate at least one dB below the off-axis EIRP-density limits in order to protect the FSS from harmful interference. In addition, the Order requires ESV applicants seeking a waiver of the one dB requirement to file a report regarding their system operations. Further, the Second Reconsideration Order requires variable power ESV systems to cease transmissions if the power-density from an individual terminal exceeds the off-axis EIRP-density limits or the power-density of one or more terminals causes the aggregate power to exceed the off-axis EIRP-density limits. The revisions this Second Reconsideration Order adopts for variable power ESVs should provide greater operational flexibility for those ESVs while continuing to ensure that the FSS operators are protected from harmful interference in the C-band and Ku-band.

The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for notice-and-comment rule making proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the U.S. Small Business Administration (SBA). In light of the rules adopted in the ESV Order, we find that there are only two categories of licensees that would be affected by the new rules. These categories of licensees are Satellite Telecommunications and Fixed-Satellite Transmit/Receive Earth Stations. The SBA has determined that the small business size standard for Satellite Telecommunications is a business that has $15 million or less in average annual receipts. Currently there are approximately 3,390 operational fixed-satellite transmit/received earth stations authorized for use in the C- and Ku-bands. The Commission does not request or collect annual revenue information, and thus is unable to estimate the number of earth stations that would constitute a small business under the SBA definition. Of the two classifications of licensees, we estimate that only 15 entities will provide ESV service. For the reasons described below, we certify that the policies and rules adopted in this Second Reconsideration Order will not have a significant economic impact on a substantial number of small entities.

In the ESV Order, the Commission established licensing and service rules for ESVs operating in the 5925-6425 MHz/3700-4200 MHz (C-band) and 14.0-14.5 GHz/11.7-12.2 GHz (Ku-band) frequencies. These rules allow ESV operations in the C- and Ku-bands, while ensuring that ESVs protect the fixed service (FS) and fixed-satellite service (FSS) operators, and a limited number of Government operations in these bands from harmful interference. In the Order on Reconsideration, the Commission clarified and modified certain ESV rules designed to protect the FSS and the FS in the C- and Ku-bands in order to allow greater operational flexibility for ESVs. For example, ESVs may operate at higher off-axis power-density levels as long as the ESV remains within the parameters of the coordination agreements between the target satellite and adjacent satellites. In this Second Reconsideration Order, we further promote operational flexibility while ensuring that the FSS are protected from harmful interference by adopting an aggregate power-density rule and a cessation of emission rule for variable power ESV systems. The Commission does not expect a substantial number of small entities to be directly impacted by the rule changes adopted in this Second Reconsideration Order. Specifically, we expect that fewer than ten entities will be affected by the variable power rule provisions adopted in this Order. In addition, we believe these new rule provisions will not impose a significant economic impact on small entities and, in fact, will benefit both large and small entities utilizing variable power systems by allowing greater operational flexibility in providing ESV service. Therefore, we certify that the requirements adopted in this Second Reconsideration Order will not have a significant economic impact on a substantial number of small entities.

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

The Commission will send a copy of this Second Order on Reconsideration to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

It is ordered that, pursuant to sections 4(i), 7, 302, 303(c), 303(e), 303(f) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 157, 302, 303(c), 303(e), 303(f) and 303(r), this Second Order on Reconsideration is adopted. Part 25 of the Commission's rules is amended, as specified below in the rule revisions, effective September 19, 2012.

It is further ordered that the Petition for Reconsideration filed by The Boeing Company is granted in part to the extent described above and is denied in all other respects.

It is further ordered that the Petition for Reconsideration filed by ViaSat, Inc. is denied.

It is further ordered that the Final Regulatory Flexibility Certification, as required by section 604 of the Regulatory Flexibility Act, is adopted.

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

For the reasons discussed above, the Federal Communications Commission amends 47 CFR part 25 as follows:

This is a synopsis of the Commission's Letter, released July 27, 2012. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12fth Street SW., Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractors, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or via email www.BCPIWEB.com. This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. This document is not subject to the Congressional Review Act. Therefore, the Commission is not required to submit a copy of this Report and Order to the Government Accountability Office and Congress, pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A) because these rules are rules of particular applicability and are not subject to the Commission's notice and comment procedures.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows: